What changed in this filing

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Item 1. Financial Statements

2022-07-21 compared with 2022-04-21 · 310 added, 167 removed, 851 unchanged (36% of the section changed)

3 unchanged sentences

(Amounts in millions, except per share data)

Three Months Ended

April 2, 2022 April 3, 2021

Three Months Ended Six Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Net sales $ 1,136.6 $ 1,081.4 $ 2,234.4 $ 2,106.0

28 unchanged sentences

(Amounts in millions)

Three Months Ended

April 2, 2022 April 3, 2021

Three Months Ended Six Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Comprehensive income (loss):

2 unchanged sentences

Foreign currency translation ( 110.3 ) 20.2 ( 120.0 ) ( 8.8 )

Reclassification of foreign currency translation loss from sale of equity interest to net earnings — ( 1.0 ) — ( 1.0 )

Unrealized cash flow hedges, net of tax:

2 unchanged sentences

Amortization of net unrecognized losses

4.7 9.1 9.2 18.2

Income tax benefit

( 1.1 ) ( 2.3 ) ( 2.2 ) ( 4.5 )

3.6 6.8 7.0 13.7

Total comprehensive income $ 130.1 $ 238.8 $ 346.1 $ 413.9

7 unchanged sentences

(Amounts in millions, except share data)

April 2, 2022 January 1, 2022

July 2, 2022 January 1, 2022

Current assets:

25 unchanged sentences

(Amounts in millions, except share data)

April 2, 2022 January 1, 2022

July 2, 2022 January 1, 2022

LIABILITIES AND EQUITY

34 unchanged sentences

(Amounts in millions, except share data)

The following summarizes the changes in total equity for the three month period ended April 2, 2022:

The following summarizes the changes in total equity for the three month period ended July 2, 2022:

Shareholders’ Equity Attributable to Snap-on Incorporated

6 unchanged sentences

Interests Total

Balance at January 1, 2022 $ 67.4 $ 472.7 $ 5,699.9 $ ( 343.9 ) $ ( 1,714.2 ) $ 21.9 $ 4,203.8

Net Earnings for the three months ended April 2, 2022

Balance at April 2, 2022 $ 67.4 $ 474.7 $ 5,841.0 $ ( 350.6 ) $ ( 1,734.2 ) $ 22.3 $ 4,320.6

Net Earnings for the three months ended July 2, 2022

— — 231.5 — — 5.7 237.2

6 unchanged sentences

Other — — ( 0.6 ) — — ( 5.6 ) ( 6.2 )

Balance at April 2, 2022 $ 67.4 $ 474.7 $ 5,841.0 $ ( 350.6 ) $ ( 1,734.2 ) $ 22.3 $ 4,320.6

The following summarizes the changes in total equity for the three month period ended April 3, 2021:

Balance at July 2, 2022 $ 67.4 $ 488.1 $ 5,996.2 $ ( 457.7 ) $ ( 1,769.6 ) $ 22.4 $ 4,346.8

The following summarizes the changes in total equity for the six month period ended July 2, 2022:

Shareholders’ Equity Attributable to Snap-on Incorporated

7 unchanged sentences

Balance at January 1, 2022 $ 67.4 $ 472.7 $ 5,699.9 $ ( 343.9 ) $ ( 1,714.2 ) $ 21.9 $ 4,203.8

Net Earnings for the three months ended April 3, 2021

Net Earnings for the six months ended July 2, 2022

— — 448.9 — — 11.0 459.9

6 unchanged sentences

Other — — ( 1.2 ) — — ( 10.5 ) ( 11.7 )

Balance at Balance at April 3, 2021 $ 67.4 $ 419.7 $ 5,282.5 $ ( 388.3 ) $ ( 1,505.3 ) $ 21.9 $ 3,897.9

Balance at July 2, 2022 $ 67.4 $ 488.1 $ 5,996.2 $ ( 457.7 ) $ ( 1,769.6 ) $ 22.4 $ 4,346.8

See Notes to Condensed Consolidated Financial Statements.

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Amounts in millions, except share data)

The following summarizes the changes in total equity for the three month period ended July 3, 2021:

Shareholders’ Equity Attributable to Snap-on Incorporated

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Treasury

Stock Noncontrolling

Interests Total

Balance at April 3, 2021 $ 67.4 $ 419.7 $ 5,282.5 $ ( 388.3 ) $ ( 1,505.3 ) $ 21.9 $ 3,897.9

Net Earnings for the three months ended July 3, 2021

— — 208.0 — — 5.2 213.2

Other comprehensive income — — — 25.6 — — 25.6

Cash dividends – $ 1.23 per share

— — ( 66.7 ) — — — ( 66.7 )

Stock compensation plans — 41.4 — — 56.8 — 98.2

Share repurchases – 566,900 shares

— — — — ( 137.4 ) — ( 137.4 )

Other — — ( 0.3 ) — — ( 5.0 ) ( 5.3 )

Balance at Balance at July 3, 2021 $ 67.4 $ 461.1 $ 5,423.5 $ ( 362.7 ) $ ( 1,585.9 ) $ 22.1 $ 4,025.5

The following summarizes the changes in total equity for the six month period ended July 3, 2021:

Shareholders’ Equity Attributable to Snap-on Incorporated

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Treasury

Stock Noncontrolling

Interests Total

Balance at January 2, 2021 $ 67.4 $ 391.7 $ 5,156.9 $ ( 365.8 ) $ ( 1,425.3 ) $ 21.7 $ 3,846.6

Net Earnings for the six months ended July 3, 2021

— — 400.6 — — 10.2 410.8

Other comprehensive income — — — 3.1 — — 3.1

Cash dividends – $ 2.46 per share

— — ( 133.4 ) — — — ( 133.4 )

Stock compensation plans — 69.4 — — 128.7 — 198.1

Share repurchases – 1,288,900 shares

— — — — ( 289.3 ) — ( 289.3 )

Other — — ( 0.6 ) — — ( 9.8 ) ( 10.4 )

Balance at Balance at July 3, 2021 $ 67.4 $ 461.1 $ 5,423.5 $ ( 362.7 ) $ ( 1,585.9 ) $ 22.1 $ 4,025.5

See Notes to Condensed Consolidated Financial Statements.

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in millions)

Three Months Ended

April 2, 2022 April 3, 2021

Six Months Ended

July 2, 2022 July 3, 2021

Operating activities:

6 unchanged sentences

Stock-based compensation expense 17.5 23.8

Deferred income tax provision 2.3 2.3

Gain on sales of assets ( 2.7 ) —

Deferred income tax provision (benefit) ( 7.1 ) 4.0

Loss (gain) on sales of assets ( 2.9 ) 1.4

Changes in operating assets and liabilities, net of effects of acquisitions:

2 unchanged sentences

Inventories ( 123.4 ) ( 16.1 )

Prepaid and other assets 1.9 ( 1.8 )

Prepaid expenses and other assets ( 23.4 ) ( 14.3 )

Accounts payable 42.1 59.5

17 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 2.9 ) 0.8

Increase (decrease) in cash and cash equivalents 81.1 ( 18.8 )

Increase in cash and cash equivalents 32.9 42.5

Cash and cash equivalents at beginning of year 780.0 923.4

10 unchanged sentences

These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included in Snap-on’s 2021 Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (“2021 year end”).

The company’s 2022 fiscal first quarter ended on April 2, 2022;

the 2021 fiscal first quarter ended on April 3, 2021.

The company’s 2022 and 2021 fiscal first quarters each contained 13 weeks of operating results.

The company’s 2022 fiscal second quarter ended on July 2, 2022;

the 2021 fiscal second quarter ended on July 3, 2021.

The company’s 2022 and 2021 fiscal second quarters each contained 13 weeks of operating results.

Snap-on’s Condensed Consolidated Financial Statements are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”).

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the Condensed Consolidated Financial Statements for the three month periods ended April 2, 2022, and April 3, 2021, have been made.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the Condensed Consolidated Financial Statements for the three and six month periods ended July 2, 2022, and July 3, 2021, have been made.

Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year.

12 unchanged sentences

this ASU allows for early adoption in any interim period after issuance of the update.

The company is currently assessing the impact this ASU will have on its consolidated financial statements.

The adoption of this ASU is not expected to have a material impact on Snap-on’s Consolidated Financial Statements.

Revenue Recognition

4 unchanged sentences

The following table shows the consolidated revenues by revenue source:

Three Months Ended

(Amounts in millions) April 2, 2022 April 3, 2021

Three Months Ended Six Months Ended

(Amounts in millions) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Revenue from contracts with customers $ 1,130.5 $ 1,075.3 $ 2,222.4 $ 2,094.1

7 unchanged sentences

The following tables represent external net sales disaggregated by geography, based on the customers’ billing addresses:

For the Three Months Ended April 2, 2022

For the Three Months Ended July 2, 2022

Commercial Snap-on Repair Systems

10 unchanged sentences

Total revenue $ 359.1 $ 520.6 $ 416.8 $ 86.4 $ ( 159.9 ) $ 1,223.0

For the Three Months Ended April 3, 2021

For the Six Months Ended July 2, 2022

Commercial Snap-on Repair Systems

12 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

For the Three Months Ended July 3, 2021

Commercial Snap-on Repair Systems

& Industrial Tools & Information Financial Snap-on

(Amounts in millions) Group Group Group Services Eliminations Incorporated

North America* $ 126.6 $ 416.3 $ 236.8 $ — $ — $ 779.7

Europe 79.2 43.8 66.5 — — 189.5

All other 68.9 24.0 19.3 — — 112.2

External net sales 274.7 484.1 322.6 — — 1,081.4

Intersegment net sales 75.8 — 76.0 — ( 151.8 ) —

Total net sales 350.5 484.1 398.6 — ( 151.8 ) 1,081.4

Financial services revenue — — — 86.9 — 86.9

Total revenue $ 350.5 $ 484.1 $ 398.6 $ 86.9 $ ( 151.8 ) $ 1,168.3

For the Six Months Ended July 3, 2021

Commercial Snap-on Repair Systems

& Industrial Tools & Information Financial Snap-on

(Amounts in millions) Group Group Group Services Eliminations Incorporated

North America* $ 244.6 $ 824.4 $ 437.7 $ — $ — $ 1,506.7

Europe 163.5 88.0 127.1 — — 378.6

All other 137.7 50.0 33.0 — — 220.7

External net sales 545.8 962.4 597.8 — — 2,106.0

Intersegment net sales 150.4 — 148.4 — ( 298.8 ) —

Total net sales 696.2 962.4 746.2 — ( 298.8 ) 2,106.0

Financial services revenue — — — 175.5 — 175.5

Total revenue $ 696.2 $ 962.4 $ 746.2 $ 175.5 $ ( 298.8 ) $ 2,281.5

* North America is comprised of the United States, Canada and Mexico.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following tables represent external net sales disaggregated by customer type:

For the Three Months Ended April 2, 2022

For the Three Months Ended July 2, 2022

Commercial Snap-on Repair Systems

8 unchanged sentences

Total revenue $ 359.1 $ 520.6 $ 416.8 $ 86.4 $ ( 159.9 ) $ 1,223.0

For the Three Months Ended April 3, 2021

For the Six Months Ended July 2, 2022

Commercial Snap-on Repair Systems

8 unchanged sentences

Total revenue $ 699.2 $ 1,032.7 $ 815.0 $ 174.1 $ ( 312.5 ) $ 2,408.5

For the Three Months Ended July 3, 2021

Commercial Snap-on Repair Systems

& Industrial Tools & Information Financial Snap-on

(Amounts in millions) Group Group Group Services Eliminations Incorporated

Vehicle service professionals $ 25.7 $ 484.1 $ 322.6 $ — $ — $ 832.4

All other professionals 249.0 — — — — 249.0

External net sales 274.7 484.1 322.6 — — 1,081.4

Intersegment net sales 75.8 — 76.0 — ( 151.8 ) —

Total net sales 350.5 484.1 398.6 — ( 151.8 ) 1,081.4

Financial services revenue — — — 86.9 — 86.9

Total revenue $ 350.5 $ 484.1 $ 398.6 $ 86.9 $ ( 151.8 ) $ 1,168.3

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

For the Six Months Ended July 3, 2021

Commercial Snap-on Repair Systems

& Industrial Tools & Information Financial Snap-on

(Amounts in millions) Group Group Group Services Eliminations Incorporated

Vehicle service professionals $ 49.8 $ 962.4 $ 597.8 $ — $ — $ 1,610.0

All other professionals 496.0 — — — — 496.0

External net sales 545.8 962.4 597.8 — — 2,106.0

Intersegment net sales 150.4 — 148.4 — ( 298.8 ) —

Total net sales 696.2 962.4 746.2 — ( 298.8 ) 2,106.0

Financial services revenue — — — 175.5 — 175.5

Total revenue $ 696.2 $ 962.4 $ 746.2 $ 175.5 $ ( 298.8 ) $ 2,281.5

Nature of Goods and Services:

8 unchanged sentences

Approximately 90 % of Snap-on’s net sales are products sold at a point in time through ship-and-bill performance obligations that also include repair services.

The remaining sales revenue is earned over time primarily on a subscription basis including software, extended warranty and other subscription service agreements.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The remaining sales revenue is earned over time primarily for software subscriptions, other subscription service agreements and extended warranty programs.

Snap-on enters into contracts related to the selling of tools, diagnostics, repair information, equipment and related services.

7 unchanged sentences

The remaining duration of these unsatisfied performance obligations range from one month up to 60 months.

Snap-on had approximately $ 195.0 million of long-term contracts that have fixed consideration that extends beyond one year as of April 2, 2022.

Snap-on had approximately $ 188.0 million of long-term contracts that have fixed consideration that extends beyond one year as of July 2, 2022.

Snap-on expects to recognize approximately 60 % of these contracts as revenue by the end of fiscal 2023, an additional 35 % by the end of fiscal 2025, and the balance thereafter.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Contract Liabilities:

1 unchanged sentence

The timing of payment is typically on a monthly, quarterly or annual basis.

The balance of total contract liabilities was $ 65.8 million and $ 63.8 million at April 2, 2022, and January 1, 2022, respectively.

The balance of total contract liabilities was $ 65.9 million and $ 63.8 million at July 2, 2022, and January 1, 2022, respectively.

The current portion of contract liabilities is included in “Other accrued liabilities” and the non-current portion of such liabilities is included in “Other long-term liabilities” on the accompanying Condensed Consolidated Balance Sheets.

During the three months ended April 2, 2022, Snap-on recognized revenue of $ 34.6 million that was included in the $ 63.8 million contract liability balance at January 1, 2022, which was primarily from the amortization of software subscriptions, extended warranties and other subscription agreements.

During the three and six months ended July 2, 2022, Snap-on recognized revenue of $ 10.3 million and $ 44.9 million, respectively, that was included in the $ 63.8 million contract liability balance at January 1, 2022, which was primarily from the amortization of software subscriptions, extended warranties and other subscription agreements.

On August 1, 2021, Snap-on acquired AutoCrib EMEA GmbH (“AutoCrib Germany”), a former independent distributor, for a cash purchase price of $ 4.4 million (or $ 4.2 million, net of cash acquired).

3 unchanged sentences

On July 1, 2021, Snap-on exchanged its 35 % equity interest in Deville S.A., valued at $ 21.8 million, for 100 % ownership of Secateurs Pradines (“Pradines”), a wholly owned subsidiary of Deville S.A.

with a fair value of $ 20.7 million (or $ 16.2 million, net of cash acquired), and cash of $ 1.1 million.

with a fair value of $ 20.2 million (or $ 15.7 million, net of cash acquired), which reflects a $ 0.5 million purchase accounting adjustment finalized in the second quarter of 2022, and cash of $ 1.6 million.

Pradines, located in Bauge-en-Anjou, France, designs and manufactures horticultural hand tools for professionals and individuals.

As of April 2, 2022, the company recorded, on a preliminary basis, the $ 10.7 million excess of the purchase price over the fair value of net assets acquired in “Goodwill” in the accompanying Condensed Consolidated Balance Sheets.

The company will complete the purchase accounting for the acquired net assets of Pradines in the second quarter of 2022.

The $ 10.2 million excess of the purchase price over the fair value of net assets acquired is recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets.

On February 26, 2021, Snap-on acquired Dealer-FX Group, Inc.

7 unchanged sentences

See Note 6 for further information on goodwill and other intangible assets.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Trade and Other Accounts Receivable:

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

The components of Snap-on’s trade and other accounts receivable as of April 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions) April 2, 2022 January 1, 2022

The components of Snap-on’s trade and other accounts receivable as of July 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions) July 2, 2022 January 1, 2022

Trade and other accounts receivable $ 757.2 $ 709.6

1 unchanged sentence

Total trade and other accounts receivable – net $ 729.1 $ 682.3

The following is a rollforward of the allowances for credit losses related to trade and other accounts receivable for the three months ended April 2, 2022, and April 3, 2021:

Three months ended

(Amounts in millions) April 2, 2022 April 3, 2021

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following is a rollforward of the allowances for credit losses related to trade and other accounts receivable for the three and six months ended July 2, 2022, and July 3, 2021:

Three Months Ended Six Months Ended

(Amounts in millions) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Allowances for credit losses:

2 unchanged sentences

2.9 5.4 6.6 7.3

( 2.2 ) ( 2.1 ) ( 5.2 ) ( 4.2 )

Currency translation

( 1.0 ) 0.4 ( 0.7 ) 0.1

End of period $ 28.1 $ 29.5 $ 28.1 $ 29.5

9 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The components of Snap-on’s current finance and contract receivables as of April 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions) April 2, 2022 January 1, 2022

The components of Snap-on’s current finance and contract receivables as of July 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions) July 2, 2022 January 1, 2022

Finance installment receivables $ 562.6 $ 557.0

19 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The components of Snap-on’s finance and contract receivables with payment terms beyond one year as of April 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions) April 2, 2022 January 1, 2022

The components of Snap-on’s finance and contract receivables with payment terms beyond one year as of July 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions) July 2, 2022 January 1, 2022

Finance installment receivables $ 1,166.1 $ 1,155.3

33 unchanged sentences

However, customers are monitored prior to becoming 30 days past due.

The amortized cost basis of finance and contract receivables by origination year as of April 2, 2022, are as follows:

The amortized cost basis of finance and contract receivables by origination year as of July 2, 2022, are as follows:

(Amounts in millions) 2022 2021 2020 2019 2018 Prior Total

34 unchanged sentences

The allowance for credit losses is adjusted each period for changes in the credit risk and expected lifetime credit losses.

The following is a rollforward of the allowances for credit losses for finance and contract receivables for the three months ended April 2, 2022, and April 3, 2021:

The following is a rollforward of the allowances for credit losses for finance and contract receivables for the three and six months ended July 2, 2022, and July 3, 2021:

Three Months Ended

April 2, 2022 Three Months Ended

April 3, 2021

July 2, 2022 Six Months Ended

(Amounts in millions) Finance

7 unchanged sentences

Recoveries 2.7 0.1 5.0 0.1

Currency translation ( 0.2 ) — ( 0.2 ) —

End of period $ 61.3 $ 7.2 $ 61.3 $ 7.2

Three Months Ended

July 3, 2021 Six Months Ended

(Amounts in millions) Finance Receivables Contract Receivables Finance Receivables Contract Receivables

Allowances for credit losses:

Beginning of period $ 75.3 $ 9.2 $ 76.3 $ 9.0

Provision for credit losses 6.6 0.1 17.9 0.8

Charge-offs ( 12.4 ) ( 0.5 ) ( 27.3 ) ( 1.1 )

Recoveries 2.8 0.2 5.4 0.3

Currency translation — — — —

End of period $ 72.3 $ 9.0 $ 72.3 $ 9.0

Depending on the contract, payments for finance and contract receivables are due on a monthly or weekly basis.

5 unchanged sentences

In limited instances, Snap-on’s financial services business may modify certain receivables in troubled debt restructurings.

The amount and number of restructured finance and contract receivables as of April 2, 2022, and January 1, 2022, were immaterial to both the financial services portfolio and the company’s results of operations and financial position.

The amount and number of restructured finance and contract receivables as of July 2, 2022, and January 1, 2022, were immaterial to both the financial services portfolio and the company’s results of operations and financial position.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The aging of finance and contract receivables as of April 2, 2022, and January 1, 2022, is as follows:

The aging of finance and contract receivables as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions) 30-59

2 unchanged sentences

Past Due Total Greater

April 2, 2022:

July 2, 2022:

Finance receivables $ 15.1 $ 9.6 $ 15.6 $ 40.3 $ 1,695.0 $ 1,735.3 $ 13.3

17 unchanged sentences

Such finance and contract receivables are covered by the company’s respective allowances for credit losses and are written-off against the allowances when appropriate.

The amount of finance and contract receivables on nonaccrual status as of April 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions) April 2, 2022 January 1, 2022

The amount of finance and contract receivables on nonaccrual status as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions) July 2, 2022 January 1, 2022

Finance receivables $ 8.7 $ 7.7

1 unchanged sentence

Inventories by major classification are as follows:

(Amounts in millions) April 2, 2022 January 1, 2022

(Amounts in millions) July 2, 2022 January 1, 2022

Finished goods $ 756.7 $ 686.5

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 61 % and 60 % of total inventories as of April 2, 2022 and January 1, 2022, respectively.

Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 61 % and 60 % of total inventories as of July 2, 2022, and January 1, 2022, respectively.

The company accounts for its non-U.S.

inventory on the FIFO method.

As of April 2, 2022, approximately 35 % of the company’s U.S.

As of July 2, 2022, approximately 36 % of the company’s U.S.

inventory was accounted for using the FIFO method and 64 % was accounted for using the last-in, first-out (“LIFO”) method.

There were no LIFO inventory liquidations in the three months ended April 2, 2022, or April 3, 2021.

There were no LIFO inventory liquidations in the three and six months ended July 2, 2022, or July 3, 2021.

Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by segment for the three months ended April 2, 2022, are as follows:

The changes in the carrying amount of goodwill by segment for the six months ended July 2, 2022, are as follows:

(Amounts in millions) Commercial

5 unchanged sentences

Acquisition-related adjustments ( 0.5 ) — ( 32.6 ) ( 33.1 )

Balance as of April 2, 2022 $ 322.2 $ 12.4 $ 743.2 $ 1,077.8

Goodwill of $ 1,077.8 million as of April 2, 2022, included $ 118.2 million from the acquisition of Dealer-FX, $ 10.7 million, on a preliminary basis, from the acquisition of Pradines and $ 3.3 million from the acquisition of AutoCrib Germany.

As of the three months ended April 2, 2022, the purchase accounting valuations for the acquired net assets, including deferred tax assets, of Dealer-FX were completed, resulting in a reduction of goodwill of $ 32.6 million from 2021 year end.

Balance as of July 2, 2022 $ 302.6 $ 12.4 $ 731.0 $ 1,046.0

Goodwill of $ 1,046.0 million as of July 2, 2022, included $ 118.2 million from the acquisition of Dealer-FX, $ 10.2 million from the acquisition of Pradines and $ 3.3 million from the acquisition of AutoCrib Germany.

In the first quarter of 2022, the purchase accounting valuations for the acquired net assets, including deferred tax assets, of Dealer-FX were completed, resulting in a reduction of goodwill of $ 32.6 million from 2021 year end.

In the second quarter of 2022, the purchase accounting valuations for the acquired net assets of Pradines were completed, resulting in a reduction of goodwill of $ 0.5 million from 2021 year end.

The goodwill from Dealer-FX is included in the Repair Systems & Information Group and the goodwill from Pradines and AutoCrib Germany is included in the Commercial & Industrial Group.

1 unchanged sentence

Additional disclosures related to other intangible assets are as follows:

April 2, 2022 January 1, 2022

July 2, 2022 January 1, 2022

(Amounts in millions) Gross Carrying

12 unchanged sentences

Total other intangible assets $ 622.2 $ ( 338.7 ) $ 637.6 $ ( 335.9 )

As of April 2, 2022, the gross carrying value of intangible assets includes $ 28.4 million of customer relationships, $ 14.8 million of developed technology and a $ 17.7 million non-amortized trademark related to the Dealer-FX acquisition.

Provision for impairment of goodwill and/or other intangible assets could arise in a future period due to significant and unanticipated changes in circumstances, such as declines in profitability and cash flow due to significant and long-term deterioration in macroeconomic, industry and market conditions, the loss of key customers, changes in technology or markets, significant changes in key personnel or litigation, a significant and sustained decrease in share price and/or other events, including effects from the sale or disposal of a reporting unit.

As of April 2, 2022, the company had no accumulated impairment losses.

As of July 2, 2022, the gross carrying value of intangible assets includes $ 28.4 million of customer relationships, $ 14.8 million of developed technology and a $ 17.7 million non-amortized trademark related to the Dealer-FX acquisition.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Snap-on completed its annual impairment testing of goodwill and other indefinite-lived intangible assets in the second quarter of 2022, and the testing did not result in any impairment.

As of July 2, 2022, the company had no accumulated impairment losses.

The weighted-average amortization periods related to other intangible assets are as follows:

8 unchanged sentences

Intangible asset renewal costs are expensed as incurred.

The aggregate amortization expense was $ 7.2 million and $ 6.0 million for the respective three month periods ended April 2, 2022, and April 3, 2021.

The aggregate amortization expense was $ 7.2 million and $ 14.4 million for the respective three and six month periods ended July 2, 2022, and $ 6.3 million and $ 12.3 million for the respective three and six month periods ended July 3, 2021.

Based on current levels of amortizable intangible assets and estimated weighted-average useful lives, estimated annual amortization expense is expected to be $ 28.4 million in 2022, $ 25.8 million in 2023, $ 19.6 million in 2024, $ 14.1 million in 2025, $ 10.9 million in 2026, and $ 9.7 million in 2027.

Exit and Disposal Activities

Snap-on did not record any costs for exit and disposal activities for both the three month periods ended April 2, 2022, and April 3, 2021.

Snap-on’s exit and disposal accrual activity for the first three months of 2022 is as follows:

Balance at First Three Months Balance at

Snap-on did not record any costs for exit and disposal activities for each of the three and six month periods ended July 2, 2022, and July 3, 2021.

Snap-on’s exit and disposal accrual activity for the first six months of 2022 is as follows:

Balance at First Quarter Balance at Second Quarter Balance at

(Amounts in millions) January 1, 2022 Provision Usage April 2,

2022 Provision Usage July 2,

Severance costs:

3 unchanged sentences

Total $ 7.0 $ — $ ( 0.9 ) $ 6.1 $ — $ ( 0.7 ) $ 5.4

As of April 2, 2022, the company expects that approximately $ 4.3 million of the $ 6.1 million exit and disposal accrual will be utilized in 2022, and the remainder thereafter, primarily for longer-term severance payments.

As of July 2, 2022, the company expects that approximately $ 3.2 million of the $ 5.4 million exit and disposal accrual will be utilized in 2022, and the remainder thereafter, primarily for longer-term severance payments.

Snap-on expects to fund the remaining cash requirements of its exit and disposal activities with available cash on hand, cash flows from operating activities and borrowings under the company’s existing credit facilities.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Snap-on’s effective income tax rate on earnings attributable to Snap-on was 23.7 % and 23.5 % in the respective first three month periods of 2022 and 2021.

Snap-on’s effective income tax rate on earnings attributable to Snap-on was 23.7 % and 23.4 % in the respective first six month periods of 2022 and 2021.

Snap-on and its subsidiaries file income tax returns in the United States and in various state, local and foreign jurisdictions.

3 unchanged sentences

Short-term and Long-term Debt

Short-term and long-term debt as of April 2, 2022, and January 1, 2022, consisted of the following:

(Amounts in millions) April 2, 2022 January 1, 2022

Short-term and long-term debt as of July 2, 2022, and January 1, 2022, consisted of the following:

(Amounts in millions) July 2, 2022 January 1, 2022

3.25 % unsecured notes due 2027

$ 300.0 $ 300.0

4.10 % unsecured notes due 2048

4 unchanged sentences

( 18.8 ) ( 17.4 )

( 19.6 ) ( 17.4 )

Total long-term debt $ 1,183.4 $ 1,182.9

* Includes unamortized debt issuance costs.

Notes payable of $ 19.6 million as of April 2, 2022, compared to $ 17.4 million as of 2021 year end.

Notes payable of $ 18.8 million as of July 2, 2022, compared to $ 17.4 million as of 2021 year end.

Snap-on has an $ 800 million multi-currency revolving credit facility that terminates on September 16, 2024 (the “Credit Facility”);

no amounts were outstanding under the Credit Facility as of April 2, 2022.

no amounts were outstanding under the Credit Facility as of July 2, 2022.

Borrowings under the Credit Facility bear interest at varying rates based on either:

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Snap-on may, up to two times during any five-year period during the term of the Credit Facility (including any extensions thereof), elect to increase the maximum Leverage Ratio to 0.65 to 1.00 and/or increase the maximum Consolidated Net Debt to EBITDA Ratio to 4.00 to 1.00 for four consecutive fiscal quarters in connection with certain material acquisitions (as defined in the related credit agreement).

As of April 2, 2022, the company’s actual ratios of 0.08 and 0.30 , respectively, were both within the permitted ranges set forth in this financial covenant.

As of July 2, 2022, the company’s actual ratios of 0.09 and 0.34 , respectively, were both within the permitted ranges set forth in this financial covenant.

Snap-on generally issues commercial paper to fund its financing needs on a short-term basis and uses the Credit Facility as back-up liquidity to support such commercial paper issuances.

As of April 2, 2022, there were no commercial paper issuances outstanding.

As of July 2, 2022, there were no commercial paper issuances outstanding.

SNAP-ON INCORPORATED

11 unchanged sentences

Snap-on does not use derivative instruments for speculative or trading purposes.

The company is exposed to global market risks, including the effects of changes in foreign currency exchange rates, interest rates, and the company’s stock price, and therefore uses derivatives to manage financial exposures that occur in the normal course of business.

Snap-on is exposed to global market risks, including the effects of changes in foreign currency exchange rates, interest rates, and the company’s stock price.

The company uses derivatives to manage financial exposures that occur in the normal course of business.

The primary risks managed by using derivative instruments are foreign currency risk, interest rate risk and stock-based deferred compensation risk.

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The change in the fair value of the derivative is recorded in “Long-term debt” on the accompanying Condensed Consolidate d Balance Sheets.

T here were no outstanding interest rate swaps as of both April 2, 2022, and January 1, 2022 .

T here were no outstanding interest rate swaps as of both July 2, 2022, and January 1, 2022 .

Treasury locks:

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Upon the issuance of debt, the related amount in Accumulated OCI is released over the term of the debt and recognized as an adjustment to interest expense on the Condensed Consolidated Statements of Earnings.

There were no treasury locks outstanding as of both April 2, 2022, and January 1, 2022.

There were no treasury locks outstanding as of both July 2, 2022, and January 1, 2022.

SNAP-ON INCORPORATED

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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.

As of April 2, 2022, Snap-on had equity forwards in place intended to manage market risk with respect to 74,000 shares of Snap-on common stock associated with its deferred compensation plans.

As of July 2, 2022, Snap-on had equity forwards in place intended to manage market risk with respect to 71,200 shares of Snap-on common stock associated with its deferred compensation plans.

Counterparty Risk:

4 unchanged sentences

The fair values of financial instruments that do not approximate the carrying values in the financial statements are as follows:

April 2, 2022 January 1, 2022

July 2, 2022 January 1, 2022

(Amounts in millions) Carrying

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Snap-on’s net periodic pension (benefit) cost included the following components:

Three Months Ended

(Amounts in millions) April 2, 2022 April 3, 2021

Three Months Ended Six Months Ended

(Amounts in millions) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Service cost $ 6.3 $ 6.9 $ 13.4 $ 14.4

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Snap-on’s net periodic postretirement health care cost included the following components:

Three Months Ended

(Amounts in millions) April 2, 2022 April 3, 2021

Three Months Ended Six Months Ended

(Amounts in millions) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Interest cost $ 0.3 $ 0.3 $ 0.6 $ 0.6

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The 2011 Incentive Stock and Awards Plan (the “2011 Plan”) provides for the grant of stock options, performance share units (“PSUs”), stock appreciation rights (“SARs”) and restricted stock awards (which may be designated as “restricted stock units” or “RSUs”).

As of April 2, 2022, the 2011 Plan had 3,096,154 shares available for future grants.

As of July 2, 2022, the 2011 Plan had 3,116,594 shares available for future grants.

The company uses treasury stock to deliver shares under the 2011 Plan.

Net stock-based compensation expense was $ 9.0 million and $ 12.3 million for the respective three month periods ended April 2, 2022, and April 3, 2021.

Cash received from stock purchase and option plan exercises during the respective three month periods ended April 2, 2022, and April 3, 2021 totaled $ 5.8 million and $ 93.0 million.

The tax benefit realized from both the exercise and vesting of share-based payment arrangements was $ 2.1 million and $ 7.7 million for the respective three month periods ended April 2, 2022, and April 3, 2021.

Net stock-based compensation expense was $ 8.5 million and $ 17.5 million for the respective three and six month periods ended July 2, 2022, and $ 11.5 million and $ 23.8 million for the respective three and six month periods ended July 3, 2021.

Cash received from stock purchase and option plan exercises during the respective three and six month periods ended July 2, 2022, totaled $ 23.4 million and $ 29.2 million.

Cash received from stock purchase and option plan exercises during the respective three and six month periods ended July 3, 2021, totaled $ 61.8 million and $ 154.8 million.

The tax benefit realized from both the exercise and vesting of share-based payment arrangements was $ 1.8 million and $ 3.9 million for the respective three and six month periods ended July 2, 2022, and $ 6.2 million and $ 13.9 million for the respective three and six month periods ended July 3, 2021.

Stock Options:

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treasury yield curve on the grant date for the expected term of the option.

The following weighted-average assumptions were used in calculating the fair value of stock options granted during the three months ended April 2, 2022, and April 3, 2021, using the Black-Scholes valuation model:

Three Months Ended

April 2, 2022 April 3, 2021

The following weighted-average assumptions were used in calculating the fair value of stock options granted during the three month period ended July 2, 2022, and the six month periods ended July 2, 2022 and July 3, 2021, using the Black-Scholes valuation model;

no stock options were granted during the three month period ended July 3, 2021:

Three Months Ended Six Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Expected term of option (in years)

Expected volatility factor 22.61 % 21.80 %

Expected dividend yield 2.68 % 2.59 %

Risk-free interest rate 2.00 % 0.67 %

A summary of stock option activity as of and for the three months ended April 2, 2022, is presented below:

3.74 N/A 5.14 5.33

Expected volatility factor 23.12 % N/A 22.61 % 21.80 %

Expected dividend yield 2.73 % N/A 2.68 % 2.59 %

Risk-free interest rate 2.73 % N/A 2.00 % 0.67 %

A summary of stock option activity as of and for the six months ended July 2, 2022, is presented below:

(in thousands)

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Forfeited or expired ( 16 ) 183.40

Outstanding at April 2, 2022 2,669 157.77 5.9 $ 124.8

Exercisable at April 2, 2022 2,031 147.09 4.9 115.0

Outstanding at July 2, 2022 2,587 158.72 5.7 $ 106.0

Exercisable at July 2, 2022 1,954 147.97 4.7 98.2

* Weighted-average

The weighted-average grant date fair value of options granted during the three months ended April 2, 2022, and April 3, 2021, was $ 34.35 and $ 26.19 , respectively.

The intrinsic value of options exercised was $ 2.8 million and $ 30.8 million during the respective three month periods ended April 2, 2022, and April 3, 2021.

The fair value of stock options vested was $ 10.5 million and $ 12.5 million during the respective three month periods ended April 2, 2022, and April 3, 2021.

As of April 2, 2022, there was $ 17.5 million of unrecognized compensation cost related to non-vested stock options that is expected to be recognized as a charge to earnings over a weighted-average period of 2.1 years.

The weighted-average grant date fair value of options granted during the six months ended July 2, 2022, and July 3, 2021, was $ 34.35 and $ 26.19 , respectively.

The intrinsic value of options exercised was $ 7.4 million and $ 10.2 million during the respective three and six month periods ended July 2, 2022, and $ 28.1 million and $ 58.9 million during the respective three and six month periods ended July 3, 2021.

The fair value of stock options vested was $ 10.5 million and $ 12.5 million during the respective six month periods ended July 2, 2022, and July 3, 2021.

As of July 2, 2022, there was $ 14.9 million of unrecognized compensation cost related to non-vested stock options that is expected to be recognized as a charge to earnings over a weighted-average period of 1.8 years.

Performance Share Units and Restricted Stock Units:

9 unchanged sentences

in recent years, forfeitures have not been significant.

The weighted-average grant date fair value of awards granted during the three months ended April 2, 2022, and April 3, 2021, was $ 207.67 and $ 188.72 , respectively.

PSUs related to 46,217 shares were paid out during the three months ended April 2, 2022.

There were no PSUs paid out during the three months ended April 3, 2021.

The weighted-average grant date fair value of awards granted during the six months ended July 2, 2022, and July 3, 2021, was $ 206.58 and $ 187.12 , respectively.

PSUs related to 46,217 shares were paid out during the six months ended July 2, 2022.

There were no PSUs paid out during the six months ended July 3, 2021.

Earned PSUs vest and are generally paid out following the conclusion of the applicable performance period upon approval by the Organization and Executive Compensation Committee of the company’s Board of Directors (the “Board”).

Changes to the company’s non-vested PSUs and RSUs during the three months ended April 2, 2022, are as follows:

Changes to the company’s non-vested PSUs and RSUs during the six months ended July 2, 2022, are as follows:

(in thousands)

2 unchanged sentences

Cancellations and other ( 6 ) 192.40

Non-vested PSUs and RSUs at April 2, 2022 317 189.22

Non-vested PSUs and RSUs at July 2, 2022 320 189.21

* Weighted-average

As of April 2, 2022, there was $ 38.3 million of unrecognized compensation cost related to non-vested PSUs and RSUs that are expected to be recognized as a charge to earnings over a weighted-average period of 1.8 years.

As of July 2, 2022, there was $ 33.6 million of unrecognized compensation cost related to non-vested PSUs and RSUs that are expected to be recognized as a charge to earnings over a weighted-average period of 1.6 years.

Stock Appreciation Rights:

15 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following weighted-average assumptions were used in calculating the fair value of stock-settled SARs granted during the three months ended April 2, 2022, and April 3, 2021, using the Black-Scholes valuation model:

Three Months Ended

April 2, 2022 April 3, 2021

The following weighted-average assumptions were used in calculating the fair value of stock-settled SARs granted during the six months ended July 2, 2022, and July 3, 2021, using the Black-Scholes valuation model:

Six Months Ended

July 2, 2022 July 3, 2021

Expected term of stock-settled SARs (in years)

2 unchanged sentences

Risk-free interest rate 1.96 % 0.19 %

A summary of stock-settled SARs as of and for the three months ended April 2, 2022, are as follows:

A summary of stock-settled SARs as of and for the six months ended July 2, 2022, are as follows:

Stock-settled

6 unchanged sentences

Forfeited or expired ( 41 ) 168.44

Outstanding at April 2, 2022 454 168.56 7.0 $ 16.6

Exercisable at April 2, 2022 296 155.09 5.8 14.4

Outstanding at July 2, 2022 420 168.65 6.7 $ 13.4

Exercisable at July 2, 2022 273 154.97 5.5 11.8

* Weighted-average

The weighted-average grant date fair value of stock-settled SARs granted during the three months ended April 2, 2022, and April 3, 2021, was $ 32.63 and $ 24.05 , respectively.

The intrinsic value of stock-settled SARs exercised was $ 0.2 million and $ 2.2 million during the respective three month periods ended April 2, 2022, and April 3, 2021.

The fair value of stock-settled SARs vested was $ 2.0 million and $ 2.1 million during the respective three month periods ended April 2, 2022, and April 3, 2021.

As of April 2, 2022, there was $ 4.1 million of unrecognized compensation cost related to non-vested stock-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of 2.2 years.

The following weighted-average assumptions were used in calculating the fair value of cash-settled SARs granted during the three months ended April 2, 2022, and April 3, 2021, using the Black-Scholes valuation model:

Three Months Ended

April 2, 2022 April 3, 2021

The weighted-average grant date fair value of stock-settled SARs granted during the six months ended July 2, 2022, and July 3, 2021, was $ 32.63 and $ 24.05 , respectively.

The intrinsic value of stock-settled SARs exercised was $ 0.5 million and $ 0.7 million during the respective three and six month periods ended July 2, 2022, and $ 0.8 million and $ 3.0 million during the respective three and six month periods ended July 3, 2021.

The fair value of stock-settled SARs vested was $ 2.0 million and $ 2.1 million during the respective six month periods ended July 2, 2022, and July 3, 2021.

As of July 2, 2022, there was $ 3.4 million of unrecognized compensation cost related to non-vested stock-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of 1.9 years.

The following weighted-average assumptions were used in calculating the fair value of cash-settled SARs granted during the six months ended July 2, 2022, and July 3, 2021, using the Black-Scholes valuation model:

Six Months Ended

July 2, 2022 July 3, 2021

Expected term of cash-settled SARs (in years)

2 unchanged sentences

Risk-free interest rate 2.85 % 0.45 %

The intrinsic value of cash-settled SARs exercised was $ 0.4 million and $ 0.5 million during the respective three month periods ended April 2, 2022, and April 3, 2021.

The fair value of cash-settled SARs vested was $ 0.1 million for both of the three month periods ended April 2, 2022, and April 3, 2021.

The intrinsic value of cash-settled SARs exercised was $ 0.2 million and $ 0.6 million during the respective three and six month periods ended July 2, 2022, and $ 0.1 million and $ 0.6 million during the respective three and six month periods ended July 3, 2021.

The fair value of cash-settled SARs vested was $ 0.1 million for both the six month periods ended July 2, 2022, and July 3, 2021.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Changes to the company’s non-vested cash-settled SARs during the three months ended April 2, 2022, are as follows:

Changes to the company’s non-vested cash-settled SARs during the six months ended July 2, 2022, are as follows:

(in thousands)

2 unchanged sentences

Vested ( 1 ) 41.69

Non-vested cash-settled SARs at April 2, 2022 2 36.59

Non-vested cash-settled SARs at July 2, 2022 2 34.56

* Weighted-average

As of April 2, 2022, there was $ 0.1 million of unrecognized compensation cost related to non-vested cash-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of 2.2 years.

As of July 2, 2022, there was $ 0.1 million of unrecognized compensation cost related to non-vested cash-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of 1.9 years.

Restricted Stock Awards – Non-employee Directors:

The company awarded 6,525 shares and 6,858 shares of restricted stock to non-employee directors for the respective three month periods ended April 2, 2022, and April 3, 2021.

The company awarded 6,525 shares and 6,858 shares of restricted stock to non-employee directors for the respective six month periods ended July 2, 2022, and July 3, 2021.

The fair value of the restricted stock awards is expensed over a one-year vesting period based on the fair value on the date of grant.

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The purchase price of the company’s common stock to participants is the lesser of the mean of the high and low price of the stock on the beginning date (May 15) or ending date (the following May 14) of each plan year.

There were no share issuances under this plan for the three month periods ended April 2, 2022, and April 3, 2021.

As of April 2, 2022, shares reserved for issuance under this plan totaled 597,275 shares and Snap-on held participant contributions of approximately $ 4.1 million.

For the six month periods ended July 2, 2022, and July 3, 2021, issuances under this plan totaled 18,464 shares and 82,286 shares, respectively.

As of July 2, 2022, shares reserved for issuance under this plan totaled 578,811 shares and Snap-on held participant contributions of approximately $ 0.4 million.

Participants are able to withdraw from the plan at any time prior to the ending date and receive back all contributions made during the plan year.

Compensation expense for plan participants was zero and $ 4.8 million for the respective three month periods ended April 2, 2022, and April 3, 2021.

Compensation expense for plan participants was zero for both the three and six month periods ended July 2, 2022, and $ 4.8 million and $ 9.6 million for the respective three and six month periods ended July 3, 2021.

Franchisee stock purchase plan:

1 unchanged sentence

There were no share issuances under this plan for the three month periods ended April 2, 2022, and April 3, 2021.

As of April 2, 2022, shares reserved for issuance under this plan totaled 270,162 shares and Snap-on held participant contributions of approximately $ 9.4 million.

Participants are able to withdraw from the plan at any time prior to the ending date and receive back all contributions made during the plan year.

The company recognized mark-to-market expense of zero and $ 5.4 million for the respective three month periods ended April 2, 2022, and April 3, 2021.

For the six month periods ended July 2, 2022, and July 3, 2021, issuances under this plan totaled 44,937 shares and 143,388 shares, respectively.

As of July 2, 2022, shares reserved for issuance under this plan totaled 225,225 shares and Snap-on held participant contributions of approximately $ 0.9 million.

Participants are able to withdraw from the plan at any time prior to the ending date and generally receive back all contributions made during the plan year.

The company recognized mark-to-market expense of zero for both the three and six month periods ended July 2, 2022, and $ 11.3 million and $ 16.7 million for the respective three and six month periods ended July 3, 2021.

Earnings Per Share

The shares used in the computation of the company’s basic and diluted earnings per common share are as follows:

Three Months Ended

April 2, 2022 April 3, 2021

Three Months Ended Six Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Weighted-average common shares outstanding 53,312,259 54,051,436 53,354,487 54,117,937

2 unchanged sentences

54,238,807 55,307,732 54,275,411 55,212,811

The dilutive effect of the potential exercise of outstanding options and stock-settled SARs to purchase common shares is calculated using the treasury stock method.

As of April 2, 2022, there were 358,774 awards outstanding that were anti-dilutive;

as of April 3, 2021, there were 400 awards outstanding that were anti-dilutive.

Performance-based equity awards are included in the diluted earnings per share calculation based on the attainment of the applicable performance metrics to date.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The dilutive effect of the potential exercise of outstanding options and stock-settled SARs to purchase common shares is calculated using the treasury stock method.

As of both July 2, 2022, and July 3, 2021, there were no awards outstanding that were anti-dilutive.

Performance-based equity awards are included in the diluted earnings per share calculation based on the attainment of the applicable performance metrics to date.

Commitments and Contingencies

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Snap-on calculates its accrual requirements based on historic warranty loss experience that is periodically adjusted for recent actual experience, including the timing of claims during the warranty period and actual costs incurred.

Snap-on’s product warranty accrual activity for the three months ended April 2, 2022, and April 3, 2021, is as follows:

Three Months Ended

(Amounts in millions) April 2, 2022 April 3, 2021

Snap-on’s product warranty accrual activity for the three and six months ended July 2, 2022, and July 3, 2021, is as follows:

Three Months Ended Six Months Ended

(Amounts in millions) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Warranty reserve:

6 unchanged sentences

Lessee Accounting:

Supplemental balance sheet information related to leases as of April 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions) April 2, 2022 January 1, 2022

Supplemental balance sheet information related to leases as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions) July 2, 2022 January 1, 2022

Finance leases:

10 unchanged sentences

Total operating lease liabilities $ 58.7 $ 53.8

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Lessor Accounting:

2 unchanged sentences

See Note 4 for further information on finance and contract receivables.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Other Income (Expense) – Net

“Other income (expense) – net” on the accompanying Condensed Consolidated Statements of Earnings consists of the following:

Three Months Ended

(Amounts in millions) April 2, 2022 April 3, 2021

Three Months Ended Six Months Ended

(Amounts in millions) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Interest income $ 1.6 $ 0.4 $ 2.1 $ 0.8

Net foreign exchange loss ( 1.0 ) ( 0.2 )

Net foreign exchange gain (loss) ( 1.6 ) 0.2 ( 2.6 ) —

Net periodic pension and postretirement benefits – non-service 9.3 3.8 18.1 7.6

Foreign currency translation loss from sale of equity interest — ( 1.0 ) — ( 1.0 )

Other — — — 0.3

Total other income (expense) – net $ 9.3 $ 3.4 $ 17.6 $ 7.7

Accumulated Other Comprehensive Income (Loss)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended April 2, 2022:

The following is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended July 2, 2022:

(Amounts in millions) Foreign

2 unchanged sentences

Postretirement

Balance as of April 2, 2022 $ ( 154.8 ) $ 8.5 $ ( 204.3 ) $ ( 350.6 )

Other comprehensive loss before reclassifications ( 110.3 ) — — ( 110.3 )

Amounts reclassified from Accumulated OCI — ( 0.4 ) 3.6 3.2

Net other comprehensive income (loss) ( 110.3 ) ( 0.4 ) 3.6 ( 107.1 )

Balance as of July 2, 2022 $ ( 265.1 ) $ 8.1 $ ( 200.7 ) $ ( 457.7 )

The following is a summary of net changes in Accumulated OCI by component and net of tax for the six months ended July 2, 2022:

(Amounts in millions) Foreign

Translation Cash Flow

Hedges Defined

Postretirement

Balance as of January 1, 2022 $ ( 145.1 ) $ 8.9 $ ( 207.7 ) $ ( 343.9 )

2 unchanged sentences

Net other comprehensive income (loss) ( 120.0 ) ( 0.8 ) 7.0 ( 113.8 )

Balance as of July 2, 2022 $ ( 265.1 ) $ 8.1 $ ( 200.7 ) $ ( 457.7 )

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended July 3, 2021:

(Amounts in millions) Foreign

Translation Cash Flow

Hedges Defined

Postretirement

Balance as of April 3, 2021 $ ( 103.7 ) $ 10.1 $ ( 294.7 ) $ ( 388.3 )

The following is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended April 3, 2021:

Other comprehensive income before reclassifications 20.2 — — 20.2

Amounts reclassified from Accumulated OCI ( 1.0 ) ( 0.4 ) 6.8 5.4

Net other comprehensive income (loss) 19.2 ( 0.4 ) 6.8 25.6

Balance as of July 3, 2021 $ ( 84.5 ) $ 9.7 $ ( 287.9 ) $ ( 362.7 )

The following is a summary of net changes in Accumulated OCI by component and net of tax for the six months ended July 3, 2021:

(Amounts in millions) Foreign

6 unchanged sentences

Net other comprehensive income (loss) ( 9.8 ) ( 0.8 ) 13.7 3.1

Balance as of April 3, 2021 $ ( 103.7 ) $ 10.1 $ ( 294.7 ) $ ( 388.3 )

Balance as of July 3, 2021 $ ( 84.5 ) $ 9.7 $ ( 287.9 ) $ ( 362.7 )

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The reclassifications out of Accumulated OCI for the three month periods ended April 2, 2022, and April 3, 2021, are as follows:

The reclassifications out of Accumulated OCI for the three and six month periods ended July 2, 2022, and July 3, 2021, are as follows:

Amount Reclassified from Accumulated OCI

Three Months Ended

April 2, 2022 April 3, 2021 Statement of Earnings

Three Months Ended Six Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Statement of Earnings

(Amounts in millions)

Foreign currency loss from sale of equity interest:

Foreign currency $ — $ 1.0 $ — $ 1.0 Other income (expense) - net

Income tax expense — — — — Income tax expense

Net of tax — 1.0 — 1.0

Gains on cash flow hedges:

28 unchanged sentences

Financial Data by Segment:

Three Months Ended

(Amounts in millions) April 2, 2022 April 3, 2021

Three Months Ended Six Months Ended

(Amounts in millions) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Commercial & Industrial Group $ 359.1 $ 350.5 $ 699.2 $ 696.2

17 unchanged sentences

Earnings before income taxes and equity earnings $ 309.5 $ 275.1 $ 599.7 $ 531.3

(Amounts in millions) April 2, 2022 January 1, 2022

(Amounts in millions) July 2, 2022 January 1, 2022

Commercial & Industrial Group $ 1,204.6 $ 1,209.3

10 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-Q

Item 1. Financial Statements