UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-Q

(Mark one)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~ March 30, ~~2017~~

2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number1-7724

Snap-on Incorporated

(Exact name of registrant as specified in its charter)

Delaware

39-0622040

~~Delaware~~

~~39-0622040~~

(State of incorporation)

(I.R.S. Employer Identification No.)

2801 80th Street,

Kenosha,

Wisconsin

53143

~~2801 80~~^th ~~Street, Kenosha, Wisconsin~~

~~53143~~

~~(Address~~ (Address of principal executive offices)

(Zip code)

(262)656-5200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	SNA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.

~~Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐~~

~~Emerging growth company ☐~~

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:


Class			Outstanding at April 12, 2024
~~Class~~	~~Outstanding at October 13, 2017~~
Common Stock, $1.00 par value		~~57,007,188~~52,718,549 shares

Table of Contents

TABLE OF CONTENTS

Page

~~Page~~

Part I: Financial Information

Item 1.

Financial Statements

Condensed Consolidated Statements of Earnings (unaudited) – Three ~~and Nine~~ Months Ended
~~September~~ March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016~~2023

Condensed Consolidated Statements of Comprehensive Income (unaudited) – Three ~~and Nine~~ Months Ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016~~2023

Condensed Consolidated Balance Sheets (unaudited) – ~~September~~March 30, ~~2017,~~2024, and December ~~31, 2016~~30, 2023

~~5-6~~

Condensed Consolidated Statements of Equity (unaudited) – ~~Nine~~Three Months Ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016~~2023

Condensed Consolidated Statements of Cash Flows (unaudited) – ~~Nine~~Three Months Ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016~~2023

Notes to Condensed Consolidated Financial Statements (unaudited)

~~9-36~~

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~37-56~~

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

~~57-58~~

Item 4.

Controls and Procedures

~~58-59~~

Part II: Other Information

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

~~59-60~~

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1: Financial Statements

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in millions, except per share data)

(Unaudited)

   Three Months Ended    Nine Months Ended
     September 30,
2017      October 1,
2016      September 30,
2017      October 1,
2016
Net sales
     $ 903.8         $ 834.1         $ 2,712.3         $ 2,540.6
Cost of goods sold
       (455.2)          (415.0)          (1,352.7)          (1,274.9)








Gross profit
   448.6       419.1       1,359.6       1,265.7
Operating expenses
   (295.5)      (261.5)      (853.3)      (786.3)








Operating earnings before financial services
   153.1       157.6       506.3       479.4
Financial services revenue
   79.0       71.6       233.5       207.2
Financial services expenses
   (23.0)      (21.0)      (70.4)      (60.1)








Operating earnings from financial services
   56.0       50.6       163.1       147.1








Operating earnings
   209.1       208.2       669.4       626.5
Interest expense
   (13.1)      (13.1)      (38.8)      (39.1)
Other income (expense) – net
   (2.1)      (0.8)      (5.7)      (0.3)








Earnings before income taxes and equity earnings
   193.9       194.3       624.9       587.1
Income tax expense
   (57.2)      (59.6)      (187.1)      (179.4)








Earnings before equity earnings
   136.7       134.7       437.8       407.7
Equity earnings, net of tax
   0.4       0.5       1.2       2.2








Net earnings
   137.1       135.2       439.0       409.9
Net earnings attributable to noncontrolling interests
   (3.7)      (3.5)      (10.8)      (9.8)








Net earnings attributable toSnap-on Incorporated
     $ 133.4         $ 131.7         $ 428.2         $ 400.1








Net earnings per share attributable toSnap-on Incorporated:

Basic
     $ 2.33         $ 2.27         $ 7.43         $ 6.89
Diluted
   2.29       2.22       7.27       6.74
Weighted-average shares outstanding:

Basic
   57.2       58.0       57.6       58.1
Effect of dilutive securities
   1.1       1.3       1.3       1.3








Diluted
   58.3       59.3       58.9       59.4








Dividends declared per common share
     $ 0.71         $ 0.61         $ 2.13         $ 1.83


	Three Months Ended
	March 30, 2024		April 1, 2023
Net sales	$	1,182.3	$	1,183.0
Cost of goods sold	(585.6)		(593.4)
Gross profit	596.7		589.6
Operating expenses	(325.8)		(329.8)
Operating earnings before financial services	270.9		259.8

Financial services revenue	99.6		92.6
Financial services expenses	(31.3)		(26.3)
Operating earnings from financial services	68.3		66.3

Operating earnings	339.2		326.1
Interest expense	(12.5)		(12.4)
Other income (expense) – net	18.1		15.2
Earnings before income taxes	344.8		328.9
Income tax expense	(75.2)		(74.6)


Net earnings	269.6		254.3
Net earnings attributable to noncontrolling interests	(6.1)		(5.6)
Net earnings attributable to Snap-on Incorporated	$	263.5	$	248.7

Net earnings per share attributable to Snap-on Incorporated:
Basic	$	4.99	$	4.69
Diluted	4.91		4.60

Weighted-average shares outstanding:
Basic	52.8		53.0
Effect of dilutive securities	0.9		1.1
Diluted	53.7		54.1

Dividends declared per common share	$	1.86	$	1.62

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in millions)

(Unaudited)

   Three Months Ended    Nine Months Ended
     September 30,        October 1,        September 30,        October 1,
   2017    2016    2017    2016
Comprehensive income (loss):

Net earnings
     $ 137.1           $ 135.2           $ 439.0           $ 409.9
Other comprehensive income (loss):

Foreign currency translation*
   51.4         (7.8)        138.9         (22.8)
Unrealized cash flow hedges, net of tax:

Other comprehensive income before reclassifications
   –           –           6.1         –
Reclassification of cash flow hedges to net earnings
   (0.5)        (0.1)        (1.2)        (0.3)
Defined benefit pension and postretirement plans:

Amortization of net unrecognized losses and prior service credits included in net periodic benefit cost
   6.6         7.6         19.8         22.7
Income tax benefit
   (2.3)        (2.8)        (6.9)        (8.3)








Net of tax
   4.3         4.8         12.9         14.4








Total comprehensive income
     $ 192.3           $ 132.1           $ 595.7           $ 401.2
Comprehensive income attributable to noncontrolling interests
   (3.7)        (3.5)        (10.8)        (9.8)








Comprehensive income attributable toSnap-on Incorporated
     $ 188.6           $   128.6           $   584.9           $   391.4

*	~~There is no reclassification adjustment as there was no sale or liquidation of any foreign entity during any period presented.~~


	Three Months Ended
	March 30, 2024		April 1, 2023
Comprehensive income (loss):
Net earnings	$	269.6	$	254.3
Other comprehensive income (loss):
Foreign currency translation	(44.8)		18.1



Reclassification of cash flow hedges to net earnings, net of tax	(0.4)		(0.4)
Defined benefit pension and postretirement plans:
Amortization of net unrecognized losses	1.8		—
Income tax benefit	(0.4)		—
Net of tax	1.4		—
Total comprehensive income	225.8		272.0

Comprehensive income attributable to noncontrolling interests	(6.1)		(5.6)
Comprehensive income attributable to Snap-on Incorporated	$	219.7	$	266.4

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in millions, except share data)

(Unaudited)

     September 30,
2017      December 31,
2016
ASSETS

Current assets:

Cash and cash equivalents
       $ 94.1             $ 77.6
Trade and other accounts receivable – net
   675.2         598.8
Finance receivables – net
   505.8         472.5
Contract receivables – net
   99.8         88.1
Inventories – net
   649.9         530.5
Prepaid expenses and other assets
   121.1         116.5




Total current assets
       2,145.9             1,884.0
Property and equipment:

Land
   24.4         19.1
Buildings and improvements
   350.3         309.4
Machinery, equipment and computer software
   872.8         809.6




   1,247.5         1,138.1
Accumulated depreciation and amortization
   (773.3)        (712.9)




Property and equipment – net
   474.2         425.2
Deferred income tax assets
   81.2         72.8
Long-term finance receivables – net
   1,018.6         934.5
Long-term contract receivables – net
   310.4         286.7
Goodwill
   924.0         895.5
Other intangibles – net
   258.3         184.6
Other assets
   43.6         39.9




Total assets
       $ 5,256.2             $ 4,723.2


	March 30, 2024		December 30, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,121.0	$	1,001.5
Trade and other accounts receivable – net	827.5		791.3
Finance receivables – net	604.9		594.1
Contract receivables – net	116.6		120.8
Inventories – net	970.5		1,005.9
Prepaid expenses and other current assets	135.6		138.4
Total current assets	3,776.1		3,652.0

Property and equipment:
Land	34.1		34.5
Buildings and improvements	446.0		452.8
Machinery, equipment and computer software	1,088.1		1,083.1
Property and equipment – gross	1,568.2		1,570.4
Accumulated depreciation	(1,033.5)		(1,031.1)
Property and equipment – net	534.7		539.3

Operating lease right-of-use assets	74.4		74.7
Deferred income tax assets	78.4		76.0
Long-term finance receivables – net	1,290.6		1,284.2
Long-term contract receivables – net	413.6		407.9
Goodwill	1,071.3		1,097.4
Other intangible assets – net	277.7		268.9
Pension assets	130.4		130.5
Other long-term assets	19.6		14.0
Total assets	$	7,666.8	$	7,544.9

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in millions, except share data)

(Unaudited)

     September 30,
2017      December 31,
2016
LIABILITIES AND EQUITY

Current liabilities:

Notes payable and current maturities of long-term debt
       $ 453.4             $ 301.4
Accounts payable
   204.7         170.9
Accrued benefits
   47.8         52.8
Accrued compensation
   74.8         89.8
Franchisee deposits
   76.1         66.7
Other accrued liabilities
   366.0         307.9




Total current liabilities
   1,222.8         989.5
Long-term debt
   755.0         708.8
Deferred income tax liabilities
   28.5         13.1
Retiree health care benefits
   34.3         36.7
Pension liabilities
   181.8         246.5
Other long-term liabilities
   93.8         93.4




Total liabilities
       2,316.2             2,088.0




Commitments and contingencies (Note 14)

Equity

Shareholders’ equity attributable toSnap-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 67,407,599 and 67,400,250 shares, respectively)
   67.4         67.4
Additionalpaid-in capital
   344.4         317.3
Retained earnings
   3,689.5         3,384.9
Accumulated other comprehensive loss
   (341.8)        (498.5)
Treasury stock at cost(10,400,929 and 9,450,393 shares, respectively)
   (837.7)        (653.9)




Total shareholders’ equity attributable toSnap-on Incorporated
   2,921.8         2,617.2
Noncontrolling interests
   18.2         18.0




Total equity
   2,940.0         2,635.2




Total liabilities and equity
       $ 5,256.2             $ 4,723.2


	March 30, 2024		December 30, 2023
LIABILITIES AND EQUITY
Current liabilities:
Notes payable	$	15.2	$	15.6
Accounts payable	257.4		238.0
Accrued benefits	70.5		64.4
Accrued compensation	67.9		102.9
Franchisee deposits	73.7		73.3
Other accrued liabilities	505.0		447.4
Total current liabilities	989.7		941.6

Long-term debt	1,184.9		1,184.6
Deferred income tax liabilities	88.3		79.2
Retiree health care benefits	21.2		21.8
Pension liabilities	75.3		82.3
Operating lease liabilities	54.5		54.6
Other long-term liabilities	89.6		87.4
Total liabilities	2,503.5		2,451.5

Commitments and contingencies (Note 14)

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 67,456,437 and 67,450,999 shares, respectively)	67.5		67.5
Additional paid-in capital	527.4		545.5
Retained earnings	7,113.1		6,948.5
Accumulated other comprehensive loss	(493.3)		(449.5)
Treasury stock at cost (14,737,944 and 14,756,982 shares, respectively)	(2,073.7)		(2,040.7)
Total shareholders’ equity attributable to Snap-on Incorporated	5,141.0		5,071.3
Noncontrolling interests	22.3		22.1
Total equity	5,163.3		5,093.4
Total liabilities and equity	$	7,666.8	$	7,544.9

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Amounts in millions, except share data)

(Unaudited)

The following summarizes the changes in total equity for the ~~nine~~three month period ended ~~September~~March 30, ~~2017:~~

   Shareholders’ Equity Attributable toSnap-on Incorporated

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings
   Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock
   Noncontrolling
Interests
Total
Equity



Balance at December 31, 2016
     $ 67.4         $ 317.3      $ 3,384.9      $ (498.5)      $ (653.9)      $ 18.0      $ 2,635.2
Net earnings for the nine months ended
September 30, 2017
   –           –           428.2    –           –           10.8    439.0
Other comprehensive income
   –           –           –           156.7    –           –           156.7
Cash dividends – $2.13 per share
   –           –           (123.0)    –           –           –           (123.0)
Stock compensation plans
   –           27.1    –           –           28.8    –           55.9
Share repurchases – 1,348,000 shares
   –           –           –           –           (212.6)    –           (212.6)
Other
   –           –           (0.6)    –           –           (10.6)    (11.2)


Balance at September 30, 2017
     $     67.4         $     344.4      $     3,689.5      $     (341.8)      $     (837.7)      $     18.2      $     2,940.0


The following summarizes the changes in total equity for the nine month period ended October 1, 2016:

   Shareholders’ Equity Attributable toSnap-on Incorporated

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings
   Accumulated
Other
Comprehensive
Loss
Treasury
Stock
   Noncontrolling
Interests
Total
Equity



Balance at January 2, 2016
     $ 67.4         $ 296.3         $ 2,986.9         $ (364.2)        $ (573.7)        $ 18.0         $ 2,430.7
Net earnings for the nine months ended
October 1, 2016
   –           –           400.1       –           –           9.8       409.9
Other comprehensive loss
   –           –           –           (8.7)      –           –           (8.7)
Cash dividends – $1.83 per share
   –           –           (106.3)      –           –           –           (106.3)
Stock compensation plans
   –           22.8       –           –           27.1       –           49.9
Share repurchases – 492,000 shares
   –           –           –           –           (76.4)      –           (76.4)
Other
   –           –           (0.7)      –           –           (9.8)      (10.5)


Balance at October 1, 2016
     $     67.4         $     319.1         $     3,280.0         $     (372.9)        $     (623.0)        $     18.0         $     2,688.6

2024:


	Shareholders’ Equity Attributable to Snap-on Incorporated
	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total Equity
Balance at December 30, 2023	$	67.5	$	545.5	$	6,948.5	$	(449.5)	$	(2,040.7)	$	22.1	$	5,093.4
Net earnings for the three months ended March 30, 2024	—		—		263.5		—		—		6.1		269.6
Other comprehensive loss	—		—		—		(43.8)		—		—		(43.8)
Cash dividends – $1.86 per share	—		—		(98.2)		—		—		—		(98.2)
Stock compensation plans	—		(18.1)		—		—		37.2		—		19.1
Share repurchases – 248,000 shares	—		—		—		—		(70.2)		—		(70.2)
Other	—		—		(0.7)		—		—		(5.9)		(6.6)
Balance at March 30, 2024	$	67.5	$	527.4	$	7,113.1	$	(493.3)	$	(2,073.7)	$	22.3	$	5,163.3

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


	Shareholders’ Equity Attributable to Snap-on Incorporated
	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total Equity
Balance at December 31, 2022	$	67.4	$	499.9	$	6,296.2	$	(528.3)	$	(1,853.9)	$	22.2	$	4,503.5
Net earnings for the three months ended April 1, 2023	—		—		248.7		—		—		5.6		254.3
Other comprehensive income	—		—		—		17.7		—		—		17.7
Cash dividends – $1.62 per share	—		—		(86.1)		—		—		—		(86.1)
Stock compensation plans	—		0.3		—		—		36.1		—		36.4
Share repurchases – 356,000 shares	—		—		—		—		(87.2)		—		(87.2)
Other	0.1		—		(0.7)		—		—		(5.6)		(6.2)
Balance at April 1, 2023	$	67.5	$	500.2	$	6,458.1	$	(510.6)	$	(1,905.0)	$	22.2	$	4,632.4

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in millions)

(Unaudited)

   Nine Months Ended
     September 30,
2017      October 1,
2016
Operating activities:

Net earnings
     $ 439.0           $ 409.9
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:

Depreciation
   48.7         45.7
Amortization of other intangibles
   20.7         18.2
Provision for losses on finance receivables
   38.6         30.4
Provision for losses onnon-finance receivables
   7.9         6.1
Stock-based compensation expense
   21.4         21.5
Deferred income tax benefit
   (10.1)        (12.5)
Gain on sale of assets
   (0.1)        (0.1)
Settlement of treasury lock
   14.9         –
Changes in operating assets and liabilities, net of effects of acquisitions:

Increase in trade and other accounts receivable
   (50.8)        (31.2)
Increase in contract receivables
   (31.8)        (30.8)
Increase in inventories
   (86.9)        (29.9)
Increase in prepaid and other assets
   (9.7)        (28.5)
Increase in accounts payable
   26.5         27.7
Decrease in accruals and other liabilities
   (13.3)        (10.9)




Net cash provided by operating activities
   415.0         415.6
Investing activities:

Additions to finance receivables
   (670.0)        (691.4)
Collections of finance receivables
   528.9         501.7
Capital expenditures
   (57.3)        (56.6)
Acquisitions of businesses, net of cash acquired
   (82.9)        –
Disposal of property and equipment
   1.4         1.9
Other
   (2.5)        0.3




Net cash used by investing activities
       (282.4)            (244.1)
Financing activities:

Proceeds from issuance of long-term debt
   297.8         –
Repayments of long-term debt
   (150.0)        –
Proceeds from notes payable
   16.8         4.5
Repayments of notes payable
   (4.5)        (5.3)
Net increase in other short-term borrowings
   38.7         15.6
Cash dividends paid
   (123.0)        (106.3)
Purchases of treasury stock
   (212.6)        (76.4)
Proceeds from stock purchase and option plans
   36.2         32.4
Other
   (18.9)        (11.3)




Net cash used by financing activities
   (119.5)        (146.8)




Effect of exchange rate changes on cash and cash equivalents
   3.4         –




Increase in cash and cash equivalents
   16.5         24.7
Cash and cash equivalents at beginning of year
   77.6         92.8




Cash and cash equivalents at end of period
     $ 94.1           $ 117.5




Supplemental cash flow disclosures:

Cash paid for interest
     $ (49.7)          $ (49.2)
Net cash paid for income taxes
   (168.3)        (175.7)

Three Months Ended
March 30, 2024 April 1, 2023
Operating activities:
Net earnings $ 269.6 $ 254.3
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation 18.2 18.0
Amortization of other intangible assets 6.3 6.9
Provision for losses on finance receivables 18.2 14.2
Provision for losses on non-finance receivables 4.9 5.0
Stock-based compensation expense 9.8 10.2
Deferred income tax provision (benefit) 1.6 (0.2)
Gain on sales of assets (0.2) (0.2)
Changes in operating assets and liabilities, net of effects of acquisitions:
Trade and other accounts receivable (47.9) (22.9)
Contract receivables (4.0) 0.2
Inventories 22.1 (13.2)
Prepaid expenses and other current assets (3.5) 1.7
Accounts payable 23.3 (0.5)
Accrued and other liabilities 30.3 28.1
Net cash provided by operating activities 348.7 301.6
Investing activities:
Additions to finance receivables (248.0) (257.1)
Collections of finance receivables 207.8 207.5
Capital expenditures (21.8) (23.0)
Disposals of property and equipment 1.1 0.5
Other (2.3) (0.8)
Net cash used by investing activities (63.2) (72.9)
Financing activities:
Net increase (decrease) in other short-term borrowings (0.4) 0.8
Cash dividends paid (98.2) (86.1)
Purchases of treasury stock (70.2) (87.2)
Proceeds from stock purchase plan and stock option exercises 28.3 32.8
Other (23.7) (12.4)
Net cash used by financing activities (164.2) (152.1)
Effect of exchange rate changes on cash and cash equivalents (1.8) —
Increase in cash and cash equivalents 119.5 76.6
Cash and cash equivalents at beginning of year 1,001.5 757.2
Cash and cash equivalents at end of period $ 1,121.0 $ 833.8
Supplemental cash flow disclosures:
Cash paid for interest $ (13.7) $ (13.6)
Net cash paid for income taxes (14.7) (13.3)

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1: Summary of Accounting Policies

Principles of consolidation and presentation

The Condensed Consolidated Financial Statements include the accounts ofSnap-on Incorporated and its ~~wholly-owned~~wholly owned and majority-owned subsidiaries (collectively,~~“Snap-on”~~ “Snap-on” or ~~“the company”~~the “company”)~~.These~~. These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included inSnap-on’s ~~2016~~ 2023 Annual Report on Form10-K for the fiscal year ended December ~~31, 2016~~30, 2023 (“~~2016~~2023 year end”). The company’s ~~2017~~2024 fiscal ~~third~~first quarter ended on ~~September~~March 30, ~~2017; the 2016~~2024, and its 2023 fiscal ~~third~~first quarter ended on ~~October~~April 1, ~~2016.~~2023. The company’s ~~2017~~2024 and ~~2016~~2023 fiscal first ~~second and third~~ quarters each contained 13 weeks of operating results.

~~Snap-on~~ ~~accounts for investments in unconsolidated affiliates whereSnap-on~~ has a greater than 20% but less than 50% ownership interest under the equity method of accounting. Investments in unconsolidated affiliates of $18.4 million as of September 30, 2017, and $15.2 million as of December 31, 2016, are included in “Other assets” on the accompanying Condensed Consolidated Balance Sheets; no equity investment dividends were received in any period presented. In the normal course of business, the company may purchase products or services from, or sell products and services to, unconsolidated affiliates. Purchases from unconsolidated affiliates were $2.4 million and $2.7 million in the respective fiscal third quarters of 2017 and 2016, and $8.1 million and $10.1 million in the respective first nine months of 2017 and 2016. Sales to unconsolidated affiliates were $0.1 million and zero in the respective fiscal third quarters of 2017 and 2016, and $0.3 million and zero in the respective first nine months of 2017 and 2016. The Condensed Consolidated Financial Statements do not include the accounts of the company’s independent franchisees.Snap-on’s Condensed Consolidated Financial Statements are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). ~~All intercompany accounts and transactions have been eliminated.~~

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the Condensed Consolidated Financial Statements for the three ~~and nine~~ month periods ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016,~~2023, have been made. Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year.

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’snon-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 9 for ~~further~~additional information on financial instruments.

New Accounting Standards

~~The following new accounting pronouncement was adopted in fiscal year 2017:~~

In ~~January 2017, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”)No. 2017-04,~~~~Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment~~, which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair~~value. Snap-on~~ early adopted this ASU in the second quarter of 2017 in conjunction with its annual impairment test. The amendments in this ASU are being applied on a prospective basis and the adoption did not have a significant impact on the company’s consolidated financial statements.

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~The following new accounting pronouncements, and related impacts on adoption, are being evaluated by the company:~~

~~In August 2017,~~November 2023, the FASB issued ASUNo. ~~2017-12,~~~~Derivatives and Hedging~~2023-07, Segment Reporting (Topic ~~815) –~~~~Targeted~~280): Improvements to ~~Accounting for Hedging Activities~~Reportable Segment Disclosures, which ~~improves~~requires the ~~financial reporting~~disclosure of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this update also make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP.additional segment information. ASUNo. ~~2017-12~~2023-07 is effective for fiscal years beginning after December 15, ~~2018, including~~2023, and interim periods within ~~those~~ fiscal ~~years; the~~years beginning after December 15, 2024; this ASU allows for early adoption. The adoption ~~in any interim period after issuance~~ of ~~the update. The company is currently assessing the impact~~ this ASU ~~will~~is not expected to have a material impact on ~~its consolidated financial statements.~~

Snap-on’s Condensed Consolidated Financial Statements.

In ~~March 2017,~~December 2023, the FASB issued ASUNo. ~~2017-07,~~~~Compensation – Retirement Benefits~~2023-09, Income Taxes (Topic ~~715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~740): Improvements to Income Tax Disclosures, which ~~provides additional guidance~~requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on ~~the presentation of net periodic pension and postretirement benefit costs in the~~ income ~~statement and on the components eligible for capitalization. The amendments in this~~taxes paid. ASU require that an employer report the service cost component of the net periodic benefit costs in the same income statement line item as other compensation costs arising from services rendered by employees during the period. The~~non-service-cost~~ components of net periodic benefit costs are to be presented in the income statement separately from the service cost components and outside a subtotal of income from operations. The ASU also allows for the capitalization of the service cost components, when applicable (i.e., as a cost of internally manufactured inventory or a self-constructed asset).

~~The ASU~~No. 2023-09 is effective for annual periods beginning after December 15, ~~2017, including interim periods within those annual periods; early adoption~~2024. The guidance is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in this ASU are to be applied retrospectively. The company does not expect the adoption of this ASU to have a significant impact on its consolidated income statement.

~~In October 2016, the FASB issued ASUNo. 2016-16,~~~~Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other Than Inventory~~. The ASU eliminates the requirement to defer the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Under the new guidance, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years; early adoption is permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance (i.e., the first interim period if an entity issues interim financial statements). The amendments in this ASU are to be applied on a ~~modified retrospective~~prospective basis ~~through a cumulative-effect adjustment directly~~with the option to ~~retained earnings at~~apply the ~~time of~~standard retrospectively; this ASU allows for early adoption. The ~~company does not expect the~~ adoption of this ASU is not expected to have a ~~significant~~material impact on ~~its~~Snap-on’s Condensed Consolidated Financial Statements.

Note 2: Revenue Recognition

Snap-on recognizes revenue from the ~~consolidated financial statements.~~

~~In August 2016, the FASB issued ASUNo. 2016-15,~~~~Statement~~sale of ~~Cash Flows (Topic 230)~~~~, which adds and/or clarifies guidance~~tools, diagnostics, equipment, and related services based on the classification of certain cash receipts and payments in the statement of cash flows. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years; early adoption is permitted. The company does not expect the adoptionwhen control of the ~~ASU to have a significant impact~~product passes to the ~~designations~~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.

Table of ~~operating, investing and financing activities on its consolidated statement of cash flows.~~

Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~In June 2016,~~

Revenue Disaggregation: The following table shows the ~~FASB issued ASUNo. 2016-13,~~~~Financial Instruments – Credit Losses (Topic 326)~~~~, to require~~consolidated revenues by revenue source:


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

Revenue from contracts with customers	$	1,175.2	$	1,176.5
Other revenues	7.1		6.5
Total net sales	1,182.3		1,183.0
Financial services revenue	99.6		92.6
Total revenues	$	1,281.9	$	1,275.6

Snap-on evaluates the ~~measurement~~performance of ~~expected credit losses for financial instruments held at the reporting date~~its operating segments based on ~~historical experience, current conditions~~segment revenues and segment operating earnings. The Snap-on Tools Group segment revenues include external net sales, while the Commercial & Industrial Group and the Repair Systems & Information Group segment revenues include both external and intersegment net sales. Snap-on accounts for intersegment net sales and transfers based primarily on standard costs with reasonable ~~forecasts. The main objective of this ASU is~~mark-ups established between the segments. Intersegment amounts are eliminated to ~~provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity~~arrive at ~~each reporting date. ASUNo. 2016-13~~ is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years; the ASU allows for early adoption as of the beginning of an interim or annual reporting period beginning after December 15, 2018. The company is currently assessing the impact this ASU will have on itsSnap-on’s consolidated financial ~~statements.~~

~~In February 2016, the FASB issued ASUNo. 2016-02,~~~~Leases (Topic 842)~~~~, to increase transparency and comparability among organizations~~results.

The following tables represent external net sales disaggregated by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU is intended to represent an improvement over previous GAAP, which did not require lease assets and lease liabilities to be recognized for most leases. This ASU, which supersedes most current lease guidance, affects any entity that enters into a lease (as that term is defined in the ASU), with some specified scope exemptions. ASU~~No. 2016-02~~ is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years; the ASU allows for early adoption as of the beginning of an interim or annual reporting period. The company is currently assessing the impact this ASU will have on its consolidated financial statements.

~~In May 2014, the FASB issued ASUNo. 2014-09,~~~~Revenue from Contracts with Customers (Topic 606)~~, that, together with several subsequent updates, outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Topic 606 isgeography, based on the ~~principle that an entity should recognize revenue to depict the transfer~~customers’ billing addresses:


	For the Three Months Ended March 30, 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*	$	148.6	$	433.3	$	302.1	$	—	$	—	$	884.0
Europe	81.0		39.6		62.1		—		—		182.7
All other	61.4		27.2		27.0		—		—		115.6
External net sales	291.0		500.1		391.2		—		—		1,182.3
Intersegment net sales	68.9		—		72.6		—		(141.5)		—
Total net sales	359.9		500.1		463.8		—		(141.5)		1,182.3
Financial services revenue	—		—		—		99.6		—		99.6
Total revenue	$	359.9	$	500.1	$	463.8	$	99.6	$	(141.5)	$	1,281.9


	For the Three Months Ended April 1, 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*	$	137.6	$	473.9	$	281.8	$	—	$	—	$	893.3
Europe	75.0		35.7		63.2		—		—		173.9
All other	66.0		27.4		22.4		—		—		115.8
External net sales	278.6		537.0		367.4		—		—		1,183.0
Intersegment net sales	85.2		—		79.2		—		(164.4)		—
Total net sales	363.8		537.0		446.6		—		(164.4)		1,183.0
Financial services revenue	—		—		—		92.6		—		92.6
Total revenue	$	363.8	$	537.0	$	446.6	$	92.6	$	(164.4)	$	1,275.6

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

Table of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Topic 606 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments.

Entities have the option of adopting this standard using either a full retrospective approach or a modified retrospective approach (i.e., through a cumulative-effect adjustment directly to retained earnings at the time of adoption).

~~Snap-on~~ commenced its assessment of Topic 606 during the second half of 2014 and developed a comprehensive project plan that included representatives from across the company’s business segments. The project plan included analyzing the standard’s impact on the company’s various revenue streams, comparing its historical accounting policies and practices to the requirements of the new standard, identifying potential differences from applying the requirements of the new standard to its contracts, and providing updates on implementation progress. The company is in the process of identifying and implementing appropriate changes to its business processes, systems and controls to support revenue recognition and disclosures under Topic 606.

As of September 30, 2017, and subject to the company’s ongoing evaluation of new transactions and contracts, the company has substantially completed its evaluation of the expected impact of adopting Topic 606 and anticipates that the adoption of this standard will not have a significant impact on the company’s consolidated financial statements. The company believes that the adoption will result in the recognition of an inventory asset related to certain product returns by increasing the returns liability and an inventory asset for the anticipated value of the returns; the corresponding increase in the inventory asset and returns liability is expected to be in the range of $24 million to $28 million at the date of adoption. The adoption will also result in the recognition of an increase in the inventory obsolescence reserve related to the anticipated value on returns in the range of $2 million to $3 million with a corresponding adjustment to beginning retained earnings.

~~The company expects to adopt Topic 606 at the beginning of its 2018 fiscal year using the modified retrospective approach.~~

Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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


	For the Three Months Ended March 30, 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	$	20.3	$	500.1	$	391.2	$	—	$	—	$	911.6
All other professionals	270.7		—		—		—		—		270.7
External net sales	291.0		500.1		391.2		—		—		1,182.3
Intersegment net sales	68.9		—		72.6		—		(141.5)		—
Total net sales	359.9		500.1		463.8		—		(141.5)		1,182.3
Financial services revenue	—		—		—		99.6		—		99.6
Total revenue	$	359.9	$	500.1	$	463.8	$	99.6	$	(141.5)	$	1,281.9


	For the Three Months Ended April 1, 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	$	21.1	$	537.0	$	367.4	$	—	$	—	$	925.5
All other professionals	257.5		—		—		—		—		257.5
External net sales	278.6		537.0		367.4		—		—		1,183.0
Intersegment net sales	85.2		—		79.2		—		(164.4)		—
Total net sales	363.8		537.0		446.6		—		(164.4)		1,183.0
Financial services revenue	—		—		—		92.6		—		92.6
Total revenue	$	363.8	$	537.0	$	446.6	$	92.6	$	(164.4)	$	1,275.6

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.

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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.

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 approximately $187.0 million of long-term contracts that have fixed consideration that extends beyond one year as of March 30, 2024. Snap-on expects to recognize approximately 70% of these contracts as revenue by the end of fiscal 2025, an additional 25% by the end of fiscal 2027, and the balance thereafter.

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 $66.3 million and $63.3 million at March 30, 2024, and December 30, 2023, respectively. The current portion of contract liabilities is included in “Other accrued liabilities” and the non-current portion of such liabilities is included in “Other long-term liabilities” on the accompanying Condensed Consolidated Balance Sheets. During the three months ended March 30, 2024, Snap-on recognized $35.4 million of revenue that was included in the $63.3 million contract liability balance at December 30, 2023, which was primarily from the amortization of software subscriptions, extended warranties and other subscription agreements.

Note 2:3: Acquisitions

On ~~July 28, 2017,~~November 20, 2023, Snap-on acquired ~~Torque Control Specialist~~certain assets of SAVTEQ, Inc. (“~~TCS”~~SAVTEQ”), for a cash purchase price of ~~$3.6 million (or $3.5 million, net of cash acquired). TCS,~~$3.0 million. SAVTEQ, based in ~~Adelaide, Australia, distributes a full range of torque products, including wrenches, multipliers and calibrators for use in critical industries.~~

Lexington, Kentucky, provides precise non-contact measuring capabilities. In ~~the third quarter of 2017,~~fiscal 2023, the company ~~substantially~~ completed the purchase accounting valuations for the acquired net assets of ~~TCS.~~SAVTEQ. The ~~$1.9~~$1.7 million excess of the purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets. ~~For segment reporting purposes, the results of operations and assets of TCS have been included in the Commercial & Industrial Group since the acquisition date.~~

On ~~May 4, 2017,~~November 1, 2023, Snap-on acquired ~~Norbar Torque Tools Holding Limited, along with its U.S. and Chinese joint ventures~~Mountz, Inc. (“~~Norbar”~~Mountz”), for a cash purchase price of ~~$71.6 million (or $69.9 million, net of cash acquired), which reflects a $0.8 million working capital adjustment finalized in the third quarter of 2017. Norbar,~~$39.6 million. Mountz, based in ~~Banbury, U.K., designs~~San Jose, California, is a leading developer, manufacturer and ~~manufactures a full range~~marketer of high-precision torque ~~products,~~tools, including ~~wrenches, multipliers~~measurement, calibration and ~~calibrators for use in critical industries.~~

~~In the third quarter of 2017, the~~documentation products. The company ~~substantially~~ completed the purchase accounting valuations for the acquired net assets of ~~Norbar, including intangible assets.~~Mountz in the first quarter of 2024. The ~~$23.7~~$19.8 million excess of the ~~Norbar~~ purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets.

For segment reporting purposes, the results of operations and assets of ~~Norbar have been included in the Commercial & Industrial Group since the acquisition date.~~

In the second quarter of 2017, the company completed the purchase accounting valuations for the acquired net assets of BTC, including intangible assets. The $5.9 million excess of the BTC purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets. For segment reporting purposes, the results of operations and assets of BTC have been included in the Repair Systems and Information Group since the acquisition date.

~~On November 16, 2016,Snap-on~~ acquired Ryeson Corporation (d/b/a Sturtevant Richmont) for a purchase price of $13.0 million (or $12.6 million, net of cash acquired), which reflects a $0.1 million working capital adjustment finalized in the first quarter of 2017. Sturtevant Richmont designs, manufactures and distributes mechanical and electronic torque wrenches as well as wireless torque error proofing systems for a variety of industrial applications.

In the first quarter of 2017, the company completed the purchase accounting valuations for the acquired net assets, including intangible assets. The $5.0 million excess of the Sturtevant Richmont purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets. For segment reporting purposes, the results of operations and assets of Sturtevant Richmont have been included in the Commercial & Industrial Group since the acquisition date.

~~In the third quarter of 2017, the company substantially completed the purchase accounting valuations for the acquired net assets ofCar-O-Liner,~~ ~~including intangible assets. The $77.7 million excess of theCar-O-Liner~~ purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets. For segment reporting purposes, substantially all of~~Car-O-Liner’s~~ ~~results of operations and assets~~SAVTEQ have been included in the Repair Systems & Information Group since the acquisition date, ~~with~~and the ~~remaining portions~~results of operations and assets of Mountz have been included in the Commercial & Industrial ~~Group.~~

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~The following is a summary of~~Group since the ~~values of the assets acquired and liabilities assumed ofCar-O-Liner,~~ ~~including adjustments recorded as of the nine months ended September 30, 2017, as a result of new information obtained about facts and circumstances that existed as of the October 31, 2016~~ acquisition ~~date:~~


~~(Amounts in millions)~~	~~Amounts as of~~ ~~October 31, 2016~~ ~~(As Adjusted)~~
~~Assets acquired:~~
~~Cash~~	$	~~3.9~~
~~Trade and other accounts receivable~~		~~17.0~~
~~Inventories~~		~~18.3~~
~~Property and equipment~~		~~17.3~~
~~Goodwill~~		~~77.7~~
~~Other intangibles:~~
~~Customer relationships~~		~~27.2~~
~~Non-amortized~~ ~~trademarks~~		~~27.7~~
~~Other assets~~		~~5.9~~

~~Total assets acquired~~		~~195.0~~

~~Liabilities assumed:~~
~~Accounts payable~~		~~9.8~~
~~Deferred income tax liabilities~~		~~15.4~~
~~Accrued expenses~~		~~13.5~~
~~Pension liabilities~~		~~4.3~~

~~Total liabilities assumed~~		~~43.0~~

~~Net assets acquired~~	$	~~152.0~~

~~In the nine month period ended September 30, 2017,Snap-on~~ recognized expense of $0.5 million (of which $0.2 million was in “Cost of goods sold” and $0.3 million was in “Operating expenses”) in the accompanying Condensed Consolidated Statements of Earnings related to~~Car-O-Liner~~ that would have been recognized in 2016 if the provisional adjustments identified in the current reporting period had been recognized as of the October 31, 2016 acquisition date; there was no such expense in the three months ended September 30, 2017.

date.

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

See Note 3:6 for additional information on goodwill and other intangible assets.

Note 4: Receivables

Trade and ~~Other Accounts Receivable~~

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

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The components ofSnap-on’s trade and other accounts receivable as of ~~September~~March 30, ~~2017,~~2024, and December ~~31, 2016,~~30, 2023, are as follows:

(Amounts in millions)    September 30,
2017    December 31,
2016
Trade and other accounts receivable
       $     689.6             $     612.8
Allowances for doubtful accounts
   (14.4)        (14.0)




Total trade and other accounts receivable – net
       $ 675.2             $ 598.8

(Amounts in millions) March 30,
2024 December 30, 2023
Trade and other accounts receivable $ 863.4 $ 826.2
Allowances for credit losses (35.9) (34.9)
Total trade and other accounts receivable – net $ 827.5 $ 791.3

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

Three Months Ended
(Amounts in millions) March 30, 2024 April 1, 2023
Allowances for credit losses:
Beginning of period $ 34.9 $ 31.1
Provision for credit losses 4.3 4.7
Charge-offs (3.0) (4.8)
Recoveries 0.1 —
Currency translation (0.4) 0.2
End of period $ 35.9 $ 31.2

Finance and ~~Contract Receivables~~

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 ofSnap-on’s products sold through the U.S. franchisee ~~and customer~~ network and to certain other customers ofSnap-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 Condensed Consolidated Statements of Earnings.

~~Snap-on’s~~ ~~finance~~

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, ~~and diagnostic~~diagnostics, and equipment products on an extended-term payment plan, ~~generally~~ with average payment terms ~~approaching~~of approximately four years.

Contract receivables, with payment terms of up to 10 years, are comprised of extended-term ~~installment~~ payment contracts to a broad base of customers worldwide, including shop owners, both independents and national chains, for their purchase of tools, ~~and diagnostic~~diagnostics, and equipment ~~products. Contract receivables also include~~products, as well as extended-term ~~installment loans~~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.~~leases, or the expansion of an existing franchise. Finance and contract receivables are generally secured by the underlying tools, diagnostics and/~~or diagnostic~~ or equipment products financed and, for ~~installment loans~~contracts to franchisees, other franchisee assets.

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The components ofSnap-on’s current finance and contract receivables as of ~~September~~March 30, ~~2017,~~2024, and December ~~31, 2016,~~30, 2023, are as follows:

(Amounts in millions)    September 30,
2017    December 31,
2016
Finance receivables, net of unearned finance charges of $20.7 million and $17.0 million, respectively
       $     522.8             $     488.1
Contract receivables, net of unearned finance charges of $17.0 million and $15.6 million, respectively
   101.4         89.3




Total
   624.2         577.4




Allowances for doubtful accounts:

Finance receivables
   (17.0)        (15.6)
Contract receivables
   (1.6)        (1.2)




Total
   (18.6)        (16.8)




Total current finance and contract receivables – net
       $ 605.6             $ 560.6




Finance receivables – net
       $ 505.8             $ 472.5
Contract receivables – net
   99.8         88.1




Total current finance and contract receivables – net
       $ 605.6             $ 560.6


(Amounts in millions)	March 30, 2024		December 30, 2023
Finance installment receivables	$	614.5	$	605.2
Finance lease receivables, net of unearned finance charges of $4.3 million and $3.4 million, respectively	12.4		10.1
Total finance receivables	626.9		615.3

Contract installment receivables	55.5		59.9
Contract lease receivables, net of unearned finance charges of $21.4 million and $21.1 million, respectively	62.8		62.7
Total contract receivables	118.3		122.6
Total	745.2		737.9

Allowances for credit losses:
Finance installment receivables	(21.8)		(21.1)
Finance lease receivables	(0.2)		(0.1)
Total finance allowances for credit losses	(22.0)		(21.2)

Contract installment receivables	(0.8)		(0.9)
Contract lease receivables	(0.9)		(0.9)
Total contract allowances for credit losses	(1.7)		(1.8)
Total allowances for credit losses	(23.7)		(23.0)
Total current finance and contract receivables – net	$	721.5	$	714.9

Finance receivables – net	$	604.9	$	594.1
Contract receivables – net	116.6		120.8
Total current finance and contract receivables – net	$	721.5	$	714.9

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The components ofSnap-on’s finance and contract receivables with payment terms beyond one year as of ~~September~~March 30, ~~2017,~~2024, and December ~~31, 2016,~~30, 2023, are as follows:

(Amounts in millions)    September 30,
2017    December 31,
2016
Finance receivables, net of unearned finance charges of $16.4 million and $13.0 million, respectively
       $ 1,055.8             $ 967.5
Contract receivables, net of unearned finance charges of $24.3 million and $21.5 million, respectively
   313.9         289.4




Total
   1,369.7         1,256.9




Allowances for doubtful accounts:

Finance receivables
   (37.2)        (33.0)
Contract receivables
   (3.5)        (2.7)




Total
   (40.7)        (35.7)




Total long-term finance and contract receivables – net
       $ 1,329.0             $ 1,221.2




Finance receivables – net
       $ 1,018.6             $ 934.5
Contract receivables – net
   310.4         286.7




Total long-term finance and contract receivables – net
       $     1,329.0             $     1,221.2


(Amounts in millions)	March 30, 2024		December 30, 2023
Finance installment receivables	$	1,323.0	$	1,318.5
Finance lease receivables, net of unearned finance charges of $3.5 million and $2.8 million, respectively	15.4		12.3
Total finance receivables	1,338.4		1,330.8

Contract installment receivables	219.9		216.0
Contract lease receivables, net of unearned finance charges of $35.8 million and $35.1 million, respectively	198.8		196.8
Total contract receivables	418.7		412.8
Total	1,757.1		1,743.6

Allowances for credit losses:
Finance installment receivables	(47.5)		(46.4)
Finance lease receivables	(0.3)		(0.2)
Total finance allowances for credit losses	(47.8)		(46.6)

Contract installment receivables	(3.3)		(3.1)
Contract lease receivables	(1.8)		(1.8)
Total contract allowances for credit losses	(5.1)		(4.9)
Total allowances for credit losses	(52.9)		(51.5)
Total long-term finance and contract receivables – net	$	1,704.2	$	1,692.1

Finance receivables – net	$	1,290.6	$	1,284.2
Contract receivables – net	413.6		407.9
Total long-term finance and contract receivables – net	$	1,704.2	$	1,692.1

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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. ~~Receivable balances~~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 March 30, 2024, and charge-offs recorded in the three months ended March 30, 2024, by origination year, are as follows:


(Amounts in millions)	2024		2023		2022		2021		2020		Prior		Total
Finance receivables:
Delinquent	$	0.2	$	24.1	$	15.8	$	7.4	$	3.9	$	2.3	$	53.7
Non-delinquent	513.3		937.8		297.1		107.2		44.7		11.5		1,911.6
Total Finance receivables	$	513.5	$	961.9	$	312.9	$	114.6	$	48.6	$	13.8	$	1,965.3

Finance receivables charge-offs	$	—	$	7.7	$	6.0	$	2.6	$	1.4	$	0.6	$	18.3

Contract receivables:
Delinquent	$	—	$	0.3	$	0.9	$	0.5	$	0.5	$	0.4	$	2.6
Non-delinquent	54.9		178.3		116.5		78.2		52.0		54.5		534.4
Total Contract receivables	$	54.9	$	178.6	$	117.4	$	78.7	$	52.5	$	54.9	$	537.0

Contract receivables charge-offs	$	—	$	0.1	$	0.1	$	0.1	$	0.2	$	0.1	$	0.6

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.

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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 the three months ended March 30, 2024, and April 1, 2023:


	Three Months Ended March 30, 2024				Three Months Ended April 1, 2023
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Allowances for credit losses:
Beginning of period	$	67.8	$	6.7	$	60.9	$	6.6

Provision for credit losses	18.2		0.6		14.2		0.3
Charge-offs	(18.3)		(0.6)		(14.5)		(0.5)
Recoveries	2.2		0.1		2.1		0.1
Currency translation	(0.1)		—		—		—
End of period	$	69.8	$	6.8	$	62.7	$	6.5

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.

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

It is the general practice of Snap-on’s financial services business not to engage in contract or loan modifications. In limited instances, Snap-on’s financial services business may modify certain receivables. The amount and number of finance and contract receivable modifications as of March 30, 2024, and December 30, 2023, were immaterial to both the financial services portfolio and the company’s results of operations and financial position.

The aging of finance and contract receivables as of March 30, 2024, and December 30, 2023, is as follows:


(Amounts in millions)	30-59 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
March 30, 2024:
Finance receivables	$	15.9	$	12.7	$	25.1	$	53.7	$	1,911.6	$	1,965.3	$	21.2
Contract receivables	1.1		0.3		1.2		2.6		534.4		537.0		0.3

December 30, 2023:
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. ~~Finance receivables that are considered nonperforming include receivables that are on nonaccrual status and receivables that are generally more than 90 days past due.~~

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. ~~Contract receivables that are considered nonperforming include receivables that are on nonaccrual status and receivables that are generally more than 90 days past due.~~

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. ~~Finance and contract receivables are evaluated for impairment on a collective basis.~~ A receivable ~~is impaired~~may have credit losses when it is ~~probable~~expected that all amounts related to the receivable will not be collected according to the contractual terms of the applicable agreement. ~~Impaired~~Such finance and contract receivables are covered by the company’s respective allowances for ~~doubtful accounts~~credit losses and are~~charged-off~~ written-off against the allowances when appropriate. As of September 30, 2017, and December 31, 2016, there were $27.8 million and $24.9 million, respectively, of impaired finance receivables, and there were $2.2 million and $2.0 million, respectively, of impaired contract receivables.

~~It is the general practice ofSnap-on’s~~ ~~financial services business to not engage in contract or loan modifications. In limited instances,Snap-on’s~~ financial services business may modify certain impaired receivables in troubled debt restructurings. The amount and number of restructured finance and contract receivables as of September 30, 2017, and December 31, 2016, were immaterial to both the financial services portfolio and the company’s results of operations and financial position.

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~The aging of finance and contract receivables as of September 30, 2017, and December 31, 2016, 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
September 30, 2017:

Finance receivables
     $   16.0         $   11.6         $   19.3         $   46.9         $   1,531.6         $   1,578.5         $   15.1
Contract receivables
   1.4       0.7       1.7       3.8       411.6       415.4       0.8
December 31, 2016:

Finance receivables
     $ 15.1         $ 9.8       $ 17.0         $ 41.9         $ 1,413.7         $ 1,455.6         $ 13.2
Contract receivables
   1.4       0.9       1.4       3.7       375.0       378.7       0.5

~~The amount of performing and nonperforming finance and contract receivables based on payment activity as of September 30, 2017, and December 31, 2016, is as follows:~~

   September 30, 2017    December 31, 2016
(Amounts in millions)    Finance
Receivables    Contract
Receivables    Finance
Receivables    Contract
Receivables
Performing
       $ 1,550.7            $ 413.2            $ 1,430.7            $        376.7
Nonperforming
   27.8        2.2        24.9        2.0








Total
       $        1,578.5            $        415.4            $        1,455.6            $ 378.7

The amount of finance and contract receivables on nonaccrual status as of ~~September~~March 30, ~~2017,~~2024, and December ~~31, 2016,~~30, 2023, is as follows:

(Amounts in millions)    September 30,
2017    December 31,
2016
Finance receivables
       $        12.7             $     11.7
Contract receivables
   1.5         1.5

~~The following is a rollforward~~


(Amounts in millions)	March 30, 2024		December 30, 2023
Finance receivables	$	11.3	$	10.6
Contract receivables	2.6		3.3

Table of ~~the allowances for doubtful accounts for finance and contract receivables for the three and nine months ended September 30, 2017:~~

   Three Months Ended
September 30, 2017    Nine Months Ended
September 30, 2017
(Amounts in millions)    Finance
Receivables    Contract
Receivables    Finance
Receivables    Contract
Receivables
Allowances for doubtful accounts:

Beginning of period
       $ 52.5             $ 4.8             $ 48.6             $ 3.9
Provision
   12.8         0.8         38.6         2.7
Charge-offs
       (12.6)            (0.7)            (38.0)            (1.9)
Recoveries
   1.5         0.2         4.9         0.3
Currency translation
   –             –             0.1         0.1








End of period
       $ 54.2             $ 5.1             $ 54.2             $ 5.1

Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~The following is a rollforward of the allowances for doubtful accounts for finance and contract receivables for the three and nine months ended October 1, 2016:~~

   Three Months Ended
October 1, 2016    Nine Months Ended
October 1, 2016
(Amounts in millions)    Finance
Receivables    Contract
Receivables    Finance
Receivables    Contract
Receivables
Allowances for doubtful accounts:

Beginning of period
       $ 42.6             $ 4.5             $ 38.2             $ 4.4
Provision
   10.8         0.5         30.4         1.1
Charge-offs
       (9.2)        (0.6)        (28.0)        (1.3)
Recoveries
   1.4         0.1         5.0         0.3








End of period
       $ 45.6             $ 4.5             $ 45.6             $ 4.5

Note 4:5: Inventories

Inventories by major classification are as follows:

(Amounts in millions)    September 30,
2017    December 31,
2016
Finished goods
       $ 556.6             $ 467.4
Work in progress
   49.5         42.7
Raw materials
   118.2         93.6




Total FIFO value
   724.3         603.7
Excess of current cost over LIFO cost
       (74.4)            (73.2)




Total inventories – net
       $ 649.9             $ 530.5


(Amounts in millions)	March 30, 2024		December 30, 2023
Finished goods	$	846.3	$	874.6
Work in progress	76.5		76.1
Raw materials	168.3		171.1
Total FIFO value	1,091.1		1,121.8
Excess of current cost over LIFO cost	(120.6)		(115.9)
Total inventories – net	$	970.5	$	1,005.9

Inventories accounted for using thefirst-in,first-out (“FIFO”) method approximated ~~60% and~~ 59% of total inventories as of ~~September~~both March 30, ~~2017,~~2024, and December ~~31, 2016, respectively.~~30, 2023. The company accounts for itsnon-U.S. inventory on the FIFO method. As of ~~September~~March 30, ~~2017,~~2024, approximately ~~32%~~36% of the company’s U.S. inventory was accounted for using the FIFO method and ~~68%~~64% was accounted for using thelast-in,first-out (“LIFO”) method. There were no LIFO inventory liquidations in the three ~~and nine~~ months ended ~~September~~March 30, ~~2017,~~2024, or ~~October~~April 1, ~~2016.~~

2023.

Note 5:6: Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by segment for the ~~nine~~three months ended ~~September~~March 30, ~~2017,~~2024, are as follows:

(Amounts in millions)    Commercial
& Industrial
Group    Snap-on
Tools Group    Repair Systems
& Information
Group    Total
Balance as of December 31, 2016
       $       242.4             $ 12.5             $ 640.6             $ 895.5
Currency translation
   29.1         –             16.5         45.6
Acquisitions and related adjustments
   25.7         –                 (42.8)            (17.1)








Balance as of September 30, 2017
       $ 297.2             $     12.5             $ 614.3             $ 924.0


(Amounts in millions)	Commercial & Industrial Group		Snap-on Tools Group		Repair Systems & Information Group		Total
Balance as of December 30, 2023	$	346.6	$	12.4	$	738.4	$	1,097.4
Currency translation	(8.0)		—		(4.9)		(12.9)
Acquisition adjustments	(13.2)		—		—		(13.2)
Balance as of March 30, 2024	$	325.4	$	12.4	$	733.5	$	1,071.3

Goodwill of $1,071.3 million as of March 30, 2024, includes $19.8 million from the acquisition of Mountz. In the first quarter of 2024, the purchase accounting valuations for the acquired net assets of Mountz were completed, resulting in a reduction of goodwill of $13.2 million from year end 2023.See Note 3 for additional information on acquisitions.

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~Goodwill of $924.0 million as of September 30, 2017, includes (i) $77.7 million, on a preliminary basis, from the acquisition ofCar-O-Liner,~~ (ii) $23.7 million, on a preliminary basis, from the acquisition of Norbar, (iii) $5.9 million from the acquisition of BTC, (iv) $5.0 million from the acquisition of Sturtevant Richmont, and (v) $1.9 million, on a preliminary basis, from the acquisition of TCS. The goodwill from the~~Car-O-Liner~~ acquisition is distributed as follows: $76.9 million in the Repair Systems & Information Group and $0.8 million in the Commercial & Industrial Group. The goodwill from the Norbar, Sturtevant Richmont and TCS acquisitions is included in the Commercial & Industrial Group and the goodwill from the BTC acquisition is included in the Repair Systems & Information Group. See Note 2 for additional information on acquisitions.

~~Since the purchase accounting for deferred taxes for the acquired net assets ofCar-O-Liner,~~ Norbar and TCS were not complete as of September 30, 2017, the allocation of the respective purchase prices and resulting goodwill has been prepared on a preliminary basis and changes to the allocations will occur as the deferred taxes are determined. The company anticipates completing the purchase accounting for these acquisitions in the fourth quarter of 2017.

Additional disclosures related to other intangible assets are as follows:

   September 30, 2017    December 31, 2016
(Amounts in millions)    Gross Carrying
Value    Accumulated
Amortization    Gross Carrying
Value    Accumulated
Amortization
Amortized other intangible assets:

Customer relationships
       $ 175.5             $ (95.6)            $     142.6             $ (86.0)
Developed technology
   18.9         (18.4)        17.7         (17.7)
Internally developed software
   174.5         (129.7)        165.7             (118.3)
Patents
   33.7         (22.5)        31.9         (21.5)
Trademarks
   2.9         (1.9)        2.8         (1.8)
Other
   7.7         (2.6)        7.2         (2.2)








Total
   413.2         (270.7)        367.9         (247.5)
Non-amortized trademarks
   115.8         –             64.2         –








Total other intangible assets
       $     529.0             $     (270.7)            $ 432.1             $ (247.5)

~~As of September 30, 2017, the $175.5 million~~


	March 30, 2024						December 30, 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	$	220.8	$	(164.4)	$	56.4	$	214.5	$	(163.6)	$	50.9
Developed technology	36.2		(30.5)		5.7		36.2		(29.8)		6.4
Internally developed software	194.5		(150.6)		43.9		191.3		(148.2)		43.1
Patents	47.3		(20.5)		26.8		53.0		(26.8)		26.2
Trademarks	3.9		(2.5)		1.4		4.0		(2.5)		1.5
Other	6.1		(2.8)		3.3		6.2		(2.8)		3.4
Total	508.8		(371.3)		137.5		505.2		(373.7)		131.5
Non-amortized trademarks	140.2		—		140.2		137.4		—		137.4
Total other intangible assets	$	649.0	$	(371.3)	$	277.7	$	642.6	$	(373.7)	$	268.9

The gross carrying value of customer relationships and non-amortized trademarks includes ~~$29.1~~$8.7 million and $5.4 million, respectively, related to the~~Car-O-Liner~~ ~~acquisition, $1.2 million related to~~ Mountz acquisition.

Provisions for the ~~BTC acquisition and $1.1 million related to the Norbar acquisition. The $115.8 million gross carrying value ofnon-amortized~~ ~~trademarks as of September 30, 2017, includes $30.2 million related to theCar-O-Liner~~ ~~acquisition, $16.9 million related to the Norbar acquisition and $2.1 million related to the BTC acquisition.~~

~~Snap-on~~ ~~completed its annual~~ impairment ~~testing~~ of goodwill ~~and~~and/or other ~~indefinite-lived~~ intangible assets could arise in ~~the second quarter of 2017, the results of which did not result in any impairment. Significant~~a future period due to significant and unanticipated changes in circumstances, such as declines in profitability and cash flow due to ~~significant and~~ long-term deterioration in macroeconomic, industry and market conditions, the loss of key customers, changes in technology or markets, ~~significant~~ changes in key personnel or litigation, a ~~significant and~~ sustained decrease in share price and/or other ~~events, including effects from the sale or disposal of a reporting unit, could require a provision for impairment of goodwill and/or other intangible assets in a future period.~~events. As of ~~September~~March 30, ~~2017,~~2024, the company had no accumulated impairment losses.

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

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


			In Years
Customer relationships	~~In Years~~14
~~Customer relationships~~ Developed technology		15	5
Internally developed software		3	6
Patents		8	15
Trademarks		6	9
Other		39

~~Snap-on~~ ~~is amortizing its customer relationships on both an accelerated and straight-line basis over a15-year~~ ~~weighted-average life; the remaining intangibles are amortized on a straight-line basis.~~

The weighted-average amortization period for all amortizable ~~intangibles~~intangible assets on a combined basis is 1112 years.

~~The company’s customer relationships generally have contractual terms of three to five years and are typically renewed without significant cost to the company. The weighted-average15-year~~ ~~life for customer relationships is based on the company’s historical renewal experience.~~ Intangible asset renewal costs are expensed as incurred.

The aggregate amortization expense was ~~$7.1~~$6.3 million and ~~$20.7~~$6.9 million for the respective three month periods ended March 30, 2024, and ~~nine months ended September 30, 2017, and $5.9 million and $18.2 million for the respective three and nine months ended October~~April 1, ~~2016.~~2023. Based on current levels of amortizable intangible assets and estimated weighted-average useful lives, estimated annual amortization expense is expected to be ~~$27.6~~$24.7 million in ~~2017, $26.3~~2024, $18.2 million in ~~2018, $22.7~~2025, $13.5 million in ~~2019, $18.0~~2026, $11.4 million in ~~2020, $14.7~~2027, $10.0 million in ~~2021,~~2028, and ~~$9.9~~$7.4 million in ~~2022.~~

~~Note 6: Exit and Disposal Activities~~

~~Snap-on~~ ~~did not record any costs for exit and disposal activities in the three and nine months ended September 30, 2017, or in the three months ended October 1, 2016.Snap-on~~ ~~recorded $0.9 million~~2029.

Table of costs for exit and disposal activities in the nine months ended October 1, 2016. The majority of the $0.8 million exit and disposal accrual as of September 30, 2017, is expected to be utilized in 2017.~~Snap-on~~ anticipates funding the remaining cash requirements of its exit and disposal activities with available cash on hand, cash flows from operations and borrowings under the company’s existing credit facilities. The estimated costs for the exit and disposal activities were based on management’s best business judgment under prevailing circumstances.

Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 7: Income Taxes

Snap-on’s effective income tax rate on earnings attributable toSnap-on was ~~30.5%~~22.2% and ~~31.1%~~23.1% in the respective first ~~nine months~~three month periods of ~~2017~~2024 and ~~2016, respectively.~~

2023.

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, causingSnap-on’s gross unrecognized tax benefits to decrease by a range of zero to ~~$2.3~~$0.9 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 ~~$1.3~~$0.9 million over the next 12 months for uncertain tax positions expected to be taken in future tax filings.

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Note 8: Short-term and Long-term Debt

Short-term and long-term debt as of ~~September~~March 30, ~~2017,~~2024, and December ~~31, 2016,~~30, 2023, consisted of the following:

(Amounts in millions)
September 30,
2017

December 31,
2016
5.50% unsecured notes due 2017
       $       –                   $        150.0
4.25% unsecured notes due 2018
   250.0           250.0
6.70% unsecured notes due 2019
   200.0           200.0
6.125% unsecured notes due 2021
   250.0           250.0
3.25% unsecured notes due 2027
   300.0           –
Other debt*
   208.4           160.2




   1,208.4           1,010.2
Less: notes payable and current maturities of long-term debt:

Current maturities of long-term debt
   (250.0)          (150.0)
Commercial paper borrowings
   (170.0)              (130.0)
Other notes
   (33.4)          (21.4)




   (453.4)          (301.4)




Total long-term debt
       $    755.0               $        708.8

*Includes fair value adjustments related to interest rate swaps, debt discounts and debt issuance costs.


(Amounts in millions)	March 30, 2024		December 30, 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*	0.1		0.2
	1,200.1		1,200.2



Less: notes payable	(15.2)		(15.6)

Total long-term debt	$	1,184.9	$	1,184.6



*			Includes unamortized debt issuance costs and issuance discounts.

Notes payable ~~and current maturities~~ of ~~long-term debt of $453.4~~$15.2 million as of ~~September~~March 30, ~~2017, included $250~~2024, compared to $15.6 million as of ~~4.25% unsecured notes that mature on January 15, 2018 (the “2018 Notes”), $170 million of commercial paper borrowings and $33.4 million of other notes. As of 2016~~2023 year end, notes payable and current maturities of long-term debt of $301.4 million included $150 million of unsecured 5.50% notes that were repaid in January 2017 upon maturity, $130 million of commercial paper borrowings and $21.4 million of other notes. As of 2016 year end, the 2018 Notes were included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheets as their scheduled maturity was in excess of one year of the 2016~~year-end~~ ~~balance sheet date.~~

~~On February 15, 2017,~~end.

Snap-on sold, at a discount, $300 million of unsecured 3.25% long-term notes that mature on March 1, 2027 (the “2027 Notes”). Interest on the 2027 Notes is payable semi-annually beginning September 1, 2017.~~Snap-on~~ used the $297.8 million of net proceeds from the sale of the 2027 Notes, reflecting $1.9 million of transaction costs, to repay a portion of its then-outstanding commercial paper borrowings and the remainder was retained for general corporate purposes, which may include working capital, capital expenditures and possible acquisitions.

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~Snap-on~~ has a ~~five-year, $700~~$900 million ~~multi-currency~~multicurrency revolving credit facility that terminates on ~~December 15, 2020~~September 12, 2028 (the “Credit Facility”)~~; no~~. 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 three months ended and as of ~~September~~March 30, ~~2017.~~ 2024. Borrowings under the Credit Facility bear interest at varying rates based on either: (i) Snap-on’s then-current, long-term debt ~~ratings. The Credit Facility’s financial covenant requires thatSnap-on~~ ~~maintain, as~~ratings; or (ii) Snap-on’s then-current ratio of ~~each fiscal quarter end, either (i) a ratio not greater than 0.60 to 1.00 of~~ consolidated ~~net debt (consolidated~~ debt net of certain cash ~~adjustments) to the sum of such consolidated net debt plus total equity and less accumulated other comprehensive income or loss (the “Debt Ratio”~~adjustments (“Consolidated Net Debt”)~~; or (ii) a ratio not greater than 3.50 to 1.00 of such consolidated net debt~~ to earnings before interest, taxes, depreciation, amortization and certain other adjustments for the preceding four fiscal quarters then ended (the ~~“Debt~~“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 ~~Debt~~Leverage Ratio to 0.65 to 1.00 and/or increase the maximum Consolidated Net Debt to EBITDA Ratio to ~~3.75~~4.00 to 1.00 for four consecutive fiscal quarters in connection with certain material acquisitions (as defined in the related credit agreement). As of ~~September~~March 30, ~~2017,~~2024, the company’s actual ratios of ~~0.26~~0.03 and ~~1.16~~0.10, respectively, were both within the permitted ranges set forth in this financial covenant.Snap-on generally issues commercial paper to fund its financing needs on a short-term basis and uses the Credit Facility asback-up liquidity to support such commercial paper issuances.

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

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 9: Financial Instruments

Derivatives:All derivative instruments are reported in the Condensed Consolidated Financial Statements at fair value. Changes in the fair value of derivatives are recorded each period in earnings or on the accompanying Condensed 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 ~~Accumulated~~earnings are presented in the same Condensed 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”) ~~must be~~are reclassified to earnings in the period in which earnings are affected by the underlying hedged ~~item and the ineffective portion of all hedges must be recognized in earnings in the period that such portion is determined to be ineffective.~~

item.

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. ~~On the date~~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.

~~The company~~

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, and therefore~~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:~~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 thatSnap-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 netexposures. 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 Condensed Consolidated Statements of Earnings.

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~As of September 30, 2017,Snap-on~~ had $179.1 million of net foreign currency forward buy contracts outstanding comprised of buy contracts including $66.4 million in euros, $53.6 million in Swedish kronor, $50.6 million in British pounds, $13.1 million in Hong Kong dollars, $11.1 million in Singapore dollars, $6.7 million in South Korean won, $4.4 million in Mexican pesos, $3.3 million in Danish kroner, $3.2 million in Norwegian kroner, and $2.2 million in other currencies, and sell contracts including $13.7 million in Australian dollars, $6.5 million in Canadian dollars, $5.4 million in Indian rupees, $2.8 million in Thai baht, and $7.1 million in other currencies. As of 2016 year end,~~Snap-on~~ had $144.4 million of net foreign currency forward buy contracts outstanding comprised of buy contracts including $55.0 million in euros, $53.6 million in British pounds, $47.0 million in Swedish kronor, $9.0 million in Hong Kong dollars, $7.0 million in South Korean won, $5.5 million in Singapore dollars, $4.9 million in Mexican pesos, $4.6 million in Norwegian kroner, and $6.4 million in other currencies, and sell contracts including $16.6 million in Japanese yen, $11.8 million in Canadian dollars, $4.4 million in Australian dollars, $4.0 million in Brazilian real, and $11.8 million in other currencies.

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

Interest ~~Rate Risk Management:~~rate risk management:Snap-on ~~aims to control funding costs by managing~~ may manage the exposure created by the differing maturities and interest rate structures ofSnap-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 ~~enters~~ 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 Condensed Consolidated Statements of Earnings. The ~~effective portion of the~~ change in the fair value of the derivative is recorded in “Long-term debt” on the accompanying Condensed ~~Consolidated~~Consolidated Balance ~~Sheets, while any ineffective portion is recorded as an adjustment to “Interest expense” on the accompanying Condensed Consolidated Statements of Earnings. The notional amount of~~Sheets. There were no outstanding interest rate swaps ~~outstanding and designated as fair value hedges was $100 million~~ as of both ~~September~~March 30, ~~2017,~~2024, and December ~~31, 2016.~~

30, 2023.

Treasury locks:Snap-on ~~entered into a $250 million~~ may use treasury ~~lock in the fourth quarter of 2016~~locks to manage the potential change in interest rates in anticipation of the ~~possible~~ issuance of fixed rate debt. Treasury locks are accounted for as cash flow hedges. The ~~effective~~ differentials to be paid or received on treasury locks related to the anticipated issuance of fixed rate debt are initially recorded in Accumulated ~~OCI. In~~OCI for derivative instruments that are designated and qualify as cash flow hedges. Upon the ~~first quarter of 2017,Snap-on~~ ~~settled the $250 million treasury lock in conjunction with the February 2017~~ issuance of debt, the ~~2027 Notes. The $14.9 million gain on the settlement of the treasury lock was recorded~~related amount in Accumulated OCI ~~and~~ is ~~being amortized~~released over the term of the ~~2027 Notes~~debt and recognized as an adjustment to interest expense on the ~~consolidated statements~~Condensed Consolidated Statements of ~~earnings. As of September 30, 2017,~~Earnings. There were no treasury locks ~~were outstanding. The notional amount of treasury locks~~ outstanding ~~and designated as cash flow hedges~~ as of both March 30, 2024, and December ~~31, 2016, was $250 million.~~

30, 2023. See Note 16 for additional information on Other income (expense) – net.

Table of Contents
SNAP-ON INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Stock-based ~~Deferred Compensation Risk Management:~~deferred compensation risk management:Snap-on ~~aims to manage~~ 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 potentialmark-to-market effect on stock-based deferred compensation from changes in~~Snap-on’s~~ 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 suchmark-to-market changes. As of ~~September~~March 30, ~~2017,~~2024, Snap-on had equity forwards in place intended to manage market risk with respect to ~~120,900~~76,900 shares ofSnap-on common stock associated with its deferred compensation plans.

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~Fair Value Measurements:~~~~Snap-on~~ has derivative assets and liabilities related to interest rate swaps, treasury locks, foreign currency forwards and equity forwards that are measured at Level 2 fair value on a recurring basis. The fair value of derivative instruments included within the Condensed Consolidated Balance Sheets as of September 30, 2017, and December 31, 2016, are as follows:

      September 30, 2017    December 31, 2016
(Amounts in millions)
Balance Sheet
Presentation
   Asset
Derivatives
Fair Value    Liability
Derivatives
Fair Value    Asset
Derivatives
Fair Value    Liability
Derivatives
Fair Value
Derivatives designated as hedging instruments:
Interest rate swaps
   Other assets        $ 8.1          $ –                $ 9.8            $ –
Treasury locks
   Other assets    –            –            14.3        –








      8.1        –            24.1        –








Derivatives not designated as hedging instruments:
Foreign currency forwards
   Prepaid expenses and other assets        $ 8.5          $ –                $ 4.4            $ –
Foreign currency forwards
   Other accrued liabilities    –            3.0        –            13.5
Equity forwards
   Prepaid expenses and other assets    18.0        –            17.9        –








Total
      26.5        3.0        22.3        13.5








Total derivative instruments
          $     34.6            $     3.0            $     46.4            $     13.5

~~As of September 30, 2017, and December 31, 2016, the fair value adjustment to long-term debt related to the interest rate swaps was $8.1 million and $9.8 million, respectively.~~

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. Interest rate swaps are valued based on the~~six-month~~ ~~LIBOR swap rate for similar instruments. Treasury locks are valued based on the10-year~~ U.S. treasury interest rate. 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 as of and for the nine months ended September 30, 2017.

~~The effect of derivative instruments designated as fair value hedges as included in the Condensed Consolidated Statements of Earnings is as follows:~~

      Effective Portion of Gain Recognized in Income
      Three months ended    Nine months ended
(Amounts in millions)    Statement of Earnings
Presentation    September 30,
2017    October 1,
2016    September 30,
2017    October 1,
2016
Derivatives designated as fair value hedges:
Interest rate swaps
   Interest expense        $     0.7            $    0.4            $     2.1            $     1.9

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

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

   Effective Portion of Gain
Recognized in
Accumulated OCI
Three months ended    Statement of
Earnings
Presentation    Effective Portion of Gain
Reclassified from Accumulated
OCI into Income
Three months ended
(Amounts in millions)    September 30,
2017    October 1,
2016       September 30,
2017    October 1,
2016
Derivatives designated as cash flow hedges:
Treasury locks
       $     –                $     –                Interest expense            $     0.5            $     0.1

   Effective Portion of Gain
Recognized in
Accumulated OCI
Nine months ended    Statement of
Earnings
Presentation    Effective Portion of Gain
Reclassified from Accumulated
OCI into Income
Nine months ended
(Amounts in millions)    September 30,
2017    October 1,
2016       September 30,
2017    October 1,
2016
Derivatives designated as cash flow hedges:
Treasury locks
       $     6.1            $     –            Interest expense            $     1.2            $     0.3

~~The effects of derivative instruments not designated as hedging instruments as included in the Condensed Consolidated Statements of Earnings are as follows:~~

   Gain (Loss) Recognized in Income
   Three months ended Nine months ended
(Amounts in millions)
Statement of Earnings
Presentation
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Derivatives not designated as hedging instruments:
Foreign currency forwards

  Other income (expense) – net
  $ 1.6      $     (0.7)     $     (2.3)     $     (4.9)
Equity forwards

  Operating expenses
    (0.9)   (0.7)   (2.2)   (1.4)

~~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 Condensed Consolidated Statements of Earnings. The $1.6 million derivative gain recognized in the third quarter of 2017 was more than offset by transaction losses on net exposures of $3.6 million, resulting in a net foreign exchange loss of $2.0 million for the quarter. The $0.7 million derivative loss recognized in the third quarter of 2016 was increased by transaction losses on net exposures of $0.3 million, resulting in a foreign exchange loss of $1.0 million for the quarter. The $2.3 million derivative loss recognized in the first nine months of 2017 was increased by transaction losses on net exposures of $3.4 million, resulting in a 2017~~year-to-date~~ net foreign exchange loss of $5.7 million. The $4.9 million derivative loss recognized in the first nine months of 2016 was partially offset by transaction gains on net exposures of $4.0 million, resulting in a 2016~~year-to-date~~ net foreign exchange loss of $0.9 million. The resulting net foreign exchange gains and losses are included in “Other income (expense) – net” on the accompanying Condensed Consolidated Statements of Earnings. See Note 15 for additional information on “Other income (expense) – net.”

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~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 Condensed Consolidated Statements of Earnings. The $0.9 million derivative loss recognized in the third quarter of 2017 was offset by $0.9 million of~~mark-to-market~~ ~~deferred compensation benefit. The $0.7 million derivative loss recognized in the third quarter of 2016 was offset by $0.7 million ofmark-to-market~~ ~~deferred compensation benefit. The $2.2 million derivative loss recognized in the first nine months of 2017 was substantially offset by amark-to-market~~ ~~deferred compensation benefit of $2.1 million. The $1.4 million derivative loss recognized in the first nine months of 2016 was more than offset by amark-to-market~~ ~~deferred compensation benefit of $1.8 million.~~

~~As of September 30, 2017, the maximum maturity date of any fair value hedge was four years. During the next 12 months,Snap-on~~ ~~expects to reclassify into earnings net gains from Accumulated OCI of approximately $1.0 million after tax at the time the underlying hedge transactions are realized.~~

Counterparty ~~Risk:~~risk: Snap-on is exposed to credit losses in the event ofnon-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 ofA- or better.Snap-on does not anticipatenon-performance by its counterparties, but cannot provide assurances.

Fair ~~Value~~value of ~~Financial Instruments:~~financial instruments: The fair values of financial instruments that do not approximate the carrying values in the financial statements are as follows:

   September 30, 2017    December 31, 2016
(Amounts in millions)    Carrying
Value    Fair
Value    Carrying
Value    Fair
Value
Finance receivables – net
       $        1,524.4            $        1,767.1            $     1,407.0            $     1,631.2
Contract receivables – net
   410.2        448.4        374.8        409.7
Long-term debt, notes payable and current maturities of long-term debt
   1,208.4        1,264.7        1,010.2        1,076.7


	March 30, 2024				December 30, 2023
(Amounts in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Finance receivables – net	$	1,895.5	$	2,137.4	$	1,878.3	$	2,138.7
Contract receivables – net	530.2		564.1		528.7		561.6
Long-term debt and notes payable	1,200.1		984.9		1,200.2		1,031.5

The following methods and assumptions ~~were~~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 ~~and current maturities of long-term debt was~~is estimated, using Level 2 fair value measurements, based on quoted market values ofSnap-on’s publicly traded senior debt. The carrying value of long-term debt includes ~~adjustments related to fair value hedges.~~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.

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 10: Pension Plans

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

   Three Months Ended    Nine Months Ended
(Amounts in millions)    September 30,
2017    October 1,
2016    September 30,
2017    October 1,
2016
Service cost
       $ 5.6             $ 4.8             $ 16.8             $ 14.5
Interest cost
   13.9         14.2         41.8         42.6
Expected return on plan assets
       (21.2)            (20.4)            (62.2)            (60.8)
Amortization of unrecognized loss
   6.9         7.8         20.8         23.5
Amortization of prior service credit
   (0.2)        (0.2)        (0.8)        (0.8)








Net periodic pension cost
       $ 5.0             $ 6.2             $ 16.4             $ 19.0


	Three Months Ended
(Amounts in millions)	March 30, 2024		April 1, 2023
Service cost	$	5.0	$	4.9
Interest cost	16.4		16.3
Expected return on plan assets	(25.5)		(26.2)
Amortization of unrecognized loss	2.1		0.3

Net periodic pension benefit	$	(2.0)	$	(4.7)

The components of net periodic pension benefit, other than the service cost component, are included in “Other income (expense) – net” on the accompanying Condensed Consolidated Statements of Earnings. See Note 16 for additional information on other income (expense) – net.

Snap-on intends to make contributions of ~~$7.1~~$6.0 million to its foreign pension plans and ~~$2.3~~$3.7 million to its domestic pension plans in ~~2017,~~2024, as required by law. ~~In the first nine months of 2017,Snap-on~~ ~~made $61.2 million of cash contributions to its domestic pension plans consisting of (i) $60.0 million of discretionary contributions and (ii) $1.2 million of required contributions.~~ Depending on market and other conditions,Snap-on may make ~~additional~~ discretionary cash contributions to its pension plans in ~~2017.~~

2024.

Note 11: Postretirement Health Care Plans

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

   Three Months Ended    Nine Months Ended
(Amounts in millions)    September 30,
2017    October 1,
2016    September 30,
2017    October 1,
2016
Interest cost
       $ 0.5             $ 0.6             $ 1.5             $ 1.7
Expected return on plan assets
       (0.2)            (0.3)            (0.6)            (0.7)
Amortization of unrecognized gain
   (0.1)        –             (0.2)        –








Net periodic postretirement health care cost
       $ 0.2             $ 0.3             $ 0.7             $ 1.0


	Three Months Ended
(Amounts in millions)	March 30, 2024		April 1, 2023
Interest cost	$	0.5	$	0.5
Expected return on plan assets	(0.2)		(0.2)
Amortization of unrecognized gain	(0.3)		(0.3)
Net periodic postretirement health care cost	$	—	$	—

The components of net periodic postretirement health care cost, other than the service cost component, are included in “Other income (expense) – net” on the accompanying Condensed Consolidated Statements of Earnings. See Note 16 for additional information on Other income (expense) – net.

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 12: 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 ~~awards,~~share units (“PSUs”), stock appreciation rights (“SARs”) and restricted stock awards (which may be designated as “restricted stock units” or “RSUs”). No further grants are being made under its predecessor, the 2001 Incentive Stock and Awards Plan (the “2001 Plan”), although outstanding awards under the 2001 Plan will continue in accordance with their terms. As of ~~September~~March 30, ~~2017,~~2024, the 2011 Plan had ~~3,287,403~~2,047,931 shares available for future grants. The company uses treasury stock to deliver shares under ~~both~~ the ~~2001 and~~ 2011 ~~Plans.~~

Plan.

Net stock-based compensation expense was ~~$7.0~~$9.8 million and ~~$21.4~~$10.2 million for the respective three month periods ended March 30, 2024, and ~~nine months ended September 30, 2017, and $7.3 million and $21.5 million for the respective three and nine months ended October~~April 1, ~~2016.~~2023. Cash received from stock purchase plan and stock option ~~plan~~ exercises during the respective three month periods ended March 30, 2024, and ~~nine months ended September 30, 2017,~~April 1, 2023 totaled ~~$1.6~~$28.3 million and $36.2 million, respectively. Cash received from stock purchase and option plan exercises during the three and nine months ended October 1, 2016, totaled $4.0 million and $32.4 million, respectively.$32.8 million. The tax benefit realized from both the exercise and vesting of share-based payment arrangements was ~~$0.8~~$9.7 million and ~~$12.9~~$5.1 million for the respective three month periods ended March 30, 2024, and ~~nine months ended September 30, 2017, and $1.8 million and $14.9 million for the respective three and nine months ended October~~April 1, ~~2016.~~

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

2023.

Stock ~~Options~~

options: Stock options are granted with an exercise price equal to the market value of a share ofSnap-on’s common stock on the date of grant and have a contractual term of ~~ten~~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 ~~company’s historical~~expected annual dividend ~~payments.~~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.

The following weighted-average assumptions were used in calculating the fair value of stock options granted during the ~~nine months~~three month periods ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016,~~2023, using the Black-Scholes valuation ~~model; there were no stock options granted during the three months ended September 30, 2017, or October 1, 2016:~~

   Nine Months Ended
   September 30,
2017    October 1,
2016
Expected term of option(in years)
     5.15         5.05
Expected volatility factor
   22.01%    22.17%
Expected dividend yield
     1.63%      1.77%
Risk-free interest rate
             1.78%                      1.04%

Amodel:


	Three Months Ended
		March 30, 2024	April 1, 2023
Expected term of stock option (in years)		4.90	4.90
Expected volatility factor		23.63%	23.99%
Expected dividend yield		2.76%	2.60%
Risk-free interest rate		4.30%	3.99%

Below is a summary of stock option activity as of and for the ~~nine~~three months ended ~~September~~March 30, ~~2017, is presented below:~~

   Shares
(in thousands)    Exercise
Price Per
Share*    Remaining
Contractual
Term*
(in years)    Aggregate
Intrinsic
Value
(in millions)
Outstanding at December 31, 2016
   3,011               $ 100.78
Granted
           655               168.71
Exercised
   (278)          87.00
Forfeited or expired
   (71)          153.52



Outstanding at September 30, 2017
   3,317           114.22            6.6            $     127.7



Exercisable at September 30, 2017
   2,108           90.90            5.3        122.5

* Weighted-average

2024:


	Shares (in thousands)	Exercise Price Per Share*		Remaining Contractual Term* (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at December 30, 2023	1,916	$	177.79
Granted	233	269.01
Exercised	(160)	177.15
Forfeited or expired	(9)	236.26
Outstanding at March 30, 2024	1,980	188.30		5.7	$	213.7
Exercisable at March 30, 2024	1,510	168.43		4.5	192.9



*			Weighted-average

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The weighted-average grant date fair value of stock options granted during the ~~nine~~three months ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016,~~2023, was ~~$31.13~~$55.07 and ~~$22.99,~~$51.09, respectively. The intrinsic value of stock options exercised was ~~$2.0~~$17.1 million and ~~$23.4~~$22.6 million during the respective three month periods ended March 30, 2024, and ~~nine months ended September 30, 2017, and $4.8 million and $22.2 million during the respective three and nine months ended October~~April 1, ~~2016.~~2023. The fair value of stock options vested was ~~$14.0~~$9.5 million and ~~$12.7~~$9.1 million during the respective ~~nine months~~three month periods ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016.~~

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

2023.

As of ~~September~~March 30, ~~2017,~~2024, there was ~~$23.3~~$22.1 million of unrecognized compensation cost related tonon-vested stock options that is expected to be recognized as a charge to earnings over a weighted-average period of ~~1.7~~2.2 years.

Performance ~~Awards~~

~~Performance awards, which are granted as performance~~ share ~~units (“PSUs”) and performance-based RSUs,~~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 ~~performance awards~~PSUs is dependent upon performance relative topre-defined goals for revenue growth and return on net assets for the applicable performance period. For performance achieved above ~~a certain level,~~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 performance-based RSUs have aone-year~~ ~~performance period based on the results of the consolidated financial metrics of the company followed by atwo-year~~ ~~cliff vesting schedule, assuming continued employment.~~

The fair value of ~~performance awards~~PSUs is calculated using the market value of a share ofSnap-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 ~~performance awards~~PSUs granted during the ~~nine~~three months ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016,~~2023, was ~~$168.70~~$269.00 and ~~$138.80,~~$249.26, respectively. PSUs related to ~~60,980~~137,096 shares and ~~94,186~~60,402 shares were paid out during the ~~respective nine~~three months ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016.~~2023, respectively. Earned PSUs vest and are generally paid out following the conclusion of the applicable performance period upon approval by the Organization and Executive Compensation Committee of the company’s Board of Directors (the “Board”).

Based on the company’s 2016 performance, 45,502 RSUs granted in 2016 were earned; assuming continued employment, these RSUs will vest at the end of fiscal 2018. Based on the company’s 2015 performance, 64,327 RSUs granted in 2015 were earned; assuming continued employment, these RSUs will vest at the end of fiscal 2017. Based on the company’s 2014 performance, 78,585 RSUs granted in 2014 were earned; these RSUs vested as of fiscal 2016 year end and were paid out shortly thereafter.

Changes to the company’snon-vested ~~performance awards~~ PSUs during the ~~nine~~three months ended ~~September~~March 30, ~~2017,~~2024, are as follows:

   Shares
(in thousands)    Fair Value
Price per
Share*
Non-vested performance awards at December 31, 2016
              207               $     141.94
Granted
   77           168.70
Vested
   (5)          142.78
Cancellations and other
   (28)          154.46



Non-vested performance awards at September 30, 2017
   251           148.64

* Weighted-average


	Shares (in thousands)	Fair Value Price per Share*
Non-vested PSUs at December 30, 2023	177	$	226.81
Granted	53	269.00
Performance assumption change **	—	—
Vested	—	—
Cancellations and other	—	—
Non-vested PSUs at March 30, 2024	230	236.55



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

As of ~~September~~March 30, ~~2017,~~2024, there was ~~$14.1~~$29.0 million of unrecognized compensation cost related tonon-vested ~~performance awards~~ PSUs that isare expected to be recognized as a charge to earnings over a weighted-average period of ~~1.7~~1.5 years.

Restricted stock units: RSUs are earned and expensed using the fair value of the award over the contractual term of three years. Vesting of the RSUs is dependent upon continued employment over the three-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 the three months ended March 30, 2024, and April 1, 2023, was $269.00 and $249.26, respectively.

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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

Shares
(in thousands)
Fair Value
Price per
Share*
Non-vested RSUs at December 30, 2023 80 $ 215.84
Granted 24 269.00
Vested (29) 189.89
Cancellations and other — —
Non-vested RSUs at March 30, 2024 75 242.64



*			Weighted-average

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

Stock ~~Appreciation Rights (“SARs”)~~

appreciation rights: The company also issues stock-settled and cash-settled SARs to certain keynon-U.S. employees. SARs have a contractual term of ~~ten~~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 ofSnap-on’s common stock on the date of grant.

Stock-settled SARs are accounted for as equity instruments and provide for the issuance ofSnap-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 ofSnap-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 ofSnap-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 ofSnap-on’s common stock over the grant price is paid in cash and not in common stock.

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’speriod-end~~ 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 expected term of the SARs granted based on the period of time that similar instruments 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 ~~company’s historical~~expected annual dividend ~~payments.~~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 length of time corresponding to the expected term of the SARs.

The following weighted-average assumptions were used in calculating the fair value of stock-settled SARs granted during the ~~nine~~three months ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016,~~2023, using the Black-Scholes valuation ~~model; there were no stock-settled SARs granted during the three months ended September 30, 2017, or October 1, 2016:~~

   Nine Months Ended
     September 30,
2017    October 1,
2016
Expected term of stock-settled SARs(in years)
     3.99         4.03
Expected volatility factor
   19.39%    20.09%
Expected dividend yield
     1.46%      1.66%
Risk-free interest rate
           1.55%                      1.11%

~~Changes to the company’s stock-settled SARs during the nine months ended September 30, 2017, are as follows:~~

   Stock-settled
SARs
(in thousands)    Exercise
Price Per
Share*    Remaining
Contractual
Term*
(in years)    Aggregate
Intrinsic
Value
(in millions)
Outstanding at December 31, 2016
   303               $ 125.38
Granted
   100               168.73
Exercised
   (8)          106.07
Forfeited or expired
   (22)          124.88



Outstanding at September 30, 2017
   373           137.49            7.8            $     6.3



Exercisable at September 30, 2017
   179           118.54            6.8            5.4

* Weighted-average

model:


	Three Months Ended
	March 30, 2024	April 1, 2023
Expected term of stock-settled SARs (in years)	4.20	4.08
Expected volatility factor	23.80%	24.68%
Expected dividend yield	2.77%	2.60%
Risk-free interest rate	4.22%	3.87%

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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


	Stock-settled SARs (in thousands)	Exercise Price Per Share*		Remaining Contractual Term* (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at December 30, 2023	321	$	189.93
Granted	63	269.00
Exercised	(10)	161.95
Forfeited or expired	(18)	186.44
Outstanding at March 30, 2024	356	204.88		7.0	$	32.5
Exercisable at March 30, 2024	229	178.82		5.8	26.9



*			Weighted-average

The weighted-average grant date fair value of stock-settled SARs granted during the ~~nine~~three months ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016,~~2023, was ~~$24.13~~$52.12 and ~~$19.47,~~$48.85, respectively. The intrinsic value of stock-settled SARs exercised was ~~zero~~$1.3 million and ~~$0.5~~$2.2 million during the respective three month periods ended March 30, 2024, and ~~nine months ended September 30, 2017, and $0.1 million and $0.8 million during the respective three and nine months ended October~~April 1, ~~2016.~~2023. The fair value of stock-settled SARs vested was $2.3 million and $1.9 million during ~~both~~ the ~~nine months~~respective three month periods ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016, was $2.1 million.~~

2023.

As of ~~September~~March 30, ~~2017,~~2024, there was ~~$3.0~~$5.6 million of unrecognized compensation cost related tonon-vested stock-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of ~~1.7~~2.2 years.

The following weighted-average assumptions were used in calculating the fair value of cash-settled SARs granted during the ~~nine~~three months ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016,~~2023, using the Black-Scholes valuation ~~model; no cash-settled SARs were granted during the three months ended September 30, 2017, or October 1, 2016:~~

   Nine Months Ended
     September 30,
2017    October 1,
2016
Expected term of cash-settled SARs(in years)
     3.38         3.43
Expected volatility factor
   19.58%    19.03%
Expected dividend yield
     1.57%      1.58%
Risk-free interest rate
             1.62%                      0.88%

model:


	Three Months Ended
	March 30, 2024	April 1, 2023
Expected term of cash-settled SARs (in years)	4.13	3.96
Expected volatility factor	23.76%	24.42%
Expected dividend yield	2.51%	2.62%
Risk-free interest rate	4.21%	3.60%

The intrinsic value of cash-settled SARs exercised was zero and ~~$0.8~~$0.4 million ~~during~~for the respective three month periods ended March 30, 2024, and ~~nine months ended September 30, 2017, and $0.1 million and $0.9 million during the respective three and nine months ended October~~April 1, ~~2016.~~2023. The fair value of cash-settled SARs vested ~~during the nine months ended September 30, 2017, and October 1, 2016,~~ was $0.1 million for both the three month periods ended March 30, 2024, and ~~$0.2 million, respectively.~~

April 1, 2023.

Changes to the company’snon-vested cash-settled SARs during the ~~nine~~three months ended ~~September~~March 30, ~~2017,~~2024, are as follows:

   Cash-settled
SARs
(in thousands)    Fair Value
Price per
Share*
Non-vested cash-settled SARs at December 31, 2016
              7               $     40.83
Granted
   1           13.52
Vested
   (3)          26.11



Non-vested cash-settled SARs at September 30, 2017
   5           18.78

* Weighted-average


	Cash-settled SARs (in thousands)	Fair Value Price per Share*
Non-vested cash-settled SARs at December 30, 2023	2	$	79.16
Granted	1	70.16
Vested	(1)	93.05
Non-vested cash-settled SARs at March 30, 2024	2	76.13



*			Weighted-average

As of ~~September~~March 30, ~~2017,~~2024, there was ~~$0.1~~$0.2 million of unrecognized compensation cost related tonon-vested cash-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of ~~1.4~~2.2 years.

Table of Contents
SNAP-ON INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Restricted ~~Stock Awards~~stock awards –~~Non-employee~~ ~~Directors~~

non-employee directors: The company awarded ~~6,966~~5,391 shares and ~~7,145~~5,760 shares of restricted stock tonon-employee directors infor the ~~first nine months of 2017~~respective three month periods ended March 30, 2024, and ~~2016, respectively.~~April 1, 2023. The fair value of the restricted stock awards is expensed over aone-year vesting period based on the fair value on the date of grant. All restrictions ~~for~~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.

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Employee ~~Stock Purchase Plan~~

stock purchase plan:Substantially allSnap-on employees in the United States and Canada are eligible to participate in an employee stock purchase plan. The purchase price of the company’s common stock to participants is the lesser of the mean of the high and low ~~price~~prices of the stock on the beginning date (May 15) or ending date (the following May 14) of each plan year. ~~For~~The company records compensation expense when Snap-on’s period-end stock price is greater than the ~~nine months ended September 30, 2017, and October 1, 2016, issuances~~plan purchase price. There were no shares issued under this plan ~~totaled 26,963 shares~~for the respective three month periods ended March 30, 2024, and ~~27,156 shares, respectively.~~April 1, 2023. As of ~~September~~March 30, ~~2017,~~2024, 551,598 shares were reserved for issuance under this plan ~~totaled 753,600 shares~~ andSnap-on held participant contributions of approximately ~~$1.4~~$4.8 million. Participants are able to withdraw from the plan at any time prior to the ending date and receive back all contributions made during the plan year. ~~No compensation costs were recognized~~Compensation expense for plan participants ~~in the third quarters of 2017~~was $0.3 million and ~~2016. The company recognized compensation costs for plan participants of $0.1~~$0.5 million ~~of expense and a $0.1 million benefit~~ for the ~~respective nine months~~three month periods ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016.~~

2023, respectively.

Franchisee ~~Stock Purchase Plan~~

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 ~~price~~prices of the stock on the beginning date (May 15) or ending date (the following May 14) of each plan year. ~~For~~The company records mark-to-market expense when Snap-on’s period-end stock price is greater than the ~~nine months ended September 30, 2017, and October 1, 2016, issuances~~plan purchase price. There were no shares issued under this plan ~~totaled 47,314 shares~~for the respective three month periods ended March 30, 2024, and ~~42,867 shares, respectively.~~April 1, 2023. As of ~~September~~March 30, ~~2017,~~2024, 178,715 shares were reserved for issuance under this plan ~~totaled 566,155 shares~~ andSnap-on held participant contributions of approximately ~~$2.8~~$10.1 million. Participants are able to withdraw from the plan at any time prior to the ending date and generally receive back all contributions made during the plan year. The company ~~did not recognize any~~recognized mark-to-market ~~costs for plan participants in the third quarters~~ expense of ~~2017 and 2016. Expense for plan participants was $0.1~~$0.7 million and ~~a $0.4~~$0.9 million ~~benefit~~ for the ~~respective nine months~~three month periods ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016.~~

2023, respectively.

Note 13: Earnings Per Share

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

   Three Months Ended    Nine Months Ended
   September 30,
2017    October 1,
2016    September 30,
2017    October 1,
2016
Weighted-average common shares outstanding
       57,200,880            58,013,852            57,643,948            58,076,627
Effect of dilutive securities
   1,054,360        1,251,062        1,220,575        1,292,765








Weighted-average common shares outstanding, assuming dilution
   58,255,240        59,264,914        58,864,523        59,369,392

Three Months Ended
March 30, 2024 April 1, 2023
Weighted-average common shares outstanding 52,741,565 53,019,170
Effect of dilutive securities 929,466 1,044,581
Weighted-average common shares outstanding, assuming dilution 53,671,031 54,063,751

The dilutive effect of the potential exercise of outstanding stock options and stock-settled SARs to purchase common shares is calculated using the treasury stock method. As of ~~September~~March 30, ~~2017,~~2024, there were ~~723,215~~no awards outstanding that were anti-dilutive; as of ~~October~~April 1, ~~2016,~~2023, there were ~~1,600~~302,756 awards outstanding that were anti-dilutive. Performance-based equity awards are included in the diluted earnings per share calculation based on the attainment of the applicable performance metrics to date.

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 14: 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 the three ~~and nine~~ months ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016,~~2023, is as follows:

   Three Months Ended    Nine Months Ended
(Amounts in millions)    September 30,
2017    October 1,
2016    September 30,
2017    October 1,
2016
Warranty reserve:

Beginning of period
       $     18.9             $     16.1             $     16.0             $     16.4
Additions
   1.1         2.8         10.4         8.8
Usage
   (2.2)        (3.3)        (8.6)        (9.6)








End of period
       $ 17.8             $ 15.6             $ 17.8             $ 15.6


	Three Months Ended
(Amounts in millions)	March 30, 2024		April 1, 2023
Warranty reserve:
Beginning of period	$	14.7	$	14.3
Additions	4.0		3.8
Usage	(3.8)		(3.3)
End of period	$	14.9	$	14.8

In the ordinary course of our business, Snap-on is ~~involved in various~~subject to legal ~~matters~~disputes that are being litigated and/or ~~settled in~~settled. The accompanying Condensed Consolidated Statement of Earnings for the ~~ordinary course of business. The~~ three months ended ~~September~~March 30, ~~2017, included~~2024, includes an $11.3 million benefit in “Operating expenses” for payments received associated with a ~~$15.0 million charge related to a judgement in an employment-related litigation matter brought by an individual that is being appealed.~~legal matter. Although it is not possible to predict the outcome of ~~these~~ legal matters, management believes that the results of ~~these~~all legal matters will not have a material impact onSnap-on’s consolidated financial position, results of operations or cash flows.

Note 15: Leases

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


(Amounts in millions)	March 30, 2024		December 30, 2023
Finance leases:
Property and equipment - gross	$	17.7	$	19.1
Accumulated depreciation	(15.7)		(16.8)
Property and equipment - net	$	2.0	$	2.3

Other accrued liabilities	$	1.3	$	1.6
Other long-term liabilities	0.9		1.1
Total finance lease liabilities	$	2.2	$	2.7

Operating leases:
Operating lease right-of-use assets	$	74.4	$	74.7

Other accrued liabilities	$	23.9	$	23.8
Operating lease liabilities	54.5		54.6
Total operating lease liabilities	$	78.4	$	78.4

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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

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

Note 16: Other Income (Expense) – Net

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

   Three Months Ended    Nine Months Ended
(Amounts in millions)    September 30,
2017    October 1,
2016    September 30,
2017    October 1,
2016
Interest income
       $     –               $     0.2             $     0.2             $     0.5
Net foreign exchange loss
   (2.0)        (1.0)        (5.7)        (0.9)
Other
   (0.1)        –           (0.2)        0.1








Total other income (expense) – net
       $ (2.1)            $ (0.8)            $ (5.7)            $ (0.3)

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~


	Three Months Ended
(Amounts in millions)	March 30, 2024		April 1, 2023
Interest income	$	12.9	$	8.0
Net foreign exchange loss	(2.0)		(2.5)
Net periodic pension and postretirement benefits – non-service	7.0		9.6


Other	0.2		0.1
Total other income (expense) – net	$	18.1	$	15.2

Note ~~16:~~17: Accumulated Other Comprehensive Income (Loss)

~~The following~~

Below is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended ~~September~~March 30, ~~2017:~~

(Amounts in millions)    Foreign
Currency
Translation    Cash Flow
Hedges    Defined
Benefit
Pension and
Postretirement
Plans    Total
Balance as of July 1, 2017
       $ (130.2)            $     14.6             $     (281.4)            $     (397.0)
Other comprehensive income before reclassifications
   51.4         –           –           51.4
Amounts reclassified from Accumulated OCI
   –           (0.5)        4.3         3.8








Net other comprehensive income (loss)
   51.4         (0.5)        4.3         55.2








Balance as of September 30, 2017
       $     (78.8)            $ 14.1             $ (277.1)            $ (341.8)

~~The following is a summary of net changes in Accumulated OCI by component and net of tax for the nine months ended September 30, 2017:~~

(Amounts in millions)    Foreign
Currency
Translation    Cash Flow
Hedges    Defined
Benefit
Pension and
Postretirement
Plans    Total
Balance as of December 31, 2016
       $     (217.7)            $ 9.2             $     (290.0)            $     (498.5)
Other comprehensive income before reclassifications
   138.9         6.1         –           145.0
Amounts reclassified from Accumulated OCI
   –           (1.2)        12.9         11.7








Net other comprehensive income
   138.9         4.9         12.9         156.7








Balance as of September 30, 2017
       $ (78.8)            $     14.1             $ (277.1)            $ (341.8)

~~The following~~2024:


(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of December 30, 2023	$	(211.8)	$	5.7	$	(243.4)	$	(449.5)
Other comprehensive loss before reclassifications	(44.8)		—		—		(44.8)
Amounts reclassified from Accumulated OCI	—		(0.4)		1.4		1.0
Net other comprehensive income (loss)	(44.8)		(0.4)		1.4		(43.8)
Balance as of March 30, 2024	$	(256.6)	$	5.3	$	(242.0)	$	(493.3)

Below is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended ~~October~~April 1, ~~2016:~~

(Amounts in millions)    Foreign
Currency
Translation    Cash Flow
Hedges    Defined
Benefit
Pension and
Postretirement
Plans    Total
Balance as of July 2, 2016
       $     (133.5)            $     0.5             $     (236.8)            $     (369.8)
Other comprehensive loss before reclassifications
   (7.8)        –           –           (7.8)
Amounts reclassified from Accumulated OCI
   –           (0.1)        4.8         4.7








Net other comprehensive income (loss)
   (7.8)        (0.1)        4.8         (3.1)








Balance as of October 1, 2016
       $ (141.3)            $ 0.4             $ (232.0)            $ (372.9)

2023:


(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of December 31, 2022	$	(272.5)	$	7.3	$	(263.1)	$	(528.3)
Other comprehensive income before reclassifications	18.1		—		—		18.1
Amounts reclassified from Accumulated OCI	—		(0.4)		—		(0.4)
Net other comprehensive income (loss)	18.1		(0.4)		—		17.7
Balance as of April 1, 2023	$	(254.4)	$	6.9	$	(263.1)	$	(510.6)

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~The following is a summary of net changes in Accumulated OCI by component and net of tax for nine months ended October 1, 2016:~~

(Amounts in millions)    Foreign
Currency
Translation    Cash Flow
Hedges    Defined
Benefit
Pension and
Postretirement
Plans    Total
Balance as of January 2, 2016
       $     (118.5)            $ 0.7            $     (246.4)            $     (364.2)
Other comprehensive loss before reclassifications
   (22.8)        –           –           (22.8)
Amounts reclassified from Accumulated OCI
   –               (0.3)        14.4         14.1








Net other comprehensive income (loss)
   (22.8)        (0.3)        14.4         (8.7)








Balance as of October 1, 2016
       $ (141.3)            $ 0.4             $ (232.0)            $ (372.9)

The reclassifications out of Accumulated OCI for the three ~~and nine~~ month periods ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016,~~2023, are as follows:

   Amount Reclassified from Accumulated OCI
   Three Months Ended    Nine Months Ended
Details about Accumulated OCI
               Components
   September 30,
2017    October 1,
2016    September 30,
2017    October 1,
2016
Statement of Earnings
Presentation
(Amounts in millions)
Gains on cash flow hedges:

Treasury locks
       $ 0.5             $ 0.1             $ 1.2             $ 0.3         Interest expense
Income tax expense
   –            –            –            –            Income tax expense









Net of tax
   0.5         0.1         1.2         0.3









Amortization of net unrecognized losses and prior service credits
   (6.6)        (7.6)        (19.8)        (22.7)        See footnote below*
Income tax benefit
   2.3         2.8         6.9         8.3         Income tax expense









Net of tax
   (4.3)        (4.8)        (12.9)        (14.4)









Total reclassifications for the period, net of tax
       $     (3.8)            $     (4.7)            $     (11.7)            $     (14.1)


	Amount Reclassified from Accumulated OCI
	Three Months Ended
(Amounts in millions)	March 30, 2024		April 1, 2023		Statement of Earnings Presentation






Gains on cash flow hedges:
Treasury locks	$	0.4	$	0.4	Interest expense
Income tax expense	—		—		Income tax expense
Net of tax	0.4		0.4

Amortization of net unrecognized losses	$	(1.8)	$	—	See footnote below*
Income tax benefit	0.4		—		Income tax expense
Net of tax	(1.4)		—
Total reclassifications for the period, net of tax	$	(1.0)	$	0.4



*			These Accumulated OCI components are included in the computation of net periodic pension and postretirement health care costs; see Note 10 and Note 11 for ~~further~~additional information.

~~SNAP-ON INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Note ~~17:~~18: Segments

Snap-on’s business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance.Snap-on’s reportable business segments are: (i) the Commercial & Industrial Group; (ii) theSnap-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. TheSnap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians through the company’s ~~worldwide~~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 ~~dealership service and repair shops (“OEM dealerships”),~~dealerships, through direct and distributor channels. Financial Services consists of the business operations ofSnap-on’s finance subsidiaries.

Snap-on evaluates the performance of its operating segments based on segment revenues ~~including~~and segment operating earnings. The Snap-on Tools Group segment revenues include external net sales, while the Commercial & Industrial Group and the Repair Systems & Information Group segment revenues include both external and intersegment net ~~sales, and segment operating earnings.~~sales. Snap-on accounts for intersegment net sales and transfers based primarily on standard costs with reasonablemark-ups established between the segments. 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. ~~All significant intersegment~~Intersegment amounts are eliminated to arrive atSnap-on’s consolidated financial results.

~~Financial Data by Segment:~~

   Three Months Ended    Nine Months Ended
(Amounts in millions)    September 30,
2017    October 1,
2016    September 30,
2017    October 1,
2016
Net sales:

Commercial & Industrial Group
       $ 314.6             $ 289.3             $ 923.3             $ 862.0
Snap-on Tools Group
   392.7         397.2         1,215.9         1,216.4
Repair Systems & Information Group
   333.5         286.1         990.4         860.1








Segment net sales
   1,040.8         972.6         3,129.6         2,938.5
Intersegment eliminations
       (137.0)            (138.5)        (417.3)        (397.9)








Total net sales
       $ 903.8             $ 834.1             $     2,712.3             $ 2,540.6
Financial Services revenue
   79.0         71.6         233.5         207.2








Total revenues
       $ 982.8             $ 905.7             $ 2,945.8             $     2,747.8








Operating earnings:

Commercial & Industrial Group
       $ 50.1             $ 43.7             $ 134.4             $ 124.1
Snap-on Tools Group
   56.3         64.6         207.2         207.6
Repair Systems & Information Group
   83.4         71.8         244.0         215.3
Financial Services
   56.0         50.6         163.1         147.1








Segment operating earnings
   245.8         230.7         748.7         694.1
Corporate
   (36.7)        (22.5)        (79.3)        (67.6)








Operating earnings
       $ 209.1             $ 208.2             $ 669.4             $ 626.5
Interest expense
   (13.1)        (13.1)        (38.8)        (39.1)
Other income (expense) – net
   (2.1)        (0.8)        (5.7)        (0.3)








Earnings before income taxes and equity earnings
       $ 193.9             $ 194.3             $ 624.9             $ 587.1

Table of Contents

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(Amounts in millions)    September 30,
2017    December 31,
2016
Assets:

Commercial & Industrial Group
       $ 1,104.0             $ 907.1
Snap-on Tools Group
   734.9         668.1
Repair Systems & Information Group
   1,313.5         1,211.0
Financial Services
   1,944.3         1,789.7




Total assets from reportable segments
       $     5,096.7             $ 4,575.9
Corporate
   224.2         212.3
Elimination of intersegment receivables
   (64.7)        (65.0)




Total assets
       $ 5,256.2             $     4,723.2

Financial Data by Segment:


	Three Months Ended
(Amounts in millions)	March 30, 2024		April 1, 2023
Net sales:
Commercial & Industrial Group	$	359.9	$	363.8
Snap-on Tools Group	500.1		537.0
Repair Systems & Information Group	463.8		446.6
Segment net sales	1,323.8		1,347.4
Intersegment eliminations	(141.5)		(164.4)
Total net sales	1,182.3		1,183.0
Financial Services revenue	99.6		92.6
Total revenues	$	1,281.9	$	1,275.6
Operating earnings:
Commercial & Industrial Group	$	55.4	$	55.8
Snap-on Tools Group	117.3		131.7
Repair Systems & Information Group	112.9		104.6
Financial Services	68.3		66.3
Segment operating earnings	353.9		358.4
Corporate	(14.7)		(32.3)
Operating earnings	339.2		326.1
Interest expense	(12.5)		(12.4)
Other income (expense) – net	18.1		15.2
Earnings before income taxes	$	344.8	$	328.9


(Amounts in millions)	March 30, 2024		December 30, 2023
Assets:
Commercial & Industrial Group	$	1,282.9	$	1,293.7
Snap-on Tools Group	941.2		941.8
Repair Systems & Information Group	1,673.5		1,680.0
Financial Services	2,450.6		2,430.0
Total assets from reportable segments	6,348.2		6,345.5
Corporate	1,405.7		1,285.0
Elimination of intersegment receivables	(87.1)		(85.6)
Total assets	$	7,666.8	$	7,544.9

Table of Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Caution Regarding Forward-Looking Statements:

Statements in this document that are not historical facts, including statements that (i) are in the future ~~tense;~~tense, (ii) include the words “expects,” “plans,” “targets,” “estimates,” “believes,” “anticipates,” or similar words that referenceSnap-on Incorporated(“ (“Snap-on” or “the company”) or its ~~management;~~management, (iii) are specifically identified as ~~forward-looking;~~forward-looking, or (iv) describe~~Snap-on’s~~ Snap‑on’s or management’s future outlook, plans, estimates, objectives or goals, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.Snap-on cautions the reader that any forward-looking statements included in this document that are based upon assumptions and estimates were developed by management in good faith and are subject to risks, uncertainties or other factors that could cause (and in some cases have caused) actual results to differ materially from those described in any such statement. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results or regarded as a representation by the company or its management that the projected results will be achieved. For those forward-looking statements,Snap-on cautions the reader that numerous important factors, such as those listed below, as well as those factors discussed in its Annual Report on Form10-K for the fiscal year ended December ~~31, 2016, which are incorporated herein by reference,~~30, 2023 (“2023 year end”), and those discussed in this document, could affect the company’s actual results and could cause its actual consolidated results to differ materially from those expressed in any forward-looking statement made by, or on behalf of,Snap-on.

~~These risks~~

Risks and uncertainties include, without ~~limitation, uncertainties~~limitation:

•Uncertainties related to estimates, ~~statements,~~ assumptions and projections ~~generally, and the~~generally;

•The timing and progress with whichSnap-on can attain value through itsSnap-on Value Creation Processes, including its ability to (i) realize efficiencies and savings from its rapid continuous improvement and other cost reduction initiatives, (ii) improve workforce productivity, (iii) achieve improvements in the company’s manufacturing footprint and greater efficiencies in its supply chain, and (iv) enhance machine maintenance, plant productivity and manufacturing lineset-up and change-over practices, any or all of which could result in production inefficiencies, higher costs and/or lost ~~revenues. These risks also include uncertainties related to~~revenues;

•Snap-on’s capability to successfully implement future strategies with respect to its existing ~~businesses, its~~businesses;

•Snap-on’s ability to refine its brand and franchise strategies, retain and attract franchisees, and further enhance service and value to franchisees ~~and thereby~~in order to help improve ~~their~~the sales and profitability of franchisees;

•The company’s ability to introduce successful new ~~products,~~products;

•Significant changes in the current competitive environment;

•Risks related to pursuing, completing and integrating acquisitions;

•Inflation, interest rate changes and other monetary and market fluctuations;

•Price and supply fluctuations related to raw materials, components and certain purchased finished goods, such as steel, plastics, and electronics;

•The effects of external economic factors, including adverse developments in world financial markets, disruptions related to tariffs and other trade or sanction issues, and global supply chain inefficiencies, including as a result of the current war in Ukraine and other regional conflicts;

•Snap-on’s ability to successfully ~~pursue, complete~~manage changes in prices and ~~integrate acquisitions, as well as its~~the availability of energy sources, including gasoline;

•Snap-on’s ability to withstand disruption arising from natural disasters, ~~(such as the recent hurricanes in the southern United States and the Caribbean), planned facility closures~~including climate-related events or other ~~labor interruptions,~~unusual occurrences;

•Risks associated with data security and technological systems and protections, including the effects of ~~external negative factors, including adverse developments in world financial markets, weakness~~cyber incidents and from new legislation, regulations or government-related developments;

•The impact of labor interruptions or challenges, and Snap-on’s ability to effectively manage human capital resources;

•Weakness in certain geographic areas, ~~of the global economy (including~~including as a result of localized recessions, and the impact of matters related to the United Kingdom’s ~~pending~~ exit from the European ~~Union), and significant changes in the current competitive environment, inflation, interest rates and other monetary and market fluctuations, changes~~Union;

•Changes in tax rates, ~~rules~~laws and regulations ~~and the impact of energy and raw material supply and pricing, including steel and gasoline, the~~as well as uncertainty surrounding potential changes;

•The amount, rate and growth of~~Snap-on’s~~ ~~general and administrative expenses, including~~ health care and postretirement costs, ~~(resulting from, among other matters, U.S. health care legislation and its ongoing implementation or reform),~~including continuing and potentially increasing required contributions to pension and postretirement ~~plans, the impacts~~plans;

Table of~~non-strategic~~ ~~business and/or product line rationalizations, and the~~ Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

•The effects ~~on business as a result~~ of new requirements, legislation, regulations or government-related developments or issues, ~~risks associated with data security~~as well as third party actions, including those addressing climate change;

•Potential reputational damages and ~~technological systems and protections, the inability to assure that~~ costs related to ~~litigation will be reduced or eliminated~~litigation;

•The impact of outbreaks of infectious diseases as well as the effects of governmental actions related thereto on ~~appeal,~~Snap-on’s business, which could have the potential to amplify the impact of the other risks facing the company; and ~~other~~

•Other world or local events outsideSnap-on’s control, including terrorist ~~disruptions.~~disruptions, armed conflicts and civil unrest.

Snap-on disclaims any responsibility to update any forward-looking statement provided in this document, except as required by ~~law.~~

law.

In ~~addition,~~addition, investors should be aware that generally accepted accounting principles in the United States of America (“GAAP”) prescribe when a company should reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for a major contingency. Reported results, therefore, may appear to be volatile in certain accounting periods.

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

~~Recent Acquisitions~~

~~On July 28, 2017,Snap-on~~ ~~acquired Torque Control Specialist (“TCS”), for a cash purchase price~~

Non-GAAP Measures

References in Management’s Discussion and Analysis of ~~$3.6 million (or $3.5 million, net of cash acquired). TCS, based in Adelaide, Australia, distributes a full range of torque products, including wrenches, multipliers~~Financial Condition and calibrators for use in critical industries. For segment reporting purposes, the results of operations and assets of TCS have been included in the Commercial & Industrial Group since the acquisition date.

~~On May 4, 2017,Snap-on~~ acquired Norbar Torque Tools Holding Limited, along with its U.S. and Chinese joint ventures (“Norbar”), for a purchase price of $71.6 million (or $69.9 million, net of cash acquired), which reflects a $0.8 million working capital adjustment finalized in the third quarter of 2017. Norbar, based in Banbury, U.K., designs and manufactures a full range of torque products, including wrenches, multipliers and calibrators for use in critical industries. For segment reporting purposes, the results of operations and assets of Norbar have been included in the Commercial & Industrial Group since the acquisition date.

~~On January 30, 2017,Snap-on~~ acquired BTC Global Limited (“BTC”) for a cash purchase price of $9.2 million. BTC, based in Crewe, U.K., designs and implements automotive vehicle inspection and management software for original equipment manufacturer (“OEM”) franchise repair shops. For segment reporting purposes, the results of operations and assets of BTC have been included in the Repair Systems & Information Group since the acquisition date.

~~On October 31, 2016,Snap-on~~ ~~acquiredCar-O-Liner~~ ~~Holding AB(“Car-O-Liner”)~~ ~~for a purchase price of $152.0 million (or $148.1 million, net of cash acquired), which reflects a $0.2 million working capital adjustment finalized in the first quarter of 2017.Car-O-Liner~~ ~~designs and manufactures collision repair equipment, and information and truck alignment systems. For segment reporting purposes, substantially all ofCar-O-Liner’s~~ ~~results of operations and assets have been included in the Repair Systems & Information Group since the acquisition date, with the remaining portions included in the Commercial & Industrial Group.~~

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

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

~~RESULTS OF OPERATIONS~~

Results of ~~operations for the three months ended September 30, 2017, and October 1, 2016, are as follows:~~

   Three Months Ended
(Amounts in millions)    September 30, 2017    October 1, 2016    Change
Net sales
     $ 903.8       100.0%        $ 834.1         100.0%        $ 69.7       8.4%
Cost of goods sold
   (455.2)      -50.4%      (415.0)      -49.8%      (40.2)      -9.7%







Gross profit
   448.6       49.6%      419.1       50.2%      29.5       7.0%
Operating expenses
     (295.5)      -32.7%        (261.5)      -31.3%        (34.0)        -13.0%







Operating earnings before financial services
   153.1       16.9%      157.6       18.9%      (4.5)      -2.9%

Financial services revenue
   79.0         100.0%      71.6       100.0%      7.4       10.3%
Financial services expenses
   (23.0)      -29.1%      (21.0)      -29.3%      (2.0)      -9.5%







Operating earnings from financial services
   56.0       70.9%      50.6       70.7%      5.4       10.7%








Operating earnings
   209.1       21.3%      208.2       23.0%      0.9       0.4%
Interest expense
   (13.1)      -1.4%      (13.1)      -1.4%      –        –
Other income (expense) – net
   (2.1)      -0.2%      (0.8)      -0.1%      (1.3)      NM







Earnings before income taxes and equity earnings
   193.9       19.7%      194.3       21.5%      (0.4)      -0.2%
Income tax expense
   (57.2)      -5.8%      (59.6)      -6.6%      2.4       4.0%







Earnings before equity earnings
   136.7       13.9%      134.7       14.9%      2.0       1.5%
Equity earnings, net of tax
   0.4       –          0.5       –          (0.1)      -20.0%







Net earnings
   137.1       13.9%      135.2       14.9%      1.9       1.4%
Net earnings attributable to noncontrolling interests
   (3.7)      -0.3%      (3.5)      -0.4%      (0.2)      -5.7%







Net earnings attributable toSnap-on Inc.
     $ 133.4       13.6%        $ 131.7       14.5%        $ 1.7       1.3%

~~NM: Not meaningful~~

Percentage Disclosure: All income statement line item percentages below “Operating earnings from financial services” are calculated as a percentage of the sum of Net sales and Financial services revenue.

~~Net sales of $903.8 million in the third quarter of 2017 increased $69.7 million, or 8.4%, from 2016 levels, reflecting a $19.5 million, or 2.3%, increase in organic sales (anon-GAAP~~ financial measure that excludes acquisition-related sales and the impact of foreign currency translation), $44.3 million of acquisition-related sales, and $5.9 million of favorable foreign currency translation.~~Snap-on~~ ~~has significant international operations and is subject to risks inherent with foreign operations, including foreign currency translation fluctuations.~~

~~References in this report~~Operations to “organic sales” refer to sales from continuing operations calculated in accordance with GAAP, adjusted to exclude acquisition-related sales and the impact of foreign currency translation. Management evaluates the company’s sales performance based on organic sales growth, which primarily reflects growth from the company’s existing businesses as a result of increased output, expanded customer base, ~~and~~ geographic expansion, new product development ~~and/or~~and pricing changes, and excludes sales contributions from acquired operations the company did not own as of the comparable prior-year reporting period. ~~The company’s organic~~Organic sales ~~disclosures~~ also exclude the effects of foreign currency translation as foreign currency translation is subject to volatility that can obscure underlying business trends. Management believes that thenon-GAAP financial measure of organic sales is meaningful to investors as it provides them with useful information to aid in identifying underlying growth trends in ~~our~~the company’s businesses and ~~facilitating~~facilitates comparisons of ~~our~~its sales performance with prior periods.

Table of Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

RESULTS OF OPERATIONS

Results of operations for the three months ended March 30, 2024, and April 1, 2023, are as follows:


	Three Months Ended
(Amounts in millions)	March 30, 2024				April 1, 2023				Change
Net sales	$	1,182.3	100.0	%	$	1,183.0	100.0	%	$	(0.7)	(0.1)	%
Cost of goods sold	(585.6)		(49.5)	%	(593.4)		(50.2)	%	7.8		1.3	%
Gross profit	596.7		50.5	%	589.6		49.8	%	7.1		1.2	%
Operating expenses	(325.8)		(27.6)	%	(329.8)		(27.8)	%	4.0		1.2	%
Operating earnings before financial services	270.9		22.9	%	259.8		22.0	%	11.1		4.3	%

Financial services revenue	99.6		100.0	%	92.6		100.0	%	7.0		7.6	%
Financial services expenses	(31.3)		(31.4)	%	(26.3)		(28.4)	%	(5.0)		(19.0)	%
Operating earnings from financial services	68.3		68.6	%	66.3		71.6	%	2.0		3.0	%

Operating earnings	339.2		26.5	%	326.1		25.6	%	13.1		4.0	%
Interest expense	(12.5)		(1.0)	%	(12.4)		(1.0)	%	(0.1)		(0.8)	%
Other income (expense) – net	18.1		1.4	%	15.2		1.2	%	2.9		19.1	%
Earnings before income taxes	344.8		26.9	%	328.9		25.8	%	15.9		4.8	%
Income tax expense	(75.2)		(5.9)	%	(74.6)		(5.9)	%	(0.6)		(0.8)	%


Net earnings	269.6		21.0	%	254.3		19.9	%	15.3		6.0	%
Net earnings attributable to noncontrolling interests	(6.1)		(0.4)	%	(5.6)		(0.4)	%	(0.5)		(8.9)	%
Net earnings attributable to Snap-on Inc.	$	263.5	20.6	%	$	248.7	19.5	%	$	14.8	6.0	%




Percentage Disclosure: All income statement line item percentages below “Operating earnings from financial services” are calculated as a percentage of the sum of Net sales and Financial services revenue.

Net sales of $1,182.3 million in the first quarter of 2024 represented a decrease of $0.7 million, or 0.1%, from 2023 levels, reflecting a $9.9 million, or 0.8%, organic decline, partially offset by $6.7 million of acquisition-related sales and $2.5 million of favorable foreign currency translation.

Gross profit of ~~$448.6~~$596.7 million in the ~~third~~first quarter of ~~2017~~2024 compared to ~~$419.1~~$589.6 million last ~~year.~~year, an increase of $7.1 million or 1.2%. Gross margin (gross profit as a percentage of net sales) ~~of 49.6%~~ in the quarter ~~declined 60~~improved 70 basis points (100 basis points (“bps”) equals 1.0 percent) from ~~50.2% last year~~the first quarter of 2023 primarily due to ~~40 bps of unfavorable foreign currency effects~~lower material and ~~lower gross margin on acquisition related sales, partially offset by savings~~other costs, and benefits from the company’s “Rapid Continuous Improvement” or ~~“RCI~~“RCI” initiatives.”

Snap-on’s RCI initiatives employ a structured set of tools and processes across multiple businesses and geographies intended to eliminate waste and improve operations. Savings fromSnap-on’s RCI initiatives reflect benefits from a wide variety of ongoing efficiency, productivity and process improvements, including savings generated from product design cost reductions, improved manufacturing lineset-up and change-over practices, lower-cost sourcing initiatives, and facility consolidations. Unless individually significant, it is not practicable to disclose each RCI activity that generated savings and/or segregate RCI savings embedded in sales volume increases.

Operating expenses of ~~$295.5~~$325.8 million in the ~~third~~first quarter of ~~2017~~2024, including an $11.3 million benefit for payments received associated with a legal matter (the “legal payment”), compared to ~~$261.5~~$329.8 million last year, as 2017 included a $15.0 million charge related to a judgment in an employment-related litigation matter brought by an individual that is being appealed (“legal charge”). The company can provide no assurance as to the results of that appeal. The operating expense margin (operatingyear. Operating expenses as a percentage of net ~~sales) of 32.7% was 140~~sales improved 20 bps ~~higher than~~from last year, ~~as 170 bps for~~primarily reflecting the benefit from the legal ~~charge and 30 bps of operating expenses for acquisitions were~~payment, partially offset by ~~sales volume leverage.~~

increased personnel and other costs.

Operating earnings before financial services of ~~$153.1~~$270.9 million in the ~~third~~first quarter of ~~2017,~~2024, including ~~$1.9~~an $11.3 million ~~of unfavorable foreign currency effects and $15.0 million for~~ benefit from the legal ~~charge, decreased $4.5 million, or 2.9%, as~~payment, compared to ~~$157.6~~$259.8 million ~~last year.~~in the first quarter of 2023. As a percentage of net sales, operating earnings before financial services ~~of 16.9%, including the legal charge,~~were 22.9% compared to ~~18.9%~~22.0% last year.

Table of Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Financial services revenue of ~~$79.0~~$99.6 million in the ~~third~~first quarter of ~~2017~~2024 compared to ~~revenue of $71.6~~$92.6 million last year. Financial services operating earnings of ~~$56.0~~$68.3 million in the ~~third quarter of 2017, including $0.1 million of favorable foreign currency effects, increased $5.4 million, or 10.7%, as~~period compared to ~~$50.6~~$66.3 million ~~last year. The year-over-year increases~~ in ~~both revenue and operating earnings primarily reflect continued growth of the company’s financial services portfolio.~~

2023.

Operating earnings of ~~$209.1~~$339.2 million in the ~~third~~first quarter of ~~2017,~~2024, including ~~$1.8~~an $11.3 million ~~of unfavorable foreign currency effects and $15.0 million for~~ benefit from the legal ~~charge, increased $0.9~~payment, compared to $326.1 million last year, an increase of $13.1 million or ~~0.4%, from $208.2 million last year.~~4.0%. As a percentage of revenues (net sales plus financial services revenue), operating earnings of ~~21.3%~~26.5% in the quarter compared to ~~23.0%~~25.6% last year.

Interest expense ~~was unchanged at $13.1 million~~ in the ~~respective third quarters~~first quarter of ~~2017 and 2016.~~ 2024 increased $0.1 million compared to last year. See Note 8 to the Condensed Consolidated Financial Statements for additional information on~~Snap-on’s~~ debt and credit facilities.

Other income (expense) – net ~~was expense~~primarily includes interest income, non-service components of ~~$2.1 million~~net periodic benefit costs, and ~~$0.8 million in the respective third quarters of 2017 and 2016. Other income (expense) – net reflects~~ net gains and losses associated with hedging and currency exchange rate ~~transactions and interest income.~~transactions. See Note 1516 to the Condensed Consolidated Financial Statements for additional information on ~~other~~Other income (expense) – net.

~~Snap-on’s~~ ~~third quarter~~

The effective income tax rate on earnings attributable toSnap-on was ~~30.1%, including a 0.6% benefit from~~22.2% in the ~~legal charge,~~first quarter of 2024 and 23.1% in ~~2017 and 31.2% in 2016. See~~the first quarter of 2023. See Note 7 to the Condensed Consolidated Financial Statements for additional information on income taxes.

Net earnings attributable toSnap-on of ~~$133.4~~$263.5 million, or ~~$2.29~~$4.91 per diluted share, in the ~~third~~first quarter of ~~2017,~~2024, including ~~$9.3~~an $8.8 million, or $0.16 per diluted share, ~~for the after tax legal charge, increased $1.7 million, or $0.07 per diluted share, from 2016 levels. Net earnings attributable toSnap-on~~ ~~in the third quarter of 2016 were $131.7 million, or $2.22 per diluted share.~~

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

~~Results of operations for the nine months ended September 30, 2017, and October 1, 2016, are as follows:~~

Nine Months Ended
(Amounts in millions) September 30, 2017 October 1, 2016 Change
Net sales
  $ 2,712.3      100.0%     $ 2,540.6      100.0%     $ 171.7    6.8%
Cost of goods sold
  (1,352.7)   -49.9%     (1,274.9)   -50.2%   (77.8)   -6.1%

Gross profit
1,359.6    50.1%   1,265.7    49.8%   93.9    7.4%
Operating expenses
(853.3)   -31.4%   (786.3)   -30.9%     (67.0)   -8.5%

Operating earnings before financial services
506.3    18.7%   479.4    18.9%   26.9    5.6%

Financial services revenue
233.5    100.0%   207.2    100.0%   26.3    12.7%
Financial services expenses
(70.4)   -30.1%   (60.1)   -29.0%   (10.3)     -17.1%

Operating earnings from financial services
163.1    69.9%   147.1    71.0%   16.0    10.9%

Operating earnings
669.4    22.7%   626.5    22.8%   42.9    6.8%
Interest expense
(38.8)   -1.3%   (39.1)   -1.4%   0.3    0.8%
Other income (expense) – net
(5.7)   -0.2%   (0.3)   –        (5.4)   NM

Earnings before income taxes and equity earnings
624.9    21.2%   587.1    21.4%   37.8    6.4%
Income tax expense
(187.1)   -6.3%   (179.4)   -6.6%   (7.7)   -4.3%

Earnings before equity earnings
437.8    14.9%   407.7    14.8%   30.1    7.4%
Equity earnings, net of tax
1.2    –        2.2    0.1%   (1.0)   -45.5%

Net earnings
439.0    14.9%   409.9    14.9%   29.1    7.1%
Net earnings attributable to noncontrolling interests
(10.8)   -0.4%   (9.8)   -0.3%   (1.0)   10.2%

Net earnings attributable toSnap-on Inc.
  $ 428.2    14.5%     $ 400.1    14.6%     $ 28.1    7.0%

~~NM: Not meaningful~~

Net sales of $2,712.3 million in the first nine months of 2017 increased $171.7 million, or 6.8%, from 2016 levels, reflecting a $76.1 million, or 3.0%, organic sales gain and $111.8 million of acquisition-related sales, partially offset by $16.2 million of unfavorable foreign currency translation.

Gross profit of $1,359.6 million in the first nine months of 2017 compared to $1,265.7 million last year. Gross margin of 50.1% in 2017 improved 30 bps from 49.8% last year primarily due to benefits from higher sales and savings from the company’s RCI initiatives, partially offset by 20 bps of unfavorable foreign currency effects. Restructuring costs reflected in gross profit were $0.8 million in the first nine months of 2016.

Operating expenses of $853.3 million in the first nine months of 2017, including $15.0 million for the legal charge, compared to $786.3 million last year. The operating expense margin of 31.4% in 2017 increased 50 bps from 30.9% last year as 50 bps of operating expenses from acquisitions and 50 bps from the legal charge were partially offset by benefits from sales volume leverage. Restructuring costs included in operating expenses were $0.1 million in the first nine months of 2016.

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

Operating earnings before financial services of $506.3 million in the first nine months of 2017, including $10.1 million of unfavorable foreign currency effects and $15.0 million for the legal charge, increased $26.9 million, or 5.6%, as compared to $479.4 million last year. As a percentage of net sales, operating earnings before financial services of 18.7%, including the legal charge, compared to 18.9% last year.

Financial services revenue of $233.5 million in the first nine months of 2017 compared to revenue of $207.2 million last year. Financial services operating earnings of $163.1 million in 2017, including $0.7 million of unfavorable foreign currency effects, increased $16.0 million, or 10.9%, as compared to $147.1 million last year. The year-over-year increases in both revenue and operating earnings primarily reflect continued growth of the company’s financial services portfolio.

Operating earnings of $669.4 million in the first nine months of 2017, including $10.8 million of unfavorable foreign currency effects and $15.0 million for the legal charge, increased $42.9 million, or 6.8%, from $626.5 million last year. As a percentage of revenues, operating earnings of 22.7% declined 10 bps from 22.8% last year.

Interest expense of $38.8 million in the first nine months of 2017 decreased $0.3 million from $39.1 million last year. See Note 8 to the Condensed Consolidated Financial Statements for information on~~Snap-on’s~~ ~~debt and credit facilities.~~

Other income (expense) – net was expense of $5.7 million and $0.3 million in the respective first nine months of 2017 and 2016. See Note 15 to the Condensed Consolidated Financial Statements for information on other income (expense) – net.

~~In the first nine months of 2017,Snap-on’s~~ ~~effective income tax rate on earnings attributable toSnap-on~~ ~~was 30.5%, including a 0.2%~~after-tax benefit from the legal ~~charge, and 31.1% in 2016. See Note 7~~payment, compared to ~~the Condensed Consolidated Financial Statements for information on income taxes.~~

~~Net earnings attributable toSnap-on~~ ~~of $428.2~~$248.7 million, or ~~$7.27~~$4.60 per diluted share, in the first nine months of 2017, including $9.3 million, or $0.16 per diluted share, for the after tax legal charge, increased $28.1 million, or $0.53 per diluted share, from 2016 levels. Net earnings attributable to~~Snap-on~~ ~~in the first nine months of 2016 were $400.1 million, or $6.74 per diluted share.~~

~~Exit and Disposal Activities~~

~~Snap-on~~ ~~did not record any costs for exit and disposal activities in the first nine months of 2017 or the third~~ quarter of ~~2016.Snap-on~~ ~~recorded $0.9 million of costs for exit and disposal activities in the first nine months of 2016. See Note 6 to the Condensed Consolidated Financial Statements for information onSnap-on’s~~ ~~exit and disposal activities.~~

2023.

Segment Results

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

Commercial & Industrial Group

   Three Months Ended
(Amounts in millions)    September 30, 2017    October 1, 2016    Change
External net sales
     $ 250.8       79.7%        $ 213.1       73.7%        $ 37.7       17.7%
Intersegment net sales
   63.8       20.3%      76.2       26.3%      (12.4)      -16.3%







Segment net sales
   314.6         100.0%      289.3         100.0%      25.3       8.7%
Cost of goods sold
     (187.9)      -59.7%        (176.6)      -61.0%        (11.3)      -6.4%







Gross profit
   126.7       40.3%      112.7       39.0%      14.0       12.4%
Operating expenses
   (76.6)      -24.4%      (69.0)      -23.9%      (7.6)        -11.0%







Segment operating earnings
     $ 50.1       15.9%        $ 43.7       15.1%        $ 6.4       14.6%

Three Months Ended
(Amounts in millions) March 30, 2024 April 1, 2023 Change
External net sales $ 291.0 80.9 % $ 278.6 76.6 % $ 12.4 4.5 %
Intersegment net sales 68.9 19.1 % 85.2 23.4 % (16.3) (19.1) %
Segment net sales 359.9 100.0 % 363.8 100.0 % (3.9) (1.1) %
Cost of goods sold (213.2) (59.2) % (222.5) (61.2) % 9.3 4.2 %
Gross profit 146.7 40.8 % 141.3 38.8 % 5.4 3.8 %
Operating expenses (91.3) (25.4) % (85.5) (23.5) % (5.8) (6.8) %
Segment operating earnings $ 55.4 15.4 % $ 55.8 15.3 % $ (0.4) (0.7) %

Table of Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Segment net sales of ~~$314.6~~$359.9 million in the ~~third~~first quarter of ~~2017 increased $25.3~~2024 represented a decrease of $3.9 million, or ~~8.7%~~1.1%, from ~~2016~~2023 levels, reflecting a ~~$0.6~~$9.2 million, or ~~0.2%~~2.5%, organic sales ~~gain, $22.7~~decline and $1.4 million of unfavorable foreign currency translation, partially offset by $6.7 million of acquisition-related ~~sales and $2.0 million of favorable foreign currency translation.~~sales. The organic ~~sales increase includes~~decrease is primarily due to a double-digit reduction in the segment’s power tools business and a high single-digit decline in the segment’s Asia-Pacific operations, partially offset by a mid single-digit gain in sales to customers in critical ~~industries,~~industries.

Segment gross margin in the first quarter improved 200 bps from last year, primarily reflecting increased sales volumes in the higher-gross-margin critical industry sector, lower material and other costs, savings from the segment’s RCI initiatives, and 50 bps of benefits from acquisitions.

Segment operating expenses as a ~~low single-digit gain in~~percentage of sales in the segment’s European-based hand tools business, substantially offset by a double-digit decrease in sales of power tools, and a mid single-digit sales decrease in the segment’s Asia Pacific operations.

~~Segment gross profit of $126.7 million in the third~~first quarter ~~of 2017~~rose 190 bps as compared to ~~$112.7 million last year. Third quarter gross margin of 40.3% in 2017 increased 130 bps from 39.0% in 2016~~ 2023 primarily due to ~~favorable business mix~~the effects of lower sales volumes, increased personnel and ~~benefits~~other costs, and a 70 bps impact from ~~the company’s RCI initiatives.~~

Segment operating expenses of $76.6 million in the third quarter of 2017 compared to $69.0 million last year. The operating expense margin of 24.4% in 2017 increased 50 bps from 23.9% in 2016 primarily due to 40 bps of operating expenses for acquisitions.

As a result of these factors, segment operating earnings of ~~$50.1~~$55.4 million in the ~~third~~first quarter of ~~2017, including $0.1~~2024 compared to $55.8 million in 2023, a decrease of ~~favorable foreign currency effects, increased $6.4~~$0.4 million ~~from 2016 levels.~~or 0.7%. Operating margin (segment operating earnings as a percentage of segment net sales) for the Commercial & Industrial Group of ~~15.9%~~15.4% in ~~2017 improved 80 bps from 15.1%~~the first quarter of 2024 compared to 15.3% in ~~2016.~~

   Nine Months Ended
(Amounts in millions)    September 30, 2017    October 1, 2016    Change
External net sales
     $ 712.9       77.2%        $ 644.5       74.8%        $ 68.4         10.6%
Intersegment net sales
   210.4       22.8%      217.5       25.2%      (7.1)      -3.3%







Segment net sales
   923.3         100.0%      862.0         100.0%      61.3       7.1%
Cost of goods sold
     (559.2)      -60.6%        (527.4)      -61.2%        (31.8)      -6.0%







Gross profit
   364.1       39.4%      334.6       38.8%      29.5       8.8%
Operating expenses
   (229.7)      -24.8%      (210.5)      -24.4%      (19.2)      -9.1%







Segment operating earnings
     $ 134.4       14.6%        $ 124.1       14.4%        $ 10.3       8.3%

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

2023.

Snap-on Tools Group


	Three Months Ended
(Amounts in millions)	March 30, 2024				April 1, 2023				Change
Segment net sales	$	500.1	100.0	%	$	537.0	100.0	%	$	(36.9)	(6.9)	%
Cost of goods sold	(259.0)		(51.8)	%	(283.1)		(52.7)	%	24.1		8.5	%
Gross profit	241.1		48.2	%	253.9		47.3	%	(12.8)		(5.0)	%
Operating expenses	(123.8)		(24.7)	%	(122.2)		(22.8)	%	(1.6)		(1.3)	%
Segment operating earnings	$	117.3	23.5	%	$	131.7	24.5	%	$	(14.4)	(10.9)	%

Segment net sales of ~~$923.3~~$500.1 million in the first ~~nine months~~quarter of ~~2017 increased $61.3~~2024 represented a decrease of $36.9 million, or ~~7.1%~~6.9%, from ~~2016~~2023 levels, reflecting a ~~$22.5~~$37.5 million, or ~~2.6%~~7.0%, organic sales ~~gain and $46.4 million of acquisition-related sales,~~decline, partially offset by ~~$7.6~~$0.6 million of ~~unfavorable~~favorable foreign currency translation. The organic ~~sales increase primarily includes mid~~decrease is due to a high single-digit ~~gains~~decline in the ~~segment’s European-based hand tools business and in sales to customers in critical industries,~~U.S., partially offset by a mid single-digit ~~decrease~~gain in ~~sales of power tools.~~

the segment’s international operations.

Segment gross ~~profit of $364.1 million~~margin in the first ~~nine months of 2017 compared to $334.6 million last year. Gross margin of 39.4%~~quarter improved 6090 bps from ~~38.8%~~ last year, primarily ~~due to higher~~reflecting decreased sales ~~savings from the company’s RCI initiatives and 20 bps~~ of ~~favorable foreign currency effects, partially offset by a 10 bps impact from acquisitions.~~

lower-gross-margin products.

Segment operating expenses as a percentage of ~~$229.7 million~~net sales in the first ~~nine months of 2017~~quarter rose 190 bps as compared to ~~$210.5 million last year. The operating expense margin of 24.8% increased 40 bps from 24.4% last year~~2023 primarily due to ~~increased costs, including higher costs for research and engineering activities, and 20 bps of operating expenses for acquisitions.~~

the lower sales volumes.

As a result of these factors, segment operating earnings of ~~$134.4~~$117.3 million in the first ~~nine months~~quarter of ~~2017, including $1.0~~2024 compared to $131.7 million in 2023, a decrease of ~~favorable foreign currency effects, increased $10.3~~$14.4 million ~~from 2016 levels.~~or 10.9%. Operating margin for the ~~Commercial & Industrial~~Snap-on Tools Group of ~~14.6%~~23.5% in the first ~~nine months~~quarter of ~~2017 increased 20 bps from 14.4%~~2024 compared to 24.5% last year.

~~Snap-on~~ ~~Tools~~

Repair Systems & Information Group

   Three Months Ended
(Amounts in millions)    September 30, 2017    October 1, 2016    Change
Segment net sales
     $ 392.7         100.0%        $ 397.2         100.0%        $     (4.5)      -1.1%
Cost of goods sold
   (228.5)      -58.2%        (223.9)      -56.4%      (4.6)      -2.1%







Gross profit
   164.2       41.8%      173.3       43.6%      (9.1)      -5.3%
Operating expenses
     (107.9)      -27.5%      (108.7)      -27.3%      0.8       0.7%







Segment operating earnings
     $ 56.3       14.3%        $ 64.6       16.3%        $     (8.3)        -12.8%


	Three Months Ended
(Amounts in millions)	March 30, 2024				April 1, 2023				Change
External net sales	$	391.2	84.3	%	$	367.4	82.3	%	$	23.8	6.5	%
Intersegment net sales	72.6		15.7	%	79.2		17.7	%	(6.6)		(8.3)	%
Segment net sales	463.8		100.0	%	446.6		100.0	%	17.2		3.9	%
Cost of goods sold	(254.9)		(55.0)	%	(252.2)		(56.5)	%	(2.7)		(1.1)	%
Gross profit	208.9		45.0	%	194.4		43.5	%	14.5		7.5	%
Operating expenses	(96.0)		(20.7)	%	(89.8)		(20.1)	%	(6.2)		(6.9)	%
Segment operating earnings	$	112.9	24.3	%	$	104.6	23.4	%	$	8.3	7.9	%

Table of Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Segment net sales of ~~$392.7~~$463.8 million in the ~~third~~first quarter of ~~2017 decreased $4.5~~2024 represented an increase of $17.2 million, or ~~1.1%~~3.9%, from ~~2016~~2023 levels, reflecting a ~~$6.5~~$14.7 million, or ~~1.6%~~3.3%, organic sales ~~decrease, partially offset by $2.0~~gain and $2.5 million of favorable foreign currency translation. The organic increase primarily reflects high single-digit gains in activity with OEM dealerships and low single-digit increases in sales ~~decrease includes a mid single-digit decrease~~of undercar equipment.

Segment gross margin in the ~~company’s U.S. franchise operations, partially offset by a double-digit sales gain in the company’s international franchise operations.~~

~~Segment gross profit of $164.2 million in the third~~first quarter ~~of 2017 compared to $173.3 million last year. Gross margin of 41.8% decreased 180~~improved 150 bps from ~~43.6%~~ last year primarily due to ~~a year-over-year shift in product mix~~lower material and ~~70 bps of unfavorable foreign currency effects.~~

other costs, and savings from RCI initiatives.

Segment operating expenses as a percentage of ~~$107.9 million~~net sales in the ~~third~~first quarter ~~of 2017 compared to $108.7 million last year. The operating expense margin of 27.5% increased 20~~rose 60 bps from ~~27.3% last year~~2023, primarily ~~due to the effect of the lower sales.~~

reflecting increased personnel and other costs.

As a result of these factors, segment operating earnings of ~~$56.3 million in the third quarter of 2017, including $2.3 million of unfavorable foreign currency effects, decreased $8.3 million from 2016 levels. Operating margin for theSnap-on~~ ~~Tools Group of 14.3% in the third quarter of 2017 compared to 16.3% last year.~~

   Nine Months Ended
(Amounts in millions)    September 30, 2017    October 1, 2016    Change
Segment net sales
     $   1,215.9         100.0%        $   1,216.4         100.0%        $   (0.5)      –
Cost of goods sold
   (691.0)      -56.8%      (687.8)      -56.5%      (3.2)        -0.5%







Gross profit
   524.9       43.2%      528.6       43.5%      (3.7)      -0.7%
Operating expenses
   (317.7)      -26.2%      (321.0)      -26.4%      3.3       1.0%







Segment operating earnings
     $ 207.2       17.0%        $ 207.6       17.1%        $ (0.4)      -0.2%

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

~~Segment net sales of $1,215.9~~$112.9 million in the first ~~nine months~~quarter of ~~2017 decreased $0.5~~2024 compared to $104.6 million ~~from 2016 levels, reflecting a $5.7~~in 2023, an increase of $8.3 million or 0.5%, organic sales gain, which was more than offset by $6.2 million of unfavorable foreign currency translation. The organic sales increase includes a double-digit sales gain in the company’s international franchise operations partially offset by a low single-digit sales decrease in the company’s U.S. franchise operations.

Segment gross profit of $524.9 million in the first nine months of 2017 compared to $528.6 million last year. Gross margin of 43.2% declined 30 bps from 43.5% last year primarily due to 60 bps of unfavorable foreign currency effects, partially offset by savings from the company’s RCI initiatives.

Segment operating expenses of $317.7 million in the first nine months of 2017 compared to $321.0 million last year. The operating expense margin of 26.2% improved 20 bps from 26.4% last year primarily due to sales volume leverage in the company’s international franchise operations.

As a result of these factors, segment operating earnings of $207.2 million in the first nine months of 2017, including $9.2 million of unfavorable foreign currency effects, decreased $0.4 million from 2016 levels. Operating margin for the~~Snap-on~~ ~~Tools Group of 17.0% in the first nine months of 2017 compared to 17.1% last year.~~

~~Repair Systems & Information Group~~

   Three Months Ended
(Amounts in millions)    September 30, 2017    October 1, 2016    Change
External net sales
     $ 260.3       78.1%        $ 223.8       78.2%        $ 36.5       16.3%
Intersegment net sales
   73.2       21.9%      62.3       21.8%      10.9       17.5%







Segment net sales
   333.5         100.0%      286.1         100.0%      47.4       16.6%
Cost of goods sold
     (175.8)      -52.7%        (153.0)      -53.5%        (22.8)      -14.9%







Gross profit
   157.7       47.3%      133.1       46.5%      24.6       18.5%
Operating expenses
   (74.3)      -22.3%      (61.3)      -21.4%      (13.0)        -21.2%







Segment operating earnings
     $ 83.4       25.0%        $ 71.8       25.1%        $ 11.6       16.2%

Segment net sales of $333.5 million in the third quarter of 2017 increased $47.4 million, or 16.6%, from 2016 levels, reflecting a $23.7 million, or 8.2%, organic sales gain, $21.6 million of acquisition-related sales and $2.1 million of favorable foreign currency translation. The organic sales increase includes double-digit gains in sales of diagnostic and repair information products to independent repair shop owners and managers, a high single-digit sales increase to OEM dealerships, and a low single-digit sales increase of undercar equipment.

Segment gross profit of $157.7 million in the third quarter of 2017 compared to $133.1 million last year. Gross margin of 47.3% improved 80 bps from 46.5% last year as a result of 40 bps of benefits from acquisitions and savings from the company’s RCI initiatives.

Segment operating expenses of $74.3 million in the third quarter of 2017 compared to $61.3 million last year. The operating expense margin of 22.3% increased 90 bps from 21.4% last year primarily due to 180 bps of impact from acquisitions, partially offset by benefits of sales volume leverage.

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

As a result of these factors, segment operating earnings of $83.4 million in the third quarter of 2017, including $0.3 million of favorable foreign currency effects, increased $11.6 million from 2016 levels.7.9%. Operating margin for the Repair Systems & Information Group of ~~25.0%~~24.3% in the ~~third~~first quarter of ~~2017~~2024 compared to ~~25.1%~~23.4% last year.

   Nine Months Ended
(Amounts in millions)    September 30, 2017    October 1, 2016    Change
External net sales
     $ 783.5       79.1%        $ 679.7       79.0%        $ 103.8       15.3%
Intersegment net sales
   206.9       20.9%      180.4       21.0%      26.5       14.7%







Segment net sales
   990.4         100.0%      860.1         100.0%      130.3       15.1%
Cost of goods sold
   (519.8)      -52.5%        (457.6)      -53.2%        (62.2)      -13.6%







Gross profit
   470.6       47.5%      402.5       46.8%      68.1       16.9%
Operating expenses
     (226.6)      -22.9%      (187.2)      -21.8%      (39.4)        -21.0%







Segment operating earnings
     $ 244.0       24.6%        $ 215.3       25.0%        $ 28.7       13.3%

~~Segment net sales~~

Financial Services


	Three Months Ended
(Amounts in millions)	March 30, 2024				April 1, 2023				Change
Financial services revenue	$	99.6	100.0	%	$	92.6	100.0	%	$	7.0	7.6	%
Financial services expenses	(31.3)		(31.4)	%	(26.3)		(28.4)	%	(5.0)		(19.0)	%
Segment operating earnings	$	68.3	68.6	%	$	66.3	71.6	%	$	2.0	3.0	%

Financial services revenue is generally dependent on the size of ~~$990.4~~the average financial services portfolio during the period, as well as on the average yield on receivables. Financial services revenue of $99.6 million in the first ~~nine months~~quarter of ~~2017~~2024 increased ~~$130.3~~$7.0 million, or ~~15.1%~~7.6%, from 2016 levels, reflecting a $69.4 million, or 8.1%, organic sales gain and $65.4 million of acquisition-related sales, partially offset by $4.5 million of unfavorable foreign currency translation. The organic sales increase includes high single-digit gains in sales of diagnostic and repair information products to independent repair shop owners and managers and in sales to OEM dealerships, and a mid single-digit gain in sales of undercar equipment.

~~Segment gross profit of $470.6 million in~~last year. In the first ~~nine months~~quarters of ~~2017 compared to $402.5 million last year. Gross margin of 47.5% improved 70 bps from 46.8% last year primarily due to benefits from acquisitions~~both 2024 and ~~savings from the company’s RCI initiatives. Restructuring costs included in gross profit were $0.8 million in the first nine months of 2016.~~

Segment operating expenses of $226.6 million in the first nine months of 2017 compared to $187.2 million last year. The operating expense margin of 22.9% increased 110 bps from 21.8% last year primarily due to 190 bps of impact from acquisitions, partially offset by sales volume leverage. Restructuring costs included in operating expenses were $0.1 million in the first nine months of 2016.

As a result of these factors, segment operating earnings of $244.0 million in the first nine months of 2017, including $1.9 million of unfavorable foreign currency effects, increased $28.7 million from 2016 levels. Operating margin for the Repair Systems & Information Group of 24.6% in the first nine months of 2017 compared to 25.0% last year.

~~Financial Services~~

   Three Months Ended
(Amounts in millions)    September 30, 2017    October 1, 2016    Change
Financial services revenue
     $ 79.0         100.0%        $ 71.6         100.0%        $ 7.4         10.3%
Financial services expenses
     (23.0)      -29.1%        (21.0)      -29.3%        (2.0)      -9.5%







Segment operating earnings
     $ 56.0       70.9%        $ 50.6       70.7%        $ 5.4       10.7%

Financial services revenue of $79.0 million in the third quarter of 2017 increased $7.4 million, or 10.3%, from $71.6 million last year primarily due to $8.0 million of higher revenue as a result of growth of the company’s financial services portfolio, partially offset by $0.7 million of decreased revenue from lower average yields on finance and contract receivables. In the third quarter2023, the average yield on finance receivables was ~~17.9% for 2017~~17.7%. In the first quarters of 2024 and ~~18.0% for 2016, and~~2023, the ~~respective~~ average ~~yield~~yields on contract receivables ~~was 9.2%~~were 9.0% and ~~9.4%.~~8.7%, respectively. Originations of ~~$271.8~~$301.7 million in the ~~third~~first quarter of ~~2017 increased $2.0~~2024 represented an increase of $0.8 million, or ~~0.7%~~0.3%, from ~~2016~~2023 levels.

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

Financial services expenses primarily include personnel-related and other general and administrative costs, as well as provisions for credit losses. These expenses are generally more dependent on changes in the size of the financial services portfolio than they are on the revenue of the segment. Financial services expenses ~~of $23.0 million~~ in the ~~third~~first quarter of ~~2017~~2024 increased ~~$2.0 million from $21.0 million last year~~ primarily due to ~~changes in both the size of the portfolio and in the~~higher provisions for credit ~~losses.~~losses as compared to those recorded in the first quarter of 2023. As a percentage of the average financial services portfolio, ~~financial services~~ expenses were ~~1.2% in both of the third quarters of 2017 and 2016.~~

Financial services operating earnings of $56.0 million in the third quarter of 2017, including $0.1 million of favorable foreign currency effects, increased $5.4 million, or 10.7%, from 2016 levels.

   Nine Months Ended
(Amounts in millions)    September 30, 2017    October 1, 2016    Change
Financial services revenue
     $   233.5         100.0%        $ 207.2         100.0%        $ 26.3       12.7%
Financial services expenses
   (70.4)      -30.1%        (60.1)      -29.0%        (10.3)        -17.1%







Segment operating earnings
     $ 163.1       69.9%        $ 147.1       71.0%        $ 16.0       10.9%

~~Financial services revenue of $233.5 million~~1.3% in the first ~~nine months~~quarter of 2017 increased $26.3 million, or 12.7%, from $207.2 million last year primarily due to $27.2 million of higher revenue as a result of continued growth of the company’s financial services portfolio, partially offset by $0.6 million of decreased revenue from lower average yields on contract receivables. In the first nine months of 20172024 and ~~2016, the average yield on finance receivables was 17.9% for both periods, and the respective average yield on contract receivables was 9.2% and 9.4%. Originations of $807.0 million~~1.1% in ~~2017 decreased $8.4 million, or 1.0%, from 2016 levels.~~

~~Financial services expenses of $70.4 million~~2023.

Segment operating earnings in the first ~~nine months~~quarter of ~~2017~~2024 increased $10.3 million from $60.1 million last year primarily due to changes in both the size of the portfolio and in the provisions for credit losses. As a percentage of the average financial services portfolio, financial services expenses were 3.7% and 3.6% in the respective first nine months of 2017 and 2016.

~~Financial services operating earnings of $163.1 million in the first nine months of 2017, including $0.7 million of unfavorable foreign currency effects, increased $16.0~~$2.0 million, or ~~10.9%~~3.0%, from ~~2016~~2023 levels.

~~See Note 3 to the Condensed Consolidated Financial Statements for further information on financial services.~~

Corporate

Snap-on’s ~~third~~ first quarter ~~2017~~2024 general corporate expenses of ~~$36.7~~$14.7 million ~~increased $14.2 million from $22.5~~compared to $32.3 million last year. The year-over-year ~~increase~~decrease in ~~general~~ corporate expenses primarily reflects ~~$15.0 million for~~a benefit from the legal ~~charge partially offset by~~payment and lower ~~pension expense.~~

~~Snap-on’s~~ ~~general corporate expenses in the first nine months~~performance-based compensation and other costs.

Table of 2017 of $79.3 million increased $11.7 million from $67.6 million last year. The year-over-year increase in general corporate expenses primarily reflects $15.0 million for the legal charge partially offset by lower pension expense.

Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Non-GAAP Supplemental Data

The followingnon-GAAP supplemental data is presented for informational purposes to provide readers with insight into the information used by management for assessing the operating performance of~~Snap-on~~ ~~Incorporated’s(“Snap-on”)~~ Snap-on’s non-financial services (“Operations”) and ~~“Financial Services”~~Financial Services businesses.

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

The supplemental Operations data reflects the results of operations and financial position ofSnap-on’s tools, ~~diagnostic and~~diagnostics, equipment products, software, and othernon-financial services operations with Financial Services presented on the equity method. The supplemental Financial Services data reflects the results of operations and financial position ofSnap-on’s U.S. and international financial services operations. The financing needs of Financial Services are met through intersegment borrowings and cash generated from Operations; Financial Services is charged interest expense on intersegment borrowings at market rates. Income taxes are charged to Financial Services on the basis of the specific tax attributes generated by the U.S. and international financial services businesses. Transactions between the Operations and Financial Services businesses ~~were~~are eliminated to arrive at the Condensed Consolidated Financial Statements.

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the three months ended ~~September~~March 30, ~~2017,~~2024, and ~~October~~April 1, ~~2016,~~2023, is as follows:

Operations* Financial Services
(Amounts in millions) September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Net sales
  $ 903.8        $ 834.1        $ –           $ –
Cost of goods sold
    (455.2)         (415.0)     –         –

Gross profit
448.6      419.1      –         –
Operating expenses
(295.5)     (261.5)     –         –

Operating earnings before financial services
153.1      157.6      –         –
Financial services revenue
–         –         79.0      71.6
Financial services expenses
–         –             (23.0)         (21.0)

Operating earnings from financial services
–         –         56.0      50.6

Operating earnings
153.1      157.6      56.0      50.6
Interest expense
(13.1)     (13.0)     –         (0.1)
Intersegment interest income (expense) – net
17.7      18.3      (17.7)     (18.3)
Other income (expense) – net
(2.1)     (0.9)     –         0.1

Earnings before income taxes and equity earnings
155.6      162.0      38.3      32.3
Income tax expense
(43.2)     (47.7)     (14.0)     (11.9)

Earnings before equity earnings
112.4      114.3      24.3      20.4
Financial services – net earnings attributable toSnap-on
24.3      20.4      –         –
Equity earnings, net of tax
0.4      0.5      –         –

Net earnings
137.1      135.2      24.3      20.4
Net earnings attributable to noncontrolling interests
(3.7)     (3.5)     –         –

Net earnings attributable toSnap-on
  $ 133.4        $ 131.7        $ 24.3        $ 20.4


	Operations*				Financial Services
(Amounts in millions)	March 30, 2024		April 1, 2023		March 30, 2024		April 1, 2023
Net sales	$	1,182.3	$	1,183.0	$	—	$	—
Cost of goods sold	(585.6)		(593.4)		—		—
Gross profit	596.7		589.6		—		—
Operating expenses	(325.8)		(329.8)		—		—
Operating earnings before financial services	270.9		259.8		—		—

Financial services revenue	—		—		99.6		92.6
Financial services expenses	—		—		(31.3)		(26.3)
Operating earnings from financial services	—		—		68.3		66.3

Operating earnings	270.9		259.8		68.3		66.3
Interest expense	(12.5)		(12.4)		—		—
Intersegment interest income (expense) – net	16.7		15.7		(16.7)		(15.7)
Other income (expense) – net	18.0		15.2		0.1		—
Earnings before income taxes and equity earnings	293.1		278.3		51.7		50.6
Income tax expense	(62.3)		(61.5)		(12.9)		(13.1)
Earnings before equity earnings	230.8		216.8		38.8		37.5
Financial services – net earnings attributable to Snap-on	38.8		37.5		—		—

Net earnings	269.6		254.3		38.8		37.5
Net earnings attributable to noncontrolling interests	(6.1)		(5.6)		—		—
Net earnings attributable to Snap-on	$	263.5	$	248.7	$	38.8	$	37.5

*Snap-on with Financial Services presented on the equity method.

Table of Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Non-GAAP ~~Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the nine months ended September 30, 2017, and October 1, 2016, is as follows:~~

Operations* Financial Services
(Amounts in millions) September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Net sales
  $ 2,712.3        $ 2,540.6        $ –           $ –
Cost of goods sold
    (1,352.7)         (1,274.9)     –         –

Gross profit
1,359.6      1,265.7      –         –
Operating expenses
(853.3)     (786.3)     –         –

Operating earnings before financial services
506.3      479.4      –         –
Financial services revenue
–         –         233.5      207.2
Financial services expenses
–         –             (70.4)     (60.1)

Operating earnings from financial services
–         –         163.1      147.1

Operating earnings
506.3      479.4      163.1      147.1
Interest expense
(38.6)     (38.8)     (0.2)     (0.3)
Intersegment interest income (expense) – net
53.1      53.9      (53.1)     (53.9)
Other income (expense) – net
(5.7)     (0.4)     –         0.1

Earnings before income taxes and equity earnings
515.1      494.1      109.8      93.0
Income tax expense
(146.6)     (145.1)     (40.5)         (34.3)

Earnings before equity earnings
368.5      349.0      69.3      58.7
Financial services – net earnings attributable toSnap-on
69.3      58.7      –         –
Equity earnings, net of tax
1.2      2.2      –         –

Net earnings
439.0      409.9      69.3      58.7
Net earnings attributable to noncontrolling interests
(10.8)     (9.8)     –         –

Net earnings attributable toSnap-on
  $ 428.2        $ 400.1        $ 69.3        $ 58.7

*Snap-on with Financial Services on the equity method.

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

~~Non-GAAP~~ Supplemental Consolidating Data – Supplemental Condensed Balance Sheet information as of ~~September~~March 30, ~~2017,~~2024, and December ~~31, 2016,~~30, 2023, is as follows:

Operations* Financial Services
(Amounts in millions) September 30,
2017 December 31,
2016 September 30,
2017 December 31,
2016
ASSETS

Current assets:

Cash and cash equivalents
    $ 93.9         $ 77.5         $ 0.2         $ 0.1
Intersegment receivables
21.0     15.0     –        –
Trade and other accounts receivable – net
674.6     598.2     0.6     0.6
Finance receivables – net
–        –        505.8     472.5
Contract receivables – net
8.3     7.9     91.5     80.2
Inventories – net
649.9     530.5     –        –
Prepaid expenses and other assets
127.6     122.4     0.8     1.1

Total current assets
1,575.3     1,351.5     598.9     554.5
Property and equipment – net
472.6     423.8     1.6     1.4
Investment in Financial Services
311.6     288.7     –        –
Deferred income tax assets
55.2     49.1     26.0     23.7
Intersegment long-term notes receivable
553.0     584.7     –        –
Long-term finance receivables – net
–        –        1,018.6     934.5
Long-term contract receivables – net
11.2     11.2     299.2     275.5
Goodwill
924.0     895.5     –        –
Other intangibles – net
258.3     184.6     –        –
Other assets
52.6     47.9     –        0.1

Total assets
    $     4,213.8         $     3,837.0         $     1,944.3         $     1,789.7


	Operations*				Financial Services
(Amounts in millions)	March 30, 2024		December 30, 2023		March 30, 2024		December 30, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,120.9	$	1,001.3	$	0.1	$	0.2
Intersegment receivables	18.6		15.7		—		—
Trade and other accounts receivable – net	826.7		790.6		0.8		0.7
Finance receivables – net	—		—		604.9		594.1
Contract receivables – net	5.1		5.5		111.5		115.3
Inventories – net	970.5		1,005.9		—		—
Prepaid expenses and other current assets	140.0		143.2		8.3		7.4
Total current assets	3,081.8		2,962.2		725.6		717.7

Property and equipment – net	532.2		536.5		2.5		2.8
Operating lease right-of-use assets	73.6		73.8		0.8		0.9
Investment in Financial Services	395.5		393.9		—		—
Deferred income tax assets	53.0		51.3		25.4		24.7
Intersegment long-term notes receivable	792.8		785.6		—		—
Long-term finance receivables – net	—		—		1,290.6		1,284.2
Long-term contract receivables – net	8.1		8.3		405.5		399.6
Goodwill	1,071.3		1,097.4		—		—
Other intangible assets – net	277.7		268.9		—		—
Pension assets	130.4		130.5		—		—
Other long-term assets	36.6		30.2		0.2		0.1
Total assets	$	6,453.0	$	6,338.6	$	2,450.6	$	2,430.0

* Snap-on with Financial Services presented on the equity method.

Table of Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Balance Sheets Information (continued):

Operations* Financial Services
(Amounts in millions)   September 30,
2017   December 31,
2016   September 30,
2017   December 31,
2016
LIABILITIES AND EQUITY

Current liabilities:

Notes payable and current maturities of long-term debt
    $ 203.4         $ 151.4         $ 250.0         $ 150.0
Accounts payable
203.4     170.3     1.3     0.6
Intersegment payables
–        –        21.0     15.0
Accrued benefits
47.7     52.8     0.1     –
Accrued compensation
72.2     85.7     2.6     4.1
Franchisee deposits
76.1     66.7     –        –
Other accrued liabilities
338.9     292.1     34.5     22.8

Total current liabilities
941.7     819.0     309.5     192.5
Long-term debt and intersegment long-term
–        –        1,308.0     1,293.5
Deferred income tax liabilities
28.5     13.1     –        –
Retiree health care benefits
34.3     36.7     –        –
Pension liabilities
181.8     246.5     –        –
Other long-term liabilities
87.5     86.5     15.2     15.0

Total liabilities
1,273.8     1,201.8     1,632.7     1,501.0

Total shareholders’ equity attributable toSnap-on Inc.
2,921.8     2,617.2     311.6     288.7
Noncontrolling interests
18.2     18.0     –        –

Total equity
2,940.0     2,635.2     311.6     288.7

Total liabilities and equity
    $     4,213.8         $     3,837.0         $     1,944.3         $     1,789.7


	Operations*				Financial Services
(Amounts in millions)	March 30, 2024		December 30, 2023		March 30, 2024		December 30, 2023
LIABILITIES AND EQUITY
Current liabilities:
Notes payable	$	15.2	$	15.6	$	—	$	—
Accounts payable	256.7		236.2		0.7		1.8
Intersegment payables	—		—		18.6		15.7
Accrued benefits	70.5		64.4		—		—
Accrued compensation	66.0		99.9		1.9		3.0
Franchisee deposits	73.7		73.3		—		—
Other accrued liabilities	480.2		432.2		37.5		27.4
Total current liabilities	962.3		921.6		58.7		47.9

Long-term debt and intersegment long-term debt	—		—		1,977.7		1,970.2
Deferred income tax liabilities	88.3		79.2		—		—
Retiree health care benefits	21.2		21.8		—		—
Pension liabilities	75.3		82.3		—		—
Operating lease liabilities	54.1		54.0		0.4		0.6
Other long-term liabilities	88.5		86.3		18.3		17.4
Total liabilities	1,289.7		1,245.2		2,055.1		2,036.1
Total shareholders’ equity attributable to Snap-on	5,141.0		5,071.3		395.5		393.9
Noncontrolling interests	22.3		22.1		—		—
Total equity	5,163.3		5,093.4		395.5		393.9
Total liabilities and equity	$	6,453.0	$	6,338.6	$	2,450.6	$	2,430.0

* Snap-on with Financial Services presented on the equity method.

Table of Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Liquidity and Capital Resources

Snap-on’s growth has historically been funded by a combination of cash provided by operating activities and debt financing.Snap-on believes that its cash from operations and collections of finance receivables, coupled with its sources of borrowings and available cash on hand, are sufficient to fund its currently anticipated requirements for scheduled debt repayments, ~~(including the repayment of $250 million of unsecured 4.25% notes, due January 15, 2018 (the “2018 Notes”)),~~ payments of interest and dividends, new receivables originated by our financial services businesses, capital expenditures, working capital, the funding of pension plans, and funding for share repurchases and acquisitions, if and as they arise.

Due toSnap-on’s credit rating over the years, external funds have been available at an acceptable cost. As of ~~the close of business on October 13, 2017,~~April 12, 2024, Snap-on’s long-term debt and commercial paper were rated, respectively, A2 andP-1 by Moody’s Investors Service;A- andA-2 by Standard & Poor’s; and A and F1 by Fitch Ratings.Snap-on believes that its current credit arrangements are sound and that the strength of its balance sheet affords the company the financial flexibility, including through access to financial markets for potential new financing, to respond to both internal growth opportunities and those available through acquisitions. However,Snap-on cannot provide any ~~assurances of~~assurance that financing will be available in the ~~availability of~~ future ~~financing or the~~on acceptable terms, ~~on which it might be available,~~ or that its debt ratings ~~may~~will not decrease.

The following discussion focuses on information included in the accompanying Condensed Consolidated Balance Sheets.

~~As of September 30, 2017, working~~

Working capital (current assets less current liabilities) of ~~$923.1~~$2,786.4 million ~~increased $28.6~~as of March 30, 2024, represented an increase of $76.0 million from ~~$894.5~~$2,710.4 million as of December ~~31, 2016~~30, 2023 (fiscal ~~2016~~2023 year end) ~~due to~~, primarily as a ~~$261.9 million~~result of the net ~~increase in total current assets, partially offset by a $233.3 million increase in total current liabilities as~~changes discussed below.

The following represents the company’s working capital position as of ~~September~~March 30, ~~2017,~~2024, and December ~~31, 2016:~~

(Amounts in millions)    September 30,
2017    December 31,
2016
Cash and cash equivalents
       $ 94.1             $ 77.6
Trade and other accounts receivable – net
   675.2         598.8
Finance receivables – net
   505.8         472.5
Contract receivables – net
   99.8         88.1
Inventories – net
   649.9         530.5
Prepaid expenses and other assets
   121.1         116.5




Total current assets
   2,145.9         1,884.0




Notes payable and current maturities of long-term debt
   (453.4)        (301.4)
Accounts payable
   (204.7)        (170.9)
Other current liabilities
   (564.7)        (517.2)




Total current liabilities
   (1,222.8)        (989.5)




Total working capital
       $ 923.1             $ 894.5

30, 2023:


(Amounts in millions)	March 30, 2024		December 30, 2023
Cash and cash equivalents	$	1,121.0	$	1,001.5
Trade and other accounts receivable – net	827.5		791.3
Finance receivables – net	604.9		594.1
Contract receivables – net	116.6		120.8
Inventories – net	970.5		1,005.9
Prepaid expenses and other current assets	135.6		138.4
Total current assets	3,776.1		3,652.0

Notes payable	(15.2)		(15.6)
Accounts payable	(257.4)		(238.0)
Other current liabilities	(717.1)		(688.0)
Total current liabilities	(989.7)		(941.6)
Working capital	$	2,786.4	$	2,710.4

Cash and cash equivalents of ~~$94.1~~$1,121.0 million as of ~~September~~March 30, ~~2017, increased $16.5~~2024, represented an increase of $119.5 million from ~~2016~~2023 year-end levels primarily due toto: (i) ~~$528.9~~$348.7 million of cash generated from operations; (ii) $207.8 million of cash from collections of finance receivables; ~~(ii) $415.0 million of cash generated from operations, including $14.9 million of cash proceeds from the first-quarter 2017 settlement of a treasury lock;~~and (iii) $297.8 million of net proceeds from the February 15, 2017 issuance of $300 million of unsecured 3.25% notes that mature on March 1, 2027 (the “2027 Notes”); (iv) $51.0 million of net proceeds from notes payable and other short-term borrowings; and (v) $36.2$28.3 million of cash proceeds from stock purchase plan and stock option ~~plan~~ exercises. These increases in cash and cash equivalents were partially offset byby: (i) the funding of ~~$670.0~~$248.0 million of new finance receivables; (ii) dividend payments to shareholders of $98.2 million; (iii) the repurchase of ~~1,348,000~~248,000 shares of the company’s common stock for ~~$212.6~~$70.2 million; ~~(iii) the January 2017 repayment of $150 million of long-term notes at maturity (the “2017 Notes”);~~and (iv) ~~dividend payments to shareholders of $123.0 million; (v)~~ the funding of ~~$82.9 million for acquisitions; and (vi) the funding of $57.3~~$21.8 million of capital expenditures.

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

Of the ~~$94.1~~$1,121.0 million of cash and cash equivalents as of ~~September~~March 30, ~~2017, $76.7~~2024, $406.9 million was held outside of the United States.Snap-on maintainsnon-U.S. funds in its foreign operations to: (i) provide adequate working capital; (ii) satisfy various regulatory requirements; and/or (iii) take advantage of business expansion opportunities as they arise. ~~The repatriation~~Although the Tax Cuts and Jobs Act (“Tax Act”) generally eliminated U.S. federal taxation of ~~cash~~dividends from ~~certain~~ foreign subsidiaries, ~~could have adverse net tax consequences on the company shouldSnap-on~~such dividends may still be ~~required~~subject to ~~pay and record U.S.~~state income ~~taxes~~taxation and foreign withholding ~~taxes on such funds. Alternatively, the repatriation of cash from certain other foreign subsidiaries could result in favorable net tax consequences for the company.~~taxes. Snap-on periodically evaluates its cash held outside the United States and may pursue opportunities to repatriate certain foreign cash amounts to the extent that it ~~does not incur unfavorable net~~can be accomplished in a tax ~~consequences.~~

efficient manner.

Table of Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Trade and other accounts receivable – net of ~~$675.2~~$827.5 million as of ~~September~~March 30, ~~2017, increased $76.4~~2024, compared to $791.3 million ~~from 2016year-end~~ ~~levels~~as of December 30, 2023, an increase of $36.2 million primarily due to ~~higher~~an increase in days sales ~~$22.2~~outstanding, partially offset by $6.9 million of foreign currency ~~translation and $9.1 million of receivables related to the Norbar, BTC and TCS acquisitions.~~translation. Days sales outstanding (trade and other accounts receivable – net as of the respective period end, divided by the respective trailing 12 months sales, times 360 days) was ~~67 days at September 30, 2017, and~~ 63 days atand 60 days as of March 30, 2024, and December ~~31, 2016.~~

30, 2023, respectively.

The current portions of net finance and contract receivables of ~~$605.6~~$721.5 million as of ~~September~~March 30, ~~2017,~~2024, compared to ~~$560.6~~$714.9 million at ~~2016~~2023 year end. The long-term portions of net finance and contract receivables of ~~$1,329.0~~$1,704.2 million as of ~~September~~March 30, ~~2017,~~2024, compared to ~~$1,221.2~~$1,692.1 million at ~~2016~~2023 year end. The combined ~~$152.8~~$18.7 million increase in net current and long-term finance and contract receivables over ~~2016~~2023 year-end levels is primarily due to ~~continued growth of the company’s financial services portfolio and $20.0~~net receivable originations, partially offset by $6.7 million of foreign currency translation.

Inventories – net of ~~$649.9~~$970.5 million as of ~~September~~March 30, ~~2017, increased $119.4~~2024, decreased $35.4 million ~~from 2016year-end~~ ~~levels primarily~~compared to ~~support continued higher customer demand~~$1,005.9 million as of December 30, 2023, primarily due to easing supply chain disruptions and ~~new product introductions, as well as from $24.1~~$12.5 million of foreign currency ~~translation and $6.0 million of inventories related to the Norbar and TCS acquisitions.~~translation. Inventory turns (trailing 12 months of cost of goods sold, divided by the average of the beginning and ending inventory balance for the trailing 12 months) were ~~3.1~~2.4 turns and ~~3.3~~2.3 turns as of ~~September~~March 30, ~~2017,~~2024, and December ~~31, 2016,~~30, 2023, respectively. Inventories accounted for using thefirst-in,first-out (“FIFO”) method approximated ~~60% and~~ 59% of total inventories as of ~~September~~both March 30, ~~2017,~~2024, and December ~~31, 2016, respectively.~~30, 2023. All other inventories are accounted for using thelast-in,first-out (“LIFO”) method. The company’s LIFO reserve was ~~$74.4~~$120.6 million and ~~$73.2~~$115.9 million as of ~~September~~March 30, ~~2017,~~2024, and December ~~31, 2016,~~30, 2023, respectively.

Notes payable ~~and current maturities~~ of ~~long-term debt of $453.4~~$15.2 million as of ~~September~~March 30, ~~2017, included $250~~2024, compared to $15.6 million as of ~~the 2018 Notes, $170 million of commercial paper borrowings and $33.4 million of other notes. As of 2016~~2023 year end, notes payable and current maturities of long-term debt of $301.4 million included $150 million of the 2017 Notes (that were repaid upon maturity in January 2017), $130 million of commercial paper borrowings and $21.4 million of other notes. As of 2016 year end, the 2018 Notes were included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheets as their scheduled maturity was in excess of one year of the 2016~~year-end~~ ~~balance sheet date.~~

end.

Accounts payable of ~~$204.7~~$257.4 million as of ~~September~~March 30, ~~2017, increased $33.8~~2024, compared to $238.0 million ~~from 2016year-end~~ ~~levels~~as of December 30, 2023, an increase of $19.4 million primarily due to the timing of payments, ~~and $6.5~~partially offset by $1.9 million of foreign currency translation.

Other accrued liabilities of ~~$366.0~~$505.0 million as of ~~September~~March 30, ~~2017, increased $58.1~~2024, compared to $447.4 million ~~from 2016year-end~~ ~~levels~~as of 2023 year end, an increase of $57.6 million primarily ~~due~~due to higher ~~income~~ tax accruals, ~~the $15.0 million legal charge and $10.3~~ partially offset by $3.7 million of foreign currency translation.

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

Long-term debt of ~~$755.0~~$1,184.9 million as of ~~September~~March 30, ~~2017,~~2024, consisted ofof: (i) ~~$200~~$300 million of unsecured ~~6.70%~~3.25% notes that mature ~~in 2019;~~on March 1, 2027 (the “2027 Notes”); (ii) ~~$250~~$400 million of unsecured ~~6.125%~~4.10% notes that mature ~~in 2021;~~on March 1, 2048 (the “2048 Notes”); and (iii) ~~$300~~$500 million of the 2027 Notes; and (iv) $5.0 million of other long-term debt. Long-term debt of $708.8 million as of 2016 year end consisted of (i) $250 million of the 2018 Notes; (ii) $200 million of unsecured 6.70%3.10% notes that mature ~~in 2019; (iii) $250~~on May 1, 2050 (“the 2050 Notes”), partially offset by $15.1 million of ~~unsecured 6.125% notes that mature in 2021;~~unamortized debt issuance costs and (iv) $8.8 million of other long-term debt. As of 2016 year end, the 2018 Notes were included in “Long-term debt” on the accompanying Consolidated Balance Sheets as their scheduled maturity was in excess of one year of the 2016~~year-end~~ ~~balance sheet date; the 2027 Notes were issued in February 2017.~~

issuance discounts.

Snap-on has a ~~five-year, $700~~$900 million ~~multi-currency~~ multicurrency revolving credit facility that terminates on ~~December 15, 2020~~September 12, 2028 (the “Credit Facility”)~~; as~~. 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 ~~September 30, 2017, no~~the lenders providing additional commitments. No amounts were borrowed or outstanding under the Credit ~~Facility.~~ Facility during the three months ended and as of March 30, 2024. Borrowings under the Credit Facility bear interest at varying rates based on either: (i) Snap-on’s then-current, long-term debt ~~ratings. The Credit Facility’s financial covenant requires thatSnap-on~~ ~~maintain, as~~ratings; or (ii) Snap-on’s then-current ratio of ~~each fiscal quarter end, either (i) a ratio not greater than 0.60 to 1.00 of~~ consolidated ~~net debt (consolidated~~ debt net of certain cash ~~adjustments) to the sum of such consolidated net debt plus total equity and less accumulated other comprehensive income or loss (the “Debt Ratio”~~adjustments (“Consolidated Net Debt”)~~; or (ii) a ratio not greater than 3.50 to 1.00 of such consolidated net debt~~ to earnings before interest, taxes, depreciation, amortization and certain other adjustments for the preceding four fiscal quarters then ended (the ~~“Debt~~“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 ~~Debt~~Leverage Ratio to 0.65 to 1.00 and/or increase the maximum Consolidated Net Debt to EBITDA Ratio to ~~3.75~~4.00 to 1.00 for four consecutive fiscal quarters in connection with certain material acquisitions (as defined in the related credit agreement). As of ~~September~~March 30, ~~2017,~~2024, the company’s actual ratios of ~~0.26~~0.03 and ~~1.16,~~0.10, respectively, were both within the permitted ranges set forth in this financial covenant.Snap-on generally issues commercial paper to fund its financing needs on a short-term basis and uses the Credit Facility asback-up liquidity to support such commercial paper issuances.

~~Snap-on’s~~ ~~Credit Facility and other debt agreements also contain certain usual and customary borrowing, affirmative, negative and maintenance covenants.~~ As of ~~September~~March 30, ~~2017,Snap-on~~ ~~was in compliance with all covenants~~2024, there were no commercial paper issuances outstanding.

Table of ~~its Credit Facility and other debt agreements.~~

Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Snap-on believes it has sufficient available cash and access to both committed and uncommitted credit facilities to cover its expected funding needs on both a short-term and long-term ~~basis, including the repayment of the 2018 Notes upon maturity.~~basis. Snap-on manages its aggregate short-term borrowings so as not to exceed its availability under the ~~revolving~~ Credit Facility.Snap-on believes that it can access short-term debt markets, predominantly through commercial paper issuances and existing lines of credit, to fund its short-term requirements and to ensure near-term liquidity.Snap-on regularly monitors the credit and financial markets and, if it believes conditions are favorable, it may take advantage of ~~what it believes are favorable market~~such conditions to issue long-term debt to further improve its liquidity and capital resources. Near-term liquidity requirements forSnap-on include ~~scheduled debt payments (including the repayment of the 2018 Notes),~~ payments of interest and dividends, funding to support new receivables originated by our financial services businesses, capital expenditures, working capital, the funding of pension plans, and funding for share repurchases and acquisitions, if and as they arise.Snap-on intends to make contributions of ~~$7.1~~$6.0 million to its foreign pension plans and ~~$2.3~~$3.7 million to its domestic pension plans in ~~2017,~~2024, as required by law. ~~In the first nine months of 2017,Snap-on~~ ~~made $60.0 million of discretionary cash contributions to its domestic pension plans; depending~~Depending on market and other conditions,Snap-on may make ~~additional~~ discretionary cash contributions to its pension plans in ~~the balance of 2017.~~

2024.

Snap-on’s long-term financing strategy is to maintain continuous access to the debt markets to accommodate its liquidity needs, including the potential use of commercial paper, additional fixed-term debt and/or securitizations.

The following discussion focuses on information included in the accompanying Condensed Consolidated Statements of Cash Flows.

Operating Activities

Net cash provided by operating activities was ~~$415.0~~$348.7 million and ~~$415.6~~$301.6 million in the first ~~nine~~three months of ~~2017~~2024 and ~~2016,~~2023, respectively. The ~~$0.6~~$47.1 million year-over-year ~~decrease~~increase in net cash provided by operating activities primarily reflects a $26.9 million change in net ~~changes in~~ operating assets and liabilities ~~partially offset by higher~~and an $15.3 million increase in net ~~earnings and $14.9 million of cash proceeds from the settlement of a treasury lock.~~

~~SNAP-ON INCORPORATED~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS~~

~~OF OPERATIONS~~

~~(continued)~~

earnings.

Investing Activities

Net cash used by investing activities of ~~$282.4~~$63.2 million in the first ~~nine~~three months of ~~2017~~2024 included additions to finance receivables of ~~$670.0~~$248.0 million, partially offset by collections of ~~$528.9~~$207.8 million. Net cash used by investing activities of ~~$244.1~~$72.9 million in the first ~~nine~~three months of ~~2016~~2023 included additions to finance receivables of ~~$691.4~~$257.1 million, partially offset by collections of ~~$501.7~~$207.5 million. 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, ~~and diagnostic~~diagnostics, and equipment products on an extended-term payment plan, ~~generally~~ with average payment terms ~~approaching~~of approximately four years.

Net cash used by investing activities in the first nine months of 2017 also included a total of $82.9 million (net of $1.8 million of cash acquired) for acquisitions. See Note 2 to the Consolidated Financial Statements for information on acquisitions.

Capital expenditures were ~~$57.3~~$21.8 million and ~~$56.6~~$23.0 million in the first ~~nine~~three months of ~~2017~~2024 and ~~2016,~~2023, respectively. Capital expenditures in both years included continued investments related to the company’s execution of its strategic Value Creation Processes around safety, quality, customer connection, innovation and ~~Rapid Continuous Improvement.~~

RCI.

Financing Activities

Net cash used by financing activities of $119.5 million in the first nine months of 2017 included the $150 million repayment of the 2017 Notes at maturity, and the other items discussed below. These amounts were partially offset by~~Snap-on’s~~ ~~sale, on February 15, 2017, of $300 million of the 2027 Notes at a discount, from whichSnap-on~~ ~~received $297.8 million of net proceeds, reflecting $1.9 million of transaction costs, and $51.0 million of net proceeds from notes payable and other short-term borrowings.~~

Net cash used by financing activities was ~~$146.8~~$164.2 million in the first ~~nine~~three months of ~~2016.~~

2024, including a reduction in net short-term borrowings of $0.4 million. Net cash used by financing activities of $152.1 million in the first three months of 2023 included net short-term borrowings of $0.8 million.

Proceeds from stock purchase plan and stock option ~~plan~~ exercises totaled ~~$36.2~~$28.3 million and ~~$32.4~~$32.8 million in the ~~respective~~ first ~~nine~~three months of ~~2017~~2024 and ~~2016.Snap-on~~ has undertaken stock repurchases from time to time to offset dilution created by shares issued for employee and franchisee stock purchase plans and stock options, as well as for other corporate purposes.2023, respectively. In the first ~~nine~~three months of ~~2017,~~2024, Snap-on repurchased ~~1,348,000~~248,000 shares of its common stock for ~~$212.6~~$70.2 million under its previously announced share repurchase programs, including the up to $500 million share repurchase program approved by the Board of Directors on August 3, 2017. The 2017 share repurchase program replaced the company’s 1998 and 1999 share repurchase programs; the company’s 1996 repurchase program remains unchanged.programs. In the first ~~nine~~three months of ~~2016,~~2023, Snap-on repurchased ~~492,000~~356,000 shares of its common stock for ~~$76.4~~$87.2 million under its previously announced share repurchase programs. As of ~~September~~March 30, ~~2017,~~2024, Snap-on had remaining availability to repurchase up to an additional ~~$438.8~~$290.6 million in common stock pursuant to its ~~Board of Directors’ (“Board”)~~Board’s authorizations. The ~~purchase~~repurchase ofSnap-on common stock to offset dilution related to equity plan issuances or for other corporate purposes is at the company’s discretion, subject to prevailing financial and market conditions.~~Snap-on~~ Snap‑on believes that its cash generated from operations, available cash on hand, and funds available from its credit facilities, will be sufficient to fund the company’s additional share repurchases, if ~~any, in the balance of 2017.~~

any.

Snap-on has paid consecutive quarterly cash dividends, without interruption or reduction, since 1939. Cash dividends totaled ~~$123.0~~$98.2 million and ~~$106.3~~$86.1 million in the first ~~nine~~three months of ~~2017~~2024 and ~~2016,~~2023, respectively. On November ~~3, 2016,~~2, 2023, the Board increased the quarterly cash dividend by ~~16.4%~~14.8% to ~~$0.71~~$1.86 per share ($~~2.84~~7.44 per share annualized).Snap-on believes that its cash generated from operations, available cash on hand, and funds available from its credit facilities, will be sufficient to pay ~~dividends in the balance~~dividends.

Table of ~~2017.~~

Contents

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

~~Off-Balance~~ ~~Sheet Arrangements~~

~~The company had nooff-balance~~ ~~sheet arrangements as of September 30, 2017.~~

Critical Accounting Policies and Estimates

Snap-on’s ~~disclosures of its~~ critical accounting policies and estimates, which are ~~contained~~discussed in its Annual Report on Form10-K for the fiscal year ended December ~~31, 2016,~~30, 2023, have not materially changed since ~~that~~the report was filed.

Outlook

We believe that our markets and our operations possess and have demonstrated continuing and considerable resilience against the uncertainties of the current environment. In 2024, Snap-on expects to make ~~continued~~ongoing progress ~~in 2017~~ along its defined runways for coherent growth, leveraging capabilities already demonstrated in the automotive repair arena and developing and expanding its professional customer base, not only in automotive repair, but in adjacent markets, additional geographies and other areas, including extending in critical industries, where the cost and penalties for failure can be high. In pursuit of these initiatives,~~Snap-on~~ ~~expects~~ we project that capital expenditures in ~~2017~~2024 will be in athe range of ~~$80~~$100 million to ~~$90~~$110 million, of which ~~$57.3~~$21.8 million was ~~expended~~incurred in the first ~~nine months.~~three months of the year.

Snap-on ~~also~~ currently anticipates that its ~~full year 2017~~full-year 2024 effective income tax rate will be ~~comparable~~in the range of 22% to ~~its 2016 full year rate.~~

23%.

Table of Contents

Item 3: Quantitative and Qualitative Disclosures About Market Risk

~~Market, Credit and Economic Risks~~

~~Market risk is the potential economic loss that may result from adverse changes~~

There has been no significant change in the ~~fair value of financial instruments.Snap-on~~ ~~is exposed~~company’s exposure to market risk ~~from changes in interest rates~~during the first quarter of 2024. Refer to Part II,

Item 7A: Quantitative and ~~foreign currency exchange rates, including as a result of the weakening of the British poundvis-à-vis~~ ~~the U.S. dollar following the United Kingdom’s vote to exit from the European Union.Snap-on~~ ~~is also exposed to market risk associated with the stock-based portion of its deferred compensation plans.Snap-on~~ monitors its exposure to these risks and attempts to manage the underlying economic exposures through the use of financial instruments such as foreign currency forward contracts, interest rate swap agreements, treasury lock agreements and prepaid equity forward agreements (“equity forwards”).~~Snap-on~~ ~~does not use derivative instruments for speculative or trading purposes.Snap-on’s~~ ~~broad-based business activities help to reduce the impact that volatility in any particular area or related areas may have on its operating earnings as a whole.Snap-on’s~~ ~~management takes an active role~~Qualitative Disclosures About Market Risk in the ~~risk management process and has developed policies and procedures that require specific administrative and business functions to assist in~~company’s Annual Report on Form 10-K for the ~~identification, assessment and control of various risks.~~

~~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 thatSnap-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. See Note 9 to the Condensed Consolidated Financial Statements~~year ended December 30, 2023 for ~~information on foreign currency risk management.~~

further discussion.

Interest Rate Risk Management

Snap-on ~~aims to control funding costs by managing~~ may manage the exposure created by the differing maturities and interest rate structures ofSnap-on’s borrowings through the use of interest rate swap agreements. Treasury lock agreements ~~are~~may be used ~~from time to time~~ to manage the potential change in interest rates in anticipation of the ~~possible~~ issuance of fixed rate debt. See Note 9 to the Condensed Consolidated Financial Statements for information on interest rate risk management.

Snap-on utilizes aValue-at-Risk (“VAR”) model to determine the potentialone-day loss in the fair value of its interest rate and foreign exchange-sensitive financial instruments from adverse changes in market factors. The VAR model estimates were made assuming normal market conditions and a 95% confidence level.Snap-on’s computations are based on the inter-relationships among movements in various currencies and interest rates~~(variance/~~ (variance/co-variance technique). These inter-relationships were determined by observing interest rate and foreign currency market changes over the preceding quarter.

The estimated maximum potential net one-day loss in fair value, calculated using the VAR model, as of ~~September~~March 30, ~~2017,~~2024, was ~~$1.8~~$9.6 million, consisting of a $9.7 million loss on interest rate-sensitive financial instruments and ~~$0.5~~a $0.1 million gain on foreign currency-sensitive financial instruments. The VAR model is a risk management tool and does not purport to represent actual losses in fair value that will be incurred bySnap-on, nor does it consider the potential effect of favorable changes in market factors.

~~Stock-based Deferred Compensation Risk Management~~

~~Snap-on~~ ~~aims to manage market risk associated with the stock-based portion of its deferred compensation plans through the use of equity forwards. Equity forwards are used to aid in offsetting the potentialmark-to-market~~ ~~effect on stock-based deferred compensation from changes inSnap-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 compensation expense that may result from such~~mark-to-market~~ ~~changes. See Note 9 to the Condensed Consolidated Financial Statements for additional information on stock-based deferred compensation risk management.~~

~~Credit Risk~~

Credit risk is the possibility of loss from a customer’s failure to make payments according to contract terms. Prior to extending credit, each customer is evaluated, taking into consideration various factors, including the customer’s financial condition, debt-servicing ability, past payment experience, credit bureau information, and other financial and qualitative factors that may affect the customer’s ability to repay, as well as the value of the underlying collateral. Credit risk is also monitored regularly through the use of internal proprietary custom scoring models to evaluate each transaction at the time of the application for credit and by periodically updating those credit scores for ongoing monitoring purposes.~~Snap-on~~ evaluates credit quality through the use of an internal proprietary measuring system that provides a framework to analyze finance and contract receivables on the basis of risk factors of the individual obligor as well as transaction specific risk. The finance and contract receivables are typically monitored through an asset quality review process that closely monitors past due accounts and initiates a progressive collection action process when appropriate.

~~Counterparty Risk~~

~~Snap-on~~ ~~is exposed to credit losses in the event ofnon-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 ofA- ~~or better.Snap-on~~ ~~does not anticipatenon-performance~~ ~~by its counterparties, but cannot provide assurances.~~

~~Economic Risk~~

~~Economic risk is the possibility of loss resulting from economic instability in certain areas of the world.Snap-on~~ continually monitors its exposure in these markets; for example, the company is monitoring the potential effects of the United Kingdom’s pending exit from the European Union, although it is too soon to know what effects this might have on the world economy or the company. Inflation has not had a significant impact on the company.

As a result of the above market, credit and economic risks, net earnings and revenues in any particular period may not be representative of full-year results and may vary significantly from year to year.

Item 4: 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 certifySnap-on’s financial reports and to other members of senior management and the Board, as appropriate.

In accordance with Rule13a-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 Rules13a-15(e) and15d-15(e) under the Exchange Act) as of ~~September~~March 30, ~~2017.~~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 ~~September~~March 30, ~~2017,~~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 ~~not~~ been ~~any~~no change in the company’s internal control over financial reporting during the quarter ended ~~September~~March 30, ~~2017,~~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 Rules13a-15(f) and15d-15(f)).

Table of Contents

PART II. OTHER INFORMATION

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following chart discloses information regarding the shares ofSnap-on’s common stock repurchased by the company during the ~~third~~first quarter of fiscal ~~2017,~~2024, all of which were purchased pursuant to the Board’s authorizations that the company has publicly announced.Snap-on has undertaken stock repurchases from time to time to offset dilution ~~created by shares issued~~related to equity plan issuances and for ~~employee and franchisee stock purchase plans, stock options and~~ other corporate purposes, as well as when the company believes market conditions are favorable. The repurchase ofSnap-on common stock is at the company’s discretion, subject to prevailing financial and market ~~conditions.~~

                  Period
   Shares
purchased    Average
price
per share    Shares
purchased as part of
publicly announced
plans or programs    Approximate
value of shares
that may yet be
purchased under
publicly
announced plans
or programs^*
07/02/17 to 07/29/17    90,000          $     151.12        90,000                $     131.2 million
07/30/17 to 08/26/17        390,000          $ 150.16        390,000                $ 456.4 million
08/27/17 to 09/30/17    123,000          $ 146.05        123,000                $ 438.8 million





Total/Average
   603,000          $ 149.46        603,000              N/A

~~N/A: Not applicable~~

*	Subject to further adjustment pursuant to the 1996 Authorization described below, as of September 30, 2017, the approximate value of shares that may yet be purchased pursuant to the outstanding Board authorizations discussed below is $438.8 million.

conditions, and pursuant to the Board’s authorizations that the company has publicly announced.

Period Shares
purchased Average
price
per share Shares
purchased as part of
publicly announced
plans or programs
Approximate
value of shares
that may yet be
purchased under
publicly
announced plans
or programs*
12/31/2023 to 01/27/2024 — — — $287.5 million
01/28/2024 to 02/24/2024 36,000 $269.35 36,000 $311.2 million
02/25/2024 to 03/30/2024 212,000 $285.62 212,000 $290.6 million
Total/Average 248,000 $283.26 248,000 N/A
N/A: Not applicable

* Subject to further adjustment pursuant to the 1996 Authorization described below, as of March 30, 2024, the approximate value of shares that may yet be

purchased pursuant to the outstanding Board authorizations discussed below is $290.6 million.

•In 1996, the Board authorized the company to repurchase shares of the company’s common stock ~~from time to time~~periodically in the open market or in privately negotiated transactions ~~(“the 1996~~(the “1996 Authorization”). The 1996 Authorization allows the repurchase of up to the number of shares issued or delivered from treasury ~~from time to time~~ under the various plans the company has in place that call for the issuance of the company’s common stock. Because the number of shares that are purchased pursuant to the 1996 Authorization will change ~~from time to time~~ as (i) the company issues shares under its various plans; and (ii) shares are repurchased pursuant to this authorization, the number of shares authorized to be repurchased will vary from time to time. The 1996 Authorization will expire when terminated by the Board. When calculating the approximate value of shares that the company may yet purchase under the 1996 Authorization, the company assumed a price of $152.43, $144.91 and $149.01 per share of common stock as of the end of the respective fiscal 2017 months ended July 29, 2017, August 26, 2017, and September 30, 2017.

•On ~~August 3, 2017,~~November 4, 2021, the Board authorized the repurchase ~~of an aggregate~~ of up to $500 million of the company’s common stock ~~(“the 2017~~(the “2021 Authorization”). The ~~2017~~2021 Authorization will expire when the aggregate repurchase price limit is met, unless terminated earlier by the Board. The 2017 Authorization replaced both the 1998 $100 million authorization and the 1999 $50 million authorization, as discussed in “Item 2; Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” above.

Other Purchases or Sales of Equity Securities

The following chart discloses information regarding transactions by a counterparty in shares ofSnap-on’s common stock ~~by Citibank, N.A. (“Citibank”)~~ during the ~~third~~first quarter of ~~2017~~2024 pursuant to a prepaid equity forward agreement (the “Agreement”) ~~with Citibank~~ that is intended to reduce the impact of market risk associated with the stock-based portion of the company’s deferred compensation plans. The company’s stock-based deferred compensation liabilities ~~which are impacted by changes in the company’s stock price,~~ increase as the company’s stock price rises and decrease as the company’s stock price declines. Pursuant to the Agreement, ~~Citibank~~the counterparty may purchase or sell shares of the company’s common stock ~~(for Citibank’s account)~~for its account in the market or in privately negotiated transactions. ~~The~~At termination, the Agreement ~~has no stated expiration date~~settles in cash and does not provide forSnap-on to purchase or repurchase its shares.


Period	Shares purchased (sold)	Average price per share
12/31/2023 to 01/27/2024	(1,000)	$284.32
01/28/2024 to 02/24/2024	8,200	$268.24
02/25/2024 to 03/30/2024	800	$295.10
Total/Average	8,000	$271.99

Table of Contents

Item 5: Other Information

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 March 30, 2024.

Name and Title

Type of Plan

Adoption Date

Duration or End Date

Aggregate Number of Securities to be Sold

Description of Trading Arrangement

~~Citibank Purchases~~
Iain Boyd
Vice President – Operations Development

Rule 10b5-1 trading arrangement

February 29, 2024

February 15, 2025

10,239

Exercises of~~Snap-on~~ ~~Stock~~ vested stock options and sales of shares

                  Period
   Shares
purchased    Average
price
per share
07/02/17 to 07/29/17    –              –
07/30/17 to 08/26/17    –              –
08/27/17 to 09/30/17        12,500          $     144.50



Total/Average
   12,500          $ 144.50

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.

Table of Contents~~Item 6: Exhibits~~


~~Exhibit 10.1~~Item 6: Exhibits		~~Snap-on~~ Incorporated 2011 Incentive Stock and Awards Plan (As Amended and Restated) *

Exhibit 31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002

Exhibit 31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002

Exhibit 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.~~2002

Exhibit 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.~~2002

Exhibit 101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
~~Exhibit 101.INS~~		XBRL Instance Document**

Exhibit 101.SCH	Inline XBRL Taxonomy Extension Schema Document**Document

Exhibit 101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document**Document

Exhibit 101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document**Document

Exhibit 101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document**Document

Exhibit 101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document**Document

Exhibit 104		Cover page Inline XBRL data (contained in Exhibit 101)

*	~~Reflectsnon-material~~ ~~changes~~

Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Earnings for the three and nine months ended September 30, 2017, and October 1, 2016; (ii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017, and October 1, 2016; (iii) Condensed Consolidated Balance Sheets as of September 30, 2017, and December 31, 2016; (iv) Condensed Consolidated Statements of Equity for the nine months ended September 30, 2017, and October 1, 2016; (v) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017, and October 1, 2016; and (vi) Notes to Condensed Consolidated Financial Statements.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,Snap-on Incorporated has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	SNAP-ON INCORPORATED
Date: April 18, 2024			~~SNAP-ON~~ ~~INCORPORATED~~
~~Date:October 19, 2017~~		~~/s/~~/s/ Aldo J. Pagliari
			Aldo J. Pagliari, Principal Financial Officer,
			Senior Vice President – Finance and
			Chief Financial Officer


	Three Months Ended				Nine Months Ended
	September 30, 2017		October 1, 2016		September 30, 2017		October 1, 2016
Net sales	$	903.8	$	834.1	$	2,712.3	$	2,540.6
Cost of goods sold		(455.2)		(415.0)		(1,352.7)		(1,274.9)

Gross profit		448.6		419.1		1,359.6		1,265.7
Operating expenses		(295.5)		(261.5)		(853.3)		(786.3)

Operating earnings before financial services		153.1		157.6		506.3		479.4

Financial services revenue		79.0		71.6		233.5		207.2
Financial services expenses		(23.0)		(21.0)		(70.4)		(60.1)

Operating earnings from financial services		56.0		50.6		163.1		147.1


Operating earnings		209.1		208.2		669.4		626.5
Interest expense		(13.1)		(13.1)		(38.8)		(39.1)
Other income (expense) – net		(2.1)		(0.8)		(5.7)		(0.3)

Earnings before income taxes and equity earnings		193.9		194.3		624.9		587.1
Income tax expense		(57.2)		(59.6)		(187.1)		(179.4)

Earnings before equity earnings		136.7		134.7		437.8		407.7
Equity earnings, net of tax		0.4		0.5		1.2		2.2

Net earnings		137.1		135.2		439.0		409.9
Net earnings attributable to noncontrolling interests		(3.7)		(3.5)		(10.8)		(9.8)

Net earnings attributable toSnap-on Incorporated	$	133.4	$	131.7	$	428.2	$	400.1


Net earnings per share attributable toSnap-on Incorporated:
Basic	$	2.33	$	2.27	$	7.43	$	6.89
Diluted		2.29		2.22		7.27		6.74

Weighted-average shares outstanding:
Basic		57.2		58.0		57.6		58.1
Effect of dilutive securities		1.1		1.3		1.3		1.3

Diluted		58.3		59.3		58.9		59.4


Dividends declared per common share	$	0.71	$	0.61	$	2.13	$	1.83


	Three Months Ended				Nine Months Ended
	September 30,		October 1,		September 30,		October 1,
	2017		2016		2017		2016
Comprehensive income (loss):
Net earnings	$	137.1	$	135.2	$	439.0	$	409.9
Other comprehensive income (loss):
Foreign currency translation*		51.4		(7.8)		138.9		(22.8)

Unrealized cash flow hedges, net of tax:
Other comprehensive income before reclassifications		–		–		6.1		–
Reclassification of cash flow hedges to net earnings		(0.5)		(0.1)		(1.2)		(0.3)
Defined benefit pension and postretirement plans:

Amortization of net unrecognized losses and prior service credits included in net periodic benefit cost		6.6		7.6		19.8		22.7
Income tax benefit		(2.3)		(2.8)		(6.9)		(8.3)

Net of tax		4.3		4.8		12.9		14.4

Total comprehensive income	$	192.3	$	132.1	$	595.7	$	401.2

Comprehensive income attributable to noncontrolling interests		(3.7)		(3.5)		(10.8)		(9.8)

Comprehensive income attributable toSnap-on Incorporated	$	188.6	$	128.6	$	584.9	$	391.4


	September 30, 2017		December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	94.1	$	77.6
Trade and other accounts receivable – net		675.2		598.8
Finance receivables – net		505.8		472.5
Contract receivables – net		99.8		88.1
Inventories – net		649.9		530.5
Prepaid expenses and other assets		121.1		116.5

Total current assets		2,145.9		1,884.0

Property and equipment:
Land		24.4		19.1
Buildings and improvements		350.3		309.4
Machinery, equipment and computer software		872.8		809.6

		1,247.5		1,138.1
Accumulated depreciation and amortization		(773.3)		(712.9)

Property and equipment – net		474.2		425.2

Deferred income tax assets		81.2		72.8
Long-term finance receivables – net		1,018.6		934.5
Long-term contract receivables – net		310.4		286.7
Goodwill		924.0		895.5
Other intangibles – net		258.3		184.6
Other assets		43.6		39.9

Total assets	$	5,256.2	$	4,723.2


(Amounts in millions)	September 30, 2017		December 31, 2016
Trade and other accounts receivable	$	689.6	$	612.8
Allowances for doubtful accounts		(14.4)		(14.0)

Total trade and other accounts receivable – net	$	675.2	$	598.8


	September 30, 2017				December 31, 2016
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Performing	$	1,550.7	$	413.2	$	1,430.7	$	376.7
Nonperforming		27.8		2.2		24.9		2.0

Total	$	1,578.5	$	415.4	$	1,455.6	$	378.7


	Three Months Ended September 30, 2017				Nine Months Ended September 30, 2017
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Allowances for doubtful accounts:
Beginning of period	$	52.5	$	4.8	$	48.6	$	3.9
Provision		12.8		0.8		38.6		2.7
Charge-offs		(12.6)		(0.7)		(38.0)		(1.9)
Recoveries		1.5		0.2		4.9		0.3
Currency translation		–		–		0.1		0.1

End of period	$	54.2	$	5.1	$	54.2	$	5.1


	Three Months Ended October 1, 2016				Nine Months Ended October 1, 2016
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Allowances for doubtful accounts:
Beginning of period	$	42.6	$	4.5	$	38.2	$	4.4
Provision		10.8		0.5		30.4		1.1
Charge-offs		(9.2)		(0.6)		(28.0)		(1.3)
Recoveries		1.4		0.1		5.0		0.3

End of period	$	45.6	$	4.5	$	45.6	$	4.5


		Gain (Loss) Recognized in Income
		Three months ended				Nine months ended
(Amounts in millions)	Statement of Earnings Presentation	September 30, 2017		October 1, 2016		September 30, 2017		October 1, 2016
Derivatives not designated as hedging instruments:
Foreign currency forwards	Other income (expense) – net	$	1.6	$	(0.7)	$	(2.3)	$	(4.9)
Equity forwards	Operating expenses		(0.9)		(0.7)		(2.2)		(1.4)


	Shares (in thousands)		Exercise Price Per Share*		Remaining Contractual Term* (in years)		Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2016		3,011	$	100.78
Granted		655		168.71
Exercised		(278)		87.00
Forfeited or expired		(71)		153.52

Outstanding at September 30, 2017		3,317		114.22		6.6	$	127.7

Exercisable at September 30, 2017		2,108		90.90		5.3		122.5


	Shares (in thousands)		Fair Value Price per Share*
Non-vested performance awards at December 31, 2016		207	$	141.94
Granted		77		168.70
Vested		(5)		142.78
Cancellations and other		(28)		154.46

Non-vested performance awards at September 30, 2017		251		148.64


	Shares (in thousands)	Fair Value Price per Share*
Non-vested RSUs at December 30, 2023	80	$	215.84
Granted	24	269.00
Vested	(29)	189.89
Cancellations and other	—	—
Non-vested RSUs at March 30, 2024	75	242.64


	Stock-settled SARs (in thousands)		Exercise Price Per Share*		Remaining Contractual Term* (in years)		Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2016		303	$	125.38
Granted		100		168.73
Exercised		(8)		106.07
Forfeited or expired		(22)		124.88

Outstanding at September 30, 2017		373		137.49		7.8	$	6.3

Exercisable at September 30, 2017		179		118.54		6.8		5.4


	Cash-settled SARs (in thousands)		Fair Value Price per Share*
Non-vested cash-settled SARs at December 31, 2016		7	$	40.83
Granted		1		13.52
Vested		(3)		26.11

Non-vested cash-settled SARs at September 30, 2017		5		18.78


Period	Shares purchased		Average price per share		Shares purchased as part of publicly announced plans or programs		Approximate value of shares that may yet be purchased under publicly announced plans or programs^*
07/02/17 to 07/29/17		90,000	$	151.12		90,000	$	131.2 million
07/30/17 to 08/26/17		390,000	$	150.16		390,000	$	456.4 million
08/27/17 to 09/30/17		123,000	$	146.05		123,000	$	438.8 million

Total/Average		603,000	$	149.46		603,000		N/A