Restructuring Charges & Asset Impairments

9 Months Ended

Oct. 01, 2011

Restructuring Charges & Asset Impairments

N.         Restructuring Charges & Asset Impairments

At October 1, 2011, restructuring reserves totaled $93.2 million. A summary of the restructuring reserve activity from January 1, 2011 to October 1, 2011 is as follows (in millions):

	1/1/11		Acquisitions		Net Additions			Usage			Currency			10/1/11
2011 Actions
Severance and related costs		$      —		$          5.7		$    45.3			$      (6.2	)		$    (0.9	)		$  43.9
Asset impairments		—		—		9.6			(9.6	)		—			—
Facility closures		—		—		2.5			(2.5	)		—			—
Other		—		—		1.2			(1.1	)		—			0.1
Subtotal 2011 actions		—		5.7		58.6			(19.4	)		(0.9	)		44.0
Pre-2011 Actions
Severance and related costs		97.8		—		(3.9	)		(48.3	)		1.3			46.9
Facility closures		2.3		—		2.8			(3.6	)		—			1.5
Other		1.1		—		1.2			(1.5	)		—			0.8
Subtotal Pre-2011 actions		101.2		—		0.1			(53.4	)		1.3			49.2
Total		$  101.2		$          5.7		$    58.7			$    (72.8	)		$      0.4			$  93.2

2011 Actions: In the first nine months of 2011, the Company continued to initiate restructuring activities associated with the Merger and other acquisitions, and recognized $55.7 million of restructuring charges related to activities initiated in the current year. Of those charges, $42.6 million relates to severance charges associated with the reduction of 947 employees, $2.3 million relates to facility closure costs, $9.6 million relates to asset impairments, and $1.2 million represents other charges. For the three months ended October 1, 2011, the Company recognized $26.4 million of restructuring charges associated with the Merger and other acquisitions, of which $16.1 million relates to severance charges associated with the reduction of 314 employees, $0.5 million relates to facility closure costs, $9.6 relates to asset impairments, and $0.2 million represents other charges.

In addition, the Company has initiated cost reduction actions in the first nine months of 2011 that were not associated with the Merger or other acquisitions, resulting in severance and related charges of $2.7 million pertaining to the reduction of 83 employees, and facility closure costs of $0.2 million. There were no restructuring actions initiated in the three months ended October 1, 2011 that were not associated with the Merger or other acquisitions.

Of the $44.0 million of reserves remaining as of October 1, 2011 the vast majority are expected to be utilized in 2011 and 2012.

Pre-2011 Actions: Charges recognized in the first nine months of 2011 associated with prior year initiatives amounted to $5.8 million, offset by $5.7 million of releases of reserves related to residual liabilities, which included $0.5 million of reserve releases not associated with the Merger and other acquisitions.

The vast majority of the remaining reserve balance of $49.2 million is expected to be utilized in 2011 with the remainder in 2012.

Segments: The $58.7 million of charges recognized in the first nine months of 2011 includes: $30.2 million pertaining to the CDIY segment; $10.0 million pertaining to the Security segment; and $18.5 million pertaining to the Industrial segment. The $24.3 million of charges recognized in the three months ended October 1, 2011 includes: $15.7 million pertaining to the CDIY segment; $12.6 million pertaining to the Industrial segment; and a net release of $4.0 million pertaining to the Security segment.

In addition to the restructuring charges described in the preceding paragraphs, the Company recognized $25.5 million of restructuring-related costs in the first nine months of 2011 pertaining to the Merger and other acquisitions. Those costs are classified in Cost of Sales and include accelerated depreciation and other charges associated with facility closures.