Short-term and Long-term Debt

6 Months Ended

Jun. 29, 2013

Note 8: Short-term and Long-term Debt

Short-term and long-term debt as of June 29, 2013, and December 29, 2012, consisted of the following:


(Amounts in millions)	June 29, 2013		December 29, 2012
5.85% unsecured notes due March 2014	$	100.0	$	100.0
5.50% unsecured notes due 2017		150.0		150.0
4.25% unsecured notes due 2018		250.0		250.0
6.70% unsecured notes due 2019		200.0		200.0
6.125% unsecured notes due 2021		250.0		250.0
Other debt*		26.3		25.6

		976.3		975.6

Less: notes payable and current maturities of long-term debt		(114.9)		(5.2)

Total long-term debt	$	861.4	$	970.4

* Includes fair value adjustments related to interest rate swaps.

Notes payable and current maturities of long-term debt of $114.9 million as of June 29, 2013, includes $100.0 million of 5.85% unsecured notes that mature on March 1, 2014 (the “2014 Notes”), and $14.9 million of other notes. As of 2012 year end, the 2014 Notes were included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheets as their scheduled maturity was in excess of one year of the December 29, 2012 year-end balance sheet date. Notes payable as of 2012 year end totaled $5.2 million.

Snap-on has a five-year, $500 million multi-currency revolving credit facility that terminates on December 8, 2016; as of June 29, 2013, no amounts were outstanding under this facility. Borrowings under the $500 million revolving credit facility bear interest at varying rates based on Snap-on’s then-current, long-term debt ratings. The $500 million revolving credit facility’s financial covenant requires that Snap-on maintain, as of each fiscal quarter end, either (i) a ratio of total debt to the sum of total debt plus equity (including noncontrolling interests) of not greater than 0.60 to 1.00; or (ii) a ratio of total debt to the sum of net income plus interest expense, income taxes, depreciation, amortization and other non-cash or extraordinary charges for the preceding four fiscal quarters then ended of not greater than 3.50 to 1.00. As of June 29, 2013, the company’s actual ratios of 0.34 and 1.47, respectively, were both within the permitted ranges set forth in this financial covenant.

Snap-on also has a 364-day loan and servicing agreement that allows Snap-on to borrow up to $200 million (subject to borrowing base requirements) through the pledging of finance receivables under an asset-backed commercial paper conduit facility; the loan and servicing agreement expires on September 27, 2013 (unless earlier terminated or subsequently extended pursuant to the terms of the agreement). As of June 29, 2013, no amounts were outstanding under the loan and servicing agreement.

In addition to the financial covenant required by the $500 million multi-currency revolving credit facility discussed above, Snap-on’s other debt agreements and credit facilities, including the $200 million loan and servicing agreement, also contain certain usual and customary borrowing, affirmative, negative and maintenance covenants. As of June 29, 2013, Snap-on was in compliance with all covenants of its debt agreements and credit facilities.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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