Restructuring, Integration and Impairment Activities
|12 Months Ended|
Dec. 31, 2016
|Restructuring and Related Activities [Abstract]|
Restructuring, Integration and Impairment Activities
The Company has announced and implemented a number of initiatives designed to improve the Company’s cost structure, better utilize overall capacity, improve general operating efficiencies and consolidate the operations of recently acquired businesses. These initiatives resulted in the recognition of restructuring, integration and impairment charges in the Consolidated Statements of Operations during 2016, 2015 and 2014.
The costs incurred under these initiatives include:
•Restructuring Activities – These amounts relate to:
•Integration Activities – These amounts relate to professional fees for systems integration and deal costs, employee termination and benefits and other charges associated with integrating the operations of recently acquired businesses.
•Asset Disposition and Impairment Actions – These amounts relate to sales and impairments of assets. Impairments of assets are recognized when the carrying amount of the asset is not expected to be fully recoverable. The impairments recognized were equal to the difference between the carrying amount of the asset and the estimated fair value of the asset, which was determined using observable inputs, including appraisals from independent third parties when available. When observable inputs were not available, estimated fair value was determined using the Company’s assumptions, including the data that market participants would use in pricing the asset, based on the best information available in the circumstances. Specifically, the Company used discounted cash flows to determine the fair value of the asset when observable inputs were unavailable.
The Company has reported restructuring and integration activities based on the specific driver of the cost and reflected the expense in the accounting period when the Company has committed to or incurred the cost, as appropriate. The following table is a summary of the net expense associated with the restructuring, integration and impairment activities for 2016, 2015 and 2014. The 2016 charges related to actions initiated in 2016 and 2015. The 2015 charges related to actions initiated in 2015. The 2014 charges related to actions initiated in 2014 and prior years.
Reductions in demand for the Company’s products, further refinement of its product portfolio, further opportunities to reduce costs or the cost of integrating future acquisitions may result in additional restructuring, integration or impairment charges in future periods.
Actions Initiated in 2016
The Company acquired Cybex International, Inc. (Cybex) and Indoor Cycling Group GmbH (ICG) in the first and third quarters of 2016, respectively, as discussed in Note 4 – Acquisitions. During 2016, the Company executed certain restructuring and integration activities within the Fitness segment primarily related to these acquisitions, resulting in the recognition of restructuring and integration charges in the Consolidated Statements of Operations. In the fourth quarter of 2016, the Company recorded restructuring charges related to the realignment of certain executive positions within the Boat segment as well as an asset impairment charge recorded within the Corporate segment.
The following table is a summary of the expense associated with the restructuring and integration activities for the year ended December 31, 2016 and related actions initiated in 2016:
Actions Initiated in 2015
In the fourth quarter of 2015, the Company recorded impairment charges for certain long-lived assets in Brazil as a result of unfavorable market conditions and declining currency values. The Company used estimated future cash flows, a Level 3 input, to assess the fair value of the long-lived assets. The Company also recorded impairment charges in the fourth quarters of 2016 and 2015 in connection with its decision to sell its corporate headquarters facility in Lake Forest, Illinois. The Company used an independent market appraisal report, a Level 2 input, to assess the fair value of its corporate headquarters facility. Additionally, the Company recorded charges related to the restructuring of personnel, primarily within the Boat segment product development and engineering organizations.
The following table is a summary of the expense associated with the restructuring activities and impairment charges for the year ended December 31, 2016 and 2015 and related actions initiated in 2015:
During 2016, the Company made cash payments of $10.2 million relating to all restructuring and integration activities, including payments related to prior period restructuring activities. As of December 31, 2016, accruals remaining for restructuring and integration activities totaled $4.6 million which are expected to be paid during 2017.
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef