What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-16 compared with 2023-02-09 · 201 added, 250 removed, 1931 unchanged (19% of the section changed)

5 unchanged sentences

Changes in Internal Control

There has not been any change in the company’s internal control over financial reporting during the quarter ended December 31, 2022, that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)).

There has been no change in the company’s internal control over financial reporting during the quarter ended December 30, 2023, that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)).

Management’s Report on Internal Control over Financial Reporting

12 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 30, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated February 9, 2023, expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s adoption of Accounting Standard Update No.

2016-13, Financial Instruments – Credit Losses (Topic 326).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 30, 2023, of the Company and our report dated February 15, 2024, expressed an unqualified opinion on those financial statements.

Basis for Opinion

19 unchanged sentences

Other Information

Executive Officer and Director Rule 10b5-1 Trading Arrangements

Historically, the company’s executive officers and directors have entered into Rule 10b5-1 trading arrangements periodically.

Now, in accordance with the new disclosure requirement set forth in Item 408(a) of Regulation S-K, the following table discloses any officer (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended) or director who adopted a contract, instruction or written plan for the sale of securities of the company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) during the quarterly period ended December 30, 2023:

Name and Title Type of Plan Adoption Date* Duration or End Date Aggregate Number of Securities to be Sold Description of Trading Arrangement

Chairman, President and Chief Executive Officer

Rule 10b5-1 trading arrangement October 26, 2023 December 11, 2024 130,000 Exercises of vested stock options expiring in February 2025, and sales of shares to cover exercise price and estimated tax withholding

Senior Vice President - Finance and Chief Financial Officer

Rule 10b5-1 trading arrangement October 24, 2023 February 12, 2025 34,000 Exercises of vested stock options expiring in February 2025, and sales of shares to cover exercise price and estimated tax withholding

*Trading under the Rule 10b5-1 trading arrangement will not commence until after the applicable waiting period and the conclusion of each officer’s prior Rule 10b5-1 trading arrangement.

Other than as disclosed above, no other officer or director adopted , modified or terminated a contract, instruction or written plan for the purchase or sale of securities of the company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or a non-Rule 10b5-1 trading arrangement.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

2023 ANNUAL REPORT 55

Directors, Executive Officers and Corporate Governance

19 unchanged sentences

Miller (53) – Vice President, General Counsel and Secretary since 2018.

Associate General Counsel from 2012 to 2018.

Ozolins (52) – Vice President and Controller since 2021.

5 unchanged sentences

Executive officers may either be elected by the Board or may be appointed by the Chief Executive Officer at the regular meeting of the Board that follows the Annual Shareholders’ Meeting, which is ordinarily held in April each year, or at such other times as new positions are created or vacancies must be filled.

2022 ANNUAL REPORT 55

Code of Ethics and Website Disclosure

Snap-on has adopted a written code of ethics that applies to its Chief Executive Officer, Chief Financial Officer, Vice President and Controller, and all other financial officers and executives performing similar functions.

Snap-on has posted a copy of the code of ethics in the “Investors” section on the company’s website at www.snapon.com .

Snap-on has posted a copy of the code of ethics in the “Investors” section of the company’s website at www.snapon.com .

Snap-on will also post any amendments to these documents, or information about any waivers granted to directors or executive officers with respect to the Code of Business Conduct and Ethics, on the company’s website at www.snapon.com .

Snap-on intends to satisfy the disclosure requirements under Item 10 of Form 8-K regarding amendments to, or waivers from, the code of ethics by posting such information in the “Investors” section of its corporate website at www.snapon.com .

SNAP-ON INCORPORATED

Executive Compensation

9 unchanged sentences

3,380,444 (5)

(1) Includes (i) options and stock appreciation rights (“SARs”) to acquire 2,733,876 shares granted under the 2011 Incentive Stock and Awards Plan (the “2011 Plan”);

(ii) 58,275 shares represented by time-based restricted stock units granted under the 2011 Plan;

(1) Includes (i) stock options and stock appreciation rights (“SARs”) to acquire 2,236,949 shares granted under the 2011 Incentive Stock and Awards Plan (the “2011 Plan”);

(ii) 80,623 shares represented by restricted stock units granted under the 2011 Plan;

and (iii) 7,014 shares represented by deferred share units under the Directors’ Fee Plan.

16 unchanged sentences

Incorporated by reference to the section entitled “Deloitte & Touche LLP Fee Disclosure” in Snap-on’s 2024 Proxy Statement.

SNAP-ON INCORPORATED

2023 ANNUAL REPORT 57

Exhibit and Financial Statement Schedules

2 unchanged sentences

Unless otherwise indicated, references to “fiscal 2023” or “2023” refer to the fiscal year ended December 30, 2023;

references to “fiscal 2021” or “2021” refer to the fiscal year ended January 1, 2022;

references to “fiscal 2022” or “2022” refer to the fiscal year ended December 31, 2022;

and references to “fiscal 2021” or “2021” refer to the fiscal year ended January 1, 2022.

References to 2022, 2021 and 2020 year end refer to December 31, 2022, January 1, 2022, and January 2, 2021, respectively.

References to 2023, 2022 and 2021 year end refer to December 30, 2023, December 31, 2022, and January 1, 2022, respectively.

The following consolidated financial statements of Snap-on and the Report of Independent Registered Public Accounting Firm thereon, are filed as part of this report:

21 unchanged sentences

(e)(4) Description of 2050 Notes (incorporated by reference to Exhibit 4(f)(5) to Snap‑on’s Annual Report on Form 10‑K for the fiscal year ended January 2, 2021 (Commission File No.

2022 ANNUAL REPORT 57

SNAP-ON INCORPORATED

Except for the foregoing, Snap-on and its subsidiaries have no unregistered long-term debt agreement for which the related outstanding debt exceeds 10% of consolidated total assets as of December 30, 2023.

18 unchanged sentences

(l) Form of Restricted Unit Award Agreement for Directors under the 2011 Incentive Stock and Awards Plan (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012 (Commission File No.

SNAP-ON INCORPORATED

2023 ANNUAL REPORT 59

(m) Form of Restricted Stock Award Agreement for Directors under the 2011 Incentive Stock and Awards Plan (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended March 30, 2013 (Commission File No.

(n) Form of Restricted Stock Unit Award Agreement for Executive Officers and Key Employees under the 2011 Incentive Stock and Awards Plan (incorporated by reference to Exhibit 10(o) to Snap-on's Annual Report on Form 10-K for the fiscal year ended January 2, 2021 Commission File No.

(o)(1) Third Amended and Restated Five Year Credit Agreement, dated as of September 16, 2019, by and among Snap-on Incorporated and the lenders and agents listed on the signature pages thereof, and JPMorgan Chase Bank, N.A., Citibank N.A.

Bank National Association as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.1 to Snap-on’s Current Report on Form 8-K dated September 16, 2019 (Commission File No.

(o)(2) Amendment No.

1, dated as of September 15, 2022, by and among Snap-on Incorporated, the lenders party thereto and JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the lenders, to Third Amended and Restated Five Year Credit Agreement, dated as of September 16, 2019, by and among Snap-on Incorporated and the lenders and agents listed on the signature pages thereof, and JPMorgan Chase Bank, N.A., Citibank N.A.

Bank National Association as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended October 1, 2022 (Commission File No.

(o) F our th Amended and Restated Five Year Credit A greement, dated as of September 12, 2023 a mong Snap-on Incorporated and each lenders and agents listed on the signature pages thereof, and JPMorgan Chase Bank, N.A., Citibank N.A.

Bank National Association as joint lead arr angers and joint bookrun ners (incorporated by reference to Exhibit 10.1 to S nap- on ’ s Current Report on Form 8-K dated September 12, 2023 (Commission File No.

(14) Snap-on Incorporated Section 406 of the Sarbanes-Oxley Act Code of Ethics (incorporated by reference to Exhibit 10(aa) to Snap-on’s Annual Report on Form 10-K for the fiscal year ended January 3, 2004 (Commission File No.

(19) S nap-on Incorporated Insider Tradi ng Policy

(21) Subsidiaries of the Corporation

6 unchanged sentences

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(97) Snap-on Incorporated Clawback Policy for Erroneously Awarded Compensation

(101.INS) Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL (Extensible Business Reporting Language) tags are embedded within the Inline XBRL document

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(104) Cover Page Interactive Data File (contained in Exhibit 101)

_______________________________

* Filed electronically or incorporated by reference as an exhibit to this Annual Report on Form 10-K.

2 unchanged sentences

Form 10-K Summary

2022 ANNUAL REPORT 59

SNAP-ON INCORPORATED

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Snap-on Incorporated and subsidiaries (the “Company”) as of December 31, 2022 and January 1, 2022, the related consolidated statements of earnings, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and January 1, 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Snap-on Incorporated and subsidiaries (the “Company”) as of December 30, 2023 and December 31, 2022, the related consolidated statements of earnings, comprehensive income, equity, and cash flows for each of the three years in the period ended December 30, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 30, 2023, and December 31, 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 30, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 15, 2024, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 4 to the consolidated financial statements, the Company changed its method of accounting for credit losses in the year ended January 2, 2021, due to the adoption of Accounting Standard Update No.

2016-13, Financial Instruments – Credit Losses (Topic 326) under the modified retrospective adoption method.

Basis for Opinion

12 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the 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.

SNAP-ON INCORPORATED

2023 ANNUAL REPORT 61

Finance Receivables, Net - Allowance - Refer to Notes 1 and 4 to the financial statements

2 unchanged sentences

The receivables are generally secured by the underlying tools, diagnostics and/or equipment products financed.

At December 31, 2022, these loans totaled $1,793.9 million with an allowance of $60.9 million recorded against the receivables.

At December 30, 2023, these finance receivables totaled $1,946.1 million with an allowance of $67.8 million recorded against the receivables.

Determining the proper level of allowance requires management to exercise judgment about the timing, frequency and severity of credit losses expected to occur over the life of the contracts.

5 unchanged sentences

• Where appropriate, we assessed the reasonableness of, and evaluated support for, qualitative adjustments based on market conditions and/or portfolio performance metrics.

• We tested the completeness and accuracy and evaluated the relevance of the key data used as inputs in management’s allowance for credit losses calculation, including loan balances, recoveries, charge-offs, portfolio characteristics and other data.

• We tested the mathematical accuracy of the allowance for credit losses calculation with the assistance of our credit specialists and developed an expectation of the allowance for credit losses and compared it to the recorded balance.

• We tested the completeness and accuracy and evaluated the relevance of the key data used as inputs in management’s allowance for credit losses calculation, including finance receivables balances, recoveries, charge-offs, portfolio characteristics and other data.

• We tested the mathematical accuracy of the allowance for credit losses and developed an expectation of the allowance for credit losses and compared it to the recorded balance.

• We evaluated management’s ability to accurately forecast credit losses by performing a retrospective review, which involved comparing actual credit losses to historical estimates.

3 unchanged sentences

We have served as the Company’s auditor since 2002.

2022 ANNUAL REPORT 61

SNAP-ON INCORPORATED

Snap-on Incorporated – Consolidated Statements of Earnings

26 unchanged sentences

See Notes to Consolidated Financial Statements.

SNAP-ON INCORPORATED

2023 ANNUAL REPORT 63

Snap-on Incorporated – Consolidated Statements of Comprehensive Income

5 unchanged sentences

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

Unrealized cash flow hedges, net of tax:

Other comprehensive income before reclassifications

Reclassification of cash flow hedges to net earnings ( 1.6 ) ( 1.6 ) ( 1.6 )

12 unchanged sentences

See Notes to Consolidated Financial Statements.

2022 ANNUAL REPORT 63

SNAP-ON INCORPORATED

Snap-on Incorporated – Consolidated Balance Sheets

7 unchanged sentences

Inventories – net 1,005.9 1,033.1

Prepaid expenses and other assets 144.8 134.6

Prepaid expenses and other current assets 138.4 144.8

Total current assets 3,652.0 3,368.9

5 unchanged sentences

Goodwill 1,097.4 1,045.3

Other intangibles – net 275.6 301.7

Other intangible assets – net 268.9 275.6

Pension assets 130.5 70.6

Other assets 13.7 15.6

Other long-term assets 14.0 13.7

Total assets $ 7,544.9 $ 6,972.8

32 unchanged sentences

See Notes to Consolidated Financial Statements.

SNAP-ON INCORPORATED

2023 ANNUAL REPORT 65

Snap-on Incorporated – Consolidated Statements of Equity

8 unchanged sentences

Interests Total

Balance at December 28, 2019 $ 67.4 $ 379.1 $ 4,779.7 $ ( 507.9 ) $ ( 1,309.2 ) $ 21.7 $ 3,430.8

Impact of the Credit Loss Standard (ASU No.

2016-13) — — ( 6.1 ) — — — ( 6.1 )

Balance at December 29, 2019 67.4 379.1 4,773.6 ( 507.9 ) ( 1,309.2 ) 21.7 3,424.7

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 2021

10 unchanged sentences

— — 911.7 — — 22.2 933.9

Other comprehensive income — — — 21.9 — — 21.9

Other comprehensive loss — — — ( 184.4 ) — — ( 184.4 )

Cash dividends – $ 5.88 per share

4 unchanged sentences

Other — — ( 2.3 ) — — ( 21.9 ) ( 24.2 )

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

Balance at December 31, 2022 67.4 499.9 6,296.2 ( 528.3 ) ( 1,853.9 ) 22.2 4,503.5

Net earnings for 2023

— — 1,011.1 — — 23.5 1,034.6

Other comprehensive loss — — — ( 184.4 ) — — ( 184.4 )

Other comprehensive income — — — 78.8 — — 78.8

Cash dividends – $ 6.72 per share

6 unchanged sentences

See Notes to Consolidated Financial Statements.

2022 ANNUAL REPORT 65

SNAP-ON INCORPORATED

Snap-on Incorporated – Consolidated Statements of Cash Flows

4 unchanged sentences

Depreciation 72.2 71.5 75.6

Amortization of other intangibles 28.7 29.2 23.4

Amortization of other intangible assets 27.1 28.7 29.2

Provision for losses on finance receivables 57.2 37.7 32.1

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(Gain) loss on sales of assets ( 1.0 ) ( 3.1 ) 1.7

Settlement of treasury lock — — 1.4

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

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Inventories 23.3 ( 272.1 ) ( 75.4 )

Prepaid expenses and other assets ( 6.3 ) ( 10.7 ) 8.5

Prepaid expenses and other current assets 35.1 ( 6.3 ) ( 10.7 )

Accounts payable ( 48.1 ) 17.7 56.8

10 unchanged sentences

Financing activities:

Proceeds from issuance of long-term debt — — 489.9

Repayments of long-term debt — — ( 250.0 )

2 unchanged sentences

Purchases of treasury stock ( 294.7 ) ( 198.1 ) ( 431.3 )

Proceeds from stock purchase and option plans 55.0 162.4 55.8

Proceeds from stock purchase plan and stock option exercises 113.6 55.0 162.4

Other ( 34.5 ) ( 30.4 ) ( 27.4 )

8 unchanged sentences

See Notes to Consolidated Financial Statements.

SNAP-ON INCORPORATED

2023 ANNUAL REPORT 67

Notes to Consolidated Financial Statements

7 unchanged sentences

Snap-on’s fiscal year ends on the Saturday that is on or nearest to December 31.

The 2022 fiscal year ended on December 31, 2022 (“2022”) and contained 52 weeks of operating results.

The 2021 fiscal year ended on January 1, 2022 (“2021”) and contained 52 weeks of operating results.

The 2020 fiscal year ended on January 2, 2021 (“2020”) and contained 53 weeks of operating results, with the additional week occurring in the fourth quarter;

the impact of the additional week of operations was not material to Snap-on’s 2020 total revenues or net earnings.

The 2023 fiscal year ended on December 30, 2023 (“2023”), the 2022 fiscal year ended on December 31, 2022 (“2022”), and the 2021 fiscal year ended on January 1, 2022 (“2021”).

The 2023, 2022 and 2021 fiscal years each contained 52 weeks of operating results.

Use of estimates:

4 unchanged sentences

The carrying value of the company’s non-derivative financial instruments either approximates fair value, due to their short-term nature, or the amount disclosed for fair value is based upon a discounted cash flow analysis or quoted market values.

See Note 11 for further information on financial instruments.

See Note 10 for additional information on financial instruments.

Revenue recognition:

19 unchanged sentences

Except in circumstances where the company has concluded that a lessee’s financial condition has deteriorated, the other default covenants under Snap-on’s lease arrangements are objectively determinable.

See Notes 4 and 17 for further information on finance and contract receivables and lessor accounting.

See Notes 4 and 16 for additional information on finance and contract receivables and lessor accounting.

Research and engineering:

1 unchanged sentence

Research and engineering costs are included in “Operating expenses” on the accompanying Consolidated Statements of Earnings.

2022 ANNUAL REPORT 67

Notes to Consolidated Financial Statements (continued)

SNAP-ON INCORPORATED

Internally developed software:

2 unchanged sentences

Amortization of capitalized software development costs, which is included in “Cost of goods sold” on the accompanying Consolidated Statements of Earnings, was $ 10.5 million in 2023, $ 11.6 million in 2022 and $ 11.4 million in 2021.

Unamortized capitalized software development costs of $ 42.4 million as of 2022 year end and $ 43.6 million as of 2021 year end are included in “Other intangibles – net” on the accompanying Consolidated Balance Sheets.

Unamortized capitalized software development costs of $ 43.1 million as of 2023 year end and $ 42.4 million as of 2022 year end are included in “Other intangible assets – net” on the accompanying Consolidated Balance Sheets.

Internal-use software:

32 unchanged sentences

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

See Note 9 for further information on income taxes.

SNAP-ON INCORPORATED

See Note 8 for additional information on income taxes.

2023 ANNUAL REPORT 69

Notes to Consolidated Financial Statements (continued)

Per share data:

Basic earnings per share calculations were computed by dividing net earnings attributable to Snap‑on Incorporated by the corresponding weighted-average number of common shares outstanding for the period.

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

As of both December 31, 2022, and January 1, 2022, there were no awards outstanding that were anti-dilutive;

as of January 2, 2021, there were 2,207,411 awards outstanding that were anti-dilutive.

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

As of December 30, 2023, December 31, 2022, and January 1, 2022 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.

Snap-on had dilutive securities totaling 1,060,072 shares, 945,250 shares and 1,058,553 shares, as of the end of 2023, 2022 and 2021, respectively.

See Note 14 for further information on equity awards.

See Note 13 for additional information on equity awards.

Stock-based compensation:

6 unchanged sentences

As a result, if other assumptions had been used, the recorded stock-based compensation expense could have been materially different from that depicted in the financial statements.

See Note 14 for further information on stock-based compensation.

See Note 13 for additional information on stock-based compensation.

Snap-on may utilize derivative financial instruments, including foreign currency forward contracts, interest rate swap agreements, treasury lock agreements and prepaid equity forward agreements to manage its exposures to foreign currency exchange rate risks, interest rate risks, and market risk associated with the stock-based portion of its deferred compensation plans.

1 unchanged sentence

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

See Note 11 for further information on derivatives.

See Note 10 for additional information on derivatives.

Cash equivalents:

Snap-on considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Cash and cash equivalents consisted of investments in money market funds and bank deposits at December 31, 2022 and January 1, 2022.

Cash and cash equivalents consisted of investments in money market funds and bank deposits at December 30, 2023 and December 31, 2022.

Receivables and allowances for credit losses:

10 unchanged sentences

These factors may include the customer’s financial condition, past payment experience, and credit bureau and proprietary Snap-on credit model information, as well as the value of the underlying collateral.

2022 ANNUAL REPORT 69

Notes to Consolidated Financial Statements (continued)

SNAP-ON INCORPORATED

Management performs detailed reviews of its receivables on a monthly and/or quarterly basis to assess the adequacy of the allowances and to determine if any impairment has occurred.

14 unchanged sentences

Snap-on does not believe that its trade, finance or contract receivables represent significant concentrations of credit risk because of the diversified portfolio of individual customers and geographical areas.

See Note 4 for further information on receivables and allowances for credit losses.

See Note 4 for additional information on receivables and allowances for credit losses.

Other accrued liabilities:

2 unchanged sentences

Income taxes $ 35.3 $ 33.4

Accrued warranty 14.3 17.3

Operating lease liabilities 23.8 19.4

3 unchanged sentences

Accrued selling and promotion expense 37.2 37.7

Accrued restructuring expense 2.8 7.0

Other 202.4 207.2

Total other accrued liabilities $ 447.4 $ 436.4

Snap-on values its inventory at the lower of cost or market and adjusts for the value of inventory that is estimated to be excess, obsolete or otherwise unmarketable.

Snap-on values its inventory at the lower of cost or net realizable value and adjusts for the value of inventory that is estimated to be excess, obsolete or otherwise unmarketable.

Snap-on records allowances for excess and obsolete inventory based on historical and estimated future demand and market conditions.

3 unchanged sentences

Should actual product marketability and raw material fitness for use be affected by conditions that are different from management estimates, further adjustments to inventory allowances may be required.

SNAP-ON INCORPORATED

2023 ANNUAL REPORT 71

Notes to Consolidated Financial Statements (continued)

Snap-on adopted the “last-in, first-out” (“LIFO”) inventory valuation method in 1973 for its U.S.

2 unchanged sentences

manufacturing facilities (primarily hand tools and tool storage).

Since Snap-on began acquiring businesses in the 1990’s, the company has used the “first-in, first-out” (“FIFO”) inventory valuation methodology for acquisitions;

Since the 1990s, the company has used the “first-in, first-out” (“FIFO”) inventory valuation methodology for acquisitions;

the company does not adopt the LIFO inventory valuation methodology for new acquisitions.

See Note 5 for further information on inventories.

See Note 5 for additional information on inventories.

Property and equipment:

4 unchanged sentences

Long-lived assets, including operating lease right-of-use assets, are evaluated for impairment when events or circumstances indicate that the carrying amount of the long-lived asset may not be recoverable.

See Note 6 for further information on property and equipment.

See Note 6 for additional information on property and equipment.

Goodwill and other intangible assets:

2 unchanged sentences

Snap‑on evaluates the existence of goodwill and indefinite-lived intangible asset impairment on the basis of whether the assets are fully recoverable from projected, discounted cash flows of the related reportable unit or asset.

Intangible assets with finite lives are amortized over their estimated useful lives using straight-line and accelerated methods depending on the nature of the particular asset.

Intangible assets with finite lives are evaluated for impairment when events or circumstances indicate that the carrying amount of the intangible asset may not be recoverable.

See Note 7 for further information on goodwill and other intangible assets.

Intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method.

Intangible assets with finite lives are evaluated for impairment when events or ci rcumstances indicate that the carrying amount of the intangible asset may not be recoverable.

See Note 7 for additional information on goodwill and other intangible assets.

New accounting standards:

In March 2022, the FASB issued ASU No.

On January 1, 2023, the beginning of Snap-on’s 2023 fiscal year, the company adopted ASU No.

2022-02, Financial Instruments – Credit Losses (Topic 326):

1 unchanged sentence

This ASU also requires the disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases.

2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The adoption of this ASU did not have a significant impact on Snap-on’s Consolidated Financial Statements.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires the disclosure of additional segment information.

2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024;

this ASU allows for early adoption.

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

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

2023-09 is effective for annual periods beginning after December 15, 2024.

The guidance is to be applied on a prospective basis with the option to apply the standard retrospectively;

this ASU allows for early adoption.

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

Revenue Recognition

Snap-on recognizes revenue from the sale of tools, diagnostics, equipment, and related services based on when control of the product passes to the customer or the service is provided and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services.

SNAP-ON INCORPORATED

Revenue disaggregation

6 unchanged sentences

Total revenues $ 5,108.3 $ 4,842.5

Snap-on evaluates the performance of its operating segments based on segment revenues, including both external and intersegment net sales, and segment operating earnings.

Snap-on accounts for both intersegment sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments.

Snap-on evaluates the performance of its operating segments based on segment revenues and segment operating earnings.

The Snap-on Tools Group segment revenues include external net sales, while the Commercial & Industrial Group and the Repair Systems & Information Group segment revenues include both external and intersegment net sales.

Snap-on accounts for both intersegment net sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments.

Intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results.

2022 ANNUAL REPORT 71

Notes to Consolidated Financial Statements (continued)

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

22 unchanged sentences

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

SNAP-ON INCORPORATED

2023 ANNUAL REPORT 73

Notes to Consolidated Financial Statements (continued)

The following table represents external net sales disaggregated by customer type:

28 unchanged sentences

Through its financial services businesses, Snap‑on derives revenue from various financing programs designed to facilitate the sales of its products and support its franchise business.

2022 ANNUAL REPORT 73

Notes to Consolidated Financial Statements (continued)

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.

4 unchanged sentences

Contracts with customers are comprised of customer purchase orders, invoices and written contracts.

SNAP-ON INCORPORATED

For certain performance obligations related to software subscriptions, extended warranty and other subscription agreements that are settled over time, Snap-on has elected not to disclose the value of unsatisfied performance obligations for:

28 unchanged sentences

Estimated product returns are recorded as a reduction in reported revenues at the time of sale based upon historical product return experience and is adjusted for known trends to arrive at the amount of consideration that Snap-on expects to receive.

SNAP-ON INCORPORATED

Variable consideration is estimated at the most likely amount that is expected to be earned.

7 unchanged sentences

Snap-on does not typically provide customers with the right to a refund.

2023 ANNUAL REPORT 75

Notes to 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 $ 63.3 million and $ 63.8 million at December 31, 2022, and January 1, 2022, respectively.

The balance of total contract liabilities was $ 63.3 million at both December 30, 2023, and December 31, 2022.

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 Consolidated Balance Sheets.

In 2022, Snap-on recognized revenue of $ 55.0 million that was included in the contract liability balance at January 1, 2022, which was primarily from the amortization of software subscriptions, extended warranties and other subscription agreements.

The decrease in the total contract liabilities balance was primarily driven by the timing of cash payments received or due in advance of satisfying Snap-on’s performance obligations.

In 2023, Snap-on recognized revenue of $ 56.5 million that was included in the contract liability balance at December 31, 2022, which was primarily from the amortization of software subscriptions, extended warranties and other subscription agreements.

Franchise fee revenue, including nominal, non-refundable initial fees, is recognized upon the granting of a franchise, which is when the company has performed substantially all initial services required by the franchise agreement.

1 unchanged sentence

Franchise fee revenue in 2023, 2022 and 2021 totaled $ 18.7 million, $ 18.4 million and $ 17.3 million, respectively.

On November 20, 2023, Snap-on acquired certain assets of SAVTEQ, Inc.

(“SAVTEQ”) for a cash purchase price of $ 3.0 million.

SAVTEQ, based in Lexington, Kentucky, provides precise non-contact measuring capabilities.

In fiscal 2023, the company completed the purchase accounting valuations for the acquired net assets of SAVTEQ.

The $ 1.7 million excess of the purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Consolidated Balance Sheets.

The goodwill will be deductible for tax purposes.

On November 1, 2023, Snap-on acquired Mountz, Inc.

(“Mountz”) for a cash purchase price of $ 39.6 million.

Mountz, based in San Jose, California, is a leading developer, manufacturer and marketer of high-precision torque tools, including measurement, calibration and documentation products.

The company anticipates completing the purchase accounting for the acquired net assets of Mountz, including intangible assets, in the first half of 2024.

The presentation of Mountz in the accompanying Consolidated Financial Statements has been prepared on a preliminary basis and changes to allocations may occur as fair value estimates of the acquired net assets are determined.

On a preliminary basis, the $ 33.0 million excess of the purchase price over the net assets acquired was recorded in “Goodwill” on the accompanying Consolidated Balance Sheets.

The company does not expect that the goodwill will be deductible for tax purposes.

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).

15 unchanged sentences

The $ 118.2 million excess of the purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Consolidated Balance Sheets.

2022 ANNUAL REPORT 75

Notes to Consolidated Financial Statements (continued)

The following is a summary of the values of the assets acquired and liabilities assumed of Dealer-FX, including adjustments recorded as of December 31, 2022, as a result of new information obtained about facts and circumstances that existed as of the February 26, 2021 acquisition date:

Amounts as of

(Amounts in millions) February 26, 2021

Assets acquired:

Trade and other accounts receivable 8.0

Property and equipment 0.7

Deferred income tax assets 16.5

Goodwill 118.2

Other intangibles:

Customer relationships 28.4

Developed technology 14.8

Non-amortized trademarks 17.7

Other assets 0.8

Total assets acquired 205.2

Liabilities assumed:

Accounts payable 2.6

Accrued expenses 2.5

Total liabilities acquired 5.1

Net assets acquired $ 200.1

On September 28, 2020, Snap-on acquired substantially all of the assets of AutoCrib, Inc.

(“AutoCrib”) for a cash purchase price of $ 35.4 million.

AutoCrib, based in Tustin, California, designs, manufactures and markets asset and tool control solutions for a variety of aerospace, automotive, military, natural resources and general industry operations.

In fiscal 2021, the company completed the purchase accounting valuations for the acquired net assets of AutoCrib.

The $ 18.3 million excess of the purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Consolidated Balance Sheets.

On January 31, 2020, Snap-on acquired substantially all of the assets related to the TreadReader product line from Sigmavision Limited (“Sigmavision”) for a cash purchase price of $ 5.9 million.

Sigmavision designs and manufactures handheld devices and drive-over ramps that provide tire information for use in the automotive industry.

In fiscal 2020, the company completed the purchase accounting valuations for the acquired net assets of Sigmavision.

The $ 5.6 million excess of the purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Consolidated Balance Sheets.

For segment reporting purposes, the results of operations and assets of Dealer-FX and Sigmavision have been included in the Repair Systems & Information Group since the respective acquisition dates, and the results of operations and assets of AutoCrib Germany, Pradines and AutoCrib have been included in the Commercial & Industrial Group since the respective acquisition dates.

Pro forma financial information has not been presented for any of these acquisitions as the net effects, individually and collectively, were neither significant nor material to Snap-on’s results of operations or financial position.

See Note 7 for further information on goodwill and other intangible assets.

SNAP-ON INCORPORATED

For segment reporting purposes, the results of operations and assets of SAVTEQ and Dealer-FX have been included in the Repair Systems & Information Group since the respective acquisition dates, and the results of operations and assets of Mountz, AutoCrib Germany and Pradines have been included in the Commercial & Industrial Group since the respective acquisition dates.

See Note 7 for additional information on goodwill and other intangible assets.

Trade and other accounts receivable:

12 unchanged sentences

Currency translation

( 0.7 ) ( 0.9 )

End of year $ 34.9 $ 31.1

4 unchanged sentences

Interest income on finance and contract receivables is included in “Financial services revenue” on the accompanying Consolidated Statements of Earnings.

Snap-on’s finance receivables are comprised of extended-term payment contracts to both technicians and independent shop owners (i.e., franchisees’ customers) to enable them to purchase tools, diagnostics, and equipment products on an extended-term payment plan, with average payment terms of approximately four years .

Finance receivables are comprised of extended-term payment contracts to both technicians and independent shop owners (i.e., franchisees’ customers) to enable them to purchase tools, diagnostics, and equipment products on an extended-term payment plan, with average payment terms of approximately four years .

Contract receivables, with payment terms of up to 10 years, are comprised of extended-term payment contracts to a broad base of customers worldwide, including shop owners, both independents and national chains, for their purchase of tools, diagnostics, and equipment products, as well as extended-term contracts to franchisees to meet a number of financing needs, including working capital loans, loans to enable new franchisees to fund the purchase of the franchise and van leases, or the expansion of an existing franchise.

61 unchanged sentences

The company’s receivable portfolio is comprised of two portfolio segments, finance and contract receivables, which are the same segments used to estimate expected credit losses reported in the allowances for credit losses.

The amortized cost basis for finance and contract receivables is the amount originated adjusted for applicable accrued interest and net of deferred fees or costs, collection of cash, and write-offs.

The amortized cost basis for finance and contract receivables is the amount originated adjusted for applicable accrued interest and net of deferred fees or costs, collections, and write-offs.

The company monitors and assesses credit risk based on the characteristics of each portfolio segment.

1 unchanged sentence

For finance and contract receivables, Snap-on assesses quantitative and qualitative factors through the use of credit quality indicators consisting primarily of collection experience and related internal metrics.

For finance and contract receivables, Snap-on assesses quantitative and qualitative factors through the use of credit quality indicators consisting primarily of delinquency classification, collection experience and credit exposure by customer.

Delinquency is the primary indicator of credit quality for finance and contract receivables.

1 unchanged sentence

These reviews allow for the formulation of collection strategies and potential collection policy modifications in response to changing risk profiles in the finance and contract receivable portfolios.

The other internal metrics include credit exposure by customer and delinquency classification to further monitor changing risk profiles.

The company maintains a system that aggregates credit exposure and provides delinquency data by days past due aging categories.

The company also maintains a system that aggregates credit exposure and provides delinquency data by days past due aging categories.

A receivable 30 days or more past due is considered delinquent.

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 2022 year end is as follows:

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

The amortized cost basis of finance and contract receivables by origination year as of 2023 year end and charge-offs recorded in 2023 by origination year, are as follows:

(Amounts in millions) 2023 2022 2021 2020 2019 Prior Total

3 unchanged sentences

Total Finance receivables $ 1,321.8 $ 393.4 $ 145.6 $ 64.5 $ 17.1 $ 3.7 $ 1,946.1

Finance receivables charge-offs $ 6.3 $ 25.3 $ 13.9 $ 7.6 $ 3.2 $ 2.5 $ 58.8

Contract receivables:

2 unchanged sentences

Total Contract receivables $ 195.7 $ 127.5 $ 87.7 $ 58.8 $ 35.6 $ 30.1 $ 535.4

Contract receivables charge-offs $ 0.1 $ 0.4 $ 0.9 $ 0.5 $ 0.1 $ 0.3 $ 2.3

SNAP-ON INCORPORATED

17 unchanged sentences

The WARM methodology calculates the average annual write-off rate and applies it to the remaining term of the receivables.

The WARM methodology is used since the contract receivables have limited loss experience over generally longer terms and, therefore, the predictive loss patterns are more difficult to estimate.

The WARM methodology is used since contract receivables have limited loss experience over generally longer terms and, therefore, the predictive loss patterns are more difficult to estimate.

The company performed a correlation analysis to compare historical losses to many economic factors.

17 unchanged sentences

End of year $ 67.8 $ 6.7 $ 60.9 $ 6.6

2023 ANNUAL REPORT 81

Notes to Consolidated Financial Statements (continued)

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

3 unchanged sentences

Removal from delinquent status occurs when the cumulative amount of monthly contractual payments then due have been received by the company.

2022 ANNUAL REPORT 81

Notes to Consolidated Financial Statements (continued)

It is the general practice of Snap-on’s financial services business not to engage in contract or loan modifications.

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 2022 and 2021 year end were immaterial to both the financial services portfolio and the company’s results of operations and financial position.

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

The amount and number of finance and contract receivable modifications as of 2023 and 2022 year end were immaterial to both the financial services portfolio and the company’s results of operations and financial position.

The aging of finance and contract receivables as of 2023 and 2022 year end is as follows:

27 unchanged sentences

Contract receivables 3.3 3.3

SNAP-ON INCORPORATED

Inventories by major classification as of 2023 and 2022 year end are as follows:

6 unchanged sentences

Total inventories – net $ 1,005.9 $ 1,033.1

SNAP-ON INCORPORATED

Inventories accounted for using the FIFO method approximated 59 % and 61 % of total inventories as of 2023 and 2022 year end, respectively.

17 unchanged sentences

Depreciation expense was $ 72.2 million, $ 71.5 million and $ 75.6 million in 2023, 2022 and 2021, respectively.

2023 ANNUAL REPORT 83

Notes to Consolidated Financial Statements (continued)

Goodwill and Other Intangible Assets

12 unchanged sentences

Balance as of 2023 year end $ 346.6 $ 12.4 $ 738.4 $ 1,097.4

Goodwill of $ 1,045.3 million as of 2022 year end 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.

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

Goodwill of $ 1,097.4 million as of 2023 year end included $ 33.0 million, on a preliminary basis, from the acquisition of Mountz and $ 1.7 million from the acquisition of SAVTEQ.

The goodwill from Mountz and SAVTEQ is included in the Commercial & Industrial Group and Repair Systems & Information Group, respectively.

The purchase accounting valuations for the acquired net assets of AutoCrib Germany, Dealer-FX and Pradines were completed in 2022.

1 unchanged sentence

The purchase accounting valuations for the acquired net assets of Pradines resulted 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 AutoCrib Germany and Pradines is included in the Commercial & Industrial Group.

See Note 3 for additional information on acquisitions.

2022 ANNUAL REPORT 83

Notes to Consolidated Financial Statements (continued)

Additional disclosures related to other intangible assets as of 2023 and 2022 year end are as follows:

13 unchanged sentences

Total other intangible assets $ 642.6 $ ( 373.7 ) $ 268.9 $ 621.6 $ ( 346.0 ) $ 275.6

The gross carrying value of patents as of year end 2023 includes $ 1.1 million related to the SAVTEQ 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 long-term deterioration in macroeconomic, industry and market conditions, the loss of key customers, changes in technology or markets, changes in key personnel or litigation, a sustained decrease in share price and/or other events.

As of 2023 year end, the company had no accumulated impairment losses.

SNAP-ON INCORPORATED

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

2 unchanged sentences

Internally developed software 6

The weighted-average amortization period for all amortizable intangibles on a combined basis is 12 years.

The weighted-average amortization period for all amortizable intangible assets on a combined basis is 12 years.

Intangible asset renewal costs are expensed as incurred.

1 unchanged sentence

Based on current levels of amortizable intangible assets and estimated weighted-average useful lives, estimated annual amortization expense is expected to be $ 22.6 million in 2024, $ 16.3 million in 2025, $ 12.3 million in 2026, $ 10.6 million in 2027, and $ 9.3 million in 2028.

SNAP-ON INCORPORATED

Exit and Disposal Activities

Snap-on did not record any costs for exit and disposal activities during fiscal 2022 or fiscal 2021.

Snap-on’s exit and disposal accrual activity for 2022 and 2021 are as follows:

Balance at Balance at Balance at

(Amounts in millions) 2020

Provision in 2021

Usage in 2021

Provision in 2022

Usage in 2022

Severance costs:

Commercial & Industrial Group $ 5.8 $ — $ ( 1.5 ) $ 4.3 $ — $ ( 2.7 ) $ 1.6

Snap-on Tools Group 0.4 — ( 0.1 ) 0.3 — ( 0.2 ) 0.1

Repair System & Information Group 3.8 — ( 1.4 ) 2.4 — ( 1.3 ) 1.1

Total $ 10.0 $ — $ ( 3.0 ) $ 7.0 $ — $ ( 4.2 ) $ 2.8

As of December 31, 2022, the company expects that approximately $ 1.9 million of the $ 2.8 million exit and disposal accrual will be utilized in 2023, 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.

The estimated costs for the exit and disposal activities were based on management’s best business judgement under prevailing circumstances.

The source of earnings before income taxes and equity earnings consisted of the following:

96 unchanged sentences

3.25 % unsecured notes due 2027

$ 300.0 $ 300.0

4.10 % unsecured notes due 2048

4 unchanged sentences

Total long-term debt $ 1,184.6 $ 1,183.8

* Includes unamortized debt issuance costs.

Snap-on’s long-term debt and notes payable have no annual maturities in the next four years and $ 300.0 million matures in 2027.

* Includes unamortized debt issuance costs and issuance discounts.

Snap-on’s long-term debt and notes payable maturities in the next five years include a $ 300.0 million note that matures in 2027.

Average notes payable outstanding were $ 17.5 million and $ 18.6 million in 2023 and 2022, respectively.

1 unchanged sentence

At 2023 year end, the weighted-average rate on outstanding notes payable of 11.1 % compared with 10.9 % in 2022.

The 2022 year-end rate increased primarily due to higher rates on local borrowings in emerging markets.

On April 27, 2020, Snap-on sold, at a discount, $ 500 million of unsecured 3.10 % notes that mature on May 1, 2050 (the “2050 Notes”).

Interest on the 2050 Notes accrues at a rate of 3.10 % and is paid semi-annually.

Snap-on used the $ 489.9 million net proceeds from the sale of the 2050 Notes, reflecting $ 4.4 million of transaction costs, for general corporate purposes, which included working capital, capital expenditures and acquisitions.

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

no amounts were borrowed or outstanding under the Credit Facility during the year ended and as of December 31, 2022 or January 1, 2022.

On September 12, 2023, Snap-on entered into a $ 900 million multicurrency revolving credit facility that terminates on September 12, 2028 (the “Credit Facility”), which amended and restated in its entirety Snap-on’s previous $ 800 million multicurrency revolving credit facility that was set to terminate on September 16, 2024.

The Credit Facility contains an accordion feature that, subject to certain customary conditions, may allow the maximum commitment to be increased by up to $ 450 million with the approval of the lenders providing additional commitments.

No amounts were borrowed or outstanding under either Credit Facility during the years ended and as of December 30, 2023 or December 31, 2022.

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

6 unchanged sentences

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.

There was no commercial paper issued or outstanding during the year ended and as of December 31, 2022 or January 1, 2022.

There was no commercial paper issued or outstanding during the years ended and as of December 30, 2023 or December 31, 2022.

Financial Instruments

3 unchanged sentences

Gains or losses on derivative instruments in accumulated other comprehensive income (loss) (“Accumulated OCI”) are reclassified to earnings in the period in which earnings are affected by the underlying hedged item.

SNAP-ON INCORPORATED

The criteria used to determine if hedge accounting treatment is appropriate are:

4 unchanged sentences

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

SNAP-ON INCORPORATED

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.

11 unchanged sentences

See Note 17 for additional information on Other income (expense) – net.

As of 2023 year end, Snap-on had $ 133.3 million of net foreign currency forward buy contracts outstanding comprised of buy contracts including $ 101.2 million in British pounds, $ 67.2 million in Swedish kronor, $ 44.6 million in Hong Kong dollars, $ 27.2 million in Chinese renminbi, $ 24.9 million in Australian dollars, $ 17.0 million in Singapore dollars, $ 6.4 million in Norwegian kroner, $ 6.1 million in Danish kroner, and $ 5.1 million in other currencies, and sell contracts including $ 116.9 million in Canadian dollars, $ 17.6 million in euros, $ 15.5 million in Hungarian forints, $ 10.1 million in Indian rupees, and $ 6.3 million in other currencies.

As of 2022 year end, Snap-on had $ 92.7 million of net foreign currency forward sell contracts outstanding comprised of sell contracts including $ 250.0 million in Canadian dollars, $ 39.2 million in euros, $ 8.5 million in Hungarian forints, $ 5.4 million in Indian rupees, and $ 3.9 million in other currencies, and buy contracts comprised of $ 72.0 million in British pounds, $ 41.3 million in Swedish kronor, $ 36.5 million in Hong Kong dollars, $ 26.8 million in Chinese renminbi, $ 16.0 million in Singapore dollars, $ 6.7 million in Australian dollars, $ 5.9 million in Norwegian kroner, $ 4.7 million in Danish kroner, and $ 4.4 million in other currencies.

As of 2021 year end, Snap-on had $ 81.3 million of net foreign currency forward sell contracts outstanding comprised of sell contracts including $ 290.0 million in Canadian dollars, $ 10.3 million in euros, $ 8.1 million in Indian rupees, $ 6.3 million in Hungarian forints, and $ 4.5 million in other currencies, and buy contracts comprised of $ 79.6 million in British pounds, $ 48.4 million in Swedish kronor, $ 31.0 million in Chinese renminbi, $ 30.0 million in Hong Kong dollars, $ 14.3 million in Australian dollars, $ 14.2 million in Singapore dollars, $ 7.2 million in Norwegian kroner, $ 4.9 million in Danish kroner, and $ 8.3 million in other currencies.

Interest rate risk management:

13 unchanged sentences

See Note 17 for additional information on Other income (expense) – net.

2022 ANNUAL REPORT 89

Notes to Consolidated Financial Statements (continued)

Stock-based deferred compensation risk management:

3 unchanged sentences

As of 2023 and 2022 year end, Snap-on had equity forwards in place intended to manage market risk with respect to 68,900 shares and 64,900 shares, respectively, of Snap‑on common stock associated with its deferred compensation plans.

2023 ANNUAL REPORT 89

Notes to Consolidated Financial Statements (continued)

Counterparty risk:

14 unchanged sentences

Derivatives not designated as hedging instruments:

Foreign currency forwards Prepaid expenses and other assets $ 18.5 $ — $ 10.2 $ —

Foreign currency forwards Prepaid expenses and other current assets $ 17.9 $ — $ 18.5 $ —

Foreign currency forwards Other accrued liabilities — 11.9 — 16.9

Equity forwards Prepaid expenses and other assets 14.8 — 15.5 —

Equity forwards Prepaid expenses and other current assets 19.9 — 14.8 —

Total derivative instruments $ 37.8 $ 11.9 $ 33.3 $ 16.9

1 unchanged sentence

Level 2 fair value measurements for derivative assets and liabilities are measured using quoted prices in active markets for similar assets and liabilities.

Interest rate swaps are valued based on the six-month LIBOR swap rate for similar instruments.

Foreign currency forwards are valued based on exchange rates quoted by domestic and foreign banks for similar instruments.

1 unchanged sentence

The company did not have any derivative assets or liabilities measured at Level 1 or Level 3, nor did it implement any changes in its valuation techniques in 2023 and 2022, respectively.

The effect of derivative instruments designated as cash flow hedges as included in the Accumulated OCI on the Consolidated Balance Sheets is as follows:

Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative Instruments

(Amounts in millions) 2022 2021 2020

Derivatives in Hedging Relationships:

Treasury locks $ — $ — $ 1.4

SNAP-ON INCORPORATED

2 unchanged sentences

2023 2022 2021

(Amounts in millions) Interest expense Other income (expense) - net Interest expense Other income (expense) - net Interest expense Other income (expense) - net

(Amounts in millions) Interest expense Other income (expense) – net

Interest expense Other income (expense) – net

Total amounts of income and expense presented in the Consolidated Statements of Earnings:

46 unchanged sentences

• Fair value of long-term debt is estimated, using Level 2 fair value measurements, based on quoted market values of Snap-on’s publicly traded senior debt.

The carrying value of long-term debt includes unamortized debt issuance costs.

The carrying value of long-term debt includes unamortized debt issuance costs and issuance discounts.

The fair value of notes payable approximates such instruments’ carrying value due to their short-term nature.

15 unchanged sentences

Benefits paid ( 79.2 ) ( 77.7 )

Actuarial gain ( 382.4 ) ( 30.2 )

Actuarial (gain) loss 24.0 ( 382.4 )

Foreign currency impact 8.0 ( 23.7 )

9 unchanged sentences

Funded (unfunded) status at end of year $ 42.0 $ ( 12.9 )

The decrease in the defined benefit pension plans benefit obligations in 2022 was primarily due to an increase in the discount rate in 2022 as compared to 2021.

The increase in the defined benefit pension plans benefit obligations in 2023 was primarily due to a decrease in the discount rate in 2023 as compared to 2022.

Amounts recognized in the Consolidated Balance Sheets as of 2023 and 2022 year end are as follows:

14 unchanged sentences

The accumulated benefit obligation for Snap-on’s pension plans as of 2023 and 2022 year end was $ 1,239.0 million and $ 1,201.8 million, respectively.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for Snap-on’s pension plans as of 2022 and 2021 year end are as follows:

The accumulated benefit obligation, projected benefit obligation and fair value of plan assets for Snap-on’s pension plans as of 2023 and 2022 year end are as follows:

(Amounts in millions) 2023 2022

5 unchanged sentences

Fair value of plan assets 18.4 15.1

The components of net periodic benefit cost and changes recognized in “Other comprehensive income (loss)” (“OCI”) are as follows:

The components of net periodic benefit cost (credit) and changes recognized in “Other comprehensive income (loss)” (“OCI”) are as follows:

(Amounts in millions) 2023 2022 2021

Net periodic benefit cost:

Net periodic benefit cost (credit):

Service cost $ 18.8 $ 26.5 $ 28.8

6 unchanged sentences

Net (gain) loss $ ( 19.9 ) $ 59.6 $ ( 92.8 )

Prior service cost (credit) ( 0.1 ) ( 0.1 ) 0.1

Prior service credit — ( 0.1 ) ( 0.1 )

Total recognized in OCI $ ( 19.9 ) $ 59.5 $ ( 92.9 )

The components of net periodic pension cost, other than the service cost component, are included in “Other income (expense) - net” on the accompanying Consolidated Statements of Earnings.

The components of net periodic pension cost (credit), other than the service cost component, are included in “Other income (expense) – net” on the accompanying Consolidated Statements of Earnings.

See Note 17 for additional information on Other income (expense) – net.

13 unchanged sentences

The objective of Snap-on’s discount rate assumption is to reflect the rate at which the pension benefits could be effectively settled.

In making this determination, the company takes into account the timing and amount of benefits that would be available under the plans.

The domestic discount rate as of 2023 and 2022 year end was selected based on a cash flow matching methodology developed by the company’s outside actuaries that incorporates a review of current economic conditions.

This methodology matches the plans’ yearly projected cash flows for benefits and service costs to those of hypothetical bond portfolios using high-quality, AA rated or better, corporate bonds from either Moody’s Investors Service or Standard & Poor’s credit rating agencies available at the measurement date.

The weighted-average discount rate for Snap-on’s domestic pension plans of 5.5 % represents the single rate that produces the same present value of cash flows as the estimated benefit plan payments.

This technique calculates bond portfolios that produce adequate cash flows to pay the plans’ projected yearly benefits and then selects the portfolio with the highest yield and uses that yield as the recommended discount rate.The weighted-average discount rate for Snap-on’s domestic pension plans of 5.5 % represents the single rate that produces the same present value of cash flows as the estimated benefit plan payments.

Lowering Snap-on’s domestic discount rate assumption by 50 basis points (100 basis points (“bps”) equals 1.0 percent) would have increased Snap-on’s 2023 domestic pension expense and projected benefit obligation by approximately $ 1.5 million and $ 48.1 million, respectively.

64 unchanged sentences

72.9 — — 72.9

39.2 — — 39.2

Commingled funds – domestic

3 unchanged sentences

Private equity partnerships

— — 11.0 11.0

Debt securities:

40 unchanged sentences

Debt securities* and cash and cash equivalents 59 % 58 % 49 %

Insurance contracts and hedge funds 11 % 11 % 12 %

Insurance contracts 12 % 12 % 11 %

Total 100 % 100 % 100 %

33 unchanged sentences

Postretirement Plans

Snap-on provides health care benefits for certain retired U.S.

For comprehensive major medical plans since 1989, benefits are paid based on deductibles and percentages of covered expenses.

Plan provisions allow for benefit and coverage changes.

Most retirees are required to pay the entire cost of the coverage, but Snap-on may elect to subsidize the cost of coverage under certain circumstances.

Additionally, certain eligible retirees have been provided with an account for the reimbursement of qualifying medical expenses during retirement.

Certain eligible U.S.

retirees have been provided with an account for the reimbursement of qualifying medical expenses during retirement.

Upon achieving specific age and service requirements, certain active associates are eligible for this account upon retirement from the company.

Employees retiring prior to 1989 were eligible for retiree medical coverage upon reaching early retirement age, with no retiree contributions required.

Benefits are paid based on deductibles and percentages of covered expenses and take into consideration payments made by Medicare and other insurance coverage.

Snap-on maintains other health care benefit plans for certain retired U.S.

Snap-on has a Voluntary Employees Beneficiary Association (“VEBA”) trust for the funding of existing postretirement health care benefits for certain union retirees in the United States;

33 unchanged sentences

Expected return on plan assets ( 0.6 ) ( 0.6 ) ( 0.6 )

Amortization of unrecognized gain ( 1.1 ) — —

Net periodic benefit cost $ 0.2 $ 0.6 $ 0.5

14 unchanged sentences

2029-2033 16.8

SNAP-ON INCORPORATED

The objective of the VEBA trust is to achieve net of expense returns that meet or exceed the 5.8 % long-term return on plan assets assumption used for reporting purposes.

1 unchanged sentence

Since asset allocation is a key determinant of expected investment returns, assets are periodically rebalanced to the targeted allocation to correct significant deviations from the asset allocation policy that are caused by market fluctuations and cash flow.

SNAP-ON INCORPORATED

The basis for determining the overall expected long-term return on plan assets assumption is a nominal returns forecasting method.

52 unchanged sentences

Net stock-based compensation expense was $ 44.7 million in 2023, $ 34.0 million in 2022 and $ 41.4 million in 2021.

Cash received from stock purchase and option plan exercises was $ 55.0 million in 2022, $ 162.4 million in 2021 and $ 55.8 million in 2020.

Cash received from stock purchase plan and stock option exercises was $ 113.6 million in 2023, $ 55.0 million in 2022 and $ 162.4 million in 2021.

The tax benefit realized from both the exercise and vesting of share-based payment arrangements was $ 16.9 million in 2023, $ 10.7 million in 2022 and $ 18.2 million in 2021.

3 unchanged sentences

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model.

The company uses historical data regarding stock option exercise and forfeiture behaviors for different participating groups to estimate the period of time that options granted are expected to be outstanding.

Expected volatility is based on the historical volatility of the company’s stock for the length of time corresponding to the expected term of the option.

The company uses historical data regarding stock option exercise and forfeiture behaviors for different participating groups to estimate the period of time that stock options granted are expected to be outstanding.

Expected volatility is based on the historical volatility of the company’s stock for the length of time corresponding to the expected term of the stock option.

The expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock as of the date of grant.

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

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

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

SNAP-ON INCORPORATED

1 unchanged sentence

2023 2022 2021

Expected term of option (in years)

Expected term of stock option (in years)

4.89 5.14 5.33

13 unchanged sentences

* Weighted-average

The weighted-average grant date fair value of options granted was $ 34.35 in 2022, $ 26.19 in 2021 and $ 22.95 in 2020.

The intrinsic value of options exercised was $ 37.5 million in 2022, $ 76.1 million in 2021 and $ 26.0 million in 2020.

The weighted-average grant date fair value of stock options granted was $ 51.09 in 2023, $ 34.35 in 2022 and $ 26.19 in 2021.

The intrinsic value of stock options exercised was $ 74.3 million in 2023, $ 37.5 million in 2022 and $ 76.1 million in 2021.

The fair value of stock options vested was $ 9.1 million in 2023, $ 10.5 million in 2022 and $ 12.5 million in 2021.

8 unchanged sentences

The weighted-average grant date fair value of PSUs granted during 2023, 2022 and 2021, was $ 249.26 , $ 211.67 and $ 183.13 , respectively.

Earned PSUs totaled 61,839 shares as of the 2022 year end and 46,343 as of the 2021 year end.

There were no earned PSUs as of the 2020 year end.

Earned PSUs as of year end 2023, 2022, and 2021 totaled 137,096 shares, 61,839 shares and 46,343 shares, respectively.

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”).

15 unchanged sentences

Restricted stock units:

Time-based RSUs are earned and expensed using the fair value of the award over the contractual term of three years .

Vesting of the time-based RSUs is dependent upon continued employment for the 3-year cliff vesting period.

Prior to 2021, the company granted performance-based RSUs with a one-year performance period followed by a two-year cliff vesting schedule.

RSUs are earned and expensed using the fair value of the award over a contractual term of three years .

Vesting of the RSUs is dependent upon continued employment for the 3-year cliff vesting period.

The fair value of RSUs is calculated using the market value of a share of Snap-on’s common stock on the date of grant and assumed forfeitures based on recent historical experience;

1 unchanged sentence

The weighted-average grant date fair value of RSUs granted during 2023, 2022 and 2021, was $ 249.26 , $ 211.67 and $ 189.89 , respectively.

In fiscal 2022, 28,050 time-based RSUs were granted;

assuming continued employment, these RSUs will vest at the end of the 3-year cliff vesting period.

In fiscal 2021, 32,265 time-based RSUs were granted;

assuming continued employment, these RSUs will vest at the end of the 3-year cliff vesting period.

In fiscal 2020, performance-based RSUs were granted, but based on the company’s 2020 performance, none of the RSUs granted were earned.

Changes to the company’s non-vested RSUs in 2023 are as follows:

54 unchanged sentences

The intrinsic value of cash-settled SARs exercised was $ 0.4 million in 2023, $ 0.6 million in 2022 and $ 0.6 million in 2021.

The fair value of cash-settled SARs vested during 2022, 2021 and 2020 was $ 0.1 million, $ 0.1 million and zero , respectively.

The fair value of cash-settled SARs vested during 2023, 2022 and 2021 was $ 0.1 million, $ 0.1 million and $ 0.1 million, respectively.

2023 ANNUAL REPORT 105

23 unchanged sentences

For 2023, 2022 and 2021, issuances under this plan totaled 27,225 shares, 18,452 shares and 82,286 shares, respectively.

As of 2022 year end, shares reserved for issuance under this plan totaled 578,823 shares and Snap-on held participant contributions of approximately $ 2.8 million.

As of 2023 year end, 551,598 shares were reserved for issuance under this plan and Snap-on held participant contributions of approximately $ 2.2 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.

5 unchanged sentences

For 2023, 2022 and 2021, issuances under this plan totaled 46,510 shares, 44,937 shares and 143,388 shares, respectively.

As of 2022 year end, shares reserved for issuance under this plan totaled 225,225 shares and Snap-on held participant contributions of approximately $ 6.3 million.

As of 2023 year end, 178,715 shares were reserved for issuance under this plan and Snap-on held participant contributions of approximately $ 7.3 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.

8 unchanged sentences

Cash dividends per share in 2023, 2022 and 2021 were $ 6.72 , $ 5.88 and $ 5.11 , respectively.

On February 9, 2023, the company’s Board declared a quarterly dividend of $ 1.62 per share, payable on March 10, 2023, to shareholders of record on February 23, 2023.

On February 15, 2024, the company’s Board declared a quarterly dividend of $ 1.86 per share, payable o n March 11, 2024, to shareholders of record on February 26, 2024.

Commitments and Contingencies

54 unchanged sentences

Property and equipment – gross

$ 19.1 $ 19.4

Accumulated depreciation and amortization ( 16.8 ) ( 16.4 )

22 unchanged sentences

2026 15.9 0.3

2027 11.5 0.2

2029 and thereafter 3.7 —

3 unchanged sentences

In 2023, Snap-on did not have any significant additional operating or finance leases that have not yet commenced.

2022 ANNUAL REPORT 109

Notes to Consolidated Financial Statements (continued)

Lessor accounting:

11 unchanged sentences

In 2023 and 2022, contract receivables have future minimum lease payments, including unguaranteed residual value, of $ 315.7 million and $ 296.7 million, respectively, and unearned finance charges of $ 56.2 million and $ 49.8 million, respectively.

2023 ANNUAL REPORT 109

Notes to Consolidated Financial Statements (continued)

Future minimum lease payments as of December 30, 2023 are as follows:

4 unchanged sentences

Net investment in leases $ 281.9

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

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

Other Income (Expense) – Net

8 unchanged sentences

Total other income (expense) – net $ 67.5 $ 42.5 $ 16.5

SNAP-ON INCORPORATED

Accumulated Other Comprehensive Income (Loss)

4 unchanged sentences

Balance at beginning of 2022 $ ( 145.1 ) $ 8.9 $ ( 207.7 ) $ ( 343.9 )

Other comprehensive income (loss) before reclassifications ( 69.4 ) — 66.5 ( 2.9 )

Amounts reclassified from Accumulated OCI ( 1.0 ) ( 1.6 ) 27.4 24.8

Net other comprehensive income (loss) ( 70.4 ) ( 1.6 ) 93.9 21.9

Balance as of 2021 year end $ ( 145.1 ) $ 8.9 $ ( 207.7 ) $ ( 343.9 )

Other comprehensive loss before reclassifications ( 127.4 ) — ( 69.0 ) ( 196.4 )

2 unchanged sentences

Balance as of 2022 year end $ ( 272.5 ) $ 7.3 $ ( 263.1 ) $ ( 528.3 )

Other comprehensive income before reclassifications 60.7 — 19.3 80.0

Amounts reclassified from Accumulated OCI — ( 1.6 ) 0.4 ( 1.2 )

Net other comprehensive income (loss) 60.7 ( 1.6 ) 19.7 78.8

Balance as of 2023 year end $ ( 211.8 ) $ 5.7 $ ( 243.4 ) $ ( 449.5 )

SNAP-ON INCORPORATED

The reclassifications out of Accumulated OCI in 2023 and 2022 are as follows:

2 unchanged sentences

(Amounts in millions) 2023 2022

Foreign currency loss from sale of equity interest:

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

Income tax expense — — Income tax expense

Net of tax — 1.0

Gains on cash flow hedges:

8 unchanged sentences

* These Accumulated OCI components are included in the computation of net periodic pension and postretirement health care costs;

see Note 12 and Note 13 for further information.

see Note 11 and Note 12 for additional information.

Snap-on’s business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance.

5 unchanged sentences

The Commercial & Industrial Group consists of business operations serving a broad range of industrial and commercial customers worldwide, including customers in the aerospace, natural resources, government and military, power generation, transportation and technical education market segments (collectively, “critical industries”), primarily through direct and distributor channels.

The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians through the company’s multi-national mobile tool distribution channel.

The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians through the company’s multinational mobile tool distribution channel.

The Repair Systems & Information Group consists of business operations serving other professional vehicle repair customers worldwide, primarily owners and managers of independent repair shops and OEM dealerships, through direct and distributor channels.

Financial Services consists of the business operations of Snap-on’s finance subsidiaries.

2022 ANNUAL REPORT 111

Notes to Consolidated Financial Statements (continued)

Snap-on evaluates the performance of its operating segments based on segment revenues, including both external and intersegment net sales, and segment operating earnings.

Snap-on accounts for intersegment sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments.

Snap-on evaluates the performance of its operating segments based on segment revenues and segment operating earnings.

Snap-on accounts for intersegment net sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments.

Identifiable assets by segment are those assets used in the respective reportable segment’s operations.

2 unchanged sentences

Snap-on does not have any single customer or government that represents 10% or more of its revenues in any of the indicated periods.

2023 ANNUAL REPORT 111

Notes to Consolidated Financial Statements (continued)

Financial Data by Segment:

135 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 9A. Controls and Procedures