Snap-on Inc 10-K

Item 9A: Controls and Procedures Evaluation of Disclosure Controls and Procedures Snap-on maintains a system of disclosure controls and procedures that is designed to provide reasonable assurance that material information relating to the company and its consolidated subsidiaries is timely communicated to the officers who certify Snap-on’s financial reports and to other members of senior management and the Board, as appropriate. In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), the company’s management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of the company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 28, 2024. Based upon their evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of December 28, 2024, to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission rules and forms, and to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Changes in Internal Control There has been no change in the company’s internal control over financial reporting during the quarter ended December 28, 2024, 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 Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013) . Based on this assessment, the company’s management believes that, as of December 28, 2024, our internal control over financial reporting was effective at a reasonable assurance level. The company’s internal control over financial reporting as of December 28, 2024, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in its attestation report, which is included herein. Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our internal control over financial reporting will prevent all errors or fraud. Because of inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Further, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time. 2024 ANNUAL REPORT 53 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Snap-on Incorporated Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Snap-on Incorporated and subsidiaries (the “Company”) as of December 28, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 28, 2024, 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 28, 2024, of the Company and our report dated February 13, 2025, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Milwaukee, Wisconsin February 13, 2025 54 SNAP-ON INCORPORATED Item 9B: Other Information Executive Officer and Director Rule 10b5-1 Trading Arrangements In accordance with the 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 28, 2024: Name and Title Type of Plan Adoption Date* Duration or End Date Aggregate Number of Securities to be Sold Description of Trading Arrangement Nicholas T. Pinchuk Chairman, President and Chief Executive Officer Rule 10b5-1 trading arrangement October 24, 2024 December 4, 2025 135,000 Exercises of vested stock options expiring in February 2026, and sales of shares to cover exercise price and estimated tax withholding, with the retention of the remaining shares Aldo J. Pagliari Senior Vice President - Finance and Chief Financial Officer Rule 10b5-1 trading arrangement October 22, 2024 February 10, 2026 35,000 Exercises of vested stock options expiring in February 2026, and sales of shares to cover exercise price and estimated tax withholding, with the retention of the remaining shares * 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. Item 9C: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 2024 ANNUAL REPORT 55 PART III Item 10: Directors, Executive Officers and Corporate Governance Incorporated by reference to the sections entitled “Item 1: Election of Directors,” “Corporate Governance Practices and Board Information” and “Other Information” in Snap-on’s 2025 Annual Meeting Proxy Statement, which is expected to be mailed to shareholders on or about March 12, 2025 (the “2025 Proxy Statement”). The Section 16(a) filing compliance disclosure pursuant to Item 405 of Regulation S-K is contained in Snap-on’s 2025 Proxy Statement in the section entitled “Other Information – Delinquent Section 16(a) Reports,” and is incorporated herein by reference. Information regarding the company’s insider trading policies and procedures is contained in “Corporate Governance Practices and Board Information – Insider Trading Policy” in the 2025 Proxy Statement, which is incorporated herein by reference. Information about our Executive Officers Information regarding Snap-on’s executive officers, including their ages, business experience (for at least the last five years) and titles as of December 28, 2024, is presented below: Nicholas T. Pinchuk (78) – Chairman of the Board of Directors since 2009, President and Chief Executive Officer since December 2007, and President and Chief Operating Officer during 2007. Senior Vice President and President – Worldwide Commercial & Industrial Group from 2002 to 2007. Prior to joining Snap-on, Mr. Pinchuk held various positions, including President of Global Refrigeration Operations and President of Asia Pacific Operations, at Carrier Corporation, a producer of air conditioning, heating and refrigeration systems, and a subsidiary of United Technologies Corporation. Mr. Pinchuk served as an officer of the U.S. Army in Vietnam. Aldo J. Pagliari (70) – Senior Vice President – Finance and Chief Financial Officer since 2010. Jesus M. Arregui (59) – Senior Vice President and President – Commercial Group since 2019. Mary E. Bauerschmidt (58) – Senior Vice President – Human Resources since April 2024. Vice President – Human Resources from 2018 to 2024. Iain Boyd (62) – Vice President – Operations Development since 2015. Timothy L. Chambers (60) – Senior Vice President and President – Snap-on Tools Group since 2019. June C. Lemerand (62) – Vice President and Chief Information Officer since 2017. Richard T. Miller (54) – Vice President, General Counsel and Secretary since 2018. Marty V. Ozolins (53) – Vice President and Controller since 2021. Vice President, and formerly Director, of Internal Audit from 2016 to 2021. Thomas J. Ward (72) – Senior Vice President and President – Repair Systems & Information Group since 2010. Snap-on’s executive officers include two women, a veteran of the U.S. Army, and an executive who is ethnically diverse. Additionally, there is no family relationship among the executive officers and there has been no involvement in legal proceedings during the past 10 years that would be material to the evaluation of the ability or integrity of any of the executive officers. 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. 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 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 the company’s website at www.snapon.com . 56 SNAP-ON INCORPORATED Item 11: Executive Compensation The information required by Item 11 is contained in Snap-on’s 2025 Proxy Statement in the sections entitled “Executive Compensation,” “Board Compensation,” “Compensation Committee Report,” and “Other Information” and is incorporated herein by reference. Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth information about Snap-on’s equity compensation plans at 2024 year end: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 2,058,429 (1) $193.39 (2) 2,820,103 (3) Equity compensation plans not approved by security holders 60,955 (4) Not Applicable - (5) Total 2,119,384 $193.39 (2) 2,820,103 (5) (1) Includes (i) stock options and stock appreciation rights (“SARs”) to acquire 1,981,254 shares granted under the 2011 Incentive Stock and Awards Plan (the “2011 Plan”); (ii) 69,976 shares represented by restricted stock units granted under the 2011 Plan; and (iii) 7,199 shares represented by deferred share units under the Directors’ Fee Plan. Excludes 176,278 shares issuable in connection with the vesting of performance share awards under the 2011 Plan. Also excludes shares of common stock that may be issuable under the employee and franchisee stock purchase plans. (2) Reflects only the weighted-average exercise price of outstanding stock options and SARs granted under the 2011 Plan and does not include shares represented by deferred share units under the Directors’ Fee Plan and shares issuable in connection with the vesting of restricted stock units or performance units under the 2011 Plan for which there are no exercise prices. Also excludes shares of common stock that may be issuable under the employee and franchisee stock purchase plans. (3) Includes (i) 2,095,463 shares reserved for issuance under the 2011 Plan; (ii) 194,840 shares reserved for issuance under the Directors’ Fee Plan; and (iii) 529,800 shares reserved for issuance under the employee stock purchase plan. (4) Consists of deferred share units under Snap-on’s Deferred Compensation Plan, which allows elected and appointed officers of Snap-on to defer all or a percentage of their respective annual salary and/or incentive compensation. The deferred share units are payable in shares of Snap-on common stock on a one-for-one basis and are calculated at fair market value. Shares of common stock delivered under the Deferred Compensation Plan are previously issued shares reacquired and held by Snap-on. (5) The Deferred Compensation Plan provides that Snap-on will make available, as and when required, a sufficient number of shares of common stock to meet the needs of the plan. It further provides that such shares shall be previously issued shares reacquired and held by Snap-on. The additional information required by Item 12 is contained in Snap-on’s 2025 Proxy Statement in the sections entitled “Executive Compensation,” “Security Ownership of Certain Beneficial Owners and Management,” and “Other Information,” and is incorporated herein by reference. Item 13: Certain Relationships and Related Transactions, and Director Independence Incorporated by reference to the sections entitled “Corporate Governance Practices and Board Information – Board Information” and “Other Information – Transactions with the Company” in Snap-on’s 2025 Proxy Statement. Item 14: Principal Accountant Fees and Services Incorporated by reference to the section entitled “Deloitte & Touche LLP Fee Disclosure” in Snap-on’s 2025 Proxy Statement. 2024 ANNUAL REPORT 57 PART IV Item 15: Exhibit and Financial Statement Schedules Item 15(a): Documents Filed as Part of This Report: 1. List of Financial Statements Unless otherwise indicated, references to “fiscal 2024” or “2024” refer to the fiscal year ended December 28, 2024; references to “fiscal 2023” or “2023” refer to the fiscal year ended December 30, 2023; and references to “fiscal 2022” or “2022” refer to the fiscal year ended December 31, 2022. References to 2024, 2023 and 2022 year end refer to December 28, 2024, December 30, 2023, and December 31, 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: • Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ). • Consolidated Statements of Earnings for the 2024, 2023 and 2022 fiscal years. • Consolidated Statements of Comprehensive Income for the 2024, 2023 and 2022 fiscal years. • Consolidated Balance Sheets as of 2024 and 2023 year end. • Consolidated Statements of Equity for the 2024, 2023 and 2022 fiscal years. • Consolidated Statements of Cash Flows for the 2024, 2023 and 2022 fiscal years. • Notes to Consolidated Financial Statements. 2. Financial Statement Schedules All schedules are omitted because they are not applicable, or the required information is included in the consolidated financial statements or notes thereto. 3. List of Exhibits (*) (3) (a) Restated Certificate of Incorporation of Snap-on Incorporated, as amended through April 25, 2013 (incorporated by reference to Exhibit 3.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended September 28, 2013 (Commission File No. 1-7724)) (b) Bylaws of Snap-on Incorporated, as amended and restated as of April 27, 2023 (incorporated by reference to Exhibit 3.1 to Snap-on’s Current Report on Form 8-K dated April 27, 2023 (Commission File No. 1-7724)) (4) (a) Indenture, dated as of January 8, 2007, between Snap-on Incorporated and U.S. Bank National Association as trustee (incorporated by reference to Exhibit (4)(b) to Form S-3 Registration Statement (Registration No. 333-139863)) (b) Officer’s Certificate, dated as of February 21, 2017, providing for the $300,000,000 3.25% Notes due 2027 (the “2027 Notes”) (incorporated by reference to Exhibit 4.2 to Snap-on’s Current Report on Form 8-K dated February 15, 2017 (Commission File No. 1-7724)) (c) Officer’s Certificate, dated as of February 26, 2018, providing for the $400,000,000 4.10% Notes due 2048 (the “2048 Notes”) (incorporated by reference to Exhibit 4.2 to Snap-on’s Current Report on Form 8-K dated February 20, 2018 (Commission File No. 1-7724)) (d) Officer’s Certificate, dated as of April 30, 2020, providing for the $500,000,000 3.10% Notes due 2050 (the “2050 Notes”) (incorporated by reference to Exhibit 4.2 to Snap‑on’s Current Report on Form 8‑K dated April 27, 2020 (Commission File No. 1-7724)) (e) Description of Securities (e)(1) Description of Common Stock (incorporated by reference to Exhibit 4(e)(1) to Snap‑on’s Annual Report on Form 10‑K for the fiscal year ended December 28, 2019 (Commission File No. 1-7724)) (e)(2) Description of 2027 Notes (incorporated by reference to Exhibit 4(e)(3) to Snap‑on’s Annual Report on Form 10‑K for the fiscal year ended December 28, 2019 (Commission File No. 1-7724)) (e)(3) Description of 2048 Notes (incorporated by reference to Exhibit 4(e)(4) to Snap‑on’s Annual Report on Form 10‑K for the fiscal year ended December 28, 2019 (Commission File No. 1-7724)) (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. 1-7724)) 58 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 28, 2024. Copies of debt instruments for which the related debt is less than 10% of consolidated total assets will be furnished to the Commission upon request. (10) Material Contracts (a) Amended and Restated Snap-on Incorporated 2001 Incentive Stock and Awards Plan (Amended and Restated as of April 27, 2006, as further amended on August 6, 2009) (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended October 3, 2009 (Commission File No. 1-7724))** (superseded except as to outstanding awards) (b) Snap-on Incorporated 2011 Incentive Stock and Awards Plan (As Amended and Restated) (incorporated by reference to Exhibit 10.1 to Snap-on’s Current Report on Form 8-K dated April 29, 2021 (Commission File No. 1-7724))** (c) Form of Restated Executive Agreement between Snap-on Incorporated and each of its executive officers** (incorporated by reference to Exhibit 10(c) to Snap-on’s Annual Report on Form 10-K for the fiscal year ended December 30, 2017 (Commission File No. 1-7724))** (d)(1) Form of Indemnification Agreement between Snap-on Incorporated and certain executive officers (incorporated by reference to Exhibit 10.1 to Snap-on’s Annual Report on Form 10-K for the fiscal year ended January 1, 2011 (Commission File No. 1-7724))** (d)(2) Form of Indemnification Agreement between Snap-on Incorporated and directors (incorporated by reference to Exhibit 10.1 to Snap-on’s Annual Report on Form 10-K for the fiscal year ended January 1, 2011 (Commission File No. 1-7724))** (e) M anagement A greement, dated as on March 15, 2005, between SNA Europe and Jesus Arregui** (f)(1) Amended and Restated Snap-on Incorporated Directors’ 1993 Fee Plan (as amended through August 5, 2010) (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended October 2, 2010 (Commission File No. 1-7724))** (f)(2) Amendment to Amended and Restated Snap-on Incorporated Directors’ 1993 Fee Plan (incorporated by reference to Exhibit 10(e)(2) to Snap-on’s Annual Report on Form 10-K for the fiscal year ended December 28, 2013 (Commission File No. 1-7724))** (g)(1) Snap-on Incorporated Deferred Compensation Plan (as amended and restated as of September 1, 2011) (incorporated by reference to Exhibit 10(g) to Snap-on’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (Commission File No. 1-7724))** (g)(2) Amendment to Snap-on Incorporated Deferred Compensation Plan (incorporated by reference to Exhibit 10(f)(2) to Snap-on’s Annual Report on Form 10-K for the fiscal year ended December 28, 2013 (Commission File No. 1-7724))** (h) Snap-on Incorporated Supplemental Retirement Plan for Officers (as amended through June 11, 2010) (incorporated by reference to Exhibit 10.2 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended July 3, 2010 (Commission File No. 1-7724))** (i) Form of Restricted Stock Unit Agreement for Directors under the 2001 Incentive Stock and Awards Plan (and accompanying Restricted Stock Unit Offer Letter) (incorporated by reference to Exhibit 10.2 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended October 3, 2009 (Commission File No. 1-7724))** (superseded except as to outstanding awards) (j) Form of Non-Qualified Stock Option Agreement under the 2011 Incentive Stock and Awards Plan (and accompanying Non-Qualified Stock Option Grant Offer Letter) (incorporated by reference to Exhibit 10.1 to Snap‑on’s Quarterly Report on Form 10-Q for the quarterly period ended October 1, 2011 (Commission File No. 1-7724))** (k) Form of Performance Share Unit Award Agreement 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. 1-7724))** (l) Form of Performance-Based Restricted Unit Award Agreement for Executive Officers 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. 1-7724))** 2024 ANNUAL REPORT 59 (m) 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. 1-7724))** (n) 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. 1-7724))** (o) 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. 1-7724))** (p) Fourth Amended and Restated Five Year Credit Agreement, dated as of September 12, 2023 among Snap-on Incorporated and each lenders and agents listed on the signature pages thereof, and JPMorgan Chase Bank, N.A., Citibank N.A. and U.S. 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 12, 2023 (Commission File No. 1-7724)) (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. 1-7724)) (19) Snap-on Incorporated Insider Trading Policy (incorporated by reference to Exhibit 19 to Snap-on's Annual Report on Form 10-K for the fiscal year ended December 30, 2023 (Commission File No. 1-7724)) (21) Subsidiaries of the Corporation (23) Consent of Independent Registered Public Accounting Firm (31.1) Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (31.2) Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (32.1) Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (32.2) Certification of Principal Financial Officer Pursuant to 18 U.S.C. 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 (incorporated by reference to Exhibit 97 to Snap-on's Annual Report on Form 10-K for the fiscal year ended December 30, 2023 (Commission File No. 1-7724)) (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 (101.SCH) Inline XBRL Taxonomy Extension Schema Document (101.CAL) Inline XBRL Taxonomy Extension Calculation Linkbase Document (101.DEF) Inline XBRL Taxonomy Extension Definition Linkbase Document (101.LAB) Inline XBRL Taxonomy Extension Label Linkbase Document (101.PRE) Inline XBRL Taxonomy Extension Presentation Linkbase Document (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. Copies of any materials the company files with the SEC can also be obtained free of charge through the SEC’s website at www.sec.gov . ** Represents a management compensatory plan or agreement. Item 16: Form 10-K Summary None. 60 SNAP-ON INCORPORATED REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Snap-on Incorporated Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Snap-on Incorporated and subsidiaries (the “Company”) as of December 28, 2024 and December 30, 2023, the related consolidated statements of earnings, comprehensive income, equity, and cash flows for each of the three years in the period ended December 28, 2024, 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 28, 2024, and December 30, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 28, 2024, 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 28, 2024, 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 13, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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. 2024 ANNUAL REPORT 61 Finance Receivables – Net - Allowance for Credit Losses - Refer to Notes 1 and 4 to the financial statements Critical Audit Matter Description The Company’s finance receivables are comprised of extended-term installment 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. The receivables are generally secured by the underlying tools, diagnostics and/or equipment products financed. 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. The Company estimates and records an allowance for credit losses over the remaining contractual life of their contracts considering collectability, historical loss experience, current conditions, and future market changes. Evaluating the judgments related to the finance receivable allowance for credit losses is subjective and requires auditor judgment to effectively evaluate whether management’s judgments were reasonable. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the finance receivables allowance for credit losses balance included the following procedures, among others: • We tested the design, implementation and operating effectiveness of management’s controls over the allowance for credit losses including controls over the completeness and accuracy of underlying data. • 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 accuracy and evaluated the relevance of the historical loss data used in determining the qualitative adjustments. • 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 independent expectation of the allowance for credit losses and compared it to the recorded balance. /s/ Deloitte & Touche LLP Milwaukee, Wisconsin February 13, 2025 We have served as the Company’s auditor since 2002. 62 SNAP-ON INCORPORATED Snap-on Incorporated – Consolidated Statements of Earnings (Amounts in millions, except per share data) 2024 2023 2022 Net sales $ 4,707.4 $ 4,730.2 $ 4,492.8 Cost of goods sold ( 2,329.5 ) ( 2,381.1 ) ( 2,311.7 ) Gross profit 2,377.9 2,349.1 2,181.1 Operating expenses ( 1,309.1 ) ( 1,309.2 ) ( 1,239.9 ) Operating earnings before financial services 1,068.8 1,039.9 941.2 Financial services revenue 401.0 378.1 349.7 Financial services expenses ( 124.1 ) ( 107.6 ) ( 83.7 ) Operating earnings from financial services 276.9 270.5 266.0 Operating earnings 1,345.7 1,310.4 1,207.2 Interest expense ( 49.6 ) ( 49.9 ) ( 47.1 ) Other income (expense) – net 77.0 67.5 42.5 Earnings before income taxes 1,373.1 1,328.0 1,202.6 Income tax expense ( 304.2 ) ( 293.4 ) ( 268.7 ) Net earnings 1,068.9 1,034.6 933.9 Net earnings attributable to noncontrolling interests ( 25.0 ) ( 23.5 ) ( 22.2 ) Net earnings attributable to Snap-on Incorporated $ 1,043.9 $ 1,011.1 $ 911.7 Net earnings per share attributable to Snap-on Incorporated: Basic $ 19.85 $ 19.11 $ 17.14 Diluted 19.51 18.76 16.82 Weighted-average shares outstanding: Basic 52.6 52.9 53.2 Effect of dilutive securities 0.9 1.0 1.0 Diluted 53.5 53.9 54.2 See Notes to Consolidated Financial Statements. 2024 ANNUAL REPORT 63 Snap-on Incorporated – Consolidated Statements of Comprehensive Income (Amounts in millions) 2024 2023 2022 Comprehensive income (loss): Net earnings $ 1,068.9 $ 1,034.6 $ 933.9 Other comprehensive income (loss): Foreign currency translation ( 108.8 ) 60.7 ( 127.4 ) Reclassification of cash flow hedges to net earnings ( 1.7 ) ( 1.6 ) ( 1.6 ) Defined benefit pension and postretirement plans: Net prior service costs and credits and unrecognized gain (loss) ( 28.2 ) 26.1 ( 92.8 ) Income tax benefit (expense) 7.1 ( 6.8 ) 23.8 Net of tax ( 21.1 ) 19.3 ( 69.0 ) Amortization of unrecognized loss and net prior service costs included in net periodic benefit cost 8.1 0.5 18.1 Income tax benefit ( 2.0 ) ( 0.1 ) ( 4.5 ) Net of tax 6.1 0.4 13.6 Total comprehensive income 943.4 1,113.4 749.5 Comprehensive income attributable to noncontrolling interests ( 25.0 ) ( 23.5 ) ( 22.2 ) Comprehensive income attributable to Snap-on Incorporated $ 918.4 $ 1,089.9 $ 727.3 See Notes to Consolidated Financial Statements. 64 SNAP-ON INCORPORATED Snap-on Incorporated – Consolidated Balance Sheets Fiscal Year End (Amounts in millions, except share data) 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 1,360.5 $ 1,001.5 Trade and other accounts receivable – net 815.6 791.3 Finance receivables – net 610.3 594.1 Contract receivables – net 120.0 120.8 Inventories – net 943.4 1,005.9 Prepaid expenses and other current assets 139.6 138.4 Total current assets 3,989.4 3,652.0 Property and equipment – net 542.6 539.3 Operating lease right-of-use assets 89.4 74.7 Deferred income tax assets 78.0 76.0 Long-term finance receivables – net 1,312.0 1,284.2 Long-term contract receivables – net 418.3 407.9 Goodwill 1,056.8 1,097.4 Other intangible assets – net 267.6 268.9 Pension assets 125.4 130.5 Other long-term assets 17.3 14.0 Total assets $ 7,896.8 $ 7,544.9 LIABILITIES AND EQUITY Current liabilities: Notes payable $ 13.7 $ 15.6 Accounts payable 265.9 238.0 Accrued benefits 67.2 64.4 Accrued compensation 86.1 102.9 Franchisee deposits 70.9 73.3 Other accrued liabilities 457.7 447.4 Total current liabilities 961.5 941.6 Long-term debt 1,185.5 1,184.6 Deferred income tax liabilities 73.5 79.2 Retiree health care benefits 19.4 21.8 Pension liabilities 78.4 82.3 Operating lease liabilities 68.6 54.6 Other long-term liabilities 92.9 87.4 Total liabilities 2,479.8 2,451.5 Commitments and contingencies (Note 15) Equity Shareholders’ equity attributable to Snap-on Incorporated: Preferred stock (authorized 15,000,000 shares of $ 1 par value; none outstanding) — — Common stock (authorized 250,000,000 shares of $ 1 par value; issued 67,456,641 and 67,450,999 shares, respectively) 67.5 67.5 Additional paid-in capital 557.7 545.5 Retained earnings 7,584.3 6,948.5 Accumulated other comprehensive loss ( 575.0 ) ( 449.5 ) Treasury stock at cost ( 15,074,968 and 14,756,982 shares, respectively) ( 2,240.4 ) ( 2,040.7 ) Total shareholders’ equity attributable to Snap-on Incorporated 5,394.1 5,071.3 Noncontrolling interests 22.9 22.1 Total equity 5,417.0 5,093.4 Total liabilities and equity $ 7,896.8 $ 7,544.9 See Notes to Consolidated Financial Statements. 2024 ANNUAL REPORT 65 Snap-on Incorporated – Consolidated Statements of Equity Shareholders’ Equity Attributable to Snap-on Incorporated (Amounts in millions, except share data) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Noncontrolling Interests Total Equity 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 2022 — — 911.7 — — 22.2 933.9 Other comprehensive loss — — — ( 184.4 ) — — ( 184.4 ) Cash dividends – $ 5.88 per share — — ( 313.1 ) — — — ( 313.1 ) Stock compensation plans — 27.2 — — 58.4 — 85.6 Share repurchases – 899,000 shares — — — — ( 198.1 ) — ( 198.1 ) Other — — ( 2.3 ) — — ( 21.9 ) ( 24.2 ) 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 income — — — 78.8 — — 78.8 Cash dividends – $ 6.72 per share — — ( 355.6 ) — — — ( 355.6 ) Stock compensation plans — 45.6 — — 107.9 — 153.5 Share repurchases – 1,126,000 shares — — — — ( 294.7 ) — ( 294.7 ) Other 0.1 — ( 3.2 ) — — ( 23.6 ) ( 26.7 ) 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 2024 — — 1,043.9 — — 25.0 1,068.9 Other comprehensive loss — — — ( 125.5 ) — — ( 125.5 ) Cash dividends – $ 7.72 per share — — ( 406.4 ) — — — ( 406.4 ) Stock compensation plans — 12.2 — — 90.3 — 102.5 Share repurchases – 952,000 shares — — — — ( 290.0 ) — ( 290.0 ) Other — — ( 1.7 ) — — ( 24.2 ) ( 25.9 ) Balance at December 28, 2024 $ 67.5 $ 557.7 $ 7,584.3 $ ( 575.0 ) $ ( 2,240.4 ) $ 22.9 $ 5,417.0 See Notes to Consolidated Financial Statements. 66 SNAP-ON INCORPORATED Snap-on Incorporated – Consolidated Statements of Cash Flows (Amounts in millions) 2024 2023 2022 Operating activities: Net earnings $ 1,068.9 $ 1,034.6 $ 933.9 Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Depreciation 72.7 72.2 71.5 Amortization of other intangible assets 25.3 27.1 28.7 Provision for losses on finance receivables 71.1 57.2 37.7 Provision for losses on non-finance receivables 22.8 19.2 16.8 Stock-based compensation expense 28.6 44.7 34.0 Deferred income tax benefit ( 8.2 ) ( 18.7 ) ( 10.3 ) Gain on sales of assets ( 0.6 ) ( 1.0 ) ( 3.1 ) Changes in operating assets and liabilities, net of effects of acquisitions: Trade and other accounts receivable ( 72.9 ) ( 45.2 ) ( 120.0 ) Contract receivables ( 17.4 ) ( 34.0 ) ( 11.8 ) Inventories 27.8 23.3 ( 272.1 ) Prepaid expenses and other current assets 10.4 35.1 ( 6.3 ) Accounts payable 29.0 ( 48.1 ) 17.7 Accrued and other liabilities ( 40.0 ) ( 12.2 ) ( 41.5 ) Net cash provided by operating activities 1,217.5 1,154.2 675.2 Investing activities: Additions to finance receivables ( 966.0 ) ( 1,029.0 ) ( 955.8 ) Collections of finance receivables 837.8 833.5 826.9 Capital expenditures ( 83.5 ) ( 95.0 ) ( 84.2 ) Acquisitions of businesses, net of cash acquired — ( 42.6 ) 0.5 Disposals of property and equipment 3.1 2.7 5.1 Other 4.5 ( 1.4 ) 1.3 Net cash used by investing activities ( 204.1 ) ( 331.8 ) ( 206.2 ) Financing activities: Net increase (decrease) in other short-term borrowings ( 1.3 ) ( 1.7 ) 1.6 Cash dividends paid ( 406.4 ) ( 355.6 ) ( 313.1 ) Purchases of treasury stock ( 290.0 ) ( 294.7 ) ( 198.1 ) Proceeds from stock purchase plans and stock option exercises 92.3 113.6 55.0 Other ( 44.4 ) ( 34.5 ) ( 30.4 ) Net cash used by financing activities ( 649.8 ) ( 572.9 ) ( 485.0 ) Effect of exchange rate changes on cash and cash equivalents ( 4.6 ) ( 5.2 ) ( 6.8 ) Increase (decrease) in cash and cash equivalents 359.0 244.3 ( 22.8 ) Cash and cash equivalents at beginning of year 1,001.5 757.2 780.0 Cash and cash equivalents at end of year $ 1,360.5 $ 1,001.5 $ 757.2 Supplemental cash flow disclosures: Cash paid for interest $ ( 44.1 ) $ ( 44.5 ) $ ( 44.7 ) Net cash paid for income taxes ( 305.7 ) ( 300.9 ) ( 261.2 ) See Notes to Consolidated Financial Statements. 2024 ANNUAL REPORT 67 Notes to Consolidated Financial Statements Note 1: Summary of Accounting Policies Principles of consolidation and presentation: The Consolidated Financial Statements include the accounts of Snap‑on Incorporated and its wholly-owned and majority-owned subsidiaries (collectively, “Snap-on” or “the company”). The Consolidated Financial Statements do not include the accounts of the company’s independent franchisees. Snap-on’s Consolidated Financial Statements are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Intercompany accounts and transactions have been eliminated. Fiscal year accounting period: Snap-on’s fiscal year ends on the Saturday that is on or nearest to December 31. The 2024 fiscal year ended on December 28, 2024 (“2024”), the 2023 fiscal year ended on December 30, 2023 (“2023”), and the 2022 fiscal year ended on December 31, 2022 (“2022”). The 2024, 2023 and 2022 fiscal years each contained 52 weeks of operating results. Use of estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Financial instruments: The fair value of the company’s derivative financial instruments is generally determined using quoted prices in active markets for similar assets and liabilities. 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 10 for additional information on financial instruments. 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. See Note 2 for information on revenue recognition. Financial services revenue: Snap-on generates revenue from various financing programs that include: (i) installment sales and lease contracts arising from franchisees’ customers and Snap-on customers who require financing for the purchase or lease of tools, diagnostics, and equipment products on an extended-term payment plan; and (ii) business and vehicle loans and leases to franchisees. These financing programs are offered through Snap-on’s wholly owned finance subsidiaries. Financial services revenue consists primarily of interest income on finance and contract receivables and is recognized over the life of the underlying contracts, with interest computed primarily on the average daily balances of the underlying contracts. The decision to finance through Snap-on or another financing source is solely at the election of the customer. When assessing customers for potential financing, Snap-on considers various factors regarding ability to pay, including the customers’ financial condition, past payment experience, and credit bureau and proprietary Snap-on credit model information, as well as the value of the underlying collateral. 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. Delinquency is the primary indicator of credit quality for finance and contract receivables. Snap-on conducts monthly reviews of credit and collection performance for both the finance and contract receivable portfolios, focusing on data such as delinquency trends, nonaccrual receivables, and write-off and recovery activity. Financial services lease arrangements: Snap-on accounts for its financial services leases as sales-type leases. The company recognizes the net investment in the lease as the present value of the lease payments not yet received plus the present value of the unguaranteed residual value, using the interest rate implicit in the lease. The difference between the undiscounted lease payments received over the lease term and the related net investment in the lease is reported as unearned finance charges. Unearned finance charges are amortized to income over the life of the contract. The default covenants included in the lease arrangements are usual and customary, consistent with industry practice, and do not impact the lease classification. 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 16 for additional information on finance and contract receivables and lessor accounting. Research and engineering: Snap-on incurred research and engineering costs of $ 67.0 million, $ 64.7 million and $ 60.1 million in 2024, 2023 and 2022, respectively. Research and engineering costs are included in “Operating expenses” on the accompanying Consolidated Statements of Earnings. 68 SNAP-ON INCORPORATED Internally developed software: Costs incurred in the development of software that will ultimately be sold are capitalized from the time technological feasibility has been attained and capitalization ceases when the related product is ready for general release. During 2024, 2023 and 2022, Snap-on capitalized $ 13.3 million, $ 11.0 million and $ 10.2 million, respectively, of such costs. Amortization of capitalized software development costs, which is included in “Cost of goods sold” on the accompanying Consolidated Statements of Earnings, was $ 10.7 million in 2024, $ 10.5 million in 2023 and $ 11.6 million in 2022. Unamortized capitalized software development costs of $ 44.0 million as of 2024 year end and $ 43.1 million as of 2023 year end are included in “Other intangible assets – net” on the accompanying Consolidated Balance Sheets. Internal-use software: Costs that are incurred in creating software solutions and enhancements to those solutions are capitalized only for the application development stage of the project. Shipping and handling: Amounts billed to customers for shipping and handling are included as a component of sales. Costs incurred by Snap-on for shipping and handling are included as a component of cost of goods sold when the costs relate to manufacturing activities. In 2024, 2023 and 2022, Snap-on incurred shipping and handling charges of $ 65.5 million, $ 72.0 million and $ 77.6 million, respectively, that were recorded in “Cost of goods sold” on the accompanying Consolidated Statements of Earnings. Shipping and handling costs incurred in conjunction with selling or distribution activities are included as a component of operating expenses. Shipping and handling charges were $ 116.4 million in 2024, $ 107.8 million in 2023 and $ 104.9 million in 2022; these charges were recorded in “Operating expenses” on the accompanying Consolidated Statements of Earnings. Other freight-related costs recorded in “Operating expenses” on the accompanying Consolidated Statements of Earnings in 2023 and 2022 totaled $ 11.5 million and $ 11.0 million, respectively. Advertising and promotion: Production costs of future media advertising are deferred until the advertising occurs. All other advertising and promotion costs are expensed when incurred. For 2024, 2023 and 2022, advertising and promotion expenses totaled $ 47.5 million, $ 44.5 million and $ 39.3 million, respectively. Advertising and promotion costs are included in “Operating expenses” on the accompanying Consolidated Statements of Earnings. Warranties: Snap-on provides product warranties for specific product lines and accrues for estimated future warranty costs in the period in which the sale is recorded. See Notes 2 and 15 for information on warranties. Foreign currency: The financial statements of Snap-on’s foreign subsidiaries are translated into U.S. dollars. Assets and liabilities of foreign subsidiaries are translated at current rates of exchange, and income and expense items are translated at the average exchange rates for the period. The resulting translation adjustments are recorded directly into “Accumulated other comprehensive loss” on the accompanying Consolidated Balance Sheets. Foreign exchange transactions, net of foreign currency hedges, resulted in pretax losses of $ 7.4 million, $ 11.0 million and $ 7.5 million in 2024, 2023 and 2022, respectively. Foreign exchange transaction gains and losses are reported in “Other income (expense) – net” on the accompanying Consolidated Statements of Earnings. Income taxes: Current tax assets and liabilities are based upon an estimate of taxes refundable or payable for each of the jurisdictions in which the company is subject to tax. In the ordinary course of business, there is inherent uncertainty in quantifying income tax positions. Snap-on assesses income tax positions and records tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting dates. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, Snap-on records the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. When applicable, associated interest and penalties are recognized as a component of income tax expense. Accrued interest and penalties are included within the related tax asset or liability on the accompanying Consolidated Balance Sheets. Deferred income taxes are provided for temporary differences arising from differences in bases of assets and liabilities for tax and financial reporting purposes. Deferred income taxes are recorded on temporary differences using enacted tax rates in effect for the year in which the temporary differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. 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 8 for additional information on income taxes. 2024 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 stock options and stock-settled stock appreciation rights (“SARs”) to purchase common shares is calculated using the treasury stock method . As of December 28, 2024, December 30, 2023, and December 31, 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 905,610 shares, 1,060,072 shares and 945,250 shares, as of the end of 2024, 2023 and 2022, respectively. See Note 13 for additional information on equity awards. Stock-based compensation: Snap-on recognizes the cost of employee services in exchange for awards of equity instruments based on the grant date fair value of those awards. That cost, based on the estimated number of awards that are expected to vest, is recognized on a straight-line basis over the period during which the employee is required to provide the service in exchange for the award. No compensation cost is recognized for awards for which employees do not render the requisite service. The grant date fair value of employee stock options and similar instruments is estimated using the Black-Scholes valuation model. The Black-Scholes valuation model requires the input of subjective assumptions, including the expected life of the stock-based award and stock price volatility. The assumptions used are management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment. 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 13 for additional information on stock-based compensation. Derivatives: 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. Snap-on accounts for its derivative instruments at fair value. Snap-on does not use financial instruments for speculative or trading purposes. 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 28, 2024 and December 30, 2023. Receivables and allowances for credit losses: All trade, finance and contract receivables are reported on the Consolidated Balance Sheets at their amortized cost adjusted for any write-offs and net of allowances for credit losses. The amortized costs for finance and contract receivables is the amount originated adjusted for applicable accrued interest and net of deferred fees or costs, net of collections and write-offs. Snap-on maintains allowances for credit losses, which represent an estimate of expected credit losses over the remaining contractual life of its receivables considering current conditions and supportable forecasts when appropriate. The estimate is a result of the company’s ongoing assessments and evaluations of collectability, historical loss experience, current conditions, and future expectations in estimating credit losses in each of its receivable portfolios (trade, finance and contract receivables). For trade receivables, Snap-on uses historical loss experience rates by portfolio and applies them to a related aging analysis while also considering customer and/or economic risk where appropriate. Snap-on uses a vintage loss experience methodology for finance receivables. For contract receivables, Snap-on primarily uses a Weighted-Average Remaining Maturity (“WARM”) methodology. Determination of the proper amount of allowances by portfolio requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, net earnings. The allowances take into consideration numerous quantitative and qualitative factors that include receivable type, historical loss experience, delinquency trends, collection experience, current conditions, supportable forecasts, when appropriate, and credit risk characteristics. Snap-on evaluates the credit risk of the customer when extending credit based on a combination of various financial and qualitative factors that may affect its customers’ ability to pay. 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. 70 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. Monthly reviews of credit and collection performance are conducted for both its finance and contract receivable portfolios focusing on data such as delinquency trends, non-performing assets, and write-off and recovery activity. 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. A receivable generally has credit losses when it is expected that all amounts related to the receivable will not be collected according to the contractual terms of the agreement. Amounts determined to be uncollectable are charged directly against the allowances, while amounts recovered on previously written off accounts increase the allowances. 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. For finance receivables only, write-offs are partially offset by recourse from franchisees. Recovered interest and fees previously written off are recorded through the allowances for credit losses and increase the allowances. Absent a repossession, finance receivables are generally written off when an account becomes 120 days past due. Repossessed accounts are typically written off within 60 days of asset repossession. Contract receivables related to equipment leases are generally written off when an account becomes 150 days past due, while contract receivables related to franchise finance and van leases are generally written off no later than when the receivable becomes 180 days past the asset return date. For finance and contract receivables, customer bankruptcies are generally written off upon notification that the associated debt is not being reaffirmed or, in any event, no later than when the receivable becomes 180 days past due. Changes to the allowances for credit losses are maintained through adjustments to the provisions for credit losses. Actual amounts as of the balance sheet dates may be materially different than the amounts reported in future periods due to the uncertainty in the estimation process. Also, future amounts could differ materially from those estimates due to changes in circumstances after the balance sheet date. 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 additional information on receivables and allowances for credit losses. Other accrued liabilities: Supplemental balance sheet information for “Other accrued liabilities” as of 2024 and 2023 year end is as follows: (Amounts in millions) 2024 2023 Income taxes $ 39.3 $ 35.3 Operating lease liabilities 25.0 23.8 Deferred subscription revenue 59.0 58.4 Accrued new tool return 51.2 59.1 Accrued property, payroll and other taxes 28.5 31.2 Accrued selling and promotion expense 37.5 37.2 Other 217.2 202.4 Total other accrued liabilities $ 457.7 $ 447.4 Inventories: 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. Allowances for raw materials are largely based on an analysis of raw material age and actual physical inspection of raw material for fitness for use. As part of evaluating the adequacy of allowances for work-in-progress and finished goods, management reviews individual product stock-keeping units (SKUs) by product category and product life cycle. Cost adjustments for each product category/product life-cycle state are generally established and maintained based on a combination of historical experience, forecasted sales and promotions, technological obsolescence, inventory age and other actual known conditions and circumstances. 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. 2024 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. locations. Snap-on’s U.S. inventories accounted for on a LIFO basis consist of purchased product and inventory manufactured at the company’s heritage U.S. manufacturing facilities (primarily hand tools and tool storage). 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 additional information on inventories. Property and equipment: Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided on a straight-line basis over estimated useful lives. Major repairs that extend the useful life of an asset are capitalized, while routine maintenance and repairs are expensed as incurred. Capitalized internal-use software is depreciated on a straight-line basis over estimated useful lives. 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 additional information on property and equipment. Goodwill and other intangible assets: Goodwill and other indefinite-lived assets are tested for impairment annually or more frequently if events or changes in circumstances indicate that the assets might be impaired. Annual impairment tests are performed by the company in the second quarter of each year using information available as of April month end. 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 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: Snap-on adopted ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires the disclosure of additional segment information at the end of fiscal year 2024. The adoption of this ASU resulted in new disclosures, including comparative information for all years presented, but otherwise had no impact on the company’s Consolidated Financial Statements. See Note 19 for additional information on segments. The following new accounting pronouncements, and related impacts on adoption, are being evaluated by the company: In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires disaggregated expense information in the notes to the financial statements related to purchases of inventory, employee compensation, depreciation, intangible asset amortization and selling expenses for each statement of earnings line item that contains those expenses. ASU No. 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. 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. 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. ASU No. 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. Note 2: 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. 72 SNAP-ON INCORPORATED Revenue disaggregation The following table shows the consolidated revenues by revenue source: (Amounts in millions) 2024 2023 Revenue from contracts with customers $ 4,677.6 $ 4,703.2 Other revenues 29.8 27.0 Total net sales 4,707.4 4,730.2 Financial services revenue 401.0 378.1 Total revenues $ 5,108.4 $ 5,108.3 Snap-on evaluates the performance of the Commercial & Industrial Group, the Snap-on Tools Group and the Repair Systems & Information Group operating segments based on segment net sales and segment operating earnings while the Financial Services operating segment is evaluated based on segment revenue and segment operating earnings. The Snap-on Tools Group segment net sales reflect external net sales, while the Commercial & Industrial Group and the Repair Systems & Information Group segment net sales 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 table represents external net sales disaggregated by geography, based on the customers’ billing addresses: 2024 Commercial & Snap-on Repair Systems Industrial Tools & Information Financial Snap-on (Amounts in millions) Group Group Group Services Eliminations Incorporated Net sales: North America* $ 621.9 $ 1,725.6 $ 1,171.9 $ — $ — $ 3,519.4 Europe 310.8 158.3 253.2 — — 722.3 All other 254.9 105.3 105.5 — — 465.7 External net sales 1,187.6 1,989.2 1,530.6 — — 4,707.4 Intersegment net sales 289.2 — 267.3 — ( 556.5 ) — Total net sales 1,476.8 1,989.2 1,797.9 — ( 556.5 ) 4,707.4 Financial services revenue — — — 401.0 — 401.0 Total revenue $ 1,476.8 $ 1,989.2 $ 1,797.9 $ 401.0 $ ( 556.5 ) $ 5,108.4 2023 Commercial & Snap-on Repair Systems Industrial Tools & Information Financial Snap-on (Amounts in millions) Group Group Group Services Eliminations Incorporated Net sales: North America* $ 580.5 $ 1,839.2 $ 1,146.5 $ — $ — $ 3,566.2 Europe 295.7 149.7 243.5 — — 688.9 All other 269.4 99.9 105.8 — — 475.1 External net sales 1,145.6 2,088.8 1,495.8 — — 4,730.2 Intersegment net sales 312.7 — 285.4 — ( 598.1 ) — Total net sales 1,458.3 2,088.8 1,781.2 — ( 598.1 ) 4,730.2 Financial services revenue — — — 378.1 — 378.1 Total revenue $ 1,458.3 $ 2,088.8 $ 1,781.2 $ 378.1 $ ( 598.1 ) $ 5,108.3 * North America is comprised of the United States, Canada and Mexico. 2024 ANNUAL REPORT 73 Notes to Consolidated Financial Statements (continued) The following table represents external net sales disaggregated by customer type: 2024 Commercial & Snap-on Repair Systems Industrial Tools & Information Financial Snap-on (Amounts in millions) Group Group Group Services Eliminations Incorporated Net sales: Vehicle service professionals $ 82.6 $ 1,989.2 $ 1,530.6 $ — $ — $ 3,602.4 All other professionals 1,105.0 — — — — 1,105.0 External net sales 1,187.6 1,989.2 1,530.6 — — 4,707.4 Intersegment net sales 289.2 — 267.3 — ( 556.5 ) — Total net sales 1,476.8 1,989.2 1,797.9 — ( 556.5 ) 4,707.4 Financial services revenue — — — 401.0 — 401.0 Total revenue $ 1,476.8 $ 1,989.2 $ 1,797.9 $ 401.0 $ ( 556.5 ) $ 5,108.4 2023 Commercial & Snap-on Repair Systems Industrial Tools & Information Financial Snap-on (Amounts in millions) Group Group Group Services Eliminations Incorporated Net sales: Vehicle service professionals $ 82.5 $ 2,088.8 $ 1,495.8 $ — $ — $ 3,667.1 All other professionals 1,063.1 — — — — 1,063.1 External net sales 1,145.6 2,088.8 1,495.8 — — 4,730.2 Intersegment net sales 312.7 — 285.4 — ( 598.1 ) — Total net sales 1,458.3 2,088.8 1,781.2 — ( 598.1 ) 4,730.2 Financial services revenue — — — 378.1 — 378.1 Total revenue $ 1,458.3 $ 2,088.8 $ 1,781.2 $ 378.1 $ ( 598.1 ) $ 5,108.3 Nature of goods and services: Snap-on derives net sales from a broad line of products and complementary services that are grouped into three categories: (i) tools; (ii) diagnostics, information and management systems; and (iii) equipment. The tools product category includes hand tools, power tools, tool storage products and other similar products. The diagnostics, information and management systems product category includes handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer (“OEM”) purchasing facilitation services, and warranty management systems and analytics to help OEM dealership service and repair shops (“OEM dealerships”) manage and track performance. The equipment product category includes solutions for the service of vehicles and industrial equipment. Snap-on supports the sale of its diagnostics and vehicle service shop equipment by offering training programs as well as after-sales support to its customers. 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. Approximately 90 % of Snap-on’s net sales are products sold at a point in time through ship-and-bill performance obligations that also include repair services. The remaining sales revenue is earned over time primarily for software subscriptions, other subscription service agreements and extended warranty programs. Snap-on enters into contracts related to the selling of tools, diagnostics, repair information, equipment and related services. At contract inception, an assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, Snap-on considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Contracts with customers are comprised of customer purchase orders, invoices and written contracts. 74 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: (i) contracts that have an original expected length of one year or less; (ii) contracts where revenue is recognized as invoiced; and (iii) contracts with variable consideration related to unsatisfied performance obligations. The remaining duration of these unsatisfied performance obligations range from one month up to 60 months. Snap-on had $ 183.5 million of long-term contracts that have fixed consideration that extends beyond one year as of December 28, 2024. Snap-on expects to recognize approximately 75 % of these contracts as revenue by the end of fiscal 2026, an additional 20 % by the end of fiscal 2028 and the balance thereafter. Snap-on typically expenses incremental direct costs of obtaining a contract (sales commissions) when incurred because the amortization period is generally 12 months or less. Capitalized long-term contract costs are not significant. Contract costs are expensed or amortized in “Operating expenses” on the accompanying Consolidated Statements of Earnings. When performance obligations are satisfied: For performance obligations related to the majority of ship-and-bill products, including repair services contracts, control transfers at a point in time when title transfers upon shipment of the product to the customer, and for some sales, control transfers when title is transferred at time of receipt by customer. Once a product or repaired product has shipped or has been delivered, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from the asset, revenue is recognized. Snap-on considers control to have transferred upon shipment or delivery when Snap-on has a present right to payment, the customer has legal title to the asset, Snap-on has transferred physical possession of the asset, and the customer has significant risk and rewards of ownership of the asset. For performance obligations related to software subscriptions, extended warranties and other subscription agreements, Snap-on transfers control and recognizes revenue over time on a ratable basis using a time-based output method. The performance obligations are typically satisfied as services are rendered on a straight-line basis over the contract term, which is generally for 12 months but can be for a term up to 60 months. Significant payment terms: For ship-and-bill type contracts with customers, the contract states the final terms of the sale, including the description, quantity, and price of each product or service purchased. Payment terms are typically due upon delivery or up to 30 days after delivery but can range up to 120 days after delivery. For subscription contracts, payment terms are in advance or in arrears of services on a monthly, quarterly or annual basis over the contract term, which is generally for 12 months but can be for a term up to 60 months depending on the product or service. The customer typically agrees to a stated rate and price in the contract that does not vary over the contract term. In some cases, customers prepay for their licenses, or in other cases, pay on a monthly or quarterly basis. When the timing of the payment made by the customer precedes the delivery of the performance obligation, a contract liability is recognized. Variable consideration: In some cases, the nature of Snap-on’s contracts give rise to variable consideration, including rebates, credits, allowances for returns or other similar items that generally decrease the transaction price. These variable amounts generally are credited to the customer, based on achieving certain levels of sales activity, product returns and making payments within specific terms. In the normal course of business, Snap-on allows franchisees to return product per the provisions in the franchise agreement that allow for the return of product in a saleable condition. For other customers, product returns are generally not accepted unless the item is defective as manufactured. Where applicable, Snap-on establishes provisions for estimated sales returns. 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. Variable consideration is estimated at the most likely amount that is expected to be earned. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the anticipated performance and all information (historical, current and forecasted) that is reasonably available. Warranties: Snap-on allows customers to return product when the product is defective as manufactured. Where applicable, Snap-on establishes provisions for estimated warranties. Estimated product warranties are provided for specific product lines and Snap-on accrues for estimated future warranty cost in the period in which the sale is recorded. The costs are included in “Cost of goods sold” on the accompanying Consolidated Statements of Earnings. 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 does not typically provide customers with the right to a refund. 2024 ANNUAL REPORT 75 Notes to Consolidated Financial Statements (continued) Contract liabilities: Contract liabilities are recorded when cash payments are received in advance of Snap-on’s performance. The timing of payment is typically on a monthly, quarterly or annual basis. The balance of total contract liabilities was $ 63.8 million at December 28, 2024, and $ 63.3 million at December 30, 2023. 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 2024, Snap-on recognized revenue of $ 57.6 million that was included in the contract liability balance at December 30, 2023, 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. Franchise fee revenue also includes ongoing monthly fees (primarily for sales and business training as well as marketing and product promotion programs) that are recognized as the fees are earned. Franchise fee revenue in 2024, 2023 and 2022 totaled $ 19.4 million, $ 18.7 million and $ 18.4 million, respectively. Note 3: Acquisitions 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. 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 Consolidated Balance Sheets. For segment reporting purposes, the results of operations and assets of SAVTEQ have been included in the Repair Systems & Information Group and those of Mountz have been included in the Commercial & Industrial Group since the respective acquisition dates. 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 7 for additional information on goodwill and other intangible assets. Note 4: Receivables 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 2024 and 2023 year end are as follows: (Amounts in millions) 2024 2023 Trade and other accounts receivable $ 852.7 $ 826.2 Allowances for credit losses ( 37.1 ) ( 34.9 ) Total trade and other accounts receivable – net $ 815.6 $ 791.3 76 SNAP-ON INCORPORATED The following is a rollforward of the allowances for credit losses related to trade and other accounts receivable for 2024 and 2023: (Amounts in millions) 2024 2023 Allowances for credit losses: Beginning of year $ 34.9 $ 31.1 Provision for credit losses 20.2 17.3 Charge-offs ( 16.8 ) ( 14.2 ) Recoveries 0.2 0.2 Currency translation ( 1.4 ) 0.5 End of year $ 37.1 $ 34.9 Finance and contract receivables: Snap-on Credit LLC (“SOC”), the company’s financial services operation in the United States, originates extended-term finance and contract receivables on sales of Snap-on’s products sold through the U.S. franchisee network and to certain other customers of Snap-on; Snap-on’s foreign finance subsidiaries provide similar financing internationally. Interest income on finance and contract receivables is included in “Financial services revenue” on the accompanying Consolidated Statements of Earnings. 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. 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. 2024 ANNUAL REPORT 77 Notes to Consolidated Financial Statements (continued) The components of Snap-on’s current finance and contract receivables as of 2024 and 2023 year end are as follows: (Amounts in millions) 2024 2023 Finance installment receivables $ 616.0 $ 605.2 Finance lease receivables, net of unearned finance charges of $ 6.5 million and $ 3.4 million, respectively 17.1 10.1 Total finance receivables 633.1 615.3 Contract installment receivables 61.7 59.9 Contract lease receivables, net of unearned finance charges of $ 21.9 million and $ 21.1 million, respectively 60.0 62.7 Total contract receivables 121.7 122.6 Total 754.8 737.9 Allowances for credit losses: Finance installment receivables ( 22.5 ) ( 21.1 ) Finance lease receivables ( 0.3 ) ( 0.1 ) Total finance allowances for credit losses ( 22.8 ) ( 21.2 ) Contract installment receivables ( 0.9 ) ( 0.9 ) Contract lease receivables ( 0.8 ) ( 0.9 ) Total contract allowances for credit losses ( 1.7 ) ( 1.8 ) Total allowances for credit losses ( 24.5 ) ( 23.0 ) Total current finance and contract receivables – net $ 730.3 $ 714.9 Finance receivables – net $ 610.3 $ 594.1 Contract receivables – net 120.0 120.8 Total current finance and contract receivables – net $ 730.3 $ 714.9 78 SNAP-ON INCORPORATED The components of Snap-on’s finance and contract receivables with payment terms beyond one year as of 2024 and 2023 year end are as follows: (Amounts in millions) 2024 2023 Finance installment receivables $ 1,337.5 $ 1,318.5 Finance lease receivables, net of unearned finance charges of $ 5.7 million and $ 2.8 million, respectively 24.1 12.3 Total finance receivables 1,361.6 1,330.8 Contract installment receivables 223.0 216.0 Contract lease receivables, net of unearned finance charges of $ 36.3 million and $ 35.1 million, respectively 200.4 196.8 Total contract receivables 423.4 412.8 Total 1,785.0 1,743.6 Allowances for credit losses: Finance installment receivables ( 49.2 ) ( 46.4 ) Finance lease receivables ( 0.4 ) ( 0.2 ) Total finance allowances for credit losses ( 49.6 ) ( 46.6 ) Contract installment receivables ( 3.3 ) ( 3.1 ) Contract lease receivables ( 1.8 ) ( 1.8 ) Total contract allowances for credit losses ( 5.1 ) ( 4.9 ) Total allowances for credit losses ( 54.7 ) ( 51.5 ) Total long-term finance and contract receivables – net $ 1,730.3 $ 1,692.1 Finance receivables – net $ 1,312.0 $ 1,284.2 Contract receivables – net 418.3 407.9 Total long-term finance and contract receivables – net $ 1,730.3 $ 1,692.1 2024 ANNUAL REPORT 79 Notes to Consolidated Financial Statements (continued) Long-term finance and contract receivables installments, net of unearned finance charges, as of 2024 and 2023 year end are scheduled as follows: 2024 2023 (Amounts in millions) Finance Receivables Contract Receivables Finance Receivables Contract Receivables Due in Months: 13 – 24 $ 502.8 $ 98.1 $ 475.0 $ 95.0 25 – 36 413.2 87.7 405.7 84.8 37 – 48 291.7 74.6 288.8 72.7 49 – 60 153.9 58.8 156.7 57.0 Thereafter — 104.2 4.6 103.3 Total $ 1,361.6 $ 423.4 $ 1,330.8 $ 412.8 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 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, collections, and write-offs. The company monitors and assesses credit risk based on the characteristics of each portfolio segment. When extending credit, Snap-on evaluates the collectability of the receivables based on a combination of various financial and qualitative factors that may affect a customer’s ability to pay. 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. 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. Snap-on conducts monthly reviews of credit and collection performance for both the finance and contract receivable portfolios focusing on data such as delinquency trends, nonaccrual receivables, and write-off and recovery activity. 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 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 2024 year end and charge-offs recorded in 2024 by origination year, are as follows: (Amounts in millions) 2024 2023 2022 2021 2020 Prior Total Finance Receivables: Delinquent $ 22.3 $ 25.5 $ 11.6 $ 5.2 $ 2.6 $ 0.9 $ 68.1 Non-delinquent 1,284.1 424.2 150.5 49.4 15.8 2.6 1,926.6 Total Finance receivables $ 1,306.4 $ 449.7 $ 162.1 $ 54.6 $ 18.4 $ 3.5 $ 1,994.7 Finance receivables charge-offs $ 7.4 $ 34.2 $ 19.1 $ 7.9 $ 4.2 $ 2.8 $ 75.6 Contract receivables: Delinquent $ 0.3 $ 0.7 $ 0.5 $ 0.4 $ 0.4 $ 0.1 $ 2.4 Non-delinquent 200.2 132.0 88.9 55.5 34.1 32.0 542.7 Total Contract receivables $ 200.5 $ 132.7 $ 89.4 $ 55.9 $ 34.5 $ 32.1 $ 545.1 Contract receivables charge-offs $ 0.1 $ 0.4 $ 0.9 $ 0.6 $ 0.5 $ 0.5 $ 3.0 80 SNAP-ON INCORPORATED Allowances for credit losses: The allowances for credit losses are maintained at levels that are considered adequate to cover expected credit losses over the remaining contractual life of the receivables using historical loss experience, asset specific risk characteristics, current conditions, reasonable and supportable forecasts, and an appropriate reversion period, when applicable. 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. A receivable generally has credit losses when it is expected that all amounts related to the receivable will not be collected according to the contractual terms of the agreement. Amounts determined to be uncollectable are charged directly against the allowances, while amounts recovered on previously written off accounts increase the allowances. 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. For finance receivables only, write-offs are partially offset by recourse from franchisees. Recovered interest and fees previously written off are recorded through the allowances for credit losses and increase the allowances. Absent a repossession, finance receivables are typically written off when an account reaches 120 days past due. Repossessed accounts are typically written off within 60 days of asset repossession. Contract receivables related to equipment leases are generally written off when an account becomes 150 days past due, while contract receivables related to franchise finance and van leases are generally written off no later than when the receivable becomes 180 days past the asset return date. For finance and contract receivables, customer bankruptcies are generally written off upon notification that the associated debt is not being reaffirmed or, in any event, no later than when the receivable becomes 180 days past due. Changes to the allowances for credit losses are maintained through adjustments to the provisions for credit losses. For finance receivables, the company uses a vintage loss rate methodology to determine expected losses. Vintage analysis aims to calculate losses based on the timing of the losses relative to the origination of the receivables. The finance receivable portfolio contains a substantial amount of homogeneous contracts which fits well with the vintage analysis. For contract receivables, the company primarily uses a Weighted-Average Remaining Maturity (“WARM”) methodology. 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 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. The primary economic factors considered were real gross domestic product, civilian unemployment, industrial production index, and repair and maintenance employment rate; the company determined that there is limited correlation between the historical losses and economic factors. As a result, consideration was given to qualitative factors to adjust the reserve balance for asset specific risk characteristics, current conditions and future expectations. Similar qualitative factors are considered for both finance and contract receivables. The qualitative factors used in determining the estimate of expected credit losses are influenced by the changes in the composition of the portfolio, underwriting practices, and other relevant conditions that were different from the historical periods. 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 2024 and 2023: 2024 2023 (Amounts in millions) Finance Receivables Contract Receivables Finance Receivables Contract Receivables Allowances for credit losses: Beginning of year $ 67.8 $ 6.7 $ 60.9 $ 6.6 Provision for credit losses 71.1 2.6 57.2 1.9 Charge-offs ( 75.6 ) ( 3.0 ) ( 58.8 ) ( 2.3 ) Recoveries 9.3 0.5 8.4 0.4 Currency translation ( 0.2 ) — 0.1 0.1 End of year $ 72.4 $ 6.8 $ 67.8 $ 6.7 2024 ANNUAL REPORT 81 Notes to Consolidated Financial Statements (continued) Past due: Depending on the contract, payments for finance and contract receivables are due on a monthly or weekly basis. Weekly payments are converted into a monthly equivalent for purposes of calculating delinquency. Delinquencies are assessed at the end of each month following the monthly equivalent contractual payment due date. The entire receivable balance of a contract is considered delinquent when contractual payments become 30 days past due. 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 2024 and 2023 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 2024 and 2023 year end is as follows: (Amounts in millions) 30-59 Days Past Due 60-90 Days Past Due Greater Than 90 Days Past Due Total Past Due Total Not Past Due Total Greater Than 90 Days Past Due and Accruing 2024 year end: Finance receivables $ 26.6 $ 14.8 $ 26.7 $ 68.1 $ 1,926.6 $ 1,994.7 $ 23.0 Contract receivables 0.9 0.5 1.0 2.4 542.7 545.1 0.2 2023 year end: Finance receivables $ 21.5 $ 13.6 $ 23.2 $ 58.3 $ 1,887.8 $ 1,946.1 $ 19.9 Contract receivables 1.5 0.6 1.2 3.3 532.1 535.4 0.2 Nonaccrual: SOC maintains the accrual of interest income during the progression through the various stages of delinquency prior to processing for write-off. At the time of write-off, the entire balance including the accrued but unpaid interest income amount is recorded as a loss. Finance receivables are generally placed on nonaccrual status (nonaccrual of interest and other fees): (i) when a customer is placed on repossession status; (ii) upon receipt of notification of bankruptcy; (iii) upon notification of the death of a customer; or (iv) in other instances in which management concludes collectability is not reasonably assured. Contract receivables are generally placed on nonaccrual status: (i) when a receivable is more than 90 days past due or at the point a customer’s account is placed on terminated status regardless of its delinquency status; (ii) upon notification of the death of a customer; or (iii) in other instances in which management concludes collectability is not reasonably assured. The accrual of interest and other fees is resumed when the finance or contract receivable becomes contractually current and collection of all remaining contractual amounts due is reasonably assured. A receivable may have credit losses when it is expected that all amounts related to the receivable will not be collected according to the contractual terms of the applicable agreement. 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 2024 and 2023 year end is as follows: (Amounts in millions) 2024 2023 Finance receivables $ 11.3 $ 10.6 Contract receivables 2.5 3.3 82 SNAP-ON INCORPORATED Note 5: Inventories Inventories by major classification as of 2024 and 2023 year end are as follows: (Amounts in millions) 2024 2023 Finished goods $ 840.1 $ 874.6 Work in progress 72.5 76.1 Raw materials 153.2 171.1 Total FIFO value 1,065.8 1,121.8 Excess of current cost over LIFO cost ( 122.4 ) ( 115.9 ) Total inventories – net $ 943.4 $ 1,005.9 Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 57 % and 59 % of total inventories as of 2024 and 2023 year end, respectively. The company accounts for its non-U.S. inventory on the FIFO method. As of 2024 year end, approximately 35 % of the company’s U.S. inventory was accounted for using the FIFO method and 65 % was accounted for using the last-in, first-out (“LIFO”) method. There were no LIFO inventory liquidations in 2024, 2023 or 2022. Note 6: Property and Equipment Property and equipment (which are carried at cost) as of 2024 and 2023 year end are as follows: (Amounts in millions) 2024 2023 Land $ 33.7 $ 34.5 Buildings and improvements 462.6 452.8 Machinery, equipment and computer software 1,103.7 1,083.1 Property and equipment – gross 1,600.0 1,570.4 Accumulated depreciation ( 1,057.4 ) ( 1,031.1 ) Property and equipment – net $ 542.6 $ 539.3 The estimated service lives of property and equipment are principally as follows: Buildings and improvements 3 to 50 years Machinery, equipment and computer software 2 to 15 years Depreciation expense was $ 72.7 million, $ 72.2 million and $ 71.5 million in 2024, 2023 and 2022, respectively. 2024 ANNUAL REPORT 83 Notes to Consolidated Financial Statements (continued) Note 7: Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill by segment for 2024 and 2023 are as follows: (Amounts in millions) Commercial & Industrial Group Snap-on Tools Group Repair Systems & Information Group Total Balance as of 2022 year end $ 302.9 $ 12.4 $ 730.0 $ 1,045.3 Currency translation 10.7 — 6.7 17.4 Acquisition adjustments 33.0 — 1.7 34.7 Balance as of 2023 year end $ 346.6 $ 12.4 $ 738.4 $ 1,097.4 Currency translation ( 17.8 ) — ( 9.6 ) ( 27.4 ) Acquisition adjustments ( 13.2 ) — — ( 13.2 ) Balance as of 2024 year end $ 315.6 $ 12.4 $ 728.8 $ 1,056.8 Goodwill of $ 1,056.8 million as of 2024 year end included $ 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. 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. See Note 3 for additional information on acquisitions. Additional disclosures related to other intangible assets as of 2024 and 2023 year end are as follows: 2024 2023 (Amounts in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Amortized other intangible assets: Customer relationships $ 84.2 $ ( 35.1 ) $ 49.1 $ 214.5 $ ( 163.6 ) $ 50.9 Developed technology 26.6 ( 23.1 ) 3.5 36.2 ( 29.8 ) 6.4 Internally developed software 179.6 ( 135.6 ) 44.0 191.3 ( 148.2 ) 43.1 Patents 49.8 ( 21.4 ) 28.4 53.0 ( 26.8 ) 26.2 Trademarks 3.8 ( 2.5 ) 1.3 4.0 ( 2.5 ) 1.5 Other 6.1 ( 2.9 ) 3.2 6.2 ( 2.8 ) 3.4 Total 350.1 ( 220.6 ) 129.5 505.2 ( 373.7 ) 131.5 Non-amortized trademarks 138.1 — 138.1 137.4 — 137.4 Total other intangible assets $ 488.2 $ ( 220.6 ) $ 267.6 $ 642.6 $ ( 373.7 ) $ 268.9 The gross carrying value of customer relationships and non-amortized trademarks as of year end 2024 includes $ 8.7 million and $ 5.4 million, respectively, related to the Mountz acquisition. In 2024, Snap-on retired $ 136.9 million of customer relationships, $ 23.2 million of internally developed software and $ 9.5 million of developed technology that were fully amortized and had reached the end of their useful lives. Provisions 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 2024 year end, the company had no accumulated impairment losses. 84 SNAP-ON INCORPORATED The weighted-average amortization periods related to other intangible assets are as follows: In Years Customer relationships 14 Developed technology 5 Internally developed software 6 Patents 15 Trademarks 9 Other 39 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. The aggregate amortization expense was $ 25.3 million in 2024, $ 27.1 million in 2023 and $ 28.7 million in 2022. Based on current levels of amortizable intangible assets and estimated weighted-average useful lives, estimated annual amortization expense is expected to be $ 21.7 million in 2025, $ 16.8 million in 2026, $ 13.9 million in 2027, $ 11.5 million in 2028, and $ 8.2 million in 2029. Note 8: Income Taxes The source of earnings before income taxes consisted of the following: (Amounts in millions) 2024 2023 2022 United States $ 1,188.2 $ 1,143.7 $ 1,028.7 Foreign 184.9 184.3 173.9 Total $ 1,373.1 $ 1,328.0 $ 1,202.6 The provision (benefit) for income taxes consisted of the following: (Amounts in millions) 2024 2023 2022 Current: Federal $ 220.8 $ 215.4 $ 185.4 Foreign 50.4 55.2 45.2 State 41.2 41.5 48.4 Total current 312.4 312.1 279.0 Deferred: Federal ( 8.6 ) ( 14.5 ) ( 8.5 ) Foreign 0.1 ( 3.9 ) ( 2.1 ) State 0.3 ( 0.3 ) 0.3 Total deferred ( 8.2 ) ( 18.7 ) ( 10.3 ) Total income tax provision $ 304.2 $ 293.4 $ 268.7 2024 ANNUAL REPORT 85 Notes to Consolidated Financial Statements (continued) The following is a reconciliation of the statutory federal income tax rate to Snap-on’s effective tax rate: 2024 2023 2022 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % Increase (decrease) in tax rate resulting from: State income taxes, net of federal benefit 2.5 2.6 3.0 Noncontrolling interests ( 0.4 ) ( 0.4 ) ( 0.4 ) Repatriation of foreign earnings ( 0.2 ) ( 0.3 ) ( 0.3 ) Change in valuation allowance for deferred tax assets 0.2 0.2 0.3 Adjustments to tax accruals and reserves ( 0.1 ) ( 0.6 ) ( 0.7 ) Foreign rate differences 0.6 0.7 0.4 Excess tax benefits related to equity compensation ( 0.8 ) ( 0.8 ) ( 0.5 ) Other ( 0.6 ) ( 0.3 ) ( 0.5 ) Effective tax rate 22.2 % 22.1 % 22.3 % Snap-on’s effective income tax rate on earnings attributable to Snap-on Incorporated was 22.6 % in 2024, 22.5 % in 2023, and 22.8 % in 2022. Temporary differences that give rise to the net deferred income tax asset (liability) as of 2024, 2023 and 2022 year end are as follows: (Amounts in millions) 2024 2023 2022 Deferred income tax assets (liabilities): Inventories $ 42.9 $ 43.2 $ 34.0 Accruals not currently deductible 64.1 68.6 66.9 Tax credit carryforward 3.0 5.2 4.2 Employee benefits 2.9 1.4 16.7 Net operating losses 49.0 48.0 47.9 Depreciation and amortization ( 140.9 ) ( 156.4 ) ( 170.1 ) Valuation allowance ( 23.9 ) ( 27.2 ) ( 23.5 ) Equity-based compensation 12.1 16.2 14.7 Undistributed non-U.S. earnings ( 3.6 ) ( 3.9 ) ( 4.2 ) Other ( 1.1 ) 1.7 1.3 Net deferred income tax asset (liability) $ 4.5 $ ( 3.2 ) $ ( 12.1 ) As of 2024 year end, Snap-on had tax net operating loss carryforwards totaling $ 186.2 million as follows: (Amounts in millions) State Federal Foreign Total Year of expiration: 2025-2029 $ — $ — $ 28.0 $ 28.0 2030-2034 — — 21.5 21.5 2035-2039 — — 52.8 52.8 2040-2044 — — 34.1 34.1 2045-2049 — — — — Indefinite — — 49.8 49.8 Total net operating loss carryforwards $ — $ — $ 186.2 $ 186.2 86 SNAP-ON INCORPORATED A valuation allowance totaling $ 23.9 million, $ 27.2 million and $ 23.5 million as of 2024, 2023 and 2022 year end, respectively, has been established for deferred income tax assets primarily related to certain subsidiary loss carryforwards that may not be realized. Realization of the net deferred income tax assets is dependent on generating sufficient taxable income prior to their expiration. Although realization is not assured, management believes it is more-likely-than-not that the net deferred income tax assets will be realized. The amount of the net deferred income tax assets considered realizable, however, could change in the near term if estimates of future taxable income during the carryforward period fluctuate. The following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits for 2024, 2023 and 2022: (Amounts in millions) 2024 2023 2022 Unrecognized tax benefits at beginning of year $ 7.5 $ 5.6 $ 8.9 Gross increases – tax positions in prior periods — 1.2 — Gross decreases – tax positions in prior periods ( 0.7 ) — ( 0.3 ) Gross increases – tax positions in the current period 0.6 0.7 0.6 Settlements with taxing authorities — — ( 3.0 ) Lapsing of statutes of limitations ( 0.8 ) — ( 0.6 ) Unrecognized tax benefits at end of year $ 6.6 $ 7.5 $ 5.6 The unrecognized tax benefits of $ 6.6 million, $ 7.5 million and $ 5.6 million as of 2024, 2023 and 2022 year end, respectively, would impact the effective income tax rate if recognized. As of December 28, 2024, unrecognized tax benefits of $ 1.1 million and $ 5.5 million were included in “Deferred income tax assets” and “Other long-term liabilities,” respectively, on the accompanying Consolidated Balance Sheets. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense. As of 2024, 2023 and 2022 year end, the company had provided for $ 1.2 million, $ 1.2 million and $ 0.9 million, respectively, of accrued interest and penalties related to unrecognized tax benefits. As of December 28, 2024, $ 1.2 million of accrued interest and penalties were included in “Other long-term liabilities” on the accompanying Consolidated Balance Sheets. Snap-on and its subsidiaries file income tax returns in the United States and in various state, local and foreign jurisdictions. It is reasonably possible that certain unrecognized tax benefits may either be settled with taxing authorities or the statutes of limitations for such items may lapse within the next 12 months, causing Snap-on’s gross unrecognized tax benefits to decrease by a range of zero to $ 0.6 million. Over the next 12 months, Snap-on anticipates taking certain tax positions on various tax returns for which the related tax benefit does not meet the recognition threshold. 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. With few exceptions, Snap-on is no longer subject to U.S. federal and state/local income tax examinations by tax authorities for years prior to 2018, and Snap-on is no longer subject to non-U.S. income tax examinations by tax authorities for years prior to 2012. In general, it is Snap-on’s practice and intention to reinvest certain earnings of its non-U.S. subsidiaries in those operations. As of 2024 year end, the company has not made a provision for incremental U.S. income taxes or additional foreign withholding taxes on approximately $ 523.0 million of such undistributed earnings that is deemed indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable. As a result of the Tax Act, which subjected the majority of the company’s undistributed foreign earnings to taxation for the 2017 tax year, the company can now repatriate non-U.S. cash in a tax efficient manner. Accordingly, the company does not have an indefinitely reinvested assertion on the majority of undistributed earnings for its non-U.S. subsidiaries and has recorded a deferred tax liability of $ 3.6 million for the incremental tax costs associated with the future potential repatriation of such earnings. 2024 ANNUAL REPORT 87 Notes to Consolidated Financial Statements (continued) Note 9: Short-term and Long-term Debt Short-term and long-term debt as of 2024 and 2023 year end consisted of the following: (Amounts in millions) 2024 2023 3.25 % unsecured notes due 2027 $ 300.0 $ 300.0 4.10 % unsecured notes due 2048 400.0 400.0 3.10 % unsecured notes due 2050 500.0 500.0 Other debt* ( 0.8 ) 0.2 1,199.2 1,200.2 Less: notes payable ( 13.7 ) ( 15.6 ) Total long-term debt $ 1,185.5 $ 1,184.6 * 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 $ 14.9 million and $ 17.5 million in 2024 and 2023, respectively. The 2024 weighted-average interest rate on such borrowings of 10.4 % compared with 11.0 % in 2023. At 2024 year end, the weighted-average rate on outstanding notes payable of 9.5 % compared with 11.1 % in 2023. 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 the Credit Facility during the years ended and as of December 28, 2024 or December 30, 2023. Borrowings under the Credit Facility bear interest at varying rates based on either: (i) Snap-on’s then-current, long-term debt ratings; or (ii) Snap-on’s then-current ratio of consolidated debt net of certain cash adjustments (“Consolidated Net Debt”) to earnings before interest, taxes, depreciation, amortization and certain other adjustments for the preceding four fiscal quarters then ended (the “Consolidated Net Debt to EBITDA Ratio”). The Credit Facility’s financial covenant requires that Snap-on maintain, as of each fiscal quarter end, either (i) a ratio not greater than 0.60 to 1.00 of Consolidated Net Debt to the sum of Consolidated Net Debt plus total equity and less accumulated other comprehensive income or loss (the “Leverage Ratio”); or (ii) a Consolidated Net Debt to EBITDA Ratio not greater than 3.50 to 1.00. 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 December 28, 2024, the company’s consolidated cash balance, net of certain adjustments, exceeded consolidated debt resulting in actual ratios of ( 0.01 ) and ( 0.05 ), respectively. Both ratios are 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. There was no commercial paper issued or outstanding during the years ended and as of December 28, 2024 or December 30, 2023. Note 10: Financial Instruments Derivatives: All derivative instruments are reported in the Consolidated Financial Statements at fair value. Changes in the fair value of derivatives are recorded each period in earnings or on the accompanying Consolidated Balance Sheets, depending on whether the derivative is designated and effective as part of a hedged transaction. Gains or losses on derivative instruments recorded in earnings are presented in the same Consolidated Statement of Earnings line that is used to present the earnings effect of the hedged item. 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. 88 SNAP-ON INCORPORATED The criteria used to determine if hedge accounting treatment is appropriate are: (i) the designation of the hedge to an underlying exposure; (ii) whether or not overall risk is being reduced; and (iii) if there is a correlation between the value of the derivative instrument and the underlying hedged item. Once a derivative contract is entered into, Snap-on designates the derivative as a fair value hedge, a cash flow hedge, a hedge of a net investment in a foreign operation, or a natural hedging instrument whose change in fair value is recognized as an economic hedge against changes in the value of the hedged item. Snap-on does not use derivative instruments for speculative or trading purposes. Snap-on is exposed to global market risks, including the effects of changes in foreign currency exchange rates, interest rates, and the company’s stock price. The company uses derivatives to manage financial exposures that occur in the normal course of business. The primary risks managed by using derivative instruments are foreign currency risk, interest rate risk and stock-based deferred compensation risk. Foreign currency risk management: Snap-on has significant international operations and is subject to certain risks inherent with foreign operations that include currency fluctuations. Foreign currency exchange risk exists to the extent that Snap-on has payment obligations or receipts denominated in currencies other than the functional currency, including intercompany loans denominated in foreign currencies. To manage these exposures, Snap-on identifies naturally offsetting positions and then purchases hedging instruments to protect the residual net exposures. Snap-on manages most of these exposures on a consolidated basis, which allows for netting of certain exposures to take advantage of natural offsets. Foreign currency forward contracts (“foreign currency forwards”) are used to hedge the net exposures. Gains or losses on net foreign currency hedges are intended to offset losses or gains on the underlying net exposures in an effort to reduce the earnings volatility resulting from fluctuating foreign currency exchange rates. Snap-on’s foreign currency forwards are typically not designated as hedges. The fair value changes of these contracts are reported in earnings as foreign exchange gain or loss, which is included in “Other income (expense) – net” on the accompanying Consolidated Statements of Earnings. See Note 17 for additional information on Other income (expense) – net. As of 2024 year end, Snap-on had $ 197.4 million of net foreign currency forward buy contracts outstanding comprised of buy contracts including $ 108.5 million in British pounds, $ 102.5 million in Swedish kronor, $ 53.9 million in Hong Kong dollars, $ 32.9 million in euros, $ 27.9 million in Chinese renminbi, $ 26.7 million in Australian dollars, $ 24.2 million in Singapore dollars, $ 7.0 million in Norwegian kroner, and $ 19.4 million in other currencies, and sell contracts including $ 193.4 million in Canadian dollars, $ 9.7 million in Indian rupees, and $ 2.5 million in other currencies. 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. Interest rate risk management: Snap-on may manage the exposure created by the differing maturities and interest rate structures of Snap-on’s borrowings through the use of interest rate swap agreements (“interest rate swaps”) and treasury lock agreements (“treasury locks”). Interest rate swaps: Snap-on may enter into interest rate swaps to manage risks associated with changing interest rates related to the company’s fixed rate borrowings. Interest rate swaps are accounted for as fair value hedges. The differentials paid or received on interest rate swaps are recognized as adjustments to “Interest expense” on the accompanying Consolidated Statements of Earnings. The change in the fair value of the derivative is recorded in “Long-term debt” on the accompanying Consolidated Balance Sheets. There were no outstanding interest rate swaps as of both 2024 and 2023 year end. Treasury locks: Snap-on may use treasury locks to manage the potential change in interest rates in anticipation of the issuance of fixed rate debt. Treasury locks are accounted for as cash flow hedges. The differentials to be paid or received on treasury locks related to the anticipated issuance of fixed rate debt are initially recorded in Accumulated OCI for derivative instruments that are designated and qualify as cash flow hedges. 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 Consolidated Statements of Earnings. There were no treasury locks outstanding as of both 2024 and 2023 year end. See Note 17 for additional information on Other income (expense) – net. 2024 ANNUAL REPORT 89 Notes to Consolidated Financial Statements (continued) Stock-based deferred compensation risk management: Snap-on manages market risk associated with the stock-based portion of its deferred compensation plans through the use of prepaid equity forward agreements (“equity forwards”). Equity forwards are used to aid in offsetting the potential mark-to-market effect on stock-based deferred compensation from changes in Snap‑on’s stock price. 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 2024 and 2023 year end, Snap-on had equity forwards in place intended to manage market risk with respect to 68,100 shares and 68,900 shares, respectively, of Snap‑on common stock associated with its deferred compensation plans. Counterparty risk: Snap-on is exposed to credit losses in the event of non-performance by the counterparties to its various financial agreements, including its foreign currency forward contracts, interest rate swap agreements, treasury lock agreements and prepaid equity forward agreements. Snap-on does not obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of the counterparties and generally enters into agreements with financial institution counterparties with a credit rating of A- or better. Snap-on does not anticipate non-performance by its counterparties, but cannot provide assurances. Fair value measurements: The fair value measurement hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority (“Level 1”) to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority (“Level 3”) to unobservable inputs. Fair value measurements primarily based on observable market information are given a “Level 2” priority. Snap-on has derivative assets and liabilities related to foreign currency forwards and equity forwards that are measured at Level 2 fair value on a recurring basis. The fair values of derivative instruments included within the accompanying Consolidated Balance Sheets as of 2024 and 2023 year end are as follows: 2024 2023 (Amounts in millions) Balance Sheet Presentation Derivative Assets Fair Value Derivative Liability Fair Value Derivative Assets Fair Value Derivative Liability Fair Value Derivatives not designated as hedging instruments: Foreign currency forwards Prepaid expenses and other current assets $ 12.3 $ — $ 17.9 $ — Foreign currency forwards Other accrued liabilities — 21.3 — 11.9 Equity forwards Prepaid expenses and other current assets 23.4 — 19.9 — Total derivative instruments $ 35.7 $ 21.3 $ 37.8 $ 11.9 Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date. Level 2 fair value measurements for derivative assets and liabilities are measured using quoted prices in active markets for similar assets and liabilities. Foreign currency forwards are valued based on exchange rates quoted by domestic and foreign banks for similar instruments. Equity forwards are valued using a market approach based primarily on the company’s stock price at the reporting date. 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 2024 and 2023, respectively. 90 SNAP-ON INCORPORATED The effect of cash flow hedges included in the Consolidated Statements of Earnings is as follows: Gain (Loss) Recognized in Income on Cash Flow Hedging Relationships 2024 2023 2022 (Amounts in millions) The amount of interest expense presented in the Consolidated Statements of Earnings: $ ( 49.6 ) $ ( 49.9 ) $ ( 47.1 ) Gain on cash flow hedging relationships: Treasury locks Gain reclassified from accumulated OCI into income $ 1.7 $ 1.6 $ 1.6 During the next 12 months, Snap-on expects to reclassify into earnings net gains from Accumulated OCI of approximately $ 1.2 million after tax at the time the underlying hedge transactions are realized. The effects of derivative instruments not designated as hedging instruments as included in the Consolidated Statements of Earnings are as follows: Statement of Earnings Presentation Gain (Loss) Recognized in Income on Derivatives (Amounts in millions) 2024 2023 2022 Gain (loss) on derivative relationships: Foreign currency forwards Other income (expense) – net $ ( 9.1 ) $ 6.0 $ ( 17.6 ) Net exposures Other income (expense) – net 1.7 ( 17.0 ) 10.1 Equity forwards Operating expenses $ 4.8 $ 4.5 $ 1.4 Stock-based deferred compensation liabilities Operating expenses ( 4.5 ) ( 4.5 ) ( 1.4 ) 2024 ANNUAL REPORT 91 Notes to Consolidated Financial Statements (continued) Snap-on’s foreign currency forwards are typically not designated as hedges for financial reporting purposes. The fair value changes of foreign currency forwards not designated as hedging instruments are reported in earnings as foreign exchange gain or loss in “Other income (expense) – net” on the accompanying Consolidated Statements of Earnings. See Note 17 for additional information on “Other income (expense) – net.” Snap-on’s equity forwards are not designated as hedges for financial reporting purposes. Fair value changes of both the equity forwards and related stock-based (mark-to-market) deferred compensation liabilities are reported in “Operating expenses” on the accompanying Consolidated Statements of Earnings. Fair value of financial instruments: The fair values of financial instruments that do not approximate the carrying values in the financial statements as of 2024 and 2023 year end are as follows: 2024 2023 (Amounts in millions) Carrying Value Fair Value Carrying Value Fair Value Finance receivables – net $ 1,922.3 $ 2,180.9 $ 1,878.3 $ 2,138.7 Contract receivables – net 538.3 569.5 528.7 561.6 Long-term debt and notes payable 1,199.2 944.2 1,200.2 1,031.5 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. The fair value estimates of finance and contract receivables are derived utilizing discounted cash flow analyses performed on groupings of receivables that are similar in terms of loan type and characteristics. The cash flow analyses consider recent prepayment trends where applicable. The cash flows are discounted over the average life of the receivables using a current market discount rate of a similar term adjusted for credit quality. Significant inputs to the fair value measurements of the receivables are unobservable and, as such, are classified as Level 3. • 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 and issuance discounts. The fair value of notes payable approximates such instruments’ carrying value due to their short-term nature. • 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. 92 SNAP-ON INCORPORATED Note 11: Pension Plans Snap-on has several non-contributory defined benefit pension plans covering most U.S. employees and certain employees in foreign countries. Snap-on also has foreign contributory defined benefit pension plans covering certain foreign employees. Retirement benefits are generally provided based on employees’ years of service and average earnings or stated amounts for years of service. Normal retirement age is 65 , with provisions for earlier retirement. The status of Snap-on’s pension plans as of 2024 and 2023 year end is as follows: (Amounts in millions) 2024 2023 Change in projected benefit obligation: Benefit obligation at beginning of year $ 1,291.9 $ 1,254.6 Service cost 19.9 18.8 Interest cost 65.4 65.3 Plan participant contributions 0.3 0.4 Benefits paid ( 84.1 ) ( 79.2 ) Actuarial (gain) loss ( 12.2 ) 24.0 Foreign currency impact ( 11.0 ) 8.0 Benefit obligation at end of year 1,270.2 1,291.9 Change in plan assets: Fair value of plan assets at beginning of year 1,333.9 1,241.7 Return on plan assets 58.8 155.3 Employer contributions 8.3 8.1 Plan participant contributions 0.3 0.4 Benefits paid ( 84.1 ) ( 79.3 ) Foreign currency impact ( 9.1 ) 7.7 Fair value of plan assets at end of year 1,308.1 1,333.9 Funded status at end of year $ 37.9 $ 42.0 The decrease in the defined benefit pension plans benefit obligations in 2024 was primarily due to an increase in the discount rate in 2024 as compared to 2023. Amounts recognized in the Consolidated Balance Sheets as of 2024 and 2023 year end are as follows: (Amounts in millions) 2024 2023 Pension assets $ 125.4 $ 130.5 Accrued benefits ( 9.1 ) ( 6.2 ) Pension liabilities ( 78.4 ) ( 82.3 ) Net asset $ 37.9 $ 42.0 Amounts included in Accumulated OCI on the accompanying Consolidated Balance Sheets as of 2024 and 2023 year end are as follows: (Amounts in millions) 2024 2023 Net loss, net of tax of $ 86.9 million and $ 81.8 million, respectively $ ( 264.0 ) $ ( 249.1 ) Prior service cost, net of tax of $ 0.1 million and $ 0.2 million, respectively ( 0.5 ) ( 0.5 ) Total amount included in Accumulated OCI $ ( 264.5 ) $ ( 249.6 ) 2024 ANNUAL REPORT 93 Notes to Consolidated Financial Statements (continued) The accumulated benefit obligation for Snap-on’s pension plans as of 2024 and 2023 year end was $ 1,219.5 million and $ 1,239.0 million, respectively. The accumulated benefit obligation, projected benefit obligation and fair value of plan assets for Snap-on’s pension plans as of 2024 and 2023 year end are as follows: (Amounts in millions) 2024 2023 Pension plans with accumulated benefit obligations in excess of plan assets: Accumulated benefit obligation $ 101.5 $ 103.3 Fair value of plan assets 17.6 18.4 Pension plans with projected benefit obligations in excess of plans assets: Projected benefit obligation $ 105.1 $ 106.9 Fair value of plan assets 17.6 18.4 The components of net periodic benefit cost (credit) and changes recognized in “Other comprehensive income (loss)” (“OCI”) are as follows: (Amounts in millions) 2024 2023 2022 Net periodic benefit cost (credit): Service cost $ 19.9 $ 18.8 $ 26.5 Interest cost 65.4 65.3 44.4 Expected return on plan assets ( 101.5 ) ( 104.7 ) ( 99.2 ) Amortization of unrecognized loss 9.2 1.5 18.0 Amortization of prior service cost 0.1 0.1 0.1 Net periodic benefit cost (credit) $ ( 6.9 ) $ ( 19.0 ) $ ( 10.2 ) Changes in benefit obligations recognized in OCI, net of tax: Net (gain) loss $ 14.9 $ ( 19.9 ) $ 59.6 Prior service credit — — ( 0.1 ) Total recognized in OCI $ 14.9 $ ( 19.9 ) $ 59.5 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. The worldwide weighted-average assumptions used to determine Snap-on’s full-year pension costs are as follows: 2024 2023 2022 Discount rate 5.3 % 5.4 % 2.8 % Expected return on plan assets 7.3 % 7.4 % 6.2 % Rate of compensation increase 3.2 % 3.2 % 3.4 % Interest crediting rate - U.S. cash balance plan 3.8 % 3.8 % 3.8 % The worldwide weighted-average assumptions used to determine Snap-on’s projected benefit obligation as of 2024 and 2023 year end are as follows: 2024 2023 Discount rate 5.5 % 5.3 % Rate of compensation increase 3.2 % 3.2 % Interest crediting rate - U.S. cash balance plan 3.8 % 3.8 % 94 SNAP-ON INCORPORATED The objective of Snap-on’s discount rate assumption is to reflect the rate at which the pension benefits could be effectively settled. The domestic discount rate as of 2024 and 2023 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. 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 5.6 % 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 2024 domestic pension expense and projected benefit obligation by approximately $ 3.0 million and $ 46.4 million, respectively. As of 2024 year end, Snap-on’s domestic projected benefit obligation comprised approximately 85 % of Snap-on’s worldwide projected benefit obligation. The weighted-average discount rate for Snap-on’s foreign pension plans of 4.6 % represents the single rate that produces the same present value of cash flows as the estimated benefit plan payments. Lowering Snap-on’s foreign discount rate assumption by 50 bps would have increased Snap-on’s 2024 foreign pension expense and projected benefit obligation by approximately $ 1.0 million and $ 12.3 million, respectively. Actuarial gains and losses in excess of 10 percent of the greater of the projected benefit obligation or market-related value of assets are amortized on a straight-line basis over the average remaining service period of active participants or over the average remaining life expectancy for plans with primarily inactive participants. Prior service costs and credits resulting from plan amendments are amortized in equal annual amounts over the average remaining service period of active participants or over the average remaining life expectancy for plans with primarily inactive participants. As a practical expedient, Snap-on uses the calendar year end as the measurement date for its plans. Snap-on funds its pension plans as required by governmental regulation and may consider discretionary contributions as conditions warrant. Snap‑on intends to make contributions of $ 4.3 million to its foreign pension plans and $ 6.5 million to its domestic pension plans in 2025, as required by law. Depending on market and other conditions, Snap-on may make discretionary cash contributions to its pension plans in 2025. The following benefit payments, which reflect expected future service, are expected to be paid as follows: (Amounts in millions) Amount Year: 2025 $ 96.3 2026 97.4 2027 101.8 2028 101.6 2029 103.4 2030-2034 513.4 Snap-on’s domestic pension plans have a long-term investment horizon and a total return strategy that emphasizes a capital growth objective. The long-term investment performance objective for Snap-on’s domestic plans’ assets is to achieve net of expense returns that meet or exceed the 7.5 % domestic long-term return on plan assets assumption used for reporting purposes. Snap-on uses a three-year, market-related value asset method of amortizing the difference between actual and expected returns on its domestic plans’ assets. As of 2024 year end, Snap-on’s domestic pension plans’ assets comprised approximately 86 % of the company’s worldwide pension plan assets. The basis for determining the overall expected long-term return on plan assets assumption is a nominal returns forecasting method. For each asset class, future returns are estimated by identifying the premium of riskier asset classes over lower risk alternatives. The methodology constructs expected returns using a “building block” approach to the individual components of total return. These forecasts are stated in both nominal and real (after inflation) terms. This process first considers the long-term historical return premium based on the longest set of data available for each asset class. These premiums, which are calculated using the geometric mean, are then adjusted based on current relative valuation levels, macro-economic conditions, and the expected alpha related to active investment management. The asset return assumption is also adjusted by an implicit expense load for estimated administrative and investment-related expenses. 2024 ANNUAL REPORT 95 Notes to Consolidated Financial Statements (continued) For risk and correlation assumptions, the actual experience for each asset class is reviewed for the longest time period available. Expected relationships for a 10 to 20 year time horizon are determined based upon historical results, with adjustments made for material changes. Investments are diversified to attempt to minimize the risk of large losses. 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. Asset/liability studies are conducted periodically to determine if any revisions to the strategic asset allocation policy are necessary. Snap-on’s domestic pension plans’ target allocation and actual weighted-average asset allocation by asset category and fair value of plan assets as of 2024 and 2023 year end are as follows: Target 2024 2023 Asset category: Equity securities 49 % 46 % 46 % Debt securities and cash and cash equivalents 46 % 45 % 46 % Hedge funds 5 % 9 % 8 % Total 100 % 100 % 100 % Fair value of plan assets (Amounts in millions) $ 1,126.3 $ 1,143.7 The fair value measurement hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority (Level 1) to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority (Level 3) to unobservable inputs. Fair value measurements primarily based on observable market information are given a Level 2 priority. Certain equity and debt securities are valued at quoted per share or unit market prices for which an official close or last trade pricing on an active exchange is available and are categorized as Level 1 in the fair value hierarchy. If quoted market prices are not readily available for specific securities, values are estimated using quoted prices of securities with similar characteristics and are categorized as Level 2 in the fair value hierarchy. Insurance contracts are valued at the present value of the estimated future cash flows promised under the terms of the insurance contracts and are categorized as Level 2 in the fair value hierarchy. Commingled equity securities and commingled multi-strategy funds are valued at the Net Asset Value (“NAV”) per share or unit multiplied by the number of shares or units held as of the measurement date, as reported by the fund managers. The share or unit price is quoted on a private market and is based on the value of the underlying investments, which are primarily based on observable inputs; such investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. Private equity partnership funds, hedge funds, and real estate and other real assets are valued at the NAV as reported by the fund managers. Private equity partnership funds, certain hedge funds, and certain real estate and other real assets are valued based on the proportionate interest or share of net assets held by the pension plan, which is based on the estimated fair market value of the underlying investments. Certain other hedge funds and real estate and other real assets are valued at the NAV per share or unit multiplied by the number of shares or units held as of the measurement date, based on the estimated value of the underlying investments as reported by the fund managers. These investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. The company regularly reviews fund performance directly with its investment advisor and the fund managers, and performs qualitative analysis to corroborate the reasonableness of the reported NAVs. For funds for which the company did not receive a year-end NAV, the company recorded an estimate of the change in fair value for the latest period based on return estimates and other fund activity obtained from the fund managers. The columns labeled “Investments Measured at NAV” in the following tables reflect certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit a reconciliation of the fair value hierarchy to the pension plan assets. 96 SNAP-ON INCORPORATED The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of Snap-on’s domestic pension plans’ assets as of 2024 year end: (Amounts in millions) Quoted Prices for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Investments Measured at NAV Total Asset category: Cash and cash equivalents $ 23.9 $ — $ — $ 23.9 Equity securities: Domestic 71.9 — — 71.9 Foreign 47.9 — — 47.9 Commingled funds – domestic — — 212.9 212.9 Commingled funds – foreign — — 176.8 176.8 Private equity partnerships — — 6.5 6.5 Debt securities: Government 147.2 3.9 — 151.1 Corporate bonds — 330.9 — 330.9 Real estate and other real assets — — 0.6 0.6 Hedge funds — — 103.8 103.8 Total $ 290.9 $ 334.8 $ 500.6 $ 1,126.3 The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of Snap-on’s domestic pension plans’ assets as of 2023 year end: (Amounts in millions) Quoted Prices for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Investments Measured at NAV Total Asset category: Cash and cash equivalents $ 12.2 $ — $ — $ 12.2 Equity securities: Domestic 72.9 — — 72.9 Foreign 1.5 — — 1.5 Commingled funds – domestic — — 203.8 203.8 Commingled funds – foreign — — 233.3 233.3 Private equity partnerships — — 9.1 9.1 Debt securities: Government 162.6 4.8 — 167.4 Corporate bonds — 350.4 — 350.4 Real estate and other real assets — — 0.7 0.7 Hedge funds — — 92.4 92.4 Total $ 249.2 $ 355.2 $ 539.3 $ 1,143.7 Snap-on’s primary investment objective for its foreign pension plans’ assets is to meet the projected obligations to the beneficiaries over a long period of time, and to do so in a manner that is consistent with the company’s risk tolerance. The foreign asset allocation policies consider the company’s financial strength and long-term asset class risk/return expectations, since the obligations are long term in nature. The company believes the foreign pension plans’ assets, which are managed locally by professional investment firms, are well diversified. 2024 ANNUAL REPORT 97 Notes to Consolidated Financial Statements (continued) The expected long-term rates of return on foreign plans’ assets, which range fro m 2.2 % to 6.4 % as of 2024 year end, reflect management’s expectations of long-term average rates of return on funds invested to provide benefits included in the plans’ projected benefit obligation. The expected returns are based on outlooks for inflation, fixed income returns and equity returns, asset allocations and investment strategies. Differences between actual and expected returns on foreign pension plans’ assets are recorded as an actuarial gain or loss and amortized accordingly. Snap-on’s foreign pension plans’ target allocation and actual weighted-average asset allocation by asset category and fair value of plan assets as of 2024 and 2023 year end are as follows: Target 2024 2023 Asset category: Equity securities* 27 % 29 % 30 % Debt securities* and cash and cash equivalents 62 % 60 % 58 % Insurance contracts 11 % 11 % 12 % Total 100 % 100 % 100 % Fair value of plan assets (Amounts in millions) $ 181.8 $ 190.2 * Includes commingled funds - multi-strategy The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of Snap-on’s foreign pension plans’ assets as of 2024 year end: (Amounts in millions) Quoted Prices for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Investments Measured at NAV Total Asset category: Cash and cash equivalents $ 1.5 $ — $ — $ 1.5 Commingled funds – multi-strategy — — 115.8 115.8 Debt securities: Government 19.1 — — 19.1 Corporate bonds — 24.7 — 24.7 Insurance contracts — 20.7 — 20.7 Total $ 20.6 $ 45.4 $ 115.8 $ 181.8 The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of Snap-on’s foreign pension plans’ assets as of 2023 year end: (Amounts in millions) Quoted Prices for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Investments Measured at NAV Total Asset category: Cash and cash equivalents $ 1.9 $ — $ — $ 1.9 Commingled funds – multi-strategy — — 119.8 119.8 Debt securities: Government 20.4 — — 20.4 Corporate bonds — 26.3 — 26.3 Insurance contracts — 21.8 — 21.8 Total $ 22.3 $ 48.1 $ 119.8 $ 190.2 98 SNAP-ON INCORPORATED Snap-on has several 401(k) plans covering certain U.S. employees. Snap-on’s employer match to the 401(k) plans is made with cash contributions. For 2024, 2023 and 2022, Snap-on recognized $ 12.4 million, $ 12.3 million and $ 11.8 million, respectively, of expense related to its 401(k) plans. Note 12: Postretirement Plans 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. Snap-on maintains other health care benefit plans for certain retired U.S. employees. 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; all other retiree health care plans are unfunded. The status of Snap-on’s U.S. postretirement health care plans as of 2024 and 2023 year end is as follows: (Amounts in millions) 2024 2023 Change in accumulated postretirement benefit obligation: Benefit obligation at beginning of year $ 35.8 $ 37.3 Interest cost 1.8 1.9 Plan participant contributions 0.1 0.2 Benefits paid ( 3.6 ) ( 3.3 ) Actuarial gain ( 0.6 ) ( 0.3 ) Benefit obligation at end of year 33.5 35.8 Change in plan assets: Fair value of plan assets at beginning of year 11.4 11.2 Return on plan assets 1.0 1.0 Employer contributions 2.7 2.3 Plan participant contributions 0.1 0.2 Benefits paid ( 3.6 ) ( 3.3 ) Fair value of plan assets at end of year 11.6 11.4 Unfunded status at end of year $ ( 21.9 ) $ ( 24.4 ) Amounts recognized in the Consolidated Balance Sheets as of 2024 and 2023 year end are as follows: (Amounts in millions) 2024 2023 Accrued benefits $ ( 2.5 ) $ ( 2.6 ) Retiree health care benefits ( 19.4 ) ( 21.8 ) Net liability $ ( 21.9 ) $ ( 24.4 ) Amounts included in Accumulated OCI on the accompanying Consolidated Balance Sheets as of 2024 and 2023 year end are as follows: (Amounts in millions) 2024 2023 Net gain, net of tax of $ 2.0 million and $ 2.1 million, respectively $ 6.1 $ 6.2 2024 ANNUAL REPORT 99 Notes to Consolidated Financial Statements (continued) The components of net periodic benefit cost (credit) and changes recognized in OCI are as follows: (Amounts in millions) 2024 2023 2022 Net periodic benefit cost (credit): Interest cost $ 1.8 $ 1.9 $ 1.2 Expected return on plan assets ( 0.6 ) ( 0.6 ) ( 0.6 ) Amortization of unrecognized gain ( 1.2 ) ( 1.1 ) — Net periodic benefit cost (credit) $ — $ 0.2 $ 0.6 Changes in benefit obligations recognized in OCI, net of tax: Net (gain) loss $ 0.1 $ 0.2 $ ( 4.1 ) 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 Consolidated Statements of Earnings. See Note 17 for additional information on Other income (expense) – net. The weighted-average discount rate used to determine Snap-on’s postretirement health care expense is as follows: 2024 2023 2022 Discount rate 5.3 % 5.3 % 2.7 % The weighted-average discount rate used to determine Snap-on’s accumulated benefit obligation is as follows: 2024 2023 Discount rate 5.5 % 5.3 % The methodology for selecting the year-end 2024 and 2023 weighted-average discount rate for the company’s domestic postretirement plans was to match 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. As a practical expedient, Snap-on uses the calendar year end as the measurement date for its plans. For 2025, the actuarial calculations assume a pre-65 health care cost trend rate of 6.6 % and a post-65 health care cost trend rate of 7.0 %, both decreasing gradually to 4.0 % in 2047 and thereafter. The following benefit payments, which reflect expected future service, are expected to be paid as follows: (Amounts in millions) Amount Year: 2025 $ 3.1 2026 3.2 2027 3.2 2028 3.3 2029 3.3 2030-2034 15.7 100 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. Investments are diversified to attempt to minimize the risk of large losses. 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. The basis for determining the overall expected long-term return on plan assets assumption is a nominal returns forecasting method. For each asset class, future returns are estimated by identifying the premium of riskier asset classes over lower risk alternatives. The methodology constructs expected returns using a “building block” approach to the individual components of total return. These forecasts are stated in both nominal and real (after inflation) terms. This process first considers the long-term historical return premium based on the longest set of data available for each asset class. These premiums, which are calculated using the geometric mean, are then adjusted based on current relative valuation levels and macro-economic conditions. The asset return assumption is also adjusted by an implicit expense load for estimated administrative and investment-related expenses. Snap-on’s VEBA plan target allocation and actual weighted-average asset allocation by asset category and fair value of plan assets as of 2024 and 2023 year end are as follows: Target 2024 2023 Asset category: Debt securities and cash and cash equivalents 46 % 45 % 46 % Equity securities 29 % 28 % 29 % Hedge funds 25 % 27 % 25 % Total 100 % 100 % 100 % Fair value of plan assets (Amounts in millions) $ 11.6 $ 11.4 The fair value measurement hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority (Level 1) to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority (Level 3) to unobservable inputs. Fair value measurements primarily based on observable market information are given a Level 2 priority. Debt securities are valued at quoted per share or unit market prices for which an official close or last trade pricing on an active exchange is available and are categorized as Level 1 in the fair value hierarchy. Equity securities are valued at the NAV per share or unit multiplied by the number of shares or units held as of the measurement date, as reported by the fund managers. The share or unit price is quoted on a private market and is based on the value of the underlying investments, which are primarily based on observable inputs; such investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. Hedge funds are stated at the NAV per share or unit (based on the estimated fair market value of the underlying investments) multiplied by the number of shares or units held as of the measurement date, as reported by the fund managers. These investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. The company regularly reviews fund performance directly with its investment advisor and the fund managers, and performs qualitative analysis to corroborate the reasonableness of the reported NAVs. For funds for which the company did not receive a year-end NAV, the company recorded an estimate of the change in fair value for the latest period based on return estimates and other fund activity obtained from the fund managers. The columns labeled “Investments Measured at NAV” in the following tables are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit a reconciliation of the fair value hierarchy to the VEBA plan assets. 2024 ANNUAL REPORT 101 Notes to Consolidated Financial Statements (continued) The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of the VEBA plan assets as of 2024 year end: (Amounts in millions) Quoted Prices for Identical Assets (Level 1) Investments Measured at NAV Total Asset category: Cash and cash equivalents $ 0.2 $ — $ 0.2 Debt securities 5.0 — 5.0 Equity securities — 3.3 3.3 Hedge fund — 3.1 3.1 Total $ 5.2 $ 6.4 $ 11.6 The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of the VEBA plan assets as of 2023 year end: (Amounts in millions) Quoted Prices for Identical Assets (Level 1) Investments Measured at NAV Total Asset category: Cash and cash equivalents $ 0.2 $ — $ 0.2 Debt securities 5.1 — 5.1 Equity securities — 3.2 3.2 Hedge fund — 2.9 2.9 Total $ 5.3 $ 6.1 $ 11.4 Note 13: 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 2024 year end, the 2011 Plan had 2,095,463 shares available for future grants. The company uses treasury stock to deliver shares under the 2011 Plan. Net stock-based compensation expense was $ 28.6 million in 2024, $ 44.7 million in 2023 and $ 34.0 million in 2022. Cash received from stock purchase plans and stock option exercises was $ 92.3 million in 2024, $ 113.6 million in 2023 and $ 55.0 million in 2022. The tax benefit realized from both the exercise and vesting of share-based payment arrangements was $ 20.2 million in 2024, $ 16.9 million in 2023 and $ 10.7 million in 2022. Stock options: Stock options are granted with an exercise price equal to the market value of a share of Snap-on’s common stock on the date of grant and have a contractual term of 10 years. Stock option grants vest ratably on the first, second and third anniversaries of the date of grant. 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 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 stock option. 102 SNAP-ON INCORPORATED The following weighted-average assumptions were used in calculating the fair value of stock options granted during 2024, 2023 and 2022, using the Black-Scholes valuation model: 2024 2023 2022 Expected term of stock option (in years) 4.90 4.89 5.14 Expected volatility factor 23.63 % 23.99 % 22.61 % Expected dividend yield 2.76 % 2.60 % 2.68 % Risk-free interest rate 4.30 % 3.99 % 2.00 % A summary of stock option activity during 2024 is presented below: Shares (in thousands) Exercise Price per Share* Remaining Contractual Term* (in years) Aggregate Intrinsic Value (in millions) Outstanding at beginning of year 1,916 $ 177.79 Granted 233 269.01 Exercised ( 442 ) 171.34 Forfeited or expired ( 37 ) 245.98 Outstanding at end of year 1,670 190.73 5.2 $ 255.2 Exercisable at end of year 1,227 168.54 4.0 214.8 * Weighted-average The weighted-average grant date fair value of stock options granted was $ 55.07 in 2024, $ 51.09 in 2023 and $ 34.35 in 2022. The intrinsic value of stock options exercised was $ 57.4 million in 2024, $ 74.3 million in 2023 and $ 37.5 million in 2022. The fair value of stock options vested was $ 9.5 million in 2024, $ 9.1 million in 2023 and $ 10.5 million in 2022. As of 2024 year end, there was $ 13.0 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 1.4 years. Performance share units: PSUs are earned and expensed using the fair value of the award over a contractual term of three years based on the company’s performance. Vesting of the PSUs is dependent upon performance relative to pre-defined goals for revenue growth and return on net assets for the applicable performance period. For performance achieved above specified levels, the recipient may earn additional shares of stock, not to exceed 100 % of the number of performance awards initially granted. The PSUs have a three-year performance period based on the results of the consolidated financial metrics of the company. The fair value of PSUs 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; in recent years, forfeitures have not been significant. The weighted-average grant date fair value of PSUs granted during 2024, 2023 and 2022, was $ 269.00 , $ 249.26 and $ 211.67 , respectively. Earned PSUs as of year end 2024, 2023, and 2022 totaled 63,445 shares, 137,096 shares and 61,839 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”). PSUs related to 137,096 shares, 60,402 shares and 46,217 shares were paid out in 2024, 2023 and 2022, respectively. 2024 ANNUAL REPORT 103 Notes to Consolidated Financial Statements (continued) Changes to the company’s non-vested PSUs in 2024 are as follows: Shares (in thousands) Fair Value Price per Share* Non-vested PSUs at beginning of year 177 $ 226.81 Granted 53 269.00 Performance assumption change** ( 46 ) 216.17 Vested ( 63 ) 211.67 Cancellations and other ( 8 ) 247.56 Non-vested PSUs at end of year 113 257.95 * Weighted-average ** Reflects the number of PSUs adjusted based on performance metrics. As of 2024 year end, there was $ 14.2 million of unrecognized compensation cost related to non-vested PSUs that is expected to be recognized as a charge to earnings over a weighted-average period of 1.4 years. Restricted stock units: 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; in recent years, forfeitures have not been significant. The weighted-average grant date fair value of RSUs granted during 2024, 2023 and 2022, was $ 269.00 , $ 249.26 and $ 211.67 , respectively. Changes to the company’s non-vested RSUs in 2024 are as follows: Shares (in thousands) Fair Value Price per Share* Non-vested RSUs at beginning of year 80 $ 215.84 Granted 24 269.00 Vested ( 31 ) 191.94 Cancellations and other ( 3 ) 251.93 Non-vested RSUs at end of year 70 242.63 * Weighted-average As of 2024 year end, there was $ 6.4 million of unrecognized compensation cost related to non-vested RSUs that is expected to be recognized as a charge to earnings over a weighted-average period of 1.1 years. Stock appreciation rights: The company also issues stock-settled and cash-settled SARs to certain key non-U.S. employees. SARs have a contractual term of 10 years and vest ratably on the first, second and third anniversaries of the date of grant. SARs are granted with an exercise price equal to the market value of a share of Snap-on’s common stock on the date of grant. Stock-settled SARs are accounted for as equity instruments and provide for the issuance of Snap-on common stock equal to the amount by which the company’s stock has appreciated over the exercise price. Stock-settled SARs have an effect on dilutive shares and shares outstanding as any appreciation of Snap-on’s common stock value over the exercise price will be settled in shares of common stock. Cash-settled SARs provide for the cash payment of the excess of the fair market value of Snap‑on’s common stock price on the date of exercise over the grant price. Cash-settled SARs have no effect on dilutive shares or shares outstanding as any appreciation of Snap-on’s common stock over the grant price is paid in cash and not in common stock. 104 SNAP-ON INCORPORATED The fair value of stock-settled SARs is estimated on the date of grant using the Black-Scholes valuation model. The fair value of cash-settled SARs is revalued (mark-to-market) each reporting period using the Black-Scholes valuation model based on Snap-on’s period-end stock price. The company uses historical data regarding SARs exercise and forfeiture behaviors for different participating groups to estimate the period of time that SARs 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 SARs. 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 (for stock-settled SARs) or reporting date (for cash-settled SARs). The risk-free interest rate is based on the U.S. treasury yield curve in effect as of the grant date (for stock-settled SARs) or reporting date (for cash-settled SARs) for the expected term of the SARs. The following weighted-average assumptions were used in calculating the fair value of stock-settled SARs granted during 2024, 2023 and 2022, using the Black-Scholes valuation model: 2024 2023 2022 Expected term of stock-settled SARs (in years) 4.20 4.08 4.02 Expected volatility factor 23.80 % 24.68 % 23.09 % Expected dividend yield 2.77 % 2.60 % 2.68 % Risk-free interest rate 4.22 % 3.87 % 1.96 % Changes to the company’s stock-settled SARs in 2024 are as follows: Stock-settled SARs (in thousands) Exercise Price per Share* Remaining Contractual Term* (in years) Aggregate Intrinsic Value (in millions) Outstanding at beginning of year 321 $ 189.93 Granted 63 269.00 Exercised ( 29 ) 172.32 Forfeited or expired ( 44 ) 189.02 Outstanding at end of year 311 207.64 6.3 $ 42.3 Exercisable at end of year 186 177.36 4.9 30.8 * Weighted-average The weighted-average grant date fair value of stock-settled SARs granted was $ 52.12 in 2024, $ 48.85 in 2023 and $ 32.63 in 2022. The intrinsic value of stock-settled SARs exercised was $ 4.0 million in 2024, $ 5.3 million in 2023 and $ 1.7 million in 2022. The fair value of stock-settled SARs vested was $ 2.3 million in 2024, $ 1.9 million in 2023 and $ 2.0 million in 2022. As of 2024 year end, there was $ 3.5 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 1.4 years. The following weighted-average assumptions were used in calculating the fair value of cash-settled SARs granted during 2024, 2023 and 2022, using the Black-Scholes valuation model: 2024 2023 2022 Expected term of cash-settled SARs (in years) 3.37 3.30 3.10 Expected volatility factor 24.25 % 22.51 % 23.67 % Expected dividend yield 2.49 % 2.58 % 2.84 % Risk-free interest rate 4.36 % 4.01 % 4.22 % The intrinsic value of cash-settled SARs exercised was zero in 2024, $ 0.4 million in 2023 and $ 0.6 million in 2022. The fair value of cash-settled SARs vested during 2024, 2023 and 2022 was $ 0.2 million, $ 0.1 million and $ 0.1 million, respectively. 2024 ANNUAL REPORT 105 Notes to Consolidated Financial Statements (continued) Changes to the company’s non-vested cash-settled SARs in 2024 are as follows: Cash-settled SARs (in thousands) Fair Value Price per Share* Non-vested cash-settled SARs at beginning of year 2 $ 79.16 Granted 1 100.82 Vested ( 1 ) 131.20 Non-vested cash-settled SARs at end of year 2 108.41 * Weighted-average As of 2024 year end, there was $ 0.3 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 1.5 years. Restricted stock awards – non-employee directors: The company awarded 5,391 shares, 5,760 shares and 6,525 shares of restricted stock to non-employee directors in 2024, 2023 and 2022, respectively. 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 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. Directors’ fee plan: Under the Directors’ 1993 Fee Plan, as amended, non-employee directors may elect to receive up to 100 % of their fees and retainer in shares of Snap-on’s common stock. Directors may elect to defer receipt of all or part of these shares. For 2024, 2023 and 2022, issuances under the Directors’ Fee Plan totaled 441 shares, 449 shares and 621 shares, respectively, of which 184 shares, 176 shares and 309 shares, respectively, were deferred. As of 2024 year end, shares reserved for issuance to directors under this plan totaled 194,840 shares. Employee stock purchase plan: 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 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. For 2024, 2023 and 2022, issuances under this plan totaled 21,798 shares, 27,225 shares and 18,452 shares, respectively. As of 2024 year end, 529,800 shares were reserved for issuance under this plan and Snap-on held participant contributions of approximately $ 3.5 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 $ 0.9 million in 2024, $ 1.4 million in 2023 and $ 0.2 million in 2022. Franchisee stock purchase plan: All franchisees in the United States and Canada are eligible to participate in a franchisee 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 prices of the stock on the beginning date (May 15) or ending date (the following May 14) of each plan year. The company records mark-to-market expense when Snap-on’s period-end stock price is greater than the plan purchase price. For 2024, 2023 and 2022, issuances under this plan totaled 42,687 shares, 46,510 shares and 44,937 shares, respectively. As of 2024 year end, 136,049 shares were reserved for issuance under this plan and Snap-on held participant contributions of approximately $ 7.8 million. Participants are able to withdraw from the plan at any time prior to the ending date and generally receive back all contributions made during the plan year. The company recognized mark-to-market expense of $ 1.9 million in 2024, $ 2.5 million in 2023 and $ 0.4 million in 2022. Note 14: Capital Stock Snap-on has undertaken repurchases of Snap-on common stock from time to time to offset dilution created by shares issued for employee and franchisee stock purchase plans, stock awards and other corporate purposes, as well as when the company believes market conditions are favorable. Snap-on repurchased 952,000 shares, 1,126,000 shares and 899,000 shares in 2024, 2023 and 2022, respectively. As of 2024 year end, Snap-on has remaining availability to repurchase up to an additional $ 429.4 million in common stock pursuant to Board authorizations. The purchase of Snap-on common stock is at the company’s discretion, subject to prevailing financial and market conditions. 106 SNAP-ON INCORPORATED Cash dividends paid in 2024, 2023 and 2022 totaled $ 406.4 million, $ 355.6 million and $ 313.1 million, respectively. Cash dividends per share in 2024, 2023 and 2022 were $ 7.72 , $ 6.72 and $ 5.88 , respectively. On February 13, 2025, the company’s Board declared a quarterly dividend of $ 2.14 per share, payable o n March 10, 2025, to shareholders of record on February 24, 2025. Note 15: Commitments and Contingencies Snap-on provides product warranties for specific product lines and accrues for estimated future warranty cost in the period in which the sale is recorded. 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 2024, 2023 and 2022 is as follows: (Amounts in millions) 2024 2023 2022 Warranty accrual: Beginning of year $ 14.7 $ 14.3 $ 17.3 Additions 15.0 14.7 9.8 Usage ( 14.5 ) ( 14.3 ) ( 12.8 ) End of year $ 15.2 $ 14.7 $ 14.3 Approximately 2,300 employees, or 18 % of Snap-on’s worldwide workforce, are represented by unions and/or covered under collective bargaining agreements. The number of covered union employees whose contracts expire over the next five years approximates 1,650 employees in 2025, 450 employees in 2026, and 200 employees in 2027; there are no contracts currently scheduled to expire in 2028 or 2029. In recent years, Snap-on has not experienced any significant work slowdowns, stoppages or other labor disruptions. In the ordinary course of business, Snap-on is subject to legal disputes that are being litigated and/or settled. The accompanying Consolidated Statements of Earnings for the year ended December 28, 2024, include benefits in “Operating expenses” of $ 22.5 million for payments received associated with a legal matter; the final payments related to this matter were received in the three months ended June 29, 2024. 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. Note 16: Leases Lessee accounting: Snap-on determines if an arrangement is a lease at inception. Snap-on has operating and finance leases for manufacturing plants, distribution centers, software development facilities, financial services offices, data centers, company store vans and certain equipment. Snap-on’s leases have lease terms of one year to 20 years and some include options to extend and/or terminate the lease. The exercise of lease renewal options is at the company’s sole discretion. Certain leases also include options to purchase the leased property. When deemed reasonably certain of exercise, the renewal and purchase options are included in the determination of the lease term and lease payment obligation, respectively. The depreciable life of assets and leasehold improvements are limited to the expected term, unless there is a transfer of title or purchase option reasonably certain of exercise. The company’s lease agreements do not contain any material variable lease payments, material residual value guarantees or any material restrictive covenants. Right-of-use (“ROU”) assets represent Snap-on’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When readily determinable, Snap-on uses the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, Snap-on uses its country specific incremental borrowing rate based on the information available at the lease commencement date, including the lease term. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Snap-on has lease agreements with lease and non-lease components, which are generally accounted for separately. For all equipment leases, including vehicles, Snap-on accounts for the lease and non-lease components as a single lease component. 2024 ANNUAL REPORT 107 Notes to Consolidated Financial Statements (continued) Total lease costs for 2024, 2023 and 2022 consist of the following: (Amounts in millions) 2024 2023 2022 Finance lease costs: Amortization of ROU assets $ 1.4 $ 1.5 $ 1.5 Interest on lease liabilities 0.1 0.1 0.2 Operating lease costs* 32.2 27.4 24.3 Total lease costs $ 33.7 $ 29.0 $ 26.0 * Includes short-term leases, variable lease costs and sublease income, which are immaterial. Supplemental cash flow information related to leases in 2024, 2023 and 2022 is as follows: (Amounts in millions) 2024 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 1.7 $ 2.0 $ 2.4 Operating cash flows from finance leases 0.1 0.1 0.2 Operating cash flows from operating leases 30.0 24.7 22.2 ROU assets obtained in exchange for new lease obligations: Finance lease liabilities $ 0.7 $ 0.8 $ 0.2 Operating lease liabilities 44.6 36.0 33.5 Supplemental balance sheet information related to leases in 2024 and 2023 is as follows: (Amounts in millions) 2024 2023 Finance leases: Property and equipment – gross $ 17.0 $ 19.1 Accumulated depreciation ( 15.5 ) ( 16.8 ) Property and equipment – net $ 1.5 $ 2.3 Other accrued liabilities $ 0.5 $ 1.6 Other long-term liabilities 1.0 1.1 Total finance lease liabilities $ 1.5 $ 2.7 Operating leases: Operating lease right-of-use assets $ 89.4 $ 74.7 Other accrued liabilities $ 25.0 $ 23.8 Operating lease liabilities 68.6 54.6 Total operating lease liabilities $ 93.6 $ 78.4 108 SNAP-ON INCORPORATED Weighted-average lease terms and discount rates in 2024 and 2023 are as follows: 2024 2023 2022 Weighted-average remaining lease terms (in years) : Finance leases 3.8 2.5 2.1 Operating leases 4.7 3.8 4.0 Weighted-average discount rates: Finance leases 4.5 % 4.1 % 3.1 % Operating leases 3.6 % 4.0 % 2.9 % Maturities of lease liabilities as of December 28, 2024, are as follows: (Amounts in millions) Operating Leases Finance Leases Year: 2025 $ 28.0 $ 0.5 2026 23.3 0.4 2027 18.0 0.3 2028 12.8 0.2 2029 7.4 0.1 2030 and thereafter 12.8 0.1 Total lease payments 102.3 1.6 Less: amount representing interest ( 8.7 ) ( 0.1 ) Total lease liabilities $ 93.6 $ 1.5 In 2024, Snap-on did not have any significant additional operating or finance leases that have not yet commenced. Lessor accounting: 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. Snap-on accounts for its financial services leases as sales-type leases. In certain circumstances, the lessee has the option to terminate the lease. In the event of the lessee’s deteriorated financial condition or default, Snap-on has the right to terminate the lease. The leases contain an end-of-term purchase option that is generally insignificant and is reasonably certain to be exercised by the lessee. The company recognizes the net investment in the lease as the present value of the lease payments not yet received plus the present value of the unguaranteed residual value, using the interest rate implicit in the lease. The difference between the undiscounted lease payments received over the lease term and the related net investment in the lease is reported as unearned finance charges. Unearned finance charges are amortized to income over the life of the contract and are included as a component of “Financial services revenue” on the accompanying Consolidated Statements of Earnings. Sales-type leases are included in both “Finance receivables – net” and “Long-term finance receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to five years . In 2024 and 2023, finance receivables have future minimum lease payments, including unguaranteed residual value, of $ 53.4 million and $ 28.6 million, respectively, and unearned finance charges of $ 12.2 million and $ 6.2 million, respectively. Sales-type leases are also included in both “Contract receivables – net” and “Long-term contract receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to seven years . In 2024 and 2023, contract receivables have future minimum lease payments, including unguaranteed residual value, of $ 318.6 million and $ 315.7 million, respectively, and unearned finance charges of $ 58.2 million and $ 56.2 million, respectively. 2024 ANNUAL REPORT 109 Notes to Consolidated Financial Statements (continued) Future minimum lease payments as of December 28, 2024 are as follows: (Amounts in millions) Lease Receivables Year: 2025 $ 105.6 2026 91.8 2027 70.0 2028 50.1 2029 32.2 2030 and thereafter 22.4 Total lease payments 372.1 Less: unearned finance charges ( 70.4 ) Net investment in leases $ 301.7 See Note 4 for additional information on finance and contract receivables. Note 17: Other Income (Expense) – Net “Other income (expense) – net” on the accompanying Consolidated Statements of Earnings consists of the following: (Amounts in millions) 2024 2023 2022 Interest income $ 57.0 $ 40.2 $ 13.0 Net foreign exchange loss ( 7.4 ) ( 11.0 ) ( 7.5 ) Net periodic pension and postretirement benefits - non-service 26.8 37.6 36.1 Other 0.6 0.7 0.9 Total other income (expense) – net $ 77.0 $ 67.5 $ 42.5 Note 18: Accumulated Other Comprehensive Income (Loss) The following is a summary of net changes in Accumulated OCI by component and net of tax for 2024 and 2023: (Amounts in millions) Foreign Currency Translation Cash Flow Hedges Defined Benefit Pension and Postretirement Plans Total Balance at beginning of 2023 $ ( 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 ) Other comprehensive loss before reclassifications ( 108.8 ) — ( 21.1 ) ( 129.9 ) Amounts reclassified from Accumulated OCI — ( 1.7 ) 6.1 4.4 Net other comprehensive loss ( 108.8 ) ( 1.7 ) ( 15.0 ) ( 125.5 ) Balance as of 2024 year end $ ( 320.6 ) $ 4.0 $ ( 258.4 ) $ ( 575.0 ) 110 SNAP-ON INCORPORATED The reclassifications out of Accumulated OCI in 2024 and 2023 are as follows: Amounts Reclassified from Accumulated OCI Statement of Earnings Presentation (Amounts in millions) 2024 2023 Gains on cash flow hedges: Treasury locks $ 1.7 $ 1.6 Interest expense Income tax expense — — Income tax expense Net of tax 1.7 1.6 Amortization of net unrecognized losses and prior service credits ( 8.1 ) ( 0.5 ) See footnote below* Income tax benefit 2.0 0.1 Income tax expense Net of tax ( 6.1 ) ( 0.4 ) Total reclassifications for the period, net of tax $ ( 4.4 ) $ 1.2 * These Accumulated OCI components are included in the computation of net periodic pension and postretirement health care costs; see Note 11 and Note 12 for additional information. Note 19: Segments Snap-on’s operating segments, which represent Snap-on’s reportable segments, are based on the organizational structure used by the Chief Executive Officer, its chief operating decision maker (“CODM”), to make operating and investment determinations and to assess performance. Snap-on’s reportable operating segments are: (i) the Commercial & Industrial Group; (ii) the Snap-on Tools Group; (iii) the Repair Systems & Information Group; and (iv) Financial Services. 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 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. The CODM evaluates the performance of the Commercial & Industrial Group, the Snap-on Tools Group and the Repair Systems & Information Group operating segments based on segment net sales and segment operating earnings. The Snap-on Tools Group segment net sales reflect external net sales, while the Commercial & Industrial Group and the Repair Systems & Information Group segment net sales 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. The Financial Services operating segment is evaluated based on financial services revenue and segment operating earnings. Segment net sales and segment operating earnings are used to determine the compensation of certain management employees. Identifiable assets by segment are those assets used in the respective reportable segment’s operations. Corporate assets consist of cash and cash equivalents (excluding cash held at Financial Services), deferred income taxes and certain other assets. Corporate expenses primarily reflect stock-based compensation and other costs not attributable to an operating segment. Intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results. Snap-on does not have any single customer or government that represents 10% or more of its revenues in any of the indicated periods. 2024 ANNUAL REPORT 111 Notes to Consolidated Financial Statements (continued) Financial Data by Segment: 2024 Commercial & Snap-on Repair Systems Industrial Tools & Information Financial Total (Amounts in millions) Group Group Group Services Segments External net sales $ 1,187.6 $ 1,989.2 $ 1,530.6 $ — $ 4,707.4 Intersegment net sales 289.2 — 267.3 — 556.5 Segment net sales 1,476.8 1,989.2 1,797.9 — 5,263.9 Segment cost of goods sold ( 868.6 ) ( 1,050.3 ) ( 967.1 ) — ( 2,886.0 ) Segment gross profit 608.2 938.9 830.8 — 2,377.9 Financial services revenue — — — 401.0 401.0 Segment operating and financial services expenses Personnel ( 218.8 ) ( 191.7 ) ( 253.9 ) ( 34.7 ) Shipping and handling costs ( 27.8 ) ( 87.7 ) — — Depreciation and amortization ( 7.8 ) ( 7.5 ) ( 20.8 ) ( 1.0 ) Provisions for credit losses — — — ( 73.7 ) Other segment expenses* ( 111.7 ) ( 204.7 ) ( 100.9 ) ( 14.7 ) Total segment operating and financial services expenses ( 366.1 ) ( 491.6 ) ( 375.6 ) ( 124.1 ) ( 1,357.4 ) Segment operating earnings $ 242.1 $ 447.3 $ 455.2 $ 276.9 $ 1,421.5 Reconciliation of segment net sales to total net sales and total revenues: Segment net sales $ 5,263.9 Intersegment eliminations ( 556.5 ) Total net sales 4,707.4 Financial services revenue 401.0 Total revenues $ 5,108.4 Reconciliation of segment cost of goods sold to cost of goods sold: Segment cost of goods sold $ ( 2,886.0 ) Intersegment eliminations 556.5 Cost of goods sold $ ( 2,329.5 ) Reconciliation of segment operating earnings to operating earnings and earnings before income taxes: Segment operating earnings $ 1,421.5 Corporate operating expenses ( 75.8 ) Operating earnings 1,345.7 Interest expense ( 49.6 ) Other income (expense) – net 77.0 Earnings before income taxes $ 1,373.1 * Other segment expenses primarily include: Commercial & Industrial Group - shared service allocations; technology, travel and marketing expenses. Snap-on Tools Group - franchisee support costs, shared service allocations and technology expenses. Repair Systems & Information Group - technology, travel, professional fee and marketing expenses; shared service allocations. Financial Services - customer support and technology expenses. 112 SNAP-ON INCORPORATED Financial Data by Segment (continued): 2023 Commercial & Snap-on Repair Systems Industrial Tools & Information Financial Total (Amounts in millions) Group Group Group Services Segments External net sales $ 1,145.6 $ 2,088.8 $ 1,495.8 $ — $ 4,730.2 Intersegment net sales 312.7 — 285.4 — 598.1 Segment net sales 1,458.3 2,088.8 1,781.2 — 5,328.3 Segment cost of goods sold ( 887.5 ) ( 1,107.7 ) ( 984.0 ) — ( 2,979.2 ) Segment gross profit 570.8 981.1 797.2 — 2,349.1 Financial services revenue — — — 378.1 378.1 Segment operating and financial services expenses Personnel ( 207.7 ) ( 199.9 ) ( 248.9 ) ( 34.7 ) Shipping and handling and other freight expenses ( 24.7 ) ( 93.3 ) — — Depreciation and amortization ( 7.5 ) ( 7.5 ) ( 24.4 ) ( 0.9 ) Provisions for credit losses — — — ( 59.1 ) Other segment expenses* ( 104.8 ) ( 186.6 ) ( 90.7 ) ( 12.9 ) Total segment operating and financial services expenses ( 344.7 ) ( 487.3 ) ( 364.0 ) ( 107.6 ) ( 1,303.6 ) Segment operating earnings $ 226.1 $ 493.8 $ 433.2 $ 270.5 $ 1,423.6 Reconciliation of segment net sales to total net sales and total revenues: Segment net sales $ 5,328.3 Intersegment eliminations ( 598.1 ) Total net sales 4,730.2 Financial services revenue 378.1 Total revenues $ 5,108.3 Reconciliation of segment cost of goods sold to cost of goods sold: Segment cost of goods sold $ ( 2,979.2 ) Intersegment eliminations 598.1 Cost of goods sold $ ( 2,381.1 ) Reconciliation of segment operating earnings to operating earnings and earnings before income taxes: Segment operating earnings $ 1,423.6 Corporate operating expenses ( 113.2 ) Operating earnings 1,310.4 Interest expense ( 49.9 ) Other income (expense) – net 67.5 Earnings before income taxes $ 1,328.0 * Other segment expenses primarily include: Commercial & Industrial Group - shared service allocations; technology, travel and marketing expenses. Snap-on Tools Group - franchisee support costs, shared service allocations and technology expenses. Repair Systems & Information Group - technology, travel, professional fee and marketing expenses; shared service allocations. Financial Services - customer support and technology expenses. 2024 ANNUAL REPORT 113 Notes to Consolidated Financial Statements (continued) Financial Data by Segment (continued): 2022 Commercial & Snap-on Repair Systems Industrial Tools & Information Financial Total (Amounts in millions) Group Group Group Services Segments External net sales $ 1,058.3 $ 2,072.0 $ 1,362.5 $ — $ 4,492.8 Intersegment net sales 340.9 — 304.4 — 645.3 Segment net sales 1,399.2 2,072.0 1,666.9 — 5,138.1 Segment cost of goods sold ( 880.5 ) ( 1,141.7 ) ( 934.8 ) — ( 2,957.0 ) Segment gross profit 518.7 930.3 732.1 — 2,181.1 Financial services revenue — — — 349.7 349.7 Segment operating and financial services expenses Personnel ( 194.2 ) ( 199.0 ) ( 234.0 ) ( 32.6 ) Shipping and handling and other freight expenses ( 24.2 ) ( 90.2 ) — — Depreciation and amortization ( 7.4 ) ( 9.0 ) ( 24.3 ) ( 0.9 ) Provisions for credit losses — — — ( 38.2 ) Other segment expenses* ( 95.3 ) ( 173.4 ) ( 80.5 ) ( 12.0 ) Total segment operating and financial services expenses ( 321.1 ) ( 471.6 ) ( 338.8 ) ( 83.7 ) ( 1,215.2 ) Segment operating earnings $ 197.6 $ 458.7 $ 393.3 $ 266.0 $ 1,315.6 Reconciliation of segment net sales to total net sales and total revenues: Segment net sales $ 5,138.1 Intersegment eliminations ( 645.3 ) Total net sales 4,492.8 Financial services revenue 349.7 Total revenues $ 4,842.5 Reconciliation of segment cost of goods sold to cost of goods sold: Segment cost of goods sold $ ( 2,957.0 ) Intersegment eliminations 645.3 Cost of goods sold $ ( 2,311.7 ) Reconciliation of segment operating earnings to operating earnings and earnings before income taxes: Segment operating earnings $ 1,315.6 Corporate operating expenses ( 108.4 ) Operating earnings 1,207.2 Interest expense ( 47.1 ) Other income (expense) – net 42.5 Earnings before income taxes $ 1,202.6 * Other segment expenses primarily include: Commercial & Industrial Group - shared service allocations; technology, travel and marketing expenses. Snap-on Tools Group - franchisee support costs, shared service allocations and technology expenses. Repair Systems & Information Group - technology, travel, professional fee, and marketing expenses; shared service allocations. Financial Services - customer support and technology expenses. 114 SNAP-ON INCORPORATED Financial Data by Segment (continued): (Amounts in millions) 2024 2023 2022 Capital expenditures: Commercial & Industrial Group $ 19.4 $ 22.5 $ 26.0 Snap-on Tools Group 39.6 46.1 35.0 Repair Systems & Information Group 22.2 20.3 18.3 Financial Services 0.6 1.8 1.1 Total from reportable segments 81.8 90.7 80.4 Corporate 1.7 4.3 3.8 Total capital expenditures $ 83.5 $ 95.0 $ 84.2 Depreciation and amortization: Commercial & Industrial Group $ 25.3 $ 25.7 $ 26.1 Snap-on Tools Group 30.5 29.3 29.3 Repair Systems & Information Group 37.0 39.4 40.1 Financial Services 1.0 0.9 0.9 Total from reportable segments 93.8 95.3 96.4 Corporate 4.2 4.0 3.8 Total depreciation and amortization $ 98.0 $ 99.3 $ 100.2 Revenues by geographic region:* United States $ 3,640.9 $ 3,664.3 $ 3,465.4 Europe 793.8 760.9 723.3 All other 673.7 683.1 653.8 Total revenues $ 5,108.4 $ 5,108.3 $ 4,842.5 (Amounts in millions) 2024 2023 Assets: Commercial & Industrial Group $ 1,230.8 $ 1,293.7 Snap-on Tools Group 937.5 941.8 Repair Systems & Information Group 1,695.5 1,680.0 Financial Services 2,491.9 2,430.0 Total assets from reportable segments 6,355.7 6,345.5 Corporate 1,633.0 1,285.0 Elimination of intersegment receivables ( 91.9 ) ( 85.6 ) Total assets $ 7,896.8 $ 7,544.9 Long-lived assets:** United States $ 412.7 $ 394.2 Europe 163.9 172.1 All other 55.4 47.7 Total long-lived assets $ 632.0 $ 614.0 * Revenues are attributed to countries based on origin of the sale. ** Long-lived assets consist of Property and equipment – net and Operating lease right-of-use assets. 2024 ANNUAL REPORT 115 Notes to Consolidated Financial Statements (continued) Products and Services: Snap-on derives net sales from a broad line of products and complementary services that are grouped into three categories: (i) tools; (ii) diagnostics, information and management systems; and (iii) equipment. The tools product category includes hand tools, power tools, tool storage products and other similar products. The diagnostics, information and management systems product category includes handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, OEM purchasing facilitation services, and warranty management systems and analytics to help OEM dealerships manage and track performance. The equipment product category includes solutions for the service of vehicles and industrial equipment. Snap-on supports the sale of its diagnostics and vehicle service shop equipment by offering training programs as well as after-sales support for its customers. Through its financial services businesses, Snap-on also derives revenue from various financing programs designed to facilitate the sales of its products and support its franchise business. Further product line information is not presented as it is not practicable to do so. The following table shows the consolidated net sales and revenues of these product groups in the last three years: (Amounts in millions) 2024 2023 2022 Net sales: Tools $ 2,546.2 $ 2,528.9 $ 2,399.4 Diagnostics, information and management systems 1,028.1 991.2 942.4 Equipment 1,133.1 1,210.1 1,151.0 Total net sales 4,707.4 4,730.2 4,492.8 Financial services revenue 401.0 378.1 349.7 Total revenues $ 5,108.4 $ 5,108.3 $ 4,842.5 116 SNAP-ON INCORPORATED SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Snap-on has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SNAP-ON INCORPORATED By: /s/ Nicholas T. Pinchuk Date: February 13, 2025 Nicholas T. Pinchuk, Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Snap-on and in the capacities and on the date indicated. /s/ Nicholas T. Pinchuk Date: February 13, 2025 Nicholas T. Pinchuk, Chairman, President and Chief Executive Officer /s/ Aldo J. Pagliari Date: February 13, 2025 Aldo J. Pagliari, Principal Financial Officer, Senior Vice President – Finance and Chief Financial Officer /s/ Marty V. Ozolins Date: February 13, 2025 Marty V. Ozolins, Principal Accounting Officer, Vice President and Controller 2024 ANNUAL REPORT 117 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Snap-on and in the capacities and on the date indicated. By: /s/ David C. Adams Date: February 13, 2025 David C. Adams, Director By: /s/ Karen L. Daniel Date: February 13, 2025 Karen L. Daniel, Director By: /s/ Ruth Ann M. Gillis Date: February 13, 2025 Ruth Ann M. Gillis, Director By: /s/ James P. Holden Date: February 13, 2025 James P. Holden, Director By: /s/ Nathan J. Jones Date: February 13, 2025 Nathan J. Jones, Director By: /s/ Henry W. Knueppel Date: February 13, 2025 Henry W. Knueppel, Director By: /s/ W. Dudley Lehman Date: February 13, 2025 W. Dudley Lehman, Director By: /s/ Nicholas T. Pinchuk Date: February 13, 2025 Nicholas T. Pinchuk, Director By: /s/ Gregg M. Sherrill Date: February 13, 2025 Gregg M. Sherrill, Director By: /s/ Donald J. Stebbins Date: February 13, 2025 Donald J. Stebbins, Director 118 SNAP-ON INCORPORATED