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What changed in Snap-on's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Snap-on's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+243 added−257 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-16)

Top changes in Snap-on's 2025 10-K

243 paragraphs added · 257 removed · 226 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeSavings from Snap-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 line set-up and change-over practices, lower-cost sourcing initiatives and facility consolidations. 4 SNAP-ON INCORPORATED Snap-on’s primary customer segments include: (i) commercial and industrial customers, including professionals in critical industries and in emerging markets; (ii) professional vehicle repair technicians who purchase products through the company’s multinational mobile tool distribution network; and (iii) other professional customers related to vehicle repair, including owners and managers of independent service and repair shops, as well as original equipment manufacturer (“OEM”) dealership service and repair shops (“OEM dealerships”).
Biggest changeSnap-on’s primary customer segments include: (i) commercial and industrial customers, including professionals in critical industries and in emerging markets; (ii) professional vehicle repair technicians who purchase products through the company’s multinational mobile tool distribution network; and (iii) other professional customers related to vehicle repair, including owners and managers of independent service and repair shops, as well as original equipment manufacturer (“OEM”) dealership service and repair shops (“OEM dealerships”).
Some of the major trade names and trademarks and the products and services with which they are associated include the following: Names Products and Services Snap-on Hand tools, power tools, tool storage products (including tool control software and hardware), diagnostics, certain equipment and related accessories, mobile tool stores, websites, electronic parts catalogs, warranty analytics solutions, business management systems and services, OEM specialty tools and equipment development and distribution, and OEM facilitation services ATI Aircraft hand tools and machine tools AutoCrib Asset and tool control systems autoVHC Vehicle inspection and training services BAHCO Saw blades, cutting tools, pruning tools, hand tools, power tools and tool storage, including tool control systems Blackhawk Collision repair equipment Blue-Point Hand tools, power tools, tool storage, diagnostics, certain equipment and related accessories Car-O-Liner Collision repair equipment, and information and truck alignment systems Cartec Safety testing, brake testers, test lane equipment, dynamometers, suspension testers, emission testers and other equipment CDI Torque tools Challenger Vehicle lifts Cognitran OEM SaaS products Dealer-FX Service operation solutions and OEM SaaS systems Ecotechnics Vehicle air conditioning service equipment Fastorq Hydraulic torque and tensioning products Fish and Hook Saw blades, cutting tools, pruning tools, hand tools, power tools and tool storage Hofmann Wheel balancers, vehicle lifts, tire changers, wheel aligners, brake testers and test lane equipment Irimo Saw blades, cutting tools, hand tools, power tools and tool storage John Bean Wheel balancers, vehicle lifts, tire changers, wheel aligners, brake testers and test lane equipment Josam Heavy duty alignment and collision repair solutions Lindström Hand tools Mitchell1 Repair and service information, shop management systems and business services Mountz Torque tools Nexiq Diagnostic tools, information and program distributions for fleet and heavy duty equipment Norbar Torque tools Power Hawk Rescue tools and related equipment for military, government, fire and rescue Pro-Cut Brake service equipment and accessories Sandflex Hacksaw blades, bandsaws, saw blades, hole saws and reciprocating saw blades ShopKey Repair and service information, shop management systems and business services Sioux Power tools Sturtevant Richmont Torque tools Sun Diagnostic tools, wheel balancers, vehicle lifts, tire changers, wheel aligners, air conditioning products and emission testers TreadReader Automotive tire drive-over ramps and handheld devices TruckCam Commercial vehicle OEM factory solutions Williams Hand tools, tool storage, certain equipment and related accessories 2023 ANNUAL REPORT 7 Financial Services Snap-on also generates revenue from various financing programs that include: (i) installment sales and lease contracts arising from franchisees’ customers and Snap-on customers who require financing for the purchase or lease of tools, diagnostics, and equipment products on an extended-term payment plan; and (ii) business and vehicle loans and leases to franchisees.
Some of the major trade names and trademarks and the products and services with which they are associated include the following: Names Products and Services Snap-on Hand tools, power tools, tool storage products (including tool control software and hardware), diagnostics, certain equipment and related accessories, mobile tool stores, websites, electronic parts catalogs, warranty analytics solutions, business management systems and services, OEM specialty tools and equipment development and distribution, and OEM facilitation services ATI Aircraft hand tools and machine tools AutoCrib Asset and tool control systems autoVHC Vehicle inspection and training services BAHCO Saw blades, cutting tools, pruning tools, hand tools, power tools and tool storage, including tool control systems Blue-Point Hand tools, power tools, tool storage, diagnostics, certain equipment and related accessories Car-O-Liner Collision repair equipment and information systems Cartec Safety testing, brake testers, test lane equipment, dynamometers, suspension testers, emission testers and other equipment CDI Torque tools Challenger Vehicle lifts Cognitran OEM SaaS products Dealer-FX Service operation solutions and OEM SaaS systems Ecotechnics Vehicle air conditioning service equipment Fastorq Hydraulic torque and tensioning products Fish and Hook Saw blades, cutting tools, pruning tools, hand tools, power tools and tool storage Hofmann Wheel balancers, vehicle lifts, tire changers, wheel aligners, brake testers and test lane equipment Irimo Saw blades, cutting tools, hand tools, power tools and tool storage John Bean Wheel balancers, vehicle lifts, tire changers, wheel aligners, brake testers and test lane equipment Josam Heavy duty alignment and collision repair solutions Lindström Hand tools Mitchell1 Repair and service information, shop management systems and business services Mountz Torque tools Nexiq Diagnostic tools, information and program distributions for fleet and heavy duty equipment Norbar Torque tools Power Hawk Rescue tools and related equipment for military, government, fire and rescue Pro-Cut Brake service equipment and accessories Sandflex Hacksaw blades, bandsaws, saw blades, hole saws and reciprocating saw blades ShopKey Repair and service information, shop management systems and business services Sioux Power tools Sturtevant Richmont Torque tools Sun Diagnostic tools, wheel balancers, vehicle lifts, tire changers, wheel aligners, air conditioning products and emission testers TreadReader Automotive tire drive-over ramps and handheld devices TruckCam Commercial vehicle OEM factory solutions Williams Hand tools, tool storage, certain equipment and related accessories 2024 ANNUAL REPORT 7 Financial Services Snap-on also generates revenue from various financing programs that include: (i) installment sales and lease contracts arising from franchisees’ customers and Snap-on customers who require financing for the purchase or lease of tools, diagnostics, and equipment products on an extended-term payment plan; and (ii) business and vehicle loans and leases to franchisees.
Financial Services consists of the business operations of Snap-on Credit LLC (“SOC”), the company’s financial services business in the United States, and Snap-on’s other financial services subsidiaries in those international markets where Snap-on has franchise operations. See Note 19 to the Consolidated Financial Statements for information on business segments and foreign operations.
Financial Services consists of the business operations of Snap-on Credit LLC (“SOC”), the company’s financial services business in the United States, and Snap-on’s other financial services subsidiaries in those international markets where Snap-on has franchise operations. See Note 19 to the Consolidated Financial Statements for information on operating segments and foreign operations.
Furthermore, through our Snap-on Value Creation Processes, a suite of principles we use every day, the company remains committed to the areas of safety, quality, customer connection, innovation and RCI, which are closely linked to and contribute to improving employee engagement, productivity, and efficiency. 2023 ANNUAL REPORT 11 Successful execution of our way forward is dependent on attracting, developing and retaining key employees and members of our management team, which we achieve through the following: • Snap-on believes strongly in workplace safety.
Furthermore, through our Snap-on Value Creation Processes, a suite of principles we use every day, the company remains committed to the areas of safety, quality, customer connection, innovation and RCI, which are closely linked to and contribute to improving employee engagement, productivity, and efficiency. 2024 ANNUAL REPORT 11 Successful execution of our way forward is dependent on attracting, developing and retaining key employees and members of our management team, which we achieve through the following: • Snap-on believes strongly in workplace safety.
Snap-on will also post any amendments to these documents, or information about any waivers granted to directors or executive officers with respect to the Code of Business Conduct and Ethics, on the company’s website at www.snapon.com . 2023 ANNUAL REPORT 5 Products and Services Tools; Diagnostics, Information and Management Systems; and Equipment Snap-on offers a broad line of products and complementary services that are grouped into three product categories: (i) tools; (ii) diagnostics, information and management systems; and (iii) equipment.
Snap-on will also post any amendments to these documents, or information about any waivers granted to directors or executive officers with respect to the Code of Business Conduct and Ethics, on the company’s website at www.snapon.com . 2024 ANNUAL REPORT 5 Products and Services Tools; Diagnostics, Information and Management Systems; and Equipment Snap-on offers a broad line of products and complementary services that are grouped into three product categories: (i) tools; (ii) diagnostics, information and management systems; and (iii) equipment.
Wheel service and other vehicle service equipment are sold through distributors primarily under brands including Blackhawk, Car-O-Liner, Cartec, Challenger, Ecotechnics, Hofmann, John Bean, and Pro-Cut. Diagnostics and equipment products are marketed through distributors in South America and Asia, and through both a direct sales force and distributors in Europe under the Snap-on, Blue-Point and Sun brands.
Wheel service and other vehicle service equipment are sold through distributors primarily under brands including Car-O-Liner, Challenger, Ecotechnics, Hofmann, John Bean, and Pro-Cut. Diagnostics and equipment products are marketed through distributors in South America and Asia, and through both distributors and a direct sales force in Europe under the Snap-on, Blue-Point and Sun brands.
As of 2023 year end, company-owned routes comprised approximately 5% of the total route population. Snap-on may elect to increase or reduce the number of company-owned routes in the future. As of 2023 year end, Snap-on’s total route count was approximately 4,700, including approximately 3,400 routes in the United States.
As of 2024 year end, company-owned routes comprised approximately 5% of the total route population. Snap-on may elect to increase or reduce the number of company-owned routes in the future. As of 2024 year end, Snap-on’s total route count was approximately 4,700, including approximately 3,400 routes in the United States.
Company Direct Sales A significant proportion of shop equipment sales in North America under the Blackhawk, Car-O-Liner, Challenger, Hofmann, John Bean and Pro-Cut brands, diagnostic products under the Snap-on brand, and information and shop management products under the Mitchell1 brand are made by direct and independent sales forces that have responsibility for national and other accounts.
Company Direct Sales A significant proportion of shop equipment sales in North America under the Car-O-Liner, Challenger, Hofmann, John Bean and Pro-Cut brands, diagnostic products under the Snap-on brand, and information and shop management products under the Mitchell1 and Dealer-FX brands are made by direct and independent sales forces that have responsibility for national and other accounts.
Snap-on offers financing through SOC and the company’s international finance subsidiaries in most markets where Snap-on has franchise operations. Financing revenue from contract originations is recognized over the life of the underlying contracts, with interest or finance charges computed primarily on the average daily balances of the underlying contracts.
Snap-on offers financing through SOC and the company’s international finance subsidiaries in most markets where Snap-on has franchise operations. Financing revenue is recognized over the life of the underlying contracts, with interest or finance charges computed primarily on the average daily balances of the underlying contracts.
Snap-on believes that it complies with applicable environmental and government requirements in its operations. Expenditures on environmental and governmental matters through EH & SMS have not had a material effect upon Snap-on’s capital expenditures, earnings or competitive position. However, the increasing global focus on climate change may result in new or more stringent environmental or climate-related regulations or standards.
Snap-on believes that it complies with applicable environmental and government requirements in its operations. Expenditures on environmental and governmental matters through EH & SMS have not had a material effect upon Snap-on’s capital expenditures, earnings or competitive position. However, the increasing global focus on climate change is resulting in new and/or more stringent environmental or climate-related regulations or standards.
To date, over 300,000 students have earned Snap-on certifications, preparing them for successful and satisfying careers across various technical disciplines.
To date, over 350,000 students have earned Snap-on certifications, preparing them for successful and satisfying careers across various technical disciplines.
As of 2023 year end, Snap-on had industrial sales associates and independent distributors primarily in the United States, Canada and in various European, Latin American, Middle Eastern, Asian and African countries, with the United States representing the majority of Snap-on’s total industrial sales. 2023 ANNUAL REPORT 9 Snap-on also sells software, services and solutions to the automotive, commercial, heavy duty, agriculture, power equipment and power sports segments.
As of 2024 year end, Snap-on had industrial sales associates and independent distributors primarily in the United States, Canada and in various European, Latin American, Middle Eastern, Asia Pacific and African countries, with the United States representing the majority of Snap-on’s total industrial sales. 2024 ANNUAL REPORT 9 Snap-on also sells software, services and solutions to the automotive, commercial, heavy duty, agriculture, power equipment and power sports segments.
The company does not currently anticipate any significant impact in 2024 from raw material and purchased component cost or availability issues.
The company does not currently anticipate any significant impact in 2025 from raw material and purchased component cost or availability issues.
For 2023, Snap-on had an overall safety incident rate of 1.16 (nu mber of injuries and illnesses multiplied by 200,000, divided by hours worked). • Snap-on is committed to its employees and provides developmental opportunities throughout the organization.
For 2024, Snap-on had an overall safety incident rate of 1.08 (nu mber of injuries and illnesses multiplied by 200,000, divided by hours worked). • Snap-on is committed to its employees and provides developmental opportunities throughout the organization.
In 2023 , the company’s total Scope 1 and Scope 2 GHG emissions of 99,021 metric tons of carbon dioxide equivalent (“CO2e”) reflected an intensity of 20.9 (metric tons of CO2e, divided by net sales in millions). 12 SNAP-ON INCORPORATED Snap-on’s sustainability framework is focused on key areas impacting our industry, including energy management, employee health and safety, and material management, and is aligned with the principles of the International Financial Reporting Standards Foundation (formerly known as the Sustainability Accounting Standards Board or “SASB”), which has been consolidated into the International Financial Reporting Standards Foundation.
In 2024 , the company’s total Scope 1 and Scope 2 GHG emissions of 89,085 metric tons of carbon dioxide equivalent (“CO2e”) reflected an intensity of 18.9 (metric tons of CO2e, divided by net sales in millions). 12 SNAP-ON INCORPORATED Snap-on’s sustainability framework is focused on key areas impacting our industry, including energy management, employee health and safety, and material management, and is aligned with the principles of the International Financial Reporting Standards Foundation (formerly known as the Sustainability Accounting Standards Board or “SASB”), which has been consolidated into the International Financial Reporting Standards Foundation.
Snap-on charges nominal initial and ongoing monthly franchise fees. Franchise fee revenue, including nominal, non-refundable initial and ongoing monthly fees (primarily for sales and business training, marketing and product promotion programs, and technology support), is recognized as the fees are earned. Franchise fee revenue totaled $18.7 million, $18.4 million and $17.3 million in fiscal 2023, 2022 and 2021, respectively.
Snap-on charges nominal initial and ongoing monthly franchise fees. Franchise fee revenue, including nominal, non-refundable initial and ongoing monthly fees (primarily for sales and business training, marketing and product promotion programs, and technology support), is recognized as the fees are earned. Franchise fee revenue totaled $19.4 million, $18.7 million and $18.4 million in fiscal 2024, 2023 and 2022, respectively.
As of 2023 year end, Snap-on and its subsidiaries held approximately 890 active and pending patents in the United States and approximately 3,170 active and pending patents outside of the United States. Sales relating to any single patent did not represent a material portion of Snap-on’s revenues in any of the last three years.
As of 2024 year end, Snap-on and its subsidiaries held approximately 940 active and pending patents in the United States and approximately 3,420 active and pending patents outside of the United States. Sales relating to any single patent did not represent a material portion of Snap-on’s revenues in any of the last three years.
While such regulations have historically created select opportunities for our business operations, the company continually monitors developments in this area. Human Capital Management As of December 30, 2023, Snap-on employed approximately 13,200 people worldwide, of which approximately 7,500 were employed in the United States and approximately 5,700 were outside the United States.
While such regulations have historically created select opportunities for our business operations, the company continually monitors developments in this area. Human Capital Management As of December 28, 2024, Snap-on employed approximately 13,000 people worldwide, of which approximately 7,300 were employed in the United States and approximately 5,700 were outside the United States.
The following table shows the consolidated net sales of these product categories for the last three years: Net Sales (Amounts in millions) 2023 2022 2021 Product Category: Tools $ 2,528.9 $ 2,399.4 $ 2,343.0 Diagnostics, information and management systems 991.2 942.4 892.5 Equipment 1,210.1 1,151.0 1,016.5 $ 4,730.2 $ 4,492.8 $ 4,252.0 The tools product category includes hand tools, power tools, tool storage products and other similar products.
The following table shows the consolidated net sales of these product categories for the last three years: Net Sales (Amounts in millions) 2024 2023 2022 Product Category: Tools $ 2,546.2 $ 2,528.9 $ 2,399.4 Diagnostics, information and management systems 1,028.1 991.2 942.4 Equipment 1,133.1 1,210.1 1,151.0 $ 4,707.4 $ 4,730.2 $ 4,492.8 The tools product category includes hand tools, power tools, tool storage products and other similar products.
The company also provides financing programs to facilitate the sales of its products and to support its franchise business. Snap-on markets its products and brands worldwide in more than 130 countries. Snap-on’s largest geographic markets include the United States, Europe, Canada and Asia Pacific.
The company also provides financing programs to facilitate the sales of its products and to support its franchise business. Snap-on markets its products and brands worldwide in more than 130 countries. Snap-on’s largest geographic market is the United States.
Additional information related to these plans is included in Notes 11 and 13 to the Consolidated Financial Statements. Other benefits, including skill training and tuition assistance programs, are available to employees, but vary from location to location. • Snap-on seeks to advance our progress on diversity and inclusion within our company and is committed to providing equal opportunities.
Additional information related to these plans is included in Notes 11 and 13 to the Consolidated Financial Statements. Other benefits, including skill training and tuition assistance programs, are available to employees, but vary from location to location. • Snap-on is committed to providing equal opportunities across all of our stakeholders and the company does not tolerate discrimination.
Resources Raw Materials and Purchased Product Snap-on’s supply of raw materials, including steel, and purchased components are generally available from numerous suppliers and the company continuously works to expand and enhance supplier relationships to meet its supply needs.
Resources Raw Materials and Purchased Product Snap-on’s supply of raw materials, including steel, and purchased components are generally available from numerous suppliers and the company continuously works to expand and enhance supplier relationships to meet its supply needs. Snap-on believes it has secured sufficient raw materials and purchased components for the near future to meet the expected general sales demand.
Additionally, to further our support of makers and fixers, both within and outside our company, Snap-on is partnering with national nonprofit organizations and community colleges to leverage career and technical education to expand the opportunities for underrepresented groups in our facilities, as well as in the critical industries we serve and beyond.
To further our support of makers and fixers, both within and outside our company, Snap-on is partnering with national nonprofit organizations and community colleges to leverage career and technical education to expand the opportunities in our facilities, as well as in the critical industries we serve and beyond, for people from all walks of life. • Snap-on’s people and the behaviors they display define our success, including integrity, respect and teamwork.
Snap-on evaluates the performance of its operating segments based on segment revenues and segment operating earnings. The Snap-on Tools Group segment revenues include external net sales, while the Commercial & Industrial Group and the Repair Systems & Information Group segment revenues include both external and intersegment net sales.
Snap-on evaluates the performance of the Commercial & Industrial Group, the Snap-on Tools Group and the Repair Systems & Information Group operating segments based on segment net sales and segment operating earnings while the Financial Services operating segment is evaluated based on segment revenue and segment operating earnings.
Additionally, on a global basis, approximately 2,700 employees are represented by unions and/or covered under collective bargaining agreements with varying expiration dates through 2026. In recent years, Snap-on has not experienced any significant work slowdowns, stoppages or other labor disruptions.
Recently filed EEO-1 data is available under “ESG Reporting” in the “Investors” section of the company’s website at www.snapon.com . Additionally, on a global basis, approximately 2,300 employees are represented by unions and/or covered under collective bargaining agreements with varying expiration dates through 2027. In recent years, Snap-on has not experienced any significant work slowdowns, stoppages or other labor disruptions.
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) the Snap-on Tools Group; (iii) the Repair Systems & Information Group; and (iv) Financial Services.
Snap-on’s reportable operating segments are: (i) the Commercial & Industrial Group; (ii) the Snap-on Tools Group; (iii) the Repair Systems & Information Group; and (iv) Financial Services.
Snap-on’s Financial Services customer segment includes: (i) franchisees’ customers, principally serving vehicle repair technicians, and Snap-on customers who require financing for the purchase or lease of tools, diagnostics, and equipment products on an extended-term payment plan; and (ii) franchisees who require financing options for vehicle and business needs.
Snap-on’s Financial Services customer segment includes: (i) franchisees’ customers, principally serving vehicle repair technicians, and Snap-on customers who require financing for the purchase or lease of tools, diagnostics, and equipment products on an extended-term payment plan; and (ii) franchisees who require financing options for vehicle and business needs. 4 SNAP-ON INCORPORATED Snap-on’s operating segments, which represent Snap-on’s reportable segments, are based on the organizational structure used by the Chief Executive Officer, its chief operating decision maker (“CODM”), to make operating and investment determinations and to assess performance.
Snap-on accounts for intersegment net sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments. Identifiable assets by segment are those assets used in the respective reportable segment’s operations. Corporate assets consist of cash and cash equivalents (excluding cash held at Financial Services), deferred income taxes and certain other assets.
Identifiable assets by segment are those assets used in the respective reportable segment’s operations. Corporate assets consist of cash and cash equivalents (excluding cash held at Financial Services), deferred income taxes and certain other assets. Corporate expenses primarily reflect stock-based compensation and other costs not attributable to an operating segment.
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Snap-on believes it has secured a sufficient amount of raw materials and purchased components for the near future to meet the expected general sales demand.
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In addition, Snap-on has a meaningful presence across continental Europe and in the Asia Pacific region, as well as in Canada and the United Kingdom.
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Based on Snap-on’s most recently filed EEO-1 data, which is available under “ESG Reporting” in the “Investors” section of the company’s website at www.snapon.com , females constitut e 26.4% and minorities constitute 25.2% of th e company’s workforce in the United States.
Added
Savings from Snap-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 line set-up and change-over practices, lower-cost sourcing initiatives and facility consolidations.
Removed
The company does not tolerate discrimination. As part of our efforts, Snap-on has instituted company-wide training on inclusion and unconscious bias, and has expanded internship, mentorship and recruitment activities for underrepresented groups.
Added
The Snap-on Tools Group segment net sales reflect external net sales, while the Commercial & Industrial Group and the Repair Systems & Information Group segment net sales include both external and intersegment net sales. Snap-on accounts for intersegment net sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments.
Removed
The company is also investing in and building relationships with several Historically Black Colleges and Universities (HBCUs) to help advance their missions and broaden the pipeline of Black engineers and other technically trained graduates. • Snap-on’s people and the behaviors they display define our success, including integrity, respect and teamwork.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeData security and information technology infrastructure and security are critical to supporting business objectives; failure of our systems, as well as those of third parties with which we do business, to operate effectively could adversely affect our business and reputation.
Biggest changeMoreover, since each distribution method has distinct risks and costs, our failure to implement the most advantageous balance in the delivery model for our products and services could adversely affect our revenue and profitability. 2024 ANNUAL REPORT 15 Data security and information technology infrastructure and security are critical to supporting business objectives; failure of our systems, as well as those of third parties with which we do business, to operate effectively could adversely affect our business and reputation.
If our franchisees are not successful, or if we do not maintain an effective relationship with our franchisees, the delivery of products, the collection of receivables and/or our relationship with end users could be adversely affected and thereby negatively impact our business, financial condition, results of operations and cash flows. 2023 ANNUAL REPORT 13 In addition, if we are unable to maintain effective relationships with franchisees, Snap-on or the franchisees may choose to terminate the relationship, which may result in: (i) open routes, in which end-user customers are not provided reliable service; (ii) litigation resulting from termination; (iii) reduced collections or increased charge-offs of franchisee receivables owed to Snap-on; and/or (iv) reduced collections or increased charge-offs of finance and contract receivables.
If our franchisees are not successful, or if we do not maintain an effective relationship with our franchisees, the delivery of products, the collection of receivables and/or our relationship with end users could be adversely affected and thereby negatively impact our business, financial condition, results of operations and cash flows. 2024 ANNUAL REPORT 13 In addition, if we are unable to maintain effective relationships with franchisees, Snap-on or the franchisees may choose to terminate the relationship, which may result in: (i) open routes, in which end-user customers are not provided reliable service; (ii) litigation resulting from termination; (iii) reduced collections or increased charge-offs of franchisee receivables owed to Snap-on; and/or (iv) reduced collections or increased charge-offs of finance and contract receivables.
Adverse developments in the credit and financial markets could negatively impact the availability of credit that we and our customers need to operate our businesses. We depend upon the availability of credit to operate our business, including the financing of receivables from end-user customers that are originated by our financial services businesses.
Adverse developments in the credit and financial markets could negatively impact the availability of credit that we and our customers need to operate our businesses. From time to time we depend upon the availability of credit to operate our business, including the financing of receivables from end-user customers that are originated by our financial services businesses.
Raw materials, components and certain purchased finished goods can exhibit price and demand cyclicality, including as a result of tariffs, other trade protection measures, inflationary factors, and supply chain inefficiencies. Associated unexpected variability has resulted, and in the future could result, in an increase in product costs and require Snap-on to increase prices to maintain margins.
Raw materials, components and certain purchased finished goods can exhibit price and demand cyclicality, including as a result of tariffs, other trade protection measures, inflationary factors, and supply chain inefficiencies. Associated unexpected variability has resulted, and in the future could result, in an increase in product costs and require Snap-on to increase prices or reduce costs to maintain margins.
While we believe that advances in vehicle technologies provide us with opportunities to develop innovative products and solutions for the vehicle repair market, if we are not able to effectively execute on those possibilities, our business and results of operations could suffer. The performance of Snap-on’s mobile tool distribution business depends on the success of its franchisees.
While we believe that changes in vehicle technologies provide us with opportunities to develop innovative products and solutions for the vehicle repair market, if we are not able to effectively execute on those possibilities, our business and results of operations could suffer. The performance of Snap-on’s mobile tool distribution business depends on the success of its franchisees.
As we integrate, implement and deploy new information technology processes and enhance our information infrastructure across our global operations, we could experience disruptions that could have an adverse effect on our business, financial condition, results of operations and cash flows. Failure to attract, retain and effectively manage qualified personnel could lead to a loss of revenue and/or profitability.
As we integrate, implement and deploy new information technology processes and enhance our information infrastructure across our global operations, we could experience disruptions that may have an adverse effect on our business, financial condition, results of operations and cash flows. Failure to attract, develop, retain and effectively manage qualified personnel could lead to a loss of revenue and/or profitability.
We are required to perform impairment tests on our goodwill and other intangible assets annually or at any time when events occur that could impact the value of our business segments. Our determination of whether impairment has occurred is based on a comparison of each of our reporting units’ fair market value with its carrying value.
We are required to perform impairment tests on our goodwill and other intangible assets annually or at any time when events occur that could impact the value of our operating segments. Our determination of whether impairment has occurred is based on a comparison of each of our reporting units’ fair market value with its carrying value.
Any prolonged disruption in the operations of our existing manufacturing facilities, whether due to technical or labor difficulties, facility consolidation or closure actions, lack of raw material or component availability, destruction of or damage to any facility (as a result of natural disasters, climate or weather events, use and storage of hazardous materials, armed conflicts, sabotage, terrorism, civil unrest or other events), or other reasons, including outbreaks of infectious diseases, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Any prolonged disruption in the operations of our existing manufacturing facilities, whether due to technical or labor difficulties, facility expansion, consolidation or closure actions, lack of raw material or component availability, destruction of or damage to any facility (as a result of natural disasters, climate or weather events, use and storage of hazardous materials, armed conflicts, sabotage, terrorism, civil unrest, fire, flood or other events), or other reasons, including outbreaks of infectious diseases, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
In addition, technological developments and enhancements of products and service offerings in our industry may require our expanded use of artificial intelligence (“AI”) and machine learning; if we are unable to keep pace with the rate of these and other developments, our ability to effectively compete could be adversely affected.
In addition, technological developments and enhancements of products and service offerings in our industry may require our expanded use of artificial intelligence (“AI”); if we are unable to keep pace with the rate of these and other developments, our ability to effectively compete could be adversely affected.
Foreign Corrupt Practices Act. Risks related to our non-U.S. operations could further include currency volatility, transportation delays or interruptions, sovereign debt uncertainties and difficulties in enforcement of contract and intellectual property rights, as well as reputational risks related to, among other factors, different standards and practices among countries.
Foreign Corrupt Practices Act. Risks related to our non-U.S. operations could further include currency volatility, supply chain inefficiencies, transportation delays or interruptions, sovereign debt uncertainties and difficulties in enforcement of contract and intellectual property rights, as well as reputational risks related to, among other factors, different standards and practices among countries.
Failure to comply with any of these laws or regulations could also result in civil, criminal, monetary and/or non-monetary penalties, damage to our reputation, and/or require significant remediation costs. 2023 ANNUAL REPORT 19 In recent years there has been increased public awareness, concern and focus on environmental and sustainability issues, including matters related to climate change, and we expect these trends to continue.
Failure to comply with any of these laws or regulations could also result in civil, criminal, monetary and/or non-monetary penalties, damage to our reputation, and/or require significant remediation costs. In recent years there has been increased public awareness, concern and focus on environmental and sustainability issues, including matters related to climate change, and we expect these trends to continue.
These also include changes in government policies and regulations, including those intended to address climate change, imposition or increases in withholding and other taxes on remittances and other payments by international subsidiaries, increases in trade sanctions and other related measures, as well as exposure to liabilities under anti-bribery and anti-corruption laws in various countries, such as the U.S.
These also include changes in government policies and regulations, including those intended to address climate change and other sustainability-related factors, imposition of, or increases in withholding and other taxes on remittances and other payments by international subsidiaries, increases in trade sanctions, tariffs and other related measures, as well as exposure to liabilities under anti-bribery and anti-corruption laws in various countries, such as the U.S.
The company’s allowances may not be adequate to cover actual losses, and future provisions for credit losses could materially and adversely affect our financial condition, results of operations and cash flows. 2023 ANNUAL REPORT 17 Foreign operations are subject to currency exchange, inflation, interest and other risks that could adversely affect our business, financial condition, results of operations and cash flows.
The company’s allowances may not be adequate to cover actual losses, and future provisions for credit losses could materially and adversely affect our financial condition, results of operations and cash flows. Foreign operations are subject to currency exchange, inflation, interest and other risks that could adversely affect our business, financial condition, results of operations and cash flows.
Approximately 28% of our revenues in 2023 were generated outside of the United States. Future growth rates and success of our business depends in large part on continued growth in our non-U.S. operations, including growth in emerging markets and critical industries. Numerous risks and uncertainties affect our non-U.S. operations.
Approximately 29% of our revenues in 2024 were generated outside of the United States. Future growth rates and success of our business depends in large part on continued growth in our non-U.S. operations, including growth in emerging markets and critical industries. Numerous risks and uncertainties affect our non-U.S. operations.
Changes in plan demographics, including an increase in the number of retirements or changes in life expectancy assumptions, may also increase the costs and funding requirements of the obligations related to the company’s pension plans. 18 SNAP-ON INCORPORATED Our pension plan obligations are affected by changes in market interest rates.
Changes in plan demographics, including an increase in the number of retirements or changes in life expectancy assumptions, may also increase the costs and funding requirements of the obligations related to the company’s pension plans. Our pension plan obligations are affected by changes in market interest rates.
We, our franchisees and our customers, and the economy as a whole, also may be affected by future world or local events outside our control, such as tariffs and other trade protection measures put in place by the United States or other countries, acts of terrorism, developments in the war on terrorism, armed conflicts (including the current war in Ukraine, an escalation of the conflict in the Middle East, and other regional conflicts), civil unrest, conflicts in international situations, weather events and natural disasters, outbreaks of infectious diseases, as well as government-related developments or issues, including changes in tax laws and regulations, new or enhanced regulations related to climate change and other sustainability matters, and changes in financial accounting standards.
We, our franchisees and our customers, and the economy as a whole, also may be affected by future world or local events outside our control, such as tariffs and other trade protection measures put in place by the United States or other countries, acts of terrorism, developments in the war on terrorism, armed conflicts (including the ongoing war in Ukraine, as well as conflicts in the Middle East and other regions), civil unrest, conflicts in international situations, supply chain inefficiencies, labor interruptions, weather events and natural disasters, outbreaks of infectious diseases, as well as government-related developments or issues, including changes in tax laws and regulations, new or enhanced regulations related to climate change and other sustainability matters, and changes in financial accounting standards.
Adverse developments in the credit and financial markets, or unfavorable changes in Snap-on’s credit rating, could negatively impact the availability of future financing and the terms on which it might be available to Snap-on, its end-user customers, franchisees and suppliers.
Our end-user customers, franchisees and suppliers also require access to credit for their businesses. Adverse developments in the credit and financial markets, or unfavorable changes in Snap-on’s credit rating, could negatively impact the availability of future financing and the terms on which it might be available to Snap-on, its end-user customers, franchisees and suppliers.
The company maintains allowances for credit losses for receivables to provide for defaults and nonperformance. These allowances represent an estimate of 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.
These allowances represent an estimate of 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.
Successfully managing the interaction of our distribution efforts to reach various potential customer segments for our products and services is a complex process.
We use a variety of distribution methods to sell our products and services. Successfully managing the interaction of our distribution efforts to reach various potential customer segments for our products and services is a complex process.
If circumstances surrounding our customers’ ability to repay their credit obligations were to deteriorate and result in the write-down or write-off of such receivables, it would negatively affect our operating results for the relevant period and, if large, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If circumstances surrounding our customers’ ability to repay their credit obligations were to deteriorate and result in the write-down or write-off of such receivables, it would negatively affect our operating results for the relevant period and, if large, could have a material adverse effect on our business, financial condition, results of operations and cash flows. 2024 ANNUAL REPORT 17 The company maintains allowances for credit losses for receivables to provide for defaults and nonperformance.
Approximately 41% of our consolidated net revenues in 2023 were generated by the Snap-on Tools Group, which consists of Snap-on’s business operations primarily serving vehicle service and repair technicians through the company’s multinational mobile tool distribution channel.
Approximately 39% of our consolidated net revenues (net sales plus financial services revenue) in 2024 were generated by the Snap-on Tools Group, which consists of Snap-on’s business operations primarily serving vehicle service and repair technicians through the company’s multinational mobile tool distribution channel.
Business Risks The sales of many of our products are dependent on the health of the vehicle repair market and the changing requirements of vehicle repair. We believe sales of many of our products are dependent on the changing vehicle repair requirements, the number of vehicles on the road, the general aging of vehicles and the number of miles driven.
Business Risks The sales of many of our products are dependent on the health of the vehicle repair market and the changing requirements of vehicle repair. We believe sales of many of our products are dependent on the general aging of vehicles, increases in vehicle complexity, changes in vehicle technologies and the number of vehicles on the road.
Significant changes to legislative and regulatory activity, and compliance burdens, including those associated with: (i) sales to our government, military and defense contractor customers; and (ii) classification of third parties, including our franchisees, as independent from the company, as well as the manner in which they are applied, could significantly impact our business and the economy as a whole.
Significant changes to legislative and regulatory activity, and compliance burdens, including those associated with: (i) sales to our government, military and defense contractor customers; and (ii) classification of third parties, including our franchisees, as independent from the company, as well as the manner in which they are applied, could significantly impact our business and the economy as a whole. 2024 ANNUAL REPORT 19 Financial services businesses of all kinds are subject to significant and complex regulations and enforcement.
However, there can be no assurance that the value of the pension plan assets, or the investment returns on those plan assets, will be sufficient to meet the future benefit obligations of such plans.
Additional contributions to enhance the funded status of the pension plans can be made at the company’s discretion. However, there can be no assurance that the value of the pension plan assets, or the investment returns on those plan assets, will be sufficient to meet the future benefit obligations of such plans.
Adverse outcomes or settlements could also require us to pay damages, potentially in excess of amounts reserved, or incur liability for other remedies that could have a material adverse effect on our business, reputation, financial condition, results of operations and cash flows.
Adverse outcomes or settlements could also require us to pay damages, potentially in excess of amounts reserved, or incur liability for other remedies that could have a material adverse effect on our business, reputation, financial condition, results of operations and cash flows. 20 SNAP-ON INCORPORATED Our operations expose us to the risk of environmental liabilities, costs, litigation and violations that could adversely affect our financial condition, results of operations and reputation.
A significant decrease in market interest rates and a decrease in the fair value of plan assets would increase net pension expense and may adversely affect the company’s future financial results. See Note 11 to the Consolidated Financial Statements for additional information on the company’s pension plans.
A significant decrease in market interest rates and a decrease in the fair value of plan assets would increase net pension expense and may adversely affect the company’s future financial results.
Required funding for the company’s domestic defined benefit pension plans is determined in accordance with guidelines set forth in the federal Employee Retirement Income Security Act (“ERISA”); foreign defined benefit pension plans are funded in accordance with local statutes or practice. Additional contributions to enhance the funded status of the pension plans can be made at the company’s discretion.
The assets of the pension plans are diversified in an attempt to mitigate the risk of a large loss. Required funding for the company’s domestic defined benefit pension plans is determined in accordance with guidelines set forth in the federal Employee Retirement Income Security Act (“ERISA”); foreign defined benefit pension plans are funded in accordance with local statutes or practice.
Intellectual property rights are an important and integral component of our business and failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business.
Failure to adequately protect intellectual property, or claims of infringement, could adversely affect our business, reputation, financial condition, results of operations and cash flows. Intellectual property rights are an integral component of our business and failure to obtain or maintain adequate protection of these rights for any reason could have a material adverse effect on our business.
The current focus on these matters is expected to result in additional and/or more restrictive regulations, such as the Corporate Sustainability Reporting Directive (CSRD) in the European Union and the proposed SEC regulations relating to climate change disclosures, and industry or third-party requirements and standards to reduce or mitigate climate change as well as other environmental or sustainability risks.
The current focus on these matters is resulting in additional and/or more restrictive regulations, such as the Corporate Sustainability Reporting Directive (CSRD) in the European Union and the currently stayed SEC regulations relating to climate change disclosures.
The recognition of impairment charges on goodwill or other intangible assets could adversely impact our future financial condition and results of operations. We have a substantial amount of goodwill and purchased intangible assets, almost all of which are booked in the Commercial & Industrial Group and in the Repair Systems & Information Group.
We have a substantial amount of goodwill and purchased intangible assets, almost all of which are booked in the Commercial & Industrial Group and in the Repair Systems & Information Group.
The inability to continue to introduce new products that respond to customer needs and achieve market acceptance could result in lower revenues and reduced profitability. Sales from new products represent a significant portion of our net sales and are expected to continue to represent a significant component of our future net sales.
The inability to continue to introduce new products that respond to customer needs and achieve market acceptance could result in lower revenues and reduced profitability. The introduction of new products is an important element of our business.
Should the economic environment in our non-U.S. markets deteriorate from current levels, our results of operations and financial position could be materially impacted, including as a result of the effects of potential impairment write-downs of goodwill and/or other intangible assets related to these businesses. 14 SNAP-ON INCORPORATED As part of the agreement related to the United Kingdom’s (“U.K.”) departure from the European Union (“Brexit”), there is a new series of customs and regulatory checks, including rules of origin and stringent local content requirements.
Should the economic environment in our non-U.S. markets deteriorate from current levels, our results of operations and financial position could be materially impacted, including as a result of the effects of potential impairment write-downs of goodwill and/or other intangible assets related to these businesses. 14 SNAP-ON INCORPORATED The Russian invasion of Ukraine and the ongoing conflict in the region has led to sanctions and actions taken against Russia and Belarus by the United States, the United Kingdom, the European Union and others.
In addition, we may incur costs related to remedial efforts or alleged environmental damage associated with past or current waste disposal practices.
In addition, we may incur costs related to remedial efforts or alleged environmental damage associated with past or current waste disposal practices. We cannot provide assurance that our costs of complying with current or future environmental protection and health and safety laws will not exceed our estimates.
We conduct business in many countries, which requires us to interpret the income tax laws and rulings in each of those taxing jurisdictions.
The inability to successfully defend claims from taxing authorities and changes in tax laws and rules could adversely affect our financial condition, results of operations and cash flows. We conduct business in many countries, which requires us to interpret the income tax laws and rulings in each of those taxing jurisdictions.
Our competitors’ new products may beat our products to market, be more effective, contain more features, be less expensive than our products, and/or render our products obsolete.
Our competitors’ new products may beat our products to market, be more effective, contain more features, be less expensive than our products, and/or render our products obsolete. Any new products that we develop may not receive market acceptance or otherwise generate any meaningful net sales or profits for us relative to our expectations.
Energy price increases raise both our operating costs and the costs of our materials, and we may not be able to increase our prices enough to offset these costs in certain areas.
Energy price increases raise both our operating costs and the costs of our materials, and we may not be able to increase our prices enough to offset these costs. Higher prices also may reduce the level of future customer orders and our profitability. Failure to maintain effective distribution of products and services could adversely impact revenue and profitability.
Therefore, we cannot give assurances that credit will be available on terms that we consider attractive, or at all, if and when necessary or beneficial to us. Failure to achieve expected investment returns on pension plan assets, as well as changes in interest rates or plan demographics, could adversely impact our results of operations, financial condition and cash flows.
Failure to achieve expected investment returns on pension plan assets, as well as changes in interest rates or plan demographics, could adversely impact our results of operations, financial condition and cash flows. Snap-on sponsors various defined benefit pension plans (the “pension plans”).
The timing of certain of these regulations has yet to be determined. Increased regulatory requirements or standards may result in increased compliance or input costs, including those related to energy or raw materials, for us and our suppliers.
In addition, various industry and third-party requirements or standards have been developed that are intended to reduce or mitigate climate change as well as other environmental or sustainability risks. Increased regulatory requirements or standards may result in increased compliance or input costs, including those related to energy or raw materials, for us and our suppliers.
The war in Ukraine has not had a material impact on our business and operations; however, expansion of the conflict beyond its current geographic, political and economic scope could adversely impact our business, results of operations and financial condition.
Expansion of the conflict or changes in governmental and/or third party responses or actions could adversely impact our business, results of operations and financial condition.
In addition, the number of electric and hybrid vehicles developed and sold has risen in recent years, and is expected to continue to increase in the future.
In addition, the development of emerging vehicle drivetrains and advanced driver assistance systems (ADAS) has increased in recent years, and further innovation is expected to continue in the future.
Removed
Any new products that we develop may not receive market acceptance or otherwise generate any meaningful net sales or profits for us relative to our expectations based on, among other factors, existing and anticipated investments in manufacturing capacity and commitments to fund advertising, marketing, promotional programs and research and development.
Added
In addition, other risks and uncertainties not currently known to the company, or which Snap-on currently believes are not material, may become material and also negatively impact the company’s business, operating results, cash flows, financial condition and/or reputation.
Removed
Failure to adequately protect intellectual property, or claims of infringement, could adversely affect our business, reputation, financial condition, results of operations and cash flows.
Added
Our efforts are intended to reduce the risk of, or moderate the consequences of, potential cyber threats and incidents.
Removed
There are also restrictions on the free movement of people and temporary visas for work-related purposes have been re-introduced.
Added
As previously disclosed, in 2022, the company experienced and responded to a cyber incident that did not have a significant impact on the results of our operations.
Removed
The implications of Brexit, including disruptions to trade and the movement of goods, services and people between the U.K. and the European Union or other countries, may lead to additional cost, delays and volatility in currency exchange rates, as well as create legal and global economic uncertainty.
Added
See Note 11 to the Consolidated Financial Statements for additional information on the company’s pension plans. 18 SNAP-ON INCORPORATED The recognition of impairment charges on goodwill or other intangible assets could adversely impact our future financial condition and results of operations.
Removed
These and other potential implications could adversely affect our business and results of operations. The February 2022 Russian invasion of Ukraine and the ongoing conflict in the region has led to sanctions and actions taken against Russia and Belarus by the United States, the U.K., the European Union and others.
Added
Therefore, we cannot give assurances that credit will be available on terms that we consider attractive, or at all, if and when necessary or beneficial to us.
Removed
Higher prices also may reduce the level of future customer orders and our profitability. 2023 ANNUAL REPORT 15 Failure to maintain effective distribution of products and services could adversely impact revenue, gross margin and profitability. We use a variety of distribution methods to sell our products and services.
Removed
Moreover, since each distribution method has distinct risks, costs and gross margins, our failure to implement the most advantageous balance in the delivery model for our products and services could adversely affect our revenue, gross margins and profitability.
Removed
In the first quarter of 2022, as previously disclosed, Snap-on detected unusual activity in some areas of its information technology environment, quickly took down its network connections as part of the company’s defense protocols, launched a comprehensive analysis assisted by a leading external forensics firm, and notified law enforcement.
Removed
The company continued to pursue its commercial activities and restored connections as system interfaces were cleared. This incident did not have a significant impact on the results of our operations, and we are not currently aware of a security breach at any third-party service provider that we believe could significantly affect our operations.
Removed
Our end-user customers, franchisees and suppliers also require access to credit for their businesses. At times, world financial markets have been unstable and subject to uncertainty.
Removed
Snap-on sponsors various defined benefit pension plans (the “pension plans”). The assets of the pension plans are diversified in an attempt to mitigate the risk of a large loss.
Removed
Financial services businesses of all kinds are subject to significant and complex regulations and enforcement.
Removed
Our operations expose us to the risk of environmental liabilities, costs, litigation and violations that could adversely affect our financial condition, results of operations and reputation.
Removed
We cannot provide assurance that our costs of complying with current or future environmental protection and health and safety laws will not exceed our estimates. 20 SNAP-ON INCORPORATED The inability to successfully defend claims from taxing authorities and changes in tax laws and rules could adversely affect our financial condition, results of operations and cash flows.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeElements of the cybersecurity program include: • A cross-functional approach to addressing and managing the risk from cybersecurity threats and incidents involving management personnel from operations, legal, risk, finance, information technology and other key business functions, and with oversight by the Board of Directors. • Collaboration mechanisms with public and private entities, including intelligence and enforcement agencies (such as the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency), industry groups, consultants and other third-party service providers to identify and assess cybersecurity risks. • Technical safeguards intended to protect the Company’s information systems from cybersecurity threats, including data encryption, firewalls, threat monitoring, intrusion prevention and detection systems, anti-malware, access controls, privilege management, network segmentation, asset and end point management, and ongoing system security assessments. 2023 ANNUAL REPORT 21 • Annual training for personnel regarding cybersecurity threats based on their roles, responsibilities, and levels of system access. • A risk-based approach to identifying and monitoring cybersecurity risks presented by third parties, such as vendors and service providers, that includes periodic assessments. • A data incident response plan that addresses the Company’s response to a cybersecurity threat or incident.
Biggest changeThe company’s cybersecurity program is designed to detect, contain and respond to cybersecurity threats and incidents in a prompt and effective manner with the primary goals of protecting information assets, preventing the misuse and loss of those assets, minimizing disruptions to the business, and establishing the basis for audits and risk assessments. 2024 ANNUAL REPORT 21 Elements of the cybersecurity program include: • A cross-functional approach to addressing and managing the risk from cybersecurity threats and incidents involving management personnel from operations, legal, risk, finance, information technology and other key business functions, and with oversight by the Board of Directors. • Collaboration mechanisms with public and private entities, including intelligence and enforcement agencies (such as the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency), industry groups, consultants and other third-party service providers to identify and assess cybersecurity risks. • Technical safeguards intended to protect the company’s information systems from cybersecurity threats, including data encryption, firewalls, threat monitoring, intrusion prevention and detection systems, anti-malware, access controls, privilege management, network segmentation, asset and end point management, and ongoing system security assessments. • Annual training for personnel regarding cybersecurity threats based on their roles, responsibilities, and levels of system access. • A risk-based approach to identifying and monitoring cybersecurity risks presented by third parties, such as vendors and service providers, that includes periodic assessments. • A data incident response plan that addresses the company’s response to a cybersecurity threat or incident.
The VP of IT has served in information technology leadership roles at Snap-on for over 12 years. In addition to regularly updating senior management on information security matters as part of the Company’s quarterly business review process, the CIO provides a dedicated presentation to the Board of Directors on information security matters at least once per year.
The VP of IT has served in information technology leadership roles at Snap-on for over 13 years. In addition to regularly updating senior management on information security matters as part of the company’s quarterly business review process, the CIO provides a dedicated presentation to the Board of Directors on information security matters at least once per year.
The Chief Executive Officer informs the Board of Directors and the Audit Committee regarding any significant incidents as well as collaborates on management’s recommendations concerning materiality. Management also facilitates external communications, as appropriate. 22 SNAP-ON INCORPORATED Management of cybersecurity risk is overseen by the Company’s Board of Directors and is supported by the Audit Committee.
The Chief Executive Officer informs the Board of Directors and the Audit Committee regarding any significant incidents as well as collaborates on management’s recommendations concerning materiality. Management also facilitates external communications, as appropriate. Management of cybersecurity risk is overseen by the company’s Board of Directors and is supported by the Audit Committee.
The Incident Response Team also coordinates communications with internal and external stakeholders. The Incident Response Team leads the materiality assessment with input and guidance from senior management, including the Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer.
The Incident Response Team also coordinates communications with internal and external stakeholders. 22 SNAP-ON INCORPORATED The Incident Response Team leads the materiality assessment with input and guidance from senior management, including the Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer.
Removed
The Company’s cybersecurity program is designed to detect, contain and respond to cybersecurity threats and incidents in a prompt and effective manner with the primary goals of protecting information assets, preventing the misuse and loss of those assets, minimizing disruptions to the business, and establishing the basis for audits and risk assessments.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocations: Elkmont, Alabama Manufacturing Owned SOT Conway, Arkansas Manufacturing and distribution Owned and leased RS&I City of Industry, California Manufacturing Leased C&I San Diego, California Software development Owned RS&I San Jose, California Software development Leased RS&I Tustin, California Manufacturing and distribution Leased C&I Columbus, Georgia Distribution Owned C&I Crystal Lake, Illinois Distribution Owned and leased SOT Libertyville, Illinois Financial services Leased FS Lincolnshire, Illinois Software development Owned RS&I Algona, Iowa Manufacturing and distribution Owned SOT Louisville, Kentucky Manufacturing and distribution Leased RS&I Olive Branch, Mississippi Distribution Owned SOT Carson City, Nevada Distribution Owned and leased SOT Murphy, North Carolina Manufacturing and distribution Owned and leased C&I Richfield, Ohio Software development Owned RS&I Robesonia, Pennsylvania Distribution Owned SOT Elizabethton, Tennessee Manufacturing Owned SOT Kenosha, Wisconsin Distribution and corporate Owned SOT, C&I, RS&I Milwaukee, Wisconsin Manufacturing Owned SOT Pleasant Prairie, Wisconsin Distribution Owned SOT, C&I, RS&I Non-U.S.
Biggest changeLocations: Elkmont, Alabama Manufacturing Owned SOT Conway, Arkansas Manufacturing and distribution Owned and leased RS&I City of Industry, California Manufacturing Leased C&I San Diego, California Software development Owned RS&I San Jose, California Software development Leased RS&I Tustin, California Manufacturing and distribution Leased C&I Columbus, Georgia Distribution Owned C&I Crystal Lake, Illinois Distribution Owned and leased SOT Libertyville, Illinois Financial services Leased FS Lincolnshire, Illinois Software development Owned RS&I Algona, Iowa Manufacturing and distribution Owned SOT Louisville, Kentucky Manufacturing and distribution Leased RS&I Olive Branch, Mississippi Distribution Owned SOT Carson City, Nevada Distribution Owned and leased SOT Murphy, North Carolina Manufacturing and distribution Owned and leased C&I Richfield, Ohio Software development Owned RS&I Robesonia, Pennsylvania Distribution Owned SOT Elizabethton, Tennessee Manufacturing Owned SOT Kenosha, Wisconsin Manufacturing, distribution and corporate Owned SOT, C&I, RS&I Milwaukee, Wisconsin Manufacturing Owned SOT Pleasant Prairie, Wisconsin Distribution Owned and leased SOT, C&I, RS&I Non-U.S.
Snap-on management continually monitors the company’s capacity needs and makes adjustments as dictated by market and other conditions. 2023 ANNUAL REPORT 23 The following table provides information about our corporate headquarters and financial services operations, and each of Snap-on’s principal active manufacturing locations, distribution centers and software development locations (exceeding 50,000 square feet) as of 2023 year end: Location Principal Property Use Owned/Leased Segment* U.S.
Snap-on management continually monitors the company’s capacity needs and makes adjustments as dictated by market and other conditions. 2024 ANNUAL REPORT 23 The following table provides information about our corporate headquarters and financial services operations, and each of Snap-on’s principal active manufacturing locations, distribution centers and software development locations (exceeding 50,000 square feet) as of 2024 year end: Location Principal Property Use Owned/Leased Segment* U.S.
Snap-on’s facilities in the United States occupy approximately 4.3 million square feet, of which 71% is owned, including its corporate and general office facility located in Kenosha, Wisconsin. Snap-on’s facilities outside the United States occupy approximately 4.4 million square feet, of which approximately 73% is owned. Certain Snap-on facilities are leased through operating and finance lease agreements.
Snap-on’s facilities in the United States occupy approximately 4.5 million square feet, of which 71% is owned, including its corporate and general office facility located in Kenosha, Wisconsin. Snap-on’s facilities outside the United States occupy approximately 4.5 million square feet, of which approximately 72% is owned. Certain Snap-on facilities are leased through operating and finance lease agreements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod 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* 10/01/23 to 10/28/23 32,000 $252.77 32,000 $296.3 million 10/29/23 to 11/25/23 86,000 $268.43 86,000 $275.2 million 11/26/23 to 12/30/23 99,000 $282.48 99,000 $282.9 million Total/Average 217,000 $272.53 217,000 N/A N/A: Not applicable * Subject to further adjustment pursuant to the 1996 Authorization described below, as of December 30, 2023, the approximate value of shares that may yet be purchased pursuant to the outstanding Board authorizations discussed below is $282.9 million. • In 1996, the Board authorized the company to repurchase shares of the company’s common stock periodically in the open market or in privately negotiated transactions (“the 1996 Authorization”).
Biggest changePeriod 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* (in millions) 09/29/24 to 10/26/24 21,000 $ 324.26 21,000 $ 493.6 10/27/24 to 11/23/24 157,000 350.74 157,000 460.0 11/24/24 to 12/28/24 137,000 355.49 137,000 429.4 Total/Average 315,000 351.04 315,000 N/A N/A: Not applicable * Subject to further adjustment pursuant to the 1996 Authorization described below, as of December 28, 2024, the approximate value of shares that may yet be purchased pursuant to the outstanding Board authorizations discussed below is $429.4 million. • In 1996, the Board authorized the company to repurchase shares of the company’s common stock periodically in the open market or in privately negotiated transactions (“the 1996 Authorization”).
The 2021 Authorization will expire when the aggregate repurchase price limit is met, unless terminated earlier by the Board. 2023 ANNUAL REPORT 25 Other Purchases or Sales of Equity Securities The following chart discloses information regarding transactions by a counterparty in shares of Snap-on’s common stock during the fourth quarter of fiscal 2023 pursuant to a prepaid equity forward agreement (the “Agreement”) that is intended to reduce the impact of market risk associated with the stock-based portion of the company’s deferred compensation plans.
The 2024 Authorization will expire when the aggregate repurchase price limit is met, unless terminated earlier by the Board. 2024 ANNUAL REPORT 25 Other Purchases or Sales of Equity Securities The following chart discloses information regarding transactions by a counterparty in shares of Snap-on’s common stock during the fourth quarter of fiscal 2024 pursuant to a prepaid equity forward agreement (the “Agreement”) that is intended to reduce the impact of market risk associated with the stock-based portion of the company’s deferred compensation plans.
Issuer Purchases of Equity Securities The following chart discloses information regarding the shares of Snap-on’s common stock repurchased by the company during the fourth quarter of fiscal 2023, all of which were purchased pursuant to the Board’s authorizations that the company has publicly announced.
Issuer Purchases of Equity Securities The following chart discloses information regarding the shares of Snap-on’s common stock repurchased by the company during the fourth quarter of fiscal 2024, all of which were purchased pursuant to the Board’s authorizations that the company has publicly announced.
Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Snap-on had 52,694,017 shares of common stock outstanding as of 2023 year end. Snap-on’s stock is listed on the New York Stock Exchange under the ticker symbol “SNA.” At February 9, 2024, there were 3,992 registered holders of Snap-on common stock.
Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Snap-on had 52,381,673 shares of common stock outstanding as of 2024 year end. Snap-on’s stock is listed on the New York Stock Exchange under the ticker symbol “SNA.” At February 7, 2025, there were 3,836 registered holders of Snap-on common stock.
The 1996 Authorization will expire when terminated by the Board. • On November 4, 2021, the Board authorized the repurchase of up to $500 million of the company’s common stock (the “2021 Authorization”).
The 1996 Authorization will expire when terminated by the Board. • On August 8, 2024, the Board authorized the repurchase of up to $500 million of the company’s common stock (the “2024 Authorization”).
Period Shares Purchased (Sold) Average Price per Share 10/01/23 to 10/28/23 — — 10/29/23 to 11/25/23 (1,000) $252.03 11/26/23 to 12/30/23 500 $279.25 Total/Average (500) $261.10 26 SNAP-ON INCORPORATED Five-year Stock Performance Graph The graph below illustrates the cumulative total shareholder return on Snap-on common stock since December 31, 2018, of a $100 investment, assuming that dividends were reinvested quarterly.
Period Shares Purchased (Sold) Average Price per Share 09/29/24 to 10/26/24 (9,500) $ 325.27 10/27/24 to 11/23/24 — — 11/24/24 to 12/28/24 400 361.00 Total/Average (9,100) 326.71 26 SNAP-ON INCORPORATED Five-year Stock Performance Graph The graph below illustrates the cumulative total shareholder return on Snap-on common stock since December 31, 2019, of a $100 investment, assuming that dividends were reinvested quarterly.
Fiscal Year Ended (1) Snap-on Incorporated S&P 500 Industrials S&P 500 December 31, 2018 $100.00 $100.00 $100.00 December 31, 2019 $119.54 $129.37 $131.49 December 31, 2020 $124.33 $143.68 $155.68 December 31, 2021 $160.19 $174.02 $200.37 December 31, 2022 $174.47 $164.49 $164.08 December 31, 2023 $226.27 $194.31 $207.21 (1) The company’s fiscal year ends on the Saturday that is on or nearest to December 31 of each year; for ease of calculation, the fiscal year end is assumed to be December 31.
Fiscal Year Ended* Snap-on Incorporated S&P 500 Industrials S&P 500 December 31, 2019 $ 100.00 $ 100.00 $ 100.00 December 31, 2020 104.01 111.06 118.40 December 31, 2021 134.00 134.52 152.39 December 31, 2022 145.95 127.15 124.79 December 31, 2023 189.28 150.20 157.59 December 31, 2024 228.34 176.44 197.02 * The company’s fiscal year ends on the Saturday that is on or nearest to December 31 of each year; for ease of calculation, the fiscal year end is assumed to be December 31.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

138 edited+9 added−11 removed70 unchanged
Biggest changeThe year-over-year increase primarily reflects higher stock-based and performance-based compensation expense. 2023 ANNUAL REPORT 35 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Quarterly Data (Amounts in millions, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Total 2023 Net sales $ 1,183.0 $ 1,191.3 $ 1,159.3 $ 1,196.6 $ 4,730.2 Gross profit 589.6 603.7 578.2 577.6 2,349.1 Financial services revenue 92.6 93.4 94.9 97.2 378.1 Financial services expenses (26.3) (26.5) (25.5) (29.3) (107.6) Net earnings 254.3 269.9 249.1 261.3 1,034.6 Net earnings attributable to Snap-on Incorporated 248.7 264.0 243.1 255.3 1,011.1 Earnings per share – basic* 4.69 4.98 4.60 4.84 19.11 Earnings per share – diluted* 4.60 4.89 4.51 4.75 18.76 Cash dividends paid per share 1.62 1.62 1.62 1.86 6.72 First Quarter Second Quarter Third Quarter Fourth Quarter Total 2022 Net sales $ 1,097.8 $ 1,136.6 $ 1,102.5 $ 1,155.9 $ 4,492.8 Gross profit 534.3 553.5 532.6 560.7 2,181.1 Financial services revenue 87.7 86.4 87.3 88.3 349.7 Financial services expenses (17.3) (21.1) (20.9) (24.4) (83.7) Net earnings 222.7 237.2 229.5 244.5 933.9 Net earnings attributable to Snap-on Incorporated 217.4 231.5 223.9 238.9 911.7 Earnings per share – basic* 4.07 4.34 4.21 4.50 17.14 Earnings per share – diluted* 4.00 4.27 4.14 4.42 16.82 Cash dividends paid per share 1.42 1.42 1.42 1.62 5.88 * Amounts may not total to annual earnings per share because each quarter and year are calculated separately based on basic and diluted weighted-average common shares outstanding during each respective period. 36 SNAP-ON INCORPORATED Fourth Quarter Results of operations for the fourth quarters of 2023 and 2022 are as follows: Fourth Quarter (Amounts in millions) 2023 2022 Change Net sales $ 1,196.6 100.0 % $ 1,155.9 100.0 % $ 40.7 3.5 % Cost of goods sold (619.0) (51.7) % (595.2) (51.5) % (23.8) (4.0) % Gross profit 577.6 48.3 % 560.7 48.5 % 16.9 3.0 % Operating expenses (319.7) (26.7) % (312.7) (27.0) % (7.0) (2.2) % Operating earnings before financial services 257.9 21.6 % 248.0 21.5 % 9.9 4.0 % Financial services revenue 97.2 100.0 % 88.3 100.0 % 8.9 10.1 % Financial services expenses (29.3) (30.1) % (24.4) (27.6) % (4.9) (20.1) % Operating earnings from financial services 67.9 69.9 % 63.9 72.4 % 4.0 6.3 % Operating earnings 325.8 25.2 % 311.9 25.1 % 13.9 4.5 % Interest expense (12.5) (1.0) % (12.0) (1.0) % (0.5) (4.2) % Other income (expense) – net 17.5 1.4 % 11.8 1.0 % 5.7 48.3 % Earnings before income taxes 330.8 25.6 % 311.7 25.1 % 19.1 6.1 % Income tax expense (69.5) (5.4) % (67.2) (5.4) % (2.3) (3.4) % Net earnings 261.3 20.2 % 244.5 19.7 % 16.8 6.9 % Net earnings attributable to noncontrolling interests (6.0) (0.5) % (5.6) (0.5) % (0.4) (7.1) % Net earnings attributable to Snap-on Inc. $ 255.3 19.7 % $ 238.9 19.2 % $ 16.4 6.9 % 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.
Biggest changeQuarterly Data 2024 ANNUAL REPORT 35 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (Amounts in millions, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Total 2024 Net sales $ 1,182.3 $ 1,179.4 $ 1,147.0 $ 1,198.7 $ 4,707.4 Gross profit 596.7 597.3 587.8 596.1 2,377.9 Financial services revenue 99.6 100.5 100.4 100.5 401.0 Financial services expenses (31.3) (30.3) (28.7) (33.8) (124.1) Net earnings 269.6 277.6 257.5 264.2 1,068.9 Net earnings attributable to Snap-on Incorporated 263.5 271.2 251.1 258.1 1,043.9 Earnings per share – basic* 4.99 5.15 4.77 4.92 19.85 Earnings per share – diluted* 4.91 5.07 4.70 4.82 19.51 Cash dividends paid per share 1.86 1.86 1.86 2.14 7.72 First Quarter Second Quarter Third Quarter Fourth Quarter Total 2023 Net sales $ 1,183.0 $ 1,191.3 $ 1,159.3 $ 1,196.6 $ 4,730.2 Gross profit 589.6 603.7 578.2 577.6 2,349.1 Financial services revenue 92.6 93.4 94.9 97.2 378.1 Financial services expenses (26.3) (26.5) (25.5) (29.3) (107.6) Net earnings 254.3 269.9 249.1 261.3 1,034.6 Net earnings attributable to Snap-on Incorporated 248.7 264.0 243.1 255.3 1,011.1 Earnings per share – basic* 4.69 4.98 4.60 4.84 19.11 Earnings per share – diluted* 4.60 4.89 4.51 4.75 18.76 Cash dividends paid per share 1.62 1.62 1.62 1.86 6.72 * Amounts may not total to annual earnings per share because each quarter and year are calculated separately based on basic and diluted weighted-average common shares outstanding during each respective period. 36 SNAP-ON INCORPORATED Fourth Quarter Results of operations for the fourth quarters of 2024 and 2023 are as follows: Fourth Quarter (Amounts in millions) 2024 2023 Change Net sales $ 1,198.7 100.0 % $ 1,196.6 100.0 % $ 2.1 0.2 % Cost of goods sold (602.6) (50.3) % (619.0) (51.7) % 16.4 2.6 % Gross profit 596.1 49.7 % 577.6 48.3 % 18.5 3.2 % Operating expenses (330.9) (27.6) % (319.7) (26.7) % (11.2) (3.5) % Operating earnings before financial services 265.2 22.1 % 257.9 21.6 % 7.3 2.8 % Financial services revenue 100.5 100.0 % 97.2 100.0 % 3.3 3.4 % Financial services expenses (33.8) (33.6) % (29.3) (30.1) % (4.5) (15.4) % Operating earnings from financial services 66.7 66.4 % 67.9 69.9 % (1.2) (1.8) % Operating earnings 331.9 25.5 % 325.8 25.2 % 6.1 1.9 % Interest expense (12.3) (0.9) % (12.5) (1.0) % 0.2 1.6 % Other income (expense) – net 19.6 1.5 % 17.5 1.4 % 2.1 12.0 % Earnings before income taxes 339.2 26.1 % 330.8 25.6 % 8.4 2.5 % Income tax expense (75.0) (5.8) % (69.5) (5.4) % (5.5) (7.9) % Net earnings 264.2 20.3 % 261.3 20.2 % 2.9 1.1 % Net earnings attributable to noncontrolling interests (6.1) (0.4) % (6.0) (0.5) % (0.1) (1.7) % Net earnings attributable to Snap-on Inc. $ 258.1 19.9 % $ 255.3 19.7 % $ 2.8 1.1 % 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.
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, 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.
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, payments of interest and dividends, new receivables originated by our financial services businesses, capital expenditures, working capital, funding of pension plans, and share repurchases and acquisitions, if and as they arise.
Non-GAAP Measures References in this Management’s Discussion and Analysis of Financial Condition and Results of 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.
Non-GAAP Measures References in Management’s Discussion and Analysis of Financial Condition and Results of 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.
As of 2023 year end, Snap-on’s domestic pension plans’ assets comprised approximately 86% of the company’s worldwide pension plan assets. 48 SNAP-ON INCORPORATED Based on forward-looking capital market expectations, Snap-on selected an expected return on plan assets assumption for its U.S. pension plans of 7.5%, the same rate used in 2023, to be used in determining pension expense for 2024.
As of 2024 year end, Snap-on’s domestic pension plans’ assets comprised approximately 86% of the company’s worldwide pension plan assets. 48 SNAP-ON INCORPORATED Based on forward-looking capital market expectations, Snap-on selected an expected return on plan assets assumption for its U.S. pension plans of 7.5%, the same rate used in 2024, to be used in determining pension expense for 2025.
Annual impairment tests are performed by the company in the second quarter of each year using information available as of April month end. 2023 ANNUAL REPORT 47 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Snap-on evaluates the recoverability of goodwill by estimating the future discounted cash flows of the businesses to which the goodwill relates.
Annual impairment tests are performed by the company in the second quarter of each year using information available as of April month end. 2024 ANNUAL REPORT 47 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Snap-on evaluates the recoverability of goodwill by estimating the future discounted cash flows of the businesses to which the goodwill relates.
In 2023, the long-term investment performance objective for Snap-on’s domestic plans’ assets was to achieve net of expense returns that met or exceeded the 7.5% domestic expected return on plan assets assumption. Snap-on uses a three-year, market-related value asset method of amortizing the difference between actual and expected returns on its domestic plans’ assets.
In 2024, the long-term investment performance objective for Snap-on’s domestic plans’ assets was to achieve net of expense returns that met or exceeded the 7.5% domestic expected return on plan assets assumption. Snap-on uses a three-year, market-related value asset method of amortizing the difference between actual and expected returns on its domestic plans’ assets.
Financial Services intends to focus on the following strategic priorities in 2024: • Delivering financial products and services that attract and sustain profitable franchisees and support Snap‑on’s strategies for expanding market coverage and penetration; • Improving productivity levels and ensuring high quality in all financial products and processes through the use of RCI initiatives; and • Maintaining healthy portfolio performance levels.
Financial Services intends to focus on the following strategic priorities in 2025: • Delivering financial products and services that attract and sustain profitable franchisees and support Snap‑on’s strategies for expanding market coverage and penetration; • Improving productivity levels and ensuring high quality in all financial products and processes through the use of RCI initiatives; and • Maintaining healthy portfolio performance levels.
Based on the company’s second quarter 2023 impairment testing, and assuming a hypothetical 10% decrease in the estimated fair values of each of its 11 reporting units, the hypothetical fair value of each of the company’s 11 reporting units would have been greater than its carrying value. See Note 7 to the Consolidated Financial Statements for additional information about goodwill.
Based on the company’s second quarter 2024 impairment testing, and assuming a hypothetical 10% decrease in the estimated fair values of each of its 11 reporting units, the hypothetical fair value of each of the company’s 11 reporting units would have been greater than its carrying value. See Note 7 to the Consolidated Financial Statements for additional information about goodwill.
See Note 11 to the Consolidated Financial Statements for additional information on pension plans. 2023 ANNUAL REPORT 49 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Outlook We believe that our markets and our operations possess and have demonstrated continuing and considerable resilience against the uncertainties of the current environment.
See Note 11 to the Consolidated Financial Statements for additional information on pension plans. 2024 ANNUAL REPORT 49 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Outlook We believe that our markets and our operations possess and have demonstrated continuing and considerable resilience against the uncertainties of the current environment.
As of 2023 year end, Snap-on was in compliance with all covenants of its Credit Facility and other debt agreements. 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.
As of 2024 year end, Snap-on was in compliance with all covenants of its Credit Facility and other debt agreements. 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.
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 in 2023 increased primarily due to higher provisions for credit losses as compared to those recorded in 2022.
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 in 2024 increased primarily due to higher provisions for credit losses as compared to those recorded in 2023.
The organic gain includes a high single-digit increase in activity with OEM dealerships and a mid single-digit gain in sales of undercar equipment, partially offset by a high single-digit decline in sales of diagnostic and repair information products to independent repair shop owners and managers.
The organic gain includes a mid single-digit increase in activity with OEM dealerships and a low single-digit gain in sales of diagnostic and repair information products to independent repair shop owners and managers, partially offset by a low single-digit decline in sales of undercar equipment.
The company’s methodologies for valuing goodwill are applied consistently on a year-over-year basis; the assumptions used in performing the second quarter 2023 impairment calculations were evaluated in light of then-current market and business conditions.
The company’s methodologies for valuing goodwill are applied consistently on a year-over-year basis; the assumptions used in performing the second quarter 2024 impairment calculations were evaluated in light of then-current market and business conditions.
Snap-on’s value proposition of making work easier for serious professionals is an ongoing strength as we move forward along our runways for coherent growth: • Enhancing the franchise network, where we continued to focus on helping our franchisees extend their reach through innovative selling processes and productivity initiatives that break the traditional time and space barriers inherent in a mobile van; • Expanding with repair shop owners and managers, where we continued to make progress in connecting with customers and translating the resulting insights into innovation that solves specific challenges in the repair facility; • Further extending to critical industries, where we continued to grow our lines of products customized for specific industries, including through further integration of acquisitions; and • Building in emerging markets, where we continued to maintain manufacturing capacity, as well as refine product lines and distribution capabilities.
Snap‑on’s value proposition of making work easier for serious professionals is an ongoing strength as we proceed along our strategic runways for coherent growth: • Enhancing the franchise network, where we continued to focus on helping our franchisees increase their reach through innovative selling processes and productivity initiatives that break the traditional time and space barriers inherent in a mobile van; • Expanding with repair shop owners and managers, where we continued to make progress in connecting with customers and translating the resulting insights into innovation that solves specific challenges in the repair facility; • Further extending to critical industries, where we continued to grow our lines of products customized for specific industries, including through further integration of acquisitions; and • Building in emerging markets, where we continued to maintain manufacturing capacity, as well as refine product lines and distribution capabilities.
Depending on market and other conditions, Snap-on may make additional discretionary cash contributions to its pension plans in 2024; see Note 11 and Note 12 to the Consolidated Financial Statements for information on the company’s benefit plans and payments.
Depending on market and other conditions, Snap-on may make additional discretionary cash contributions to its pension plans in 2025; see Note 11 and Note 12 to the Consolidated Financial Statements for information on the company’s benefit plans and payments.
The domestic discount rate as of 2023 and 2022 year end was selected based on a cash flow matching methodology developed by the company’s outside actuaries that incorporates a review of current economic conditions.
The domestic discount rate as of 2024 and 2023 year end was selected based on a cash flow matching methodology developed by the company’s outside actuaries that incorporates a review of current economic conditions.
To determine the 2024 net periodic benefit cost, Snap-on is using weighted-average discount rates for its domestic and foreign pension plans of 5.5% and 4.3%, respectively, and an expected return on plan assets for its domestic pension plans of 7.5%. The expected returns on plan assets for foreign pension plans ranged from 2.2% to 6.7% as of 2023 year end.
To determine the 2025 net periodic benefit cost, Snap-on is using weighted-average discount rates for its domestic and foreign pension plans of 5.6% and 4.6%, respectively, and an expected return on plan assets for its domestic pension plans of 7.5%. The expected returns on plan assets for foreign pension plans ranged from 2.2% to 6.4% as of 2024 year end.
Snap-on completed its annual impairment testing of goodwill in the second quarter of 2023, the results of which did not result in any impairment. As of 2023 year end, the company has no accumulated impairment losses.
Snap-on completed its annual impairment testing of goodwill in the second quarter of 2024, the results of which did not result in any impairment. As of 2024 year end, the company has no accumulated impairment losses.
Due to the uncertainty of the timing of settlements with taxing authorities, Snap-on is unable to make reasonably reliable estimates of the period of cash settlement of unrecognized tax benefits totaling $7.5 million for its remaining uncertain tax liabilities. See Note 8 to the Consolidated Financial Statements for information on income taxes.
Due to the uncertainty of the timing of settlements with taxing authorities, Snap-on is unable to make reasonably reliable estimates of the period of cash settlement of unrecognized tax benefits totaling $6.6 million for its remaining uncertain tax liabilities. See Note 8 to the Consolidated Financial Statements for information on income taxes.
Our strategic priorities and plans for 2024 involve continuing to build on our Snap-on Value Creation Processes – our suite of strategic principles and processes we employ every day designed to create value, and employed in the areas of safety, quality, customer connection, innovation and Rapid Continuous Improvement (“RCI”).
Our strategic priorities and plans for 2025 also involve continuing to build on our Snap-on Value Creation Processes – our suite of strategic principles and processes we employ every day designed to create value, and employed in the areas of safety, quality, customer connection, innovation and Rapid Continuous Improvement (“RCI”).
Due to Snap-on’s credit rating over the years, external funds have been available at an acceptable cost. As of February 9, 2024, Snap-on’s long-term debt and commercial paper were rated, respectively: A2 and P-1 by Moody’s Investors Service; A- and A-2 by Standard & Poor’s; and A and F1 by Fitch Ratings.
Due to Snap-on’s credit rating over the years, external funds have been available at an acceptable cost. As of February 7, 2025, Snap-on’s long-term debt and commercial paper were rated, respectively: A2 and P-1 by Moody’s Investors Service; A- and A-2 by Standard & Poor’s; and A and F1 by Fitch Ratings.
The selection of the 5.5% weighted-average discount rate for Snap-on’s domestic pension plans as of 2023 year end (compared to 5.5% as of 2022 year end) represents the single rate that produces the same present value of cash flows as the estimated benefit plan payments.
The selection of the 5.6% weighted-average discount rate for Snap-on’s domestic pension plans as of 2024 year end (compared to 5.5% as of 2023 year end) represents the single rate that produces the same present value of cash flows as the estimated benefit plan payments.
See Note 17 to the Consolidated Financial Statements for additional information on Other income (expense) – net. 2023 ANNUAL REPORT 37 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) The effective income tax rate on earnings attributable to Snap-on in the fourth quarter was 21.4% in 2023 and 22.0% in 2022.
See Note 17 to the Consolidated Financial Statements for additional information on Other income (expense) – net. 2024 ANNUAL REPORT 37 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) The effective income tax rate on earnings attributable to Snap-on in the fourth quarter was 22.5% in 2024 and 21.4% in 2023.
The Commercial & Industrial Group intends to focus on the following strategic priorities in 2024: • Expanding our business with existing customers and reaching new customers in critical industries and other market segments; • Continuing to invest in emerging market growth initiatives; • Broadening our product offering designed particularly for critical industry segments; • Increasing our customer-connection-driven understanding of work across multiple industries; • Investing in innovation that, guided by that understanding of work, delivers an ongoing stream of productivity-enhancing custom engineered solutions; and • Continuing to reduce structural and operating costs, as well as improve efficiencies, through RCI initiatives.
The Commercial & Industrial Group intends to focus on the following strategic priorities in 2025: • Expanding our business with existing customers and reaching new customers in critical industries and other market segments; • Leveraging our investments in emerging markets to support growth initiatives; • Broadening our product offering designed particularly for critical industry segments; • Increasing our customer-connection-driven understanding of work across multiple industries; • Investing in innovation that, guided by that understanding of work, delivers an ongoing stream of productivity-enhancing custom-engineered solutions; and • Continuing to reduce structural and operating costs, as well as improve efficiencies, through RCI initiatives.
See Note 17 to the Consolidated Financial Statements for additional information on Other income (expense) – net. The effective income tax rate on earnings attributable to Snap-on was 22.5% in 2023 and 22.8% in 2022. See Note 8 to the Consolidated Financial Statements for additional information on income taxes.
See Note 17 to the Consolidated Financial Statements for additional information on Other income (expense) – net. The effective income tax rate on earnings attributable to Snap-on was 22.6% in 2024 and 22.5% in 2023. See Note 8 to the Consolidated Financial Statements for additional information on income taxes.
Fiscal 2022 as Compared to Fiscal 2021 A discussion regarding our financial condition and results of operations for fiscal 2022 compared to fiscal 2021 can be found under “Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on the Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 9, 2023, and is available on the SEC’s website at www.sec.gov as well as in the “Investors” section of our website at www.snapon.com .
Fiscal 2023 as Compared to Fiscal 2022 A discussion regarding our financial condition and results of operations for fiscal 2023 compared to fiscal 2022 can be found under “Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on the Form 10-K for the fiscal year ended December 30, 2023, which was filed with the SEC on February 16, 2024, and is available on the SEC’s website at www.sec.gov as well as in the “Investors” section of our website at www.snapon.com .
There was no commercial paper issued or outstanding during the years ended and as of December 30, 2023 or December 31, 2022. 44 SNAP-ON INCORPORATED Snap-on’s Credit Facility and other debt agreements also contain certain usual and customary borrowing, affirmative, negative and maintenance covenants.
There was no commercial paper issued or outstanding during the years ended and as of December 28, 2024 or December 30, 2023. 44 SNAP-ON INCORPORATED Snap-on’s Credit Facility and other debt agreements also contain certain usual and customary borrowing, affirmative, negative and maintenance covenants.
Recent Acquisitions On November 20, 2023, Snap-on acquired certain assets of SAVTEQ, Inc. (“SAVTEQ”), for a cash purchase price of $3.0 million. SAVTEQ, based in Lexington, Kentucky, provides precise non-contact measuring capabilities that Snap-on intends to leverage in its product offerings. On November 1, 2023, Snap-on acquired Mountz, Inc. (“Mountz”) for a cash purchase price of $39.6 million.
Recent Acquisitions On November 20, 2023, Snap-on acquired certain assets of SAVTEQ, Inc. (“SAVTEQ”) for a cash purchase price of $3.0 million. SAVTEQ, based in Lexington, Kentucky, provides precise non-contact measuring capabilities that Snap-on is leveraging in its product offerings. On November 1, 2023, Snap-on acquired Mountz, Inc. (“Mountz”) for a cash purchase price of $39.6 million.
The weighted-average discount rate for Snap-on’s foreign pension plans of 4.3% (compared to 4.8% as of 2022 year end) represents the single rate that produces the same present value of cash flows as the estimated benefit plan payments.
The weighted-average discount rate for Snap-on’s foreign pension plans of 4.6% (compared to 4.3% as of 2023 year end) represents the single rate that produces the same present value of cash flows as the estimated benefit plan payments.
In 2024, Snap-on expects to make ongoing progress 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 2025, Snap-on expects to make ongoing progress along its decisive runways for coherent growth, leveraging capabilities already proven in the automotive repair arena, 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.
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. Snap-on has paid consecutive quarterly cash dividends, without interruption or reduction, since 1939. Cash dividends paid in 2023 and 2022 totaled $355.6 million and $313.1 million, respectively.
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. Snap-on has paid consecutive quarterly cash dividends, without interruption or reduction, since 1939. Cash dividends paid in 2024 and 2023 totaled $406.4 million and $355.6 million, respectively.
Mountz, based in San Jose, California, is a leading developer, manufacturer and marketer of high-precision torque tools, including measurement, calibration and documentation products. The acquisition of Mountz complements and expands Snap-on’s torque offerings to customers in a variety of critical industries including aerospace, transportation and advanced manufacturing.
Mountz, based in San Jose, California, is a leading developer, manufacturer and marketer of high-precision torque tools, including measurement, calibration and documentation products. The acquisition of Mountz has complemented and expanded Snap-on’s torque offerings to customers in a variety of critical industries including aerospace, transportation and advanced manufacturing.
Quarterly dividends in 2022 were $1.62 per share in the fourth quarter and $1.42 per share in the first three quarters ($5.88 per share for the year). 2023 2022 Cash dividends paid per common share $ 6.72 $ 5.88 Cash dividends paid as a percentage of prior-year retained earnings 5.6 % 5.5 % 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 2024.
Quarterly dividends in 2023 were $1.86 per share in the fourth quarter and $1.62 per share in the first three quarters ($6.72 per share for the year). 2024 2023 Cash dividends paid per common share $ 7.72 $ 6.72 Cash dividends paid as a percentage of prior-year retained earnings 5.8 % 5.6 % 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 2025.
Throughout the variability, we maintained and further extended our ongoing advantages in our products, in our brands and in our people.
Throughout the uncertainty, we maintained and further extended our ongoing advantages in our products, in our brands and in our people.
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 60 days and 61 days at the respective 2023 and 2022 year ends.
Days sales outstanding (trade and other accounts receivable – net as of the respective period end, divided by the respective trailing 12 months of sales, times 360 days) was 62 days and 60 days at the respective 2024 and 2023 year ends.
Of the $1,001.5 million of cash and cash equivalents as of 2023 year end, $394.9 million was held outside of the United States. Snap-on maintains non-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.
Of the $1,360.5 million of cash and cash equivalents as of 2024 year end, $494.1 million was held outside of the United States. Snap-on maintains non-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.
Net cash used by investing activities in 2023 also included $42.6 million for the acquisitions of Mountz and SAVTEQ. Net cash used by investing activities in 2022 included $0.5 million of cash provided by acquisitions. See Note 3 to the Consolidated Financial Statements for information about acquisitions. Capital expenditures in 2023 and 2022 totaled $95.0 million and $84.2 million, respectively.
Net cash used by investing activities in 2023 also included $42.6 million for the acquisitions of Mountz and SAVTEQ. See Note 3 to the Consolidated Financial Statements for information about acquisitions. Capital expenditures in 2024 and 2023 totaled $83.5 million and $95.0 million, respectively.
Interest expense in 2023 increased $2.8 million compared to last year. See Note 9 to the Consolidated Financial Statements for additional information on debt and credit facilities. 32 SNAP-ON INCORPORATED Other income (expense) – net primarily includes net gains and losses associated with hedging and currency exchange rate transactions, non-service components of net periodic benefit costs, and interest income.
Interest expense in 2024 decreased $0.3 million compared to last year. See Note 9 to the Consolidated Financial Statements for additional information on debt and credit facilities. 32 SNAP-ON INCORPORATED Other income (expense) – net primarily includes interest income, non-service components of net periodic benefit costs, and net gains and losses associated with hedging and currency exchange rate transactions.
Management utilizes established policies and procedures in an effort to ensure the estimates and assumptions are well controlled, reviewed and consistently applied. As of December 30, 2023, the ratio of the allowance for credit losses to finance receivables was 3.48%. As of December 31, 2022, the allowance ratio was 3.39%.
Management utilizes established policies and procedures in an effort to ensure the estimates and assumptions are well controlled, reviewed and consistently applied. As of December 28, 2024, the ratio of the allowance for credit losses to finance receivables was 3.63%. As of December 30, 2023, the allowance ratio was 3.48%.
For reference, a 100 bps increase in the allowance ratios for finance receivables as of December 30, 2023, would have increased Snap-on’s 2023 provision for credit losses and related allowance for credit losses by approximately $19.4 million. For additional information on Snap-on’s allowances for credit losses, see Note 1 and Note 4 to the Consolidated Financial Statements.
For reference, a 100 bps increase in the allowance ratios for finance receivables as of December 28, 2024, would have increased Snap-on’s 2024 provision for credit losses and related allowance for credit losses by approximately $20.0 million. For additional information on Snap-on’s allowances for credit losses, see Note 1 and Note 4 to the Consolidated Financial Statements.
The Snap-on Tools Group intends to focus on the following strategic priorities in 2024: • Enhancing franchisee sales productivity, profitability, commercial health, and satisfaction; • Developing new programs and products to expand market coverage, reaching new technician customers and increasing penetration with existing customers; • Increasing investment in new product innovation and development; and • Improving customer service levels and productivity in back office support functions, manufacturing and the supply chain through RCI initiatives and capacity investment.
The Snap-on Tools Group intends to focus on the following strategic priorities in 2025: • Enhancing franchisee sales productivity, profitability, commercial health, and satisfaction; • Developing new programs and products to match current technician preferences, reaching new customers and increasing penetration with existing customers; • Expanding investment in new product innovation and development; and • Improving customer service levels and productivity in back office support functions, manufacturing and the supply chain through RCI initiatives and capacity investment.
The Repair Systems & Information Group intends to focus on the following strategic priorities in 2024: • Expanding the product offering with new products and services, thereby providing more to sell to repair shop owners and managers; • Continuing software and hardware upgrades to further improve functionality, performance and efficiency; • Leveraging integration of software solutions; • Continuing productivity advancements through RCI initiatives and leveraging of resources; and • Increasing geographic penetration, including in emerging markets. 30 SNAP-ON INCORPORATED Financial Services generates revenue from various financing programs and is a strategic partner of the company’s mobile franchise van channel.
The Repair Systems & Information Group intends to focus on the following strategic priorities in 2025: • Expanding the product offering with new products and services, thereby providing more to sell to repair shop owners and managers; • Continuing software and hardware upgrades to further improve functionality, performance and efficiency; • Further building our proprietary databases to enhance software solutions; • Advancing productivity through RCI initiatives and the optimization of resources; and • Increasing geographic penetration, including in emerging markets. 30 SNAP-ON INCORPORATED Financial Services generates revenue from various financing programs and is a strategic partner of the company’s mobile franchise van channel.
Long-term debt of $1,184.6 million as of 2023 year end consisted of: (i) $300.0 million of unsecured 3.25% notes that mature on March 1, 2027 (the “2027 Notes”); (ii) $400.0 million of unsecured 4.10% notes that mature on March 1, 2048 (“the 2048 Notes”); and (iii) $500.0 million of 3.10% notes that mature on May 1, 2050 (the “2050 Notes”), partially offset by $15.4 million of unamortized debt issuance costs and issuance discounts.
Long-term debt of $1,185.5 million as of 2024 year end consisted of: (i) $300.0 million of unsecured 3.25% notes that mature on March 1, 2027 (the “2027 Notes”); (ii) $400.0 million of unsecured 4.10% notes that mature on March 1, 2048 (“the 2048 Notes”); and (iii) $500.0 million of 3.10% notes that mature on May 1, 2050 (the “2050 Notes”), partially offset by $14.5 million of unamortized debt issuance costs and issuance discounts.
Amortization expense was $27.1 million in 2023 and $28.7 million in 2022. See Note 6 and Note 7 to the Consolidated Financial Statements for information on property and equipment and goodwill and other intangible assets.
Amortization expense was $25.3 million in 2024 and $27.1 million in 2023. See Note 6 and Note 7 to the Consolidated Financial Statements for information on property and equipment and goodwill and other intangible assets.
Snap-on believes that its cash generated from operations, as well as its available cash on hand and funds available from its credit facilities will be sufficient to fund the company’s capital expenditure requirements in 2024. Financing Activities Net cash used by financing activities of $572.9 million in 2023 included net repayments of other short-term borrowings of $1.7 million.
Snap-on believes that its cash generated from operations, as well as its available cash on hand and funds available from its credit facilities will be sufficient to fund the company’s capital expenditure requirements in 2025. Financing Activities Net cash used by financing activities of $649.8 million in 2024 included net repayments of other short-term borrowings of $1.3 million.
References in this document to 2023, 2022 and 2021 year end refer to December 30, 2023, December 31, 2022, and January 1, 2022, respectively. Snap-on’s 2023, 2022 and 2021 fiscal years each contained 52 weeks of operating results.
References in this document to 2024, 2023 and 2022 year end refer to December 28, 2024, December 30, 2023, and December 31, 2022, respectively. Snap-on’s 2024, 2023 and 2022 fiscal years each contained 52 weeks of operating results.
The organic decrease is due to a high single-digit decline in the U.S. operations, partially offset by a mid single-digit gain in the segment’s international operations. Segment gross margin in the fourth quarter improved 200 bps from last year, primarily reflecting decreased sales of lower-gross-margin products.
The organic decrease is due to a mid single-digit decline in the U.S., partially offset by a low single-digit gain in the segment’s international operations. Segment gross margin in 2024 improved 20 bps from last year primarily reflecting decreased sales of lower-gross-margin products.
On November 2, 2023, the company announced that its Board increased the quarterly cash dividend by 14.8% to $1.86 per share ($7.44 per share annualized). Quarterly dividends in 2023 were $1.86 per share in the fourth quarter and $1.62 per share in the first three quarters ($6.72 per share for the year).
On November 8, 2024, the company announced that its Board increased the quarterly cash dividend by 15.1% to $2.14 per share ($8.56 per share annualized). Quarterly dividends in 2024 were $2.14 per share in the fourth quarter and $1.86 per share in the first three quarters ($7.72 per share for the year).
Lowering the expected rate of return assumption for Snap-on’s domestic pension plans’ assets by 50 bps would have increased Snap-on’s 2023 domestic pension expense by approximately $6.2 million. The objective of Snap-on’s discount rate assumption is to reflect the rate at which the pension benefits could be effectively settled.
Lowering the expected rate of return assumption for Snap-on’s domestic pension plans’ assets by 50 bps would have increased Snap-on’s 2024 domestic pension expense by approximatel y $6.0 million. The objective of Snap-on’s discount rate assumption is to reflect the rate at which the pension benefits could be effectively settled.
Snap-on intends to make contributions of $6.0 million to its foreign pension plans and $3.7 million to its domestic pension plans in 2024, as required by law. Depending on market and other conditions, Snap-on may make discretionary cash contributions to its pension plans in 2024.
Snap-on intends to make contributions of $4.3 million to its foreign pension plans and $6.5 million to its domestic pension plans in 2025, as required by law. Depending on market and other conditions, Snap-on may make discretionary cash contributions to its pension plans in 2025.
Pension income in 2023 was $19.0 million and Snap-on expects to have pension income of approximately $8.0 million in 2024, primarily reflecting higher amortization of pension actuarial losses. The projected 2024 pension income is based on benefit plan status, weighted average discount rates, expected returns on plan assets, and other factors.
Pension income in 2024 was $6.9 million and Snap-on expects to have pension expense of approximately $16.8 million in 2025, primarily reflecting higher amortization of pension actuarial losses. The projected 2025 pension expense is based on benefit plan status, weighted average discount rates, expected returns on plan assets, and other factors.
As of year-end 2023, the company had $138.0 million in purchase commitments to be paid in 2024 and $11.4 million to be paid thereafter. Snap-on intends to make contributions of $6.0 million to its foreign pension plans and $3.7 million to its domestic pension plans in 2024, as required by law.
As of year-end 2024, the company had $159.0 million in purchase commitments to be paid in 2025 and $5.1 million to be paid thereafter. Snap-on intends to make contributions of $4.3 million to its foreign pension plans and $6.5 million to its domestic pension plans in 2025, as required by law.
As of 2023 and 2022 year end, 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 2.3 turns and 2.5 turns, respectively.
As of 2024 and 2023 year end, inventory turns (trailing 12 months of cost of goods sold, divided by the average of the beginning and ending inventory balances for the trailing 12 months) were 2.4 turns and 2.3 turns, respectively.
Financial Services consists of the business operations of Snap-on’s finance subsidiaries. Snap-on evaluates the performance of its operating segments based on segment revenues and segment operating earnings. The Snap-on Tools Group segment revenues include external net sales, while the Commercial & Industrial Group and the Repair Systems & Information Group segment revenues include both external and intersegment net sales.
Financial Services consists of the business operations of Snap-on’s finance subsidiaries. Snap-on evaluates the performance of the Commercial & Industrial Group, the Snap-on Tools Group and the Repair Systems & Information Group operating segments based on segment net sales and segment operating earnings.
Inventories accounted for using the first-in, first-out (“FIFO”) method as of 2023 and 2022 year end approximated 59% and 61% of total inventories, respectively. All other inventories are accounted for using the last-in, first-out (“LIFO”) method. The company’s LIFO reserve was $115.9 million and $108.6 million at 2023 and 2022 year end, respectively.
Inventories accounted for using the first-in, first-out (“FIFO”) method as of 2024 and 2023 year end approximated 57% and 59% of total inventories, respectively. All other inventories are accounted for using the last-in, first-out (“LIFO”) method. The company’s LIFO reserve was $122.4 million and $115.9 million at 2024 and 2023 year end, respectively.
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 can be accomplished in a tax efficient manner. 2023 ANNUAL REPORT 43 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Trade and other accounts receivable – net of $791.3 million as of 2023 year end represented an increase of $29.6 million from 2022 year-end levels primarily due to higher sales, $9.3 million of foreign currency translation and $4.1 million from acquisitions.
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 can be accomplished in a tax efficient manner. 2024 ANNUAL REPORT 43 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Trade and other accounts receivable – net of $815.6 million as of 2024 year end represented an increase of $24.3 million from 2023 year-end levels primarily due to an increase in days sales outstanding, partially offset by $21.2 million of foreign currency translation.
Notes payable of $15.6 million as of 2023 year end compared to $17.2 million as of 2022 year end. Average notes payable outstanding were $17.5 million and $18.6 million in 2023 and 2022, respectively. The 2023 weighted-average interest rate on such borrowings of 11.0% compared with 9.9% in 2022.
Notes payable of $13.7 million as of 2024 year end compared to $15.6 million as of 2023 year end. Average notes payable outstanding were $14.9 million and $17.5 million in 2024 and 2023, respectively. The 2024 weighted-average interest rate on such borrowings of 10.4% compared with 11.0% in 2023.
The current portions of net finance and contract receivables of $714.9 million as of 2023 year end compared to $672.1 million at 2022 year end. The long-term portions of net finance and contract receivables of $1,692.1 million as of 2023 year end compared to $1,554.6 million at 2022 year end.
The current portions of net finance and contract receivables of $730.3 million as of 2024 year end compared to $714.9 million at 2023 year end. The long-term portions of net finance and contract receivables of $1,730.3 million as of 2024 year end compared to $1,692.1 million at 2023 year end.
In 2023, Snap-on repurchased 1,126,000 shares of its common stock for $294.7 million under its previously announced share repurchase programs. As of 2023 year end, Snap-on had remaining availability to repurchase up to an additional $282.9 million in common stock pursuant to its Board’s authorizations. Snap-on repurchased 899,000 shares of its common stock for $198.1 million in 2022.
In 2024, Snap-on repurchased 952,000 shares of its common stock for $290.0 million under its previously announced share repurchase programs. Snap-on repurchased 1,126,000 shares of its common stock for $294.7 million in 2023. As of 2024 year end, Snap-on had remaining availability to repurchase up to an additional $429.4 million in common stock pursuant to its Board’s authorizations.
The current focus on these matters is expected to result in additional and/or more restrictive regulations, and industry or third-party requirements and standards to reduce or mitigate climate change as well as other environmental or sustainability risks. The timing of certain of these regulations and requirements has yet to be determined. Snap-on is monitoring developments in this area.
The current focus on these matters is resulting in additional and/or more restrictive regulations, disclosure requirements and industry or third-party requirements and standards to reduce or mitigate climate change as well as other environmental or sustainability risks. Snap-on is monitoring developments in this area.
Net cash used by financing activities of $572.9 million in 2023 included $355.6 million for dividend payments to shareholders, $294.7 million for the repurchase of 1,126,000 shares of Snap-on’s common stock, and net repayments of other short-term borrowings of $1.7 million. These amounts were partially offset by $113.6 million of proceeds from stock purchase plan and stock option exercises.
Net cash used by financing activities of $572.9 million in 2023 included $355.6 million for dividend payments to shareholders, $294.7 million for the repurchase of 1,126,000 shares of Snap-on’s common stock, and net repayments of other short-term borrowings of $1.7 million.
Unless otherwise indicated, references in this document to “fiscal 2023” or “2023” refer to the fiscal year ended December 30, 2023; references to “fiscal 2022” or “2022” refer to the fiscal year ended December 31, 2022; and references to “fiscal 2021” or “2021” refer to the fiscal year ended January 1, 2022.
Unless otherwise indicated, references in this document to “fiscal 2024” or “2024” refer to the fiscal year ended December 28, 2024; references to “fiscal 2023” or “2023” refer to the fiscal year ended December 30, 2023; and references to “fiscal 2022” or “2022” refer to the fiscal year ended December 31, 2022.
Snap-on Tools Group Fourth Quarter (Amounts in millions) 2023 2022 Change Segment net sales $ 513.3 100.0 % $ 542.7 100.0 % $ (29.4) (5.4) % Cost of goods sold (281.2) (54.8) % (308.3) (56.8) % 27.1 8.8 % Gross profit 232.1 45.2 % 234.4 43.2 % (2.3) (1.0) % Operating expenses (121.1) (23.6) % (118.3) (21.8) % (2.8) (2.4) % Segment operating earnings $ 111.0 21.6 % $ 116.1 21.4 % $ (5.1) (4.4) % Segment net sales of $513.3 million in the fourth quarter of 2023 represented a decrease of $29.4 million, or 5.4%, from 2022 levels, reflecting a $31.0 million, or 5.7%, organic sales decline, partially offset by $1.6 million of favorable foreign currency translation.
Snap-on Tools Group Fourth Quarter (Amounts in millions) 2024 2023 Change Segment net sales $ 506.6 100.0 % $ 513.3 100.0 % $ (6.7) (1.3) % Segment cost of goods sold (280.5) (55.4) % (281.2) (54.8) % 0.7 0.2 % Segment gross profit 226.1 44.6 % 232.1 45.2 % (6.0) (2.6) % Segment operating expenses (119.2) (23.5) % (121.1) (23.6) % 1.9 1.6 % Segment operating earnings $ 106.9 21.1 % $ 111.0 21.6 % $ (4.1) (3.7) % Segment net sales of $506.6 million in the fourth quarter of 2024 represented a decrease of $6.7 million, or 1.3%, from 2023 levels, reflecting a $7.3 million, or 1.4%, organic sales decline, partially offset by $0.6 million of favorable foreign currency translation.
Lowering Snap-on’s foreign discount rate assumption by 50 bps would have increased Snap-on’s 2023 foreign pension expense and projected benefit obligation by approximately $0.9 million and $13.5 million, respectively.
Lowering Snap-on’s foreign discount rate assumption by 50 bps would have increased Snap-on’s 2024 foreign pension expense and projected benefit obligation by approximately $1.0 million and $12.3 million, respectively.
Net cash used by financing activities of $485.0 million in 2022 included net proceeds from other short-term borrowings of $1.6 million. 2023 ANNUAL REPORT 45 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Proceeds from stock purchase plan and stock option exercises totaled $113.6 million in 2023 and $55.0 million in 2022.
Net cash used by financing activities of $572.9 million in 2023 included net repayments of other short-term borrowings of $1.7 million. 2024 ANNUAL REPORT 45 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Proceeds from stock purchase plans and stock option exercises totaled $92.3 million in 2024 and $113.6 million in 2023.
Operating margin for the Repair Systems & Information Group of 24.3% in 2023 compared to 23.6% last year. 34 SNAP-ON INCORPORATED Financial Services (Amounts in millions) 2023 2022 Change Financial services revenue $ 378.1 100.0 % $ 349.7 100.0 % $ 28.4 8.1 % Financial services expenses (107.6) (28.5) % (83.7) (23.9) % (23.9) (28.6) % Segment operating earnings $ 270.5 71.5 % $ 266.0 76.1 % $ 4.5 1.7 % Financial services revenue is generally dependent on the size of the average financial services portfolio during the period, as well as on the average yield on receivables.
Operating margin for the Repair Systems & Information Group of 25.3% in 2024 compared to 24.3% last year. 34 SNAP-ON INCORPORATED Financial Services (Amounts in millions) 2024 2023 Change Financial services revenue $ 401.0 100.0 % $ 378.1 100.0 % $ 22.9 6.1 % Financial services expenses (124.1) (30.9) % (107.6) (28.5) % (16.5) (15.3) % Segment operating earnings $ 276.9 69.1 % $ 270.5 71.5 % $ 6.4 2.4 % Financial services revenue is generally dependent on the size of the average financial services portfolio during the period, as well as on the average yield on receivables.
Net earnings attributable to Snap-on of $1,011.1 million, or $18.76 per diluted share, in 2023 compared to $911.7 million, or $16.82 per diluted share, in 2022, an increase of $99.4 million or $1.94 per diluted share. 2023 ANNUAL REPORT 29 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Summary of Segment Performance 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.
Net earnings attributable to Snap-on of $1,043.9 million, or $19.51 per diluted share, in 2024, including a $17.5 million, or $0.32 per diluted share, after-tax benefit from the legal payments, compared to $1,011.1 million, or $18.76 per diluted share, in 2023, an increase of $32.8 million or $0.75 per diluted share. 2024 ANNUAL REPORT 29 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Summary of Segment Performance 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.
As a result of these factors, segment operating earnings of $113.3 million in the fourth quarter of 2023, including $0.4 million of favorable foreign currency effects, compared to $110.6 million in 2022, an increase of $2.7 million or 2.4%. Operating margin for the Repair Systems & Information Group of 25.1% in the quarter compared to 25.3% last year.
As a result of these factors, segment operating earnings of $121.4 million in the fourth quarter of 2024 compared to $113.3 million in 2023, an increase of $8.1 million or 7.1%. Operating margin for the Repair Systems & Information Group of 26.6% in the quarter compared to 25.1% last year.
Operating Activities Net cash provided by operating activities of $1,154.2 million in 2023 increased $479.0 million from $675.2 million in 2022. The $479.0 million increase is primarily due to a $352.9 million change in net operating assets and liabilities, and a $100.7 million increase in net earnings. Depreciation expense was $72.2 million in 2023 and $71.5 million in 2022.
Operating Activities Net cash provided by operating activities of $1,217.5 million in 2024 increased $63.3 million from $1,154.2 million in 2023. The increase is primarily due to a $34.3 million increase in net earnings and a $18.0 million change in net operating assets and liabilities. Depreciation expense was $72.7 million in 2024 and $72.2 million in 2023.
See Note 1 and Note 4 to the Consolidated Financial Statements for additional information on financial services. 2023 ANNUAL REPORT 39 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Corporate Snap-on’s fourth quarter 2023 general corporate expenses of $20.5 million compared to $26.6 million last year.
See Note 1 and Note 4 to the Consolidated Financial Statements for additional information on financial services. Corporate Snap-on’s fourth quarter 2024 general corporate expenses of $26.6 million compared to $20.5 million last year.
As of 2023 year end, working capital (current assets less current liabilities) of $2,710.4 million represented an increase of $313.1 million from $2,397.3 million as of 2022 year end primarily as a result of other net changes in working capital discussed below.
As of 2024 year end, working capital (current assets less current liabilities) of $3,027.9 million represented an increase of $317.5 million from $2,710.4 million as of 2023 year end primarily as a result of the net changes in working capital discussed below.
Lowering Snap-on’s domestic discount rate assumption by 50 bps would have increased Snap-on’s 2023 domestic pension expense and projected benefit obligation by approximately $1.5 million and $48.1 million, respectively. As of 2023 year end, Snap-on’s domestic projected benefit obligation comprised approximately 84% of Snap-on’s worldwide projected benefit obligation.
Lowering Snap-on’s domestic discount rate assumption by 50 bps would have increased Snap-on’s 2024 domestic pension expense and projected benefit obligation by approximately $3.0 million and $46.4 million, respectively. As of 2024 year end, Snap-on’s domestic projected benefit obligation comprised approximately 85% of Snap-on’s worldwide projected benefit obligation.
See Note 8 to the Consolidated Financial Statements for additional information on income taxes. Net earnings attributable to Snap-on of $255.3 million, or $4.75 per diluted share, in the fourth quarter of 2023 compared to $238.9 million, or $4.42 per diluted share, in 2022, an increase of $16.4 million or $0.33 per diluted share.
See Note 8 to the Consolidated Financial Statements for additional information on income taxes. Net earnings attributable to Snap-on of $258.1 million, or $4.82 per diluted share, in the fourth quarter of 2024 compared to $255.3 million, or $4.75 per diluted share, in the fourth quarter of 2023.
Investing Activities Net cash used by investing activities of $331.8 million in 2023 included additions to finance receivables of $1,029.0 million, partially offset by collections of $833.5 million. Net cash used by investing activities of $206.2 million in 2022 included additions to finance receivables of $955.8 million, partially offset by collections of $826.9 million.
Investing Activities Net cash used by investing activities of $204.1 million in 2024 included additions to finance receivables of $966.0 million, partially offset by collections of $837.8 million. Net cash used by investing activities of $331.8 million in 2023 included additions to finance receivables of $1,029.0 million, partially offset by collections of $833.5 million.
In pursuit of these initiatives, it is projected that capital expenditures in 2024 will be in a range of $100 million to $110 m illion. Snap-on currently anticipates that its full-year 2024 effective income tax rate will be in the range of 22% to 23%. 50 SNAP-ON INCORPORATED
In pursuit of these initiatives, we project that capital expenditures in 2025 will approximate $100 million. Snap-on currently anticipates that its full-year 2025 effective income tax rate will be in the range of 22% to 23%. 50 SNAP-ON INCORPORATED
These increases in cash and cash equivalents were partially offset by: (i) the funding of $1,029.0 million of new finance receivables; (ii) dividend payments to shareholders of $355.6 million; (iii) the repurchase of 1,126,000 shares of the company’s common stock for $294.7 million; (iv) the funding of $95.0 million for capital expenditures; (v) the funding of $42.6 million for acquisitions; and (vi) net repayments of other short-term borrowings of $1.7 million.
These increases in cash and cash equivalents were partially offset by: (i) the funding of $966.0 million of new finance receivables; (ii) dividend payments to shareholders of $406.4 million; (iii) the repurchase of 952,000 shares of the company’s common stock for $290.0 million; (iv) the funding of $83.5 million for capital expenditures; and (v) net repayments of other short-term borrowings of $1.3 million.
Net sales of $4,730.2 million in 2023 represented an increase of $237.4 million, or 5.3%, from 2022 levels, reflecting a $250.7 million, or 5.6%, organic gain and $5.5 million of acquisition-related sales, partially offset by $18.8 million of unfavorable foreign currency translation.
Segment net sales of $1,476.8 million in 2024 represented an increase of $18.5 million, or 1.3%, from 2023 levels, reflecting a $1.5 million, or 0.1%, organic gain and $23.3 million of acquisition-related sales, partially offset by $6.3 million of unfavorable foreign currency translation.
Net cash used by investing activities of $331.8 million in 2023 included additions to finance receivables of $1,029.0 million, which were partially offset by collections of $833.5 million, as well as a use of cash of $42.6 million for the acquisitions of Mountz and SAVTEQ.
Net cash used by investing activities of $331.8 million in 2023 included additions to finance receivables of $1,029.0 million, partially offset by collections of $833.5 million, as well as $42.6 million of cash used for acquisitions. Capital expenditures in 2024 and 2023 totaled $83.5 million and $95.0 million, respectively.
The following represents the company’s working capital position as of 2023 and 2022 year end: (Amounts in millions) 2023 2022 Cash and cash equivalents $ 1,001.5 $ 757.2 Trade and other accounts receivable – net 791.3 761.7 Finance receivables – net 594.1 562.2 Contract receivables – net 120.8 109.9 Inventories – net 1,005.9 1,033.1 Prepaid expenses and other current assets 138.4 144.8 Total current assets 3,652.0 3,368.9 Notes payable (15.6) (17.2) Accounts payable (238.0) (287.0) Other current liabilities (688.0) (667.4) Total current liabilities (941.6) (971.6) Working capital $ 2,710.4 $ 2,397.3 Cash and cash equivalents of $1,001.5 million as of 2023 year end represented an increase of $244.3 million from 2022 year-end levels primarily due to: (i) $1,154.2 million of cash generated from operations; (ii) $833.5 million of cash from collections of finance receivables; and (iii) $113.6 million of cash proceeds from stock purchase plan and stock option exercises.
The following represents the company’s working capital position as of 2024 and 2023 year end: (Amounts in millions) 2024 2023 Cash and cash equivalents $ 1,360.5 $ 1,001.5 Trade and other accounts receivable – net 815.6 791.3 Finance receivables – net 610.3 594.1 Contract receivables – net 120.0 120.8 Inventories – net 943.4 1,005.9 Prepaid expenses and other current assets 139.6 138.4 Total current assets 3,989.4 3,652.0 Notes payable (13.7) (15.6) Accounts payable (265.9) (238.0) Other current liabilities (681.9) (688.0) Total current liabilities (961.5) (941.6) Working capital $ 3,027.9 $ 2,710.4 Cash and cash equivalents of $1,360.5 million as of 2024 year end represented an increase of $359.0 million from 2023 year-end levels primarily due to: (i) $1,217.5 million of cash generated from operations; (ii) $837.8 million of cash from collections of finance receivables; and (iii) $92.3 million of cash proceeds from stock purchase plans and stock option exercises.
Segment net sales of $2,088.8 million in 2023 represented an increase of $16.8 million, or 0.8%, from 2022 levels, reflecting a $25.0 million, or 1.2%, organic sales gain, partially offset by $8.2 million of unfavorable foreign currency translation.
Segment net sales of $1,797.9 million in 2024 represented an increase of $16.7 million, or 0.9%, from 2023 levels, reflecting an $18.1 million, or 1.0%, organic sales gain, partially offset by $1.4 million of unfavorable foreign currency translation.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAssociated unexpected price increases could result in an erosion of product margins or require Snap-on to increase prices to customers to maintain margins.
Biggest changeAssociated unexpected cost increases could result in an erosion of product margins or require Snap-on to increase prices to customers to maintain margins if other cost reduction efforts do not offset raw material cost increases.
See Note 10 to the Consolidated Financial Statements for additional information on stock-based deferred compensation risk management. 2023 ANNUAL REPORT 51 Credit Risk Credit risk is the possibility of loss from a customer’s failure to make payments according to contract terms.
See Note 10 to the Consolidated Financial Statements for additional information on stock-based deferred compensation risk management. 2024 ANNUAL REPORT 51 Credit Risk Credit risk is the possibility of loss from a customer’s failure to make payments according to contract terms.
Counterparty Risk Snap-on is exposed to credit losses in the event of non-performance by the counterparties to its various financial agreements, including its foreign currency forward contracts, interest rate swap agreements, treasury lock agreements and prepaid equity forward agreements.
Counterparty Risk Snap-on is exposed to credit losses in the event of non-performance by the counterparties to its various financial agreements, including current or future foreign currency forward contracts, interest rate swap agreements, treasury lock agreements and prepaid equity forward agreements.
The estimated maximum potential net one-day loss in fair value, calculated using the VAR model, as of 2023 and 2022 year end was $15.2 million, consisting of a $15.8 million loss on interest rate-sensitive financial instruments and a $0.6 million gain on foreign currency-sensitive financial instruments; and $18.2 million, consisting of a $18.0 million loss on interest rate-sensitive financial instruments and a $0.2 million loss on foreign currency-sensitive financial instruments, respectively.
The estimated maximum potential net one-day loss in fair value, calculated using the VAR model, as of 2024 and 2023 year end was $9.8 million, consisting of a $10.0 million loss on interest rate-sensitive financial instruments and a $0.2 million gain on foreign currency-sensitive financial instruments; and $15.2 million, consisting of a $15.8 million loss on interest rate-sensitive financial instruments and a $0.6 million gain on foreign currency-sensitive financial instruments, respectively.
To the extent that commodity prices increase and the company does not have firm pricing agreements with its suppliers, the company may experience margin declines to the extent that it is not able to increase the selling prices of its products. 52 SNAP-ON INCORPORATED
To the extent that commodity prices increase and the company does not have firm pricing agreements with its suppliers, the company may experience margin declines to the extent that it is not able to increase the selling prices of its products or reduce other costs. 52 SNAP-ON INCORPORATED
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 continuing global economic impact of and developments related to Russia’s invasion of Ukraine and the conflict in the Middle East.
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 global economic impact of and developments related to the ongoing war in Ukraine as well as conflicts in the Middle East and other regions.
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In addition, the company continues to monitor developments resulting from the United Kingdom’s exit from the European Union, and the effects this may have on the world economy and the company.

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