Short-term and Long-term Debt

9 Months Ended

Oct. 01, 2016

Note 8: Short-term and Long-term Debt

Short-term and long-term debt as of October 1, 2016, and January 2, 2016, consisted of the following:


(Amounts in millions)	October 1, 2016	January 2, 2016
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*	46.0	30.1

	896.0	880.1

Less: notes payable and current maturities of long-term debt	(182.6)	(18.4)

Total long-term debt	$ 713.4	$ 861.7

* Includes fair value adjustments related to interest rate swaps.

Notes payable and current maturities of long-term debt of $182.6 million as of October 1, 2016, consisted of $150.0 million of 5.50% unsecured notes that mature on January 15, 2017 (the “2017 Notes”) and $32.6 million of other notes, including $8.0 million of commercial paper borrowings. Notes payable at 2015 year end totaled $18.4 million and there were no commercial paper borrowings outstanding. As of 2015 year end, the 2017 Notes were included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheet as their scheduled maturity was in excess of one year of the 2015 year-end balance sheet date.

Snap-on has a five-year, $700 million multi-currency revolving credit facility that terminates on December 15, 2020 (the “Credit Facility”); no amounts were outstanding under the Credit Facility as of October 1, 2016. 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 (the “Debt Ratio”); 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 (the “Debt to EBITDA Ratio”). Snap-on may, up to two times during any five-year period during the term of the Credit Facility (including any extensions thereof), increase the maximum Debt Ratio to 0.65 to 1.00 and/or increase the maximum Debt to EBITDA Ratio to 3.75 to 1.00 for four consecutive fiscal quarters in connection with certain material acquisitions (as defined in the related credit agreement). As of October 1, 2016, the company’s actual ratios of 0.22 and 0.90, respectively, were both within the permitted ranges set forth in this financial covenant.