Snap-on’s trade and other accounts receivable primarily arise from the sale of tools and diagnostic and equipment products to a broad range of industrial and commercial customers and to Snap-on’s independent franchise van channel on a non-extended-term basis with payment terms generally ranging from 30 to 120 days.

Snap-on Credit LLC, the company’s financial services operation in the United States, originates extended-term finance and contract receivables on sales of Snap-on’s products sold through the U.S. franchisee and customer network and to certain other customers of Snap-on; Snap-on’s foreign finance subsidiaries provide similar financing internationally. Interest income on finance and contract receivables is included in “Financial services revenue” on the accompanying Consolidated Statements of Earnings.

Snap-on’s finance receivables are comprised of extended-term payment contracts to both technicians and independent shop owners (i.e., franchisees’ customers) to enable them to purchase tools and diagnostic and equipment products on an extended-term payment plan, generally with average payment terms of approximately four years. Finance receivables are generally secured by the underlying tools and/or diagnostic or equipment products financed.

Snap-on’s contract receivables, with payment terms of up to 10 years, are comprised of extended-term payment contracts to a broad base of customers worldwide. Contract receivables include extended-term loans to franchisees to meet a number of financing needs, including working capital loans, loans to enable new franchisees to fund the purchase of the franchise or for the expansion of an existing franchise, as well as van leases. Contract receivables also include extended-term loans to shop owners, both independents and national chains, for their purchase of tools and diagnostic and equipment products. Contract receivables are generally secured by the underlying tools and/or diagnostic or equipment products financed and, for loans to franchisees, other franchisee assets.


(Amounts in millions)	2019		2018
Finance installment receivables	$	511.9	$	499.0
Finance lease receivables, net of unearned finance charges of $11.7 million and $11.4 million, respectively	37.9		39.1
Total finance receivables	549.8		538.1

Contract installment receivables	50.8		48.9
Contract lease receivables, net of unearned finance charges of $18.2 million and $18.4 million, respectively	51.4		50.6
Total contract receivables	102.2		99.5
Total	652.0		637.6

Allowances for doubtful accounts:
Finance installment receivables	(19.2)		(19.0)
Finance lease receivables	(0.5)		(0.6)
Total finance allowance for doubtful accounts	(19.7)		(19.6)

Contract installment receivables	(0.5)		(0.4)
Contract lease receivables	(1.0)		(0.8)
Total contract allowance for doubtful accounts	(1.5)		(1.2)
Total allowance for doubtful accounts	(21.2)		(20.8)
Total current finance and contract receivables – net	$	630.8	$	616.8

Finance receivables – net	$	530.1	$	518.5
Contract receivables – net	100.7		98.3
Total current finance and contract receivables – net	$	630.8	$	616.8


(Amounts in millions)	2019		2018
Finance installment receivables	$	1,106.0	$	1,080.1
Finance lease receivables, net of unearned finance charges of $8.2 million and $6.7 million, respectively	39.7		36.1
Total finance receivables	1,145.7		1,116.2

Contract installment receivables	195.5		190.6
Contract lease receivables, net of unearned finance charges of $29.4 million and $27.8 million, respectively	168.7		157.4
Total contract receivables	364.2		348.0
Total	1,509.9		1,464.2

Allowances for doubtful accounts:
Finance installment receivables	(41.6)		(41.3)
Finance lease receivables	(0.6)		(0.5)
Total finance allowance for doubtful accounts	(42.2)		(41.8)

Contract installment receivables	(1.8)		(1.5)
Contract lease receivables	(2.3)		(1.6)
Total contract allowance for doubtful accounts	(4.1)		(3.1)
Total allowance for doubtful accounts	(46.3)		(44.9)
Total current finance and contract receivables – net	$	1,463.6	$	1,419.3

Finance receivables – net	$	1,103.5	$	1,074.4
Contract receivables – net	360.1		344.9
Total current finance and contract receivables – net	$	1,463.6	$	1,419.3


	2019						2018
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Due in Months:
13 – 24	$	439.1	$	86.4	$	428.7	$	82.2
25 – 36	352.4		76.9		345.0		72.5
37 – 48	238.0		65.6		232.8		60.5
49 – 60	116.2		51.3		109.7		48.8
Thereafter	—		84.0		—		84.0
Total	$	1,145.7	$	364.2	$	1,116.2	$	348.0

Delinquency is the primary indicator of credit quality for finance and contract receivables. The entire receivable balance of a contract is considered delinquent when contractual payments become 30 days past due. Depending on the contract, payments for finance and contract receivables are due on a monthly or weekly basis. Weekly payments are converted into a monthly equivalent for purposes of calculating delinquency. Delinquencies are assessed at the end of each month following the monthly equivalent due date. Removal from delinquent status occurs when the cumulative number and amount of monthly equivalent payments due has been received by the company.

Finance receivables are generally placed on nonaccrual status (nonaccrual of interest and other fees): (i) when a customer is placed on repossession status; (ii) upon receipt of notification of bankruptcy; (iii) upon notification of the death of a customer; or (iv) in other instances in which management concludes collectability is not reasonably assured. Finance receivables that are considered nonperforming include receivables that are on nonaccrual status and receivables that are generally more than 90 days past due.

Contract receivables are generally placed on nonaccrual status: (i) when a receivable is more than 90 days past due or at the point a customer’s account is placed on terminated status regardless of its delinquency status; (ii) upon notification of the death of a customer; or (iii) in other instances in which management concludes collectability is not reasonably assured. Contract receivables that are considered nonperforming include receivables that are on nonaccrual status and receivables that are generally more than 90 days past due.

The accrual of interest and other fees is resumed when the finance or contract receivable becomes contractually current and collection of all remaining contractual amounts due is reasonably assured. Finance and contract receivables are evaluated for impairment on a collective basis. A receivable is impaired when it is probable that all amounts related to the receivable will not be collected according to the contractual terms of the applicable agreement. Impaired finance and contract receivables are covered by the company’s respective allowances for doubtful accounts and are charged-off against the allowances when appropriate. As of 2019 and 2018 year end, there were $29.4 million and $27.9 million, respectively, of impaired finance receivables, and there were $2.7 million and $6.0 million, respectively, of impaired contract receivables.

It is the general practice of Snap-on’s financial services business to not engage in contract or loan modifications. In limited instances, Snap-on’s financial services business may modify certain impaired receivables in troubled debt restructurings. The amount and number of restructured finance and contract receivables as of 2019 and 2018 year end were immaterial to both the financial services portfolio and the company’s results of operations and financial position.


(Amounts in millions)	30-59 Days Past Due		60-90 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Total Not Past Due		Total		Greater Than 90 Days Past Due and Accruing
2019 year end:
Finance receivables	$	19.7	$	12.0	$	21.4	$	53.1	$	1,642.4	$	1,695.5	$	17.2
Contract receivables	1.5		0.9		1.5		3.9		462.5		466.4		0.5

2018 year end:
Finance receivables	$	19.4	$	12.1	$	20.3	$	51.8	$	1,602.5	$	1,654.3	$	15.9
Contract receivables	1.7		1.2		5.2		8.1		439.4		447.5		0.2


	2019						2018
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Performing	$	1,666.1	$	463.7	$	1,626.4	$	441.5
Nonperforming	29.4		2.7		27.9		6.0
Total	$	1,695.5	$	466.4	$	1,654.3	$	447.5


	2019						2018
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Allowances for doubtful accounts:
Beginning of year	$	61.4	$	4.3	$	56.5	$	4.6
Provision	49.9		4.7		57.5		2.0
Charge-offs	(57.1)		(3.9)		(59.4)		(2.5)
Recoveries	7.7		0.5		7.1		0.4
Currency translation	—		—		(0.3)		(0.2)
End of year	$	61.9	$	5.6	$	61.4	$	4.3


(Amounts in millions)	Balance at Beginning of Year		Expenses		Deductions ⁽¹⁾		Balance at End of Year
Allowances for doubtful accounts:
2019	$	83.2	$	68.2	$	(63.0)	$	88.4
2018	75.7		70.3		(62.8)		83.2
2017	66.5		65.1		(55.9)		75.7