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Income Taxes (Tables) | 12 Months Ended
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Jan. 01, 2022
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) |  | 2021 |  | 2020 |  | 2019
United States |  | $ | 911.4 |  |  | $ | 715.9 |  |  | $ | 765.3 |
Foreign |  | 175.5 |  |  | 119.3 |  |  | 156.8 |
Total |  | $ | 1,086.9 |  |  | $ | 835.2 |  |  | $ | 922.1 |
Components of Income Tax | The provision (benefit) for income taxes consisted of the following:
(Amounts in millions) |  | 2021 |  | 2020 |  | 2019
Current: |  |  |  |  |  |
Federal |  | $ | 152.9 |  |  | $ | 136.8 |  |  | $ | 110.0 |
Foreign |  | 48.2 |  |  | 29.9 |  |  | 38.1 |
State |  | 37.5 |  |  | 30.6 |  |  | 29.5 |
Total current |  | 238.6 |  |  | 197.3 |  |  | 177.6 |
Deferred: |  |  |  |  |  |
Federal |  | 6.1 |  |  | (10.0) |  |  | 26.6 |
Foreign |  | (0.3) |  |  | 3.0 |  |  | 1.5 |
State |  | 2.6 |  |  | (1.2) |  |  | 6.1 |
Total deferred |  | 8.4 |  |  | (8.2) |  |  | 34.2 |
Total income tax provision |  | $ | 247.0 |  |  | $ | 189.1 |  |  | $ | 211.8 |
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:
|  | 2021 |  | 2020 |  | 2019
Statutory federal income tax rate |  | 21.0% |  | 21.0% |  | 21.0%
Increase (decrease) in tax rate resulting from: |  |  |  |  |  |
State income taxes, net of federal benefit |  | 2.8 |  | 2.9 |  | 2.9
Noncontrolling interests |  | (0.4) |  | (0.5) |  | (0.4)
Repatriation of foreign earnings |  | (0.5) |  | (0.7) |  | (0.1)
Change in valuation allowance for deferred tax assets |  | 0.2 |  | 0.5 |  | 0.4
Adjustments to tax accruals and reserves |  | 0.3 |  | (0.5) |  | (0.4)
Foreign rate differences |  | 0.5 |  | 0.5 |  | 0.4
Excess tax benefits related to equity compensation |  | (1.0) |  | (0.5) |  | (0.5)
Other |  | (0.2) |  | (0.1) |  | (0.3)
Effective tax rate |  | 22.7% |  | 22.6% |  | 23.0%
Schedule of Deferred Tax Assets and Liabilities | Temporary differences that give rise to the net deferred income tax liability as of 2021, 2020 and 2019 year end are as follows:
(Amounts in millions) |  | 2021 |  | 2020 |  | 2019
Deferred income tax assets (liabilities): |  |  |  |  |  |
Inventories |  | $ | 37.5 |  |  | $ | 41.4 |  |  | $ | 34.7 |
Accruals not currently deductible |  | 77.6 |  |  | 75.1 |  |  | 62.4 |
Tax credit carryforward |  | 1.2 |  |  | 2.4 |  |  | 2.0 |
Employee benefits |  | 6.4 |  |  | 32.4 |  |  | 41.3 |
Net operating losses |  | 35.0 |  |  | 37.1 |  |  | 40.4 |
Depreciation and amortization |  | (213.2) |  |  | (192.0) |  |  | (178.9) |
Valuation allowance |  | (24.5) |  |  | (26.7) |  |  | (27.8) |
Equity-based compensation |  | 13.1 |  |  | 14.3 |  |  | 16.2 |
Undistributed non-U.S. earnings |  | (4.4) |  |  | (5.4) |  |  | (6.6) |
Other |  | (1.9) |  |  | 1.3 |  |  | (0.7) |
Net deferred income tax liability |  | $ | (73.2) |  |  | $ | (20.1) |  |  | $ | (17.0) |
Operating Loss Carry Forwards | As of 2021 year end, Snap-on had tax net operating loss carryforwards totaling $160.5 million as follows:
(Amounts in millions) |  | State |  | Federal |  | Foreign |  | Total
Year of expiration: |  |  |  |  |  |  |  |
2022-2026 |  | $ | 0.3 |  |  | $ | — |  |  | $ | 46.7 |  |  | $ | 47.0 |
2027-2031 |  | 36.3 |  |  | — |  |  | 15.5 |  |  | 51.8 |
2032-2036 |  | — |  |  | — |  |  | — |  |  | — |
2037-2041 |  | — |  |  | — |  |  | 10.8 |  |  | 10.8 |
2042-2046 |  | — |  |  | — |  |  | 17.6 |  |  | 17.6 |
Indefinite |  | — |  |  | — |  |  | 33.3 |  |  | 33.3 |
Total net operating loss carryforwards |  | $ | 36.6 |  |  | $ | — |  |  | $ | 123.9 |  |  | $ | 160.5 |
Reconciliation of Unrecognized Tax Benefits | The following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits for 2021, 2020 and 2019:
(Amounts in millions) |  | 2021 |  | 2020 |  | 2019
Unrecognized tax benefits at beginning of year |  | $ | 9.1 |  |  | $ | 10.3 |  |  | $ | 11.1 |
Gross increases – tax positions in prior periods |  | 0.4 |  |  | 0.4 |  |  | — |
Gross decreases – tax positions in prior periods |  | (0.4) |  |  | — |  |  | (0.6) |
Gross increases – tax positions in the current period |  | 0.4 |  |  | 0.4 |  |  | 0.5 |
Settlements with taxing authorities |  | — |  |  | (1.4) |  |  | — |
Lapsing of statutes of limitations |  | (0.6) |  |  | (0.6) |  |  | (0.7) |
Unrecognized tax benefits at end of year |  | $ | 8.9 |  |  | $ | 9.1 |  |  | $ | 10.3 |

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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32840-109319 + Details
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