Restructuring Charges

9 Months Ended

Sep. 30, 2013

Restructuring Charges:

As part of the efforts to achieve our strategic priorities of manufacturing and sourcing excellence and expense reduction, we initiated various rationalization actions in prior periods designed to lower our cost structure. There were several ongoing restructuring activities as of September 30, 2013, however, none were significant.

In the third quarter of 2013, we substantially completed the Regional Distribution Network restructuring activities and below are details of those activities in 2013.

Regional Distribution Network

In 2008, our Residential Heating & Cooling segment 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 2013, we recorded expense of $1.4 million with no expected future costs remaining for this restructuring activity. As of September 30, 2013, we have incurred $7.7 million in costs related to this restructuring activity.

Total Restructuring

Restructuring charges include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations, lease termination costs and other related costs. Restructuring charges are generally recorded based on planned employee termination dates and site closure and consolidation plans. The timing of associated cash payments is dependent upon the type of restructuring charge and can extend over a multi-year period.

Information regarding the charges for all ongoing restructuring actions related to continuing operations is as follows (in millions):



	Incurred in 2013		Incurred to Date		Total Expected to be Incurred
Severance and related expense	$	0.8	$	11.9	$	12.5
Asset write-offs and accelerated depreciation	0.8		1.8		1.8
Equipment moves	0.1		0.4		0.4
Lease termination	—		2.6		2.6
Other	1.5		7.1		7.2
Total restructuring charges	$	3.2	$	23.8	$	24.5

While restructuring charges are excluded from our calculation of segment profit (loss), as more fully explained in Note 15, the table below presents the restructuring charges associated with each segment (in millions):



	Incurred in 2013		Incurred to Date		Total Expected to be Incurred
Residential Heating & Cooling	$	1.4	$	7.7	$	7.7
Commercial Heating & Cooling	0.9		7.8		8.4
Refrigeration	0.9		8.3		8.4
Corporate & Other	—		—		—
Total restructuring charges	$	3.2	$	23.8	$	24.5

Restructuring reserves related to continuing operations are included in Accrued expenses in the accompanying Consolidated Balance Sheets. The table below details the activity in 2013 within the restructuring reserves (in millions):



Description of Reserves	Balance as of December 31, 2012		Charged to Earnings		Cash Utilization			Non-Cash Utilization and Other			Balance as of September 30, 2013
Severance and related expense	$	0.7	$	0.8	$	(1.1	)	$	—		$	0.4
Asset write-offs and accelerated depreciation	—		0.8		(0.2		)	(0.6		)	—
Equipment moves	—		0.1		(0.1		)	—			—
Lease termination	1.2		—		(1.2		)	—			—
Other	0.5		1.5		(1.8		)	—			0.2
Total restructuring reserves	$	2.4	$	3.2	$	(4.4	)	$	(0.6	)	$	0.6

- 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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