Exit And Disposal Activities

12 Months Ended

Dec. 29, 2012

Note 7: Exit and Disposal Activities

Snap-on recorded costs associated with exit and disposal activities of $16.5 million and $12.2 million during 2012 and 2011, respectively. The 2012 and 2011 costs associated with exit and disposal activities by operating segment are as follows:


(Amounts in millions)	2012		2011
Exit and disposal costs:
Cost of goods sold:
Commercial & Industrial Group	$	3.6	$	2.9
Snap-on Tools Group		7.1		3.7
Repair Systems & Information Group		0.2		1.0

Total cost of goods sold		10.9		7.6
Operating expenses:
Commercial & Industrial Group		5.3		2.7
Snap-on Tools Group		0.1		0.6
Repair Systems & Information Group		0.2		1.1
Corporate		–		0.2

Total operating expenses		5.6		4.6

Total exit and disposal costs:
Commercial & Industrial Group		8.9		5.6
Snap-on Tools Group		7.2		4.3
Repair Systems & Information Group		0.4		2.1
Corporate		–		0.2

Total exit and disposal costs	$	16.5	$	12.2

Costs associated with exit and disposal activities in 2012 primarily related to the settlement of a pension plan as a result of the 2011 closure of the company’s former Newmarket, Canada, facility as well as headcount reductions, largely to improve the company’s cost structure in Europe. Of the $16.5 million of exit and disposal costs incurred in 2012, $8.8 million qualified for accrual treatment. Of the $12.2 million of exit and disposal costs incurred in 2011, $8.2 million qualified for accrual treatment.

Snap-on’s exit and disposal accrual activity related to 2012 and 2011 actions is as follows:


(Amounts in millions)	Balance at 2010 Year End		Provision in 2011		Usage in 2011		Balance at 2011 Year End		Provision (reversal) in 2012		Usage in 2012		Balance at 2012 Year End
Severance costs:
Commercial & Industrial Group	$	2.8	$	4.3	$	(3.5)	$	3.6	$	8.7	$	(6.1)	$	6.2
Snap-on Tools Group		3.5		1.8		(4.7)		0.6		(0.1)		(0.4)		0.1
Repair Systems & Information Group		3.3		2.1		(1.6)		3.8		0.2		(3.3)		0.7
Corporate		0.2		–		(0.2)		–		–		–		–

Facility-related costs:
Commercial & Industrial Group		0.5		–		(0.1)		0.4		–		(0.2)		0.2
Snap-on Tools Group		0.2		–		(0.2)		–		–		–		–

Total	$	10.5	$	8.2	$	(10.3)	$	8.4	$	8.8	$	(10.0)	$	7.2

Snap-on reduced headcount by approximately 150 employees in 2012 as part of its restructuring actions. The exit and disposal accrual of $7.2 million as of 2012 year end is expected to be fully utilized in 2013.

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.

- 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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