Restructuring Activities (Notes)

6 Months Ended

Jun. 30, 2021

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

Restructuring Activities

Second quarter of 2020 impairment of small cube covered hopper railcars

During the second quarter of 2020, the oil and gas proppants (or “frac sand”) industry continued to experience economic pressure created by low oil prices, reduced fracking activity, and the ongoing economic impact of COVID-19. Significant price declines in the crude oil market, as well as lower demand for certain commodities, resulted in a decline in customer demand for certain types of railcars. As a result, certain of the Leasing Group's small cube covered hopper customers requested rent relief and, in a number of cases, filed for bankruptcy in the second quarter of 2020. Therefore, we determined that the events and circumstances that arose during the second quarter of 2020 constituted an impairment triggering event related to the small cube covered hopper car type in our lease fleet portfolio.

We performed a cash flow recoverability test of our small cube covered hopper railcars and compared the undiscounted cash flows to the carrying value of the assets. Significant management judgment was used to determine the key assumptions utilized in our impairment analysis, the substantial majority of which represent unobservable (Level 3) inputs. The aggregate impairment charge of $369.4 million is reflected in the impairment of long-lived assets line of our Consolidated Statements of Operations for the three and six months ended June 30, 2020. See Note 11 of our 2020 Annual Report on Form 10-K for further information regarding impairment of long-lived assets related to our small cube covered hopper railcars.

Restructuring activities

During the three months ended June 30, 2021, restructuring activities resulted in a net gain of $0.7 million from the disposition of non-operating facilities included in previous restructuring plans. During the six months ended June 30, 2021, restructuring activities resulted in a net gain of $1.0 million, primarily as a result of a $1.4 million gain on the disposition of certain non-operating facilities included in previous restructuring plans, partially offset by $0.4 million in employee severance costs.

During the three months ended June 30, 2020, we recorded total restructuring charges of $0.3 million from a loss on the disposition of a non-operating facility. During the six months ended June 30, 2020, we recorded total restructuring charges of $5.8 million, consisting of $5.2 million of non-cash charges from the write-down of our corporate headquarters campus and $4.1 million in cash charges for severance costs, partially offset by a $3.5 million net gain on the disposition of a non-operating facility and certain related assets.

The following table sets forth the restructuring activity and balance of the restructuring liability, which is included in other liabilities in our Consolidated Balance Sheets:

	Accrued charges as of December 31, 2020		Charges and adjustments		Payments		Accrued charges as of June 30, 2021
	(in millions)
Cash charges:
Employee severance costs	$	1.4	$	0.4	$	(1.4)	$	0.4
	$	1.4	$	0.4	$	(1.4)	$	0.4
Non-cash charges:
Gain on disposition of assets			$	(1.4)
Total restructuring activities			$	(1.0)

Although restructuring activities are not allocated to our reportable segments, the following tables summarize the restructuring activities by reportable segment:

	Three Months Ended June 30,
	2021		2020
	Gain on Disposition on Assets		Loss on Disposition on Assets
Railcar Leasing and Management Services Group	$	—	$	—
Rail Products Group	—		—
All Other	(0.7)		0.3
Corporate	—		—
Total restructuring activities	$	(0.7)	$	0.3

	Six Months Ended June 30, 2021
	Employee Severance Costs		Gain on Disposition of Assets		Total
	(in millions)
Railcar Leasing and Management Services Group	$	—	$	—	$	—
Rail Products Group	0.3		—		0.3
All Other	—		(1.4)		(1.4)
Corporate	0.1		—		0.1
Total restructuring activities	$	0.4	$	(1.4)	$	(1.0)

	Six Months Ended June 30, 2020
	Employee Severance Costs		Gain on Disposition of Assets		Write-down of Assets		Total
	(in millions)
Railcar Leasing and Management Services Group	$	—	$	—	$	—	$	—
Rail Products Group	2.6		—		—		2.6
All Other	0.1		(3.5)		—		(3.4)
Corporate	1.4		—		5.2		6.6
Total restructuring activities	$	4.1	$	(3.5)	$	5.2	$	5.8