Exit and Disposal Activities

9 Months Ended

Sep. 26, 2020

Restructuring and Related Activities [Abstract]

Exit and Disposal Activities

Exit and Disposal Activities

Snap-on did not record any costs for exit and disposal activities in the three months ended September 26, 2020. For the nine months ended September 26, 2020, Snap-on recorded costs for exit and disposal activities as follows:

	Nine Months Ended
(Amounts in millions)	September 26, 2020
Exit and disposal costs
Cost of goods sold:
Commercial & Industrial Group	$	6.4
Repair System & Information Group	0.7
Total cost of goods sold	$	7.1
Operating Expenses:
Snap-on Tools Group	$	0.6
Repair System & Information Group	3.8
Total operating expenses	$	4.4
Total exit and disposal costs:
Commercial & Industrial Group	$	6.4
Snap-on Tools Group	0.6
Repair System & Information Group	4.5
Total exit and disposal costs	$	11.5

Of the $11.5 million of costs incurred in the nine month period ended September 26, 2020, $11.4 million qualified for accrual treatment. Costs associated with exit and disposal activities in the first nine months of 2020 primarily related to headcount reductions from the ongoing optimization of the company’s cost structure in Europe and various other management and realignment actions.

Snap-on’s exit and disposal accrual activity for the third quarter of 2020 is as follows:

	Balance at		First Six Months				Balance at		Third Quarter				Balance at
(Amounts in millions)	December 28, 2019		Provision		Usage		June 27, 2020		Provision		Usage		September 26, 2020
Severance costs:
Commercial & Industrial Group	$	—	$	6.4	$	—	$	6.4	$	—	$	(0.1)	$	6.3
Snap-on Tools Group	—		0.6		—		0.6		—		(0.2)		0.4
Repair System & Information Group	—		4.4		—		4.4		—		(0.3)		4.1
Total	$	—	$	11.4	$	—	$	11.4	$	—	$	(0.6)	$	10.8

As of September 26, 2020, the company expects that of the $10.8 million exit and disposal accrual, approximately $3.0 million will be utilized in the balance of 2020, $7.1 million in 2021 and the remainder thereafter, primarily for longer-term severance payments.

Snap-on expects to fund the remaining cash requirements of its exit and disposal activities with available cash on hand, cash flows from operating activities and borrowings under the company’s existing credit facilities. The estimated costs for the exit and disposal activities were based on management’s best business judgement under prevailing circumstances.