Short-term and Long-term Debt

6 Months Ended

Jul. 03, 2021

Debt Disclosure [Abstract]

Short-term and Long-term Debt

Short-term and Long-term Debt

Short-term and long-term debt as of July 3, 2021, and January 2, 2021, consisted of the following:

(Amounts in millions)	July 3, 2021		January 2, 2021
6.125% unsecured notes due 2021	$	250.0	$	250.0
3.25% unsecured notes due 2027	300.0		300.0
4.10% unsecured notes due 2048	400.0		400.0
3.10% unsecured notes due 2050	500.0		500.0
Other*	0.6		0.6
	1,450.6		1,450.6
Less: notes payable and current maturities of long-term debt
Current maturities of long-term debt	(250.0)		(250.0)
Other notes*	(18.1)		(18.5)
	(268.1)		(268.5)
Total long-term debt	$	1,182.5	$	1,182.1

* Includes the net effects of debt amortization costs and fair value adjustments of interest rate swaps.

Notes payable and current maturities of long-term debt of $268.1 million as of July 3, 2021, consisted of $250.0 million of 6.125% unsecured notes that mature on September 1, 2021 (the “2021 Notes”), $17.5 million of other notes and $0.6 million from the net effects of debt amortization costs and fair value adjustments of interest rate swaps. As of 2020 year end, notes payable of $268.5 million included $250.0 million of the 2021 Notes, $14.9 million of other notes and $3.6 million from the net effects of debt amortization costs and fair value adjustments of interest rate swaps. Snap-on has an $800 million multi-currency revolving credit facility that terminates on September 16, 2024 (the “Credit Facility”); no amounts were outstanding under the Credit Facility as of July 3, 2021. Borrowings under the Credit Facility bear interest at varying rates based on either: (i) Snap-on’s then-current, long-term debt ratings; or (ii) Snap-on’s then-current ratio of consolidated debt net of certain cash adjustments (“Consolidated Net Debt”) to earnings before interest, taxes, depreciation, amortization and certain other adjustments for the preceding four fiscal quarters then ended (the “Consolidated Net Debt to EBITDA Ratio”). The Credit Facility’s financial covenant requires that Snap-on maintain, as of each fiscal quarter end, either (i) a ratio not greater than 0.60 to 1.00 of Consolidated Net Debt to the sum of Consolidated Net Debt plus total equity and less accumulated other comprehensive income or loss (the “Leverage Ratio”); or (ii) a Consolidated Net Debt to EBITDA Ratio not greater than 3.50 to 1.00. Snap-on may, up to two times during any five-year period during the term of the Credit Facility (including any extensions thereof), elect to increase the maximum Leverage Ratio to 0.65 to 1.00 and/or increase the maximum Consolidated Net Debt to EBITDA Ratio to 4.00 to 1.00 for four consecutive fiscal quarters in connection with certain material acquisitions (as defined in the related credit agreement). As of July 3, 2021, the company’s actual ratios of 0.11 and 0.44, respectively, were both within the permitted ranges set forth in this financial covenant. Snap-on generally issues commercial paper to fund its financing needs on a short-term basis and uses the Credit Facility as back-up liquidity to support such commercial paper issuances.