XML 63 R29.htm IDEA: XBRL DOCUMENT
v3.24.0.1

COMMITMENTS AND GUARANTEES | 12 Months Ended
--- | ---
Dec. 30, 2023
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND GUARANTEES | COMMITMENTS AND GUARANTEES COMMITMENTS — The Company has numerous assets, predominantly real estate, vehicles and equipment, under various lease arrangements. At inception of arrangements with vendors, the Company determines whether the contract is or contains a lease based on each party’s rights and obligations under the arrangement. If the lease arrangement also contains non-lease components, the lease and non-lease elements are separately accounted for in accordance with the appropriate accounting guidance for each item. From time to time, lease arrangements allow for, and the Company executes, the purchase of the underlying leased asset. Lease arrangements may also contain renewal options or early termination options. As part of its lease liability and right-of-use asset calculation, consideration is given to the likelihood of exercising any extension or termination options. Leases with expected durations of less than twelve months from inception (i.e. short-term leases) are excluded from the Company’s calculation of lease liabilities and right-of-use assets, as permitted by ASC 842, Leases. The following is a summary of the Company's right-of-use-assets and lease liabilities:
(Millions of Dollars) | December 30, 2023 |  | December 31, 2022
Right-of-use assets | $ | 502.9 |  |  | $ | 431.5 |
Lease liabilities | $ | 506.6 |  |  | $ | 440.5 |
Weighted-average incremental borrowing rate | 4.6 | % |  | 3.6 | %
Weighted-average remaining term | 7 years |  | 6 years
Right-of-use assets are included within Other assets in the Consolidated Balance Sheets, while lease liabilities are included within Accrued expenses and Other liabilities, as appropriate. The Company determines its incremental borrowing rate based on interest rates from its debt issuances, taking into consideration adjustments for collateral, lease terms and foreign currency. As of December 30, 2023, $19.4 million and $19.5 million of right-of-use assets and lease liabilities, respectively, were reclassified to held for sale due to the pending divestiture of the Infrastructure business. As a result of acquiring right-of-use assets from new leases entered into during the years ended December 30, 2023 and December 31, 2022, the Company's lease liabilities increased approximately $206.1 million and $115.8 million, respectively. The Company has variable rate leases for certain manufacturing facilities, distribution centers and office buildings in which the periodic rental payments vary based on benchmark interest rates. The following is a summary of the Company's total lease cost for the years ended December 30, 2023, December 31, 2022, and January 1, 2022:
(Millions of Dollars) | 2023 |  | 2022 |  | 2021
Operating lease cost | $ | 144.0 |  |  | $ | 147.1 |  |  | $ | 126.3 |
Short-term lease cost | 31.2 |  |  | 27.6 |  |  | 25.5 |
Variable lease cost | 11.2 |  |  | 5.9 |  |  | 5.9 |
Sublease income | (3.2) |  |  | (2.5) |  |  | (1.3) |
Total lease cost | $ | 183.2 |  |  | $ | 178.1 |  |  | $ | 156.4 |
During 2023, 2022 and 2021, the Company paid $128.3 million, $124.1 million, and $110.8 million respectively, relating to leases included in the measurement of its lease liability and right-of-use asset. The following is a summary of the Company's future lease obligations on an undiscounted basis at December 30, 2023:
(Millions of Dollars) | Total |  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028 |  | Thereafter
Lease obligations | $ | 613.0 |  |  | $ | 135.4 |  |  | $ | 105.7 |  |  | $ | 90.5 |  |  | $ | 69.5 |  |  | $ | 56.3 |  |  | $ | 155.6 |
The amounts above include undiscounted future lease obligations related to the pending divestiture of the Infrastructure business totaling $21.1 million; $4.7 million in 2024, $4.5 million in 2025, $4.5 million in 2026, $4.1 million in 2027, $1.9 million in 2028, and $1.4 million thereafter. The following is a summary of the Company’s future marketing commitments at December 30, 2023:
(Millions of Dollars) | Total |  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028 |  | Thereafter
Marketing commitments | $ | 72.5 |  |  | $ | 37.9 |  |  | $ | 18.6 |  |  | $ | 16.0 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
As of December 30, 2023, the Company had unrecognized commitments that require the future purchase of goods or services (unconditional purchase obligations) to provide it with access to products and services at competitive prices. These obligations consist of supplier agreements with long-term minimum material purchase requirements and freight forwarding arrangements with minimum quantity commitments. The following is a summary of the Company's unconditional purchase obligations related to these agreements at December 30, 2023:
(Millions of Dollars) | Total |  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028 |  | Thereafter
Supplier agreements | $ | 199.1 |  |  | $ | 87.8 |  |  | $ | 44.0 |  |  | $ | 37.9 |  |  | $ | 22.1 |  |  | $ | 7.3 |  |  | $ | — |
The Company has arrangements with third-party financial institutions that offer voluntary supply chain finance ("SCF") programs. These arrangements enable certain of the Company’s suppliers, at the supplier’s sole discretion, to sell receivables due from the Company to the financial institutions on terms directly negotiated with the financial institutions. The Company negotiates commercial terms with its suppliers, including prices, quantities, and payment terms, regardless of suppliers’ decisions to finance the receivables due from the Company under these SCF programs. The Company has no economic interest in a supplier’s decision to participate in these SCF programs, and no direct financial relationship with the financial institutions, as it relates to these SCF programs. The amounts due to the financial institutions for suppliers that voluntarily participate in these SCF programs were presented within Accounts payable on the Company’s Consolidated Balance Sheets and totaled $528.1 million and $607.5 million as of  December 30, 2023 and December 31, 2022, respectively. GUARANTEES — The Company's financial guarantees at December 30, 2023 are as follows:
(Millions of Dollars) | Term |  | Maximum Potential Payment |  | Carrying Amount of Liability
Guarantees on the residual values of leased properties | One to nine years |  | $ | 157.4 |  |  | $ | — |
Standby letters of credit | Up to twenty years |  | 185.5 |  |  | — |
Commercial customer financing arrangements | Up to six years |  | 93.1 |  |  | 15.5 |
Total |  |  | $ | 436.0 |  |  | $ | 15.5 |
The Company has guaranteed a portion of the residual values associated with certain of its variable rate leases. The lease guarantees are for an amount up to $157.4 million while the fair value of the underlying assets is estimated at $210.5 million. The related assets would be available to satisfy the guarantee obligations. The Company has issued $185.5 million in standby letters of credit that guarantee future payments which may be required under certain insurance programs and in relation to certain environmental remediation activities described more fully in Note S, Contingencies. The Company provides various limited and full recourse guarantees to financial institutions that provide financing to U.S. and Canadian Mac Tools distributors and franchisees for their initial purchase of the inventory and trucks necessary to function as a distributor and franchisee. In addition, the Company provides limited and full recourse guarantees to financial institutions that extend credit to certain end retail customers of its U.S. Mac Tools distributors and franchisees. The gross amount guaranteed in these arrangements is $93.1 million and the $15.5 million carrying value of the guarantees issued is recorded in Other liabilities in the Consolidated Balance Sheets. The Company provides warranties on certain products across its businesses. The types of product warranties offered generally range from one year to limited lifetime. There are also certain products with no warranty. Further, the Company sometimes incurs discretionary costs to service its products in connection with product performance issues. Historical warranty and service claim experience forms the basis for warranty obligations recognized. Adjustments are recorded to the warranty liability as new information becomes available. The changes in the carrying amount of product warranties for the years ended December 30, 2023, December 31, 2022, and January 1, 2022 are as follows:
(Millions of Dollars) | 2023 |  | 2022 |  | 2021
Balance beginning of period | $ | 126.6 |  |  | $ | 134.5 |  |  | $ | 107.9 |
Warranties and guarantees issued | 171.3 |  |  | 155.3 |  |  | 150.1 |
Warranties assumed in acquisitions | — |  |  | — |  |  | 33.4 |
Warranty payments and currency | (161.2) |  |  | (163.2) |  |  | (156.9) |
Balance end of period | $ | 136.7 |  |  | $ | 126.6 |  |  | $ | 134.5 |

X
- References No definition available. + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for each guarantee obligation, or each group of similar guarantee obligations, including (a) the nature of the guarantee, including its term, how it arose, and the events or circumstances that would require the guarantor to perform under the guarantee; (b) the maximum potential amount of future payments (undiscounted) the guarantor could be required to make under the guarantee; (c) the current carrying amount of the liability, if any, for the guarantor's obligations under the guarantee; and (d) the nature of any recourse provisions under the guarantee, and any assets held either as collateral or by third parties, and any relevant related party disclosure. Excludes disclosures about product warranties. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a)(4) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a)(5) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//460/tableOfContent Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (b)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 + Details
Name: | us-gaap_GuaranteesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration