Note 18: Segments
Snap-on’s business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. Snap-on’s reportable business segments are: (i) the Commercial & Industrial Group; (ii) the Snap-on Tools Group; (iii) the Repair Systems & Information Group; and (iv) Financial Services. The Commercial & Industrial Group consists of business operations serving a broad range of industrial and commercial customers worldwide, primarily through direct and distributor channels. The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians through the company’s worldwide mobile tool distribution channel. The Repair Systems & Information Group consists of business operations serving other professional vehicle repair customers worldwide, primarily owners and managers of independent repair shops and original equipment manufacturer (OEM) dealership service and repair shops, through direct and distributor channels. Financial Services consists of the business operations of Snap-on’s finance subsidiaries.
Snap-on evaluates the performance of its operating segments based on segment revenues, including both external and intersegment net sales, and segment operating earnings. Snap-on accounts for intersegment sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments. Identifiable assets by segment are those assets used in the respective reportable segment’s operations. Corporate assets consist of cash and cash equivalents (excluding cash held at Financial Services), deferred income taxes and certain other assets. All significant intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results.
Neither Snap-on nor any of its segments depend on any single customer, small group of customers or government for more than 10% of its revenues.
Financial Data by Segment:
| (Amounts in millions) | 2013 | 2012 | 2011 | |||||||||
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Net sales: |
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Commercial & Industrial Group |
$ | 1,091.0 | $ | 1,125.9 | $ | 1,125.8 | ||||||
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Snap-on Tools Group |
1,358.4 | 1,272.0 | 1,153.4 | |||||||||
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Repair Systems & Information Group |
1,009.6 | 917.1 | 920.6 | |||||||||
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Segment net sales |
3,459.0 | 3,315.0 | 3,199.8 | |||||||||
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Intersegment eliminations |
(402.5) | (377.1) | (345.6) | |||||||||
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Total net sales |
$ | 3,056.5 | $ | 2,937.9 | $ | 2,854.2 | ||||||
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Financial Services revenue |
181.0 | 161.3 | 124.3 | |||||||||
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Total revenues |
$ | 3,237.5 | $ | 3,099.2 | $ | 2,978.5 | ||||||
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Financial Data by Segment (continued):
| (Amounts in millions) | 2013 | 2012 | 2011 | |||||||||
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Operating earnings: |
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Commercial & Industrial Group |
$ | 137.3 | $ | 127.3 | $ | 123.4 | ||||||
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Snap-on Tools Group |
194.6 | 176.4 | 158.5 | |||||||||
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Repair Systems & Information Group |
231.9 | 205.7 | 184.7 | |||||||||
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Financial Services |
125.7 | 106.7 | 90.9 | |||||||||
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Segment operating earnings |
689.5 | 616.1 | 557.5 | |||||||||
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Corporate |
(103.3) | (99.7) | (82.4) | |||||||||
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Operating earnings |
586.2 | 516.4 | 475.1 | |||||||||
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Interest expense |
(56.1) | (55.8) | (61.2) | |||||||||
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Other income (expense) – net |
(3.9) | (0.4) | (1.0) | |||||||||
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Earnings before income taxes and equity earnings |
$ | 526.2 | $ | 460.2 | $ | 412.9 | ||||||
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| (Amounts in millions) | 2013 | 2012 | ||||||||||
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Assets: |
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Commercial & Industrial Group |
$ | 971.0 | $ | 935.2 | ||||||||
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Snap-on Tools Group |
557.3 | 537.7 | ||||||||||
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Repair Systems & Information Group |
979.6 | 927.7 | ||||||||||
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Financial Services |
1,224.0 | 1,076.3 | ||||||||||
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Total assets from reportable segments |
3,731.9 | 3,476.9 | ||||||||||
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Corporate |
431.8 | 477.7 | ||||||||||
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Elimination of intersegment receivables |
(53.7) | (52.3) | ||||||||||
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Total assets |
$ | 4,110.0 | $ | 3,902.3 | ||||||||
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| (Amounts in millions) | 2013 | 2012 | 2011 | |||||||||
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Capital expenditures: |
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Commercial & Industrial Group |
$ | 25.3 | $ | 31.0 | $ | 20.9 | ||||||
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Snap-on Tools Group |
26.6 | 29.9 | 29.1 | |||||||||
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Repair Systems & Information Group |
13.0 | 9.8 | 8.1 | |||||||||
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Financial Services |
0.5 | 1.6 | 0.4 | |||||||||
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Total from reportable segments |
65.4 | 72.3 | 58.5 | |||||||||
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Corporate |
5.2 | 7.1 | 2.7 | |||||||||
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Total capital expenditures |
$ | 70.6 | $ | 79.4 | $ | 61.2 | ||||||
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Depreciation and amortization: |
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Commercial & Industrial Group |
$ | 20.3 | $ | 21.2 | $ | 21.3 | ||||||
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Snap-on Tools Group |
19.5 | 17.9 | 17.2 | |||||||||
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Repair Systems & Information Group |
33.8 | 35.1 | 33.9 | |||||||||
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Financial Services |
0.8 | 0.6 | 0.4 | |||||||||
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Total from reportable segments |
74.4 | 74.8 | 72.8 | |||||||||
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Corporate |
2.3 | 1.9 | 1.8 | |||||||||
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Total depreciation and amortization |
$ | 76.7 | $ | 76.7 | $ | 74.6 | ||||||
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Financial Data by Segment (continued):
| (Amounts in millions) | 2013 | 2012 | 2011 | |||||||||
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Revenues by geographic region:* |
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United States |
$ | 2,060.2 | $ | 1,930.4 | $ | 1,759.7 | ||||||
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Europe |
658.3 | 649.0 | 731.5 | |||||||||
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All other |
519.0 | 519.8 | 487.3 | |||||||||
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Total revenues |
$ | 3,237.5 | $ | 3,099.2 | $ | 2,978.5 | ||||||
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| (Amounts in millions) | 2013 | 2012 | ||||||||||
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Long-lived assets:** |
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United States |
$ | 1,004.6 | $ | 953.5 | ||||||||
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Sweden |
144.3 | 145.0 | ||||||||||
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All other |
272.9 | 271.3 | ||||||||||
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Total long-lived assets |
$ | 1,421.8 | $ | 1,369.8 | ||||||||
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Revenues are attributed to countries based on the origin of the sale. |
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Long-lived assets consist of Property and equipment – net, Goodwill, and Other intangibles – net. |
Products and Services: Snap-on derives net sales from a broad line of products and complementary services that are grouped into three categories: (i) tools; (ii) diagnostics and repair information; and (iii) equipment. The tools category includes Snap-on’s hand tools, power tools, tool storage, saws, and cutting and pruning tools product offerings. The diagnostics and repair information category includes handheld and PC-based diagnostic products, service and repair information products, and diagnostic software solutions, including electronic parts catalogs, business management and other solutions to help owners and managers of independent repair shops and OEM dealership service and repair shops manage and track performance. The equipment category includes solutions for the diagnosis and service of automotive and industrial equipment. Through its finance services businesses, Snap-on also derives revenue from various financing programs designed to facilitate the sales of its products. Further product line information is not presented as it is not practicable to do so. The following table shows the consolidated net sales and revenues of these product groups in the last three years:
| (Amounts in millions) | 2013 | 2012 | 2011 | |||||||||
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Net sales: |
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Tools |
$ | 1,743.3 | $ | 1,729.4 | $ | 1,667.3 | ||||||
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Diagnostics and repair information |
652.0 | 619.8 | 613.7 | |||||||||
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Equipment |
661.2 | 588.7 | 573.2 | |||||||||
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Total net sales |
$ | 3,056.5 | $ | 2,937.9 | $ | 2,854.2 | ||||||
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Financial services revenue |
181.0 | 161.3 | 124.3 | |||||||||
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Total revenues |
$ | 3,237.5 | $ | 3,099.2 | $ | 2,978.5 | ||||||
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