Special Charges and Other, Net

3 Months Ended

Jun. 30, 2019

Other Nonrecurring (Income) Expense [Abstract]

The following table summarizes activity included in the "special charges and other, net" caption on the Company's condensed consolidated statements of income (in millions):



	Three Months Ended June 30,
	2019		2018
Restructuring
Employee separation costs	$	6.7	$	45.1
Impairment charges	0.5		2.0
Contract exit costs	—		(7.0		)
Other	0.9		—
Total	$	8.1	$	40.1

The Company continuously evaluates its existing operations in an attempt to identify and realize cost savings opportunities and operational efficiencies. This same approach is applied to businesses that are acquired by the Company and often the operating models of acquired companies are not as efficient as the Company's operating model which enables the Company to realize significant savings and efficiencies. As a result, following an acquisition, the Company will from time to time incur restructuring expenses; however, the Company is often not able to estimate the timing or amount of such costs in advance of the period in which they occur. The primary reason for this is that the Company regularly reviews and evaluates each position, contract and expense against the Company's strategic objectives, long-term operating targets and other operational priorities. Decisions related to restructuring activities are made on a "rolling basis" during the course of the integration of an acquisition whereby department managers, executives and other leaders work together to evaluate each of these expenses and make recommendations. As a result of this approach, at the time of an acquisition, the Company is not able to estimate the future amount of expected employee separation or exit costs that it will incur in connection with its restructuring activities.

The Company's restructuring expenses during the first quarter of fiscal 2020 and fiscal 2019 were primarily related to the Company's most recent business acquisitions, and resulted from workforce, property and other operating expense rationalizations as well as combining product roadmaps and manufacturing operations. These expenses were for employee separation costs and intangible asset impairment charges. The impairment charges in fiscal 2019 were primarily recognized as a result of writing off intangible assets purchased from Microsemi prior to the close of the acquisition and other intangible assets that were impaired as a result of changes in the combined product roadmaps after the acquisition that affected the use and life of the assets. Additional costs will be incurred in the future as additional synergies or operational efficiencies are identified in connection with the Microsemi transaction and other previous acquisitions. The Company is not able to estimate the amount of such future expenses at this time.

All of the Company's restructuring activities occurred in its semiconductor products segment. The Company incurred $112.3 million in costs since the start of fiscal 2017 in connection with employee separation activities, of which $6.7 million and $45.1 million were incurred during the three months ended June 30, 2019 and 2018, respectively. The Company could incur future expenses as additional synergies or operational efficiencies are identified. The Company is not able to estimate future expenses, if any, to be incurred in employee separation costs. The Company has incurred $40.1 million in costs in connection with contract exit activities since the start of fiscal 2017 which includes $7.0 million of income incurred for three months ended June 30, 2018. The $7.0 million income was attributable to changes in timing and amount of cash flows related to a vacated lease liability. There were no contract exit activities during the three months ended June 30, 2019.

The following is a roll forward of accrued restructuring charges for the three months ended June 30, 2019 (in millions):



	Restructuring						Non-Restructuring
	Employee Separation Costs			Exit Costs			Exit Costs			Total
Balance at March 31, 2019	$	12.9		$	19.2		$	15.7		$	47.8
Charges	6.7			—			—			6.7
Payments	(7.2		)	(1.7		)	(1.3		)	(10.2		)
Non-cash - Other	—			0.2			0.1			0.3
Effect of adoption of ASC 842	—			(12.5		)	—			(12.5		)
Balance at June 30, 2019	$	12.4		$	5.2		$	14.5		$	32.1
Current										$	22.0
Non-current										10.1
Total										$	32.1

The liability for restructuring and other exit costs of $32.1 million is included in accrued liabilities and other long-term liabilities, on the Company's consolidated balance sheets as of June 30, 2019.