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Income Taxes (Tables)

12 Months Ended

Dec. 28, 2019

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)						2019						2018						2017
United States						$	765.3					$	735.4					$	645.5
Foreign						156.8						174.5						176.4
Total						$	922.1					$	909.9					$	821.9

Components of Income Tax

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

(Amounts in millions)						2019						2018						2017
Current:
Federal						$	110.0					$	117.9					$	166.9
Foreign						38.1						52.4						41.1
State						29.5						30.4						30.6
Total current						177.6						200.7						238.6
Deferred:
Federal						26.6						18.7						8.7
Foreign						1.5						(8.4)						2.9
State						6.1						3.4						0.7
Total deferred						34.2						13.7						12.3
Total income tax provision						$	211.8					$	214.4					$	250.9

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: 

						2019						2018						2017
Statutory federal income tax rate						21.0%						21.0%						35.0%
Increase (decrease) in tax rate resulting from:
State income taxes, net of federal benefit						2.9						2.9						2.4
Noncontrolling interests						(0.4)						(0.4)						(0.6)
Repatriation of foreign earnings						(0.1)						(0.1)						(1.2)
Change in valuation allowance for deferred tax assets						0.4						0.3						0.1
Adjustments to tax accruals and reserves						(0.4)						(0.2)						(0.3)
Foreign rate differences						0.4						0.4						(2.4)
Domestic production activities deduction						—						—						(2.1)
Excess tax benefits related to equity compensation						(0.5)						(0.8)						(1.4)
U.S. tax reform, net impact						—						0.4						0.9
Other						(0.3)						0.1						0.1
Effective tax rate						23.0%						23.6%						30.5%

Schedule of Deferred Tax Assets and Liabilities

Temporary differences that give rise to the net deferred income tax asset as of 2019, 2018 and 2017 year end are as follows:

(Amounts in millions)						2019						2018						2017
Deferred income tax assets (liabilities):
Inventories						$	34.7					$	33.6					$	28.8
Accruals not currently deductible						62.4						72.9						61.7
Tax credit carryforward						2.0						1.8						2.1
Employee benefits						41.3						56.5						56.8
Net operating losses						40.4						40.9						44.0
Depreciation and amortization						(178.9)						(167.5)						(161.3)
Valuation allowance						(27.8)						(25.1)						(25.2)
Equity-based compensation						16.2						16.6						17.1
Undistributed non-U.S. earnings						(6.6)						(6.0)						—
Cash flow hedge						—						—						(0.3)
Other						(0.7)						(0.4)						(0.1)
Net deferred income tax asset (liability)						$	(17.0)					$	23.3					$	23.6

Operating Loss Carry Forwards

As of 2019 year end, Snap-on had tax net operating loss carryforwards totaling $209.6 million as follows:

(Amounts in millions)						State						Federal						Foreign						Total
Year of expiration:
2020-2024						$	0.3					$	—					$	59.0					$	59.3
2025-2029						—						—						9.4						9.4
2030-2034						74.4						—						—						74.4
2035-2039						—						—						—						—
2040-2044						—						—						34.1						34.1
Indefinite						—						—						32.4						32.4
Total net operating loss carryforwards						$	74.7					$	—					$	134.9					$	209.6

Reconciliation of Unrecognized Tax Benefits

The following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits for 2019, 2018 and 2017:

(Amounts in millions)						2019						2018						2017
Unrecognized tax benefits at beginning of year						$	11.1					$	7.7					$	9.4
Gross increases – tax positions in prior periods						—						1.3						1.4
Gross decreases – tax positions in prior periods						(0.6)						(0.1)						—
Gross increases – tax positions in the current period						0.5						2.8						1.0
Settlements with taxing authorities						—						—						(3.6)
Lapsing of statutes of limitations						(0.7)						(0.6)						(0.5)
Unrecognized tax benefits at end of year						$	10.3					$	11.1					$	7.7

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