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Income Taxes (Tables)

12 Months Ended

Dec. 29, 2018

Income Tax Disclosure [Abstract]

Earnings Before Income Taxes and Equity Earnings

The source of earnings before income taxes and equity earnings consisted of the following:

(Amounts in millions)		2018				2017				2016
United States		$	735.4			$	645.5			$	644.0
Foreign		174.5				176.4				157.4
Total		$	909.9			$	821.9			$	801.4

Components of Income Tax

The provision (benefit) for income taxes consisted of the following:

(Amounts in millions)		2018				2017				2016
Current:
Federal		$	117.9			$	166.9			$	175.9
Foreign		52.4				41.1				39.9
State		30.4				30.6				27.2
Total current		200.7				238.6				243.0
Deferred:
Federal		18.7				8.7				6.3
Foreign		(8.4		)		2.9				(6.7		)
State		3.4				0.7				1.7
Total deferred		13.7				12.3				1.3
Total income tax provision		$	214.4			$	250.9			$	244.3

Reconciliation of Statutory Federal Income Tax Rate

The following is a reconciliation of the statutory federal income tax rate to Snap-on’s effective tax rate:

		2018		2017		2016
Statutory federal income tax rate		21.0%		35.0%		35.0%
Increase (decrease) in tax rate resulting from:
State income taxes, net of federal benefit		2.9		2.4		2.4
Noncontrolling interests		(0.4)		(0.6)		(0.6)
Repatriation of foreign earnings		(0.1)		(1.2)		(0.1)
Change in valuation allowance for deferred tax assets		0.3		0.1		(1.0)
Adjustments to tax accruals and reserves		(0.2)		(0.3)		0.3
Foreign rate differences		0.4		(2.4)		(2.1)
Domestic production activities deduction		—		(2.1)		(1.9)
Excess tax benefits related to equity compensation		(0.8)		(1.4)		(1.8)
U.S. tax reform, net impact		0.4		0.9		—
Other		0.1		0.1		0.3
Effective tax rate		23.6%		30.5%		30.5%

Schedule of Deferred Tax Assets and Liabilities

Temporary differences that give rise to the net deferred income tax asset as of 2018, 2017 and 2016 year end are as follows:

(Amounts in millions)		2018				2017				2016
Long-term deferred income tax assets (liabilities):
Inventories		$	33.6			$	28.8			$	33.3
Accruals not currently deductible		72.9				61.7				77.7
Tax credit carryforward		1.8				2.1				15.1
Employee benefits		56.5				56.8				108.1
Net operating losses		40.9				44.0				42.8
Depreciation and amortization		(167.5		)		(161.3		)		(209.8		)
Valuation allowance		(25.1		)		(25.2		)		(21.7		)
Equity-based compensation		16.6				17.1				24.3
Undistributed non-U.S. earnings		(6.0		)		—				—
Cash flow hedge		—				(0.3		)		(5.5		)
Other		(0.4		)		(0.1		)		(4.6		)
Net deferred income tax asset		$	23.3			$	23.6			$	59.7

Operating Loss Carry Forwards

As of 2018 year end, Snap-on had tax net operating loss carryforwards totaling $224.8 million as follows:

(Amounts in millions)		State				Federal				Foreign				Total
Year of expiration:
2019-2023		$	0.2			$	—			$	52.5			$	52.7
2024-2028		0.1				—				38.9				39.0
2029-2033		90.6				—				6.8				97.4
2034-2038		—				—				—				—
Indefinite		—				—				35.7				35.7
Total net operating loss carryforwards		$	90.9			$	—			$	133.9			$	224.8

Reconciliation of Unrecognized Tax Benefits

The following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits for 2018, 2017 and 2016:

(Amounts in millions)		2018				2017				2016
Unrecognized tax benefits at beginning of year		$	7.7			$	9.4			$	7.2
Gross increases – tax positions in prior periods		1.3				1.4				2.5
Gross decreases – tax positions in prior periods		(0.1		)		—				(0.3		)
Gross increases – tax positions in the current period		2.8				1.0				0.5
Settlements with taxing authorities		—				(3.6		)		—
Lapsing of statutes of limitations		(0.6		)		(0.5		)		(0.5		)
Unrecognized tax benefits at end of year		$	11.1			$	7.7			$	9.4

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