Exit and Disposal Activities

9 Months Ended

Sep. 27, 2014

Restructuring and Related Activities [Abstract]

Exit and Disposal Activities

Note 6: Exit and Disposal Activities

Snap-on recorded costs associated with exit and disposal activities for the three and nine month periods ended September 27, 2014, and September 28, 2013, as follows:

	Three Months Ended				Nine Months Ended
(Amounts in millions)	September 27, 2014		September 28, 2013		September 27, 2014		September 28, 2013
Exit and disposal costs:
Cost of goods sold:
Commercial & Industrial Group	$	0.5	$	0.3	$	0.5	$	2.5
Snap-on Tools Group		–		0.1		–		0.2
Repair Systems & Information Group		1.0		0.9		4.2		1.7
Total cost of goods sold		1.5		1.3		4.7		4.4
Operating expenses:
Commercial & Industrial Group		0.4		0.3		0.4		0.4
Snap-on Tools Group		–		0.1		–		0.3
Repair Systems & Information Group		0.1		–		0.3		1.2
Total operating expenses		0.5		0.4		0.7		1.9
Financial Services		–		–		–		0.1
Total exit and disposal costs:
Commercial & Industrial Group		0.9		0.6		0.9		2.9
Snap-on Tools Group		–		0.2		–		0.5
Repair Systems & Information Group		1.1		0.9		4.5		2.9
Financial Services		–		–		–		0.1
Total exit and disposal costs	$	2.0	$	1.7	$	5.4	$	6.4

Costs associated with exit and disposal activities in 2014 primarily relate to headcount reduction initiatives. The $2.0 million and $5.4 million of costs incurred during the respective three and nine month periods ended September 27, 2014, qualified for accrual treatment.

Snap-on’s exit and disposal accrual activity for the first nine months of 2014 is as follows:

	Balance at December 28, 2013		Six Months				Balance at June  28, 2014		Third Quarter				Balance at September 27, 2014
(Amounts in millions)			Provision		Usage				Provision		Usage
Severance costs:
Commercial & Industrial Group	$	1.5	$	–	$	(0.5)	$	1.0	$	0.9	$	(0.3)	$	1.6
Snap-on Tools Group		0.2		–		(0.1)		0.1		–		(0.1)		–
Repair Systems & Information Group		2.3		3.4		(0.6)		5.1		1.1		(0.9)		5.3
Total	$	4.0	$	3.4	$	(1.2)	$	6.2	$	2.0	$	(1.3)	$	6.9

As of September 27, 2014, the company expects that approximately $2.0 million of the $6.9 million exit and disposal accrual will be utilized in the balance of 2014 and the remainder will extend into 2015 primarily 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.