Restructuring Charges

9 Months Ended

Sep. 30, 2012

Restructuring Charges:

As part of our strategic priorities of manufacturing and sourcing excellence and expense reduction, we initiated various manufacturing rationalization actions designed to lower our cost structure. We expanded these expense reductions across the company by initiating a number of activities to rationalize and reorganize various support and administrative functions. Restructuring charges are not included in our calculation of segment profit (loss). See Note 14 for further discussion on our reportable business segments. Detailed below are descriptions of the ongoing restructuring actions and their related activity in 2012.

2010 Plans

Refrigeration

We began to exit certain Refrigeration manufacturing operations in Milperra, Australia in 2010, specifically our OEM coil manufacturing and contract coil manufacturing. The exit of our OEM coil manufacturing was substantially complete in 2010. We initiated restructuring activities related to exiting contract coil manufacturing in the third quarter of 2010. The remaining costs related to this restructuring activity primarily relate to plant closure costs. In the first nine months of 2012, we recognized $0.5 million in plant closure costs. We reversed $0.3 million in severance charges in the first nine months of 2012 to adjust estimated charges for our OEM coil manufacturing restructuring to actual.

2009 and Prior Plans

Regional Distribution Network

In the fourth quarter of 2008, we commenced the transition of activities performed at our North American Parts Center in Des Moines, Iowa to other locations, including our North American Distribution Center in Marshalltown, Iowa. In the first nine months of 2012, we recognized $2.7 million primarily in lease termination charges. The total expected restructuring charges for the regional distribution network is $6.7 million of which $6.3 million were incurred to date.

Total Restructuring

Information regarding the restructuring charges for all plans is as follows (in millions):



	Charges Incurred in 2012		Charges Incurred to Date		Total Charges Expected to be Incurred
Severance and related expense	$	0.2	$	23.3	$	26.4
Asset write-offs and accelerated depreciation	—		10.1		10.1
Equipment moves	0.1		1.5		1.7
Lease termination	2.4		7.2		7.2
Other	0.4		12.2		13.1
Total	$	3.1	$	54.3	$	58.5

Information regarding the restructuring charges by segment is as follows (in millions):



	Charges Incurred in 2012			Charges Incurred to Date		Total Charges Expected to be Incurred
Residential Heating & Cooling	$	2.7		$	17.9	$	21.6
Commercial Heating & Cooling	—			7.8		7.8
Refrigeration	0.5			22.9		23.4
Corporate & Other	(0.1		)	5.7		5.7
Total	$	3.1		$	54.3	$	58.5

Restructuring reserves are included in Accrued Expenses in the accompanying Consolidated Balance Sheets. The table below details activity within the restructuring reserves for the first nine months of 2012 (in millions):



Description of Reserves	Balance as of December 31, 2011		Charged to Earnings		Cash Utilization			Non-Cash Utilization and Other		Balance as of September 30, 2012
Severance and related expense	$	2.3	$	0.2	$	(1.0	)	$	—	$	1.5
Asset write-offs and accelerated depreciation	—		—		—			—		—
Equipment moves	—		0.1		—			—		0.1
Lease termination	—		2.4		(1.9		)	—		0.5
Other	0.1		0.4		(0.2		)	—		0.3
Total restructuring reserves	$	2.4	$	3.1	$	(3.1	)	$	—	$	2.4

Plans related to Discontinued Operations

We began to reorganize certain administrative functions and the management structure of our Service Experts business in the fourth quarter of 2010. We recognized $1.1 million of severance and other costs in Loss from discontinued operations in the first nine months of 2012. Restructuring reserves of $0.2 million are included in Liabilities of discontinued operations as of September 30, 2012.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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