Restructuring

9 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND OTHER CHARGES

Restructuring

In the fourth quarter of 2021, the Company completed the execution of a multi-year restructuring and transformation program called DN Now. On a cumulative basis, $218.9 of expenses were incurred through December 31, 2021. These costs consisted primarily of severance charges, costs of personnel transitioning out of the organization, and consulting fees paid to third-party organizations who assisted with our transition to a shared service model.

In the second quarter of 2022, the Company announced a new initiative to streamline operations, drive efficiencies and digitize processes, targeting annualized cost savings of more than $150.0 by the end of 2023. During the three and nine month periods ended September 30, 2022, the Company incurred $20.7 and $98.9, respectively, of restructuring and transformation costs. The most significant of these costs was $54.9, all recorded in the second quarter of 2022, that was accrued for future severance payments under an ongoing severance benefit program. No severance accruals were recorded in the third quarter of 2022. Consistent with DN Now, other than severance, the remainder of the expenses incurred in both the three and nine-month periods primarily relate to transitioning personnel and consultant fees in relation to the transformation process.

In connection with the latest restructuring initiative, several facilities have been identified for closure, which resulted in a $5.4 impairment of right-of-use assets and related leasehold improvements and furniture and fixtures recorded during the second quarter of 2022. In connection with the organizational simplification and related portfolio optimization, $4.1 of German capitalized software was impaired in the third quarter.

The following table summarizes the impact of the Company’s restructuring and transformation charges on the consolidated statements of operations:

	Three months ended				Nine months ended
	September 30				September 30
	2022		2021		2022		2021
Cost of sales – services	$	3.0	$	—	$	7.4	$	10.1
Cost of sales – products	1.3		—		10.0		1.6
Selling and administrative expense	13.9		—		71.7		11.7
Research, development and engineering expense	2.5		—		9.8		(0.3)
Total	$	20.7	$	—	$	98.9	$	23.1

The following table summarizes the Company’s severance accrual balance and related activity:

	2022		2021
Beginning balance as of January 1	$	35.3	$	62.9
Severance Accruals	54.9		10.3
Payouts/Settlements	(35.6)		(29.5)
Other	(0.3)		(4.9)
Ending balance as of September 30	$	54.3	$	38.8