15 unchanged sentences
Snap-on aims to control funding costs by managing the exposure created by the differing maturities and interest rate structures of Snap-on’s borrowings through the use of interest rate swap agreements.
−Removed: Treasury lock agreements are used from time to time to manage the potential change in interest rates in anticipation of the possible issuance of fixed rate debt.
+Added: Treasury lock agreements are used from time to time to manage the potential change in interest rates in anticipation of the issuance of fixed rate debt.
See Note 11 to the Consolidated Financial Statements for information on interest rate risk management.
3 unchanged sentences
These inter-relationships were determined by observing interest rate and foreign currency market changes over the preceding quarter.
−Removed: The estimated maximum potential one-day loss in fair value, calculated using the VAR model, as of 2020 and 2019 year end was $13.9 million and $9.9 million, respectively, on interest rate-sensitive financial instruments, and $0.1 million and $0.2 million, respectively, on foreign currency-sensitive financial instruments.
+Added: The estimated maximum potential net one-day loss in fair value, calculated using the VAR model, as of 2021 and 2020 year end was $20.6 million and $13.9 million, respectively, on interest rate-sensitive financial instruments, and $0.3 million and $0.1 million, respectively, on foreign currency-sensitive financial instruments.
The VAR model is a risk management tool and does not purport to represent actual losses in fair value that will be incurred by Snap-on, nor does it consider the potential effect of favorable changes in market factors.
2 unchanged sentences
Equity forwards are used to aid in offsetting the potential mark-to-market effect on stock-based deferred compensation from changes in Snap-on’s stock price.
−Removed: Since stock-based deferred compensation liabilities increase as the company’s stock price rises and decrease as the company’s stock price declines, the equity forwards are intended to mitigate the potential impact on compensation expense that may result from such mark-to-market changes.
+Added: Since stock-based deferred compensation liabilities increase as the company’s stock price rises and decrease as the company’s stock price declines, the equity forwards are intended to mitigate the potential impact on deferred compensation expense that may result from such mark-to-market changes.
See Note 11 to the Consolidated Financial Statements for additional information on stock-based deferred compensation risk management.
+Added: 2021 ANNUAL REPORT 51
Credit risk is the possibility of loss from a customer’s failure to make payments according to contract terms.
−Removed: Prior to extending credit, each customer is evaluated, taking into consideration various factors, including the customer’s financial condition, debt-servicing ability, past payment experience, credit bureau information, and other financial and qualitative factors that may affect the customer’s ability to repay, as well as the value of the underlying collateral.
+Added: Prior to extending credit, each customer is evaluated, taking into consideration various factors, including the customer’s financial condition, past payment experience, credit bureau information, and other financial and qualitative factors that may affect the customer’s ability to repay, as well as the value of the underlying collateral.
Finance receivable credit risk is also monitored regularly through the use of internal proprietary custom scoring models to evaluate each transaction at the time of the application for credit.
1 unchanged sentence
The finance receivables are typically monitored through an asset quality review process that closely monitors past due accounts and initiates a progressive collection action process when appropriate.
−Removed: 2020 ANNUAL REPORT 51
Counterparty Risk
5 unchanged sentences
Snap-on continually monitors its exposure in these markets.
−Removed: For example, the company is monitoring the impact of and developments related to the COVID-19 pandemic, which has created global economic uncertainty.
−Removed: In addition, the company is monitoring the effects of the United Kingdom’s exit from the European Union, although it is too soon to know what effects this might have on the world economy or the company.
−Removed: Inflation has not had a significant impact on the company.
+Added: For example, the company is monitoring the impact of and developments related to the ongoing COVID-19 pandemic, which continues to have an impact on the global economy.
+Added: While inflation has become more prevalent in the world economy, Snap-on has taken steps to control and offset associated cost increases through its supply chain management, pricing actions, and deployment of Rapid Continuous Improvement (“RCI”).
+Added: In addition, the company continues to monitor developments related to the United Kingdom’s exit from the European Union, and the effects this may have on the world economy and the company.
As a result of the above market, credit and economic risks, net earnings and revenues in any particular period may not be representative of full-year results and may vary significantly from year to year.
2 unchanged sentences
The company is also a purchaser of components and parts that are integrated into the company’s end products, as well as the purchaser of certain finished goods, all of which may contain various commodities including steel, aluminum, nickel, copper and others.
−Removed: Snap-on’s supply of raw materials and purchased components are generally and readily available from numerous suppliers.
+Added: Snap-on’s supply of raw materials and purchased components are generally and readily available from numerous suppliers, and the company continuously works to expand and enhance supplier relationships to meet its supply needs.
The principal raw material used in the manufacture of the company’s products is steel, which the company purchases in competitive, price-sensitive markets.
−Removed: To meet Snap-on’s high quality standards, the company’s steel needs range from specialized alloys, which are available only from a limited group of approved suppliers, to common alloys, which are available from multiple suppliers.
−Removed: Some of these materials have been, and in the future may be, in short supply, particularly in the event of mill shutdowns or production cut backs.
−Removed: As some steel alloys require specialized manufacturing procedures, Snap-on could experience inventory shortages if it were required to use an alternative manufacturer on short notice.
−Removed: Steel and other raw materials, components and certain finished goods inventory can exhibit price and demand cyclicality, including as a result of tariffs and other trade protection measures.
+Added: To meet Snap-on’s high quality standards, the company’s steel requirements range from specialized alloys, which are available only from a limited group of approved suppliers, to common alloys, which are available from multiple suppliers.
+Added: Some of these materials have been, and in the future may be, in short supply, particularly in the event of mill shutdowns or production cut backs, as well as from supply chain disruptions or inefficiencies, some of which may be associated with significant weather or climate-related events.
+Added: As some steel alloys require specialized manufacturing procedures, Snap-on could experience shortages if it were required to use an alternative manufacturer on short notice.
+Added: Steel and other raw materials, components and certain finished goods can exhibit price and demand cyclicality, including as a result of tariffs and other trade protection measures.
Associated unexpected price increases could result in an erosion of product margins or require Snap-on to increase prices to customers to maintain margins.
−Removed: Snap-on believes its ability to sell product is also dependent on the changing vehicle repair requirements, the number of vehicles on the road, the general aging of vehicles and the number of miles driven.
−Removed: These factors affect the frequency, type and amount of service and repair performed on vehicles by technicians, and therefore affect the demand for the number of technicians, the prosperity of the technicians and, consequently, the demand technicians have for the company’s tools, other products and services, and the value technicians place on those products and services.
−Removed: The use of other methods of transportation, including more frequent use of public transportation, could result in a decrease in the use of privately operated vehicles.
−Removed: A decrease in the use of privately operated vehicles may lead to fewer repairs and less demand for the company’s products.
To the extent that commodity prices increase and the company does not have firm pricing agreements with its suppliers, the company may experience margin declines to the extent that it is not able to increase the selling prices of its products.
+Added: SNAP-ON INCORPORATED
Financial Statements and Supplementary Data
1 unchanged sentence
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
−Removed: SNAP-ON INCORPORATED
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.