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Short-term and Long-term Debt | 12 Months Ended
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Jan. 02, 2021
Debt Disclosure [Abstract] |
Short-term and Long-term Debt | Short-term and Long-term Debt Short-term and long-term debt as of 2020 and 2019 year end consisted of the following:
(Amounts in millions) |  | 2020 |  | 2019
6.125% unsecured notes due 2021 |  | $ | 250.0 |  |  | $ | 250.0 |
3.25% unsecured notes due 2027 |  | 300.0 |  |  | 300.0 |
4.10% unsecured notes due 2048 |  | 400.0 |  |  | 400.0 |
3.10% unsecured notes due 2050 |  | 500.0 |  |  | — |
Other debt* |  | 0.6 |  |  | 199.8 |
|  | 1,450.6 |  |  | 1,149.8 |
Less: notes payable and current maturities of long-term debt: |  |  |  |
Current maturities of long-term debt |  | $ | (250.0) |  |  | $ | — |
Commercial paper borrowings |  | — |  |  | (193.6) |
Other notes* |  | (18.5) |  |  | (9.3) |
|  | (268.5) |  |  | (202.9) |
Total long-term debt |  | $ | 1,182.1 |  |  | $ | 946.9 |
* Includes the net effects of debt amortization costs and fair value adjustments related to interest rate swaps. |
The annual maturities of Snap-on’s long-term debt and notes payable over the next five years are $268.5 million in 2021, with no maturities in 2022, 2023, 2024 and 2025. Average notes payable outstanding, including commercial paper and short-term credit facility borrowings, were $68.4 million and $175.0 million in 2020 and 2019, respectively. The 2020 weighted-average interest rate on such borrowings of 2.98% compared with 2.87% in 2019. Average commercial paper borrowings were $41.0 million and $162.2 million in 2020 and 2019, respectively, and the weighted-average interest rate of 1.53% on such borrowings in 2020 decreased from 2.27% last year. No commercial paper was outstanding as of year-end 2020. Average short-term credit facility borrowings were $13.9 million in 2020 with a weighted-average interest rate of 1.70%. No amounts were outstanding under the short-term credit facility as of year-end 2020 and no amounts were borrowed under the short-term credit facility in 2019. At 2020 year end, the weighted-average interest rate on outstanding notes payable of 8.87% compared with 2.23% in 2019. The 2020 year-end rate increased primarily due to higher local borrowings in emerging markets. On April 27, 2020, Snap-on sold, at a discount, $500 million of unsecured 3.10% notes that mature on May 1, 2050 (the “2050 Notes”). Interest on the 2050 Notes accrues at a rate of 3.10% and is paid semi-annually. Snap-on used the $489.9 million net proceeds from the sale of the 2050 Notes, reflecting $4.4 million of transaction costs, for general corporate purposes, which may include working capital, capital expenditures and potential acquisitions. Snap-on has an $800 million multi-currency revolving credit facility that terminates on September 16, 2024 (the “Credit Facility”); no amounts were outstanding under the Credit Facility as of January 2, 2021. Borrowings under the Credit Facility bear interest at varying rates based on either: (i) Snap-on’s then-current, long-term debt ratings; or (ii) Snap-on’s then-current ratio of consolidated debt net of certain cash adjustments (“Consolidated Net Debt”) to earnings before interest, taxes, depreciation, amortization and certain other adjustments for the preceding four fiscal quarters then ended (the “Consolidated Net Debt to EBITDA Ratio”). 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 to the sum of Consolidated Net Debt plus total equity and less accumulated other comprehensive income or loss (the “Leverage Ratio”); or (ii) a Consolidated Net Debt to EBITDA Ratio not greater than 3.50 to 1.00. Snap-on may, up to two times during any five-year period during the term of the Credit Facility (including any extensions thereof), elect to increase the maximum Leverage Ratio to 0.65 to 1.00 and/or increase the maximum Consolidated Net Debt to EBITDA Ratio to 4.00 to 1.00 for four consecutive fiscal quarters in connection with certain material acquisitions (as defined in the related credit agreement). As of January 2, 2021, the company’s actual ratios of 0.12 and 0.57 respectively, were both within the permitted ranges set forth in this financial covenant. Snap-on generally issues commercial paper to fund its financing needs on a short-term basis and uses the Credit Facility as back-up liquidity to support such commercial paper issuances.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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