What changed in this filing

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Item 1. Financial Statements

2024-04-18 compared with 2023-10-19 · 249 added, 356 removed, 783 unchanged (44% of the section changed)

3 unchanged sentences

(Amounts in millions, except per share data)

Three Months Ended Nine Months Ended

September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Three Months Ended

March 30, 2024 April 1, 2023

Net sales $ 1,182.3 $ 1,183.0

26 unchanged sentences

(Amounts in millions)

Three Months Ended Nine Months Ended

September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Three Months Ended

March 30, 2024 April 1, 2023

Comprehensive income (loss):

2 unchanged sentences

Foreign currency translation ( 44.8 ) 18.1

Unrealized cash flow hedges, net of tax:

Reclassification of cash flow hedges to net earnings ( 0.4 ) ( 0.4 ) ( 1.2 ) ( 1.2 )

Reclassification of cash flow hedges to net earnings, net of tax ( 0.4 ) ( 0.4 )

Defined benefit pension and postretirement plans:

Amortization of net unrecognized losses

0.1 4.6 0.2 13.8

Income tax benefit

— ( 1.2 ) — ( 3.4 )

0.1 3.4 0.2 10.4

Total comprehensive income 225.8 272.0

7 unchanged sentences

(Amounts in millions, except share data)

September 30,

2024 December 30, 2023

5 unchanged sentences

Inventories – net 970.5 1,005.9

Prepaid expenses and other assets 118.9 144.8

Prepaid expenses and other current assets 135.6 138.4

Total current assets 3,776.1 3,652.0

4 unchanged sentences

Property and equipment – gross 1,568.2 1,570.4

Accumulated depreciation and amortization ( 1,044.4 ) ( 1,024.0 )

Accumulated depreciation ( 1,033.5 ) ( 1,031.1 )

Property and equipment – net 534.7 539.3

6 unchanged sentences

Pension assets 130.4 130.5

Other assets 12.8 13.7

Other long-term assets 19.6 14.0

Total assets $ 7,666.8 $ 7,544.9

3 unchanged sentences

(Amounts in millions, except share data)

September 30,

2024 December 30, 2023

35 unchanged sentences

(Amounts in millions, except share data)

The following summarizes the changes in total equity for the three month period ended September 30, 2023:

Shareholders’ Equity Attributable to Snap-on Incorporated

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Loss Treasury

Stock Noncontrolling

Interests Total

Balance at July 1, 2023 $ 67.5 $ 521.1 $ 6,635.6 $ ( 510.7 ) $ ( 1,956.4 ) $ 22.2 $ 4,779.3

Net earnings for the three months ended September 30, 2023

— — 243.1 — — 6.0 249.1

Other comprehensive loss — — — ( 52.6 ) — — ( 52.6 )

Cash dividends – $ 1.62 per share

— — ( 85.6 ) — — — ( 85.6 )

Stock compensation plans — 10.6 — — 10.2 — 20.8

Share repurchases – 194,000 shares

— — — — ( 51.8 ) — ( 51.8 )

Other — — ( 0.8 ) — — ( 6.0 ) ( 6.8 )

Balance at September 30, 2023 $ 67.5 $ 531.7 $ 6,792.3 $ ( 563.3 ) $ ( 1,998.0 ) $ 22.2 $ 4,852.4

The following summarizes the changes in total equity for the nine month period ended September 30, 2023:

The following summarizes the changes in total equity for the three month period ended March 30, 2024:

Shareholders’ Equity Attributable to Snap-on Incorporated

7 unchanged sentences

Balance at December 30, 2023 $ 67.5 $ 545.5 $ 6,948.5 $ ( 449.5 ) $ ( 2,040.7 ) $ 22.1 $ 5,093.4

Net Earnings for the nine months ended September 30, 2023

— — 755.8 — — 17.5 773.3

Other comprehensive loss — — — ( 35.0 ) — — ( 35.0 )

Cash dividends – $ 4.86 per share

— — ( 257.6 ) — — — ( 257.6 )

Stock compensation plans — 31.8 — — 89.7 — 121.5

Share repurchases – 909,000 shares

— — — — ( 233.8 ) — ( 233.8 )

Other 0.1 — ( 2.1 ) — — ( 17.5 ) ( 19.5 )

Balance at September 30, 2023 $ 67.5 $ 531.7 $ 6,792.3 $ ( 563.3 ) $ ( 1,998.0 ) $ 22.2 $ 4,852.4

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 October 1, 2022:

Shareholders’ Equity Attributable to Snap-on Incorporated

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Loss Treasury

Stock Noncontrolling

Interests Total

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

Net earnings for the three months ended October 1, 2022

Net earnings for the three months ended March 30, 2024

— — 263.5 — — 6.1 269.6

6 unchanged sentences

Other — — ( 0.7 ) — — ( 5.9 ) ( 6.6 )

Balance at October 1, 2022 $ 67.4 $ 493.6 $ 6,144.0 $ ( 582.3 ) $ ( 1,805.5 ) $ 22.3 $ 4,339.5

The following summarizes the changes in total equity for the nine month period ended October 1, 2022:

Balance at March 30, 2024 $ 67.5 $ 527.4 $ 7,113.1 $ ( 493.3 ) $ ( 2,073.7 ) $ 22.3 $ 5,163.3

The following summarizes the changes in total equity for the three month period ended April 1, 2023:

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 nine months ended October 1, 2022

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 the three months ended April 1, 2023

— — 248.7 — — 5.6 254.3

Other comprehensive loss — — — ( 238.4 ) — — ( 238.4 )

Other comprehensive income — — — 17.7 — — 17.7

Cash dividends – $ 1.62 per share

4 unchanged sentences

Other 0.1 — ( 0.7 ) — — ( 5.6 ) ( 6.2 )

Balance at October 1, 2022 $ 67.4 $ 493.6 $ 6,144.0 $ ( 582.3 ) $ ( 1,805.5 ) $ 22.3 $ 4,339.5

Balance at April 1, 2023 $ 67.5 $ 500.2 $ 6,458.1 $ ( 510.6 ) $ ( 1,905.0 ) $ 22.2 $ 4,632.4

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(Amounts in millions)

Nine Months Ended

September 30, 2023 October 1, 2022

Three Months Ended

March 30, 2024 April 1, 2023

Operating activities:

6 unchanged sentences

Stock-based compensation expense 9.8 10.2

Deferred income tax benefit ( 16.5 ) ( 14.1 )

Deferred income tax provision (benefit) 1.6 ( 0.2 )

Gain on sales of assets ( 0.2 ) ( 0.2 )

3 unchanged sentences

Inventories 22.1 ( 13.2 )

Prepaid expenses and other assets 30.3 ( 27.9 )

Prepaid expenses and other current assets ( 3.5 ) 1.7

Accounts payable 23.3 ( 0.5 )

Accruals and other liabilities ( 7.7 ) ( 18.2 )

Accrued and other liabilities 30.3 28.1

Net cash provided by operating activities 348.7 301.6

3 unchanged sentences

Capital expenditures ( 21.8 ) ( 23.0 )

Acquisitions of businesses, net of cash acquired — 0.5

Disposals of property and equipment 1.1 0.5

2 unchanged sentences

Financing activities:

Net increase in other short-term borrowings — 2.6

Net increase (decrease) in other short-term borrowings ( 0.4 ) 0.8

Cash dividends paid ( 98.2 ) ( 86.1 )

Purchases of treasury stock ( 70.2 ) ( 87.2 )

Proceeds from stock purchase and option plans 94.5 41.4

Proceeds from stock purchase plan and stock option exercises 28.3 32.8

Other ( 23.7 ) ( 12.4 )

1 unchanged sentence

Effect of exchange rate changes on cash and cash equivalents ( 1.8 ) —

Increase (decrease) in cash and cash equivalents 202.1 ( 20.7 )

Increase in cash and cash equivalents 119.5 76.6

Cash and cash equivalents at beginning of year 1,001.5 757.2

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 2023 Annual Report on Form 10-K for the fiscal year ended December 30, 2023 (“2023 year end”).

The company’s 2023 fiscal third quarter ended on September 30, 2023, and its 2022 fiscal third quarter ended on October 1, 2022.

The company’s 2023 and 2022 fiscal third quarters each contained 13 weeks of operating results.

The company’s 2024 fiscal first quarter ended on March 30, 2024, and its 2023 fiscal first quarter ended on April 1, 2023.

The company’s 2024 and 2023 fiscal first 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 and nine month periods ended September 30, 2023, and October 1, 2022, 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 month periods ended March 30, 2024, and April 1, 2023, have been made.

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

7 unchanged sentences

New Accounting Standards

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):

Troubled Debt Restructurings and Vintage Disclosures , which requires enhanced disclosure of certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty and eliminates certain current recognition and measurement accounting guidance.

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

The adoption of this ASU did not have a significant impact on the company’s Condensed 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 Condensed 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 Condensed Consolidated Financial Statements.

Revenue Recognition

4 unchanged sentences

The following table shows the consolidated revenues by revenue source:

Three Months Ended Nine Months Ended

(Amounts in millions) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Three Months Ended

(Amounts in millions) March 30, 2024 April 1, 2023

Revenue from contracts with customers $ 1,175.2 $ 1,176.5

3 unchanged sentences

Total revenues $ 1,281.9 $ 1,275.6

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 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.

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

For the Three Months Ended September 30, 2023

For the Three Months Ended March 30, 2024

Commercial Snap-on Repair Systems

10 unchanged sentences

Total revenue $ 359.9 $ 500.1 $ 463.8 $ 99.6 $ ( 141.5 ) $ 1,281.9

For the Nine Months Ended September 30, 2023

Commercial Snap-on Repair Systems

& Industrial Tools & Information Financial Snap-on

(Amounts in millions) Group Group Group Services Eliminations Incorporated

North America* $ 428.3 $ 1,384.6 $ 849.7 $ — $ — $ 2,662.6

Europe 220.1 112.2 180.8 — — 513.1

All other 200.5 78.7 78.7 — — 357.9

External net sales 848.9 1,575.5 1,109.2 — — 3,533.6

Intersegment net sales 245.5 — 221.2 — ( 466.7 ) —

Total net sales 1,094.4 1,575.5 1,330.4 — ( 466.7 ) 3,533.6

Financial services revenue — — — 280.9 — 280.9

Total revenue $ 1,094.4 $ 1,575.5 $ 1,330.4 $ 280.9 $ ( 466.7 ) $ 3,814.5

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

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

For the Three Months Ended October 1, 2022

Commercial Snap-on Repair Systems

& Industrial Tools & Information Financial Snap-on

(Amounts in millions) Group Group Group Services Eliminations Incorporated

North America* $ 128.2 $ 440.6 $ 268.8 $ — $ — $ 837.6

Europe 62.0 29.8 51.9 — — 143.7

All other 72.6 26.2 22.4 — — 121.2

External net sales 262.8 496.6 343.1 — — 1,102.5

Intersegment net sales 94.0 — 70.9 — ( 164.9 ) —

Total net sales 356.8 496.6 414.0 — ( 164.9 ) 1,102.5

Financial services revenue — — — 87.3 — 87.3

Total revenue $ 356.8 $ 496.6 $ 414.0 $ 87.3 $ ( 164.9 ) $ 1,189.8

For the Nine Months Ended October 1, 2022

For the Three Months Ended April 1, 2023

Commercial Snap-on Repair Systems

13 unchanged sentences

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

For the Three Months Ended September 30, 2023

Commercial Snap-on Repair Systems

& Industrial Tools & Information Financial Snap-on

(Amounts in millions) Group Group Group Services Eliminations Incorporated

Vehicle service professionals $ 19.4 $ 515.4 $ 363.4 $ — $ — $ 898.2

All other professionals 261.1 — — — — 261.1

External net sales 280.5 515.4 363.4 — — 1,159.3

Intersegment net sales 85.9 — 68.4 — ( 154.3 ) —

Total net sales 366.4 515.4 431.8 — ( 154.3 ) 1,159.3

Financial services revenue — — — 94.9 — 94.9

Total revenue $ 366.4 $ 515.4 $ 431.8 $ 94.9 $ ( 154.3 ) $ 1,254.2

For the Nine Months Ended September 30, 2023

Commercial Snap-on Repair Systems

& Industrial Tools & Information Financial Snap-on

(Amounts in millions) Group Group Group Services Eliminations Incorporated

Vehicle service professionals $ 62.2 $ 1,575.5 $ 1,109.2 $ — $ — $ 2,746.9

All other professionals 786.7 — — — — 786.7

External net sales 848.9 1,575.5 1,109.2 — — 3,533.6

Intersegment net sales 245.5 — 221.2 — ( 466.7 ) —

Total net sales 1,094.4 1,575.5 1,330.4 — ( 466.7 ) 3,533.6

Financial services revenue — — — 280.9 — 280.9

Total revenue $ 1,094.4 $ 1,575.5 $ 1,330.4 $ 280.9 $ ( 466.7 ) $ 3,814.5

For the Three Months Ended October 1, 2022

For the Three Months Ended March 30, 2024

Commercial Snap-on Repair Systems

8 unchanged sentences

Total revenue $ 359.9 $ 500.1 $ 463.8 $ 99.6 $ ( 141.5 ) $ 1,281.9

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

For the Nine Months Ended October 1, 2022

For the Three Months Ended April 1, 2023

Commercial Snap-on Repair Systems

19 unchanged sentences

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

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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 $ 185.0 million of long-term contracts that have fixed consideration that extends beyond one year as of September 30, 2023.

Snap-on had approximately $ 187.0 million of long-term contracts that have fixed consideration that extends beyond one year as of March 30, 2024.

Snap-on expects to recognize approximately 70 % of these contracts as revenue by the end of fiscal 2025, an additional 25 % by the end of fiscal 2027, 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 $ 65.9 million and $ 63.3 million at September 30, 2023, and December 31, 2022, respectively.

The balance of total contract liabilities was $ 66.3 million and $ 63.3 million at March 30, 2024, and December 30, 2023, 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 and nine months ended September 30, 2023, Snap-on recognized $ 7.4 million and $ 52.7 million of revenue, respectively, that was included in the $ 63.3 million contract liability balance at December 31, 2022, which was primarily from the amortization of software subscriptions, extended warranties and other subscription agreements.

During the three months ended March 30, 2024, Snap-on recognized $ 35.4 million of revenue that was included in the $ 63.3 million contract liability balance at December 30, 2023, which was primarily from the amortization of software subscriptions, extended warranties and other subscription agreements.

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 Condensed Consolidated Balance Sheets.

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 completed the purchase accounting valuations for the acquired net assets of Mountz in the first quarter of 2024.

The $ 19.8 million excess of the purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets.

For segment reporting purposes, the results of operations and assets of SAVTEQ have been included in the Repair Systems & Information Group since the acquisition date, and the results of operations and assets of Mountz have been included in the Commercial & Industrial Group since the acquisition date.

Pro forma financial information has not been presented for 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 6 for additional information on goodwill and other intangible assets.

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 September 30, 2023, and December 31, 2022, are as follows:

(Amounts in millions) September 30,

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The components of Snap-on’s trade and other accounts receivable as of March 30, 2024, and December 30, 2023, are as follows:

(Amounts in millions) March 30,

2024 December 30, 2023

2 unchanged sentences

Total trade and other accounts receivable – net $ 827.5 $ 791.3

The following is a rollforward of the allowances for credit losses related to trade and other accounts receivable for the three and nine months ended September 30, 2023, and October 1, 2022:

Three Months Ended Nine Months Ended

(Amounts in millions) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

The following is a rollforward of the allowances for credit losses related to trade and other accounts receivable for the three months ended March 30, 2024, and April 1, 2023:

Three Months Ended

(Amounts in millions) March 30, 2024 April 1, 2023

Allowances for credit losses:

2 unchanged sentences

( 3.0 ) ( 4.8 )

( 3.6 ) ( 3.0 ) ( 10.9 ) ( 8.2 )

Currency translation

( 0.4 ) ( 0.9 ) ( 0.1 ) ( 1.6 )

End of period $ 35.9 $ 31.2

5 unchanged sentences

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 .

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

Finance and contract receivables are generally secured by the underlying tools, diagnostics and/or equipment products financed and, for contracts to franchisees, other franchisee assets.

The components of Snap-on’s current finance and contract receivables as of September 30, 2023, and December 31, 2022, are as follows:

(Amounts in millions) September 30,

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The components of Snap-on’s current finance and contract receivables as of March 30, 2024, and December 30, 2023, are as follows:

(Amounts in millions) March 30,

2024 December 30, 2023

9 unchanged sentences

Finance lease receivables ( 0.2 ) ( 0.1 )

Total finance allowance for credit losses ( 21.2 ) ( 19.6 )

Total finance allowances for credit losses ( 22.0 ) ( 21.2 )

Contract installment receivables ( 0.8 ) ( 0.9 )

Contract lease receivables ( 0.9 ) ( 0.9 )

Total contract allowance for credit losses ( 1.8 ) ( 1.7 )

Total allowance for credit losses ( 23.0 ) ( 21.3 )

Total contract allowances for credit losses ( 1.7 ) ( 1.8 )

Total allowances for credit losses ( 23.7 ) ( 23.0 )

Total current finance and contract receivables – net $ 721.5 $ 714.9

4 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 September 30, 2023, and December 31, 2022, are as follows:

(Amounts in millions) September 30,

The components of Snap-on’s finance and contract receivables with payment terms beyond one year as of March 30, 2024, and December 30, 2023, are as follows:

(Amounts in millions) March 30,

2024 December 30, 2023

9 unchanged sentences

Finance lease receivables ( 0.3 ) ( 0.2 )

Total finance allowance for credit losses ( 44.8 ) ( 41.3 )

Total finance allowances for credit losses ( 47.8 ) ( 46.6 )

Contract installment receivables ( 3.3 ) ( 3.1 )

Contract lease receivables ( 1.8 ) ( 1.8 )

Total contract allowance for credit losses ( 4.7 ) ( 4.9 )

Total allowance for credit losses ( 49.5 ) ( 46.2 )

Total contract allowances for credit losses ( 5.1 ) ( 4.9 )

Total allowances for credit losses ( 52.9 ) ( 51.5 )

Total long-term finance and contract receivables – net $ 1,704.2 $ 1,692.1

2 unchanged sentences

Total long-term finance and contract receivables – net $ 1,704.2 $ 1,692.1

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Credit quality:

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 allowance 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

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.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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, 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 September 30, 2023, and charge-offs for the nine months ended September 30, 2023, are as follows:

The amortized cost basis of finance and contract receivables by origination year as of March 30, 2024, and charge-offs recorded in the three months ended March 30, 2024, by origination year, are as follows:

(Amounts in millions) 2024 2023 2022 2021 2020 Prior Total

14 unchanged sentences

Amounts determined to be uncollectable are charged directly against the allowances, while amounts recovered on previously written off accounts increase the allowances.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

For both finance and contract receivables, write-offs include the uncollectable principal amount of the receivable as well as the uncollectable accrued interest and fees, net of repossessions.

9 unchanged sentences

The finance receivable portfolio contains a substantial amount of homogeneous contracts which fits well with the vintage analysis.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

For contract receivables, the company primarily uses a Weighted-Average Remaining Maturity (“WARM”) methodology.

8 unchanged sentences

The allowances for credit losses are 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 and nine months ended September 30, 2023, and October 1, 2022:

The following is a rollforward of the allowances for credit losses for finance and contract receivables for the three months ended March 30, 2024, and April 1, 2023:

Three Months Ended

September 30, 2023 Nine Months Ended

September 30, 2023

March 30, 2024 Three Months Ended

April 1, 2023

(Amounts in millions) Finance

9 unchanged sentences

End of period $ 69.8 $ 6.8 $ 62.7 $ 6.5

Three Months Ended

October 1, 2022 Nine Months Ended

October 1, 2022

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

Allowances for credit losses:

Beginning of period $ 61.3 $ 7.2 $ 67.3 $ 8.4

Provision for credit losses 9.5 — 24.9 0.1

Charge-offs ( 12.3 ) ( 0.4 ) ( 38.5 ) ( 1.8 )

Recoveries 2.0 0.1 7.0 0.2

Currency translation ( 0.2 ) ( 0.2 ) ( 0.4 ) ( 0.2 )

End of period $ 60.3 $ 6.7 $ 60.3 $ 6.7

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.

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.

The amount and number of finance and contract receivable modifications as of September 30, 2023, and December 31, 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 September 30, 2023, and December 31, 2022, is as follows:

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.

The amount and number of finance and contract receivable modifications as of March 30, 2024, and December 30, 2023, 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 March 30, 2024, and December 30, 2023, is as follows:

(Amounts in millions) 30-59

2 unchanged sentences

Past Due Total Greater

September 30, 2023:

March 30, 2024:

Finance receivables $ 15.9 $ 12.7 $ 25.1 $ 53.7 $ 1,911.6 $ 1,965.3 $ 21.2

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 September 30, 2023, and December 31, 2022, is as follows:

(Amounts in millions) September 30,

The amount of finance and contract receivables on nonaccrual status as of March 30, 2024, and December 30, 2023, is as follows:

(Amounts in millions) March 30,

2024 December 30, 2023

4 unchanged sentences

Inventories by major classification are as follows:

(Amounts in millions) September 30,

(Amounts in millions) March 30,

2024 December 30, 2023

5 unchanged sentences

Total inventories – net $ 970.5 $ 1,005.9

Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 58 % and 61 % of total inventories as of September 30, 2023, and December 31, 2022, respectively.

Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 59 % of total inventories as of both March 30, 2024, and December 30, 2023.

The company accounts for its non-U.S.

inventory on the FIFO method.

As of September 30, 2023, approximately 36 % of the company’s U.S.

As of March 30, 2024, 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 and nine months ended September 30, 2023, or October 1, 2022.

There were no LIFO inventory liquidations in the three months ended March 30, 2024, or April 1, 2023.

Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2023, are as follows:

The changes in the carrying amount of goodwill by segment for the three months ended March 30, 2024, are as follows:

(Amounts in millions) Commercial

4 unchanged sentences

Currency translation ( 8.0 ) — ( 4.9 ) ( 12.9 )

Balance as of September 30, 2023 $ 297.0 $ 12.4 $ 726.5 $ 1,035.9

Acquisition adjustments ( 13.2 ) — — ( 13.2 )

Balance as of March 30, 2024 $ 325.4 $ 12.4 $ 733.5 $ 1,071.3

Goodwill of $ 1,071.3 million as of March 30, 2024, includes $ 19.8 million from the acquisition of Mountz.

In the first quarter of 2024, the purchase accounting valuations for the acquired net assets of Mountz were completed, resulting in a reduction of goodwill of $ 13.2 million from year end 2023.

See Note 3 for additional information on acquisitions.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Additional disclosures related to other intangible assets are as follows:

September 30, 2023 December 31, 2022

March 30, 2024 December 30, 2023

(Amounts in millions) Gross Carrying Value Accumulated

11 unchanged sentences

Total other intangible assets $ 649.0 $ ( 371.3 ) $ 277.7 $ 642.6 $ ( 373.7 ) $ 268.9

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 2023, the results of which did not result in any impairment.

The gross carrying value of customer relationships and non-amortized trademarks includes $ 8.7 million and $ 5.4 million, respectively, related to the Mountz acquisition.

Provisions for the 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 September 30, 2023, the company had no accumulated impairment losses.

As of March 30, 2024, the company had no accumulated impairment losses.

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

4 unchanged sentences

Intangible asset renewal costs are expensed as incurred.

The aggregate amortization expense was $ 6.8 million and $ 20.7 million for the respective three and nine month periods ended September 30, 2023, and $ 7.2 million and $ 21.6 million for the respective three and nine month periods ended October 1, 2022.

The aggregate amortization expense was $ 6.3 million and $ 6.9 million for the respective three month periods ended March 30, 2024, and April 1, 2023.

Based on current levels of amortizable intangible assets and estimated weighted-average useful lives, estimated annual amortization expense is expected to be $ 24.7 million in 2024, $ 18.2 million in 2025, $ 13.5 million in 2026, $ 11.4 million in 2027, $ 10.0 million in 2028, and $ 7.4 million in 2029.

Snap-on’s effective income tax rate on earnings attributable to Snap-on was 22.9 % and 23.0 % in the respective first nine month periods of 2023 and 2022.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Snap-on’s effective income tax rate on earnings attributable to Snap-on was 22.2 % and 23.1 % in the respective first three month periods of 2024 and 2023.

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

2 unchanged sentences

Accordingly, Snap-on’s gross unrecognized tax benefits may increase by a range of zero to $ 0.9 million over the next 12 months for uncertain tax positions expected to be taken in future tax filings.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Short-term and Long-term Debt

Short-term and long-term debt as of September 30, 2023, and December 31, 2022, consisted of the following:

(Amounts in millions) September 30,

Short-term and long-term debt as of March 30, 2024, and December 30, 2023, consisted of the following:

(Amounts in millions) March 30,

2024 December 30, 2023

3 unchanged sentences

3.10 % unsecured notes due 2050

Other* 1.7 1.0

Other debt* 0.1 0.2

1,200.1 1,200.2

3 unchanged sentences

* Includes unamortized debt issuance costs and issuance discounts.

Notes payable of $ 17.3 million as of September 30, 2023, compared to $ 17.2 million as of 2022 year end.

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

Notes payable of $ 15.2 million as of March 30, 2024, compared to $ 15.6 million as of 2023 year end.

Snap-on has a $ 900 million multicurrency revolving credit facility that terminates on September 12, 2028 (the “Credit Facility”).

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 nine months ended as of September 30, 2023.

No amounts were borrowed or outstanding under the Credit Facility during the three months ended and as of March 30, 2024.

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

4 unchanged sentences

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 September 30, 2023, the company’s actual ratios of 0.05 and 0.21 , respectively, were both within the permitted ranges set forth in this financial covenant.

As of March 30, 2024, the company’s actual ratios of 0.03 and 0.10 , 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 September 30, 2023, there were no commercial paper issuances outstanding.

As of March 30, 2024, there were no commercial paper issuances outstanding.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Financial Instruments

9 unchanged sentences

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

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

18 unchanged sentences

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 September 30, 2023, and December 31, 2022 .

T here were no outstanding interest rate swaps as of both March 30, 2024, and December 30, 2023 .

Treasury locks:

3 unchanged sentences

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 September 30, 2023, and December 31, 2022.

There were no treasury locks outstanding as of both March 30, 2024, and December 30, 2023.

See Note 16 for additional information on Other income (expense) – net.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stock-based deferred compensation risk management:

2 unchanged sentences

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 September 30, 2023, Snap-on had equity forwards in place intended to manage market risk with respect to 69,400 shares of Snap-on common stock associated with its deferred compensation plans.

As of March 30, 2024, Snap-on had equity forwards in place intended to manage market risk with respect to 76,900 shares of Snap-on common stock associated with its deferred compensation plans.

Counterparty risk:

2 unchanged sentences

Snap-on does not anticipate non-performance by its counterparties, but cannot provide assurances.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Fair value of financial instruments:

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

September 30, 2023 December 31, 2022

March 30, 2024 December 30, 2023

(Amounts in millions) Carrying

4 unchanged sentences

1,200.1 984.9 1,200.2 1,031.5

The following methods and assumptions were used in estimating the fair value of financial instruments:

The following methods and assumptions are used in estimating the fair value of financial instruments:

• Finance and contract receivables include both short-term and long-term receivables.

7 unchanged sentences

• The fair value of all other financial instruments, including trade and other accounts receivable, accounts payable and other financial instruments, approximates such instruments’ carrying value due to their short-term nature.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Pension Plans

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

Three Months Ended Nine Months Ended

(Amounts in millions) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Three Months Ended

(Amounts in millions) March 30, 2024 April 1, 2023

Service cost $ 5.0 $ 4.9

7 unchanged sentences

Depending on market and other conditions, Snap-on may make discretionary cash contributions to its pension plans in 2024.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Postretirement Health Care Plans

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

Three Months Ended Nine Months Ended

(Amounts in millions) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Three Months Ended

(Amounts in millions) March 30, 2024 April 1, 2023

Interest cost $ 0.5 $ 0.5

2 unchanged sentences

Net periodic postretirement health care cost $ — $ —

The components of net periodic postretirement health care cost are included in “Other income (expense) – net” on the accompanying Condensed Consolidated Statements of Earnings.

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

See Note 16 for additional information on Other income (expense) – net.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stock-based Compensation and Other Stock Plans

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 September 30, 2023, the 2011 Plan had 2,633,565 shares available for future grants.

As of March 30, 2024, the 2011 Plan had 2,047,931 shares available for future grants.

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

Net stock-based compensation expense was $ 11.0 million and $ 31.4 million for the respective three and nine month periods ended September 30, 2023, and $ 8.1 million and $ 25.6 million for the respective three and nine month periods ended October 1, 2022.

Cash received from stock purchase plan and stock option exercises during the respective three and nine month periods ended September 30, 2023, totaled $ 9.9 million and $ 94.5 million.

Cash received from stock purchase plan and stock option exercises during the respective three and nine month periods ended October 1, 2022, totaled $ 12.2 million and $ 41.4 million.

The tax benefit realized from both the exercise and vesting of share-based payment arrangements was $ 2.6 million and $ 13.1 million for the respective three and nine month periods ended September 30, 2023, and $ 3.3 million and $ 7.2 million for the respective three and nine month periods ended October 1, 2022.

Net stock-based compensation expense was $ 9.8 million and $ 10.2 million for the respective three month periods ended March 30, 2024, and April 1, 2023.

Cash received from stock purchase plan and stock option exercises during the respective three month periods ended March 30, 2024, and April 1, 2023 totaled $ 28.3 million and $ 32.8 million.

The tax benefit realized from both the exercise and vesting of share-based payment arrangements was $ 9.7 million and $ 5.1 million for the respective three month periods ended March 30, 2024, and April 1, 2023.

Stock options:

3 unchanged sentences

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 option.

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.

The following weighted-average assumptions were used in calculating the fair value of stock options granted during the nine month periods ended September 30, 2023, and October 1, 2022, using the Black-Scholes valuation model:

Nine Months Ended

September 30, 2023 October 1, 2022

Expected term of option (in years)

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

The following weighted-average assumptions were used in calculating the fair value of stock options granted during the three month periods ended March 30, 2024, and April 1, 2023, using the Black-Scholes valuation model:

Three Months Ended

March 30, 2024 April 1, 2023

Expected term of stock option (in years)

Expected volatility factor 23.63 % 23.99 %

1 unchanged sentence

Risk-free interest rate 4.30 % 3.99 %

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Below is a summary of stock option activity as of and for the nine months ended September 30, 2023:

Below is a summary of stock option activity as of and for the three months ended March 30, 2024:

(in thousands)

5 unchanged sentences

Forfeited or expired ( 9 ) 236.26

Outstanding at September 30, 2023 2,044 175.99 5.4 $ 161.7

Exercisable at September 30, 2023 1,535 159.80 4.4 146.3

Outstanding at March 30, 2024 1,980 188.30 5.7 $ 213.7

Exercisable at March 30, 2024 1,510 168.43 4.5 192.9

* Weighted-average

The weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2023, and October 1, 2022, was $ 51.09 and $ 34.35 , respectively.

The intrinsic value of stock options exercised was $ 9.9 million and $ 57.0 million during the respective three and nine month periods ended September 30, 2023, and $ 13.1 million and $ 23.3 million during the respective three and nine month periods ended October 1, 2022.

The fair value of stock options vested was $ 9.1 million and $ 10.5 million during the respective nine month periods ended September 30, 2023, and October 1, 2022.

As of September 30, 2023, there was $ 14.5 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 1.6 years.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The weighted-average grant date fair value of stock options granted during the three months ended March 30, 2024, and April 1, 2023, was $ 55.07 and $ 51.09 , respectively.

The intrinsic value of stock options exercised was $ 17.1 million and $ 22.6 million during the respective three month periods ended March 30, 2024, and April 1, 2023.

The fair value of stock options vested was $ 9.5 million and $ 9.1 million during the respective three month periods ended March 30, 2024, and April 1, 2023.

As of March 30, 2024, there was $ 22.1 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 2.2 years.

Performance share units:

5 unchanged sentences

in recent years, forfeitures have not been significant.

The weighted-average grant date fair value of PSUs granted during the nine months ended September 30, 2023, and October 1, 2022, was $ 249.26 and $ 204.87 , respectively.

PSUs related to 60,402 shares and 46,217 shares were paid out during the nine months ended September 30, 2023, and October 1, 2022, respectively.

The weighted-average grant date fair value of PSUs granted during the three months ended March 30, 2024, and April 1, 2023, was $ 269.00 and $ 249.26 , respectively.

PSUs related to 137,096 shares and 60,402 shares were paid out during the three months ended March 30, 2024, and April 1, 2023, 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”).

Changes to the company’s non-vested PSUs during the nine months ended September 30, 2023, are as follows:

Changes to the company’s non-vested PSUs during the three months ended March 30, 2024, are as follows:

(in thousands)

3 unchanged sentences

Cancellations and other — —

Non-vested PSUs at September 30, 2023 283 208.71

Non-vested PSUs at March 30, 2024 230 236.55

* Weighted-average

** Reflects the number of PSUs above target levels based on performance metrics.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of September 30, 2023, there was $ 20.6 million of unrecognized compensation cost related to non-vested PSUs that are expected to be recognized as a charge to earnings over a weighted-average period of 1.0 year.

As of March 30, 2024, there was $ 29.0 million of unrecognized compensation cost related to non-vested PSUs that are expected to be recognized as a charge to earnings over a weighted-average period of 1.5 years.

Restricted stock units:

3 unchanged sentences

in recent years, forfeitures have not been significant.

The weighted-average grant date fair value of RSUs granted during the nine months ended September 30, 2023, and October 1, 2022, was $ 249.26 and $ 211.67 , respectively.

Changes to the company’s non-vested RSUs during the nine months ended September 30, 2023, are as follows:

The weighted-average grant date fair value of RSUs granted during the three months ended March 30, 2024, and April 1, 2023, was $ 269.00 and $ 249.26 , respectively.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Changes to the company’s non-vested RSUs during the three months ended March 30, 2024, are as follows:

(in thousands)

3 unchanged sentences

Cancellations and other — —

Non-vested RSUs at September 30, 2023 81 215.66

Non-vested RSUs at March 30, 2024 75 242.64

* Weighted-average

As of September 30, 2023, there was $ 8.1 million of unrecognized compensation cost related to non-vested RSUs that are expected to be recognized as a charge to earnings over a weighted-average period of 1.2 years.

As of March 30, 2024, there was $ 11.5 million of unrecognized compensation cost related to non-vested RSUs that are expected to be recognized as a charge to earnings over a weighted-average period of 1.9 years.

Stock appreciation rights:

13 unchanged sentences

treasury yield curve in effect as of the grant date (for stock-settled SARs) or reporting date (for cash-settled SARs) for the length of time corresponding to the expected term of the SARs.

SNAP-ON INCORPORATED

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 nine months ended September 30, 2023, and October 1, 2022, using the Black-Scholes valuation model:

Nine Months Ended

September 30, 2023 October 1,

The following weighted-average assumptions were used in calculating the fair value of stock-settled SARs granted during the three months ended March 30, 2024, and April 1, 2023, using the Black-Scholes valuation model:

Three Months Ended

March 30, 2024 April 1, 2023

Expected term of stock-settled SARs (in years)

2 unchanged sentences

Risk-free interest rate 4.22 % 3.87 %

Below is a summary of stock-settled SARs as of and for the nine months ended September 30, 2023:

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Below is a summary of stock-settled SARs as of and for the three months ended March 30, 2024:

Stock-settled

6 unchanged sentences

Forfeited or expired ( 18 ) 186.44

Outstanding at September 30, 2023 327 189.52 6.7 $ 21.4

Exercisable at September 30, 2023 195 165.35 5.4 17.5

Outstanding at March 30, 2024 356 204.88 7.0 $ 32.5

Exercisable at March 30, 2024 229 178.82 5.8 26.9

* Weighted-average

The weighted-average grant date fair value of stock-settled SARs granted during the nine months ended September 30, 2023, and October 1, 2022, was $ 48.85 and $ 32.63 , respectively.

The intrinsic value of stock-settled SARs exercised was $ 0.2 million and $ 5.0 million during the respective three and nine month periods ended September 30, 2023, and $ 0.5 million and $ 1.2 million during the respective three and nine month periods ended October 1, 2022.

The fair value of stock-settled SARs vested was $ 1.9 million and $ 2.0 million during the respective nine month periods ended September 30, 2023, and October 1, 2022.

As of September 30, 2023, there was $ 3.6 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 1.7 years.

The following weighted-average assumptions were used in calculating the fair value of cash-settled SARs granted during the nine months ended September 30, 2023, and October 1, 2022, using the Black-Scholes valuation model:

Nine Months Ended

September 30, 2023 October 1,

The weighted-average grant date fair value of stock-settled SARs granted during the three months ended March 30, 2024, and April 1, 2023, was $ 52.12 and $ 48.85 , respectively.

The intrinsic value of stock-settled SARs exercised was $ 1.3 million and $ 2.2 million during the respective three month periods ended March 30, 2024, and April 1, 2023.

The fair value of stock-settled SARs vested was $ 2.3 million and $ 1.9 million during the respective three month periods ended March 30, 2024, and April 1, 2023.

As of March 30, 2024, there was $ 5.6 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 March 30, 2024, and April 1, 2023, using the Black-Scholes valuation model:

Three Months Ended

March 30, 2024 April 1, 2023

Expected term of cash-settled SARs (in years)

2 unchanged sentences

Risk-free interest rate 4.21 % 3.60 %

The intrinsic value of cash-settled SARs exercised was zero and $ 0.4 million for the respective three and nine month periods ended September 30, 2023, and zero and $ 0.6 million for the respective three and nine month periods ended October 1, 2022.

The fair value of cash-settled SARs vested was $ 0.1 million for both the nine month periods ended September 30, 2023, and October 1, 2022.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Changes to the company’s non-vested cash-settled SARs during the nine months ended September 30, 2023, are as follows:

The intrinsic value of cash-settled SARs exercised was zero and $ 0.4 million for the respective three month periods ended March 30, 2024, and April 1, 2023.

The fair value of cash-settled SARs vested was $ 0.1 million for both the three month periods ended March 30, 2024, and April 1, 2023.

Changes to the company’s non-vested cash-settled SARs during the three months ended March 30, 2024, are as follows:

(in thousands)

2 unchanged sentences

Vested ( 1 ) 93.05

Non-vested cash-settled SARs at September 30, 2023 2 59.29

Non-vested cash-settled SARs at March 30, 2024 2 76.13

* Weighted-average

As of September 30, 2023, 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 1.7 years.

As of March 30, 2024, there was $ 0.2 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.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Restricted stock awards – non-employee directors:

The company awarded 5,760 shares and 6,525 shares of restricted stock to non-employee directors for the respective nine month periods ended September 30, 2023, and October 1, 2022.

The company awarded 5,391 shares and 5,760 shares of restricted stock to non-employee directors for the respective three month periods ended March 30, 2024, and April 1, 2023.

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.

All restrictions generally lapse upon the earlier of the first anniversary of the grant date, the recipient’s death or disability or in the event of a change in control, as defined in the 2011 Plan.

All restrictions on the restricted stock awards generally lapse upon the earlier of the first anniversary of the grant date, the recipient’s death or disability or in the event of a change in control, as defined in the 2011 Plan.

If termination of the recipient’s service occurs prior to the first anniversary of the grant date for any reason other than death or disability, the shares of restricted stock would be forfeited, unless otherwise determined by the Board.

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Substantially all Snap-on employees in the United States and Canada are eligible to participate in an employee stock purchase plan.

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.

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

The company records compensation expense when Snap-on’s period-end stock price is greater than the plan purchase price.

There were 27,225 shares and 18,452 shares issued under this plan for the respective nine month periods ended September 30, 2023, and October 1, 2022.

As of September 30, 2023, 551,598 shares were reserved for issuance under this plan and Snap-on held participant contributions of approximately $ 1.9 million.

There were no shares issued under this plan for the respective three month periods ended March 30, 2024, and April 1, 2023.

As of March 30, 2024, 551,598 shares were reserved for issuance under this plan and Snap-on held participant contributions of approximately $ 4.8 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 $ 1.0 million for the three and nine month periods ended September 30, 2023, respectively.

The company did not recognize any compensation expense for plan participants for both the three and nine month periods ended October 1, 2022.

Compensation expense for plan participants was $ 0.3 million and $ 0.5 million for the three month periods ended March 30, 2024, and April 1, 2023, respectively.

Franchisee stock purchase plan:

All franchisees in the United States and Canada are eligible to participate in a franchisee stock purchase plan.

The company records mark-to-market expense when Snap-on’s period-end stock price is greater than the plan purchase price.

There were 46,510 shares and 44,937 shares issued under this plan for the respective nine month periods ended September 30, 2023, and October 1, 2022.

As of September 30, 2023, 178,715 shares were reserved for issuance under this plan and Snap-on held participant contributions of approximately $ 4.3 million.

There were no shares issued under this plan for the respective three month periods ended March 30, 2024, and April 1, 2023.

As of March 30, 2024, 178,715 shares were reserved for issuance under this plan and Snap-on held participant contributions of approximately $ 10.1 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 market-to-market expense of zero and $ 1.6 million for the three and nine month periods ended September 30, 2023.

The company did not recognize any mark-to-market expense for both the three and nine month periods ended October 1, 2022.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The company recognized mark-to-market expense of $ 0.7 million and $ 0.9 million for the three month periods ended March 30, 2024, and April 1, 2023, respectively.

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 Nine Months Ended

September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Three Months Ended

March 30, 2024 April 1, 2023

Weighted-average common shares outstanding 52,741,565 53,019,170

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

As of both September 30, 2023, and October 1, 2022, there were no awards outstanding that were anti-dilutive.

As of March 30, 2024, there were no awards outstanding that were anti-dilutive;

as of April 1, 2023, there were 302,756 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)

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 and nine months ended September 30, 2023, and October 1, 2022, is as follows:

Three Months Ended Nine Months Ended

(Amounts in millions) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Snap-on’s product warranty accrual activity for the three months ended March 30, 2024, and April 1, 2023, is as follows:

Three Months Ended

(Amounts in millions) March 30, 2024 April 1, 2023

Warranty reserve:

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In the ordinary course of our business, Snap-on is subject to legal disputes that are being litigated and/or settled.

The accompanying Condensed Consolidated Statement of Earnings for the three months ended March 30, 2024, includes an $ 11.3 million benefit in “Operating expenses” for payments received associated with a legal matter.

Although it is not possible to predict the outcome of legal matters, management believes that the results of all legal matters will not have a material impact on Snap-on’s consolidated financial position, results of operations or cash flows.

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Lessee accounting:

Supplemental balance sheet information related to leases as of September 30, 2023, and December 31, 2022, is as follows:

(Amounts in millions) September 30,

Supplemental balance sheet information related to leases as of March 30, 2024, and December 30, 2023, is as follows:

(Amounts in millions) March 30,

2024 December 30, 2023

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Property and equipment - gross $ 17.7 $ 19.1

Accumulated depreciation and amortization ( 15.6 ) ( 16.4 )

Accumulated depreciation ( 15.7 ) ( 16.8 )

Property and equipment - net $ 2.0 $ 2.3

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Total operating lease liabilities $ 78.4 $ 78.4

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Lessor accounting:

Snap-on’s Financial Services business offers its customers lease financing for the lease of tools, diagnostics, and equipment products and to franchisees who require financing for vehicle leases.

Snap-on’s Financial Services business offers lease financing to support the sales of tools, diagnostics, and equipment products, as well as vehicle leases for franchisees.

Sales-type leases are included in both “Finance receivables – net” and “Long-term finance receivables – net” and also in both “Contract receivables – net” and “Long-term contract receivables – net” on the accompanying Condensed Consolidated Balance Sheets.

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

Three Months Ended Nine Months Ended

(Amounts in millions) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Three Months Ended

(Amounts in millions) March 30, 2024 April 1, 2023

Interest income $ 12.9 $ 8.0

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Total other income (expense) – net $ 18.1 $ 15.2

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Accumulated Other Comprehensive Income (Loss)

Below is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended September 30, 2023:

(Amounts in millions) Foreign

Translation Cash Flow

Hedges Defined

Postretirement

Balance as of July 1, 2023 $ ( 254.2 ) $ 6.5 $ ( 263.0 ) $ ( 510.7 )

Other comprehensive loss before reclassifications ( 52.3 ) — — ( 52.3 )

Amounts reclassified from Accumulated OCI — ( 0.4 ) 0.1 ( 0.3 )

Net other comprehensive income (loss) ( 52.3 ) ( 0.4 ) 0.1 ( 52.6 )

Balance as of September 30, 2023 $ ( 306.5 ) $ 6.1 $ ( 262.9 ) $ ( 563.3 )

Below is a summary of net changes in Accumulated OCI by component and net of tax for the nine months ended September 30, 2023:

Below is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended March 30, 2024:

(Amounts in millions) Foreign

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Net other comprehensive income (loss) ( 44.8 ) ( 0.4 ) 1.4 ( 43.8 )

Balance as of September 30, 2023 $ ( 306.5 ) $ 6.1 $ ( 262.9 ) $ ( 563.3 )

Below is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended October 1, 2022:

Balance as of March 30, 2024 $ ( 256.6 ) $ 5.3 $ ( 242.0 ) $ ( 493.3 )

Below is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended April 1, 2023:

(Amounts in millions) Foreign

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Postretirement

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

Other comprehensive loss before reclassifications ( 127.6 ) — — ( 127.6 )

Balance as of December 31, 2022 $ ( 272.5 ) $ 7.3 $ ( 263.1 ) $ ( 528.3 )

Other comprehensive income before reclassifications 18.1 — — 18.1

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

Net other comprehensive income (loss) 18.1 ( 0.4 ) — 17.7

Balance as of October 1, 2022 $ ( 392.7 ) $ 7.7 $ ( 197.3 ) $ ( 582.3 )

Balance as of April 1, 2023 $ ( 254.4 ) $ 6.9 $ ( 263.1 ) $ ( 510.6 )

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Below is a summary of net changes in Accumulated OCI by component and net of tax for the nine months ended October 1, 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 )

Other comprehensive loss before reclassifications ( 247.6 ) — — ( 247.6 )

Amounts reclassified from Accumulated OCI — ( 1.2 ) 10.4 9.2

Net other comprehensive income (loss) ( 247.6 ) ( 1.2 ) 10.4 ( 238.4 )

Balance as of October 1, 2022 $ ( 392.7 ) $ 7.7 $ ( 197.3 ) $ ( 582.3 )

The reclassifications out of Accumulated OCI for the three and nine month periods ended September 30, 2023, and October 1, 2022, are as follows:

The reclassifications out of Accumulated OCI for the three month periods ended March 30, 2024, and April 1, 2023, are as follows:

Amount Reclassified from Accumulated OCI

Three Months Ended Nine Months Ended

(Amounts in millions) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022 Statement of Earnings

Three Months Ended

(Amounts in millions) March 30, 2024 April 1, 2023 Statement of Earnings

Gains on cash flow hedges:

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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.

SNAP-ON INCORPORATED

NOTES TO CONDENSED 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.

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

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Financial Data by Segment:

Three Months Ended Nine Months Ended

(Amounts in millions) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Three Months Ended

(Amounts in millions) March 30, 2024 April 1, 2023

Commercial & Industrial Group $ 359.9 $ 363.8

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Earnings before income taxes $ 344.8 $ 328.9

(Amounts in millions) September 30,

(Amounts in millions) March 30,

2024 December 30, 2023

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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