Exit And Disposal Activities

9 Months Ended

Sep. 29, 2012

Exit And Disposal Activities

Note 5: Exit and Disposal Activities

Snap-on recorded costs associated with exit and disposal activities for the three and nine month periods ended September 29, 2012, and October 1, 2011, as follows:

	Three Months Ended				Nine Months Ended
(Amounts in millions)	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Exit and disposal costs:
Cost of goods sold:
Commercial & Industrial Group	$	0.9	$	0.2	$	3.6	$	0.4
Snap-on Tools Group		0.1		0.4		7.1		3.4
Repair Systems & Information Group		—		—		0.2		(0.1	)
Total cost of goods sold		1.0		0.6		10.9		3.7
Operating expenses:
Commercial & Industrial Group		1.3		2.2		5.3		2.7
Snap-on Tools Group		—		—		0.1		0.6
Repair Systems & Information Group		—		0.1		0.2		0.6
Corporate		—		—		—		0.2
Total operating expenses		1.3		2.3		5.6		4.1
Total exit and disposal costs:
Commercial & Industrial Group		2.2		2.4		8.9		3.1
Snap-on Tools Group		0.1		0.4		7.2		4.0
Repair Systems & Information Group		—		0.1		0.4		0.5
Corporate		—		—		—		0.2
Total exit and disposal costs	$	2.3	$	2.9	$	16.5	$	7.8

Of the $2.3 million and $16.5 million of costs incurred during the three and nine month periods ended September 29, 2012, respectively, $2.3 million and $8.8 million, respectively, qualified for accrual treatment. Costs associated with exit and disposal activities in 2012 primarily related to the second-quarter 2012 settlement of a pension plan as a result of the 2011 closure of the company’s Newmarket, Canada, facility and other headcount reductions, largely to improve the company’s cost structure in Europe.

Snap-on’s exit and disposal accrual activity for the first nine months of 2012 is as follows:

	Balance at		Six Months						Balance at		Third Quarter					Balance at
(Amounts in millions)	December 31, 2011		Additions			Usage			June 30, 2012		Additions		Usage			September 29, 2012
Severance costs:
Commercial & Industrial Group	$	3.6	$	6.5		$	(3.7	)	$	6.4	$	2.2	$	(0.9	)	$	7.7
Snap-on Tools Group		0.6		(0.2	)		(0.3	)		0.1		0.1		—			0.2
Repair Systems & Information Group		3.8		0.2			(1.7	)		2.3		—		(1.0	)		1.3
Facility-related costs:
Commercial & Industrial Group		0.4		—			(0.2	)		0.2		—		—			0.2
Total	$	8.4	$	6.5		$	(5.9	)	$	9.0	$	2.3	$	(1.9	)	$	9.4

As of September 29, 2012, Snap-on expects that approximately $4.6 million of the $9.4 million exit and disposal accrual will be utilized in 2012; the remaining accrual balance of approximately $4.8 million will extend into 2013 for longer-term severance obligations.

Snap-on expects to fund the remaining cash requirements of its exit and disposal activities with available cash on hand, cash flows from operations 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 judgment under prevailing circumstances.