Note 6:

Restructuring Activities

During fiscal 2016, the Company offered a voluntary retirement program to certain U.S. salaried employees. The program was offered as part of the Company’s Strengthen, Diversify and Grow transformational initiative and supports the objective of reducing operational and SG&A cost structures.

Also during fiscal 2016, the Company announced a plan to close its Washington, Iowa manufacturing facility and is in the process of transferring the facility’s production to other Americas segment manufacturing facilities, which it expects to complete by the end of fiscal 2017. In addition, the Company completed the transfer of production from its McHenry, Illinois manufacturing facility to other Americas segment manufacturing facilities. These restructuring activities reflect the Company’s focus on operating scale manufacturing facilities to improve overall competitiveness and profitability.

During fiscal 2015, the Company initiated a headcount reduction plan for its Brazil manufacturing facility within its Americas segment. The headcount reductions were in response to the economic slowdown in Brazil and reflect the Company’s objective to maintain profitability in this business despite lower sales volume.

In addition, the Company continues to execute restructuring activities within its Europe segment. These restructuring activities have included implementing headcount reductions, exiting certain non-core product lines based upon Modine’s global product strategy, reducing manufacturing costs, consolidating production facilities, and disposing of and selling certain underperforming or non-strategic assets. The Company designed these activities to align the cost structure of the segment with its strategic focus on the commercial vehicle, off-highway, automotive component, and engine product markets, while improving gross margin and return on average capital employed.

Restructuring and repositioning expenses were as follows:

	Years ended March 31,
	2016		2015		2014
Employee severance and related benefits	$	12.8	$	1.2	$	14.8
Accelerated depreciation		-		-		4.3
Other restructuring and repositioning expenses		3.8		3.5		1.3
Total	$	16.6	$	4.7	$	20.4

Other restructuring and repositioning expenses primarily consist of equipment transfer and plant consolidation costs.

During fiscal 2016, 2015, and 2014, the Company recorded $16.6 million, $4.7 million, and $16.1 million, respectively, of restructuring and repositioning expenses as restructuring expenses in the consolidated statement of operations. During fiscal 2014, the Company recorded $4.3 million of restructuring and repositioning expenses within cost of sales in the consolidated statement of operations.

The Company accrues severance in accordance with its written plans, procedures, and relevant statutory requirements. Changes in accrued severance were as follows:

	Years ended March 31,
	2016			2015
Beginning balance	$	9.9		$	19.4
Additions		12.8			1.2
Payments		(8.5	)		(7.3	)
Effect of exchange rate changes		0.5			(3.4	)
Ending balance	$	14.7		$	9.9

During fiscal 2016, the Company identified potential impairment indicators related to a manufacturing facility in Germany, including pre-tax losses and its strategic decision to exit a certain product line in the future. In response, the Company performed an impairment evaluation and recorded an asset impairment charge of $9.9 million within its Europe segment to write down the manufacturing facility’s long-lived assets to fair value. The Company determined fair value using Level 3 inputs, primarily consisting of a facility appraisal, which considered the market rental value, and estimated scrap values, which considered the specialized nature of the machinery and equipment.

During fiscal 2014, the Company recorded asset impairment charges totaling $3.2 million, including $2.0 million within its Europe segment, primarily due to a manufacturing facility in Germany that the Company has closed, and $1.2 million within its Americas segment, related to the closure of its McHenry, Illinois manufacturing facility.

During fiscal 2015, the Company sold a wind tunnel within its Europe segment for cash proceeds of $5.8 million and recognized a gain of $3.2 million. At March 31, 2016 and 2015, assets held for sale of $8.5 million and $3.2 million, respectively, were included in other noncurrent assets and consisted of facilities that the Company is marketing for sale.