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Leases | 12 Months Ended
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Dec. 30, 2023
Leases [Abstract] |
Leases | Leases 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. Right-of-use (“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 for 2023, 2022 and 2021 consist of the following:
(Amounts in millions) |  | 2023 |  | 2022 |  | 2021
Finance lease costs: |  |  |  |  |  |
Amortization of ROU assets |  | $ | 1.5 |  |  | $ | 1.5 |  |  | $ | 1.7 |
Interest on lease liabilities |  | 0.1 |  |  | 0.2 |  |  | 0.3 |
Operating lease costs* |  | 27.4 |  |  | 24.3 |  |  | 25.4 |
Total lease costs |  | $ | 29.0 |  |  | $ | 26.0 |  |  | $ | 27.4 |
* | Includes short-term leases, variable lease costs and sublease income, which are immaterial.
Supplemental cash flow information related to leases in 2023, 2022 and 2021 is as follows:
(Amounts in millions) |  | 2023 |  | 2022 |  | 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Financing cash flows from finance leases |  | $ | 2.0 |  |  | $ | 2.4 |  |  | $ | 3.1 |
Operating cash flows from finance leases |  | 0.1 |  |  | 0.2 |  |  | 0.3 |
Operating cash flows from operating leases |  | 24.7 |  |  | 22.2 |  |  | 23.5 |
ROU assets obtained in exchange for new lease obligations: |  |  |  |  |  |
Finance lease liabilities |  | $ | 0.8 |  |  | $ | 0.2 |  |  | $ | 0.3 |
Operating lease liabilities |  | 36.0 |  |  | 33.5 |  |  | 23.4 |
Supplemental balance sheet information related to leases in 2023 and 2022 is as follows:
(Amounts in millions) |  |  | 2023 |  | 2022
Finance leases: |  |  |  |  |
Property and equipment – gross |  | $ | 19.1 |  |  | $ | 19.4 |
Accumulated depreciation and amortization |  | (16.8) |  |  | (16.4) |
Property and equipment – net |  |  | $ | 2.3 |  |  | $ | 3.0 |
Other accrued liabilities |  |  | $ | 1.6 |  |  | $ | 2.0 |
Other long-term liabilities |  |  | 1.1 |  |  | 1.9 |
Total finance lease liabilities |  |  | $ | 2.7 |  |  | $ | 3.9 |
Operating leases: |  |  |  |  |
Operating lease right-of-use assets |  |  | $ | 74.7 |  |  | $ | 61.5 |
Other accrued liabilities |  |  | $ | 23.8 |  |  | $ | 19.4 |
Operating lease liabilities |  |  | 54.6 |  |  | 44.7 |
Total operating lease liabilities |  |  | $ | 78.4 |  |  | $ | 64.1 |
Weighted-average lease terms and discount rates in 2023 and 2022 are as follows:
|  | 2023 |  | 2022 |  | 2021
Weighted-average remaining lease terms: |  |  |  |  |  |
Finance leases |  | 2.5 years |  | 2.1 years |  | 2.9 years
Operating leases |  | 3.8 years |  | 4.0 years |  | 3.3 years
Weighted-average discount rates: |  |  |  |  |  |
Finance leases |  | 4.1% |  | 3.1% |  | 3.1%
Operating leases |  | 4.0% |  | 2.9% |  | 1.9%
Maturities of lease liabilities as of December 30, 2023, are as follows:
(Amounts in millions) |  | Operating Leases |  | Finance Leases
Year: |  |  |  |
2024 |  | $ | 26.3 |  |  | $ | 1.7 |
2025 |  | 20.6 |  |  | 0.5 |
2026 |  | 15.9 |  |  | 0.3 |
2027 |  | 11.5 |  |  | 0.2 |
2028 |  | 6.8 |  |  | 0.1 |
2029 and thereafter |  | 3.7 |  |  | — |
Total lease payments |  | 84.8 |  |  | 2.8 |
Less: amount representing interest |  | (6.4) |  |  | (0.1) |
Total lease liabilities |  | $ | 78.4 |  |  | $ | 2.7 |
In 2023, Snap-on did not have any significant additional operating or finance leases that have not yet commenced. 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 present value of the lease payments not yet received plus the present value of the unguaranteed residual 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 Consolidated Statements of Earnings. Sales-type leases are included in both “Finance receivables – net” and “Long-term finance receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to five years. In 2023 and 2022, finance receivables have future minimum lease payments, including unguaranteed residual value, of $28.6 million and $5.6 million, respectively, and unearned finance charges of $6.2 million and $0.7 million, respectively. Sales-type leases are included in both “Contract receivables – net” and “Long-term contract receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to seven years. In 2023 and 2022, contract receivables have future minimum lease payments, including unguaranteed residual value, of $315.7 million and $296.7 million, respectively, and unearned finance charges of $56.2 million and $49.8 million, respectively. Future minimum lease payments as of December 30, 2023 are as follows:
(Amounts in millions) |  | Lease Receivables
Year: |  |
2024 |  | $ | 97.3 |
2025 |  | 83.0 |
2026 |  | 65.2 |
2027 |  | 46.8 |
2028 |  | 30.1 |
2029 and thereafter |  | 21.9 |
Total lease payments |  | 344.3 |
Less: unearned finance charges |  | (62.4) |
Net investment in leases |  | $ | 281.9 |
See Note 4 for additional information on finance and contract receivables.
Leases | Leases 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. Right-of-use (“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 for 2023, 2022 and 2021 consist of the following:
(Amounts in millions) |  | 2023 |  | 2022 |  | 2021
Finance lease costs: |  |  |  |  |  |
Amortization of ROU assets |  | $ | 1.5 |  |  | $ | 1.5 |  |  | $ | 1.7 |
Interest on lease liabilities |  | 0.1 |  |  | 0.2 |  |  | 0.3 |
Operating lease costs* |  | 27.4 |  |  | 24.3 |  |  | 25.4 |
Total lease costs |  | $ | 29.0 |  |  | $ | 26.0 |  |  | $ | 27.4 |
* | Includes short-term leases, variable lease costs and sublease income, which are immaterial.
Supplemental cash flow information related to leases in 2023, 2022 and 2021 is as follows:
(Amounts in millions) |  | 2023 |  | 2022 |  | 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Financing cash flows from finance leases |  | $ | 2.0 |  |  | $ | 2.4 |  |  | $ | 3.1 |
Operating cash flows from finance leases |  | 0.1 |  |  | 0.2 |  |  | 0.3 |
Operating cash flows from operating leases |  | 24.7 |  |  | 22.2 |  |  | 23.5 |
ROU assets obtained in exchange for new lease obligations: |  |  |  |  |  |
Finance lease liabilities |  | $ | 0.8 |  |  | $ | 0.2 |  |  | $ | 0.3 |
Operating lease liabilities |  | 36.0 |  |  | 33.5 |  |  | 23.4 |
Supplemental balance sheet information related to leases in 2023 and 2022 is as follows:
(Amounts in millions) |  |  | 2023 |  | 2022
Finance leases: |  |  |  |  |
Property and equipment – gross |  | $ | 19.1 |  |  | $ | 19.4 |
Accumulated depreciation and amortization |  | (16.8) |  |  | (16.4) |
Property and equipment – net |  |  | $ | 2.3 |  |  | $ | 3.0 |
Other accrued liabilities |  |  | $ | 1.6 |  |  | $ | 2.0 |
Other long-term liabilities |  |  | 1.1 |  |  | 1.9 |
Total finance lease liabilities |  |  | $ | 2.7 |  |  | $ | 3.9 |
Operating leases: |  |  |  |  |
Operating lease right-of-use assets |  |  | $ | 74.7 |  |  | $ | 61.5 |
Other accrued liabilities |  |  | $ | 23.8 |  |  | $ | 19.4 |
Operating lease liabilities |  |  | 54.6 |  |  | 44.7 |
Total operating lease liabilities |  |  | $ | 78.4 |  |  | $ | 64.1 |
Weighted-average lease terms and discount rates in 2023 and 2022 are as follows:
|  | 2023 |  | 2022 |  | 2021
Weighted-average remaining lease terms: |  |  |  |  |  |
Finance leases |  | 2.5 years |  | 2.1 years |  | 2.9 years
Operating leases |  | 3.8 years |  | 4.0 years |  | 3.3 years
Weighted-average discount rates: |  |  |  |  |  |
Finance leases |  | 4.1% |  | 3.1% |  | 3.1%
Operating leases |  | 4.0% |  | 2.9% |  | 1.9%
Maturities of lease liabilities as of December 30, 2023, are as follows:
(Amounts in millions) |  | Operating Leases |  | Finance Leases
Year: |  |  |  |
2024 |  | $ | 26.3 |  |  | $ | 1.7 |
2025 |  | 20.6 |  |  | 0.5 |
2026 |  | 15.9 |  |  | 0.3 |
2027 |  | 11.5 |  |  | 0.2 |
2028 |  | 6.8 |  |  | 0.1 |
2029 and thereafter |  | 3.7 |  |  | — |
Total lease payments |  | 84.8 |  |  | 2.8 |
Less: amount representing interest |  | (6.4) |  |  | (0.1) |
Total lease liabilities |  | $ | 78.4 |  |  | $ | 2.7 |
In 2023, Snap-on did not have any significant additional operating or finance leases that have not yet commenced. 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 present value of the lease payments not yet received plus the present value of the unguaranteed residual 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 Consolidated Statements of Earnings. Sales-type leases are included in both “Finance receivables – net” and “Long-term finance receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to five years. In 2023 and 2022, finance receivables have future minimum lease payments, including unguaranteed residual value, of $28.6 million and $5.6 million, respectively, and unearned finance charges of $6.2 million and $0.7 million, respectively. Sales-type leases are included in both “Contract receivables – net” and “Long-term contract receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to seven years. In 2023 and 2022, contract receivables have future minimum lease payments, including unguaranteed residual value, of $315.7 million and $296.7 million, respectively, and unearned finance charges of $56.2 million and $49.8 million, respectively. Future minimum lease payments as of December 30, 2023 are as follows:
(Amounts in millions) |  | Lease Receivables
Year: |  |
2024 |  | $ | 97.3 |
2025 |  | 83.0 |
2026 |  | 65.2 |
2027 |  | 46.8 |
2028 |  | 30.1 |
2029 and thereafter |  | 21.9 |
Total lease payments |  | 344.3 |
Less: unearned finance charges |  | (62.4) |
Net investment in leases |  | $ | 281.9 |
See Note 4 for additional information on finance and contract receivables.
Leases | Leases 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. Right-of-use (“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 for 2023, 2022 and 2021 consist of the following:
(Amounts in millions) |  | 2023 |  | 2022 |  | 2021
Finance lease costs: |  |  |  |  |  |
Amortization of ROU assets |  | $ | 1.5 |  |  | $ | 1.5 |  |  | $ | 1.7 |
Interest on lease liabilities |  | 0.1 |  |  | 0.2 |  |  | 0.3 |
Operating lease costs* |  | 27.4 |  |  | 24.3 |  |  | 25.4 |
Total lease costs |  | $ | 29.0 |  |  | $ | 26.0 |  |  | $ | 27.4 |
* | Includes short-term leases, variable lease costs and sublease income, which are immaterial.
Supplemental cash flow information related to leases in 2023, 2022 and 2021 is as follows:
(Amounts in millions) |  | 2023 |  | 2022 |  | 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Financing cash flows from finance leases |  | $ | 2.0 |  |  | $ | 2.4 |  |  | $ | 3.1 |
Operating cash flows from finance leases |  | 0.1 |  |  | 0.2 |  |  | 0.3 |
Operating cash flows from operating leases |  | 24.7 |  |  | 22.2 |  |  | 23.5 |
ROU assets obtained in exchange for new lease obligations: |  |  |  |  |  |
Finance lease liabilities |  | $ | 0.8 |  |  | $ | 0.2 |  |  | $ | 0.3 |
Operating lease liabilities |  | 36.0 |  |  | 33.5 |  |  | 23.4 |
Supplemental balance sheet information related to leases in 2023 and 2022 is as follows:
(Amounts in millions) |  |  | 2023 |  | 2022
Finance leases: |  |  |  |  |
Property and equipment – gross |  | $ | 19.1 |  |  | $ | 19.4 |
Accumulated depreciation and amortization |  | (16.8) |  |  | (16.4) |
Property and equipment – net |  |  | $ | 2.3 |  |  | $ | 3.0 |
Other accrued liabilities |  |  | $ | 1.6 |  |  | $ | 2.0 |
Other long-term liabilities |  |  | 1.1 |  |  | 1.9 |
Total finance lease liabilities |  |  | $ | 2.7 |  |  | $ | 3.9 |
Operating leases: |  |  |  |  |
Operating lease right-of-use assets |  |  | $ | 74.7 |  |  | $ | 61.5 |
Other accrued liabilities |  |  | $ | 23.8 |  |  | $ | 19.4 |
Operating lease liabilities |  |  | 54.6 |  |  | 44.7 |
Total operating lease liabilities |  |  | $ | 78.4 |  |  | $ | 64.1 |
Weighted-average lease terms and discount rates in 2023 and 2022 are as follows:
|  | 2023 |  | 2022 |  | 2021
Weighted-average remaining lease terms: |  |  |  |  |  |
Finance leases |  | 2.5 years |  | 2.1 years |  | 2.9 years
Operating leases |  | 3.8 years |  | 4.0 years |  | 3.3 years
Weighted-average discount rates: |  |  |  |  |  |
Finance leases |  | 4.1% |  | 3.1% |  | 3.1%
Operating leases |  | 4.0% |  | 2.9% |  | 1.9%
Maturities of lease liabilities as of December 30, 2023, are as follows:
(Amounts in millions) |  | Operating Leases |  | Finance Leases
Year: |  |  |  |
2024 |  | $ | 26.3 |  |  | $ | 1.7 |
2025 |  | 20.6 |  |  | 0.5 |
2026 |  | 15.9 |  |  | 0.3 |
2027 |  | 11.5 |  |  | 0.2 |
2028 |  | 6.8 |  |  | 0.1 |
2029 and thereafter |  | 3.7 |  |  | — |
Total lease payments |  | 84.8 |  |  | 2.8 |
Less: amount representing interest |  | (6.4) |  |  | (0.1) |
Total lease liabilities |  | $ | 78.4 |  |  | $ | 2.7 |
In 2023, Snap-on did not have any significant additional operating or finance leases that have not yet commenced. 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 present value of the lease payments not yet received plus the present value of the unguaranteed residual 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 Consolidated Statements of Earnings. Sales-type leases are included in both “Finance receivables – net” and “Long-term finance receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to five years. In 2023 and 2022, finance receivables have future minimum lease payments, including unguaranteed residual value, of $28.6 million and $5.6 million, respectively, and unearned finance charges of $6.2 million and $0.7 million, respectively. Sales-type leases are included in both “Contract receivables – net” and “Long-term contract receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to seven years. In 2023 and 2022, contract receivables have future minimum lease payments, including unguaranteed residual value, of $315.7 million and $296.7 million, respectively, and unearned finance charges of $56.2 million and $49.8 million, respectively. Future minimum lease payments as of December 30, 2023 are as follows:
(Amounts in millions) |  | Lease Receivables
Year: |  |
2024 |  | $ | 97.3 |
2025 |  | 83.0 |
2026 |  | 65.2 |
2027 |  | 46.8 |
2028 |  | 30.1 |
2029 and thereafter |  | 21.9 |
Total lease payments |  | 344.3 |
Less: unearned finance charges |  | (62.4) |
Net investment in leases |  | $ | 281.9 |
See Note 4 for additional information on finance and contract receivables.

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