Good day everyone, and welcome to the Snap-on Incorporated 2017 Fourth Quarter and Full-year Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Leslie Kratcoski with Investor Relations. Please go ahead, ma'am.

Thanks, Tony, and good morning, everyone. Thanks for joining us today to review Snap-on's fourth quarter results, which are detailed in our press release issued earlier this morning. We have on the call today Nick Pinchuk, Snap-on's Chief Executive Officer and Aldo Pagliari, Snap-on's Chief Financial Officer. Nick will kick off our call this morning with his perspective on our performance. Aldo will then provide a more detailed review of our financial results. After Nick provides some closing thoughts, we'll take your questions. As usual, we've provided slides to supplement our discussions. These slides can be accessed under the Downloads tab in the webcast viewer as well as on our website, snapon.com, under the Investor Information. These slides will be archived on our website, along with the transcript of today's call. Any statements made during this call relative to management's expectations, estimates or beliefs or otherwise state management's or the company's outlook, plans or projections are forward-looking statements, and actual results may differ materially from those made in such statements. Additional information and the factors that could cause our results to differ materially from those in the forward-looking statements are contained in our SEC filings. Finally, this presentation includes non-GAAP measures of financial performance, which are not meant to be considered in isolation or as a substitute for their GAAP counterparts. Additional information regarding these measures, including a reconciliation of non-GAAP measures is included in our earnings release and conference call slide deck, which can be found on our website. With that said, I'll now turn the call over to Nick Pinchuk. Nick?

Thanks, Leslie. Good morning, everyone. I'll start with the highlights of our fourth quarter and our year and I'll give you my perspective on the results, on the market environment and on progress we've made. After that Aldo will move into a more detailed review of the financials. This is not a typical quarter. There are a number of special non-recurring events that impacted result, the legal charge, and the transition associated with the new tax law. But when you look through all that, Snap-on again showed overall and significant progress along our runways, achieving both growth and profitability. As with most quarters, we had headwinds and we had opportunities. We took advantage of the opportunities and we overcame the headwinds. Overall sales in the quarter were $974.6 million, 9.5% higher than last year, strong. That total included $29.7 million of acquisition-related volume from last year's Car-O-Liner and Sturtevant Richmont operations and this year's BTC and Norbar businesses, and $16.2 million of favorable foreign currency. Our organic growth was 4.3% relatively encouraging with varied results across the groups. Let's start by looking at the non-recurring events. First, the one-time legal charge. A judgment in a pat-related litigation matter that is being appealed. It impacted operating income by $30.9 million and the earnings per share by $0.33. Second, a $7 million or $0.12 EPS charge associated with the implementation in the new U.S. tax legislation. Excluding the legal charge, OpCo operating margin was 19.4% of sales, down 40 basis points, reflecting primarily a 30 basis point dilution from lower margin acquisitions and the impact of favorable foreign currency. For Financial Services, operating income of $54.4 million compared to last year's $51.6 million. As-reported, the EPS was $2.29, but excluding the legal charge and the impact of the tax legislation, earnings per…

Thanks, Nick. Our consolidated operating results are summarized on slide 6. Net sales of $974.6 million in the quarter increased 9.5%, reflecting a 4.3% organic sales gains, $29.7 million of acquisition-related sales and $16.2 million of favorable foreign currency translation. The year-over-year organic sales growth, which was the highest level achieved of any quarter in 2017, reflects ongoing progress in serving repair shop owners and managers in the vehicle repair sector as well as broad-based growth in the businesses that comprise the Commercial & Industrial segment. Consolidated gross margin of 47.7% declined 220 basis points, primarily due to higher sales of lower gross margin products, 60 basis points of lower gross margins on an acquisition-related sales and 20 basis points of unfavorable foreign currency. The operating expense margin of 31.5% increased 140 basis points as 320 basis points related to the legal charge that, as Nick has mentioned, is being appealed. These were partially offset by benefits from sales volume leverage and a 40 basis point benefit from operating expenses for acquisitions. Operating earnings before Financial Services of $157.7 million or 16.2% of sales, includes the legal charge and compares to $176.1 million or 19.8% of sales in the prior year. Excluding the legal charge, operating earnings before Financial Services, as-adjusted was $188.6 million or 19.4% of sales. Financial Services revenue of $79.9 million and operating earnings of $54.4 million increased $5.7 million and $2.8 million, respectively from 2016. Consolidated operating earnings of $212.1 million or 20.1% of revenues compared to $227.7 million or 23.6% of revenues a year ago. Excluding the legal charge, consolidated operating earnings as-adjusted was $243.0 million or 23.0% of revenues. Our fourth quarter effective income tax rate of 33.0% was reduced by 120 basis points as a result of the legal charge, but increased by…

Thanks, Aldo. Well, I started by saying that we were encouraged but unsatisfied in the quarter and we were. The Tools Group remain below trend, not yet recovering, but we continue to have confidence in the market and in our inherent strengths. We do have a strong franchise network. The turnover and our franchisee health metrics say so. And we are investing in new products and support to restart the growth engine. You can see it in the ZEUS, revolutionizing vehicle diagnostics and moving us further into subscription-based software. But despite the Tools Group challenges, we overcame again. Organic sales growth was 4.3% and the as-reported number was 9.5%. The RS&I Group and the C&I Group both had strong quarters. RS&I as-reported growth, 11.6% organic and inorganic gain of 6.2% and OI margin 25.2%, a significant contribution to our performance. C&I had a near-record quarter, rolling the Snap-on brand out of the garage with success. As-reported sales of 19.4% and an organic increase at 10.1%, OI margin of 14.9% among the group's highest. The results in the quarter I think clearly demonstrate that our coherent runways for growth, expanding with repair shop owners and managers and extending to critical industries are wide with abundant opportunities, and we're confident we have the strength and the position all along our runways for further growth – all along our runways. We have the strength and position for further growth and more improvement amplified by the new tax rates to maintain our positive performance trajectory as we move through 2018 and beyond. Before I turn the call over to the operator, I'll speak directly to our franchisees and associates. The performance of our fourth quarter and of the year and our clear opportunities going forward would not be possible without your extraordinary contributions. For your ongoing achievements, you have my congratulations, and for your continuing dedication and commitment to our team, you have my thanks. Now I'll turn the call over to the operator for questions. Operator?

Thank you. We'll go first to Liam Burke with B. Riley FBR.

Yes, thank you. Good morning, Nick. Good morning, Aldo.

Hey, Liam.

Nick, in the core Snap-on Tools Group, you highlighted the fact that storage sales were down again. But how did the core hand tool business fare this quarter on the year-over-year basis?

Well, the hand tool business was I think improved from the fourth quarter, but it's still down some. And we're still suffering I think the results of maybe the less than overwhelming offerings, coming out of the SFC. So, we're seeing an improvement, but not where we want it to be. The big factor, the good news in the quarter I think is associated with the ZEUS, the effect of the ZEUS and its sale off the vans, which is very encouraging for us. That's the silver lining in the quarter, I think. But in general, we still got to keep working on the Tools Group, new product, new support.

Okay. And on a free cash flow basis, Aldo, you're up about 35%. Does that change your capital allocation outlook? You went through a good part of your buyback authorization. Does that become an increasing part of your capital allocation strategy?

Certainly. The share repurchase is part of our allocation strategy, but I think our priorities remain the same, Liam. We have good access to capital markets, the new tax action provide more cash generation opportunities, but serving organic sales and then M&A opportunities still becomes the two most important items on the list, but certainly share repurchase, dividend strategy, pension contributions factor into that decision as well.

Thank you, Nick. Thank you, Aldo.

Thanks, Liam.

Next is David MacGregor at Longbow Research.

Yes. Good morning. Do you hear me okay?

Yeah.

Yeah.

Okay. Great. A couple of questions. First of all, just on the C&I, pretty remarkable organic growth. It's nice to see you follow – sort of firing on all the cylinders. I guess the question is just how sustainable is it? And just talk about – I know you don't provide quantitative outlook and guidance on your head, but if you could just talk about how sustainable that organic growth might be, given the strength you're seeing in critical industries and European hand tools?

Look, I think you can look at it this way. I believe that SNA Europe was up double-digits and you might not say double-digit every quarter, but I think we said in our thing, it's been up 17 quarters in a row in terms of sales; and 19 quarters in a row in terms of profit. And we think it's still got considerable headroom. It's still not back to where it was prerecession. So it took a big dip in a recession and we keep making it stronger, so we're positive about SNA Europe and I think we have abundant demonstration of that. The Industrial business is now through the downturn in the industrial sector in oil and gas and others. We kept investing in new product and our understanding of marketplace and I think you're seeing that come to fruition. Now I'm not going to say until you see those two big cylinders, I think working, based on improved capabilities that you can see coming through in the results to us. Now whether that's going to offer double-digit growth or not, is another question. I think we prefer to say that we look at our growth on an organic basis at 4% to 6% and we see C&I at the top end of that, but it appears as though in this environment with the strength we have, we got two big pistons there. And the other place, Asia-Pacific, had pretty good growth particularly in China and in India, in turbulent markets, I would say. And Power Tools came back, so I think you'd say C&I has positioned pretty well and the numbers showing that. If you take a look at those numbers, this is what we meant by rolling the Snap-on brand out of the garage.

Well, congratulations on all the progress there. I guess my second question was on the Tools segment and just if you could talk about franchisee order patterns through the quarter and what was changing there. I know your contract receivables are up, and you talked about that being driven by franchisee sales. Is your sense that inventories are maybe up a little, accumulating within the franchise network?

Actually no. I don't think the inventories are accumulated.

The contract receivables, David, are up principally because of the launch of new vans and the franchised channel, so a lot of franchisees have upped the size of their advance they're putting on the street, and that's one of the key drivers in franchise finance.

We would say the opposite actually that, if anything that we don't have perfect visibility on this. If anything, the franchisees inventories are coming down a little bit. I think the principal component of the franchisee story is the ZEUS. The ZEUS is selling well off the van and I don't know if the import of my remarks hits, but the franchisees are selling this big revolutionary new ZEUS at higher levels than we've seen for a large unit and they are selling what we call a data package, which is three years of subscriptions. We never really sold subscriptions with a launch before, and that's happening at record level. So I think if you look at the franchise interface level, one of the real great stories is around that revolutionary diagnostic, which is changing the industry, recognizes the market leader and is pulling us more into subscriptions-based software. Now when you do this kind of thing, it doesn't always register for the Tools Group right away, because the franchisees sell for three year subscription boom and it gets financed or sold in other way. And we, in the Tools Group, recognize on an amortized basis over the month. So they see that kind of thing, but if you look at that level, the franchisees are pretty happy about this.

And last question for me is just on the Tools business. You talked about the gross margin pressure there and I appreciate you breaking it out for us. To what extent, this promotional pressure or promotional programs sort of a headwind on gross margins, and if you could tie that in with just some commentary around the general competitive environment tools that would be helpful?

I'll say it this way. Look, I'll say it this way. Look, the Tools Group volume is down. They're vertically integrated, so you know that's going to play out in some kind of loss margin plus absorption and that kind of situation; but also, they want volume. If you're in the position of the Tools Group, if you want volume and so they're working pretty hard to take advantage of every possible piece of daylight they can. That's not the most efficient way to sell.

All right. Thank you.

Sure.

We'll go next to Gary Prestopino with Barrington.

Hey, good morning, everyone.

Good morning Gary.

Nick, on the Tool Storage area, I mean, how far are you on the product refresh that I think you – we had talked about couple of quarter – over the last couple of quarters, then you mentioned it a little in your earlier comments. I mean are you basically done with that product refresh?

I ain't done at all. I'm not done, but we were – we brought out some stuff. I think I said in the – some different themes and some different features and we migrated some features down into smaller – into the – some of the middle – mid-tier line, and we're continuing to do that. And I think we continue to make changes associated with the Tool Storage, because we think it didn't move – what happens to it, Gary, it didn't move this quarter. Some of that stuff worked, but not enough to move the overall needle, so you keep bringing out new stuff to try to make sure you can make the change. I think one of the things we're kind of encouraged about is this entry-level thing for the technicians, which we're kind of focused on in this situation. We're kind of – we're seeing some reasonable effects at the top end of the line and then – so we'd like to get these guys to – at the lower end with a little more activity. So you're seeing some of that. Then you go back to the Rock N' Roll Cabs. The Rock N' Roll Cabs, we're refurbishing them and we finished the first half of that refurbishment program right at the end of the year, so they really weren't – if you look at it, they really weren't on the road. And we expect to get the other half finished in another quarter, let's say, for government work. So you'll see those rolling out. So I don't – if you're looking for me to tell you when the thing is going to turn around, I guess I can't, but I have every confidence we can do this. And the reason I do this is because, when you look at our van network, you talk to our franchisees, you see our product line, pretty strong. Now we have gaps and it's caused us some difficulty, but the Tools Group, each one of our groups go up and down like this and we bring them back. I think the thing about the quarter is, is for the second quarter in a row, the Tools Group had difficulty and we achieved anyway because we had great quarters with RS&I and C&I.

No, no. I understand and get it. No, I'm just trying to try and get an idea of when we could see an inflection point in the Tools Group?

Yeah. Look, I think, I said, the meaning of my word unsatisfied is this, Gary. We expect to grow every quarter.

Right.

And so, we don't grow in one of these divisions, while there is the possibility of having a difficult quarter, we're not satisfied. So our expectation would be to grow, but I can't – in terms of forecasting for a financial situation, I can't be saying that we're doing that, but I can tell you internally, we're looking for it.

And then what – in terms of refurbishing the van, the Rock N' Roll, vans, cabs.

Yeah.

What are you doing there?

First of all, you start from the outside in. You make the outside look differently, you do different wraps. You go inside, you reorganize the structure of the vans themselves, you put new stuff on, you organize a more robust refreshment of the Tool Storage boxes on the van, you try to make sure you have different examples, and we install a new computer system, which will – a new 3D modeling system, which if you doesn't see it on the van, or you see it on the van and you like a different color, you get a great picture of it.

Okay.

So, we do those kinds of things. It's really to try to make it seem different, so when the technician gets on the van, he says, oh, this is different I want to take a look at this stuff.

Okay. And then getting back to the ZEUS, which is interesting.

Yeah.

Is this a federal – what is it, a federal regulation now that you have to monitor your mileage or something?

No, no, no. Sorry, I probably confused you on this. The ZEUS, I was talking about the NEXIQ Blue-Link Mini. It's an electronic data logging. That's in the heavy-duty business that you put on trucks that monitor the daily log. There was legislation that took place that took effect in December, which drove that sales. ZEUS is for, your average vehicles in your – in Bimmer's auto repair, down in Illinois or something like that, or a muffler shop.

Okay. Thank you.

Sure.

All right. Thanks.

The next to David Leiker with Baird. Joe D. Vruwink - Robert W. Baird & Co., Inc.: Hi. This is Joe Vruwink for David.

Hello. Joe D. Vruwink - Robert W. Baird & Co., Inc.: I was hoping to peel back the onion a bit more on the Tools Group. So if I look at finance receivable originations, and that's my proxy for big-ticket product sales, that was down 1% to get to Tools Group of down 3%, it means the core hand tool, power tool business, let's call it, was down 4% and that down 4% is a weaker number than it's been tracking all year long. So I'm just wondering within Q4, what trends did you see that might explain maybe a weakening or I'm wondering since we're talking about the ZEUS, are your franchisees spending more time selling ZEUS and maybe less time selling Tools and that might be getting caught up in this number?

Let's just talk about this for a minute. As you know, I know you know this well. There isn't a perfect linkage between the Tools Group sales and originations. One thing, there is a time lag, probably the stuff that's originated in the fourth quarter, some significant portion of that got sold by us in the third quarter, that's one thing, I think. Clear, you know this. The work that gets into the van, they got to sell it and so on. That's one thing. And ZEUS introduced a new wrinkle for this. ZEUS is two pieces. It is the hardware itself, revolutionizing, intelligent diagnostics, faster stream, better color resolution, all that stuff and then it's a software package, a data software package underneath the intelligent diagnostic. Well, the data software package sells for thousands of dollars because it's three years and that gets financed, but it doesn't get recognized at the Tools Group, except on a monthly basis, amortized like a subscription. So not only is there – is this new wrinkle introduced by ZEUS, and that you have franchisees financing something, which doesn't really get recognized as immediately by a sale, by the Tools Group because it's the subscription-based software. We think it's a great situation because we're going to subscription base, that creates some of that disconnect. And so, I think you could talk to us a little more extensively and we can talk about this a little bit more and go through it, that's number one. Number two is your point is well taken though, I think. The ZEUS is a very expensive unit and we do have to take a lot of effort in training the franchisees and having our diagnostics, our 130 diagnostic systems developers and the Techno van supporting them and it takes a lot of effort to sell it. So a successful ZEUS sale can be drawing attention from other things, that's true. It's hard to quantify that though, Joe, you know. But that does happen. Joe D. Vruwink - Robert W. Baird & Co., Inc.: Okay. The point on software sales, that makes a lot of sense. Maybe if I spin the question around a little bit. So, U.S. down mid single-digits. That was a consistent number as in Q3. Obviously, tool storage has been weak. We've talked about that, but in thinking about the core mechanic customer, what is your sense on just the backdrop there whether the BLS has data, it shows hours worked up, hiring up, earnings way up. It would seems like that customer is able to buy more tools. What is your sense on Snap-on's ability to tap into what is ultimately a pretty strong, I'll call it, wallet growth?

I agree. That's why I'm saying the automotive repair market is a robust market with abundant opportunity that we can drive down. We think we have the capability to do it. I mean, I think the fact that we're selling the ZEUSs in pretty good numbers, basically last year, we had a boffo quarter with the thermal imager. You know what, we sold a lot of them in the fourth quarter and at the franchisee level, they're overcoming that with ZEUS. And so what you got is people are playing the ZEUS list price, some people have looked at it, all-in is like $17,000. Now that's like a car price. There's a lot of versions of that, that gets sold, but it's thousands of dollars, and we're selling it successfully. So we're able to tap into it I think if we have the right product. Joe D. Vruwink - Robert W. Baird & Co., Inc.: And you think recent, you've talked about coming out of the franchise conference, that product introduction, but have there been other items launched in the back half of the year? We're entering Q1 or we're over a month into Q1, what have been more recent trends than just that undertaking around new products?

That's why I put the power tool in the script. The power tool that we talked about, that 3/8 inch mini power tool right angle drill sold out right away and it became a $1 million seller, a hit product. So we are launching products. Our problem is, we're not selling enough tool storage, and there are other issues, but the thing is that, we need to turn around tool storage. That's what I think. Now there are other things we'd like to see go better. So we are seeing encouraging. When we have the product, we believe we sell it. Joe D. Vruwink - Robert W. Baird & Co., Inc.: And then my last question, A lot of our focus over the past year has been on finance receivables, but let's maybe talk about contract receivables. How much of the asset book is that category? And then can you just segment of contract receivables, how much is maybe more of a commercial loan with the shop? How much is going to be van leases? And are the growth in van leases going on right now? Is that historically a leading indicator of future activity or anything you can kind of foot to for why franchisees are reinvesting right now?

Joe, actually, there's not a lot to be gleaned. The mix within the portfolio has been rather constant. If you look at the end of Q4, 81% of the portfolio is extended credit, 15% is franchise finance and 3% is to leases of equipment to shop owners. That vacillates between 3% and 4% over the years. The franchise finance goes from 13.5% to 15.5%, so it's kind of all within range. I think it's a sign of prosperity and confidence when you see the franchisees up into a new van, particularly a larger van. I think they wouldn't make an investment like that if they didn't show their commitment to the future and want to keep growing their business. Joe D. Vruwink - Robert W. Baird & Co., Inc.: Okay. I'll leave it there. Thank you very much.

Thanks.

We'll go next to Christopher Glynn with Oppenheimer. Christopher Glynn - Oppenheimer & Co., Inc.: Thanks. Good morning. I think last year, maybe a couple of phases you tightened credit a little bit. Just wondering what the results, learnings were around that, what the latest toggles are if that subsequently yielded to some opportunity to lose some credit backup perhaps?

I think we look at credit each and every quarter, a little bit harder at certain times of the year than others, Chris. It evolves, but not big movements in terms of decision making, we're always trying to tweak the portfolio in a positive way, try to put our franchisees and ourselves in a better place. Try to make sure we match our customers' needs up with what we were offering. So loosening credit, I wouldn't say that per se. I think we're judicious in terms of how we counsel the franchisees and approaching the situation. Having said that, one of the callers earlier made the comment that I think mechanics' wallets are getting bigger. I think that means that there probably is more capacity over time. We were trying to identify where that credit capacity is and loan to those mechanics. Christopher Glynn - Oppenheimer & Co., Inc.: Okay. And then on the core vans channel, wondering if you're seeing any apparent rebalancing in the vans channel marketplace around historical price spreads around the few key competitors and maybe any changes on the relative under-penetration of some of your stronger peers?

Look, certainly if you looked at our numbers and you looked at some of the other numbers, you would conclude there's some change. We don't hear it from our franchisees. We don't hear them saying, oh, by the way, I have trouble competing with this guy or that guy over a particular product. So to the extent other people are growing, I guess you could argue that they're making inroads, where we could have had those inroads, but, or had that business. But you don't hear at the level. Nobody comes up and says, boy, you got to match this or we got to do this, or this is giving me problems. You don't hear it. Christopher Glynn - Oppenheimer & Co., Inc.: Okay. And then just final, bookkeeping, if you told us I missed it, but what's the finance receivables allowance balance down the year?

The balance is about 3% of the portfolio, if you look at the coverage ratio. Christopher Glynn - Oppenheimer & Co., Inc.: Okay.

A little bit more.

If we move to the next question please.

Pardon me. Thank you. We'll go next to Scott Stember with C.L. King. Scott L. Stember - C.L. King & Associates, Inc.: Good morning, guys.

Good morning. Scott L. Stember - C.L. King & Associates, Inc.: Most of my questions have been answered, but I have one question. Nick, you had referred to the SFC, and I guess you're referring to the big pack of tools and maybe some bundling or unbundling that didn't go well, I guess from a pricing and just the actual packaging. Could you talk about what you've done to remedy that? And how long would we take to see that with an improved numbers within the Tools Group? Thank you very much.

Look, I think, yeah, the thing is that generally hand tools are something which are a little different than tool storage or diagnostics or anything else. The hand tools inventory is fairly ubiquitous on the van itself. They have a lot of handles, but generally, they have to be – you have to attract them to a bundle. It didn't work so well, some people took it in the SFC. We've tried to counter that by bringing out some tools, that's why I talked some individual tools that would be attractive. So, when I talked about the ratcheting wrenches and the specific high-durability ratcheting wrench that gets into certain small spaces, that's the kind of thing we're doing. And remember, I could have talked for the whole call about those kinds of things and so that's what we're trying to do to try to restart that. I think if you're dangerous, if you're looking at any one quarter at any particular group, because you do even in the good – when they were growing like a 7%, you saw ups and downs in those things so you can't necessarily conclude that hand tools because it's up and down, would be in trouble in terms of a tool category or be wanting in any way, we just didn't quite have the right package and we're trying to restart that with new product. Scott L. Stember - C.L. King & Associates, Inc.: Got it. That's all I have. Thank you.

Okay. Thank you.

Next to Bret Jordan with Jefferies.

Hi. Good morning, guys.

Good morning.

Are you seeing any kind of a market share struggle, I guess. I mean, the question was kind of asked earlier. I have heard from mechanics and some of your other franchise peers are being aggressive on pricing at the shop level. And is that something that you're hearing at all from your franchisees?

You know from the – Bret, from the 80,000 foot level, you would say, we must be seeing something like that, if other people are growing faster than you are. I don't know if the mechanisms for that competition are price or what, but when I ride and I was just on a van the other day and guy never mentioned Mac or Matco, or any other competition. Now of course, he is talking to me and you can argue this, but I do meet with these guys a lot and often, they're just talking about ourselves, we could have – we could use different tool storage. We could use a new model in tool storage to address this kind of thing. We like the ZEUS. It takes – we're enthusiastic about the ZEUS. The feedback I get is all associated with ourselves. So I don't think we're feeling something that other people are doing other than maybe we're not doing as well as we could do versus what we expect of ourselves, that's the difference, I think. Really.

Okay.

I think the Snap-on franchise – you ask people about the preferred form of hand tool, that seems rock solid.

Okay. And then a housekeeping. On rates, would you expect and I guess the rates were down and maybe I think Aldo mentioned some promotional issues on the quarter on the funding rate, but would you expect rate to be up going forward just given the increasing rate environment? Or do you think we're still sort of – we're going to be kind of flat?

I think they stay, Bret. It wasn't by a couple promotions. The products that fascinated the customer is what we call featured products. Featured products usually have rebates associated with them. That marketing expense comes off of the interest income that we calculate and the uptake on those was just better than what it had been in Q4 of last year. So you get a little bit of a depressant effect. And then the mix in the portfolio tend to be a little bit better quality credit and a lot of the shop owners with the ZEUS that Nick mentioned, the principal buyers of that are pretty good credit quality customers that drives the rate in the portfolio down a bit. So it depends on the mix of those. To answer your question, I think it stays in the 17% to 18% range on a holistic basis for finance receivables.

Okay. Great. Thank you. I appreciated it.

Thank you.

That concludes today's question-and-answer session. At this time, I'd like to turn the conference back to Leslie Kratcoski for any closing remarks.

Thanks for joining us today. A replay of the call will be available shortly on snapon.com. And as always, we appreciate your interest in the company. Good day.

This concludes today's conference. We do thank you for your participation. You may now disconnect.