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Leases
 6 Months Ended
Jun. 29, 2019
Leases [Abstract]  
Leases Leases

At the beginning of fiscal 2019, Snap-on adopted ASU No. 2016-02, Leases (Topic 842). The adoption of Topic 842 did not have a significant impact on the company’s consolidated financial statements. Finance leases and lessor accounting remained substantially unchanged. The adoption of Topic 842 impacted the company’s previously reported results as follows:

(Amounts in millions)
 
Classification
 
Balance at
December 29, 2018
 
Topic 842
Adjustments
 
Opening Balance at
December 30, 2018
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Finance lease assets
 
Property and equipment - net
 
$
7.8

 
$
—

 
$
7.8

Operating lease assets
 
Operating lease right-of-use assets
 
—

 
60.5

 
60.5

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Current:
 
 
 
 
 
 
 
 
  Finance lease liabilities
 
Other accrued liabilities
 
$
1.2

 
$
—

 
$
1.2

  Operating lease liabilities
 
Other accrued liabilities
 
—

 
20.2

 
20.2

 
 
 
 
 
 
 
 
 
Non-current:
 
 
 
 
 
 
 
 
  Finance lease liabilities
 
Other long-term liabilities
 
$
6.6

 
$
—

 
$
6.6

  Operating lease liabilities
 
Operating lease liabilities
 
—

 
40.4

 
40.4




Lessee Accounting
Snap-on determines if an arrangement is a lease at inception. Snap-on has operating and finance leases for manufacturing plants, distribution centers, software development facilities, financial services offices, data centers, company store vans and certain equipment. Snap-on’s leases have lease terms of one year to 20 years and some include options to extend and/or terminate the lease. The exercise of lease renewal options is at the company’s sole discretion. Certain leases also include options to purchase the leased property. When deemed reasonably certain of exercise, the renewal and purchase options are included in the determination of the lease term and lease payment obligation, respectively. The depreciable life of assets and leasehold improvements are limited to the expected term, unless there is a transfer of title or purchase option reasonably certain of exercise. The company’s lease agreements do not contain any material variable lease payments, material residual value guarantees or any material restrictive covenants.
ROU assets represent Snap-on’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When readily determinable, Snap-on uses the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, Snap-on uses its country specific incremental borrowing rate based on the information available at the lease commencement date, including the lease term. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Snap-on has lease agreements with lease and non-lease components, which are generally accounted for separately. For all equipment leases, including vehicles, Snap-on accounts for the lease and non-lease components as a single lease component.

Total lease costs consist of the following:
 
 
Three Months Ended
 
Six Months Ended
(Amounts in millions)
 
June 29, 2019
 
June 29, 2019
 
 
 
 
 
Finance lease costs:
 
 
 
 
Amortization of ROU assets
 
$
0.4

 
$
0.7

Interest on lease liabilities
 
—

 
0.1

Operating lease costs*
 
6.3

 
12.5

Total lease costs
 
$
6.7

 
$
13.3

 
 
 
 
 
 
 
 
 
*
Includes short-term leases, variable lease costs and sublease income, which are immaterial.

Supplemental cash flow information related to leases is as follows:
 
 
Six Months Ended
(Amounts in millions)
 
June 29, 2019
 
 
 
Cash paid for amounts included in the measurement of lease liabilities:
 
 
Financing cash flows from finance leases
 
$
0.7

Operating cash flows from finance leases
 
0.1

Operating cash flows from operating leases
 
11.7

 
 
 
 
 
June 29, 2019
ROU assets obtained in exchange for new lease obligations:
 
 
Finance lease liabilities
 
$
1.1

Operating lease liabilities
 
6.2

 
 
 


Supplemental balance sheet information related to leases as of June 29, 2019, is as follows:
(Amounts in millions)
 
June 29, 2019
 
 
 
Finance leases:
 
 
Property and equipment - gross
 
$
9.1

Accumulated depreciation and amortization
 
(0.7
)
Property and equipment - net
 
$
8.4

 
 
 
 Other accrued liabilities
 
$
1.5

 Other long-term liabilities
 
7.1

Total finance lease liabilities
 
$
8.6

 
 
 
Operating leases:
 
 
Operating lease right-of-use assets
 
$
55.4

 
 
 
 Other accrued liabilities
 
$
20.8

 Operating lease liabilities
 
35.7

Total operating lease liabilities
 
$
56.5

 
 
 


Weighted-average lease terms and discount rates as of June 29, 2019, are as follows:
 
 
June 29, 2019
 
 
 
Weighted-average remaining lease terms:
 
 
Finance leases
 
5.5 years
Operating leases
 
3.6 years
 
 
 
Weighted-average discount rates:
 
 
Finance leases
 
3.1%
Operating leases
 
3.0%
 
 
 


Maturities of lease liabilities as of June 29, 2019, are as follows:
(Amounts in millions)
 
Operating Leases
 
Finance Leases
 
 
 
 
 
Year:
 
 
 
 
2019 (excluding the six months ended June 29, 2019)
 
$
11.2

 
$
0.8

2020
 
18.4

 
1.7

2021
 
13.4

 
1.7

2022
 
8.8

 
1.7

2023
 
4.1

 
1.7

2024 and thereafter
 
3.7

 
1.7

Total lease payments
 
59.6

 
9.3

          Less: amount representing interest
 
(3.1
)
 
(0.7
)
Total lease liabilities
 
$
56.5

 
$
8.6



As of June 29, 2019, Snap-on does not have any significant additional operating or finance leases that have not yet commenced.

Snap-on’s future minimum lease commitments, net of sub-lease rental income, as of December 29, 2018, under Accounting Standard Codification Topic 840, the predecessor to Topic 842, are as follows:
(Amounts in millions)
 
Operating  
Leases
 
Capital
Leases     
Year:
 
 
 
 
2019
 
$
25.6

 
$
3.3

2020
 
18.4

 
3.2

2021
 
13.9

 
2.9

2022
 
9.8

 
2.5

2023
 
4.9

 
2.2

2024 and thereafter
 
4.4

 
1.9

Total minimum lease payments
 
$
77.0

 
16.0

     Less: amount representing interest
 

 
(0.9
)
Total present value of minimum capital lease payments
 
 
 
$
15.1



Amounts included in the accompanying Condensed Consolidated Balance Sheets for the present value of minimum capital lease payments as of 2018 year end are as follows: 
(Amounts in millions)
 
2018
Other accrued liabilities
 
$
3.0

Other long-term liabilities
 
12.1

Total present value of minimum capital lease payments
 
$
15.1


Rent expense for worldwide facilities, office equipment and vehicles, net of sub-lease rental income, was $33.0 million in 2018.

Lessor Accounting
Snap-on’s Financial Services business offers its customers lease financing for the lease of tools, diagnostics and equipment products and to franchisees who require financing for vehicle leases. Snap-on accounts for its financial services leases as sales-type leases. In certain circumstances, the lessee has the option to terminate the lease. In the event of the lessee’s deteriorated financial condition or default, Snap-on has the right to terminate the lease. The leases contain an end-of-term purchase option that is generally insignificant and is reasonably certain to be exercised by the lessee.
The company recognizes the net investment in the lease as the sum of the lease receivable and the unguaranteed residual value, both of which are measured at the present value using the interest rate implicit in the lease. The difference between the undiscounted lease payments received over the lease term and the related net investment in the lease is reported as unearned finance charges. Unearned finance charges are amortized to income over the life of the contract and are included as a component of “Financial services revenue” on the accompanying Condensed Consolidated Statements of Earnings.
Sales-type leases included in both “Finance receivables - net” and “Long-term finance receivables - net” on the accompanying Condensed Consolidated Balance Sheets as of June 29, 2019, have future minimum lease payments, including unguaranteed residual value, of $93.8 million and unearned finance charges of $18.3 million, with lease terms of up to five years.
Sales-type leases included in both “Contract receivables - net” and “Long-term contract receivables - net” on the accompanying Condensed Consolidated Balance Sheets as of June 29, 2019, have future minimum lease payments, including unguaranteed residual value, of $255.9 million and unearned finance charges of $46.0 million, with lease terms of up to seven years.


Future minimum lease payments as of June 29, 2019, consisted of the following:
(Amounts in millions)
 
Lease Receivables
 
 
 
Year:
 
 
2019 (excluding the six months ended June 29, 2019)
 
$
60.1

2020
 
102.8

2021
 
74.1

2022
 
50.1

2023
 
33.8

2024 and thereafter
 
28.8

Total lease payments
 
349.7

          Less: unearned finance charges
 
(64.3
)
Net investment in leases
 
$
285.4



See Note 4 for further information on finance and contract receivables.
Leases Leases

At the beginning of fiscal 2019, Snap-on adopted ASU No. 2016-02, Leases (Topic 842). The adoption of Topic 842 did not have a significant impact on the company’s consolidated financial statements. Finance leases and lessor accounting remained substantially unchanged. The adoption of Topic 842 impacted the company’s previously reported results as follows:

(Amounts in millions)
 
Classification
 
Balance at
December 29, 2018
 
Topic 842
Adjustments
 
Opening Balance at
December 30, 2018
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Finance lease assets
 
Property and equipment - net
 
$
7.8

 
$
—

 
$
7.8

Operating lease assets
 
Operating lease right-of-use assets
 
—

 
60.5

 
60.5

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Current:
 
 
 
 
 
 
 
 
  Finance lease liabilities
 
Other accrued liabilities
 
$
1.2

 
$
—

 
$
1.2

  Operating lease liabilities
 
Other accrued liabilities
 
—

 
20.2

 
20.2

 
 
 
 
 
 
 
 
 
Non-current:
 
 
 
 
 
 
 
 
  Finance lease liabilities
 
Other long-term liabilities
 
$
6.6

 
$
—

 
$
6.6

  Operating lease liabilities
 
Operating lease liabilities
 
—

 
40.4

 
40.4




Lessee Accounting
Snap-on determines if an arrangement is a lease at inception. Snap-on has operating and finance leases for manufacturing plants, distribution centers, software development facilities, financial services offices, data centers, company store vans and certain equipment. Snap-on’s leases have lease terms of one year to 20 years and some include options to extend and/or terminate the lease. The exercise of lease renewal options is at the company’s sole discretion. Certain leases also include options to purchase the leased property. When deemed reasonably certain of exercise, the renewal and purchase options are included in the determination of the lease term and lease payment obligation, respectively. The depreciable life of assets and leasehold improvements are limited to the expected term, unless there is a transfer of title or purchase option reasonably certain of exercise. The company’s lease agreements do not contain any material variable lease payments, material residual value guarantees or any material restrictive covenants.
ROU assets represent Snap-on’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When readily determinable, Snap-on uses the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, Snap-on uses its country specific incremental borrowing rate based on the information available at the lease commencement date, including the lease term. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Snap-on has lease agreements with lease and non-lease components, which are generally accounted for separately. For all equipment leases, including vehicles, Snap-on accounts for the lease and non-lease components as a single lease component.

Total lease costs consist of the following:
 
 
Three Months Ended
 
Six Months Ended
(Amounts in millions)
 
June 29, 2019
 
June 29, 2019
 
 
 
 
 
Finance lease costs:
 
 
 
 
Amortization of ROU assets
 
$
0.4

 
$
0.7

Interest on lease liabilities
 
—

 
0.1

Operating lease costs*
 
6.3

 
12.5

Total lease costs
 
$
6.7

 
$
13.3

 
 
 
 
 
 
 
 
 
*
Includes short-term leases, variable lease costs and sublease income, which are immaterial.

Supplemental cash flow information related to leases is as follows:
 
 
Six Months Ended
(Amounts in millions)
 
June 29, 2019
 
 
 
Cash paid for amounts included in the measurement of lease liabilities:
 
 
Financing cash flows from finance leases
 
$
0.7

Operating cash flows from finance leases
 
0.1

Operating cash flows from operating leases
 
11.7

 
 
 
 
 
June 29, 2019
ROU assets obtained in exchange for new lease obligations:
 
 
Finance lease liabilities
 
$
1.1

Operating lease liabilities
 
6.2

 
 
 


Supplemental balance sheet information related to leases as of June 29, 2019, is as follows:
(Amounts in millions)
 
June 29, 2019
 
 
 
Finance leases:
 
 
Property and equipment - gross
 
$
9.1

Accumulated depreciation and amortization
 
(0.7
)
Property and equipment - net
 
$
8.4

 
 
 
 Other accrued liabilities
 
$
1.5

 Other long-term liabilities
 
7.1

Total finance lease liabilities
 
$
8.6

 
 
 
Operating leases:
 
 
Operating lease right-of-use assets
 
$
55.4

 
 
 
 Other accrued liabilities
 
$
20.8

 Operating lease liabilities
 
35.7

Total operating lease liabilities
 
$
56.5

 
 
 


Weighted-average lease terms and discount rates as of June 29, 2019, are as follows:
 
 
June 29, 2019
 
 
 
Weighted-average remaining lease terms:
 
 
Finance leases
 
5.5 years
Operating leases
 
3.6 years
 
 
 
Weighted-average discount rates:
 
 
Finance leases
 
3.1%
Operating leases
 
3.0%
 
 
 


Maturities of lease liabilities as of June 29, 2019, are as follows:
(Amounts in millions)
 
Operating Leases
 
Finance Leases
 
 
 
 
 
Year:
 
 
 
 
2019 (excluding the six months ended June 29, 2019)
 
$
11.2

 
$
0.8

2020
 
18.4

 
1.7

2021
 
13.4

 
1.7

2022
 
8.8

 
1.7

2023
 
4.1

 
1.7

2024 and thereafter
 
3.7

 
1.7

Total lease payments
 
59.6

 
9.3

          Less: amount representing interest
 
(3.1
)
 
(0.7
)
Total lease liabilities
 
$
56.5

 
$
8.6



As of June 29, 2019, Snap-on does not have any significant additional operating or finance leases that have not yet commenced.

Snap-on’s future minimum lease commitments, net of sub-lease rental income, as of December 29, 2018, under Accounting Standard Codification Topic 840, the predecessor to Topic 842, are as follows:
(Amounts in millions)
 
Operating  
Leases
 
Capital
Leases     
Year:
 
 
 
 
2019
 
$
25.6

 
$
3.3

2020
 
18.4

 
3.2

2021
 
13.9

 
2.9

2022
 
9.8

 
2.5

2023
 
4.9

 
2.2

2024 and thereafter
 
4.4

 
1.9

Total minimum lease payments
 
$
77.0

 
16.0

     Less: amount representing interest
 

 
(0.9
)
Total present value of minimum capital lease payments
 
 
 
$
15.1



Amounts included in the accompanying Condensed Consolidated Balance Sheets for the present value of minimum capital lease payments as of 2018 year end are as follows: 
(Amounts in millions)
 
2018
Other accrued liabilities
 
$
3.0

Other long-term liabilities
 
12.1

Total present value of minimum capital lease payments
 
$
15.1


Rent expense for worldwide facilities, office equipment and vehicles, net of sub-lease rental income, was $33.0 million in 2018.

Lessor Accounting
Snap-on’s Financial Services business offers its customers lease financing for the lease of tools, diagnostics and equipment products and to franchisees who require financing for vehicle leases. Snap-on accounts for its financial services leases as sales-type leases. In certain circumstances, the lessee has the option to terminate the lease. In the event of the lessee’s deteriorated financial condition or default, Snap-on has the right to terminate the lease. The leases contain an end-of-term purchase option that is generally insignificant and is reasonably certain to be exercised by the lessee.
The company recognizes the net investment in the lease as the sum of the lease receivable and the unguaranteed residual value, both of which are measured at the present value using the interest rate implicit in the lease. The difference between the undiscounted lease payments received over the lease term and the related net investment in the lease is reported as unearned finance charges. Unearned finance charges are amortized to income over the life of the contract and are included as a component of “Financial services revenue” on the accompanying Condensed Consolidated Statements of Earnings.
Sales-type leases included in both “Finance receivables - net” and “Long-term finance receivables - net” on the accompanying Condensed Consolidated Balance Sheets as of June 29, 2019, have future minimum lease payments, including unguaranteed residual value, of $93.8 million and unearned finance charges of $18.3 million, with lease terms of up to five years.
Sales-type leases included in both “Contract receivables - net” and “Long-term contract receivables - net” on the accompanying Condensed Consolidated Balance Sheets as of June 29, 2019, have future minimum lease payments, including unguaranteed residual value, of $255.9 million and unearned finance charges of $46.0 million, with lease terms of up to seven years.


Future minimum lease payments as of June 29, 2019, consisted of the following:
(Amounts in millions)
 
Lease Receivables
 
 
 
Year:
 
 
2019 (excluding the six months ended June 29, 2019)
 
$
60.1

2020
 
102.8

2021
 
74.1

2022
 
50.1

2023
 
33.8

2024 and thereafter
 
28.8

Total lease payments
 
349.7

          Less: unearned finance charges
 
(64.3
)
Net investment in leases
 
$
285.4



See Note 4 for further information on finance and contract receivables.
Leases Leases

At the beginning of fiscal 2019, Snap-on adopted ASU No. 2016-02, Leases (Topic 842). The adoption of Topic 842 did not have a significant impact on the company’s consolidated financial statements. Finance leases and lessor accounting remained substantially unchanged. The adoption of Topic 842 impacted the company’s previously reported results as follows:

(Amounts in millions)
 
Classification
 
Balance at
December 29, 2018
 
Topic 842
Adjustments
 
Opening Balance at
December 30, 2018
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Finance lease assets
 
Property and equipment - net
 
$
7.8

 
$
—

 
$
7.8

Operating lease assets
 
Operating lease right-of-use assets
 
—

 
60.5

 
60.5

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Current:
 
 
 
 
 
 
 
 
  Finance lease liabilities
 
Other accrued liabilities
 
$
1.2

 
$
—

 
$
1.2

  Operating lease liabilities
 
Other accrued liabilities
 
—

 
20.2

 
20.2

 
 
 
 
 
 
 
 
 
Non-current:
 
 
 
 
 
 
 
 
  Finance lease liabilities
 
Other long-term liabilities
 
$
6.6

 
$
—

 
$
6.6

  Operating lease liabilities
 
Operating lease liabilities
 
—

 
40.4

 
40.4




Lessee Accounting
Snap-on determines if an arrangement is a lease at inception. Snap-on has operating and finance leases for manufacturing plants, distribution centers, software development facilities, financial services offices, data centers, company store vans and certain equipment. Snap-on’s leases have lease terms of one year to 20 years and some include options to extend and/or terminate the lease. The exercise of lease renewal options is at the company’s sole discretion. Certain leases also include options to purchase the leased property. When deemed reasonably certain of exercise, the renewal and purchase options are included in the determination of the lease term and lease payment obligation, respectively. The depreciable life of assets and leasehold improvements are limited to the expected term, unless there is a transfer of title or purchase option reasonably certain of exercise. The company’s lease agreements do not contain any material variable lease payments, material residual value guarantees or any material restrictive covenants.
ROU assets represent Snap-on’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When readily determinable, Snap-on uses the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, Snap-on uses its country specific incremental borrowing rate based on the information available at the lease commencement date, including the lease term. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Snap-on has lease agreements with lease and non-lease components, which are generally accounted for separately. For all equipment leases, including vehicles, Snap-on accounts for the lease and non-lease components as a single lease component.

Total lease costs consist of the following:
 
 
Three Months Ended
 
Six Months Ended
(Amounts in millions)
 
June 29, 2019
 
June 29, 2019
 
 
 
 
 
Finance lease costs:
 
 
 
 
Amortization of ROU assets
 
$
0.4

 
$
0.7

Interest on lease liabilities
 
—

 
0.1

Operating lease costs*
 
6.3

 
12.5

Total lease costs
 
$
6.7

 
$
13.3

 
 
 
 
 
 
 
 
 
*
Includes short-term leases, variable lease costs and sublease income, which are immaterial.

Supplemental cash flow information related to leases is as follows:
 
 
Six Months Ended
(Amounts in millions)
 
June 29, 2019
 
 
 
Cash paid for amounts included in the measurement of lease liabilities:
 
 
Financing cash flows from finance leases
 
$
0.7

Operating cash flows from finance leases
 
0.1

Operating cash flows from operating leases
 
11.7

 
 
 
 
 
June 29, 2019
ROU assets obtained in exchange for new lease obligations:
 
 
Finance lease liabilities
 
$
1.1

Operating lease liabilities
 
6.2

 
 
 


Supplemental balance sheet information related to leases as of June 29, 2019, is as follows:
(Amounts in millions)
 
June 29, 2019
 
 
 
Finance leases:
 
 
Property and equipment - gross
 
$
9.1

Accumulated depreciation and amortization
 
(0.7
)
Property and equipment - net
 
$
8.4

 
 
 
 Other accrued liabilities
 
$
1.5

 Other long-term liabilities
 
7.1

Total finance lease liabilities
 
$
8.6

 
 
 
Operating leases:
 
 
Operating lease right-of-use assets
 
$
55.4

 
 
 
 Other accrued liabilities
 
$
20.8

 Operating lease liabilities
 
35.7

Total operating lease liabilities
 
$
56.5

 
 
 


Weighted-average lease terms and discount rates as of June 29, 2019, are as follows:
 
 
June 29, 2019
 
 
 
Weighted-average remaining lease terms:
 
 
Finance leases
 
5.5 years
Operating leases
 
3.6 years
 
 
 
Weighted-average discount rates:
 
 
Finance leases
 
3.1%
Operating leases
 
3.0%
 
 
 


Maturities of lease liabilities as of June 29, 2019, are as follows:
(Amounts in millions)
 
Operating Leases
 
Finance Leases
 
 
 
 
 
Year:
 
 
 
 
2019 (excluding the six months ended June 29, 2019)
 
$
11.2

 
$
0.8

2020
 
18.4

 
1.7

2021
 
13.4

 
1.7

2022
 
8.8

 
1.7

2023
 
4.1

 
1.7

2024 and thereafter
 
3.7

 
1.7

Total lease payments
 
59.6

 
9.3

          Less: amount representing interest
 
(3.1
)
 
(0.7
)
Total lease liabilities
 
$
56.5

 
$
8.6



As of June 29, 2019, Snap-on does not have any significant additional operating or finance leases that have not yet commenced.

Snap-on’s future minimum lease commitments, net of sub-lease rental income, as of December 29, 2018, under Accounting Standard Codification Topic 840, the predecessor to Topic 842, are as follows:
(Amounts in millions)
 
Operating  
Leases
 
Capital
Leases     
Year:
 
 
 
 
2019
 
$
25.6

 
$
3.3

2020
 
18.4

 
3.2

2021
 
13.9

 
2.9

2022
 
9.8

 
2.5

2023
 
4.9

 
2.2

2024 and thereafter
 
4.4

 
1.9

Total minimum lease payments
 
$
77.0

 
16.0

     Less: amount representing interest
 

 
(0.9
)
Total present value of minimum capital lease payments
 
 
 
$
15.1



Amounts included in the accompanying Condensed Consolidated Balance Sheets for the present value of minimum capital lease payments as of 2018 year end are as follows: 
(Amounts in millions)
 
2018
Other accrued liabilities
 
$
3.0

Other long-term liabilities
 
12.1

Total present value of minimum capital lease payments
 
$
15.1


Rent expense for worldwide facilities, office equipment and vehicles, net of sub-lease rental income, was $33.0 million in 2018.

Lessor Accounting
Snap-on’s Financial Services business offers its customers lease financing for the lease of tools, diagnostics and equipment products and to franchisees who require financing for vehicle leases. Snap-on accounts for its financial services leases as sales-type leases. In certain circumstances, the lessee has the option to terminate the lease. In the event of the lessee’s deteriorated financial condition or default, Snap-on has the right to terminate the lease. The leases contain an end-of-term purchase option that is generally insignificant and is reasonably certain to be exercised by the lessee.
The company recognizes the net investment in the lease as the sum of the lease receivable and the unguaranteed residual value, both of which are measured at the present value using the interest rate implicit in the lease. The difference between the undiscounted lease payments received over the lease term and the related net investment in the lease is reported as unearned finance charges. Unearned finance charges are amortized to income over the life of the contract and are included as a component of “Financial services revenue” on the accompanying Condensed Consolidated Statements of Earnings.
Sales-type leases included in both “Finance receivables - net” and “Long-term finance receivables - net” on the accompanying Condensed Consolidated Balance Sheets as of June 29, 2019, have future minimum lease payments, including unguaranteed residual value, of $93.8 million and unearned finance charges of $18.3 million, with lease terms of up to five years.
Sales-type leases included in both “Contract receivables - net” and “Long-term contract receivables - net” on the accompanying Condensed Consolidated Balance Sheets as of June 29, 2019, have future minimum lease payments, including unguaranteed residual value, of $255.9 million and unearned finance charges of $46.0 million, with lease terms of up to seven years.


Future minimum lease payments as of June 29, 2019, consisted of the following:
(Amounts in millions)
 
Lease Receivables
 
 
 
Year:
 
 
2019 (excluding the six months ended June 29, 2019)
 
$
60.1

2020
 
102.8

2021
 
74.1

2022
 
50.1

2023
 
33.8

2024 and thereafter
 
28.8

Total lease payments
 
349.7

          Less: unearned finance charges
 
(64.3
)
Net investment in leases
 
$
285.4



See Note 4 for further information on finance and contract receivables.