ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Accelerated Filer ☐ |
|
Non-accelerated Filer ☐ |
Smaller reporting company |
Emerging growth company |
Incorporated Document |
Location in Form 10-K |
Proxy Statement for the 2020 Annual Meeting of Shareholders |
Part III of Form 10-K (Items 10, 11, 12, 13, 14) |
PART I |
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ITEM 1. |
1 |
||
ITEM 1A. |
10 |
||
ITEM 1B. |
17 |
||
ITEM 2. |
18 |
||
ITEM 3. |
19 |
||
ITEM 4. |
19 |
||
20 |
|||
PART II |
|||
ITEM 5. |
21 |
||
ITEM 6. |
23 |
||
ITEM 7. |
24 |
||
ITEM 7A. |
38 |
||
ITEM 8. |
42 |
||
ITEM 9. |
78 |
||
ITEM 9A. |
78 |
||
ITEM 9B. |
78 |
||
PART III |
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ITEM 10. |
79 |
||
ITEM 11. |
79 |
||
ITEM 12. |
79 |
||
ITEM 13. |
79 |
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ITEM 14. |
80 |
||
PART IV |
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ITEM 15. |
80 |
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ITEM 16. |
80 |
||
81 |
|||
82 |
|||
86 |
ITEM 1. | BUSINESS. |
− | Automobile, truck, bus, and specialty vehicle OEMs; |
− | Agricultural, industrial and construction equipment OEMs; |
− | Commercial and industrial equipment OEMs; |
− | Heating, ventilation and cooling OEMs; |
− | Construction architects and contractors; and |
− | Wholesalers of heating equipment. |
Fiscal 2020 |
Fiscal 2019 |
|||||||
Commercial HVAC&R |
32 |
% |
30 |
% |
||||
Automotive |
26 |
% |
25 |
% |
||||
Commercial vehicle |
16 |
% |
18 |
% |
||||
Off-highway |
13 |
% |
14 |
% |
||||
Data center cooling |
8 |
% |
8 |
% |
||||
Industrial cooling |
2 |
% |
2 |
% |
||||
Other |
3 |
% |
3 |
% |
North America |
South America |
Europe |
Asia/Pacific |
Middle East/Africa |
United States |
Brazil |
Austria |
China |
United Arab Emirates |
Mexico |
Belgium |
India |
||
Germany |
South Korea |
|||
Hungary |
||||
Italy |
||||
Netherlands |
||||
Serbia |
||||
Spain |
||||
Sweden |
||||
United Kingdom |
− | Code of Conduct, which is applicable to all Modine directors and employees, including the principal executive officer, the principal financial officer, and the principal accounting officer; |
− | Corporate Governance Guidelines; |
− | Audit Committee Charter; |
− | Officer Nomination and Compensation Committee Charter; |
− | Corporate Governance and Nominating Committee Charter; and |
− | Technology Committee Charter. |
ITEM 1A. | RISK FACTORS. |
A. | MARKET RISKS |
B. | OPERATIONAL RISKS |
C. | STRATEGIC RISKS |
D. | FINANCIAL RISKS |
ITEM 1B. | UNRESOLVED STAFF COMMENTS. |
ITEM 2. | PROPERTIES. |
Location of Facility |
Building Space |
Primary Use |
Owned or Leased |
VTS Segment |
|||
North and South America |
|||
Lawrenceburg, TN |
554,000 sq. ft. |
Manufacturing |
144,000 Owned 410,000 Leased |
Nuevo Laredo, Mexico |
466,000 sq. ft. |
Manufacturing |
399,000 Owned 67,000 Leased |
Sao Paulo, Brazil |
375,000 sq. ft. |
Manufacturing |
Owned |
Jefferson City, MO |
202,000 sq. ft. |
Manufacturing |
162,000 Owned 40,000 Leased |
Trenton, MO |
160,000 sq. ft. |
Manufacturing |
Owned |
Joplin, MO |
140,000 sq. ft. |
Manufacturing |
Owned |
Laredo, TX |
92,000 sq. ft. |
Warehouse |
Leased |
Europe |
|||
Bonlanden, Germany |
205,000 sq. ft. |
Administrative & technology center |
Owned |
Kottingbrunn, Austria |
221,000 sq. ft. |
Manufacturing |
Owned |
Pontevico, Italy |
167,000 sq. ft. |
Manufacturing |
Owned |
Mezökövesd, Hungary |
246,000 sq. ft. |
Manufacturing |
Owned |
Pliezhausen, Germany |
126,000 sq. ft. |
Manufacturing |
48,000 Owned 78,000 Leased |
Uden, Netherlands |
107,000 sq. ft. |
Manufacturing |
74,000 Owned 33,000 Leased |
Neuenkirchen, Germany |
76,000 sq. ft. |
Manufacturing |
Owned |
Gyöngyös, Hungary |
58,000 sq. ft. |
Manufacturing |
Leased |
Asia |
|||
Changzhou, China |
257,000 sq. ft. |
Manufacturing |
Owned |
Chennai, India |
154,000 sq. ft. |
Manufacturing |
Owned |
Yangzhou, China |
96,000 sq. ft. |
Manufacturing (Joint Venture) |
Leased |
Shanghai, China |
80,000 sq. ft. |
Manufacturing |
Leased |
Jincheon, South Korea |
46,000 sq. ft. |
Manufacturing (Joint Venture) |
Leased |
Location of Facility |
Building Space |
Primary Use |
Owned or Leased |
CIS Segment |
|||
North America |
|||
Grenada, MS |
809,000 sq. ft. |
Administrative, manufacturing & technology center |
Leased |
Grenada, MS |
220,000 sq. ft. |
Manufacturing |
Owned |
Grenada, MS |
190,000 sq. ft. |
Manufacturing |
Leased |
Juarez, Mexico |
326,000 sq. ft. |
Manufacturing |
Leased |
Jacksonville, TX |
55,000 sq. ft. |
Manufacturing |
Owned |
Temecula, CA |
33,000 sq. ft. |
Manufacturing |
Leased |
Louisville, KY |
28,000 sq. ft. |
Manufacturing |
Leased |
Tampa, FL |
23,000 sq. ft. |
Manufacturing |
Leased |
Ramos Arizpe, Mexico |
59,000 sq. ft. |
Manufacturing |
Leased |
Europe |
|||
Pocenia, Italy |
449,000 sq. ft. |
Administrative, manufacturing & technology center |
Owned |
Guadalajara, Spain |
482,000 sq. ft. |
Manufacturing |
Owned |
Söderköping, Sweden |
216,000 sq. ft. |
Manufacturing |
Owned |
Amaro, Italy |
196,000 sq. ft. |
Manufacturing |
Leased |
Kötschach-Mauthen, Austria |
195,000 sq. ft. |
Manufacturing |
Owned (closed) |
San Vito, Italy |
131,000 sq. ft. |
Manufacturing |
Owned |
Sremska Mitrovica, Serbia |
128,000 sq. ft. |
Manufacturing |
Leased |
Padova, Italy |
78,000 sq. ft. |
Manufacturing |
Leased |
Asia |
|||
Zhongshan, China |
143,000 sq. ft. |
Manufacturing |
Leased |
Wuxi, China |
303,000 sq. ft. |
Manufacturing |
Leased |
BHVAC Segment |
|||
North America |
|||
Buena Vista, VA |
197,000 sq. ft. |
Manufacturing |
Owned |
Lexington, VA |
104,000 sq. ft. |
Warehouse |
Owned |
West Kingston, RI |
93,000 sq. ft. |
Manufacturing |
Owned |
Europe |
|||
Leeds, United Kingdom |
247,000 sq. ft. |
Administrative & manufacturing |
Leased |
Consett, United Kingdom |
38,000 sq. ft. |
Manufacturing |
Owned |
Consett, United Kingdom |
20,000 sq. ft. |
Manufacturing |
Leased |
Corporate Headquarters |
|||
Racine, WI |
458,000 sq. ft. |
Headquarters & technology center |
Owned |
ITEM 3. | LEGAL PROCEEDINGS. |
ITEM 4. | MINE SAFETY DISCLOSURES. |
Name |
Age |
Position |
||
Brian J. Agen |
51 |
Vice President, Human Resources (October 2012 – Present). |
||
Scott L. Bowser |
55 |
Vice President, Commercial and Industrial Solutions and Chief Operating Officer (September 2019 - Present); previously Vice President, Chief Operating Officer; Vice President, Global Operations; and Vice President of Asia and Global Procurement for the Company. |
||
Thomas A. Burke |
62 |
President and Chief Executive Officer (April 2008 – Present). |
||
Joel T. Casterton |
48 |
Vice President, Vehicular Thermal Solutions (January 2018 – Present); previously Director – Global Program Management & Quality for the Company. |
||
Michael B. Lucareli |
51 |
Vice President, Finance and Chief Financial Officer (October 2011 – Present). |
||
Matthew J. McBurney |
50 |
Vice President, Building HVAC and Corporate Strategy (November 2019 - Present); previously Vice President, Strategic Planning and Development; Vice President, Luvata Integration; and Vice President, Building HVAC for the Company. |
||
Scott A. Miller |
55 |
Vice President, Global Coils and Coolers (November 2019 – Present); previously Vice President, Building HVAC; Managing Director – Global Operations; and Operations Director of the Building HVAC and North America business units for the Company. |
||
Sylvia A. Stein |
53 |
Vice President, General Counsel and Corporate Secretary (January 2018 – Present). Prior to joining Modine, Ms. Stein served as the Associate General Counsel, Marketing & Regulatory at the Kraft Heinz Foods Company and was Chief Counsel, Cheese & Dairy and Grocery Business Units for Kraft Foods Group, Inc. / Kraft Foods Global, Inc. |
ITEM 5. | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
Period |
Total Number of Shares Purchased |
Average Price Paid Per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (a) |
January 1 – January 31, 2020 |
2,850 (b) |
$7.28 |
——— |
$46,985,524 |
February 1 – February 29, 2020 |
16,948 (b) |
$8.07 |
——— |
$46,985,524 |
March 1 – March 31, 2020 |
——— |
——— |
——— |
$46,985,524 |
Total |
19,798 (b) |
$7.95 |
——— |
(a) | Effective October 30, 2018, the Board of Directors approved a two-year, $50.0 million share repurchase program, which allows the Company to repurchase Modine common stock through solicited and unsolicited transactions in the open market or in privately-negotiated or other transactions, at such times and prices and upon such other terms as the authorized officers of the Company deem appropriate. |
(b) | Consists of shares delivered back to the Company by employees and/or directors to satisfy tax withholding obligations that arise upon the vesting of stock awards. The Company, pursuant to its equity compensation plans, gives participants the opportunity to turn back to the Company the number of shares from the award sufficient to satisfy tax withholding obligations that arise upon the termination of restrictions. These shares are held as treasury shares. |
Indexed Returns |
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Initial Investment |
Years ended March 31, |
|||||||||||||||||||||||
Company / Index |
March 31, 2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||
Modine Manufacturing Company |
$ |
100 |
$ |
81.74 |
$ |
90.57 |
$ |
157.02 |
$ |
102.97 |
$ |
24.13 |
||||||||||||
Russell 2000 Index |
100 |
90.24 |
113.90 |
127.33 |
129.94 |
98.77 |
||||||||||||||||||
S&P MidCap 400 Industrials Index |
100 |
97.44 |
121.41 |
141.39 |
143.14 |
116.40 |
ITEM 6. | SELECTED FINANCIAL DATA. |
Years ended March 31, |
||||||||||||||||||||
(in millions, except per share amounts) |
2020 |
2019 |
2018 |
2017 |
2016 |
|||||||||||||||
Net sales |
$ |
1,976 |
$ |
2,213 |
$ |
2,103 |
$ |
1,503 |
$ |
1,353 |
||||||||||
Operating income |
38 |
110 |
92 |
42 |
37 |
|||||||||||||||
Net (loss) earnings |
(2 |
) |
86 |
24 |
15 |
(1 |
) |
|||||||||||||
Total assets |
1,536 |
1,538 |
1,573 |
1,450 |
921 |
|||||||||||||||
Long-term debt - excluding current portion |
452 |
382 |
407 |
446 |
126 |
|||||||||||||||
Net cash provided by operating activities |
58 |
103 |
124 |
42 |
72 |
|||||||||||||||
Expenditures for property, plant and equipment |
71 |
74 |
71 |
64 |
63 |
|||||||||||||||
Net (loss) earnings per share attributable to Modine shareholders: |
||||||||||||||||||||
Basic |
$ |
(0.04 |
) |
$ |
1.67 |
$ |
0.44 |
$ |
0.29 |
$ |
(0.03 |
) |
||||||||
Diluted |
(0.04 |
) |
1.65 |
0.43 |
0.29 |
(0.03 |
) |
• | On November 30, 2016, we acquired Luvata HTS for total consideration of $388 million, net of cash acquired. Since the date of acquisition, we’ve consolidated financial results from this business within our CIS segment. During fiscal 2020, 2019, 2018, and 2017, CIS segment net sales were $624 million, $708 million, $676 million, and $232 million, respectively. This transaction and the related debt financing also resulted in increases in total assets and long-term debt. During fiscal 2018 and 2017, we recorded $4 million and $15 million, respectively, of costs directly related to the acquisition and integration of Luvata HTS. |
• | During fiscal 2020, 2019, 2018, 2017, and 2016, we incurred $12 million, $10 million, $16 million, $11 million, and $17 million, respectively, of restructuring expenses. See Note 5 of the Notes to Consolidated Financial Statements for additional information. |
• | During fiscal 2020, 2018, and 2016, we recorded asset impairment charges totaling $9 million, $3 million and $10 million, respectively. See Notes 5, 13, and 14 of the Notes to Consolidated Financial Statements for additional information. |
• | During fiscal 2020 and 2019, the Company recorded $39 million and $7 million, respectively, of costs directly associated with its review of strategic alternatives for the VTS segment's automotive business, including costs to separate and prepare the business for a potential sale. |
• | During fiscal 2018, we recorded provisional income tax charges totaling $38 million as a result of U.S. tax legislation enacted in December 2017 commonly referred to as the Tax Act. During fiscal 2019, we recorded income tax benefits totaling $22 million related to the Tax Act and the recognition of foreign tax credits. See Note 7 of the Notes to Consolidated Financial Statements for additional information. |
• | During fiscal 2016, we recorded $42 million of non-cash pension settlement losses associated with a voluntary lump-sum payout program offered to certain eligible former employees and a $10 million gain related to an insurance settlement for equipment losses associated with a fire at our Airedale manufacturing facility in the U.K in September 2013. |
ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
Years ended March 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
(in millions) |
$'s |
% of sales |
$'s |
% of sales |
||||||||||||
Net sales |
$ |
1,976 |
100.0 |
% |
$ |
2,213 |
100.0 |
% |
||||||||
Cost of sales |
1,668 |
84.4 |
% |
1,847 |
83.5 |
% |
||||||||||
Gross profit |
308 |
15.6 |
% |
366 |
16.5 |
% |
||||||||||
Selling, general and administrative expenses |
250 |
12.6 |
% |
244 |
11.0 |
% |
||||||||||
Restructuring expenses |
12 |
0.6 |
% |
10 |
0.4 |
% |
||||||||||
Impairment charges |
9 |
0.4 |
% |
- |
- |
|||||||||||
(Gain) loss on sale of assets |
(1 |
) |
- |
2 |
0.1 |
% |
||||||||||
Operating income |
38 |
1.9 |
% |
110 |
5.0 |
% |
||||||||||
Interest expense |
(23 |
) |
-1.1 |
% |
(25 |
) |
-1.1 |
% |
||||||||
Other expense - net |
(5 |
) |
-0.2 |
% |
(4 |
) |
-0.2 |
% |
||||||||
Earnings before income taxes |
10 |
0.5 |
% |
81 |
3.7 |
% |
||||||||||
(Provision) benefit for income taxes |
(12 |
) |
-0.6 |
% |
5 |
0.2 |
% |
|||||||||
Net (loss) earnings |
$ |
(2 |
) |
-0.1 |
% |
$ |
86 |
3.9 |
% |
Years ended March 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
(in millions) |
$'s |
% of sales |
$'s |
% of sales |
||||||||||||
Net sales |
$ |
1,177 |
100.0 |
% |
$ |
1,352 |
100.0 |
% |
||||||||
Cost of sales |
1,032 |
87.7 |
% |
1,165 |
86.2 |
% |
||||||||||
Gross profit |
145 |
12.3 |
% |
187 |
13.8 |
% |
||||||||||
Selling, general and administrative expenses |
100 |
8.5 |
% |
113 |
8.3 |
% |
||||||||||
Restructuring expenses |
10 |
0.8 |
% |
9 |
0.7 |
% |
||||||||||
Impairment charges |
8 |
0.7 |
% |
- |
- |
|||||||||||
Gain on sale of assets |
(1 |
) |
-0.1 |
% |
- |
- |
||||||||||
Operating income |
$ |
28 |
2.3 |
% |
$ |
65 |
4.8 |
% |
CIS |
||||||||||||||||
Years ended March 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
(in millions) |
$'s |
% of sales |
$'s |
% of sales |
||||||||||||
Net sales |
$ |
624 |
100.0 |
% |
$ |
708 |
100.0 |
% |
||||||||
Cost of sales |
531 |
85.1 |
% |
593 |
83.8 |
% |
||||||||||
Gross profit |
93 |
14.9 |
% |
115 |
16.2 |
% |
||||||||||
Selling, general and administrative expenses |
57 |
9.2 |
% |
61 |
8.6 |
% |
||||||||||
Restructuring expenses |
2 |
0.3 |
% |
- |
- |
|||||||||||
Impairment charges |
1 |
0.1 |
% |
- |
0.1 |
% |
||||||||||
Operating income |
$ |
33 |
5.3 |
% |
$ |
53 |
7.5 |
% |
BHVAC |
||||||||||||||||
Years ended March 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
(in millions) |
$'s |
% of sales |
$'s |
% of sales |
||||||||||||
Net sales |
$ |
221 |
100.0 |
% |
$ |
212 |
100.0 |
% |
||||||||
Cost of sales |
150 |
67.7 |
% |
149 |
70.1 |
% |
||||||||||
Gross profit |
72 |
32.3 |
% |
63 |
29.9 |
% |
||||||||||
Selling, general and administrative expenses |
35 |
15.8 |
% |
35 |
16.4 |
% |
||||||||||
Loss on sale of assets |
- |
- |
2 |
0.8 |
% |
|||||||||||
Operating income |
$ |
36 |
16.5 |
% |
$ |
27 |
12.6 |
% |
March 31, 2020 |
||||||||||||||||||||
(in millions) |
Total |
Less than 1 year |
1 - 3 years |
4 - 5 years |
More than 5 years |
|||||||||||||||
Long-term debt |
$ |
468.9 |
$ |
15.2 |
$ |
42.6 |
$ |
294.4 |
$ |
116.7 |
||||||||||
Interest associated with long-term debt |
89.3 |
17.7 |
33.4 |
24.5 |
13.7 |
|||||||||||||||
Operating lease obligations |
71.8 |
12.8 |
20.7 |
12.1 |
26.2 |
|||||||||||||||
Capital expenditure commitments |
12.0 |
12.0 |
- |
- |
- |
|||||||||||||||
Other long-term obligations (a) |
9.9 |
1.9 |
3.1 |
3.0 |
1.9 |
|||||||||||||||
Total contractual obligations |
$ |
651.9 |
$ |
59.6 |
$ |
99.8 |
$ |
334.0 |
$ |
158.5 |
(a) | Includes finance lease obligations and other long-term obligations. |
• | The impact of the COVID-19 pandemic on the national and global economy, our business, suppliers, customers, and employees; |
• | Economic, social and political conditions, changes, challenges and unrest, particularly in the geographic, product and financial markets where we and our customers operate and compete, including, in particular, foreign currency exchange rate fluctuations; tariffs (and any potential trade war resulting from tariffs or retaliatory actions); inflation; changes in interest rates; recession and recovery therefrom; restrictions and uncertainty associated with cross-border trade, public health crises, such as pandemics and epidemics, including the ongoing COVID-19 pandemic; and the general uncertainties about the impact of regulatory and/or policy changes, including those related to tax and trade, the COVID-19 pandemic and other matters, that have been or may be implemented in the United States or abroad, as well as continuing uncertainty regarding the short- and long-term implications of “Brexit”; |
• | The impact of potential price increases associated with raw materials, including aluminum, copper, steel and stainless steel (nickel), and other purchased component inventory including, but not limited to, increases in the underlying material cost based upon the London Metal Exchange and related premiums or fabrication costs. These prices may be impacted by a variety of factors, including changes in trade laws and tariffs, the behavior of our suppliers and significant fluctuations in demand. This risk includes our ability to successfully manage our exposure and our ability to adjust product pricing in response to price increases, whether through our quotation process or through contract provisions for prospective price adjustments, as well as the inherent lag in timing of such contract provisions; and |
• | The impact of current and future environmental laws and regulations on our business and the businesses of our customers, including our ability to take advantage of opportunities to supply alternative new technologies to meet environmental and/or energy standards and objectives. |
• | The overall health and continually increasing price-down focus of our vehicular customers in light of economic and market-specific factors, and the potential impact on us from any deterioration in the stability or performance of any of our major customers; |
• | Unanticipated problems with suppliers meeting our time, quantity, quality and price demands, and the overall health of our suppliers, including their ability and willingness to supply our volume demands if their production capacity becomes constrained; |
• | Our ability to maintain current customer programs and compete effectively for new business, including our ability to offset or otherwise address increasing pricing pressures from competitors and price reduction and overall service pressures from customers, particularly in the face of macro-economic instability; |
• | Unanticipated product or manufacturing difficulties or operating inefficiencies, including unanticipated program launch and product transfer challenges and warranty claims and delays or inefficiencies resulting from restrictions imposed in response to the COVID-19 pandemic; |
• | Unanticipated delays or modifications initiated by major customers with respect to program launches, product applications or requirements; |
• | Our ability to consistently structure our operations in order to develop and maintain a competitive cost base with appropriately skilled and stable labor, while also positioning ourselves geographically, so that we can continue to support our customers with the technical expertise and market-leading products they demand and expect from Modine; |
• | Our ability to effectively and efficiently reduce our cost structure in response to sales volume declines and to complete restructuring activities and realize the anticipated benefits of those activities; |
• | Costs and other effects of the investigation and remediation of environmental contamination; particularly when related to the actions or inactions of others and/or facilities over which we have no control; |
• | Our ability to recruit and maintain talent, including personnel in managerial, leadership and administrative functions, in light of tight global labor markets; |
• | Our ability to protect our proprietary information and intellectual property from theft or attack by internal or external sources; |
• | The impact of any substantial disruption or material breach of our information technology systems, and any related delays, problems or costs; |
• | Increasingly complex and restrictive laws and regulations, including those associated with being a U.S. public company and others present in various jurisdictions in which we operate, and the costs associated with compliance therewith; |
• | Work stoppages or interference at our facilities or those of our major customers and/or suppliers; |
• | The constant and increasing pressures associated with healthcare and associated insurance costs; and |
• | Costs and other effects of unanticipated litigation, claims, or other obligations. |
• | Our ability to successfully exit the automotive business within our VTS segment in a manner that is in the best interest of our shareholders in order to optimize the segment’s future financial performance; |
• | Our ability to successfully realize anticipated benefits from our increased “industrial” market presence, with our CIS and BHVAC businesses, while maintaining appropriate focus on the market opportunities presented by our VTS business; |
• | Our ability to identify and execute growth and diversification opportunities in order to position us for long-term success; and |
• | The potential impacts from unanticipated actions by activist shareholders, including disruption of our business and related costs. |
• | Our ability to fund our global liquidity requirements efficiently for Modine’s current operations and meet our long-term commitments, particularly in light of the significant volatility and negative pressure in the financial markets as a result of the COVID-19 pandemic and in the event of disruption in or tightening of the credit markets or extended recessionary conditions in the global economy; |
• | The impact of potential increases in interest rates, particularly in LIBOR and the Euro Interbank Offered Rate (“EURIBOR”) in relation to our variable-rate debt obligations, and of the continued uncertainty around the utilization of LIBOR or alternative reference rates; |
• | Our ability to comply with the financial covenants as amended in our credit agreements, including our leverage ratio (net debt divided by Adjusted EBITDA, as defined in our credit agreements) and our interest coverage ratio (Adjusted EBITDA divided by interest expense, as defined in our credit agreements); |
• | The potential unfavorable impact of foreign currency exchange rate fluctuations on our financial results; and |
• | Our ability to effectively realize the benefits of deferred tax assets in various jurisdictions in which we operate. |
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
• | Cash and investments – We review cash deposits and short-term investments to ensure banks have acceptable credit ratings, and short-term investments are maintained in secured or guaranteed instruments. We consider our holdings in cash and investments to be stable and secure at March 31, 2020; |
• | Trade accounts receivable – Prior to granting credit, we evaluate each customer, taking into consideration the customer's financial condition, payment experience and credit information. After credit is granted, we actively monitor the customer's financial condition and applicable business news; |
• | Pension assets – We have retained outside advisors to assist in the management of the assets in our pension plans. In making investment decisions, we utilize an established risk management protocol that focuses on protection of the plan assets against downside risk. We ensure that investments within these plans provide appropriate diversification, the investments are monitored by investment teams, and portfolio managers adhere to the established investment policies. We believe the plan assets are subject to appropriate investment policies and controls; and |
• | Insurance – We monitor our insurance providers to ensure they maintain financial ratings that are acceptable to us. We have not identified any concerns in this regard based upon our reviews. |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
2020 |
2019 |
2018 |
||||||||||
Net sales |
$ |
$ |
$ |
|||||||||
Cost of sales |
||||||||||||
Gross profit |
||||||||||||
Selling, general and administrative expenses |
||||||||||||
Restructuring expenses |
||||||||||||
Impairment charges |
||||||||||||
(Gain) loss on sale of assets |
( |
) |
||||||||||
Operating income |
||||||||||||
Interest expense |
( |
) |
( |
) |
( |
) |
||||||
Other expense - net |
( |
) |
( |
) |
( |
) |
||||||
Earnings before income taxes |
||||||||||||
(Provision) benefit for income taxes |
( |
) |
( |
) |
||||||||
Net (loss) earnings |
( |
) |
||||||||||
Net earnings attributable to noncontrolling interest |
( |
) |
( |
) |
( |
) |
||||||
Net (loss) earnings attributable to Modine |
$ |
( |
) |
$ |
$ |
|||||||
Net (loss) earnings per share attributable to Modine shareholders: |
||||||||||||
Basic |
$ |
( |
) |
$ |
$ |
|||||||
Diluted |
$ |
( |
) |
$ |
$ |
|||||||
Weighted-average shares outstanding: |
||||||||||||
Basic |
||||||||||||
Diluted |
2020 |
2019 |
2018 |
||||||||||
Net (loss) earnings |
$ |
( |
) |
$ |
$ |
|||||||
Other comprehensive income (loss): |
||||||||||||
Foreign currency translation |
( |
) |
( |
) |
||||||||
Defined benefit plans, net of income taxes of ($ |
( |
) |
( |
) |
||||||||
Cash flow hedges, net of income taxes of ($ |
( |
) |
||||||||||
Total other comprehensive income (loss) |
( |
) |
( |
) |
||||||||
Comprehensive income (loss) |
( |
) |
||||||||||
Comprehensive (income) loss attributable to noncontrolling interest |
( |
) |
( |
) |
||||||||
Comprehensive income (loss) attributable to Modine |
$ |
( |
) |
$ |
$ |
2020 |
2019 |
|||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Trade accounts receivable – net |
||||||||
Inventories |
||||||||
Other current assets |
||||||||
Total current assets |
||||||||
Property, plant and equipment – net |
||||||||
Intangible assets – net |
||||||||
Goodwill |
||||||||
Deferred income taxes |
||||||||
Other noncurrent assets |
||||||||
Total assets |
$ |
$ |
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
Short-term debt |
$ |
$ |
||||||
Long-term debt – current portion |
||||||||
Accounts payable |
||||||||
Accrued compensation and employee benefits |
||||||||
Other current liabilities |
||||||||
Total current liabilities |
||||||||
Long-term debt |
||||||||
Deferred income taxes |
||||||||
Pensions |
||||||||
Other noncurrent liabilities |
||||||||
Total liabilities |
||||||||
Commitments and contingencies (see Note 20) |
||||||||
Shareholders’ equity: |
||||||||
Preferred stock, $ |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Retained earnings |
||||||||
Accumulated other comprehensive loss |
( |
) |
( |
) |
||||
Treasury stock, at cost, |
( |
) |
( |
) |
||||
Total Modine shareholders’ equity |
||||||||
Noncontrolling interest |
||||||||
Total equity |
||||||||
Total liabilities and equity |
$ |
$ |
2020 |
2019 |
2018 |
||||||||||
Cash flows from operating activities: |
||||||||||||
Net (loss) earnings |
$ |
( |
) |
$ |
$ |
|||||||
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization |
||||||||||||
Impairment charges |
||||||||||||
(Gain) loss on sale of assets |
( |
) |
||||||||||
Stock-based compensation expense |
||||||||||||
Deferred income taxes |
( |
) |
||||||||||
Other – net |
||||||||||||
Changes in operating assets and liabilities: |
||||||||||||
Trade accounts receivable |
( |
) |
( |
) |
||||||||
Inventories |
( |
) |
( |
) |
( |
) |
||||||
Accounts payable |
( |
) |
||||||||||
Accrued compensation and employee benefits |
( |
) |
( |
) |
||||||||
Other assets |
( |
) |
( |
) |
||||||||
Other liabilities |
( |
) |
( |
) |
( |
) |
||||||
Net cash provided by operating activities |
||||||||||||
Cash flows from investing activities: |
||||||||||||
Expenditures for property, plant and equipment |
( |
) |
( |
) |
( |
) |
||||||
Proceeds from dispositions of assets |
||||||||||||
Proceeds from sale of investment in affiliate |
||||||||||||
Proceeds from maturities of short-term investments |
||||||||||||
Purchases of short-term investments |
( |
) |
( |
) |
( |
) |
||||||
Other – net |
( |
) |
( |
) |
||||||||
Net cash used for investing activities |
( |
) |
( |
) |
( |
) |
||||||
Cash flows from financing activities: |
||||||||||||
Borrowings of debt |
||||||||||||
Repayments of debt |
( |
) |
( |
) |
( |
) |
||||||
Dividend paid to noncontrolling interest |
( |
) |
( |
) |
( |
) |
||||||
Purchase of treasury stock under share repurchase program |
( |
) |
( |
) |
||||||||
Financing fees paid |
( |
) |
||||||||||
Other – net |
( |
) |
( |
) |
||||||||
Net cash provided by (used for) financing activities |
( |
) |
( |
) |
||||||||
Effect of exchange rate changes on cash |
( |
) |
( |
) |
||||||||
Net increase in cash, cash equivalents and restricted cash |
||||||||||||
Cash, cash equivalents and restricted cash - beginning of year |
||||||||||||
Cash, cash equivalents and restricted cash - end of year |
$ |
$ |
$ |
Common stock |
Additional paid-in |
Retained |
Accumulated other |
Treasury stock, |
Non-controlling |
|||||||||||||||||||||||||||
Shares |
Amount |
capital |
earnings |
comprehensive loss |
at cost |
interest |
Total |
|||||||||||||||||||||||||
Balance, March 31, 2017 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
|||||||||||||||||||||
Net earnings attributable to Modine |
- |
|||||||||||||||||||||||||||||||
Other comprehensive income |
- |
|||||||||||||||||||||||||||||||
Stock options and awards |
||||||||||||||||||||||||||||||||
Purchase of treasury stock |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Adoption of new accounting guidance (Note 1) |
- |
|||||||||||||||||||||||||||||||
Stock-based compensation expense |
- |
|||||||||||||||||||||||||||||||
Dividend paid to noncontrolling interest |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Net earnings attributable to noncontrolling interest |
- |
|||||||||||||||||||||||||||||||
Balance, March 31, 2018 |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Adoption of new accounting guidance (Note 1) |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Net earnings attributable to Modine |
- |
|||||||||||||||||||||||||||||||
Other comprehensive loss |
- |
( |
) |
( |
) |
( |
) |
|||||||||||||||||||||||||
Stock options and awards |
||||||||||||||||||||||||||||||||
Purchase of treasury stock |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Stock-based compensation expense |
- |
|||||||||||||||||||||||||||||||
Dividend paid to noncontrolling interest |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Net earnings attributable to noncontrolling interest |
- |
|||||||||||||||||||||||||||||||
Balance, March 31, 2019 |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Net loss attributable to Modine |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Other comprehensive loss |
- |
( |
) |
( |
) |
( |
) |
|||||||||||||||||||||||||
Stock options and awards |
( |
) |
||||||||||||||||||||||||||||||
Purchase of treasury stock |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Stock-based compensation expense |
- |
|||||||||||||||||||||||||||||||
Dividend paid to noncontrolling interest |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Net earnings attributable to noncontrolling interest |
- |
|||||||||||||||||||||||||||||||
Balance, March 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
Years ended March 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Interest paid |
$ |
$ |
$ |
|||||||||
Income taxes paid |
Year ended March 31, 2020 |
Year ended March 31, 2019 |
|||||||||||||||||||||||||||||||
VTS |
CIS |
BHVAC |
Segment Total |
VTS |
CIS |
BHVAC |
Segment Total |
|||||||||||||||||||||||||
Primary end market: |
||||||||||||||||||||||||||||||||
Automotive |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Commercial vehicle |
||||||||||||||||||||||||||||||||
Off-highway |
||||||||||||||||||||||||||||||||
Commercial HVAC&R |
||||||||||||||||||||||||||||||||
Data center cooling |
||||||||||||||||||||||||||||||||
Industrial cooling |
||||||||||||||||||||||||||||||||
Other |
||||||||||||||||||||||||||||||||
Net sales |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Geographic location: |
||||||||||||||||||||||||||||||||
Americas |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Europe |
||||||||||||||||||||||||||||||||
Asia |
||||||||||||||||||||||||||||||||
Net sales |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Timing of revenue recognition: |
||||||||||||||||||||||||||||||||
Products transferred at a point in time |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Products transferred over time |
||||||||||||||||||||||||||||||||
Net sales |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
March 31, 2020 |
March 31, 2019 |
|||||||
Contract assets |
$ |
$ |
||||||
Contract liabilities |
• | Level 1 – Quoted prices for identical instruments in active markets. |
• | Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. |
• | Level 3 – Model-derived valuations in which one or more significant inputs are not observable. |
March 31, 2020 |
||||||||||||
Level 1 |
Level 2 |
Total |
||||||||||
Money market investments |
$ |
$ |
$ |
|||||||||
Fixed income securities |
||||||||||||
Pooled equity funds |
||||||||||||
U.S. government and agency securities |
||||||||||||
Other |
||||||||||||
Fair value excluding investments measured at net asset value |
||||||||||||
Investments measured at net asset value |
||||||||||||
Total fair value |
$ |
March 31, 2019 |
||||||||||||
Level 1 |
Level 2 |
Total |
||||||||||
Money market investments |
$ |
$ |
$ |
|||||||||
Fixed income securities |
||||||||||||
Pooled equity funds |
||||||||||||
U.S. government and agency securities |
||||||||||||
Other |
||||||||||||
Fair value excluding investment measured at net asset value |
||||||||||||
Investment measured at net asset value |
||||||||||||
Total fair value |
$ |
Years ended March 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Fair value of options |
$ |
$ |
$ |
|||||||||
Expected life of awards in years |
||||||||||||
Risk-free interest rate |
% |
% |
% |
|||||||||
Expected volatility of the Company's stock |
% |
% |
% |
|||||||||
Expected dividend yield on the Company's stock |
% |
% |
% |
Shares |
Weighted-average exercise price |
Weighted-average remaining contractual term (years) |
Aggregate intrinsic value |
|||||||||||||
Outstanding, beginning |
$ |
|||||||||||||||
Granted |
||||||||||||||||
Exercised |
||||||||||||||||
Forfeited or expired |
( |
) |
||||||||||||||
Outstanding, ending |
$ |
$ |
||||||||||||||
Exercisable, March 31, 2020 |
$ |
$ |
Years ended March 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Intrinsic value of stock options exercised |
$ |
$ |
$ |
|||||||||
Proceeds from stock options exercised |
Shares |
Weighted-average price |
|||||||
Non-vested balance, beginning |
$ |
|||||||
Granted |
||||||||
Vested |
( |
) |
||||||
Forfeited |
( |
) |
||||||
Non-vested balance, ending |
$ |
Years ended March 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Employee severance and related benefits |
$ |
$ |
$ |
|||||||||
Other restructuring and repositioning expenses |
||||||||||||
Total |
$ |
$ |
$ |
Years ended March 31, |
||||||||
2020 |
2019 |
|||||||
Beginning balance |
$ |
$ |
||||||
Additions |
||||||||
Payments |
( |
) |
( |
) |
||||
Effect of exchange rate changes |
( |
) |
( |
) |
||||
Ending balance |
$ |
$ |
Years ended March 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Equity in earnings of non-consolidated affiliate (a) |
$ |
$ |
$ |
|||||||||
Interest income |
||||||||||||
Foreign currency transactions (b) |
( |
) |
( |
) |
( |
) |
||||||
Net periodic benefit cost (c) |
( |
) |
( |
) |
( |
) |
||||||
Total other expense - net |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
(a) |
(b) |
(c) |
Years ended March 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Components of earnings (loss) before income taxes: |
||||||||||||
United States |
$ |
( |
) |
$ |
$ |
|||||||
Foreign |
||||||||||||
Total earnings before income taxes |
$ |
$ |
$ |
Income tax provision (benefit): |
||||||||||||
Federal: |
||||||||||||
Current |
$ |
( |
) |
$ |
( |
) |
$ |
|||||
Deferred |
( |
) |
( |
) |
||||||||
State: |
||||||||||||
Current |
( |
) |
( |
) |
||||||||
Deferred |
( |
) |
||||||||||
Foreign: |
||||||||||||
Current |
||||||||||||
Deferred |
( |
) |
( |
) |
||||||||
Total income tax provision (benefit) |
$ |
$ |
( |
) |
$ |
Years ended March 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Statutory federal tax |
% |
% |
% |
|||||||||
State taxes, net of federal benefit |
( |
) |
||||||||||
Taxes on non-U.S. earnings and losses |
( |
) |
||||||||||
Valuation allowances |
( |
) |
||||||||||
Tax credits |
( |
) |
( |
) |
( |
) |
||||||
Compensation |
( |
) |
( |
) |
||||||||
Tax rate or law changes |
( |
) |
||||||||||
Uncertain tax positions, net of settlements |
( |
) |
( |
) |
||||||||
Notional interest deductions |
( |
) |
( |
) |
( |
) |
||||||
Dividends and taxable foreign inclusions |
( |
) |
||||||||||
Other |
( |
) |
( |
) |
||||||||
Effective tax rate |
% |
( |
%) |
% |
March 31, |
||||||||
2020 |
2019 |
|||||||
Deferred tax assets: |
||||||||
Accounts receivable |
$ |
$ |
||||||
Inventories |
||||||||
Plant and equipment |
||||||||
Lease liabilities |
||||||||
Pension and employee benefits |
||||||||
Net operating and capital losses |
||||||||
Credit carryforwards |
||||||||
Other, principally accrued liabilities |
||||||||
Total gross deferred tax assets |
||||||||
Less: valuation allowances |
( |
) |
( |
) |
||||
Net deferred tax assets |
||||||||
Deferred tax liabilities: |
||||||||
Plant and equipment |
||||||||
Lease assets |
||||||||
Goodwill |
||||||||
Intangible assets |
||||||||
Other |
||||||||
Total gross deferred tax liabilities |
||||||||
Net deferred tax assets |
$ |
$ |
Years ended March 31, |
||||||||
2020 |
2019 |
|||||||
Beginning balance |
$ |
$ |
||||||
Gross increases - tax positions in prior period |
||||||||
Gross decreases - tax positions in prior period |
( |
) |
( |
) |
||||
Gross increases - tax positions in current period |
||||||||
Settlements |
( |
) |
( |
) |
||||
Lapse of statute of limitations |
( |
) |
( |
) |
||||
Ending balance |
$ |
$ |
Germany |
|
Italy |
|
United States |
Years ended March 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Basic Earnings Per Share: |
||||||||||||
Net (loss) earnings attributable to Modine |
$ |
( |
) |
$ |
$ |
|||||||
Less: Undistributed earnings attributable to unvested shares |
( |
) |
( |
) |
||||||||
Net (loss) earnings available to Modine shareholders |
$ |
( |
) |
$ |
$ |
|||||||
Weighted-average shares outstanding - basic |
||||||||||||
Net (loss) earnings per share - basic |
$ |
( |
) |
$ |
$ |
|||||||
Diluted Earnings Per Share: |
||||||||||||
Net (loss) earnings attributable to Modine |
$ |
( |
) |
$ |
$ |
|||||||
Less: Undistributed earnings attributable to unvested shares |
( |
) |
( |
) |
||||||||
Net (loss) earnings available to Modine shareholders |
$ |
( |
) |
$ |
$ |
|||||||
Weighted-average shares outstanding - basic |
||||||||||||
Effect of dilutive securities |
||||||||||||
Weighted-average shares outstanding - diluted |
||||||||||||
Net (loss) earnings per share - diluted |
$ |
( |
) |
$ |
$ |
March 31, |
||||||||
2020 |
2019 |
|||||||
Cash and cash equivalents |
$ |
$ |
||||||
Restricted cash |
||||||||
Total cash, cash equivalents and restricted cash |
$ |
$ |
March 31, |
||||||||
2020 |
2019 |
|||||||
Raw materials |
$ |
$ |
||||||
Work in process |
||||||||
Finished goods |
||||||||
Total inventories |
$ |
$ |
March 31, |
||||||||
2020 |
2019 |
|||||||
Land |
$ |
$ |
||||||
Buildings and improvements ( |
||||||||
Machinery and equipment ( |
||||||||
Office equipment ( |
||||||||
Construction in progress |
||||||||
Less: accumulated depreciation |
( |
) |
( |
) |
||||
Net property, plant and equipment |
$ |
$ |
March 31, 2020 |
March 31, 2019 |
|||||||||||||||||||||||
Gross Carrying Value |
Accumulated Amortization |
Net Intangible Assets |
Gross Carrying Value |
Accumulated Amortization |
Net Intangible Assets |
|||||||||||||||||||
Customer relationships |
$ |
$ |
( |
) |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||
Trade names |
( |
) |
( |
) |
||||||||||||||||||||
Acquired technology |
( |
) |
( |
) |
||||||||||||||||||||
Total intangible assets |
$ |
$ |
( |
) |
$ |
$ |
$ |
( |
) |
$ |
VTS |
CIS |
BHVAC |
Total |
|||||||||||||
Balance, March 31, 2018 |
$ |
$ |
$ |
$ |
||||||||||||
Effect of exchange rate changes |
( |
) |
( |
) |
( |
) |
||||||||||
Balance, March 31, 2019 |
||||||||||||||||
Impairment charge |
( |
) |
( |
) |
||||||||||||
Effect of exchange rate changes |
( |
) |
( |
) |
( |
) |
||||||||||
Balance, March 31, 2020 |
$ |
$ |
$ |
$ |
Years ended March 31, |
||||||||
2020 |
2019 |
|||||||
Beginning balance |
$ |
$ |
||||||
Warranties recorded at time of sale |
||||||||
Adjustments to pre-existing warranties |
( |
) |
||||||
Settlements |
( |
) |
( |
) |
||||
Effect of exchange rate changes |
( |
) |
( |
) |
||||
Ending balance |
$ |
$ |
Balance Sheet Location |
March 31, 2020 |
|||
Lease Assets |
||||
Operating lease ROU assets |
$ |
|||
Finance lease ROU assets (a) |
||||
Lease Liabilities |
||||
Operating lease liabilities |
$ |
|||
Operating lease liabilities |
||||
Finance lease liabilities |
||||
Finance lease liabilities |
(a) |
Year ended March 31, 2020 |
||||
Operating lease expense (a) |
$ |
|||
Finance lease expense: |
||||
Depreciation of ROU assets |
||||
Interest on lease liabilities |
||||
Total lease expense |
$ |
(a) |
Year ended March 31, 2020 |
||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||
Operating cash flows for operating leases |
$ |
|||
Financing cash flows for finance leases |
||||
ROU assets obtained in exchange for lease liabilities |
||||
Operating leases |
$ |
|||
Finance leases |
March 31, 2020 |
||||
Weighted-average remaining lease term: |
||||
Operating leases |
||||
Finance leases |
||||
Weighted-average discount rate: |
||||
Operating leases |
% |
|||
Finance leases |
% |
Fiscal Year |
Operating Leases |
Finance Leases |
||||||
2021 |
$ |
$ |
||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
2026 and beyond |
||||||||
Total lease payments |
||||||||
Less: Interest |
( |
) |
( |
) |
||||
Present value of lease liabilities |
$ |
$ |
Fiscal Year |
||||
2020 |
$ |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 and beyond |
||||
Total |
$ |
io |
Fiscal year of maturity |
March 31, 2020 |
March 31, 2019 |
||||||
Term loans |
$ |
$ |
|||||||
Revolving credit facility |
|||||||||
Other (a) |
|||||||||
Less: current portion |
( |
) |
( |
) |
|||||
Less: unamortized debt issuance costs |
( |
) |
( |
) |
|||||
Total long-term debt |
$ |
$ |
(a) |
Fiscal Year |
||||
2021 |
$ |
|||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
2026 & beyond |
||||
Total |
$ |
Years ended March 31, |
||||||||
2020 |
2019 |
|||||||
Change in benefit obligation: |
||||||||
Benefit obligation at beginning of year |
$ |
$ |
||||||
Service cost |
||||||||
Interest cost |
||||||||
Actuarial loss |
||||||||
Benefits paid |
( |
) |
( |
) |
||||
Curtailment gain (a) |
( |
) |
||||||
Effect of exchange rate changes |
( |
) |
( |
) |
||||
Benefit obligation at end of year |
$ |
$ |
||||||
Change in plan assets: |
||||||||
Fair value of plan assets at beginning of year |
$ |
$ |
||||||
Actual return on plan assets |
( |
) |
||||||
Benefits paid |
( |
) |
( |
) |
||||
Employer contributions |
||||||||
Fair value of plan assets at end of year |
$ |
$ |
||||||
Funded status at end of year |
$ |
( |
) |
$ |
( |
) |
||
Amounts recognized in the consolidated balance sheets: |
||||||||
Current liability |
$ |
( |
) |
$ |
( |
) |
||
Noncurrent liability |
( |
) |
( |
) |
||||
$ |
( |
) |
$ |
( |
) |
(a) |
Years ended March 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Components of net periodic benefit cost: |
||||||||||||
Service cost |
$ |
$ |
$ |
|||||||||
Interest cost |
||||||||||||
Expected return on plan assets |
( |
) |
( |
) |
( |
) |
||||||
Amortization of net actuarial loss |
||||||||||||
Settlements (a) |
||||||||||||
Curtailment gain (a) |
( |
) |
||||||||||
Net periodic benefit cost |
$ |
$ |
$ |
|||||||||
Other changes in benefit obligation recognized in other comprehensive income (loss): |
||||||||||||
Net actuarial loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
|||
Amortization of net actuarial loss |
||||||||||||
Total recognized in other comprehensive income (loss) |
$ |
( |
) |
$ |
( |
) |
$ |
(a) |
Target allocation |
Plan assets |
|||||||||||
2020 |
2019 |
|||||||||||
Equity securities |
% |
% |
% |
|||||||||
Debt securities |
% |
% |
% |
|||||||||
Real estate investments |
% |
% |
% |
|||||||||
Cash and cash equivalents |
% |
% |
% |
|||||||||
% |
% |
% |
Fiscal Year |
Estimated Pension Benefit Payments |
|||
2021 |
$ |
|||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
2026-2030 |
_ |
Balance Sheet Location |
March 31, 2020 |
March 31, 2019 |
||||||
Derivatives designated as hedges: |
|||||||||
Commodity derivatives |
Other current assets |
$ |
$ |
||||||
Commodity derivatives |
Other current liabilities |
||||||||
Foreign exchange contracts |
Other current assets |
||||||||
Derivatives not designated as hedges: |
|||||||||
Foreign exchange contracts |
Other current liabilities |
$ |
$ |
Gain (loss) recognized in other comprehensive income |
Statement of Operations |
Gain (loss) reclassified from AOCI |
|||||||||||||||||||||||
2020 |
2019 |
2018 |
Location |
2020 |
2019 |
2018 |
|||||||||||||||||||
Commodity derivatives |
$ |
( |
) |
$ |
( |
) |
$ |
Cost of sales |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||
Foreign exchange contracts |
( |
) |
( |
) |
Net sales |
( |
) |
( |
) |
||||||||||||||||
Foreign exchange contracts |
Cost of sales |
||||||||||||||||||||||||
Total gains (losses) |
$ |
( |
) |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
_ |
Statement of Operations Location |
Years ended March 31, |
|||||||||||
_ |
2020 |
2019 |
2018 |
||||||||||
Commodity derivatives |
Cost of sales |
$ |
$ |
$ |
|||||||||
Foreign exchange contracts |
Net sales |
( |
) |
( |
) |
( |
) |
||||||
Foreign exchange contracts |
Other income (expense) - net |
( |
) |
( |
) |
( |
) |
||||||
Total losses |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
• | Cash and investments – reviewing cash deposits and short-term investments to ensure banks have credit ratings acceptable to the Company and that short-term investments are maintained in secured or guaranteed instruments; |
• | Accounts receivable – performing periodic customer credit evaluations and actively monitoring their financial condition and applicable business news; |
• | Pension assets – ensuring that investments within pension plans provide appropriate diversification, monitoring of investment teams, ensuring that portfolio managers adhere to the Company’s investment policies and directives, and ensuring that exposure to high risk investments is limited; and |
• | Insurance – ensuring that insurance providers maintain financial ratings that are acceptable to the Company. |
• | Customers – performing thorough reviews of customer credit reports and accounts receivable aging reports by internal credit committees; |
• | Suppliers – maintaining a supplier risk management program and utilizing industry sources to identify and mitigate high risk situations; and |
• | Derivatives – ensuring that counterparties to derivative instruments maintain credit ratings that are acceptable to the Company. |
Foreign Currency Translation |
Defined Benefit Plans |
Cash Flow Hedges |
Total |
|||||||||||||
Balance, March 31, 2019 |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
( |
) |
||||||
Other comprehensive loss before reclassifications |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Reclassifications: |
||||||||||||||||
Amortization of unrecognized net loss (a) |
||||||||||||||||
Realized losses - net (b) |
||||||||||||||||
Foreign currency translation gains (c) |
( |
) |
( |
) |
||||||||||||
Income taxes |
||||||||||||||||
Total other comprehensive loss |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Balance, March 31, 2020 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
Foreign Currency Translation |
Defined Benefit Plans |
Cash Flow Hedges |
Total |
|||||||||||||
Balance, March 31, 2018 |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
( |
) |
||||||
Other comprehensive income (loss) before reclassifications |
( |
) |
( |
) |
( |
) |
||||||||||
Reclassifications: |
||||||||||||||||
Amortization of unrecognized net loss (a) |
||||||||||||||||
Realized losses - net (b) |
||||||||||||||||
Foreign currency translation losses (d) |
||||||||||||||||
Income taxes |
( |
) |
||||||||||||||
Total other comprehensive income (loss) |
( |
) |
( |
) |
( |
) |
||||||||||
Balance, March 31, 2019 |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
( |
) |
(a) |
(b) |
(c) |
(d) |
Year ended March 31, 2020 |
||||||||||||
External Sales |
Inter-segment Sales |
Total |
||||||||||
Net sales: |
||||||||||||
VTS |
$ |
$ |
$ |
|||||||||
CIS |
||||||||||||
BHVAC |
||||||||||||
Segment total |
||||||||||||
Corporate and eliminations |
- |
( |
) |
( |
) |
|||||||
Net sales |
$ |
$ |
- |
$ |
Year ended March 31, 2019 |
||||||||||||
External Sales |
Inter-segment Sales |
Total |
||||||||||
Net sales: |
||||||||||||
VTS |
$ |
$ |
$ |
|||||||||
CIS |
||||||||||||
BHVAC |
||||||||||||
Segment total |
||||||||||||
Corporate and eliminations |
- |
( |
) |
( |
) |
|||||||
Net sales |
$ |
$ |
- |
$ |
Year ended March 31, 2018 |
||||||||||||
External Sales |
Inter-segment Sales |
Total |
||||||||||
Net sales: |
||||||||||||
VTS |
$ |
$ |
$ |
|||||||||
CIS |
||||||||||||
BHVAC |
||||||||||||
Segment total |
||||||||||||
Corporate and eliminations |
- |
( |
) |
( |
) |
|||||||
Net sales |
$ |
$ |
- |
$ |
Years ended March 31, |
||||||||||||||||||||||||
2020 |
2019 |
2018 |
||||||||||||||||||||||
Gross profit: |
$'s |
% of sales |
$'s |
% of sales |
$'s |
% of sales |
||||||||||||||||||
VTS |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||||
CIS |
% |
% |
% |
|||||||||||||||||||||
BHVAC |
% |
% |
% |
|||||||||||||||||||||
Segment total |
% |
% |
% |
|||||||||||||||||||||
Corporate and eliminations |
( |
) |
( |
) |
||||||||||||||||||||
Gross profit |
$ |
% |
$ |
% |
$ |
% |
Years ended March 31, |
||||||||||||
Operating income: |
2020 |
2019 |
2018 |
|||||||||
VTS |
$ |
$ |
$ |
|||||||||
CIS |
||||||||||||
BHVAC |
||||||||||||
Segment total |
||||||||||||
Corporate and eliminations (a) |
( |
) |
( |
) |
( |
) |
||||||
Operating income |
$ |
$ |
$ |
(a) |
March 31, |
||||||||
2020 |
2019 |
|||||||
VTS |
$ |
$ |
||||||
CIS |
||||||||
BHVAC |
||||||||
Corporate and eliminations |
||||||||
Total assets |
$ |
$ |
Years ended March 31, |
||||||||||||
Capital expenditures: |
2020 |
2019 |
2018 |
|||||||||
VTS |
$ |
$ |
$ |
|||||||||
CIS |
||||||||||||
BHVAC |
||||||||||||
Total capital expenditures |
$ |
$ |
$ |
Years ended March 31, |
||||||||||||
Depreciation and amortization expense: |
2020 |
2019 |
2018 |
|||||||||
VTS |
$ |
$ |
$ |
|||||||||
CIS |
||||||||||||
BHVAC |
||||||||||||
Total depreciation and amortization expense |
$ |
$ |
$ |
Years ended March 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
United States |
$ |
$ |
$ |
|||||||||
Italy |
||||||||||||
China |
||||||||||||
Hungary |
||||||||||||
Germany |
||||||||||||
Austria |
||||||||||||
Other |
||||||||||||
Net sales |
$ |
$ |
$ |
March 31, |
||||||||
2020 |
2019 |
|||||||
United States |
$ |
$ |
||||||
China |
||||||||
Hungary |
||||||||
Mexico |
||||||||
Italy |
||||||||
Germany |
||||||||
Austria |
||||||||
Other |
||||||||
Total property, plant and equipment |
$ |
$ |
Years ended March 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Commercial HVAC&R |
$ |
$ |
$ |
|||||||||
Automotive |
||||||||||||
Commercial vehicle |
||||||||||||
Off-highway |
||||||||||||
Data center cooling |
||||||||||||
Industrial cooling |
||||||||||||
Other |
||||||||||||
Net sales |
$ |
$ |
$ |
Fiscal 2020 quarters ended |
||||||||||||||||||||
June |
Sept. |
Dec. |
March |
Fiscal 2020 |
||||||||||||||||
Net sales |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Gross profit |
||||||||||||||||||||
Net earnings (loss) (a) |
( |
) |
( |
) |
( |
) |
||||||||||||||
Net earnings (loss) attributable to Modine (a) |
( |
) |
( |
) |
( |
) |
||||||||||||||
Net earnings (loss) per share attributable to Modine shareholders: |
||||||||||||||||||||
Basic |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
( |
) |
|||||||||
Diluted |
( |
) |
( |
) |
( |
) |
Fiscal 2019 quarters ended |
||||||||||||||||||||
June |
Sept. |
Dec. |
March |
Fiscal 2019 |
||||||||||||||||
Net sales |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Gross profit |
||||||||||||||||||||
Net earnings (b) |
||||||||||||||||||||
Net earnings attributable to Modine (b) |
||||||||||||||||||||
Net earnings per share attributable to Modine shareholders: |
||||||||||||||||||||
Basic |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Diluted |
(a) |
(b) |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
ITEM 9A. | CONTROLS AND PROCEDURES. |
ITEM 9B. | OTHER INFORMATION. |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
ITEM 11. | EXECUTIVE COMPENSATION. |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. |
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. |
(a) | Documents Filed. The following documents are filed as part of this Report: |
Page in Form 10-K |
|
1. The consolidated financial statements of Modine Manufacturing Company and its subsidiaries filed under Item 8: |
|
Consolidated Statements of Operations for the years ended March 31, 2020, 2019 and 2018 |
42 |
Consolidated Statements of Comprehensive Income for the years ended March 31, 2020, 2019 and 2018 |
43 |
Consolidated Balance Sheets at March 31, 2020 and 2019 |
44 |
Consolidated Statements of Cash Flows for the years ended March 31, 2020, 2019 and 2018 |
45 |
Consolidated Statements of Shareholders' Equity for the years ended March 31, 2020, 2019 and 2018 |
46 |
Notes to Consolidated Financial Statements |
47-75 |
Report of Independent Registered Public Accounting Firm |
76-77 |
2. Financial Statement Schedules |
|
The following financial statement schedule should be read in conjunction with the consolidated financial statements set forth in Item 8: |
|
Schedule II -- Valuation and Qualifying Accounts for the years ended March 31, 2020, 2019 and 2018 |
81 |
Schedules other than those listed above are omitted because they are not applicable, not required, or because the required information is included in the consolidated financial statements and the notes thereto. |
|
3. Exhibits and Exhibit Index. |
82-85 |
See the Exhibit Index included as the last part of this report, which is incorporated herein by reference. Each management contract and compensatory plan or arrangement required to be filed as an exhibit to this report is identified in the Exhibit Index by an asterisk following its exhibit number. |
ITEM 16. | FORM 10-K SUMMARY. |
Additions |
||||||||||||||||
Description |
Balance at Beginning of Period |
Charged (Benefit) to Costs and Expenses |
Charged to Other Accounts |
Balance at End of Period |
||||||||||||
2020: Valuation Allowance for Deferred Tax Assets |
$ |
$ |
$ |
( |
)(a) |
$ |
||||||||||
2019: Valuation Allowance for Deferred Tax Assets |
$ |
$ |
( |
) |
$ |
( |
)(a) |
$ |
||||||||
2018: Valuation Allowance for Deferred Tax Assets |
$ |
$ |
( |
) |
$ |
(a) |
$ |
(a) |
Exhibit No. |
Description |
Incorporated Herein By Referenced To |
Filed Herewith |
|||
Amended and Restated Articles of Incorporation, as amended. |
Exhibit 3.1 to Form 10-K for the fiscal year ended March 31, 2018 |
|||||
Bylaws, as amended. |
Exhibit 3.1 to Registrant’s Current Report on Form 8-K dated October 24, 2019 |
|||||
Form of Stock Certificate of the Registrant. |
Exhibit 4(a) to Form 10-K for the fiscal year ended March 31, 2003 (“2003 10-K”) |
|||||
Amended and Restated Articles of Incorporation, as amended. |
See Exhibit 3.1 hereto. |
|||||
Note Purchase and Private Shelf Agreement (the “Original Note Purchase Agreement”) dated as of August 12, 2010 among the Registrant and the Series A Purchasers named therein of $125,000,000 6.83% Secured Senior Notes, Series A, due August 12, 2020 and $25,000,000 Private Shelf Facility and each Prudential Affiliate (as defined therein) that may become bound by certain provisions thereof. |
Exhibit 4.2 to Registrant’s Current Report on Form 8-K dated August 12, 2010 (“August 12, 2010 8-K”) |
|||||
Amended and Restated Collateral Agency Intercreditor Agreement (the “Original Intercreditor Agreement”) dated as of August 12, 2010 among the Lenders (as defined therein), the Noteholders (as defined therein) and JPMorgan Chase Bank, N.A. as Collateral Agent. |
Exhibit 4.3 to August 12, 2010 8-K |
|||||
First Amendment to Note Purchase and Private Shelf Agreement and Waiver dated as of March 15, 2012, with Prudential Investment Management, Inc., The Prudential Insurance Company of America and Prudential Retirement Insurance and Annuity Company (collectively the “Noteholders”) pursuant to which the Company and the Noteholders amended the Original Note Purchase Agreement. |
Exhibit 4.2 to Registrant’s Current Report on Form 8-K dated March 15, 2012 |
|||||
Second Amendment to Note Purchase and Private Shelf Agreement dated as of April 20, 2012, with Prudential Investment Management, Inc., The Prudential Insurance Company of America and Prudential Retirement Insurance and Annuity Company (collectively the “Noteholders”) pursuant to which the Company and the Noteholders amended the Original Note Purchase Agreement, as amended. |
Exhibit 4.2 to Registrant’s Current Report on Form 8-K dated April 20, 2012 |
|||||
Third Amendment to Note Purchase and Private Shelf Agreement dated as of August 6, 2012, with Prudential Investment Management, Inc., The Prudential Insurance Company of America and Prudential Retirement Insurance and Annuity Company (collectively the “Noteholders”) pursuant to which the Company and the Noteholders amended the Original Note Purchase Agreement, as amended. |
Exhibit 4.2 to Registrant’s Current Report on Form 8-K dated August 6, 2012 |
Second Amended and Restated Credit Agreement dated as of August 30, 2013, with JPMorgan Chase Bank, N.A., as Administrative Agent, LC Issuer, Swing Line Lender and as a Lender, and U.S. Bank, N.A. and Wells Fargo Bank, N.A. as Syndication Agents and as Lenders, BMO Harris Bank N.A., as Documentation Agent and as Lender and Associated Bank, N.A., Comerica Bank and Sovereign Bank as Lenders |
Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated August 30, 2013 (“August 30, 2013 8-K”) |
|||||
Fourth Amendment to Note Purchase and Private Shelf Agreement (the “Fourth Note Purchase Amendment”) dated as of August 30, 2013, with Prudential Investment Management, Inc., The Prudential Insurance Company of America and Prudential Retirement Insurance and Annuity Company (collectively the “Note Holders”) pursuant to which the Company and the Note Holders amended the Original Note Purchase Agreement, as amended. |
Exhibit 4.2 to August 30, 2013 8-K |
|||||
First Amendment to the Original Intercreditor Agreement, among the Lenders, the Note Holders and JPMorgan as Collateral Agent, pursuant to which the Lenders, the Note Holders and JPMorgan amended the Original Intercreditor Agreement. |
Exhibit 4.3 to August 30, 2013 8-K |
|||||
Credit Facility Agreement among Modine Holding GmbH, Modine Europe GmbH and Deutsche Bank AG dated as of April 27, 2012. |
Exhibit 4.10 to Registrant’s Form 10-K for the fiscal year ended March 31, 2012 |
|||||
Third Amended and Restated Credit Agreement dated as of November 15, 2016. |
Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated November 15, 2016 (“November 15, 2016 8-K”) |
|||||
Amended and Restated Note Purchase and Private Shelf Agreement dated as of November 15, 2016. |
Exhibit 4.2 to November 15, 2016 8-K |
|||||
Description of Registrant’s securities |
X |
|||||
Fourth Amended and Restated Credit Agreement dated as of June 28, 2019. |
Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated June 28, 2019 |
|||||
Second Amended and Restated Note Purchase and Private Shelf Agreement dated as of August 6, 2019 |
Exhibit 4.1 to Registrant’s Form 10-Q for the third quarter ended December 31, 2019 |
|||||
First Amendment to Second Amended and Restated Note Purchase and Private Shelf Agreement dated as of January 31, 2020 |
Exhibit 4.2 to Registrant’s Form 10-Q for the third quarter ended December 31, 2019 |
|||||
Amendment No. 1 to Fourth Amended and Restated Credit Agreement dated as of May 19, 2020 |
Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated May 19, 2020 (“May 19, 2020 8-K”) |
|||||
Second Amendment to Second Amended and Restated Note Purchase and Private Shelf Agreement dated as of May 19, 2020 |
Exhibit 4.2 to May 19, 2020 8-K |
|||||
10.1* |
Director Emeritus Retirement Plan effective April 1, 1992 (and frozen as of July 1, 2000). |
Exhibit 10(a) to Registrant’s Form 10-K for the fiscal year ended March 31, 2002 |
||||
10.2* |
Employment Agreement between the Registrant and Thomas A. Burke dated as of June 15, 2007. |
Exhibit 10.3 to Registrant’s Current Report on Form 8-K dated June 15, 2007 |
Form of Amendment No. 1 to Employment Agreement entered into as of July 1, 2008 with Thomas A. Burke. |
Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated July 1, 2008 |
|||||
Form of Change in Control and Termination Agreement (amended and restated) between the Registrant and officers other than Thomas A. Burke. |
Exhibit 10(f) to Registrant’s Form 10-K for the year ended March 31, 2004 |
|||||
Executive Supplemental Retirement Plan (as amended). |
Exhibit 10(f) to Registrant's Form 10-K for the fiscal year ended March 31, 2000 |
|||||
Deferred Compensation Plan (as amended). |
Exhibit 10(y) to 2003 10-K |
|||||
2008 Incentive Compensation Plan (Amended and Restated effective May 7, 2014). |
Exhibit 10.1 to Registrant's Current Report on Form 8-K dated July 17, 2014 |
|||||
Form of Fiscal 2020 Performance Stock Award Agreement. |
Exhibit 10.1 to Registrant’s Form 10-Q for the quarter ended June 30, 2019 |
|||||
Form of Fiscal 2020 Incentive Stock Option Award Agreement. |
Exhibit 10.2 to Registrant’s Form 10-Q for the quarter ended June 30, 2019 |
|||||
Form of Fiscal 2020 Restricted Stock Unit Award Agreement. |
Exhibit 10.3 to Registrant’s Form 10-Q for the quarter ended June 30, 2019 |
|||||
Form of Fiscal 2020 Non-Qualified Stock Option Award Agreement. |
Exhibit 10.4 to Registrant’s Form 10-Q for the quarter ended June 30, 2019 |
|||||
Amendment No. 1 to Form of Change in Control and Termination Agreement (amended and restated) between the Registrant and Officers other than Thomas A. Burke. |
Exhibit 10.17 to Registrant's Form 10-K for the fiscal year ended March 31, 2011 |
|||||
Supplemental Severance Policy. |
Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated October 17, 2011 |
|||||
2017 Incentive Compensation Plan. |
Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated July 20, 2017 |
|||||
Form of Fiscal 2020 Non-Employee Director Restricted Stock Unit Award. |
Exhibit 10.1 to Registrant’s Form 10-Q for the quarter ended September 30, 2019 |
|||||
Separation Letter for Dennis P. Appel dated as of September 26, 2019. |
Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended December 31, 2019 |
|||||
Release Agreement executed as of October 17, 2019, between Modine Manufacturing Company and Dennis P. Appel. |
Exhibit 10.2 to the Registrant’s Form 10-Q for the quarter ended December 31, 2019 |
|||||
Employment Retention Agreement for Scott Wollenberg, dated as of July 26, 2019. |
Exhibit 10.5 to the Registrant’s Form 10-Q for the quarter ended June 30, 2019 |
|||||
List of subsidiaries of the Registrant. |
X |
|||||
Consent of independent registered public accounting firm. |
X |
|||||
Rule 13a-14(a)/15d-14(a) Certification of Thomas A. Burke, President and Chief Executive Officer. |
X |
|||||
Rule 13a-14(a)/15d-14(a) Certification of Michael B. Lucareli, Vice President, Finance and Chief Financial Officer. |
X |
|||||
Section 1350 Certification of Thomas A. Burke, President and Chief Executive Officer. |
X |
|||||
Section 1350 Certification of Michael B. Lucareli, Vice President, Finance and Chief Financial Officer. |
X |
|||||
101.INS |
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
X |
||||
101.SCH |
Inline XBRL Taxonomy Extension Schema Document. |
X |
||||
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
X |
||||
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document. |
X |
||||
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document. |
X |
||||
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
X |
||||
104 |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
X |
||||
* | Denotes management contract or executive compensation plan or arrangement required to be filed as an exhibit pursuant to Item 15 of Form 10-K. |
** | Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, the Registrant has omitted certain agreements with respect to long-term debt not exceeding 10% of consolidated total assets. The Registrant agrees to furnish a copy of any such agreements to the Securities and Exchange Commission upon request. |
Date: May 29, 2020 |
Modine Manufacturing Company |
|
By: |
/s/ Thomas A. Burke |
|
Thomas A. Burke, President and Chief Executive Officer |
||
(Principal Executive Officer) |
/s/ Thomas A. Burke |
|
Thomas A. Burke |
May 29, 2020 |
President, Chief Executive Officer and Director |
|
(Principal Executive Officer) |
|
/s/ Michael B. Lucareli |
|
Michael B. Lucareli |
May 29, 2020 |
Vice President, Finance and Chief Financial Officer |
|
(Principal Financial and Accounting Officer) |
|
/s/ Marsha C. Williams |
|
Marsha C. Williams |
May 29, 2020 |
Director |
|
/s/ David J. Anderson |
|
David J. Anderson |
May 29, 2020 |
Director |
|
/s/ Eric D. Ashleman |
|
Eric D. Ashleman |
May 29, 2020 |
Director |
|
/s/ David G. Bills |
|
David G. Bills |
May 29, 2020 |
Director |
|
/s/ Charles P. Cooley |
|
Charles P. Cooley |
May 29, 2020 |
Director |
|
/s/ Suresh V. Garimella |
|
Suresh V. Garimella |
May 29, 2020 |
Director |
|
/s/ Larry O. Moore |
|
Larry O. Moore |
May 29, 2020 |
Director |
|
/s/ Christopher W. Patterson |
|
Christopher W. Patterson |
May 29, 2020 |
Director |
|
/s/ Christine Y. Yan |
|
Christine Y. Yan |
May 29, 2020 |
Director |
• |
Board of Directors. Our amended and restated articles of incorporation and bylaws provide that the board of directors must be divided into three classes as nearly equal in number as possible, as
determined by the board of directors. The total number of directors is to be the number provided in the bylaws, but not less than seven. One class is elected each year for a three-year term. Shareholders have the right to remove
directors, but only for good cause and by the affirmative vote of a majority of the outstanding shares entitled to vote for the election of the director. The removal of a director may only be taken at a special meeting of shareholders
called for that purpose.
|
• |
Advance Notice Requirements for Shareholder Proposals and Director Nominees. Our bylaws require advance notice with regard to business proposed to be submitted by a shareholder at any annual or
special meeting of our shareholders, including the nomination of candidates for election as directors. Notice of proposed shareholder business must be timely given in writing to our corporate secretary prior to the meeting. To be timely,
notice must be received at our principal executive offices within the time frames specified in our bylaws. The notice must also contain certain information specified in our bylaws, including, with respect to a director nomination, the
written consent of the nominee to serve as a director if elected.
|
• |
Special Meetings; Shareholder Action Without a Meeting. Special meetings of shareholders may be called by a majority of the members of the board of directors, by the chairperson of the board, by
the chief executive officer, or, as required by the WBCL, pursuant to one or more written demands signed by the holders of at least 10% of all the votes entitled to be cast on any issue proposed to be considered at the proposed special
meeting, which demand(s) must describe one or more purposes for which the special meeting is to be held. The bylaws contain provisions regarding special meetings called upon the demand of shareholders. Shareholder action may be taken
without a meeting only by the unanimous written consent of all shareholders entitled to vote on the action.
|
• |
Required Vote for Certain Actions. Pursuant to Section 180.1706(l) of the WBCL, except as otherwise provided in a corporation’s articles of incorporation or any amendment to the articles of
incorporation, any merger or share exchange, sale of all or substantially all assets otherwise than in the regular course of business, dissolution of the corporation or revocation of dissolution, involving a corporation organized before
January 1, 1973, such as Modine, which did not expressly elect before January 1, 1991 to be governed by a majority or greater voting requirement, must be approved by the affirmative vote of two-thirds of the shares entitled to vote at a
meeting called for that purpose. Article VII of our amended and restated articles of incorporation expressly retains the two-thirds vote requirement for these actions.
|
• |
Amendment of Bylaws. Shareholders have the right to amend or repeal the bylaws at any regular
or special meeting of the shareholders, if notice of the proposed action was specified in the notice of the meeting. That action requires the affirmative vote of not less than two-thirds of the shares entitled to vote. The board of
directors may also amend the bylaws by the affirmative vote of not less than two-thirds of the full board of directors of Modine.
|
Subsidiaries
|
State or country
of incorporation
or organization
|
% of
voting
securities
|
Owned by
|
MDA US LLC
|
Delaware
|
100%
|
Registrant
|
Modine, Inc.
|
Delaware
|
100%
|
Registrant
|
Modine ECD, Inc.
|
Pennsylvania
|
100%
|
Registrant
|
Modine Jackson, Inc.
|
Delaware
|
100%
|
Registrant
|
Modine Thermal Systems Korea, LLC
|
Korea
|
100%
|
Registrant
|
Modine Manufacturing Company Foundation, Inc.
|
Wisconsin
|
100%
|
Registrant
|
China
|
100%
|
Registrant
|
|
Modine Thermal Systems (Shanghai) Company Ltd.
|
China
|
100%
|
Registrant
|
Modine Manufacturing (Canada) Ltd.
|
Canada
|
100%
|
Registrant
|
Modine Thermal Systems Private Limited
|
India
|
99%
|
Registrant (1)
|
Modine UK Dollar Limited
|
UK
|
100%
|
Registrant
|
Airedale International Air Conditioning Limited
|
UK
|
100%
|
Modine UK Dollar Limited
|
Airedale Group Limited
|
UK
|
100%
|
Airedale International Air Conditioning Limited
|
Airedale Sheet Metal Limited
|
UK
|
100%
|
Airedale International Air Conditioning Limited
|
Airedale Compact Systems Limited
|
UK
|
100%
|
Airedale International Air Conditioning Limited
|
Barkell Limited
|
UK
|
100%
|
Airedale International Air Conditioning Limited
|
Modine LLC
|
Delaware
|
100%
|
Modine, Inc.
|
Modine do Brasil Sistemas Termicos Ltda.
|
Brazil
|
99.9%
|
Modine, Inc. (2)
|
Modine Transferencia de Calor, S.A. de C.V.
|
Mexico
|
99.6%
|
Modine, Inc. (2)
|
Modine CIS Holding Inc.
|
Delaware
|
100%
|
Registrant
|
Modine Astro LLC
|
Delaware
|
100%
|
Modine CIS Holding Inc.
|
Modine Grenada LLC
|
Delaware
|
100%
|
Modine CIS Holding Inc.
|
Modine Louisville Inc.
|
Kentucky
|
100%
|
Modine CIS Holding Inc.
|
Modine Jacksonville Inc.
|
Kentucky
|
100%
|
Modine Louisville Inc.
|
Modine Juarez, S. de R.L. de C.V.
|
Mexico
|
99.97%
|
Modine Grenada LLC (3)
|
Modine Ramos, S. de R.L. de C.V.
|
Mexico
|
99.97%
|
Modine Jacksonville Inc. (4)
|
Modine Ramos Servicios, S. de R.L. de C.V.
|
Mexico
|
99.97%
|
Modine Jacksonville Inc. (4)
|
Modine Acquisition, Inc.
|
Wisconsin
|
100%
|
Registrant
|
Modine Enterprises Inc.
|
Delaware
|
99.999%
|
Modine Acquisition, Inc. (2)
|
Modine Netherlands Holding B.V.
|
Netherlands
|
100%
|
Modine Enterprises Inc.
|
Modine Caribbean (Barbados) SRL
|
Barbados
|
100%
|
Modine Enterprises Inc.
|
Modine Asia Holding AB
|
Sweden
|
100%
|
Modine Netherlands Holding B.V.
|
Modine Accord Inc.
|
Delaware
|
90%
|
Modine Netherlands Holding B.V. (2)
|
Modine Thermal Systems (Zhongshan) Co., Ltd.
|
China
|
100%
|
Modine Asia Holding AB
|
Luvata India Private Ltd.
|
India
|
99.998%
|
Modine Asia Holding AB (5)
|
Modine Europe GmbH
|
Germany
|
100%
|
Modine Accord Inc.
|
Modine Thermal Systems Europe GmbH
|
Germany
|
100%
|
Modine Accord Inc.
|
Modine Austria Holding GmbH
|
Austria
|
100%
|
Modine Europe GmbH
|
Modine Austria GmbH
|
100%
|
Modine Austria Holding GmbH
|
|
Modine Austria Immobilien GmbH
|
Austria
|
100%
|
Modine Austria GmbH
|
Modine Pliezhausen GmbH
|
Germany
|
100%
|
Modine Europe GmbH
|
Modine Grundstucksverwaltungs GmbH
|
Germany
|
100%
|
Modine Europe GmbH
|
Modine Wackersdorf GmbH
|
Germany
|
100%
|
Modine Europe GmbH
|
Subsidiaries
|
State or country
of incorporation
or organization
|
% of
voting
securities
|
Owned by
|
Modine Neuenkirchen GmbH
|
Germany
|
100%
|
Modine Europe GmbH
|
MDA Hungary Automotive Limited Liability Company
|
Hungary
|
100%
|
Modine Europe GmbH
|
Modine Pontevico S.r.l.
|
Italy
|
100%
|
MDA Hungary Automotive Limited Liability Company
|
Modine Uden B.V.
|
Netherlands
|
100%
|
MDA Hungary Automotive Limited Liability Company
|
Modine Hungaria Gep. Kft.
|
Hungary
|
100%
|
Modine Thermal Systems Europe GmbH
|
Modine Thermal Systems Italy S.r.l.
|
Italy
|
100%
|
Modine Hungaria Gep. Kft.
|
Modine CIS Italy Srl
|
Italy
|
100%
|
Modine Thermal Systems Italy S.r.l.
|
Modine CIS Guadalajara SAU
|
Spain
|
100%
|
Modine CIS Italy Srl
|
Modine Söderköping AB
|
Sweden
|
100%
|
Modine CIS Italy Srl
|
Modine Far East Srl
|
Italy
|
100%
|
Modine CIS Italy Srl
|
Modine Thermal Systems (Wuxi) Co., Ltd.
|
China
|
100%
|
Modine Far East Srl
|
Modine SRB d.o.o. Sremska
|
Serbia
|
100%
|
Modine Hungaria Gep. Kft.
|
Modine CIS Austria GmbH
|
Austria
|
100%
|
Modine Hungaria Gep. Kft.
|
Modine Gailtal GmbH
|
Austria
|
99%
|
Modine CIS Austria GmbH (6)
|
/s/ PricewaterhouseCoopers LLP
|
Milwaukee, Wisconsin
|
May 29, 2020
|
1. |
I have reviewed this annual report on Form 10-K of Modine Manufacturing Company for the fiscal year ended March 31, 2020;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 29, 2020
|
/s/ Thomas A. Burke
|
|
Thomas A. Burke
|
|
President and Chief Executive Officer
|
1. |
I have reviewed this annual report on Form 10-K of Modine Manufacturing Company for the fiscal year ended March 31, 2020;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and
the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 29, 2020
|
/s/ Michael B. Lucareli
|
|
Michael B. Lucareli
|
|
Vice President, Finance and Chief Financial Officer
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 29, 2020
|
/s/ Thomas A. Burke
|
|
Thomas A. Burke
|
|
President and Chief Executive Officer
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 29, 2020
|
/s/ Michael B. Lucareli
|
|
Michael B. Lucareli
|
|
Vice President, Finance and Chief Financial Officer
|
.M!UBWO)K>>:/['!]IE2XMWB?R<9$@# $J
M0#@B@#C+GX9^,8K6:2+XFZU+(B%DC$1&X@<#_6=ZS?#/@+Q_J^A0WNK>/-
Product Warranties and Other Commitments |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties and Other Commitments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties and Other Commitments |
Note 15: Product Warranties and Other Commitments
Product warranties: Many of the Company’s products are covered under a warranty period ranging from to five years. The Company records a liability for product warranty obligations at the time of sale and adjusts its warranty accruals if it becomes probable that expected claims will differ from previous estimates.
Changes in accrued warranty costs were as follows:
Indemnification agreements: From time to time, the Company provides indemnification agreements related to the sale or purchase of an entity or facility. These indemnification agreements cover customary representations and warranties typically provided in conjunction with such transactions, including income, sales, excise or other tax matters, environmental matters and other third-party claims. The indemnification periods provided generally range from less than one year to fifteen years. In addition, standard indemnification provisions reside in many commercial agreements to which the Company is a party and relate to responsibility in the event of potential third-party claims. The fair value of the Company’s outstanding indemnification obligations at March 31, 2020 was not material.
Commitments: At March 31, 2020, the Company had capital expenditure commitments of $12.0 million. Significant commitments include tooling and equipment expenditures for new and renewal programs with customers in the VTS segment. The Company utilizes inventory arrangements with certain vendors in the normal course of business under which the vendors maintain inventory stock at the Company’s facilities or at outside facilities. Title passes to the Company at the time goods are withdrawn for use in production. The Company has agreements with the vendors to use the material within a specific period of time. In some cases, the Company bears the risk of loss for the inventory because Modine is required to insure the inventory against damage and/or theft. This inventory is included within the Company’s consolidated balance sheets as raw materials inventory.
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions |
Mar. 31, 2020 |
Mar. 31, 2019 |
---|---|---|
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.025 | $ 0.025 |
Preferred stock, shares authorized (in shares) | 16.0 | 16.0 |
Preferred stock, shares issued (in shares) | 0.0 | 0.0 |
Common stock, par value (in dollars per share) | $ 0.625 | $ 0.625 |
Common stock, shares authorized (in shares) | 80.0 | 80.0 |
Common stock, shares issued (in shares) | 53.4 | 52.8 |
Treasury stock at cost (in shares) | 2.5 | 2.1 |
Derivative Instruments |
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Derivative Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments |
Note 19: Derivative Instruments
The Company uses derivative financial instruments from time to time as a tool to manage certain financial risks. The Company’s policy prohibits the use of leveraged derivatives. Accounting for derivatives and hedging activities requires derivative financial instruments to be measured at fair value and recognized as assets or liabilities in the consolidated balance sheets. Accounting for the gain or loss resulting from the change in fair value of the derivative financial instruments depends on whether it has been designated as a hedge, and, if so, on the nature of the hedging activity.
Commodity derivatives: The Company periodically enters into over-the-counter forward contracts related to forecasted purchases of aluminum and copper. The Company’s strategy in entering into these contracts is to reduce its exposure to changing market prices of these commodities. The Company designates certain commodity forward contracts as cash flow hedges for accounting purposes. Accordingly, for these designated hedges, the Company records unrealized gains and losses related to the change in the fair value of the contracts in accumulated other comprehensive income (loss) (“AOCI”) within shareholders’ equity and subsequently recognizes the gains and losses within cost of sales as the underlying inventory is sold.
Foreign exchange contracts: The Company’s foreign exchange risk management strategy uses derivative financial instruments to mitigate foreign currency exchange risk. The Company periodically enters into foreign currency forward contracts to hedge specific foreign currency-denominated assets and liabilities as well as forecasted transactions. The Company designates certain hedges of forecasted transactions as cash flow hedges for accounting purposes. Accordingly, for these designated hedges, the Company records unrealized gains and losses related to the change in the fair value of the contracts in AOCI within shareholders’ equity and subsequently recognizes the gains and losses as a component of earnings at the same time and in the same financial statement line that the underlying transactions impact earnings. The Company has not designated forward contracts related to foreign currency-denominated assets and liabilities as hedges. Accordingly, for these non-designated contracts, the Company records unrealized gains and losses related to changes in fair value in other income and expense. Gains and losses on these foreign currency contracts are offset by foreign currency gains and losses associated with the related assets and liabilities.
The fair value of the Company’s derivative financial instruments recorded in the consolidated balance sheets were as follows:
The amounts associated with derivative financial instruments that the Company designated for hedge accounting were as follows:
The amounts associated with derivative financial instruments that the Company did not designate for hedge accounting were as follows:
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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|||||||
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | |||||||||
Net sales | $ 1,975.5 | $ 2,212.7 | $ 2,103.1 | ||||||
Cost of sales | 1,668.0 | 1,847.2 | 1,746.6 | ||||||
Gross profit | 307.5 | 365.5 | 356.5 | ||||||
Selling, general and administrative expenses | 249.6 | 244.1 | 245.8 | ||||||
Restructuring expenses | 12.2 | 9.6 | 16.0 | ||||||
Impairment charges | 8.6 | 0.4 | 2.5 | ||||||
(Gain) loss on sale of assets | (0.8) | 1.7 | 0.0 | ||||||
Operating income | 37.9 | 109.7 | 92.2 | ||||||
Interest expense | (22.7) | (24.8) | (25.6) | ||||||
Other expense - net | (4.8) | (4.1) | (3.3) | ||||||
Earnings before income taxes | 10.4 | 80.8 | 63.3 | ||||||
(Provision) benefit for income taxes | (12.4) | 5.1 | (39.5) | ||||||
Net (loss) earnings | (2.0) | 85.9 | 23.8 | ||||||
Net earnings attributable to noncontrolling interest | (0.2) | (1.1) | (1.6) | ||||||
Net (loss) earnings attributable to Modine | $ (2.2) | [1] | $ 84.8 | [2] | $ 22.2 | ||||
Net (loss) earnings per share attributable to Modine shareholders: | |||||||||
Basic (in dollars per share) | $ (0.04) | $ 1.67 | $ 0.44 | ||||||
Diluted (in dollars per share) | $ (0.04) | $ 1.65 | $ 0.43 | ||||||
Weighted-average shares outstanding: | |||||||||
Basic (in shares) | 50.8 | 50.5 | 49.9 | ||||||
Diluted (in shares) | 50.8 | 51.3 | 50.9 | ||||||
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Goodwill (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill |
Changes in the carrying amount of goodwill, by segment and in the aggregate, were as follows:
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Cash, Cash Equivalents and Restricted Cash (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents and Restricted Cash |
Cash, cash equivalents and restricted cash consisted of the following:
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Significant Accounting Policies, Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
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Supplemental cash flow information [Abstract] | |||
Interest paid | $ 21.4 | $ 22.3 | $ 23.4 |
Income taxes paid | $ 18.8 | $ 22.2 | $ 20.1 |
Pension and Employee Benefit Plans, Estimated Pension Benefit Payments (Details) - Pension Plans [Member] $ in Millions |
Mar. 31, 2020
USD ($)
|
---|---|
Estimated future benefit payments [Abstract] | |
2021 | $ 17.2 |
2022 | 16.8 |
2023 | 16.7 |
2024 | 16.7 |
2025 | 16.8 |
2026-2030 | $ 80.6 |
Fair Value Measurements (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Deferred Compensation Liability [Abstract] | |||
Investments | $ 3.8 | $ 6.0 | |
Deferred compensation obligations | 3.8 | 6.0 | |
Decrease in fair value of investments | (2.2) | ||
Decrease in fair value of deferred compensation obligations | (2.2) | ||
U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 131.1 | 155.1 | $ 157.7 |
U.S. Pension Plans [Member] | Fair Value Excluding Investments Measured at Net Asset Value [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 42.9 | 54.3 | |
U.S. Pension Plans [Member] | Investments Measured at Net Asset Value [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 88.2 | 100.8 | |
Money Market Investments [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 2.4 | 3.9 | |
Fixed Income Securities [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 8.7 | 9.4 | |
Pooled Equity Funds [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 17.9 | 27.7 | |
U.S. Government and Agency Securities [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 13.1 | 12.3 | |
Other [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 0.8 | 1.0 | |
Level 1 [Member] | U.S. Pension Plans [Member] | Fair Value Excluding Investments Measured at Net Asset Value [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 18.0 | 27.8 | |
Level 1 [Member] | Money Market Investments [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 0.0 | 0.0 | |
Level 1 [Member] | Fixed Income Securities [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 0.0 | 0.0 | |
Level 1 [Member] | Pooled Equity Funds [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 17.9 | 27.7 | |
Level 1 [Member] | U.S. Government and Agency Securities [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 0.0 | 0.0 | |
Level 1 [Member] | Other [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 0.1 | 0.1 | |
Level 2 [Member] | U.S. Pension Plans [Member] | Fair Value Excluding Investments Measured at Net Asset Value [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 24.9 | 26.5 | |
Level 2 [Member] | Money Market Investments [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 2.4 | 3.9 | |
Level 2 [Member] | Fixed Income Securities [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 8.7 | 9.4 | |
Level 2 [Member] | Pooled Equity Funds [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 0.0 | 0.0 | |
Level 2 [Member] | U.S. Government and Agency Securities [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 13.1 | 12.3 | |
Level 2 [Member] | Other [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | 0.7 | 0.9 | |
Level 3 [Member] | U.S. Pension Plans [Member] | |||
U.S. pension plan assets [Abstract] | |||
Fair value of plan assets | $ 0.0 | $ 0.0 |
Restructuring Activities (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2018 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Restructuring and repositioning expenses [Abstract] | ||||||
Employee severance and related benefits | $ 10.2 | $ 8.7 | $ 13.0 | |||
Other restructuring and repositioning expenses | 2.0 | 0.9 | 3.0 | |||
Total | 12.2 | 9.6 | 16.0 | |||
Changes in accrued severance [Roll Forward] | ||||||
Beginning balance | $ 5.0 | 10.0 | 11.0 | |||
Additions | 10.2 | 8.7 | ||||
Payments | (15.1) | (9.1) | ||||
Effect of exchange rate changes | (0.1) | (0.6) | ||||
Ending balance | $ 5.0 | 5.0 | 10.0 | 11.0 | ||
Other [Abstract] | ||||||
Severance expenses | 10.2 | 8.7 | 13.0 | |||
Asset impairment charges | $ 8.6 | $ 0.4 | 8.6 | 0.4 | 2.5 | |
VTS and CIS [Member] | Forecast [Member] | ||||||
Restructuring and repositioning expenses [Abstract] | ||||||
Employee severance and related benefits | 4.0 | |||||
Other [Abstract] | ||||||
Severance expenses | $ 4.0 | |||||
Commercial and Industrial Solutions ("CIS") [Member] | ||||||
Other [Abstract] | ||||||
Restructuring expense | 8.3 | |||||
Asset impairment charges | 0.6 | $ 0.4 | $ 1.3 | |||
VTS [Member] | ||||||
Other [Abstract] | ||||||
Asset impairment charges | $ 7.5 |
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions |
12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|||||||||||
Other comprehensive loss [Abstract] | ||||||||||||
Beginning balance | $ 533.9 | |||||||||||
Other comprehensive income (loss) before reclassifications | (59.4) | $ (44.7) | ||||||||||
Reclassifications for amortization of unrecognized net loss | [1] | 5.8 | 5.4 | |||||||||
Reclassifications for realized losses - net | [2] | 0.5 | 0.2 | |||||||||
Reclassifications for foreign currency translation (gains) losses | (0.6) | [3] | 0.8 | [4] | ||||||||
Income taxes | 8.8 | 0.2 | ||||||||||
Total other comprehensive income (loss) | (44.9) | (38.1) | ||||||||||
Ending balance | 487.9 | 533.9 | ||||||||||
Nikkei Heat Exchanger Company, Ltd [Member] | ||||||||||||
Other comprehensive loss [Abstract] | ||||||||||||
Gain (loss) on write-off of accumulated foreign currency translation | 0.6 | |||||||||||
AIAC Air Conditioning South Africa Pty Ltd [Member] | ||||||||||||
Other comprehensive loss [Abstract] | ||||||||||||
Gain (loss) on write-off of accumulated foreign currency translation | (0.8) | |||||||||||
Accumulated Other Comprehensive Loss [Member] | ||||||||||||
Other comprehensive loss [Abstract] | ||||||||||||
Beginning balance | (178.4) | (140.3) | ||||||||||
Ending balance | (223.3) | (178.4) | ||||||||||
Foreign Currency Translation [Member] | ||||||||||||
Other comprehensive loss [Abstract] | ||||||||||||
Beginning balance | (42.6) | (5.5) | ||||||||||
Other comprehensive income (loss) before reclassifications | (18.2) | (37.9) | ||||||||||
Reclassifications for amortization of unrecognized net loss | [1] | 0.0 | 0.0 | |||||||||
Reclassifications for realized losses - net | [2] | 0.0 | 0.0 | |||||||||
Reclassifications for foreign currency translation (gains) losses | (0.6) | [3] | 0.8 | [4] | ||||||||
Income taxes | 0.0 | 0.0 | ||||||||||
Total other comprehensive income (loss) | (18.8) | (37.1) | ||||||||||
Ending balance | (61.4) | (42.6) | ||||||||||
Defined Benefit Plans [Member] | ||||||||||||
Other comprehensive loss [Abstract] | ||||||||||||
Beginning balance | (136.3) | (134.9) | ||||||||||
Other comprehensive income (loss) before reclassifications | (38.7) | (7.1) | ||||||||||
Reclassifications for amortization of unrecognized net loss | [1] | 5.8 | 5.4 | |||||||||
Reclassifications for realized losses - net | [2] | 0.0 | 0.0 | |||||||||
Reclassifications for foreign currency translation (gains) losses | 0.0 | [3] | 0.0 | [4] | ||||||||
Income taxes | 8.3 | 0.3 | ||||||||||
Total other comprehensive income (loss) | (24.6) | (1.4) | ||||||||||
Ending balance | (160.9) | (136.3) | ||||||||||
Cash Flow Hedges [Member] | ||||||||||||
Other comprehensive loss [Abstract] | ||||||||||||
Beginning balance | 0.5 | 0.1 | ||||||||||
Other comprehensive income (loss) before reclassifications | (2.5) | 0.3 | ||||||||||
Reclassifications for amortization of unrecognized net loss | [1] | 0.0 | 0.0 | |||||||||
Reclassifications for realized losses - net | [2] | 0.5 | 0.2 | |||||||||
Reclassifications for foreign currency translation (gains) losses | 0.0 | [3] | 0.0 | [4] | ||||||||
Income taxes | 0.5 | (0.1) | ||||||||||
Total other comprehensive income (loss) | (1.5) | 0.4 | ||||||||||
Ending balance | $ (1.0) | $ 0.5 | ||||||||||
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Segment and Geographic Information (Tables) |
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Geographic Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales, Gross Profit, Operating Income and Total Assets by Segment |
The following is a summary of net sales, gross profit, and operating income by segment:
Inter-segment sales are accounted for based upon an established markup over production costs. Net sales for Corporate and eliminations primarily represent the elimination of inter-segment sales.
The following is a summary of total assets by segment:
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Capital Expenditures and Depreciation and Amortization Expense by Segment |
The following is a summary of capital expenditures and depreciation and amortization expense by segment:
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Net Sales and Long-lived Assets by Geographical Area |
The following is a summary of net sales by geographical area, based upon the location of the selling unit:
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Property, Plant and Equipment by Geographical Area |
The following is a summary of property, plant and equipment by geographical area:
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Net Sales by End Market |
The following is a summary of net sales by end market:
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Significant Accounting Policies, Sale of AIAC Air Conditioning South Africa (Pty) Ltd (Details) - AIAC Air Conditioning South Africa (Pty) Ltd [Member] $ in Millions |
12 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Sale of AIAC Air Conditioning South Africa (Pty) Ltd [Abstract] | |
Selling price | $ 0.5 |
Loss on sale of assets | (1.7) |
Loss on write-off of accumulated foreign currency translation | (0.8) |
Maximum [Member] | |
Sale of AIAC Air Conditioning South Africa (Pty) Ltd [Abstract] | |
Annual net sales attributable to disposed business | $ 2.0 |
Indebtedness (Details) $ in Millions |
3 Months Ended | 12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020
USD ($)
|
Mar. 31, 2020
USD ($)
|
Jan. 31, 2020
USD ($)
|
Mar. 31, 2019
USD ($)
|
|||
Long-term Debt and Capital Lease Obligations [Abstract] | ||||||||||||||
Debt | $ 472.6 | $ 472.6 | $ 434.8 | |||||||||||
Less: current portion | (15.6) | (15.6) | (48.6) | |||||||||||
Less: unamortized debt issuance costs | (5.0) | (5.0) | (4.0) | |||||||||||
Total long-term debt | 452.0 | 452.0 | 382.2 | |||||||||||
Maturities of long term debt and capital lease obligations [Abstract] | ||||||||||||||
2021 | 15.6 | 15.6 | ||||||||||||
2022 | 21.7 | 21.7 | ||||||||||||
2023 | 21.7 | 21.7 | ||||||||||||
2024 | 21.7 | 21.7 | ||||||||||||
2025 | 273.6 | 273.6 | ||||||||||||
2026 & beyond | 118.3 | 118.3 | ||||||||||||
Total debt | 472.6 | 472.6 | 434.8 | |||||||||||
Short-term debt | $ 14.8 | 14.8 | 18.9 | |||||||||||
Leverage ratio covenant limit | 3.25 | |||||||||||||
Forecast [Member] | ||||||||||||||
Maturities of long term debt and capital lease obligations [Abstract] | ||||||||||||||
Leverage ratio covenant limit | 3.25 | 3.50 | 3.75 | 4.75 | 5.75 | 5.25 | 4.75 | 4.00 | ||||||
Term Loans [Member] | ||||||||||||||
Long-term Debt and Capital Lease Obligations [Abstract] | ||||||||||||||
Debt | $ 189.4 | $ 189.4 | 238.4 | |||||||||||
Fiscal year of maturity | Mar. 31, 2025 | |||||||||||||
Maturities of long term debt and capital lease obligations [Abstract] | ||||||||||||||
Total debt | $ 189.4 | $ 189.4 | 238.4 | |||||||||||
Term Loans [Member] | Weighted Average [Member] | ||||||||||||||
Credit Facility [Abstract] | ||||||||||||||
Weighted-average interest rate | 2.80% | 2.80% | ||||||||||||
Revolving Credit Facility [Member] | ||||||||||||||
Long-term Debt and Capital Lease Obligations [Abstract] | ||||||||||||||
Debt | $ 127.2 | $ 127.2 | 47.1 | |||||||||||
Fiscal year of maturity | Mar. 31, 2025 | |||||||||||||
Maturities of long term debt and capital lease obligations [Abstract] | ||||||||||||||
Total debt | $ 127.2 | $ 127.2 | 47.1 | |||||||||||
Revolving Credit Facility [Member] | Weighted Average [Member] | ||||||||||||||
Credit Facility [Abstract] | ||||||||||||||
Weighted-average interest rate | 3.00% | 3.00% | ||||||||||||
Multi Currency Revolving Credit Facility [Member] | ||||||||||||||
Credit Facility [Abstract] | ||||||||||||||
Maximum borrowing capacity | $ 250.0 | $ 250.0 | ||||||||||||
Expiration date | Jun. 30, 2024 | |||||||||||||
Deferred debt issuance costs | 1.1 | $ 1.1 | ||||||||||||
Domestic Revolving Credit Facility [Member] | ||||||||||||||
Credit Facility [Abstract] | ||||||||||||||
Letters of credit outstanding | 5.3 | 5.3 | ||||||||||||
Available for future borrowings | 117.5 | 117.5 | ||||||||||||
Foreign Credit Agreements [Member] | ||||||||||||||
Maturities of long term debt and capital lease obligations [Abstract] | ||||||||||||||
Short-term debt | 14.8 | 14.8 | 18.9 | |||||||||||
Senior Notes [Member] | ||||||||||||||
Maturities of long term debt and capital lease obligations [Abstract] | ||||||||||||||
Long-term debt, fair value | 131.3 | 131.3 | 137.2 | |||||||||||
5.9% Senior Notes [Member] | ||||||||||||||
Credit Facility [Abstract] | ||||||||||||||
Deferred debt issuance costs | $ 1.7 | $ 1.7 | ||||||||||||
Debt instrument, face amount | $ 100.0 | |||||||||||||
Long-term Debt and Capital Lease Obligations [Abstract] | ||||||||||||||
Interest rate percentage | 5.90% | 5.90% | ||||||||||||
Debt | $ 100.0 | $ 100.0 | 0.0 | |||||||||||
Fiscal year of maturity | Mar. 31, 2029 | |||||||||||||
Maturities of long term debt and capital lease obligations [Abstract] | ||||||||||||||
Total debt | $ 100.0 | $ 100.0 | 0.0 | |||||||||||
5.8% Senior Notes [Member] | ||||||||||||||
Long-term Debt and Capital Lease Obligations [Abstract] | ||||||||||||||
Interest rate percentage | 5.80% | 5.80% | ||||||||||||
Debt | $ 50.0 | $ 50.0 | 50.0 | |||||||||||
Fiscal year of maturity | Mar. 31, 2027 | |||||||||||||
Maturities of long term debt and capital lease obligations [Abstract] | ||||||||||||||
Total debt | $ 50.0 | $ 50.0 | 50.0 | |||||||||||
6.8% Senior Notes [Member] | ||||||||||||||
Long-term Debt and Capital Lease Obligations [Abstract] | ||||||||||||||
Interest rate percentage | 6.80% | 6.80% | ||||||||||||
Debt | $ 0.0 | $ 0.0 | 85.0 | |||||||||||
Fiscal year of maturity | Mar. 31, 2021 | |||||||||||||
Maturities of long term debt and capital lease obligations [Abstract] | ||||||||||||||
Total debt | 0.0 | $ 0.0 | 85.0 | |||||||||||
Other [Member] | ||||||||||||||
Long-term Debt and Capital Lease Obligations [Abstract] | ||||||||||||||
Debt | [1] | 6.0 | 6.0 | 14.3 | ||||||||||
Maturities of long term debt and capital lease obligations [Abstract] | ||||||||||||||
Total debt | [1] | $ 6.0 | $ 6.0 | $ 14.3 | ||||||||||
|
Income Taxes, Tax Years Subject to Examination, Tax Credits and Tax Carryforwards (Details) $ in Millions |
12 Months Ended |
---|---|
Mar. 31, 2020
USD ($)
| |
Operating Loss Carryforwards [Line Items] | |
Unrecognized foreign withholding taxes and deferred tax liabilities | $ 7.0 |
Federal and State [Member] | |
Income Taxes [Abstract] | |
Tax credit carryforward | $ 61.6 |
Federal and State [Member] | Minimum [Member] | |
Income Taxes [Abstract] | |
Tax credit carryforward, expiration date | Mar. 31, 2021 |
Federal and State [Member] | Maximum [Member] | |
Income Taxes [Abstract] | |
Tax credit carryforward, expiration date | Mar. 31, 2040 |
Germany [Member] | |
Income Taxes [Abstract] | |
Tax years subject to examination | Fiscal 2011 - Fiscal 2019 |
Italy [Member] | |
Income Taxes [Abstract] | |
Tax years subject to examination | Calendar 2015 - Fiscal 2019 |
United States [Member] | |
Income Taxes [Abstract] | |
Tax years subject to examination | Fiscal 2017 - Fiscal 2019 |
Foreign Tax Jurisdictions [Member] | |
Operating Loss Carryforwards [Line Items] | |
Tax loss carryforwards | $ 314.7 |
Tax losses subject to expiration | 8.1 |
Tax losses not subject to expiration | $ 306.6 |
Foreign Tax Jurisdictions [Member] | Minimum [Member] | |
Operating Loss Carryforwards [Line Items] | |
Tax loss carryforwards, expiration date | Mar. 31, 2021 |
Foreign Tax Jurisdictions [Member] | Maximum [Member] | |
Operating Loss Carryforwards [Line Items] | |
Tax loss carryforwards, expiration date | Mar. 31, 2034 |
State and Local [Member] | |
Operating Loss Carryforwards [Line Items] | |
Tax loss carryforwards | $ 149.8 |
State and Local [Member] | Minimum [Member] | |
Operating Loss Carryforwards [Line Items] | |
Tax loss carryforwards, expiration date | Mar. 31, 2021 |
State and Local [Member] | Maximum [Member] | |
Operating Loss Carryforwards [Line Items] | |
Tax loss carryforwards, expiration date | Mar. 31, 2040 |
Income Taxes, Reconciliation of U.S. Federal Statutory Rate to Effective Tax Rate (Details) |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Reconciliation of federal statutory income tax rate to company's effective income tax rate [Abstract] | |||
Statutory federal tax | 21.00% | 21.00% | 31.50% |
State taxes, net of federal benefit | (12.00%) | 3.60% | 2.90% |
Taxes on non-U.S. earnings and losses | 32.90% | 3.90% | (3.80%) |
Valuation allowances | 156.90% | 4.00% | (5.60%) |
Tax credits | (36.70%) | (26.10%) | (17.30%) |
Compensation | 4.00% | (0.10%) | (0.80%) |
Tax rate or law changes | 3.60% | (12.00%) | 60.10% |
Uncertain tax positions, net of settlements | (37.90%) | 0.40% | (0.80%) |
Notional interest deductions | (12.50%) | (2.50%) | (3.20%) |
Dividends and taxable foreign inclusions | (11.00%) | 1.60% | 0.20% |
Other | 10.90% | (0.10%) | (0.80%) |
Effective tax rate | 119.20% | (6.30%) | 62.40% |
Intangible Assets (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Amortized intangible assets [Abstract] | |||
Gross carrying value | $ 142.7 | $ 144.3 | |
Accumulated amortization | (36.4) | (28.1) | |
Net intangible assets | 106.3 | 116.2 | |
Amortization expense | 8.9 | 9.0 | $ 9.7 |
Estimated future amortization expense [Abstract] | |||
Fiscal 2021 | 8.4 | ||
2022 | 8.0 | ||
2023 | 8.0 | ||
2024 | 8.0 | ||
2025 | 8.0 | ||
BHVAC [Member] | |||
Estimated future amortization expense [Abstract] | |||
Impairment charges | $ 1.2 | ||
Customer Relationships [Member] | |||
Amortized intangible assets [Abstract] | |||
Gross carrying value | 60.8 | 61.5 | |
Accumulated amortization | (12.6) | (9.1) | |
Net intangible assets | 48.2 | 52.4 | |
Trade Names [Member] | |||
Amortized intangible assets [Abstract] | |||
Gross carrying value | 58.3 | 58.9 | |
Accumulated amortization | (16.2) | (13.5) | |
Net intangible assets | 42.1 | 45.4 | |
Acquired Technology [Member] | |||
Amortized intangible assets [Abstract] | |||
Gross carrying value | 23.6 | 23.9 | |
Accumulated amortization | (7.6) | (5.5) | |
Net intangible assets | $ 16.0 | $ 18.4 |
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2017 |
---|---|---|---|---|
Cash, Cash Equivalents and Restricted Cash [Abstract] | ||||
Cash and cash equivalents | $ 70.9 | $ 41.7 | ||
Restricted cash | 0.4 | 0.5 | ||
Total cash, cash equivalents and restricted cash | $ 71.3 | $ 42.2 | $ 40.3 | $ 34.8 |
Other Income and Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|||||||
Other Income and Expense [Abstract] | |||||||||
Equity in earnings of non-consolidated affiliate | [1] | $ 0.2 | $ 0.7 | $ 0.2 | |||||
Interest income | 0.4 | 0.4 | 0.4 | ||||||
Foreign currency transactions | [2] | (2.4) | (2.3) | (0.6) | |||||
Net periodic benefit cost | [3] | (3.0) | (2.9) | (3.3) | |||||
Total other expense - net | (4.8) | $ (4.1) | $ (3.3) | ||||||
Nikkei Heat Exchanger Company, Ltd [Member] | |||||||||
Other Income and Expenses [Abstract] | |||||||||
Gain on sale of ownership interest | $ 0.1 | ||||||||
|
Fair Value Measurements |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
Note 3: Fair Value Measurements
Fair value is defined as the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Fair value measurements are classified under the following hierarchy:
When available, the Company uses quoted market prices to determine fair value and classifies such measurements as Level 1. In some cases, where market prices are not available, the Company uses observable market-based inputs to calculate fair value, in which case the measurements are classified as Level 2. If quoted or observable market prices are not available, the Company determines fair value based upon valuation models that use, where possible, market-based data such as interest rates, yield curves or currency rates. These measurements are classified as Level 3.
The carrying values of cash, cash equivalents, restricted cash, short-term investments, trade accounts receivable, accounts payable, and short-term debt approximate fair value due to the short-term nature of these instruments. The Company holds investments in deferred compensation trusts to fund obligations under certain non-qualified deferred compensation plans. The Company records the fair value of these investments within other noncurrent assets on its consolidated balance sheets. The Company classifies money market investments held by the trusts within Level 2 of the valuation hierarchy. The Company classifies all other investments held by the trusts within Level 1 of the valuation hierarchy, as it uses quoted market prices to determine the investments’ fair value. The Company’s deferred compensation obligations, which are recorded as other noncurrent liabilities, are recorded at the fair values of the investments held by the trust. The fair values of the investments and obligations for the Company’s deferred compensation plans each totaled $3.8 million and $6.0 million as of March 31, 2020 and 2019, respectively. The $2.2 million decrease in the fair value of the investments and deferred compensation obligations from March 31, 2019 was primarily due to participant withdrawals during fiscal 2020. The fair value of the Company’s long-term debt is disclosed in Note 17.
Plan assets related to the Company’s pension plans were classified as follows:
The Company determined the fair value of money market investments to approximate their net asset values, without discounts for credit quality or liquidity restrictions, and classified them within Level 2 of the valuation hierarchy. The Company determined the fair value of pooled equity funds based upon quoted prices from active markets and classified them within Level 1 of the valuation hierarchy. The Company determined the fair value of certain fixed income securities and U.S. government and agency securities based upon recent bid prices or the average of recent bid and asking prices when available and, if not available, the Company valued them through matrix pricing models developed by sources considered by management to be reliable. The Company classified these assets within Level 2 of the valuation hierarchy. As of March 31, 2020 and 2019, the Company held no Level 3 assets within its pension plans.
As a practical expedient, the Company valued certain investments, including pooled equity, fixed income and a real estate fund, using their net asset value (NAV) per unit, and therefore, has not classified these investments within the fair value hierarchy. The terms and conditions for redemptions vary for the investments valued at NAV. The real estate and fixed income investment funds may be redeemed quarterly and monthly, respectively, with a 90-day and 60-day notice period, respectively. Other investments valued at NAV do not have significantly-restrictive redemption frequency or notice period requirements. The Company does not intend to sell or otherwise dispose of these investments at prices different than the NAV per unit.
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Income Taxes |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
Note 7: Income Taxes
The U.S. and foreign components of earnings before income taxes and the provision or benefit for income taxes consisted of the following:
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. Shortly after the Tax Act was enacted, the SEC issued accounting guidance which provided a one-year measurement period during which a company could complete its accounting for the impacts of the Tax Act. To the extent a company’s accounting for certain income tax effects of the Tax Act was incomplete, the company could determine a reasonable estimate for those effects and record a provisional estimate in its financial statements. If a company could not determine a provisional estimate to be included in the financial statements, it was to continue applying the provisions of the tax laws that were in effect immediately prior to the Tax Act being enacted.
During fiscal 2018, the Company recorded provisional discrete tax charges totaling $38.0 million related to the Tax Act. The Company adjusted its U.S. deferred tax assets by $19.0 million due to the reduction in the U.S. federal corporate tax rate. This net reduction in deferred tax assets also included the estimated impact on the Company’s net state deferred tax assets. In addition, the Company recorded a $19.0 million charge for the transition tax required under the Tax Act.
During fiscal 2019, the Company completed its accounting for the Tax Act, which resulted in an income tax benefit totaling $7.7 million. The Company utilized its deferred tax attributes against the transition tax and finalized its fiscal 2018 U.S. federal income tax return. As a result, the Company decreased the provisional charge recorded for the reduction in the U.S. federal corporate tax rate by $9.3 million, since more deferred tax assets were utilized to offset taxable income at a higher fiscal 2018 U.S. federal corporate tax rate. The Company also decreased the transition tax liability to $18.9 million, a reduction of $0.1 million. In addition, the Company recorded a charge of $1.7 million for a reduction to state deferred tax assets.
The Tax Act included a new provision designed to tax global intangible low taxed income (“GILTI”) starting in fiscal 2019. The Company elected to record the tax effects of the GILTI provision as a period expense in the applicable tax year. To determine whether its net operating loss carryforward deferred tax assets are expected to be realized, the Company considers the applicable tax law ordering. Based upon this approach, net operating loss carryforwards are deemed to be realizable if they will reduce the expected tax liability when utilized, regardless of whether the 50% GILTI deduction or applicable tax credits may have been available.
The Company’s accounting policy is to allocate the income tax provision between net earnings and other comprehensive income. The Company applies its accounting for income taxes by tax jurisdiction, and in periods in which there is a loss before income taxes and pre-tax income in other comprehensive income, it first allocates the income tax provision to other comprehensive income, and then records a related tax benefit in the income tax provision.
The reconciliation between the U.S. federal statutory rate and the Company’s effective tax rate was as follows:
During fiscal 2020, the Company recorded net income tax charges totaling $2.9 million as a result of legal entity restructuring completed in preparation of a potential sale of the automotive business and a $1.4 million income tax benefit resulting from the recognition of a tax incentive in Italy. Also in fiscal 2020, the Company changed its determination of whether it was more likely than not certain deferred tax assets in the U.S. and in a foreign jurisdiction would be realized and, as a result, adjusted the respective valuation allowances and recorded an income tax charge of $8.4 million and an income tax benefit of $1.3 million, respectively. In addition, the Company recorded a net increase of deferred tax asset valuation allowances totaling $9.2 million related to other tax jurisdictions and recorded a $4.5 million income tax benefit associated with the reduction in unrecognized tax benefits resulting from a lapse in statutes of limitations and settlements.
During fiscal 2019, the Company recorded income tax benefits totaling $7.7 million related to the Tax Act, as discussed above; recorded income tax benefits totaling $14.5 million as a result of amending previous-year tax returns to recognize foreign tax credits that are expected to be realized based upon future sources of income; and recorded a $2.5 million income tax benefit related to a manufacturing deduction in the United States. Also in fiscal 2019, the Company changed its determination of whether it was more likely than not certain deferred tax assets of two separate subsidiaries in a foreign jurisdiction would be realized and, as a result, adjusted the respective valuation allowances and recorded an income tax benefit totaling $1.0 million. In addition, the Company recorded a net increase of deferred tax asset valuation allowances totaling $4.3 million related to other tax jurisdictions and recorded a $2.2 million income tax benefit associated with the reduction in unrecognized tax benefits resulting from a lapse in statutes of limitations.
During fiscal 2018, the Company recorded provisional charges totaling $38.0 million related to the Tax Act, as discussed above, and recognized a $9.0 million Hungarian development tax credit. Also in fiscal 2018, the Company reversed a portion of the valuation allowance on certain deferred tax assets in a foreign jurisdiction after determining it was more likely than not these assets would be realized, and, as a result, recorded an income tax benefit of $2.8 million. In addition, the Company recorded a $1.8 million income tax benefit in fiscal 2018 associated with the reduction in unrecognized tax benefits resulting from a lapse in statutes of limitations.
The Company has recorded valuation allowances against its net deferred tax assets to the extent it has determined it is more likely than not that such assets will not be realized in the future. The Company will maintain the valuation allowances in each applicable tax jurisdiction until it determines it is more likely than not the deferred tax assets will be realized, thereby eliminating the need for a valuation allowance. As further discussed in Note 20, the COVID-19 pandemic has resulted in risks and uncertainties to our business. Future events or circumstances, such as lower taxable income or unfavorable changes in the financial outlook of the Company’s operations in certain jurisdictions, could necessitate the establishment of further valuation allowances, which could have a material adverse effect on the Company’s results of operations and financial condition.
The tax effects of temporary differences that gave rise to deferred tax assets and liabilities were as follows:
Unrecognized tax benefits were as follows:
The Company’s liability for unrecognized tax benefits as of March 31, 2020 was $9.7 million, and if recognized, $7.9 million would have an effective tax rate impact. The Company estimates a $0.6 million decrease in unrecognized tax benefits during fiscal 2021 due to lapses in statutes of limitations and settlements. If recognized, these reductions would not have a significant impact on the Company’s effective tax rate.
The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. During fiscal 2020 and 2019, interest and penalties included within income tax expense in the consolidated statements of operations were not significant. At March 31, 2020 and 2019, accrued interest and penalties totaled $0.5 million and $1.1 million, respectively.
The Company files income tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world. At March 31, 2020, the Company was under income tax examination in a number of jurisdictions. The following tax years remain subject to examination for the Company’s major tax jurisdictions:
At March 31, 2020, the Company had federal and state tax credits of $61.6 million that, if not utilized against U.S. taxes, will expire between fiscal
and . The Company also had state and local tax loss carryforwards totaling $149.8 million that, if not utilized against state apportioned taxable income, will expire between fiscal and . In addition, the Company had tax loss and foreign attribute carryforwards totaling $314.7 million in various tax jurisdictions throughout the world. Certain of the carryforwards in the U.S. and in foreign jurisdictions are offset by valuation allowances. If not utilized against taxable income, $8.1 million of these carryforwards will expire between fiscal and , and $306.6 million, mainly related to Germany and Italy, will not expire due to an unlimited carryforward period.The Company’s practice and intention is to reinvest, with certain insignificant exceptions, the earnings of its non-U.S. subsidiaries outside of the U.S., and therefore, the Company has not recorded foreign withholding taxes or deferred income taxes for these earnings. The Company has estimated the net amount of unrecognized foreign withholding tax and deferred tax liabilities would total approximately $7.0 million if the accumulated foreign earnings were distributed; however, the actual tax cost would be dependent on circumstances existing when remittance occurs.
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Property, Plant and Equipment |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment |
Note 11: Property, Plant and Equipment
Property, plant and equipment, including depreciable lives, consisted of the following:
Depreciation expense totaled $68.2 million, $67.9 million, and $67.0 million for fiscal 2020, 2019, and 2018, respectively. Gains and losses related to the disposal of property, plant and equipment are recorded within SG&A expenses. For fiscal 2020, 2019, and 2018, losses related to the disposal of property, plant and equipment totaled $0.6 million, $0.9 million, and $0.7 million, respectively.
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Segment and Geographic Information, Net sales by End Market (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
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Segment Reporting Information [Abstract] | |||||||||||
Net sales | $ 472.9 | $ 473.4 | $ 500.2 | $ 529.0 | $ 556.7 | $ 541.0 | $ 548.9 | $ 566.1 | $ 1,975.5 | $ 2,212.7 | $ 2,103.1 |
Commercial HVAC&R [Member] | |||||||||||
Segment Reporting Information [Abstract] | |||||||||||
Net sales | 639.7 | 674.0 | 648.3 | ||||||||
Automotive [Member] | |||||||||||
Segment Reporting Information [Abstract] | |||||||||||
Net sales | 508.8 | 542.8 | 526.0 | ||||||||
Commercial Vehicle [Member] | |||||||||||
Segment Reporting Information [Abstract] | |||||||||||
Net sales | 323.7 | 387.6 | 381.7 | ||||||||
Off-Highway [Member] | |||||||||||
Segment Reporting Information [Abstract] | |||||||||||
Net sales | 253.9 | 314.1 | 271.2 | ||||||||
Data Center Cooling [Member] | |||||||||||
Segment Reporting Information [Abstract] | |||||||||||
Net sales | 150.2 | 187.0 | 137.6 | ||||||||
Industrial Cooling [Member] | |||||||||||
Segment Reporting Information [Abstract] | |||||||||||
Net sales | 43.5 | 47.8 | 67.6 | ||||||||
Other [Member] | |||||||||||
Segment Reporting Information [Abstract] | |||||||||||
Net sales | $ 55.7 | $ 59.4 | $ 70.7 |
Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Pension Plan Assets |
Plan assets related to the Company’s pension plans were classified as follows:
|
Schedule II - Valuation and Qualifying Accounts |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the years ended March 31, 2020, 2019 and 2018
(In millions)
|
Segment and Geographic Information, Total Assets by Segment (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Mar. 31, 2019 |
---|---|---|
Segment Reporting Information [Abstract] | ||
Total assets | $ 1,536.1 | $ 1,538.0 |
Operating Segments [Member] | VTS [Member] | ||
Segment Reporting Information [Abstract] | ||
Total assets | 683.9 | 749.9 |
Operating Segments [Member] | CIS [Member] | ||
Segment Reporting Information [Abstract] | ||
Total assets | 617.7 | 604.2 |
Operating Segments [Member] | BHVAC [Member] | ||
Segment Reporting Information [Abstract] | ||
Total assets | 102.3 | 89.4 |
Corporate and Eliminations [Member] | ||
Segment Reporting Information [Abstract] | ||
Total assets | $ 132.2 | $ 94.5 |
Accumulated Other Comprehensive Loss (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss |
Changes in accumulated other comprehensive loss were as follows:
|
Significant Accounting Policies, Sale of Nikkei Heat Exchanger Company, Ltd. ("NEX") (Details) - Nikkei Heat Exchanger Company, Ltd [Member] $ in Millions |
12 Months Ended |
---|---|
Mar. 31, 2020
USD ($)
| |
Sale of Business [Abstract] | |
Ownership percentage | 50.00% |
Selling price | $ 3.8 |
Gain (loss) on sale of business | 0.1 |
Gain on write-off of accumulated foreign currency translation | $ 0.6 |
Income Taxes, Unrecognized Tax Benefits and Deferred Tax Asset Valuation Allowances (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Taxes [Abstract] | ||||||||
Income tax expense related to legal entity restructuring | $ 2.7 | $ 2.9 | ||||||
Tax benefit from recognition of tax credits | $ (14.5) | |||||||
Tax (benefit) from foreign development tax credit | 12.4 | (5.1) | $ 39.5 | |||||
Income Taxes [Abstract] | ||||||||
Income tax expense (benefit) related to US Tax Reform | $ 2.2 | $ (24.4) | (7.7) | |||||
Deferred tax asset, income tax expense (benefit) | 2.5 | |||||||
Provisional income tax expense (benefit) related to US Tax Reform | 38.0 | |||||||
Change in deferred tax asset valuation allowances | $ 4.1 | $ 3.0 | $ 1.0 | $ (2.0) | ||||
Lapse of statute of limitations and settlements | (4.5) | |||||||
Lapse of statute of limitations | (2.4) | (2.2) | (1.8) | |||||
U.S. [Member] | ||||||||
Income Taxes [Abstract] | ||||||||
Change in deferred tax asset valuation allowances | 8.4 | |||||||
Foreign Jurisdiction [Member] | ||||||||
Income Taxes [Abstract] | ||||||||
Change in deferred tax asset valuation allowances | (1.3) | (1.0) | (2.8) | |||||
Other Tax Jurisdictions [Member] | ||||||||
Income Taxes [Abstract] | ||||||||
Change in deferred tax asset valuation allowances | 9.2 | $ 4.3 | ||||||
Italy [Member] | ||||||||
Income Taxes [Abstract] | ||||||||
Tax benefit from recognition of tax credits | $ (1.4) | |||||||
Hungarian Development Tax Credit [Member] | ||||||||
Income Taxes [Abstract] | ||||||||
Tax (benefit) from foreign development tax credit | $ (9.0) |
Goodwill (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Goodwill [Roll Forward] | ||
Beginning balance | $ 168.5 | $ 173.8 |
Impairment charge | (0.5) | |
Effect of exchange rate changes | (1.9) | (5.3) |
Ending balance | 166.1 | 168.5 |
VTS [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 0.5 | 0.5 |
Impairment charge | (0.5) | |
Effect of exchange rate changes | 0.0 | 0.0 |
Ending balance | 0.0 | 0.5 |
Accumulated impairment losses | 40.8 | 40.3 |
CIS [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 153.9 | 158.3 |
Impairment charge | 0.0 | |
Effect of exchange rate changes | (1.3) | (4.4) |
Ending balance | 152.6 | 153.9 |
BHVAC [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 14.1 | 15.0 |
Impairment charge | 0.0 | |
Effect of exchange rate changes | (0.6) | (0.9) |
Ending balance | $ 13.5 | $ 14.1 |
Inventories (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Mar. 31, 2019 |
---|---|---|
Inventories [Abstract] | ||
Raw materials | $ 123.6 | $ 122.8 |
Work in process | 34.6 | 32.2 |
Finished goods | 49.2 | 45.7 |
Total inventories | $ 207.4 | $ 200.7 |
Income Taxes, Earnings (Loss) Before Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Earnings (Loss) Before Income Taxes [Abstract] | |||
United States | $ (26.1) | $ 22.4 | $ 2.5 |
Foreign | 36.5 | 58.4 | 60.8 |
Earnings before income taxes | $ 10.4 | $ 80.8 | $ 63.3 |
Pension and Employee Benefit Plans, Defined Contribution Employee Benefit Plans (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan cost recognized | $ 6.6 | $ 6.4 | $ 5.2 |
Maximum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Company match | 4.50% |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|||||||||||||||
Basic Earnings Per Share [Abstract] | |||||||||||||||||||||||||
Net (loss) earnings attributable to Modine | $ (6.7) | [1] | $ 1.2 | [1] | $ (4.7) | [1] | $ 8.0 | [1] | $ 6.3 | [2] | $ 18.0 | [2] | $ 38.5 | [2] | $ 22.0 | [2] | $ (2.2) | [1] | $ 84.8 | [2] | $ 22.2 | ||||
Less: Undistributed earnings attributable to unvested shares | 0.0 | (0.4) | (0.2) | ||||||||||||||||||||||
Net (loss) earnings available to Modine shareholders | $ (2.2) | $ 84.4 | $ 22.0 | ||||||||||||||||||||||
Weighted-average shares outstanding - basic (in shares) | 50.8 | 50.5 | 49.9 | ||||||||||||||||||||||
Net (loss) earnings per share - basic (in dollars per share) | $ (0.13) | $ 0.02 | $ (0.09) | $ 0.16 | $ 0.12 | $ 0.36 | $ 0.76 | $ 0.43 | $ (0.04) | $ 1.67 | $ 0.44 | ||||||||||||||
Diluted Earnings Per Share [Abstract] | |||||||||||||||||||||||||
Net (loss) earnings attributable to Modine | $ (6.7) | [1] | $ 1.2 | [1] | $ (4.7) | [1] | $ 8.0 | [1] | $ 6.3 | [2] | $ 18.0 | [2] | $ 38.5 | [2] | $ 22.0 | [2] | $ (2.2) | [1] | $ 84.8 | [2] | $ 22.2 | ||||
Less: Undistributed earnings attributable to unvested shares | 0.0 | (0.2) | (0.1) | ||||||||||||||||||||||
Net (loss) earnings available to Modine shareholders | $ (2.2) | $ 84.6 | $ 22.1 | ||||||||||||||||||||||
Weighted-average shares outstanding - basic (in shares) | 50.8 | 50.5 | 49.9 | ||||||||||||||||||||||
Effect of dilutive securities (in shares) | 0.0 | 0.8 | 1.0 | ||||||||||||||||||||||
Weighted-average shares outstanding - diluted (in shares) | 50.8 | 51.3 | 50.9 | ||||||||||||||||||||||
Net (loss) earnings per share - diluted (in dollars per share) | $ (0.13) | $ 0.02 | $ (0.09) | $ 0.16 | $ 0.12 | $ 0.35 | $ 0.75 | $ 0.43 | $ (0.04) | $ 1.65 | $ 0.43 | ||||||||||||||
Antidilutive securities excluded from computation of earning per share [Abstract] | |||||||||||||||||||||||||
Potentially dilutive securities not included in computation of diluted net loss per share (in shares) | 0.3 | ||||||||||||||||||||||||
Stock Options [Member] | |||||||||||||||||||||||||
Antidilutive securities excluded from computation of earning per share [Abstract] | |||||||||||||||||||||||||
Antidilutive securities excluded from computation of earning per share (in shares) | 1.1 | 0.4 | 0.2 | ||||||||||||||||||||||
Restricted Stock [Member] | |||||||||||||||||||||||||
Antidilutive securities excluded from computation of earning per share [Abstract] | |||||||||||||||||||||||||
Antidilutive securities excluded from computation of earning per share (in shares) | 0.5 | 0.3 | |||||||||||||||||||||||
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Inventories |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
Note 10: Inventories
Inventories consisted of the following:
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Revenue Recognition |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue Recognition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition |
Note 2: Revenue Recognition
Effective April 1, 2018, the Company adopted new revenue recognition accounting guidance; see Note 1 for additional information .
The Company generates revenue from selling innovative thermal management products and solutions to diversified global markets and customers. The Company recognizes revenue based upon consideration specified in a contract and as it satisfies performance obligations by transferring control over its products to its customers, which may be at a point in time or over time. The majority of the Company’s revenue is recognized at a point in time, based upon shipment terms. The Company records an allowance for doubtful accounts for estimated uncollectible receivables and accrues for estimated warranty costs at the time of sale. These estimates are based upon historical experience, current business trends, and current economic conditions. The Company accounts for shipping and handling activities as fulfilment costs rather than separate performance obligations, and records shipping and handling costs in cost of sales and related amounts billed to customers in net sales. The Company establishes payment terms with its customers based upon industry and regional practices, which typically do not exceed 90 days. As the Company expects to receive payment from its customers within one year from the time of sale, it disregards the effects of the time value of money in its determination of the transaction price. The Company has not disclosed the value of unsatisfied performance obligations because the revenue associated with customer contracts for which the original expected performance period is greater than one year is immaterial.
The following is a description of the Company’s principal revenue-generating activities:
Vehicular Thermal Solutions (“VTS”)
The VTS segment principally generates revenue from providing engineered heat transfer systems and components for use in on- and off-highway original equipment. This segment provides powertrain and engine cooling products, including, but not limited to, radiators, charge air coolers, condensers, oil coolers, EGR coolers, and fuel coolers, to original equipment manufacturers (“OEMs”) in the automotive, commercial vehicle, and off-highway markets in the Americas, Europe, and Asia regions. In addition, the VTS segment designs customer-owned tooling for OEMs and also serves Brazil’s automotive and commercial vehicle aftermarkets.
While the VTS segment provides customized production and service parts to customers under multi-year programs, these programs typically do not contain contractually-guaranteed volumes to be purchased by the customer. As a result, individual purchase orders typically represent the quantities ordered by the customer. With the exception of a small number of VTS customers, the terms within the customer agreement, purchase order, or customer-owned tooling contract do not provide the Company with an enforceable right to payment for performance completed to date. As a result, the VTS segment recognizes revenue primarily at the time control is transferred to the customer based upon shipping terms, which is generally upon shipment.
In regard to VTS customers with contractual cancellation terms that provide an enforceable right to payment for performance completed to date, the Company recognizes revenue over time based upon its estimated progress towards satisfaction of the performance obligations. The VTS segment measures progress by evaluating the production status of ordered products not yet shipped to the customer.
For certain customer programs, the Company agrees to provide annual price reductions based upon contract terms. For these scheduled price reductions, the Company evaluates whether the provisions represent a material right to the customer, and if so, defers associated revenue as a result.
At times, the Company makes up-front incentive payments to certain customers related to future sales under multi-year programs. The Company capitalizes these incentive payments, which it expects to recover through future sales, and amortizes the assets as a reduction to revenue when the related products are sold to customers.
Commercial and Industrial Solutions (“CIS”)
The CIS segment principally generates revenue from providing thermal management products, including customized coils and coolers, to the heating, ventilating, air conditioning, and refrigeration (“HVAC&R”) markets in North America, Europe, and Asia. In addition, the segment applies corrosion protection solutions, which are referred to as coatings, to heat-transfer equipment.
For the sale of coils and coolers, individual customer purchase orders generally represent the Company’s contract with its customers. With the exception of a small number of customers, the applicable customer contracts do not provide the Company with an enforceable right to payment for performance completed to date. As a result, the CIS segment recognizes revenue for its sale of coils and coolers primarily at the time control is transferred to the customer based upon shipping terms, which is generally upon shipment.
For both sales to customers whose contract cancellation terms provide an enforceable right to payment and sales from the coatings businesses, in which the customers control the heat-transfer equipment being enhanced by the coating application, the CIS segment recognizes revenue over time based upon its estimated progress towards satisfaction of the performance obligations. The segment measures progress by evaluating the production status towards completion of ordered products or services not yet shipped to its customers.
Building HVAC Systems (“BHVAC”)
The BHVAC segment principally generates revenue from providing a variety of heating, ventilating, and air conditioning products, primarily for commercial buildings and related applications in North America and the U.K., as well as mainland Europe and the Middle East.
Heating products are manufactured in the U.S. and are generally sold to independent distributors, who in turn market the heating products to end customers. Because these products are sold to many different customers without contractual or practical limitations, the BHVAC segment recognizes revenue at the time control is transferred to the customer, generally the independent distributor, based upon shipping terms, which is generally upon shipment.
Ventilation and air conditioning products are highly-specified to a customer’s needs; however, the underlying sales contracts do not provide the Company with an enforceable right to payment for performance completed to date. As a result, the BHVAC segment recognizes revenue for these products at the time control is transferred to the customer based upon shipping terms, which is generally upon shipment.
Disaggregation of Revenue
The table below presents revenue to external customers for each of the Company’s business segments by primary end market, by geographic location and based upon the timing of revenue recognition:
Contract Balances
Contract assets and contract liabilities from contracts with customers were as follows:
Contract assets, included within other current assets in the consolidated balance sheets, primarily consist of capitalized costs related to customer-owned tooling contracts, wherein the customer has guaranteed reimbursement, and assets recorded for revenue recognized over time, which represent the Company’s rights to consideration for work completed but not yet billed. The $0.9 million decrease in contract assets during fiscal 2020 primarily resulted from a decrease in capitalized costs related to customer-owned tooling contracts, partially offset by an increase in contract assets for revenue recognized over time.
Contract liabilities, included within other current liabilities in the consolidated balance sheets, consist of payments received in advance of satisfying performance obligations under customer contracts, including contracts for customer-owned tooling. The $1.6 million increase in contract liabilities during fiscal 2020 was primarily related to customer contracts for which payment had been received in advance of the Company’s satisfaction of performance obligations.
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Other Income and Expense |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expense |
Note 6: Other Income and Expense
Other income and expense consisted of the following:
|
Segment and Geographic Information, Property, Plant and Equipment by Geographical Area (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Mar. 31, 2019 |
---|---|---|
Segment Reporting Information, Additional Information [Abstract] | ||
Total property, plant and equipment | $ 448.0 | $ 484.7 |
Reportable Geographical Components [Member] | United States [Member] | ||
Segment Reporting Information, Additional Information [Abstract] | ||
Total property, plant and equipment | 114.6 | 117.7 |
Reportable Geographical Components [Member] | China [Member] | ||
Segment Reporting Information, Additional Information [Abstract] | ||
Total property, plant and equipment | 56.8 | 57.6 |
Reportable Geographical Components [Member] | Hungary [Member] | ||
Segment Reporting Information, Additional Information [Abstract] | ||
Total property, plant and equipment | 55.4 | 55.3 |
Reportable Geographical Components [Member] | Mexico [Member] | ||
Segment Reporting Information, Additional Information [Abstract] | ||
Total property, plant and equipment | 50.0 | 56.3 |
Reportable Geographical Components [Member] | Italy [Member] | ||
Segment Reporting Information, Additional Information [Abstract] | ||
Total property, plant and equipment | 49.8 | 52.4 |
Reportable Geographical Components [Member] | Germany [Member] | ||
Segment Reporting Information, Additional Information [Abstract] | ||
Total property, plant and equipment | 27.0 | 32.8 |
Reportable Geographical Components [Member] | Austria [Member] | ||
Segment Reporting Information, Additional Information [Abstract] | ||
Total property, plant and equipment | 26.0 | 36.9 |
Reportable Geographical Components [Member] | Other [Member] | ||
Segment Reporting Information, Additional Information [Abstract] | ||
Total property, plant and equipment | $ 68.4 | $ 75.7 |
Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assumptions Used in Determining Fair Value of Options |
The Company estimated the fair value of option awards on the date of grant using the Black-Scholes option valuation model and the following assumptions:
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Stock Option Activity |
A summary of stock option activity for fiscal 2020 was as follows:
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Information Related to Stock Options Exercised |
Additional information related to stock options exercised is as follows:
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Restricted Stock Activity |
A summary of restricted stock activity for fiscal 2020 was as follows:
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Significant Accounting Policies (Policies) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of operations |
Nature of operations: Modine Manufacturing Company (“Modine” or the “Company”) specializes in providing innovative thermal management solutions to diversified global markets and customers. The Company is a leading provider of engineered heat transfer systems and high-quality heat transfer components for use in on- and off-highway original equipment manufacturer (“OEM”) vehicular applications. In addition, the Company is a global leader in thermal management technology and solutions for sale into a wide array of commercial, industrial, and building heating, ventilating, air conditioning, and refrigeration (“HVAC&R”) markets. The Company’s primary product groups include i) powertrain cooling and engine cooling; ii) coils, coolers, and coatings; and iii) heating, ventilation and air conditioning.
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Basis of presentation |
Basis of presentation: The Company prepares its consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. These principles require management to make certain estimates and assumptions in determining assets, liabilities, revenue, expenses and related disclosures. Actual amounts could differ materially from those estimates.
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Consolidation principles |
Consolidation principles: The consolidated financial statements include the accounts of Modine Manufacturing Company and its majority-owned or Modine-controlled subsidiaries. The Company eliminates intercompany transactions and balances in consolidation.
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Revenue recognition |
Revenue recognition: The Company recognizes revenue based upon consideration specified in a contract and as it satisfies performance obligations by transferring control over its products to its customers, which may be at a point in time or over time. The majority of the Company’s revenue is recognized at a point in time, based upon shipment terms. A portion of the Company’s revenue is recognized over time, based upon estimated progress towards satisfaction of the contractual performance obligations. See Note 2 for additional information.
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Shipping and handling costs |
Shipping and handling costs: The Company records shipping and handling costs incurred upon the shipment of products to its customers in cost of sales, and related amounts billed to these customers in net sales.
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Trade accounts receivable |
Trade accounts receivable: The Company records trade receivables at the invoiced amount. Trade receivables do not bear interest if paid according to the original terms. The Company records an allowance for doubtful accounts for estimated uncollectible receivables based upon historical experience or specific customer economic data. The Company recorded an allowance for doubtful accounts of $1.9 million and $1.6 million at March 31, 2020 and 2019, respectively, representing its estimated uncollectible receivables. The Company enters into supply chain financing programs from time to time to sell accounts receivable, without recourse, to third-party financial institutions. Sales of accounts receivable are reflected as a reduction of accounts receivable on the consolidated balance sheets and the proceeds are included in cash flows from operating activities in the consolidated statements of cash flows. During fiscal 2020, 2019, and 2018, the Company sold $75.4 million, $85.1 million, and $65.8 million, respectively, of accounts receivable to accelerate cash receipts. During fiscal 2020, 2019, and 2018, the Company recorded a loss on the sale of accounts receivable of $0.5 million, $0.6 million, and $0.4 million, respectively, in the consolidated statements of operations.
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Warranty |
Warranty: The Company provides product warranties for specific product lines and accrues for estimated future warranty costs in the period in which the sale is recorded. The Company records warranty expense, within cost of sales, based upon historical and current claims data or based upon estimated future claims. Accrual balances, which are recorded within other current liabilities, are monitored and adjusted if it is probable that expected claims will differ from previous estimates. See Note 15 for additional information.
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Tooling costs |
Tooling costs: The Company accounts for production tooling costs as a component of property, plant and equipment when it owns title to the tooling and amortizes the capitalized cost to cost of sales over the estimated life of the asset, which is generally three years. At March 31, 2020 and 2019, Company-owned tooling totaled $23.3 million and $24.2 million, respectively. In certain instances, tooling is customer-owned. At the time customer-owned tooling is completed and customer acceptance is obtained, the Company records tooling revenue and related production costs within net sales and cost of sales, respectively, in the consolidated statements of operations. The Company accounts for unbilled customer-owned tooling costs as a receivable within other current assets when the customer has guaranteed reimbursement to the Company. No significant arrangements exist where customer-owned tooling costs were not accompanied by guaranteed reimbursement. At March 31, 2020 and 2019, cost reimbursement receivables related to customer-owned tooling totaled $7.8 million and $11.6 million, respectively.
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Stock-based compensation |
Stock-based compensation: The Company recognizes stock-based compensation using the fair value method. Accordingly, compensation expense for stock options, restricted stock and performance-based stock awards is calculated based upon the fair value of the instruments at the time of grant, and is recognized as expense over the respective vesting periods. See Note 4 for additional information.
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Research and development |
Research and development: The Company expenses research and development costs as incurred within SG&A expenses. During fiscal 2020, 2019, and 2018, research and development costs charged to operations totaled $59.5 million, $69.8 million, and $65.8 million, respectively.
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Translation of foreign currencies |
Translation of foreign currencies: The Company translates assets and liabilities of foreign subsidiaries and equity investments into U.S. dollars at the period-end exchange rates, and translates income and expense items at the monthly average exchange rate for the period in which the transactions occur. The Company reports resulting translation adjustments within accumulated other comprehensive income (loss) within shareholders’ equity. The Company includes foreign currency transaction gains or losses in the statement of operations within other income and expense.
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Derivative instruments |
Derivative instruments: The Company enters into derivative financial instruments from time to time to manage certain financial risks. The Company enters into forward contracts to reduce exposure to changing future purchase prices for aluminum and copper and into foreign currency exchange contracts to hedge specific foreign currency-denominated assets and liabilities as well as forecasted transactions. The Company designates certain derivative financial instruments as cash flow hedges for accounting purposes. These instruments are used to manage financial risks and are not speculative. See Note 19 for additional information.
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Income taxes |
Income taxes: The Company determines deferred tax assets and liabilities based upon the difference between the amounts reported in the financial statements and the tax basis of assets and liabilities, using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company establishes a valuation allowance if it is more likely than not that a deferred tax asset, or portion thereof, will not be realized. See Note 7 for additional information.
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Earnings per share |
Earnings per share: The Company calculates basic earnings per share based upon the weighted-average number of common shares outstanding during the period, while the calculation of diluted earnings per share includes the dilutive effect of potential common shares outstanding during the period. The calculation of diluted earnings per share excludes potential common shares if their inclusion would have an anti-dilutive effect. Certain outstanding restricted stock awards provide recipients with a non-forfeitable right to receive dividends declared by the Company. Therefore, these restricted stock awards are included in computing earnings per share pursuant to the two-class method. See Note 8 for additional information.
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Cash and cash equivalents |
Cash and cash equivalents: The Company considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. Under the Company’s cash management system, cash balances at certain banks are funded when checks are presented for payment. To the extent checks issued, but not yet presented for payment, exceed the balance on hand at the specific bank against which they were written, the Company reports the amount of those checks within accounts payable in the consolidated balance sheets.
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Short-term investments |
Short-term investments: The Company invests in time deposits with original maturities of more than three months but not more than one year. The Company records these short-term investments at cost, which approximates fair value, within other current assets in the consolidated balance sheets. As of March 31, 2020 and 2019, the Company’s short-term investments totaled $3.2 million and $4.3 million, respectively.
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Inventories |
Inventories: The Company values inventories using a first-in, first-out or weighted-average basis, at the lower of cost and net realizable value.
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Property, plant and equipment |
Property, plant and equipment: The Company records property, plant and equipment at cost. For financial reporting purposes, the Company computes depreciation using the straight-line method over the expected useful lives of the assets. The Company charges maintenance and repair costs to operations as incurred. The Company capitalizes costs of improvements. Upon the sale or other disposition of an asset, the Company removes the cost and related accumulated depreciation from the accounts and includes the gain or loss in the consolidated statements of operations. Capital expenditures of $8.7 million, $17.9 million, and $15.8 million were accrued within accounts payable at March 31, 2020, 2019, and 2018, respectively.
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Goodwill |
Goodwill: The Company does not amortize goodwill; rather, it tests for impairment annually unless conditions exist that would require a more frequent evaluation. The Company performs an assessment of the fair value of its reporting units for goodwill impairment testing based upon, among other things, the present value of expected future cash flows. The Company performed its goodwill impairment test as of March 31, 2020 and, as a result, recorded a $0.5 million impairment charge within the VTS segment. See Note 14 for additional information.
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Impairment of long-lived assets |
Impairment of long-lived assets: The Company reviews long-lived assets, including property, plant and equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fully recoverable. In these instances, the Company compares the undiscounted future cash flows expected to be generated from the asset with its carrying value. If the asset’s carrying value exceeds expected future cash flows, the Company measures and records an impairment loss, if any, as the amount by which the carrying value of the asset exceeds its fair value. The Company estimates fair value using a variety of valuation techniques, including discounted cash flows, market values and comparison values for similar assets. During fiscal 2020, the Company recorded impairment charges totaling $8.1 million related to long-lived assets. See Note 5 for additional information.
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Assets held for sale |
Assets held for sale: The Company considers assets to be held for sale when management approves and commits to a formal plan to actively market the asset for sale at a reasonable price in relation to its fair value, the asset is available for immediate sale in its present condition, an active program to locate a buyer and other actions required to complete the sale have been initiated, the sale of the asset is expected to be completed within one year and it is unlikely that significant changes will be made to the plan. Upon designation as held for sale, the Company records the carrying value of the assets at the lower of its carrying value or its estimated fair value, less costs to sell, within other noncurrent assets. The Company ceases to record depreciation expense at the time of designation as held for sale. The carrying value of assets held for sale totaled $0.6 million and $1.1 million at March 31, 2020 and 2019, respectively.
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Deferred compensation trusts |
Deferred compensation trusts: The Company maintains deferred compensation trusts to fund future obligations under its non-qualified deferred compensation plans. The trusts’ investments in third-party debt and equity securities are presented within other noncurrent assets in the consolidated balance sheets.
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Self-insurance reserves |
Self-insurance reserves: The Company retains a portion of the financial risk for certain insurance coverage, including property, general liability, workers compensation, and employee healthcare, and therefore maintains reserves that estimate the impact of unreported and under-reported claims that fall below various stop-loss limits and deductibles under its insurance policies. The Company maintains reserves for the estimated settlement cost of known claims, as well as estimates of incurred but not reported claims. The Company charges costs of claims, including the impact of changes in reserves due to claim experience and severity, to operations. The Company reviews and updates the amount of its insurance-related reserves on a quarterly basis.
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Environmental liabilities |
Environmental liabilities: The Company records liabilities for environmental assessments and remediation activities in the period in which its responsibility is probable and the costs can be reasonably estimated. The Company records environmental indemnification assets from third parties, including prior owners, when recovery is probable. To the extent that the required remediation procedures change, or additional contamination is identified, the Company’s estimated environmental liabilities may also change. See Note 20 for additional information.
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Supplemental cash flow information |
Supplemental cash flow information:
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New Accounting Guidance Adopted |
New Accounting Guidance Adopted in Fiscal 2020:
Leases
In February 2016, the Financial Accounting Standards Board (“FASB”) issued new comprehensive lease accounting guidance that supersedes existing lease accounting guidance and requires balance sheet recognition for most leases. The Company adopted this guidance effective April 1, 2019 using a modified-retrospective transition method, under which it elected not to adjust comparative periods. The Company elected the package of practical expedients permitted under the new guidance, and, as a result, the Company did not reassess the classification of existing leases or initial direct costs thereof, or whether existing contracts contain leases. In addition, the Company elected accounting policies to not record short-term leases on the balance sheet and to not separate lease and non-lease components. The Company did not elect the hindsight practical expedient.
The Company assessed its global lease portfolio and implemented a new lease accounting software solution and new processes and controls to account for leases in accordance with the new guidance. The Company’s most significant leases represent leases of real estate, such as manufacturing facilities, warehouses, and office buildings. The Company also leases certain manufacturing and IT equipment and vehicles. Upon adoption of this new guidance on April 1, 2019, the Company recognized right-of-use assets for operating leases totaling $61.3 million and corresponding current and noncurrent operating lease liabilities of $12.4 million and $48.9 million, respectively. In addition, the Company assessed two existing build-to-suit arrangements, for which it had recorded property, plant and equipment and long-term debt on its consolidated balance sheet as of March 31, 2019. The Company determined these arrangements represent operating leases under the new accounting guidance. As a result, the Company derecognized the previously-recorded balances and recorded $5.2 million of operating lease right-of-use assets and corresponding lease liabilities. As a result of adopting the new guidance, there was not a significant impact on the Company’s accounting for its previously-recorded capital leases, which are now classified as finance leases under the new guidance. In addition, there was no impact to retained earnings. Also, the adoption did not have a material impact on the Company’s consolidated statement of operations or consolidated statement of cash flows. See Note 16 for additional information regarding the Company’s leases.
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
In February 2018, the FASB issued new guidance related to the accounting for certain stranded income tax effects in accumulated other comprehensive income (loss) resulting from tax reform legislation that was enacted in the U.S. in December 2017. This guidance provided companies the option to reclassify stranded income tax effects to retained earnings. The Company adopted this guidance as of April 1, 2019 and chose not to reclassify stranded income tax effects; therefore, the adoption of this guidance did not impact the Company’s consolidated financial statements.
New Accounting Guidance Adopted in Fiscal 2019:
Revenue Recognition
In May 2014, the FASB issued new guidance that outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of the new guidance is that companies are to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this new guidance for fiscal 2019 using the modified-retrospective transition method.
The Company assessed customer contracts and evaluated contractual provisions in light of the new guidance. Through its evaluation process, the Company identified a limited number of customer contracts that provide an enforceable right to payment for customized products, which require revenue recognition prior to the product being shipped to the customer. As a result of its adoption of the new guidance, the Company recorded an increase of $0.7 million to retained earnings as of April 1, 2018, along with related balance sheet reclassifications. The increase to retained earnings represented $3.0 million of net sales that, had the new guidance been in effect, the Company would have recognized as of March 31, 2018. See Note 2 for additional information regarding revenue recognition.
Income Taxes: Intra-Entity Transfers of Assets Other than Inventory
In October 2016, the FASB issued new guidance related to income tax accounting for intercompany asset transfers. This new guidance requires companies to recognize the income tax effects of intercompany asset transfers other than inventory at the transaction date. The income tax effects of these transfers were previously deferred. The Company adopted this new guidance for fiscal 2019 using the modified-retrospective transition method. Upon adoption, the Company recorded a decrease to retained earnings of $8.3 million as of April 1, 2018.
New Accounting Guidance Adopted in Fiscal 2018:
Stock-based Compensation
In March 2016, the FASB issued new guidance to simplify several aspects of accounting for stock-based payment transactions. The Company adopted this guidance beginning in its first quarter of fiscal 2018. The Company elected to account for forfeitures in the period in which they occur and recorded a cumulative-effect adjustment to equity. In addition, the Company prospectively adopted the guidance requiring all excess tax benefits or deficiencies to be recognized as income tax expense or benefit when share-based awards are settled. The provisions of this guidance did not have a material impact on the Company's consolidated financial statements. As a result of adopting this new guidance, the Company recorded a $0.4 million increase to both deferred tax assets and equity as of April 1, 2017.
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Segment and Geographic Information, Net Sales, Gross Profit, and Operating Income by Segment (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||||
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Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
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Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | $ 472.9 | $ 473.4 | $ 500.2 | $ 529.0 | $ 556.7 | $ 541.0 | $ 548.9 | $ 566.1 | $ 1,975.5 | $ 2,212.7 | $ 2,103.1 | ||
Gross profit | $ 74.9 | $ 73.5 | $ 75.7 | $ 83.4 | $ 91.6 | $ 91.7 | $ 87.9 | $ 94.3 | $ 307.5 | $ 365.5 | $ 356.5 | ||
Gross profit (% of sales) | 15.60% | 16.50% | 17.00% | ||||||||||
Operating income | $ 37.9 | $ 109.7 | $ 92.2 | ||||||||||
VTS [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | 1,177.2 | 1,351.7 | 1,295.7 | ||||||||||
Strategic review alternatives cost | 39.2 | 7.1 | |||||||||||
CIS [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | 623.9 | 707.6 | 675.7 | ||||||||||
BHVAC [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | 221.1 | 212.4 | 191.2 | ||||||||||
Total Segments [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | 2,022.2 | 2,271.7 | 2,162.6 | ||||||||||
Operating Segments [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | 1,975.5 | 2,212.7 | 2,103.1 | ||||||||||
Gross profit | $ 309.3 | $ 365.2 | $ 356.8 | ||||||||||
Gross profit (% of sales) | 15.30% | 16.10% | 16.50% | ||||||||||
Operating income | $ 96.9 | $ 145.1 | $ 133.0 | ||||||||||
Operating Segments [Member] | VTS [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | 1,136.0 | 1,298.9 | 1,239.3 | ||||||||||
Gross profit | $ 144.9 | $ 186.9 | $ 201.0 | ||||||||||
Gross profit (% of sales) | 12.30% | 13.80% | 15.50% | ||||||||||
Operating income | $ 27.6 | $ 64.8 | $ 84.2 | ||||||||||
Operating Segments [Member] | CIS [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | 620.1 | 704.7 | 674.4 | ||||||||||
Gross profit | $ 92.9 | $ 114.9 | $ 97.8 | ||||||||||
Gross profit (% of sales) | 14.90% | 16.20% | 14.50% | ||||||||||
Operating income | $ 32.9 | $ 53.4 | $ 28.5 | ||||||||||
Operating Segments [Member] | BHVAC [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | 219.4 | 209.1 | 189.4 | ||||||||||
Gross profit | $ 71.5 | $ 63.4 | $ 58.0 | ||||||||||
Gross profit (% of sales) | 32.30% | 29.90% | 30.30% | ||||||||||
Operating income | $ 36.4 | $ 26.9 | $ 20.3 | ||||||||||
Corporate and Eliminations [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | (46.7) | (59.0) | (59.5) | ||||||||||
Gross profit | $ (1.8) | $ 0.3 | $ (0.3) | ||||||||||
Gross profit (% of sales) | 0.00% | 0.00% | 0.00% | ||||||||||
Operating income | [1] | $ (59.0) | $ (35.4) | $ (40.8) | |||||||||
Inter-segment Sales [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | 46.7 | 59.0 | 59.5 | ||||||||||
Inter-segment Sales [Member] | VTS [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | 41.2 | 52.8 | 56.4 | ||||||||||
Inter-segment Sales [Member] | CIS [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | 3.8 | 2.9 | 1.3 | ||||||||||
Inter-segment Sales [Member] | BHVAC [Member] | |||||||||||||
Net sales, gross profit, operating income and total assets by segment [Abstract] | |||||||||||||
Net sales | $ 1.7 | $ 3.3 | $ 1.8 | ||||||||||
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Goodwill |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill |
Note 14: Goodwill
Changes in the carrying amount of goodwill, by segment and in the aggregate, were as follows:
The Company assesses goodwill for impairment annually, or more frequently if events or circumstances change that would, more likely than not, reduce the fair value of a reporting unit below its carrying value. Annually, the Company conducts its goodwill impairment assessment during the fourth quarter by applying a fair value-based test. For purposes of its assessment, the Company determines the fair value of each reporting unit based upon the present value of estimated future cash flows. The Company’s determination of fair value involves judgment and the use of significant estimates and assumptions, including assumptions regarding the revenue growth rates and operating profit margins used to calculate estimated future cash flows, risk-adjusted discount rates, business trends and market conditions.
As a result of its annual goodwill impairment test performed during the fourth quarter of fiscal 2020, the Company determined that the fair value of each of the reporting units within its CIS and BHVAC segments exceeded their respective book values. The Company determined, however, that the goodwill recorded within its VTS segment was fully impaired and recorded a $0.5 million impairment charge as a result. The impairment charge was primarily caused by a recent decline in the estimated fair value of the automotive business within the VTS segment.
At March 31, 2020 and 2019, accumulated goodwill impairment losses totaled $40.8 million and $40.3 million, respectively, within the VTS segment.
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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions |
12 Months Ended | ||
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Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
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Cash flows from operating activities: | |||
Net (loss) earnings | $ (2.0) | $ 85.9 | $ 23.8 |
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 77.1 | 76.9 | 76.7 |
Impairment charges | 8.6 | 0.4 | 2.5 |
(Gain) loss on sale of assets | (0.8) | 1.7 | 0.0 |
Stock-based compensation expense | 6.6 | 7.9 | 9.5 |
Deferred income taxes | 1.0 | (4.4) | 12.1 |
Other - net | 5.6 | 5.3 | 9.0 |
Changes in operating assets and liabilities: | |||
Trade accounts receivable | 36.6 | (15.3) | (26.1) |
Inventories | (12.0) | (22.0) | (12.5) |
Accounts payable | (37.7) | 16.6 | 25.2 |
Accrued compensation and employee benefits | (15.2) | (10.1) | 16.4 |
Other assets | 14.7 | (11.8) | (5.0) |
Other liabilities | (24.6) | (27.8) | (7.4) |
Net cash provided by operating activities | 57.9 | 103.3 | 124.2 |
Cash flows from investing activities: | |||
Expenditures for property, plant and equipment | (71.3) | (73.9) | (71.0) |
Proceeds from dispositions of assets | 6.2 | 0.3 | 0.3 |
Proceeds from sale of investment in affiliate | 3.8 | 0.0 | 0.0 |
Proceeds from maturities of short-term investments | 4.1 | 4.9 | 4.8 |
Purchases of short-term investments | (3.3) | (3.8) | (5.5) |
Other - net | 0.0 | (0.3) | (0.2) |
Net cash used for investing activities | (60.5) | (72.8) | (71.6) |
Cash flows from financing activities: | |||
Borrowings of debt | 692.4 | 231.2 | 171.0 |
Repayments of debt | (649.5) | (251.9) | (222.9) |
Dividend paid to noncontrolling interest | (1.3) | (1.8) | (0.9) |
Purchase of treasury stock under share repurchase program | (2.4) | (0.6) | 0.0 |
Financing fees paid | (2.8) | 0.0 | 0.0 |
Other - net | (3.1) | (2.8) | 2.7 |
Net cash provided by (used for) financing activities | 33.3 | (25.9) | (50.1) |
Effect of exchange rate changes on cash | (1.6) | (2.7) | 3.0 |
Net increase in cash, cash equivalents and restricted cash | 29.1 | 1.9 | 5.5 |
Cash, cash equivalents and restricted cash - beginning of year | 42.2 | 40.3 | 34.8 |
Cash, cash equivalents and restricted cash - end of year | $ 71.3 | $ 42.2 | $ 40.3 |
Pension and Employee Benefit Plans |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Employee Benefit Plans [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Employee Benefit Plans |
Note 18: Pension and Employee Benefit Plans
Defined Contribution Employee Benefit Plans:
The Company maintains a domestic 401(k) plan that allows employees to contribute a portion of their salary to help them save for retirement. The Company currently matches employee contributions up to 4.5 percent of their compensation for participants. The Company’s expense for defined contribution employee benefit plans during fiscal 2020, 2019, and 2018 was $6.6 million, $6.4 million, and $5.2 million, respectively.
In addition, the Company maintains non-qualified deferred compensation plans for eligible employees, and various non-U.S. subsidiaries have government-required defined contribution plans in place, under which they contribute a percentage of employee earnings into accounts, consistent with local laws.
Statutory Termination Plans:
Certain non-U.S. subsidiaries have statutory termination indemnity plans covering eligible employees. The benefits under these plans are based upon years of service and final average compensation levels or a monthly retirement benefit amount. These programs are substantially unfunded in accordance with local laws.
Defined Benefit Employee Benefit Plans:
Pension plans: The Company maintains non-contributory defined benefit pension plans that cover eligible domestic employees. These plans are closed to new participants. The primary domestic plans cover most domestic employees hired on or before December 31, 2003 and provide benefits based primarily upon years of service and average compensation for salaried and some hourly employees. Benefits for other hourly employees are based upon a monthly retirement benefit amount. Currently, the Company’s domestic pension plans do not include increases in annual earnings or future service in calculating the average annual earnings and years of credited service under the pension plan benefit formula. Certain non-U.S. subsidiaries of the Company also have legacy defined benefit plans which cover a smaller number of active employees and are substantially unfunded. The primary non-U.S. plans are maintained in Germany, Austria, and Italy and are closed to new participants.
The Company contributed $3.5 million, $8.0 million, and $13.4 million to its U.S. pension plans during fiscal 2020, 2019, and 2018, respectively. In addition, the Company contributed $2.3 million, $5.9 million, and $2.6 million to its non-U.S. pension plans during fiscal 2020, 2019, and 2018, respectively. These contributions are reported in the change in other liabilities in the consolidated statements of cash flows.
Postretirement plans: The Company provides selected healthcare and life insurance benefits for eligible retired domestic employees. The Company periodically amends these unfunded plans to change the contribution rate of retirees and the amounts and forms of coverage. An annual limit on the Company’s cost is defined for the majority of these plans. The Company’s net periodic income for its postretirement plans during fiscal 2020, 2019, and 2018 was $0.3 million, $0.3 million, and $0.2 million, respectively.
Measurement date: The Company uses March 31 as the measurement date for its pension and postretirement plans.
Changes in benefit obligations and plan assets, as well as the funded status of the Company’s global pension plans, were as follows:
As of March 31, 2020, 2019, and 2018, the benefit obligation associated with the Company’s non-U.S. pension plans totaled $35.7 million, $36.5 million, and $43.4 million respectively. In fiscal 2020, the $0.8 million decrease primarily resulted from employer contributions of $2.2 million for benefits paid to plan participants during the year, partially offset by service and interest cost totaling $0.9 million. In fiscal 2019, the $6.9 million decrease primarily resulted from employer contributions of $5.9 million for benefits paid to plan participants during the year and the impact of foreign currency exchange rate changes, partially offset by service and interest cost totaling $1.1 million.
The accumulated benefit obligation for pension plans was $263.1 million and $256.9 million as of March 31, 2020 and 2019, respectively. The net actuarial loss related to the pension plans recognized in accumulated other comprehensive loss was $191.5 million and $159.1 million as of March 31, 2020 and 2019, respectively.
Costs for the Company’s global pension plans included the following components:
The Company amortized $6.2 million, $5.6 million, and $5.6 million of net actuarial loss in fiscal 2020, 2019, and 2018, respectively. In each of these years, less than $1.0 million of the amortization was attributable to the Company’s non-U.S. pension plans. The Company estimates $6.9 million of net actuarial loss for its pension plans will be amortized from accumulated other comprehensive loss into net periodic benefit cost during fiscal 2021. The fiscal 2021 estimated amortization includes less than $1.0 million related to the Company’s non-U.S. pension plans.
The Company used a discount rate of 3.4% and 4.0% as of March 31, 2020 and 2019, respectively, for determining its benefit obligations under its U.S. pension plans. The Company used a weighted-average discount rate of 1.0% and 1.4% as of March 31, 2020 and 2019, respectively, for determining its benefit obligations under its non-U.S. pension plans. The Company used a discount rate of 4.0%, 4.0%, and 4.1% to determine its costs under its U.S. pension plans for fiscal 2020, 2019, and 2018, respectively. The Company used a weighted-average discount rate of 1.7%, 1.9%, and 1.9% to determine its costs under its non-U.S. pension plans for fiscal 2020, 2019, and 2018, respectively. The Company determined the discount rates used for its U.S. pension plans by modeling a portfolio of high-quality corporate bonds, with appropriate consideration given to expected defined benefit payment terms and duration of the respective pension obligations. The Company used a similar process to determine the discount rate for its non-U.S. pension obligations.
Plan assets in the Company’s U.S. pension plans comprise 100 percent of the Company’s world-wide pension plan assets. The Company’s U.S. pension plan weighted-average asset allocations at the measurement dates of March 31, 2020 and 2019 were as follows:
Due to market conditions and other factors, including timing of benefit payments and other transactions, actual asset allocation may vary from the target allocation outlined above. The Company periodically rebalances the assets to the target allocations. As of March 31, 2020 and 2019, the Company’s pension plans did not directly own shares of Modine common stock.
The Company employs a total return investment approach, whereby a mix of investments are used to maximize the long-term growth of principal, while avoiding excessive risk. The Company has established pension plan guidelines based upon an evaluation of market conditions, tolerance for risk and cash requirements for benefit payments. The Company measures and monitors investment risk on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements and periodic asset/liability studies.
The expected rate of return on U.S. plan assets is based upon historical return experience and forward-looking return expectations for major asset class categories. For fiscal 2020, 2019, and 2018 U.S. pension plan expense, the expected rate of return on plan assets was 7.5 percent. For fiscal 2021 U.S. pension plan expense, the Company has assumed a rate of return on plan assets of 7.5 percent.
The Company’s funding policy for its U.S. pension plans is to contribute annually, at a minimum, the amount necessary on an actuarial basis to provide for benefits in accordance with applicable laws and regulations. The Company expects to contribute approximately $20 million to these U.S. plans during fiscal 2021.
Estimated pension benefit payments for the next ten fiscal years are as follows:
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||
Net (loss) earnings | $ (2.0) | $ 85.9 | $ 23.8 |
Other comprehensive income (loss): | |||
Foreign currency translation | (19.2) | (37.6) | 41.8 |
Defined benefit plans, net of income taxes of ($8.3), ($0.3) and ($0.2) million | (24.6) | (1.4) | 0.1 |
Cash flow hedges, net of income taxes of ($0.5), $0.1 and $0.1 million | (1.5) | 0.4 | 0.1 |
Total other comprehensive income (loss) | (45.3) | (38.6) | 42.0 |
Comprehensive income (loss) | (47.3) | 47.3 | 65.8 |
Comprehensive (income) loss attributable to noncontrolling interest | 0.2 | (0.6) | (2.1) |
Comprehensive income (loss) attributable to Modine | $ (47.1) | $ 46.7 | $ 63.7 |
Product Warranties and Other Commitments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties and Other Commitments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accrued Warranty Costs |
Changes in accrued warranty costs were as follows:
|
Inventories (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
Inventories consisted of the following:
|
Stock-Based Compensation, Restricted Stock (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Compensation expense [Abstract] | |||
Stock-based compensation cost | $ 6.6 | $ 7.9 | $ 9.5 |
Restricted Stock [Member] | |||
Compensation expense [Abstract] | |||
Stock-based compensation cost | 4.5 | 4.3 | 3.9 |
Fair value of awards vesting | 4.4 | $ 4.3 | 3.9 |
Unrecognized compensation costs | $ 5.1 | ||
Weighted average period recognized | 2 years 7 months 6 days | ||
Assumptions for stock awards granted [Abstract] | |||
Award vesting period | 4 years | ||
Restricted stock activity [Roll Forward] | |||
Non-vested balance, beginning (in shares) | 0.5 | ||
Granted (in shares) | 0.4 | ||
Vested (in shares) | (0.3) | ||
Forfeited (in shares) | (0.1) | ||
Non-vested balance, ending (in shares) | 0.5 | 0.5 | |
Weighted average price [Rollforward] | |||
Non-vested balance, beginning (in dollars per share) | $ 14.95 | ||
Granted (in dollars per share) | 13.54 | ||
Vested (in dollars per share) | 14.02 | ||
Forfeited (in dollars per share) | 14.99 | ||
Non-vested balance, ending (in dollars per share) | $ 14.48 | $ 14.95 | |
Restricted Stock [Member] | Tranche One [Member] | |||
Assumptions for stock awards granted [Abstract] | |||
Annual vesting percentage | 25.00% | ||
Restricted Stock [Member] | Tranche Two [Member] | |||
Assumptions for stock awards granted [Abstract] | |||
Annual vesting percentage | 25.00% | ||
Restricted Stock [Member] | Tranche Three [Member] | |||
Assumptions for stock awards granted [Abstract] | |||
Annual vesting percentage | 25.00% | ||
Restricted Stock [Member] | Tranche Four [Member] | |||
Assumptions for stock awards granted [Abstract] | |||
Annual vesting percentage | 25.00% | ||
Performance Stock Awards [Member] | |||
Compensation expense [Abstract] | |||
Stock-based compensation cost | $ 0.8 | $ 2.4 | $ 4.4 |
Unrecognized compensation costs | $ 1.1 | ||
Weighted average period recognized | 1 year 10 months 24 days | ||
Assumptions for stock awards granted [Abstract] | |||
Award vesting period | 3 years | 3 years | 3 years |
Risks, Uncertainties, Contingencies and Litigation (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2020
USD ($)
Customer
|
Mar. 31, 2019
USD ($)
Customer
|
Mar. 31, 2018
Customer
|
|
Environmental loss contingencies [Abstract] | |||
Reserves for environmental matters | $ | $ 18.2 | $ 18.9 | |
Sales [Member] | Customer Concentration Risk [Member] | |||
Credit Risk [Abstract] | |||
Concentration risk, percentage | 45.00% | 50.00% | 48.00% |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | |||
Credit Risk [Abstract] | |||
Concentration risk, percentage | 34.00% | 38.00% | |
Number of top customers | 10 | ||
VTS [Member] | |||
Credit Risk [Abstract] | |||
Number of major customers | 1 | 2 | 2 |
Significant Accounting Policies, Short-term Investments, Property, Plant and Equipment and Assets Held for Sale (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Short-Term Investments [Abstract] | |||
Short-term investments | $ 3.2 | $ 4.3 | |
Property, Plant and Equipment [Abstract] | |||
Capital expenditures accrued | 8.7 | 17.9 | $ 15.8 |
Goodwill [Abstract] | |||
Goodwill impairment charge | 0.5 | ||
Impairment of Long-lived Assets [Abstract] | |||
Impairment of long-lived assets | 8.1 | ||
Assets Held For Sale [Abstract] | |||
Carrying value of assets held-for-sale | 0.6 | $ 1.1 | |
VTS [Member] | |||
Goodwill [Abstract] | |||
Goodwill impairment charge | $ 0.5 |
Pension and Employee Benefit Plans, Defined Benefit Employee Benefit Plans (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|||
Defined benefit plan, plan assets [Abstract] | |||||
Net periodic benefit cost (income) | [1] | $ 3.0 | $ 2.9 | $ 3.3 | |
Pension Plans [Member] | |||||
Defined benefit plan, plan assets [Abstract] | |||||
Employer contributions | 5.8 | 13.9 | |||
Net periodic benefit cost (income) | 3.7 | 3.6 | 4.1 | ||
Pension Plans [Member] | U.S. Plans [Member] | |||||
Defined benefit plan, plan assets [Abstract] | |||||
Employer contributions | 3.5 | 8.0 | 13.4 | ||
Pension Plans [Member] | Non-U.S Plans [Member] | |||||
Defined benefit plan, plan assets [Abstract] | |||||
Employer contributions | 2.3 | 5.9 | 2.6 | ||
Postretirement Plans [Member] | |||||
Defined benefit plan, plan assets [Abstract] | |||||
Net periodic benefit cost (income) | $ (0.3) | $ (0.3) | $ (0.2) | ||
|
Pension and Employee Benefit Plans, Weighted-average Asset Allocations (Details) - Pension Plans [Member] - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Target allocation | 100.00% | |||
Plan assets | 100.00% | 100.00% | ||
Anticipated contributions next fiscal year | $ 20 | |||
Equity Securities [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Target allocation | 65.00% | |||
Plan assets | 60.00% | 66.00% | ||
Debt Securities [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Target allocation | 21.00% | |||
Plan assets | 22.00% | 19.00% | ||
Real Estate Investments [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Target allocation | 13.00% | |||
Plan assets | 16.00% | 12.00% | ||
Cash and Cash Equivalents [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Target allocation | 1.00% | |||
Plan assets | 2.00% | 3.00% | ||
U.S. Plans [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Expected return on plan assets | 7.50% | 7.50% | 7.50% | |
U.S. Plans [Member] | Forecast [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Expected return on plan assets | 7.50% |
Revenue Recognition, Disaggregation of Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | $ 472.9 | $ 473.4 | $ 500.2 | $ 529.0 | $ 556.7 | $ 541.0 | $ 548.9 | $ 566.1 | $ 1,975.5 | $ 2,212.7 | $ 2,103.1 |
Contract with Customer, Asset and Liability [Abstract] | |||||||||||
Contract assets | 21.7 | 22.6 | 21.7 | 22.6 | |||||||
Contract liabilities | $ 5.6 | $ 4.0 | 5.6 | 4.0 | |||||||
Decrease in contract assets | (0.9) | ||||||||||
Increase in contract liabilities | 1.6 | ||||||||||
Automotive [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 508.8 | 542.8 | 526.0 | ||||||||
Commercial Vehicle [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 323.7 | 387.6 | 381.7 | ||||||||
Off-Highway [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 253.9 | 314.1 | 271.2 | ||||||||
Commercial HVAC&R [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 639.7 | 674.0 | 648.3 | ||||||||
Data Center Cooling [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 150.2 | 187.0 | 137.6 | ||||||||
Industrial Cooling [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 43.5 | 47.8 | 67.6 | ||||||||
Other [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 55.7 | 59.4 | 70.7 | ||||||||
VTS [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 1,177.2 | 1,351.7 | 1,295.7 | ||||||||
VTS [Member] | Products Transferred at a Point in Time [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 1,146.4 | 1,308.5 | |||||||||
VTS [Member] | Products Transferred Over Time [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 30.8 | 43.2 | |||||||||
VTS [Member] | Americas [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 554.4 | 613.7 | |||||||||
VTS [Member] | Europe [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 449.3 | 538.2 | |||||||||
VTS [Member] | Asia [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 173.5 | 199.8 | |||||||||
VTS [Member] | Automotive [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 508.8 | 542.8 | |||||||||
VTS [Member] | Commercial Vehicle [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 323.7 | 387.6 | |||||||||
VTS [Member] | Off-Highway [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 253.9 | 314.1 | |||||||||
VTS [Member] | Commercial HVAC&R [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
VTS [Member] | Data Center Cooling [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
VTS [Member] | Industrial Cooling [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
VTS [Member] | Other [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 90.8 | 107.2 | |||||||||
CIS [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 623.9 | 707.6 | 675.7 | ||||||||
CIS [Member] | Products Transferred at a Point in Time [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 518.2 | 571.1 | |||||||||
CIS [Member] | Products Transferred Over Time [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 105.7 | 136.5 | |||||||||
CIS [Member] | Americas [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 345.9 | 413.6 | |||||||||
CIS [Member] | Europe [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 232.6 | 244.8 | |||||||||
CIS [Member] | Asia [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 45.4 | 49.2 | |||||||||
CIS [Member] | Automotive [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
CIS [Member] | Commercial Vehicle [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
CIS [Member] | Off-Highway [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
CIS [Member] | Commercial HVAC&R [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 463.1 | 506.3 | |||||||||
CIS [Member] | Data Center Cooling [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 107.5 | 145.7 | |||||||||
CIS [Member] | Industrial Cooling [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 43.5 | 47.8 | |||||||||
CIS [Member] | Other [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 9.8 | 7.8 | |||||||||
BHVAC [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 221.1 | 212.4 | 191.2 | ||||||||
BHVAC [Member] | Products Transferred at a Point in Time [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 221.1 | 212.4 | |||||||||
BHVAC [Member] | Products Transferred Over Time [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
BHVAC [Member] | Americas [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 139.1 | 124.9 | |||||||||
BHVAC [Member] | Europe [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 82.0 | 87.5 | |||||||||
BHVAC [Member] | Asia [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
BHVAC [Member] | Automotive [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
BHVAC [Member] | Commercial Vehicle [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
BHVAC [Member] | Off-Highway [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
BHVAC [Member] | Commercial HVAC&R [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 176.6 | 167.7 | |||||||||
BHVAC [Member] | Data Center Cooling [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 42.7 | 41.3 | |||||||||
BHVAC [Member] | Industrial Cooling [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 0.0 | 0.0 | |||||||||
BHVAC [Member] | Other [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 1.8 | 3.4 | |||||||||
Total Segments [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 2,022.2 | 2,271.7 | $ 2,162.6 | ||||||||
Total Segments [Member] | Products Transferred at a Point in Time [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 1,885.7 | 2,092.0 | |||||||||
Total Segments [Member] | Products Transferred Over Time [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 136.5 | 179.7 | |||||||||
Total Segments [Member] | Americas [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 1,039.4 | 1,152.2 | |||||||||
Total Segments [Member] | Europe [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 763.9 | 870.5 | |||||||||
Total Segments [Member] | Asia [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 218.9 | 249.0 | |||||||||
Total Segments [Member] | Automotive [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 508.8 | 542.8 | |||||||||
Total Segments [Member] | Commercial Vehicle [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 323.7 | 387.6 | |||||||||
Total Segments [Member] | Off-Highway [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 253.9 | 314.1 | |||||||||
Total Segments [Member] | Commercial HVAC&R [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 639.7 | 674.0 | |||||||||
Total Segments [Member] | Data Center Cooling [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 150.2 | 187.0 | |||||||||
Total Segments [Member] | Industrial Cooling [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | 43.5 | 47.8 | |||||||||
Total Segments [Member] | Other [Member] | |||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||
Net sales | $ 102.4 | $ 118.4 |
Income Taxes, Unrecognized Tax Benefits (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Reconciliation of unrecognized tax benefits [Roll Forward] | ||||
Beginning balance | $ 9.7 | $ 13.8 | $ 13.6 | |
Gross increases - tax positions in prior period | 0.3 | 1.6 | ||
Gross decreases - tax positions in prior period | (1.0) | (0.2) | ||
Gross increases - tax positions in current period | 1.1 | 1.1 | ||
Settlements | (2.1) | (0.1) | ||
Lapse of statute of limitations | (2.4) | (2.2) | $ (1.8) | |
Ending balance | 9.7 | 13.8 | $ 13.6 | |
Unrecognized tax benefits that would impact effective tax rate | 7.9 | |||
Lapse of statute of limitations and settlements | 4.5 | |||
Unrecognized tax benefits accrued interest and penalties | $ 0.5 | $ 1.1 | ||
Forecast [Member] | ||||
Reconciliation of unrecognized tax benefits [Roll Forward] | ||||
Lapse of statute of limitations and settlements | $ (0.6) |
Leases (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|||||
Lease Assets and Liabilities [Abstract] | |||||||
Operating lease ROU assets | $ 61.4 | $ 61.3 | |||||
Operating lease ROU assets, Statement of Financial Position [Extensible List] | us-gaap:OtherAssetsNoncurrent | ||||||
Finance lease ROU assets | [1] | $ 8.5 | |||||
Finance lease ROU assets, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet | ||||||
Operating lease liabilities, current | $ 10.9 | 12.4 | |||||
Operating lease liabilities, current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | ||||||
Operating lease liabilities, noncurrent | $ 50.3 | 48.9 | |||||
Operating lease liabilities, noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | ||||||
Finance lease liabilities, current | $ 0.4 | ||||||
Finance lease liabilities, current, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent | ||||||
Finance lease liabilities, noncurrent | $ 3.3 | ||||||
Finance lease liabilities, noncurrent, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligations | ||||||
Accumulated amortization | $ 1.8 | ||||||
Components of Lease Expense [Abstract] | |||||||
Operating lease expense | [2] | 21.2 | |||||
Finance lease expense [Abstract] | |||||||
Depreciation of ROU assets | 0.5 | ||||||
Interest on lease liabilities | 0.2 | ||||||
Total lease expense | 21.9 | ||||||
Short-term lease expense | 4.1 | ||||||
Cash paid for amounts included in measurement of lease liabilities [Abstract] | |||||||
Operating cash flows for operating leases | 14.7 | ||||||
Financing cash flows for finance leases | 0.5 | ||||||
ROU assets obtained in exchange for lease liabilities [Abstract] | |||||||
Operating leases | 9.0 | ||||||
Finance leases | $ 0.2 | ||||||
Weighted-average remaining lease term [Abstract] | |||||||
Operating leases | 9 years 3 months 18 days | ||||||
Finance leases | 8 years 9 months 18 days | ||||||
Weighted-average discount rate [Abstract] | |||||||
Operating leases | 3.50% | ||||||
Finance leases | 4.70% | ||||||
Maturity of Operating Lease Liabilities [Abstract] | |||||||
2021 | $ 12.8 | ||||||
2022 | 11.4 | ||||||
2023 | 9.3 | ||||||
2024 | 6.3 | ||||||
2025 | 5.8 | ||||||
2026 and beyond | 26.2 | ||||||
Total lease payments | 71.8 | ||||||
Less: Interest | (10.6) | ||||||
Present value of lease liabilities | 61.2 | ||||||
Maturities of Finance Lease Liabilities [Abstract] | |||||||
2021 | 0.5 | ||||||
2022 | 0.5 | ||||||
2023 | 0.5 | ||||||
2024 | 0.5 | ||||||
2025 | 0.5 | ||||||
2026 and beyond | 2.0 | ||||||
Total lease payments | 4.5 | ||||||
Less: Interest | (0.8) | ||||||
Present value of lease liabilities | $ 3.7 | ||||||
Future minimum rental commitments under non-cancelable operating leases [Abstract] | |||||||
2020 | 14.2 | ||||||
2021 | 12.4 | ||||||
2022 | 9.1 | ||||||
2023 | 7.1 | ||||||
2024 | 4.7 | ||||||
2025 and beyond | 22.9 | ||||||
Total future minimum rental commitments | 70.4 | ||||||
Rental expense | $ 19.3 | $ 18.5 | |||||
Minimum [Member] | |||||||
Significant Accounting Policy [Abstract] | |||||||
Remaining lease term | 1 year | ||||||
Maximum [Member] | |||||||
Significant Accounting Policy [Abstract] | |||||||
Remaining lease term | 15 years | ||||||
|
Investment in Affiliate (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|||
Equity method investment [Abstract] | |||||
Equity in earnings of non-consolidated affiliate | [1] | $ 0.2 | $ 0.7 | $ 0.2 | |
Nikkei Heat Exchanger Company, Ltd. [Member] | |||||
Equity method investment [Abstract] | |||||
Ownership percentage | 50.00% | ||||
Selling price | $ 3.8 | ||||
Gain (loss) on sale of business | 0.1 | ||||
Gain (loss) on write-off of accumulated foreign currency translation | 0.6 | ||||
Equity method investment | 3.8 | ||||
Equity in earnings of non-consolidated affiliate | $ 0.1 | $ 0.7 | $ 0.2 | ||
|
Income Taxes, Tax Cuts and Jobs Act (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Taxes [Abstract] | ||||
Provisional income tax expense (benefit) related to US Tax Reform | $ 38.0 | |||
Deferred tax assets - change in amount | (19.0) | |||
Transition tax charge | $ 19.0 | |||
Income tax expense (benefit) related to US Tax Reform | $ 2.2 | $ (24.4) | $ (7.7) | |
Reduction in provisional charge related to US Tax Reform | (9.3) | |||
Transition tax liability | 18.9 | |||
Reduction in transition tax liability | (0.1) | |||
Charge for reduction in state deferred tax assets | $ 1.7 |
Pension and Employee Benefit Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Employee Benefit Plans [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Benefit Obligations and Plan Assets |
Changes in benefit obligations and plan assets, as well as the funded status of the Company’s global pension plans, were as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Benefit Plans |
Costs for the Company’s global pension plans included the following components:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Target and Plan Asset Allocations |
Plan assets in the Company’s U.S. pension plans comprise 100 percent of the Company’s world-wide pension plan assets. The Company’s U.S. pension plan weighted-average asset allocations at the measurement dates of March 31, 2020 and 2019 were as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Benefit Payments |
Estimated pension benefit payments for the next ten fiscal years are as follows:
|
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