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Restructuring and Impairment Charges | 12 Months Ended
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Dec. 31, 2021
Restructuring and Impairment Charges [Abstract] |
Restructuring and Impairment Charges | Note 8 – Restructuring and Impairment Charges On September 10, 2020, the Company announced its plan to permanently close its Shoals Facility in light of the ongoing cyclical industry downturn, which has been magnified by the COVID-19 pandemic. The Company ceased production at the Shoals Facility in February 2021. In connection with the announcement, the Company estimated the fair value of the related asset group because it determined that an impairment trigger had occurred due to the shortened asset recoverability timeframe. Non-cash restructuring and impairment charges totaling $26,576 were recognized during 2020. These non-cash charges for 2020 related to the ROU asset ($17,540) and property, plant and equipment at the Shoals Facility ($9,036). In connection with the impairment the Company reassessed the estimated useful lives of equipment that continues to be used by the Company (primarily in Castaños) and is depreciating it over their remaining useful lives. Restructuring and impairment charges for 2020 included cash charges of $6,578 which included employee severance and retention charges and other costs to close the facility and transfer equipment to Castaños. The fair value of the ROU asset was estimated using an income valuation approach known as the “sublease” discounted cash flow (“DCF”) model in which the cash flows were based on current market-based lease pricing ($3.5 per square foot) over the remaining term of the Shoals Facility lease (75 months). The cash flows were discounted to present value using a market-derived rate of return of 6.50%. The Shoals Facility personal property was abandoned in place at the facility, sold, transferred to another FCA facility (primarily Castaños), or scrapped. The assets abandoned in place represent property, plant and equipment transferred to the Shoals landlord as consideration for the landlord’s entry into the lease amendment described below. The premise of fair value differs for each type of asset disposition. The fair value of the personal property assets abandoned in place at the Shoals Facility were analyzed under a fair value in continued use (“In-Use”) premise. This premise assumes that the assets will continue to be used in the ongoing operation of the facility and therefore includes installation, other assembly, freight, engineering, electrical set-up and process piping costs that would be required to make the assets fully operational. Assets sold or transferred were analyzed under the In-Exchange (“In-Exchange”) premise of fair value. Under this premise, we considered the value of the assets assuming an orderly sale on a stand-alone basis. It is assumed the assets were sold on an as-is, where-is basis and alternative uses for the assets from the originally designed purpose are considered. Any remaining personal property assets that were neither abandoned in place nor sold/transferred were considered unmarketable and were valued under a scrap value premise. For both the aforementioned In-Use and In Exchange premises, in instances where an asset was found to have no used market resale exposure, we utilized the cost approach. For assets in which there was an active secondary market where recent sales comparables exist, the market approach was utilized. In instances where market data was available but deemed too incomplete to apply a complete market approach, we used the market relationship data available to influence, confirm, or adjust the cost approach results. On October 8, 2020, the Company reached an agreement with the Shoals facility owner and landlord, to shorten the Shoals lease term by amending the expiration date to the end of February 2021. In addition, the landlord agreed to waive the base rent payable under the original lease for the months of October 2020 through February 2021. The lease termination resulted in a lease termination gain of $15,234 during 2020. Property, plant and equipment reported as Assets Held for Sale on the balance sheet as of December 31, 2020 with an estimated fair value of $10,148 was sold or transferred to the Shoals landlord during the 2021 as consideration for the landlord’s entry into the lease amendment and the aforementioned rent waiver. Restructuring and impairment charges related to the plant closure for 2021 primarily represented costs related to relocating some of the facility’s equipment to Castaños. Restructuring and impairment charges are reported as a separate line item on the Company’s consolidated statements of operations for the years ended December 31, 2021 and 2020, and are detailed below:
|  | Year Ended |
|  | December 31, |
|  | 2021 |  |  | 2020 |
Impairment and loss on right of use asset |  | $ | - |  |  | $ | 17,540 |
Lease termination gain |  |  | - |  |  |  | (15,200 | )
Impairment and loss on disposal of machinery and equipment |  |  | 1,591 |  |  |  | 9,527 |
Employee severance and retention |  |  | (5 | ) |  |  | 3,285 |
Other charges related to facility closure |  |  | 4,944 |  |  |  | 3,173 |
Total restructuring and impairment costs |  | $ | 6,530 |  |  | $ | 18,325 |
Accrued restructuring and impairment charges primarily related to the Manufacturing segment and are detailed below:
|  | Accrued as of December 31, 2020 |  |  | Cash Charges |  |  | Non-cash charges |  |  | Cash payments |  |  | Accrued as of December 31, 2021 |
Impairment and loss on disposal of machinery and equipment |  | $ | - |  |  | $ | - |  |  | $ | 269 |  |  | $ | - |  |  | $ | - |
Employee severance and retention |  |  | 1,596 |  |  |  | - |  |  |  | (80 | ) |  |  | (1,353 | ) |  |  | 163 |
Other charges related to facility closure |  |  | 251 |  |  |  | 6,437 |  |  |  | (96 | ) |  |  | (6,688 | ) |  |  | - |
Total restructuring and impairment costs |  | $ | 1,847 |  |  | $ | 6,437 |  |  | $ | 93 |  |  | $ | (8,041 | ) |  | $ | 163 |
|  | Accrued as of December 31, 2019 |  |  | Cash Charges |  |  | Non-cash charges |  |  | Cash payments |  |  | Accrued as of December 31, 2020 |
Impairment and loss on right of use asset |  | $ | - |  |  | $ | - |  |  | $ | 17,540 |  |  | $ | - |  |  | $ | - |
Impairment and loss on disposal of machinery and equipment |  |  | - |  |  |  | - |  |  |  | 9,527 |  |  |  | - |  |  |  | - |
Lease termination gain |  |  |  |  |  |  |  |  | (15,200 | ) |  |  |  |  |  |
Employee severance and retention |  |  | 647 |  |  |  | 3,285 |  |  |  | - |  |  |  | (2,336 | ) |  |  | 1,596 |
Other charges related to facility closure |  |  | 359 |  |  |  | 3,293 |  |  |  | (120 | ) |  |  | (3,401 | ) |  |  | 251 |
Total restructuring and impairment costs |  | $ | 1,006 |  |  | $ | 6,578 |  |  | $ | 11,747 |  |  | $ | (5,737 | ) |  | $ | 1,847 |

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -URI http://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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