What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-05 compared with 2025-02-06 · 159 added, 140 removed, 567 unchanged (35% of the section changed)

1 unchanged sentence

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

Fastenal Company:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Fastenal Company and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement schedule II — valuation and qualifying accounts (collectively, the consolidated financial statements).

We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

To the Board of Directors and Stockholders of Fastenal Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Fastenal Company and its subsidiaries (the "Company") as of December 31, 2025, and the related consolidated statements of income, of comprehensive income, of stockholders' equity and of cash flows for the year then ended, including the related notes (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company's consolidated financial statements and an opinion on the Company's internal control over financial reporting based on our audits.

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Annual Report on Internal Control Over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence over inventory quantities at in-market locations

As disclosed in the consolidated balance sheet, the Company held $1,645.0 million of inventory, the majority of which was held at 3,628 in-market locations, as of December 31, 2024.

The Company's processes to track and determine consolidated inventory relies on a perpetual inventory system which involves the interaction of information technology (IT) systems.

We identified the evaluation of the sufficiency of audit evidence obtained related to the quantities of inventory at in-market locations as a critical audit matter.

Evaluating the sufficiency of audit evidence over quantities of inventory at in-market locations required challenging auditor judgment to assess the number of in-market locations visited and included the involvement of IT professionals with specialized skills and knowledge due to the interaction of IT systems that track physical inventory quantities by location.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter.

This included IT application controls, as well as certain controls related to access to programs and data, program changes, and computer operations.

It also included certain controls related to the Company's physical inventory cycle counts.

We involved IT professionals with specialized skills and knowledge, who assisted in testing certain IT controls, inclusive of the interface of IT systems, which support the Company's perpetual inventory system.

We applied auditor judgment in the determination of the locations to test the Company's inventory quantities by evaluating:

• Homogeneity of the locations;

• Historical inventory locations we have visited and results of prior physical counts;

• Inventory dollars by location;

• The Company's inventory cycle count results, including the results of monitoring and compliance with cycle count program by in-market location.

We tested the existence and completeness of inventory by counting inventory quantities on a sample basis through in-market location visits during the year to evaluate the Company's perpetual inventory records.

In addition, we evaluated the overall sufficiency of audit evidence obtained over the quantities of inventory at in-market locations.

We have served as the Company's auditor since 1987.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition

As described in Note 1 to the consolidated financial statements, net sales include products and shipping and handling charges, net of estimates for product returns and any related sales incentives.

The Company recognizes revenue when or as the Company satisfies its performance obligations by transferring control of the promised products to the customer, which primarily occurs when products are delivered or picked up by the customer.

For the year ended December 31, 2025, the Company's net sales were $8,200.5 million.

The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company's revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the revenue recognition process.

These procedures also included, among others, evaluating certain revenue transactions by either (i) testing the issuance and settlement of invoices;

tracing transactions not settled to a detailed listing of accounts receivable;

testing the completeness and accuracy of data provided by management;

and confirming a sample of outstanding customer invoice balances as of December 31, 2025 and, for confirmations not returned, obtaining and inspecting source documents, such as evidence of customer arrangement, invoices, delivery documents, and subsequent cash receipts;

or (ii) testing, on a sample basis, the revenue recognized by obtaining and inspecting source documents, such as evidence of customer arrangement, invoices, delivery documents, and subsequent cash receipts.

/s/ PricewaterhouseCoopers LLP

Minneapolis, Minnesota

February 5, 2026

FASTENAL COMPANY AND SUBSIDIARIES

We have served as the Company's auditor since 2024.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

Fastenal Company:

Opinions on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Fastenal Company and subsidiaries (the Company) as of December 31, 2024, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cashflows for each of the years in the two-year period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinions

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company's auditor from 1987 to 2025.

Minneapolis, Minnesota

February 6, 2025, except for the effects of the stock split and retrospective adoption of Accounting Standards Update (ASU) 2023-09 - Income Taxes (Topic 740):

Improvements to Income Tax Disclosures described in Note 1, as to which the date is February 5, 2026.

FASTENAL COMPANY

Consolidated Balance Sheets

18 unchanged sentences

Current portion of operating lease liabilities 106.1 98.8

Income taxes payable 3.0 —

Total current liabilities 715.6 687.1

15 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

FASTENAL COMPANY AND SUBSIDIARIES

FASTENAL COMPANY

Consolidated Statements of Income

17 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

FASTENAL COMPANY AND SUBSIDIARIES

FASTENAL COMPANY

Consolidated Statements of Comprehensive Income

3 unchanged sentences

Net income $ 1,258.4 1,150.6 1,155.0

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments (net of tax of $ 0.0 in 2024, 2023, and 2022)

( 36.7 ) 10.0 ( 34.1 )

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments 40.4 ( 36.7 ) 10.0

Comprehensive income $ 1,298.8 1,113.9 1,165.0

See accompanying Notes to Consolidated Financial Statements.

FASTENAL COMPANY AND SUBSIDIARIES

FASTENAL COMPANY

Consolidated Statements of Stockholders' Equity

7 unchanged sentences

Stock options exercised 24.3 39.6 30.1

Purchases of common stock — — ( 109.1 )

Stock-based compensation 8.4 8.0 7.3

5 unchanged sentences

Translation adjustment upon closure of foreign subsidiary — ( 0.7 ) —

Purchases of common stock — — ( 128.7 )

Balance at end of year 3,867.7 3,613.5 3,356.9

Accumulated other comprehensive (loss) income

Accumulated other comprehensive loss

Balance at beginning of year ( 91.5 ) ( 54.8 ) ( 64.8 )

Other comprehensive (loss) income ( 36.7 ) 10.0 ( 34.1 )

Other comprehensive income (loss) 40.4 ( 36.7 ) 10.0

Balance at end of year ( 51.1 ) ( 91.5 ) ( 54.8 )

2 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

FASTENAL COMPANY AND SUBSIDIARIES

FASTENAL COMPANY

Consolidated Statements of Cash Flows

6 unchanged sentences

Depreciation of property and equipment 168.5 164.7 166.6

(Gain) loss on sale of property and equipment ( 3.8 ) ( 4.3 ) 1.1

Bad debt expense (recoveries) 1.3 2.2 ( 1.8 )

Gain on sale of property and equipment ( 3.1 ) ( 3.8 ) ( 4.3 )

Bad debt expense 4.6 1.3 2.2

Deferred income taxes ( 1.6 ) ( 4.1 ) ( 10.7 )

2 unchanged sentences

Changes in operating assets and liabilities:

Trade accounts receivable ( 31.9 ) ( 72.3 ) ( 119.8 )

Trade accounts receivable, net ( 130.1 ) ( 31.9 ) ( 72.3 )

Inventories ( 89.2 ) ( 133.9 ) 189.1

14 unchanged sentences

Proceeds from exercise of stock options 24.3 39.6 30.1

Purchases of common stock — — ( 237.8 )

Cash dividends paid ( 1,004.2 ) ( 893.3 ) ( 1,016.8 )

8 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

Fastenal Company and Subsidiaries

Fastenal Company

Notes to Consolidated Financial Statements

2 unchanged sentences

Fastenal is a leader in the wholesale distribution of industrial and construction supplies.

We distribute these supplies through a network of branches and Onsite locations.

Collectively, we refer to our branches and Onsite locations as in-market locations.

We have more than 3,600 in-market locations located primarily in North America.

We distribute these supplies through a network of selling locations located primarily in North America.

Principles of Consolidation

The consolidated financial statements include the accounts of Fastenal Company and its subsidiaries (collectively, referred to as Fastenal or by terms such as we, our, or us).

The consolidated financial statements include the accounts of Fastenal Company and its subsidiaries (the 'Company,' 'Fastenal,' 'we,' 'our,' or 'us').

All material intercompany balances and transactions have been eliminated in consolidation.

On April 23, 2025, we announced a two -for-one stock split of our outstanding common stock.

Holders of the Company's common stock, par value $ 0.01 per share, at the close of business on May 5, 2025, received one additional share of common stock for every share of common stock they owned.

The stock split took effect at the close of business on May 21, 2025.

All historical common stock share, per share information, stock option awards, and stockholders' equity balances for all periods presented have been retroactively adjusted to reflect the two-for-one stock split.

Revenue Recognition

2 unchanged sentences

All revenue is recognized when or as we satisfy our performance obligations under the contract.

We recognize revenue by transferring control of the promised products to the customer, with the majority of revenue recognized at the point in time the customer obtains control of the products.

We recognize revenue by transferring control of the promised products to the customer, which primarily occurs when products are delivered or picked up by the customer.

We recognize revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer.

We estimate product returns based on historical return rates.

We estimate product returns based on historical return rates and lag.

Using probability assessments, which are based on known inputs at year-end, we estimate sales incentives expected to be paid over the term of the contract.

4 unchanged sentences

Accounts receivable are stated at their estimated net realizable value.

The allowance for credit losses is based on an income statement approach which adjusts the ending balance sheet to take into consideration expected losses over the contractual lives of the receivables, considering factors such as historical data as a basis for future expected losses.

The allowance for credit losses is based on a historical loss experience approach which adjusts the ending balance sheet to take into consideration expected losses over the contractual lives of the receivables, considering factors such as historical data as a basis for future expected losses.

Foreign Currency Translation and Transactions

2 unchanged sentences

dollars for balance sheet accounts, except retained earnings, using current exchange rates as of the balance sheet date, for retained earnings at historical exchange rates, and for sales and expense accounts using a weighted average exchange rate during the applicable period.

The translation adjustments are deferred as a separate component of stockholders' equity captioned accumulated other comprehensive income (loss).

The translation adjustments are deferred as a separate component of stockholders' equity captioned accumulated other comprehensive loss.

Gains or losses resulting from transactions denominated in foreign currencies are included in cost of sales or SG&A expenses.

7 unchanged sentences

Depreciation on property and equipment is provided for using the straight-line method over the anticipated economic useful lives of the related property.

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

We determine if an arrangement contains a lease at inception.

Operating leases are included in our operating lease right-of-use (ROU) assets, the current portion of operating lease liabilities, and the operating lease liabilities in our Consolidated Balance Sheets.

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The ROU assets represent our right to control the use of an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.

12 unchanged sentences

Long-Lived Assets

Long-lived assets consist of net property and equipment, operating lease right-of-use assets, prepaid deposits, goodwill, and definite-lived intangible assets, and are reviewed for impairment whenever an event or change in circumstance indicates that the carrying amount of the asset may not be recoverable.

If circumstances require a long-lived asset or asset group be tested for possible impairment, we first compare undiscounted cash flows expected to be generated by the asset or asset group to its carrying value.

Long-lived assets consist of net property and equipment, operating lease ROU assets, prepaid deposits, goodwill, and definite-lived intangible assets.

Other than goodwill, these are reviewed for impairment whenever an event or change in circumstance indicates that the carrying amount of the asset group may not be recoverable.

If circumstances require an asset group to be tested for possible impairment, we first compare undiscounted cash flows expected to be generated by the asset group to its carrying value.

If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent the carrying value exceeds its fair value.

2 unchanged sentences

Goodwill represents the excess of the purchase price over the fair value of net assets acquired.

Goodwill is reviewed for impairment annually.

The identifiable intangible assets are amortized on a straight-line basis over their estimated life.

Goodwill is reviewed for impairment annually or more frequently if triggering events occur.

The identifiable intangible assets are amortized on a straight-line basis over their estimated lives.

Accounting Estimates

7 unchanged sentences

We analyze historical trends, claims experience, and loss development patterns to ensure the appropriate loss development factors are applied to the incurred costs associated with the claims made.

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

Product Warranties

4 unchanged sentences

Stock-Based Compensation

We estimate the fair value of stock options as of the date of the grant using a Black-Scholes valuation model.

We estimate the fair value of stock options as of the grant date using a Black-Scholes valuation model.

Stock-based compensation expense equal to the grant date fair value is recognized on a straight-line basis over the vesting period.

Our stock-based compensation expense is recorded in SG&A expenses.

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

We account for income taxes under the asset and liability method.

10 unchanged sentences

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which enhances reporting requirements under Topic 280.

The enhanced disclosure requirements include:

title and position of the Chief Operating Decision Maker (CODM), significant segment expenses provided to the CODM, extending certain annual disclosures to interim periods, clarifying single reportable segment entities must apply Accounting Standards Codification 280 in its entirety, and permitting more than one measure of segment profit or loss to be reported under certain circumstances.

This change is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024.

We adopted ASU 2023-07 for the year ended December 31, 2024 and have applied the guidance retrospectively for all periods presented within the notes to the consolidated financial statements in this Form 10-K.

In December 2023, the Financial Accounting Standards Board ('FASB') issued Accounting Standards Update ('ASU') 2023-09, Improvements to Income Tax Disclosures (Topic 740), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements.

The new guidance requires consistent categorization and greater disaggregation of information in the income tax rate reconciliation, as well as further disaggregation of income taxes paid.

We adopted ASU 2023-09 for the year ended December 31, 2025 and have applied the guidance retrospectively for all periods presented within the notes to the consolidated financial statements.

The adoption of ASU 2023-09 did not have a material impact on our consolidated financial statements for the year ended December 31, 2025, but did require additional disclosures.

Refer to Note 7 for additional information.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740) , which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements.

The new guidance requires consistent categorization and greater disaggregation of information in the rate reconciliation, as well as further disaggregation of income taxes paid.

This change is effective for annual periods beginning after December 15, 2024.

This change will apply on a prospective basis to annual financial statements for periods beginning after the effective date.

However, retrospective application in all prior periods presented is permitted.

We are currently evaluating the impact that the adoption of ASU 2023-09 will have on our consolidated financial statements and disclosures and we anticipate adoption in our 2025 annual report on Form 10-K.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE) , which specifies additional disclosure requirements.

The new guidance requires additional disclosures, including the composition of certain income expense line items (such as purchases of inventory, employee compensation, and 'other expenses') and a separate disclosure for selling expenses.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE) , which specifies additional disclosure requirements, including the composition of certain income statement expense line items (such as purchases of inventory, employee compensation, and 'other expenses') and a separate disclosure for selling expenses.

This change is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, however, early adoption is permitted.

We are currently evaluating the impact that the adoption of ASU 2024-03 will have on our consolidated financial statements and disclosures and we anticipate adoption in our 2027 annual report on Form 10-K.

Fastenal Company and Subsidiaries

We are currently evaluating the impact that the adoption of ASU 2024-03 will have on our consolidated financial statements and disclosures and anticipate adoption in 2027.

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

Disaggregation of Revenue

The accounting policies of the operations in the various geographic areas are the same as those described in the summary of significant accounting policies.

Revenues are attributed to countries based on the selling location from which the sale occurred.

33 unchanged sentences

(1) The fastener product line represents fasteners and miscellaneous supplies.

Fastenal Company and Subsidiaries

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

Long-Lived Assets

The accounting policies of the operations in the various geographic areas are the same as those described in the summary of significant accounting policies .

Long-lived assets consist of net property and equipment, operating lease right-of-use assets, prepaid deposits, goodwill, and definite-lived intangible assets.

Long-lived assets consist of net property and equipment, operating lease ROU assets, prepaid deposits, goodwill, and definite-lived intangible assets.

Property and equipment at year end consisted of the following:

26 unchanged sentences

Transportation 6.4 5.7

Other 27.8 24.1

Accrued expenses $ 264.7 225.6

(1) In 2024, we disaggregated certain accrual category designations and have conformed the prior period amounts to the current year presentation.

Fastenal Company and Subsidiaries

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

9 unchanged sentences

The following tables summarize the details of options granted under our stock option plans that were still outstanding as of December 31, 2025, and the assumptions used to value those grants.

All such grants were effective at the close of business on the date of grant.

All such grants were effective at the close of business on the grant date.

Granted Option Exercise

Price Closing Stock

Price on Date

of Grant December 31, 2024

Date of Grant Options

Price on Grant Date December 31, 2025

Grant Date Options

Outstanding Options

7 unchanged sentences

January 2, 2018 2,175,872 $ 13.75 $ 13.635 342,584 277,404

April 19, 2016 1,690,880 $ 23.00 $ 22.870 47,038 47,038

January 3, 2017 3,059,156 $ 11.75 $ 11.738 155,970 155,970

Total 17,723,644 7,992,479 3,592,213

Date of Grant Risk-free

Grant Date Risk-free

Interest Rate Expected Life

11 unchanged sentences

January 2, 2018 2.2 % 5.00 2.3 % 23.45 % $ 2.51

April 19, 2016 1.3 % 5.00 2.6 % 26.34 % $ 4.09

January 3, 2017 1.9 % 5.00 2.6 % 24.49 % $ 2.10

All of the options in the tables above vest and become exercisable over a period of up to eight years .

Generally, each option will terminate approximat ely 10 years after the grant date.

The fair value of each share-based option is estimated on the date of grant using a Black-Scholes valuation method that uses the assumptions listed above.

Each option will terminate approximat ely 10 years after the grant date.

The fair value of each share-based option is estimated on the grant date using a Black-Scholes valuation method that uses the assumptions listed above.

The risk-free interest rate is based on the U.S.

Treasury rate over the expected life of the option at the time of grant.

The expected life is the average length of time over which we expect the employee groups will exercise their options, net of forfeitures, which is based on historical experience with similar grants.

The expected life is the average length of time over which we expect the employee groups will exercise their options, net of cancellations, which is based on historical experience with similar grants.

The dividend yield is estimated over the expected life of the option based on our current dividend payout, historical dividends paid, and expected future cash dividends.

Expected stock volatilities are based on the movement of our stock price over the most recent historical period equivalent to the expected life of the option.

Fastenal Company and Subsidiaries

Expected stock volatility is based on the movement of our stock price over the most recent historical period equivalent to the expected life of the option.

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

23 unchanged sentences

Total stock-based compensation expense related to our employee stock option plan was $ 8.4 , $ 8.0 , and $ 7.3 for 2025, 2024, and 2023, respectively.

There is no incremental stock-based compensation expense as a result of the stock split described in Note 1.

Shares Outstanding

3 unchanged sentences

Stock options exercised 1,416,569 2,676,170 2,341,386

Purchases of common stock — — ( 5,000,000 )

Balance at end of year 1,148,057,473 1,146,640,904 1,143,964,734

Fastenal Company and Subsidiaries

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

27 unchanged sentences

Income tax expense $ 390.4 6.2 396.6 361.3 ( 3.8 ) 357.5 377.8 ( 10.8 ) 367.0

Income tax expense in the accompanying consolidated financial statements differed from the expected expense as follows:

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

Income taxes paid were as follows:

2025 2024 2023

Federal $ 276.4 269.6 276.8

State 60.5 54.6 60.9

Foreign 61.9 36.3 51.5

Total income taxes paid $ 398.8 360.5 389.2

Income taxes paid (net of refunds) exceeded five percent of total income taxes paid (net of refunds) in the following jurisdictions:

2025 2024 2023

Mexico 36.5 * 20.1

* Jurisdiction below the threshold for the period presented.

Income tax expense in the accompanying consolidated financial statements differed from the expected expense as follows:

Amount Percent Amount Percent Amount Percent

United States federal statutory income tax $ 316.7 21.0 % $ 319.6 21.0 % $ 302.4 21.0 %

State income taxes, net of federal benefit 43.3 2.9 % 45.1 3.0 % 45.6 3.2 %

federal income tax expense at statutory rate $ 347.5 21.0 % 316.7 21.0 % 319.6 21.0 %

Increase (decrease) attributed to

State and local income taxes 50.7 3.1 % 43.4 2.9 % 45.1 3.0 %

Foreign tax effects 18.9 1.1 % 14.2 0.9 % 17.4 1.1 %

Effect of cross-border tax laws ( 6.4 ) - 0.4 % ( 5.7 ) - 0.4 % ( 5.6 ) - 0.4 %

Tax credits ( 5.8 ) - 0.4 % ( 5.2 ) - 0.3 % ( 5.4 ) - 0.4 %

Changes in valuation allowances 0.2 0.0 % ( 0.2 ) 0.0 % 0.4 0.0 %

Nontaxable or nondeductible items ( 2.4 ) - 0.1 % ( 10.4 ) - 0.7 % ( 6.4 ) - 0.4 %

Changes in unrecognized tax benefits ( 7.4 ) - 0.4 % 0.7 0.0 % 1.4 0.1 %

Other, net 1.3 0.1 % 4.0 0.3 % 0.5 0.0 %

Effective income tax rate $ 357.5 23.7 % $ 367.0 24.1 % $ 353.1 24.5 %

Fastenal Company and Subsidiaries

Total income tax expense, Effective income tax rate $ 396.6 24.0 % 357.5 23.7 % 367.0 24.1 %

In 2025, state taxes in Minnesota, Wisconsin, California, Illinois, New York, and Indiana made up the majority (greater than 50%) of the tax effect in this category.

In 2024, state taxes in Wisconsin, Minnesota, California, Illinois, New York, and Kansas made up the majority (greater than 50%) of the tax effect in this category.

In 2023, state taxes in Wisconsin, California, Minnesota, Illinois, New York, and Kansas made up the majority (greater than 50%) of the tax effect in this category.

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

23 unchanged sentences

Decrease related to statute of limitation lapses ( 2.5 ) ( 1.8 )

Decrease related to prior year tax positions ( 6.3 ) —

Balance at end of year $ 2.2 9.9

1 unchanged sentence

The amount of unrecognized tax benefits that would favorably impact the eff ective tax rate, if recognized, is $ 1.7 as of December 31, 2025 and $ 9.1 as of December 31, 2024.

We believe it is reasonably possible that a decrease of up to $ 1.9 in unrecognized tax benefits may be recognized by the end of 2025 as a result of the lapse of the statute of limitations.

The 2025 and 2024 liability is included in deferred income taxes in the Consolidated Balance Sheets.

6 unchanged sentences

as that income continues to be permanently reinvested.

Fastenal Company and Subsidiaries

It is not practicable to estimate the amount of unrecognized deferred tax liability on these undistributed earnings because of complexities of tax laws, the hypothetical calculation and the significant assumptions required regarding future repatriation strategies.

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

43 unchanged sentences

Leased vehicles 4.50 % 4.46 %

Fastenal Company and Subsidiaries

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

10 unchanged sentences

Unsecured revolving credit facility 4.73 % September 28, 2027 $ — —

Senior unsecured promissory notes payable, Series C 3.22 % March 1, 2024 — 60.0

Senior unsecured promissory notes payable, Series D 2.66 % May 15, 2025 — 75.0

7 unchanged sentences

Unsecured Revolving Credit Facility

We have an $ 835.0 committed unsecured revolving Credit Facility with an uncommitted accordion option to increase the aggregate revolving commitment by an additional $ 365.0 for a total amount of $ 1,200.0 .

The Credit Facility includes a committed letter of credit subfacility of $ 55.0 .

4 unchanged sentences

We pay a commitment fee for the unused portion of the Credit Facility.

This fee is either 0.10 % or 0.125 % per annum based on our usage of the Credit Facility.

This fee is either 0.10 % or 0.125 % per annum based on our use of the Credit Facility.

Senior Unsecured Promissory Notes Payable

5 unchanged sentences

The Master Note Agreement contains certain financial and other covenants and we are currently in compliance with these covenants.

Fastenal Company and Subsidiaries

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

4 unchanged sentences

Segment Reporting

Each of our geographic regions (U.S., Canada, Mexico, Central & South America, Europe, Africa, Asia, and SE Asia) is engaged in business activities for which it may earn sales and incur expenses.

Each of our geographic regions (U.S., Canada, Mexico, Central & South America, Europe, Asia, and SE Asia) are engaged in business activities for which they may earn sales and incur expenses.

Discrete financial information is available at the geographic region level through our internal Return on Asset (ROA) reporting.

The ROA reporting is ultimately a selling location income statement with a ROA calculation and the results are compiled by geographic region.

The ROA reporting is ultimately a selling location income statement with an ROA calculation and the results are compiled by geographic region.

ROA pre-tax profit measures financial performance and drives compensation programs.

Our Chief Executive Officer and President/Chief Sales Officer are our Chief Operating Decision Maker (CODM).

Our Chief Operating Decision Maker (CODM) is a group consisting of our Chief Executive Officer and President/Chief Sales Officer.

We consider each geographic region to be an operating segment.

5 unchanged sentences

individually represent less than 10% of our total operating segment net sales, ROA pre-tax profit, and ROA assets, we do not consider them reportable segments.

Therefore, we report the results of the U.S.

reportable segment below.

Prior to the fourth quarter of 2024, we aggregated the U.S., Canada, and Mexico operating segments into one operating segment, which we referred to as North America.

In the fourth quarter of 2024, we discontinued aggregating the U.S., Canada, and Mexico operating segments into one operating segment.

We no longer meet the criteria to aggregate these operating segments as we no longer believe the operating segments to be economically similar.

Further details on our significant accounting policies can be found in Note 1 of our Form 10-K, which are applied company wide.

Our measure of profit or loss is ROA pre-tax profit and our measure of assets is ROA assets.

Therefore, we report the results of our one reportable segment (U.S.) below.

Further details on our significant accounting policies can be found in Note 1, which are applied company wide.

Our segment measure of profit or loss is ROA pre-tax profit and our measure of assets is ROA assets.

ROA pre-tax profit is not a financial measure calculated in accordance with GAAP and excludes inter-company transactions.

6 unchanged sentences

(1) Other operating segment net sales includes all other operating segments that are below the reportable segment quantitative threshold.

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The following table presents a reconciliation of reportable segment ROA pre-tax profit to consolidated income before income taxes for the periods ended December 31:

5 unchanged sentences

(1) Other operating segment pre-tax profit includes ROA pre-tax profit for all other operating segments that are below the reportable segment quantitative threshold and immaterial allocations excluded from ROA pre-tax profit.

Fastenal Company

Notes to Consolidated Financial Statements (Continued)

The following table presents a reconciliation of reportable segment ROA assets to consolidated total assets for the periods ended December 31:

7 unchanged sentences

Total assets $ 5,052.9 4,698.0

(1) Operating segment ROA assets primarily include accounts receivable, inventory, in-market location vehicles, and exclude certain centrally managed assets.

(1) Operating segment ROA assets primarily include accounts receivable, inventory, selling location vehicles, and exclude certain centrally managed assets.

(2) Other operating segment ROA assets include all other operating segments that are below the reportable segment quantitative threshold.

(3) Other current assets includes cash and cash equivalents, the allowance for credit losses, inventories that are centrally managed, prepaid income taxes, and other current assets.

Other Segment Items

Other Segment Disclosures

Interest revenue and interest expense included in the ROA pre-tax profit are not material.

9 unchanged sentences

(2) Other reconciling items includes depreciation and amortization expense for certain assets not allocated to the ROA and differences in allocations specific to the ROA that drive decisions in the field and compensation programs.

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Legal Contingencies

6 unchanged sentences

In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded.

As of December 31, 2024, there were no litigation matters that we consider to be probable or reasonably possible to have a material adverse outcome.

As of December 31, 2025, there were no litigation matters that we consider to be probable or reasonably possible to have a material adverse impact on our consolidated financial statements.

Subsequent Events

3 unchanged sentences

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.

What changed 10-K

Item 8. Financial Statements and Supplementary Data