Exit and Disposal Activities

12 Months Ended

Jan. 02, 2016

Restructuring and Related Activities [Abstract]

Exit and Disposal Activities

Note 7: Exit and Disposal Activities

Snap-on did not record any costs for exit and disposal activities in 2015; Snap-on recorded $6.5 million of costs for exit and disposal activities in 2014. The 2014 exit and disposal costs, by operating segment, are as follows:

(Amounts in millions)	2014
Exit and disposal costs:
Cost of goods sold:
Commercial & Industrial Group	$	1.0
Repair Systems & Information Group		4.7
Total cost of goods sold		5.7
Operating expenses:
Commercial & Industrial Group		0.4
Repair Systems & Information Group		0.4
Total operating expenses		0.8
Total exit and disposal costs:
Commercial & Industrial Group		1.4
Repair Systems & Information Group		5.1
Total exit and disposal costs	$	6.5

Costs associated with exit and disposal activities in 2014 primarily related to severance costs associated with headcount reduction and facility consolidation initiatives. All $6.5 million of exit and disposal costs incurred in 2014 qualified for accrual treatment.

Snap-on’s exit and disposal accrual activity for 2014 and 2015 is as follows:

(Amounts in millions)	Balance at 2013 Year End		Provision in 2014		Usage in 2014		Balance at 2014 Year End		Provision in 2015		Usage in 2015		Balance at 2015 Year End
Severance costs:
Commercial & Industrial Group	$	1.5	$	1.4	$	(2.1)	$	0.8	$	–	$	(0.5)	$	0.3
Snap-on Tools Group		0.2		–		(0.2)		–		–		–		–
Repair Systems & Information Group		2.3		5.1		(1.7)		5.7		–		(1.9)		3.8
Total	$	4.0	$	6.5	$	(4.0)	$	6.5	$	–	$	(2.4)	$	4.1

The exit and disposal accrual of $4.1 million as of 2015 year end is expected to be fully utilized in 2016.

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.