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Short-term and Long-term Debt
 12 Months Ended
Jan. 03, 2015
Debt Disclosure [Abstract]  
Short-term and Long-term Debt

Note 9: Short-term and Long-term Debt

Short-term and long-term debt as of 2014 and 2013 year end consisted of the following:

 

(Amounts in millions)    2014      2013  

5.85% unsecured notes due March 2014

        $ –                  $       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*

      69.3             22.0       
  

 

 

     

 

 

  
     919.3             972.0       

Less: notes payable and current maturities of long-term debt

      (56.6)            (113.1)      
  

 

 

     

 

 

  

Total long-term debt

        $       862.7               $ 858.9       
  

 

 

     

 

 

  

 

*

Includes fair value adjustments related to interest rate swaps.

Notes payable of $56.6 million as of 2014 year end included $37.0 million of commercial paper borrowings and $19.6 million of other notes; there were no current maturities of long-term debt as of 2014 year end. Notes payable and current maturities of long-term debt of $113.1 million as of 2013 year end included $100.0 million of 5.85% unsecured notes due March 2014 (the “2014 Notes”) and $13.1 million of other notes; no commercial paper was outstanding as of 2013 year end. Snap-on repaid the 2014 Notes at maturity with available cash and commercial paper borrowings.

The annual maturities of Snap-on’s long-term debt and notes payable over the next five years are $56.6 million in 2015, no maturities in 2016, $150.0 million in 2017, $250.0 million in 2018 and $200.0 million in 2019.

Average notes payable outstanding were $45.4 million in 2014 and $13.4 million in 2013. The weighted-average interest rate on notes payable was 5.42% in 2014 and 10.85% in 2013. As of 2014 and 2013 year end, the weighted-average interest rate on outstanding notes payable was 4.86% and 12.73%, respectively. The lower weighted-average interest rates in 2014 primarily reflect the impact of lower interest rates on commercial paper borrowings; no commercial paper was outstanding during 2013. The weighted-average interest rates in both years reflect local borrowings in emerging growth markets where interest rates are generally higher.

Snap-on has a five-year, $700 million multi-currency revolving credit facility that terminates on September 27, 2018 (the “Credit Facility”); no amounts were outstanding under the Credit Facility as of 2014 year end. Borrowings under the Credit Facility bear interest at varying rates based on Snap-on’s then-current, long-term debt ratings. 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 (consolidated debt net of certain cash adjustments) to the sum of such consolidated net debt plus total equity and less accumulated other comprehensive income or loss; or (ii) a ratio not greater than 3.50 to 1.00 of such consolidated net debt to earnings before interest, taxes, depreciation, amortization and certain other adjustments for the preceding four fiscal quarters then ended. As of 2014 year end, the company’s actual ratios of 0.27 and 1.15, respectively, were both within the permitted ranges set forth in this financial covenant.

Snap-on’s Credit Facility and other debt agreements also contain certain usual and customary borrowing, affirmative, negative and maintenance covenants. As of 2014 year end, Snap-on was in compliance with all covenants of its Credit Facility and other debt agreements.