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| Percentage Disclosure: All income statement line item percentages below “Operating earnings from financial services” are calculated as a percentage of the sum of Net sales and Financial services revenue. |
Net sales of $4,707.4 million in 2024 represented a decrease of $22.8 million, or 0.5%, from 2023 levels, reflecting a $40.6 million, or 0.9%, organic decline and $5.5 million of unfavorable foreign currency translation, partially offset by $23.3 million of acquisition-related sales.
Gross profit of $2,377.9 million in 2024 compared to $2,349.1 million last year, an increase of $28.8 million or 1.2%. Gross margin (gross profit as a percentage of net sales) improved 80 basis points (100 basis points (“bps”) equals 1.0 percent) from 2023 primarily due to benefits from the company’s RCI initiatives, increased sales in higher-gross-margin businesses, and lower material and other costs.
Operating expenses of $1,309.1 million in 2024, including a $22.5 million benefit from the legal payments, compared to $1,309.2 million last year. Operating expenses as a percentage of net sales rose 10 bps from last year primarily reflecting the effects of lower sales volumes, partially offset by benefits from the legal payments.
Operating earnings before financial services of $1,068.8 million in 2024, including a $22.5 million benefit from the legal payments, compared to $1,039.9 million in 2023. As a percentage of net sales, operating earnings before financial services were 22.7% compared to 22.0% last year.
Financial services revenue of $401.0 million in 2024 compared to $378.1 million last year. Financial services operating earnings of $276.9 million in 2024 compared to $270.5 million in 2023.
Operating earnings of $1,345.7 million in 2024, including a $22.5 million benefit from the legal payments, compared to $1,310.4 million in 2023. As a percentage of revenues, operating earnings were 26.3% compared to 25.7% last year.
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.
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. 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.
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.
Segment Results
Snap-on’s operating segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. Snap-on’s reportable operating segments are: (i) the Commercial & Industrial Group; (ii) the Snap-on Tools Group; (iii) the Repair Systems & Information Group; and (iv) Financial Services. The Commercial & Industrial Group consists of business operations serving a broad range of industrial and commercial customers worldwide, including customers in the aerospace, natural resources, government and military, power generation, transportation and technical education market segments, primarily through direct and distributor channels. The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians through the company’s multinational mobile tool distribution channel. The Repair Systems & Information Group consists of business operations serving other professional vehicle repair customers worldwide, primarily owners and managers of independent repair shops and OEM dealerships, through direct and distributor channels. Financial Services consists of the business operations of Snap-on’s finance subsidiaries.
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. The Snap-on Tools Group segment net sales reflect external net sales, while the Commercial & Industrial Group and the Repair Systems & Information Group segment net sales include both external and intersegment net sales. Snap-on accounts for intersegment net sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments. The Financial Services operating segment is evaluated based on financial services revenue and segment operating earnings. Corporate expenses primarily reflect stock-based compensation and other costs not attributable to an operating segment. Intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results.
Commercial & Industrial Group
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Amounts in millions) | | 2024 | | 2023 | | Change |
| External net sales | | $ | 1,187.6 | | | 80.4 | % | | $ | 1,145.6 | | | 78.6 | % | | $ | 42.0 | | | 3.7 | % |
| Intersegment net sales | | 289.2 | | | 19.6 | % | | 312.7 | | | 21.4 | % | | (23.5) | | | (7.5) | % |
| Segment net sales | | 1,476.8 | | | 100.0 | % | | 1,458.3 | | | 100.0 | % | | 18.5 | | | 1.3 | % |
| Segment cost of goods sold | | (868.6) | | | (58.8) | % | | (887.5) | | | (60.9) | % | | 18.9 | | | 2.1 | % |
| Segment gross profit | | 608.2 | | | 41.2 | % | | 570.8 | | | 39.1 | % | | 37.4 | | | 6.6 | % |
| Segment operating expenses | | (366.1) | | | (24.8) | % | | (344.7) | | | (23.6) | % | | (21.4) | | | (6.2) | % |
| Segment operating earnings | | $ | 242.1 | | | 16.4 | % | | $ | 226.1 | | | 15.5 | % | | $ | 16.0 | | | 7.1 | % |
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. The organic increase is primarily due to a mid single-digit gain in sales to customers in critical industries, partially offset by a double-digit reduction in the power tools operation and a low single-digit decline in the European-based hand tools business.
Segment gross margin in 2024 improved 210 bps from last year, primarily reflecting increased sales volumes in higher-gross-margin critical industry sectors, savings from the segment’s RCI initiatives, lower material and other costs, and 40 bps of benefits from acquisitions.
Segment operating expenses as a percentage of net sales in 2024 rose 120 bps as compared to 2023 primarily due to increased personnel and other costs, and a 50 bps impact from acquisitions.
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| Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) | |
As a result of these factors, segment operating earnings of $242.1 million in 2024 compared to $226.1 million in 2023, an increase of $16.0 million or 7.1%. Segment operating margin (segment operating earnings as a percentage of segment net sales) for the Commercial & Industrial Group of 16.4% in 2024 compared to 15.5% last year.
Snap-on Tools Group
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| (Amounts in millions) | | 2024 | | 2023 | | Change |
| Segment net sales | | $ | 1,989.2 | | | 100.0 | % | | $ | 2,088.8 | | | 100.0 | % | | $ | (99.6) | | | (4.8) | % |
| Segment cost of goods sold | | (1,050.3) | | | (52.8) | % | | (1,107.7) | | | (53.0) | % | | 57.4 | | | 5.2 | % |
| Segment gross profit | | 938.9 | | | 47.2 | % | | 981.1 | | | 47.0 | % | | (42.2) | | | (4.3) | % |
| Segment operating expenses | | (491.6) | | | (24.7) | % | | (487.3) | | | (23.4) | % | | (4.3) | | | (0.9) | % |
| Segment operating earnings | | $ | 447.3 | | | 22.5 | % | | $ | 493.8 | | | 23.6 | % | | $ | (46.5) | | | (9.4) | % |
Segment net sales of $1,989.2 million in 2024 represented a decrease of $99.6 million, or 4.8%, from 2023 levels, reflecting a $100.9 million, or 4.8%, organic sales decline, partially offset by $1.3 million of favorable foreign currency translation. 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.
Segment operating expenses as a percentage of net sales in 2024 rose 130 bps from last year primarily due to the lower sales volumes.
As a result of these factors, segment operating earnings of $447.3 million in 2024 compared to $493.8 million in 2023, a decrease of $46.5 million or 9.4%. Operating margin for the Snap‑on Tools Group of 22.5% in 2024 compared to 23.6% last year.
Repair Systems & Information Group
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| (Amounts in millions) | | 2024 | | 2023 | | Change |
| External net sales | | $ | 1,530.6 | | | 85.1 | % | | $ | 1,495.8 | | | 84.0 | % | | $ | 34.8 | | | 2.3 | % |
| Intersegment net sales | | 267.3 | | | 14.9 | % | | 285.4 | | | 16.0 | % | | (18.1) | | | (6.3) | % |
| Segment net sales | | 1,797.9 | | | 100.0 | % | | 1,781.2 | | | 100.0 | % | | 16.7 | | | 0.9 | % |
| Segment cost of goods sold | | (967.1) | | | (53.8) | % | | (984.0) | | | (55.2) | % | | 16.9 | | | 1.7 | % |
| Segment gross profit | | 830.8 | | | 46.2 | % | | 797.2 | | | 44.8 | % | | 33.6 | | | 4.2 | % |
| Segment operating expenses | | (375.6) | | | (20.9) | % | | (364.0) | | | (20.5) | % | | (11.6) | | | (3.2) | % |
| Segment operating earnings | | $ | 455.2 | | | 25.3 | % | | $ | 433.2 | | | 24.3 | % | | $ | 22.0 | | | 5.1 | % |
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. The organic improvement primarily reflects a mid single-digit increase in activity with OEM dealerships, partially offset by a low single-digit decline in sales of undercar equipment.
Segment gross margin in 2024 improved 140 bps from last year primarily due to increased sales of higher-gross-margin products and savings from the segment’s RCI initiatives.
Segment operating expenses as a percentage of net sales in 2024 rose 40 bps from 2023 primarily reflecting increased personnel and other costs.
As a result of these factors, segment operating earnings of $455.2 million in 2024 compared to $433.2 million in 2023, an increase of $22.0 million or 5.1%. Operating margin for the Repair Systems & Information Group of 25.3% in 2024 compared to 24.3% last year.
Financial Services
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| (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. Financial services revenue of $401.0 million in 2024 represented an increase of $22.9 million, or 6.1%, from 2023. In both 2024 and 2023, the average yield on finance receivables was 17.7%. In 2024 and 2023, the average yields on contract receivables were 9.0% and 8.8%, respectively. Originations of $1,182.9 million in 2024 represented a decrease of $52.6 million, or 4.3%, from 2023 levels.
Financial services expenses primarily include personnel-related and other general and administrative costs, as well as provisions for credit losses. These expenses are generally more dependent on changes in the size of the financial services portfolio than they are on the revenue of the segment. Financial services expenses in 2024 increased primarily due to higher provisions for credit losses as compared to those recorded in 2023. As a percentage of the average financial services portfolio, financial services expenses were 5.0% in 2024 and 4.5% in 2023.
As a result of these factors, segment operating earnings of $276.9 million in 2024 compared to $270.5 million in 2023, an increase of $6.4 million, or 2.4%.
See Note 1 and Note 4 to the Consolidated Financial Statements for additional information on financial services.
Corporate
Snap-on’s general corporate expenses in 2024 of $75.8 million compared to $113.2 million recorded in 2023. The year-over-year decrease primarily reflects benefits from the legal payments received in the first six months of 2024 and lower stock-based compensation costs.
Quarterly Data
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| 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 | |
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| * | 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. |
Fourth Quarter
Results of operations for the fourth quarters of 2024 and 2023 are as follows:
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| | | 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 | % |
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| 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) | % |
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| 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) | % |
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| Net earnings | | | | | | | | | |
| Net earnings attributable to noncontrolling interests | | () | | | () | | | () | |
| Net earnings attributable to Snap-on Incorporated | | $ | | | | $ | | | | $ | | |
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| Net earnings per share attributable to Snap-on Incorporated: | | | | | | |
| Basic | | $ | | | | $ | | | | $ | | |
| Diluted | | | | | | | | | |
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| Weighted-average shares outstanding: | | | | | | |
| Basic | | | | | | | | | |
| Effect of dilutive securities | | | | | | | | | |
| Diluted | | | | | | | | | |
See Notes to Consolidated Financial Statements.
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| Snap-on Incorporated – Consolidated Statements of Comprehensive Income |
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| (Amounts in millions) | | 2024 | | 2023 | | 2022 |
| Comprehensive income (loss): | | | | | | |
| Net earnings | | $ | | | | $ | | | | $ | | |
| Other comprehensive income (loss): | | | | | | |
| Foreign currency translation | | () | | | | | | () | |
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| Reclassification of cash flow hedges to net earnings | | () | | | () | | | () | |
| Defined benefit pension and postretirement plans: | | | | | | |
Net prior service costs and credits and unrecognized gain (loss) | | () | | | | | | () | |
| Income tax benefit (expense) | | | | | () | | | | |
| Net of tax | | () | | | | | | () | |
| | | | | | |
Amortization of unrecognized loss and net prior service costs included in net periodic benefit cost | | | | | | | | | |
| Income tax benefit | | () | | | () | | | () | |
| Net of tax | | | | | | | | | |
| Total comprehensive income | | | | | | | | | |
| | | | | | |
| Comprehensive income attributable to noncontrolling interests | | () | | | () | | | () | |
| Comprehensive income attributable to Snap-on Incorporated | | $ | | | | $ | | | | $ | | |
See Notes to Consolidated Financial Statements.
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| Snap-on Incorporated – Consolidated Balance Sheets | |
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| | | | |
| | | Fiscal Year End |
| (Amounts in millions, except share data) | | 2024 | | 2023 |
| ASSETS | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | | | | $ | | |
| Trade and other accounts receivable – net | | | | | | |
| Finance receivables – net | | | | | | |
| Contract receivables – net | | | | | | |
| Inventories – net | | | | | | |
| Prepaid expenses and other current assets | | | | | | |
| Total current assets | | | | | | |
| | | | |
| Property and equipment – net | | | | | | |
| Operating lease right-of-use assets | | | | | | |
| Deferred income tax assets | | | | | | |
| Long-term finance receivables – net | | | | | | |
| Long-term contract receivables – net | | | | | | |
| Goodwill | | | | | | |
| Other intangible assets – net | | | | | | |
| Pension assets | | | | | | |
| Other long-term assets | | | | | | |
| Total assets | | $ | | | | $ | | |
| LIABILITIES AND EQUITY | | | | |
| Current liabilities: | | | | |
| Notes payable | | $ | | | | $ | | |
| Accounts payable | | | | | | |
| Accrued benefits | | | | | | |
| Accrued compensation | | | | | | |
| Franchisee deposits | | | | | | |
| Other accrued liabilities | | | | | | |
| Total current liabilities | | | | | | |
| | | | |
| Long-term debt | | | | | | |
| Deferred income tax liabilities | | | | | | |
| Retiree health care benefits | | | | | | |
| Pension liabilities | | | | | | |
| Operating lease liabilities | | | | | | |
| Other long-term liabilities | | | | | | |
| Total liabilities | | | | | | |
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| Commitments and contingencies (Note 15) | | | | |
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| Equity | | | | |
| Shareholders’ equity attributable to Snap-on Incorporated: | | | | |
Preferred stock (authorized shares of $ par value; outstanding) | | | | | | |
Common stock (authorized shares of $ par value; issued and shares, respectively) | | | | | | |
| Additional paid-in capital | | | | | | |
| Retained earnings | | | | | | |
| Accumulated other comprehensive loss | | () | | | () | |
Treasury stock at cost ( and shares, respectively) | | () | | | () | |
Total shareholders’ equity attributable to Snap-on Incorporated | | | | | | |
| Noncontrolling interests | | | | | | |
| Total equity | | | | | | |
| Total liabilities and equity | | $ | | | | $ | | |
See Notes to Consolidated Financial Statements.
| | | | | | | | |
| Snap-on Incorporated – Consolidated Statements of Equity | |
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| | | | | | | | | | | | | | |
| | Shareholders’ Equity Attributable to Snap-on Incorporated | | | | |
| (Amounts in millions, except share data) | | Common
Stock | | Additional
Paid-in
Capital | | Retained
Earnings | | Accumulated
Other
Comprehensive
Loss | | Treasury
Stock | | Noncontrolling
Interests | | Total
Equity |
| Balance at January 1, 2022 | | $ | | | | $ | | | | $ | | | | $ | () | | | $ | () | | | $ | | | | $ | | |
Net earnings for 2022 | | — | | | — | | | | | | — | | | — | | | | | | | |
| Other comprehensive loss | | — | | | — | | | — | | | () | | | — | | | — | | | () | |
Cash dividends – $ per share | | — | | | — | | | () | | | — | | | — | | | — | | | () | |
| Stock compensation plans | | — | | | | | | — | | | — | | | | | | — | | | | |
Share repurchases – shares | | — | | | — | | | — | | | — | | | () | | | — | | | () | |
| Other | | — | | | — | | | () | | | — | | | — | | | () | | | () | |
| Balance at December 31, 2022 | | | | | | | | | | | () | | | () | | | | | | | |
Net earnings for 2023 | | — | | | — | | | | | | — | | | — | | | | | | | |
| Other comprehensive income | | — | | | — | | | — | | | | | | — | | | — | | | | |
Cash dividends – $ per share | | — | | | — | | | () | | | — | | | — | | | — | | | () | |
| Stock compensation plans | | — | | | | | | — | | | — | | | | | | — | | | | |
Share repurchases – shares | | — | | | — | | | — | | | — | | | () | | | — | | | () | |
| Other | | | | | — | | | () | | | — | | | — | | | () | | | () | |
| Balance at December 30, 2023 | | | | | | | | | | | () | | | () | | | | | | | |
Net earnings for 2024 | | — | | | — | | | | | | — | | | — | | | | | | | |
| Other comprehensive loss | | — | | | — | | | — | | | () | | | — | | | — | | | () | |
Cash dividends – $ per share | | — | | | — | | | () | | | — | | | — | | | — | | | () | |
| Stock compensation plans | | — | | | | | | — | | | — | | | | | | — | | | | |
Share repurchases – shares | | — | | | — | | | — | | | — | | | () | | | — | | | () | |
| Other | | | | | — | | | () | | | — | | | — | | | () | | | () | |
| Balance at December 28, 2024 | | $ | | | | $ | | | | $ | | | | $ | () | | | $ | () | | | $ | | | | $ | | |
See Notes to Consolidated Financial Statements.
| | | | | | | | |
| Snap-on Incorporated – Consolidated Statements of Cash Flows | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| (Amounts in millions) | | 2024 | | 2023 | | 2022 |
| Operating activities: | | | | | | |
| Net earnings | | $ | | | | $ | | | | $ | | |
Adjustments to reconcile net earnings to net cash provided (used) by operating activities: | | | | | | |
| Depreciation | | | | | | | | | |
| Amortization of other intangible assets | | | | | | | | | |
| Provision for losses on finance receivables | | | | | | | | | |
Provision for losses on non-finance receivables | | | | | | | | | |
| Stock-based compensation expense | | | | | | | | | |
| Deferred income tax benefit | | () | | | () | | | () | |
| Gain on sales of assets | | () | | | () | | | () | |
|
|
| Changes in operating assets and liabilities, net of effects of acquisitions: | | | | | | |
| Trade and other accounts receivable | | () | | | () | | | () | |
| Contract receivables | | () | | | () | | | () | |
| Inventories | | | | | | | | () | |
| Prepaid expenses and other current assets | | | | | | | | () | |
| Accounts payable | | | | | () | | | | |
| Accrued and other liabilities | | () | | | () | | | () | |
| Net cash provided by operating activities | | | | | | | | | |
| | | | | | |
| Investing activities: | | | | | | |
| Additions to finance receivables | | () | | | () | | | () | |
| Collections of finance receivables | | | | | | | | | |
| Capital expenditures | | () | | | () | | | () | |
| Acquisitions of businesses, net of cash acquired | | | | | () | | | | |
| Disposals of property and equipment | | | | | | | | | |
| Other | | | | | () | | | | |
| Net cash used by investing activities | | () | | | () | | | () | |
| | | | | | |
| Financing activities: | | | | | | |
|
|
|
|
|
|
| Other | | | | | | |
| Total other accrued liabilities | | $ | | | | $ | | |
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
Note 2:
| | $ | | | | Other revenues | | | | | | |
| Total net sales | | | | | | |
| Financial services revenue | | | | | | |
| Total revenues | | $ | | | | $ | | |
Snap-on evaluates the performance of the Commercial & Industrial Group, the Snap-on Tools Group and the Repair Systems & Information Group operating segments based on segment net sales and segment operating earnings while the Financial Services operating segment is evaluated based on segment revenue and segment operating earnings. The Snap-on Tools Group segment net sales reflect external net sales, while the Commercial & Industrial Group and the Repair Systems & Information Group segment net sales include both external and intersegment net sales. Snap-on accounts for intersegment net sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments. Intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results.
| | $ | | | | $ | | | | $ | | | | $ | — | | | $ | | | | Europe | | | | | | | | | | | | | | — | | | | |
| All other | | | | | | | | | | | | | | — | | | | |
| External net sales | | | | | | | | | | | | | | — | | | | |
| Intersegment net sales | | | | | | | | | | | | | | () | | | — | |
| Total net sales | | | | | | | | | | | | | | () | | | | |
| Financial services revenue | | — | | | — | | | — | | | | | | — | | | | |
| Total revenue | | $ | | | | $ | | | | $ | | | | $ | | | | $ | () | | | $ | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2023 |
| | Commercial & | | Snap-on | | Repair Systems | | | | | | |
| | Industrial | | Tools | | & Information | | Financial | | | | Snap-on |
| (Amounts in millions) | | Group | | Group | | Group | | Services | | Eliminations | | Incorporated |
| Net sales: | | | | | | | | | | | | |
| North America* | | $ | | | | $ | | | | $ | | | | $ | | | | $ | — | | | $ | | |
| Europe | | | | | | | | | | | | | | — | | | | |
| All other | | | | | | | | | | | | | | — | | | | |
| External net sales | | | | | | | | | | | | | | — | | | | |
| Intersegment net sales | | | | | | | | | | | | | | () | | | — | |
| Total net sales | | | | | | | | | | | | | | () | | | | |
| Financial services revenue | | | | | | | | | | | | | | — | | | | |
| Total revenue | | $ | | | | $ | | | | $ | | | | $ | | | | $ | () | | | $ | | |
| | | | | | | | | | | | | | |
| | | | |
* North America is comprised of the United States, Canada and Mexico. | |
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | $ | | | | $ | | | | $ | — | | | $ | | | | All other professionals | | | | | | | | | | | | | | — | | | | |
| External net sales | | | | | | | | | | | | | | — | | | | |
| Intersegment net sales | | | | | | | | | | | | | | () | | | — | |
| Total net sales | | | | | | | | | | | | | | () | | | | |
| Financial services revenue | | | | | | | | | | | | | | — | | | | |
| Total revenue | | $ | | | | $ | | | | $ | | | | $ | | | | $ | () | | | $ | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2023 |
| | Commercial & | | Snap-on | | Repair Systems | | | | | | |
| | Industrial | | Tools | | & Information | | Financial | | | | Snap-on |
| (Amounts in millions) | | Group | | Group | | Group | | Services | | Eliminations | | Incorporated |
| Net sales: | | | | | | | | | | | | |
| Vehicle service professionals | | $ | | | | $ | | | | $ | | | | $ | | | | $ | — | | | $ | | |
| All other professionals | | | | | | | | | | | | | | — | | | | |
| External net sales | | | | | | | | | | | | | | — | | | | |
| Intersegment net sales | | | | | | | | | | | | | | () | | | — | |
| Total net sales | | | | | | | | | | | | | | () | | | | |
| Financial services revenue | | | | | | | | | | | | | | — | | | | |
| Total revenue | | $ | | | | $ | | | | $ | | | | $ | | | | $ | () | | | $ | | |
categories: (i) tools; (ii) diagnostics, information and management systems; and (iii) equipment. The tools product category includes hand tools, power tools, tool storage products and other similar products. The diagnostics, information and management systems product category includes handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer (“OEM”) purchasing facilitation services, and warranty management systems and analytics to help OEM dealership service and repair shops (“OEM dealerships”) manage and track performance. The equipment product category includes solutions for the service of vehicles and industrial equipment. Snap-on supports the sale of its diagnostics and vehicle service shop equipment by offering training programs as well as after-sales support to its customers. Through its financial services businesses, Snap‑on derives revenue from various financing programs designed to facilitate the sales of its products and support its franchise business.Approximately % of Snap-on’s net sales are products sold at a point in time through ship-and-bill performance obligations that also include repair services. The remaining sales revenue is earned over time primarily for software subscriptions, other subscription service agreements and extended warranty programs.
Snap-on enters into contracts related to the selling of tools, diagnostics, repair information, equipment and related services. At contract inception, an assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, Snap-on considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Contracts with customers are comprised of customer purchase orders, invoices and written contracts.
Snap-on had $ million of long-term contracts that have fixed consideration that extends beyond one year as of December 28, 2024. Snap-on expects to recognize approximately % of these contracts as revenue by the end of fiscal 2026, an additional % by the end of fiscal 2028 and the balance thereafter.Snap-on typically expenses incremental direct costs of obtaining a contract (sales commissions) when incurred because the amortization period is generally 12 months or less. Capitalized long-term contract costs are not significant. Contract costs are expensed or amortized in “Operating expenses” on the accompanying Consolidated Statements of Earnings.
When performance obligations are satisfied: For performance obligations related to the majority of ship-and-bill products, including repair services contracts, control transfers at a point in time when title transfers upon shipment of the product to the customer, and for some sales, control transfers when title is transferred at time of receipt by customer. Once a product or repaired product has shipped or has been delivered, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from the asset, revenue is recognized. Snap-on considers control to have transferred upon shipment or delivery when Snap-on has a present right to payment, the customer has legal title to the asset, Snap-on has transferred physical possession of the asset, and the customer has significant risk and rewards of ownership of the asset.
Significant payment terms:
The customer typically agrees to a stated rate and price in the contract that does not vary over the contract term. In some cases, customers prepay for their licenses, or in other cases, pay on a monthly or quarterly basis. When the timing of the payment made by the customer precedes the delivery of the performance obligation, a contract liability is recognized.
Variable consideration: In some cases, the nature of Snap-on’s contracts give rise to variable consideration, including rebates, credits, allowances for returns or other similar items that generally decrease the transaction price. These variable amounts generally are credited to the customer, based on achieving certain levels of sales activity, product returns and making payments within specific terms.
In the normal course of business, Snap-on allows franchisees to return product per the provisions in the franchise agreement that allow for the return of product in a saleable condition. For other customers, product returns are generally not accepted unless the item is defective as manufactured. Where applicable, Snap-on establishes provisions for estimated sales returns. Estimated product returns are recorded as a reduction in reported revenues at the time of sale based upon historical product return experience and is adjusted for known trends to arrive at the amount of consideration that Snap-on expects to receive.
Variable consideration is estimated at the most likely amount that is expected to be earned. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the anticipated performance and all information (historical, current and forecasted) that is reasonably available.
Warranties: Snap-on allows customers to return product when the product is defective as manufactured. Where applicable, Snap-on establishes provisions for estimated warranties. Estimated product warranties are provided for specific product lines and Snap-on accrues for estimated future warranty cost in the period in which the sale is recorded. The costs are included in “Cost of goods sold” on the accompanying Consolidated Statements of Earnings. Snap-on calculates its accrual requirements based on historic warranty loss experience that is periodically adjusted for recent actual experience, including the timing of claims during the warranty period and actual costs incurred. Snap-on does not typically provide customers with the right to a refund.
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| | |
| Notes to Consolidated Financial Statements (continued) | | |
Franchise fee revenue, including nominal, non-refundable initial fees, is recognized upon the granting of a franchise, which is when the company has performed substantially all initial services required by the franchise agreement. Franchise fee revenue also includes ongoing monthly fees (primarily for sales and business training as well as marketing and product promotion programs) that are recognized as the fees are earned. Franchise fee revenue in 2024, 2023 and 2022 totaled $ million, $ million and $ million, respectively.
Note 3:
million. SAVTEQ, based in Lexington, Kentucky, provides precise non-contact measuring capabilities. In fiscal 2023, the company completed the purchase accounting valuations for the acquired net assets of SAVTEQ. The $ million excess of the purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Consolidated Balance Sheets.On November 1, 2023, Snap-on acquired Mountz, Inc. (“Mountz”) for a cash purchase price of $ million. Mountz, based in San Jose, California, is a leading developer, manufacturer and marketer of high-precision torque tools, including measurement, calibration and documentation products. The company completed the purchase accounting valuations for the acquired net assets of Mountz in the first quarter of 2024. The $ million excess of the purchase price over the fair value of the net assets acquired was recorded in “Goodwill” on the accompanying Consolidated Balance Sheets.
For segment reporting purposes, the results of operations and assets of SAVTEQ have been included in the Repair Systems & Information Group and those of Mountz have been included in the Commercial & Industrial Group since the respective acquisition dates.
Pro forma financial information has not been presented for these acquisitions as the net effects, individually and collectively, were neither significant nor material to Snap-on’s results of operations or financial position. See Note 7 for additional information on goodwill and other intangible assets.
Note 4:
to days.
| | $ | | | | Allowances for credit losses | () | | | () | |
| Total trade and other accounts receivable – net | $ | | | | $ | | |
| | $ | | | Provision for credit losses | | | | | |
Charge-offs | () | | | () | |
Recoveries | | | | | |
Currency translation | () | | | | |
| End of year | $ | | | | $ | | |
Finance and contract receivables: Snap-on Credit LLC (“SOC”), the company’s financial services operation in the United States, originates extended-term finance and contract receivables on sales of Snap-on’s products sold through the U.S. franchisee network and to certain other customers of Snap-on; Snap-on’s foreign finance subsidiaries provide similar financing internationally. Interest income on finance and contract receivables is included in “Financial services revenue” on the accompanying Consolidated Statements of Earnings.
Finance receivables are comprised of extended-term payment contracts to both technicians and independent shop owners (i.e., franchisees’ customers) to enable them to purchase tools, diagnostics, and equipment products on an extended-term payment plan, with average payment terms of approximately .
Contract receivables, with payment terms of up to years, are comprised of extended-term payment contracts to a broad base of customers worldwide, including shop owners, both independents and national chains, for their purchase of tools, diagnostics, and equipment products, as well as extended-term contracts to franchisees to meet a number of financing needs, including working capital loans, loans to enable new franchisees to fund the purchase of the franchise and van leases, or the expansion of an existing franchise. Finance and contract receivables are generally secured by the underlying tools, diagnostics and/or equipment products financed and, for contracts to franchisees, other franchisee assets.
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| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | Finance lease receivables, net of unearned finance charges of $ million and $ million, respectively | | | | | |
| Total finance receivables | | | | | |
| | | |
| Contract installment receivables | | | | | |
Contract lease receivables, net of unearned finance charges of $ million and $ million, respectively | | | | | |
| Total contract receivables | | | | | |
| Total | | | | | |
| | | |
| Allowances for credit losses: | | | |
| Finance installment receivables | () | | | () | |
| Finance lease receivables | () | | | () | |
| Total finance allowances for credit losses | () | | | () | |
| | | |
| Contract installment receivables | () | | | () | |
| Contract lease receivables | () | | | () | |
| Total contract allowances for credit losses | () | | | () | |
| Total allowances for credit losses | () | | | () | |
| Total current finance and contract receivables – net | $ | | | | $ | | |
| | | |
| Finance receivables – net | $ | | | | $ | | |
| Contract receivables – net | | | | | |
| Total current finance and contract receivables – net | $ | | | | $ | | |
| | $ | | | Finance lease receivables, net of unearned finance charges of $ million and $ million, respectively | | | | | |
| Total finance receivables | | | | | |
| | | |
| Contract installment receivables | | | | | |
Contract lease receivables, net of unearned finance charges of $ million and $ million, respectively | | | | | |
| Total contract receivables | | | | | |
| Total | | | | | |
| | | |
| Allowances for credit losses: | | | |
| Finance installment receivables | () | | | () | |
| Finance lease receivables | () | | | () | |
| Total finance allowances for credit losses | () | | | () | |
| | | |
| Contract installment receivables | () | | | () | |
| Contract lease receivables | () | | | () | |
| Total contract allowances for credit losses | () | | | () | |
| Total allowances for credit losses | () | | | () | |
| Total long-term finance and contract receivables – net | $ | | | | $ | | |
| | | |
| Finance receivables – net | $ | | | | $ | | |
| Contract receivables – net | | | | | |
| Total long-term finance and contract receivables – net | $ | | | | $ | | |
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | $ | | | | $ | | | | 25 – 36 | | | | | | | | | | | | |
| 37 – 48 | | | | | | | | | | | | |
| 49 – 60 | | | | | | | | | | | | |
| Thereafter | | | | | | | | | | | | |
| Total | | $ | | | | $ | | | | $ | | | | $ | | |
Credit quality: The company’s receivable portfolio is comprised of portfolio segments, finance and contract receivables, which are the same segments used to estimate expected credit losses reported in the allowances for credit losses. The amortized cost basis for finance and contract receivables is the amount originated adjusted for applicable accrued interest and net of deferred fees or costs, collections, and write-offs. The company monitors and assesses credit risk based on the characteristics of each portfolio segment.
When extending credit, Snap-on evaluates the collectability of the receivables based on a combination of various financial and qualitative factors that may affect a customer’s ability to pay. These factors may include the customer’s financial condition, past payment experience, and credit bureau and proprietary Snap-on credit model information, as well as the value of the underlying collateral.
For finance and contract receivables, Snap-on assesses quantitative and qualitative factors through the use of credit quality indicators consisting primarily of delinquency classification, collection experience and credit exposure by customer. Delinquency is the primary indicator of credit quality for finance and contract receivables. Snap-on conducts monthly reviews of credit and collection performance for both the finance and contract receivable portfolios focusing on data such as delinquency trends, nonaccrual receivables, and write-off and recovery activity. These reviews allow for the formulation of collection strategies and potential collection policy modifications in response to changing risk profiles in the finance and contract receivable portfolios. The company also maintains a system that aggregates credit exposure and provides delinquency data by days past due aging categories. A receivable days or more past due is considered delinquent. However, customer receivables are monitored prior to becoming days past due.
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | Non-delinquent | | | | | | | | | | | | | | | | | | | | |
| Total Finance receivables | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | | | | | |
| Finance receivables charge-offs | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | | | | | |
| Contract receivables: | | | | | | | | | | | | | |
| Delinquent | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Non-delinquent | | | | | | | | | | | | | | | | | | | | |
| Total Contract receivables | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | | | | | |
| Contract receivables charge-offs | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | | | | | |
days past due. Repossessed accounts are typically written off within days of asset repossession. Contract receivables related to equipment leases are generally written off when an account becomes days past due, while contract receivables related to franchise finance and van leases are generally written off no later than when the receivable becomes days past the asset return date. For finance and contract receivables, customer bankruptcies are generally written off upon notification that the associated debt is not being reaffirmed or, in any event, no later than when the receivable becomes days past due. Changes to the allowances for credit losses are maintained through adjustments to the provisions for credit losses.For finance receivables, the company uses a vintage loss rate methodology to determine expected losses. Vintage analysis aims to calculate losses based on the timing of the losses relative to the origination of the receivables. The finance receivable portfolio contains a substantial amount of homogeneous contracts which fits well with the vintage analysis.
For contract receivables, the company primarily uses a Weighted-Average Remaining Maturity (“WARM”) methodology. The WARM methodology calculates the average annual write-off rate and applies it to the remaining term of the receivables. The WARM methodology is used since contract receivables have limited loss experience over generally longer terms and, therefore, the predictive loss patterns are more difficult to estimate.
The company performed a correlation analysis to compare historical losses to many economic factors. The primary economic factors considered were real gross domestic product, civilian unemployment, industrial production index, and repair and maintenance employment rate; the company determined that there is limited correlation between the historical losses and economic factors. As a result, consideration was given to qualitative factors to adjust the reserve balance for asset specific risk characteristics, current conditions and future expectations. Similar qualitative factors are considered for both finance and contract receivables. The qualitative factors used in determining the estimate of expected credit losses are influenced by the changes in the composition of the portfolio, underwriting practices, and other relevant conditions that were different from the historical periods.
The allowances for credit losses are adjusted each period for changes in the credit risk and expected lifetime credit losses.
| | $ | | | | $ | | | | $ | | | | |
| Provision for credit losses | | | | | | | | | | | | |
| Charge-offs | | () | | | () | | | () | | | () | |
| Recoveries | | | | | | | | | | | | |
| Currency translation | | () | | | | | | | | | | |
| End of year | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
It is the general practice of Snap-on’s financial services business not to engage in contract or loan modifications. In limited instances, Snap-on’s financial services business may modify certain receivables. The amount and number of finance and contract receivable modifications as of 2024 and 2023 year end were immaterial to both the financial services portfolio and the company’s results of operations and financial position.
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | Contract receivables | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| 2023 year end: | | | | | | | | | | | | | | |
| Finance receivables | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Contract receivables | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual: SOC maintains the accrual of interest income during the progression through the various stages of delinquency prior to processing for write-off. At the time of write-off, the entire balance including the accrued but unpaid interest income amount is recorded as a loss.
Finance receivables are generally placed on nonaccrual status (nonaccrual of interest and other fees): (i) when a customer is placed on repossession status; (ii) upon receipt of notification of bankruptcy; (iii) upon notification of the death of a customer; or (iv) in other instances in which management concludes collectability is not reasonably assured.
Contract receivables are generally placed on nonaccrual status: (i) when a receivable is more than days past due or at the point a customer’s account is placed on terminated status regardless of its delinquency status; (ii) upon notification of the death of a customer; or (iii) in other instances in which management concludes collectability is not reasonably assured.
The accrual of interest and other fees is resumed when the finance or contract receivable becomes contractually current and collection of all remaining contractual amounts due is reasonably assured. A receivable may have credit losses when it is expected that all amounts related to the receivable will not be collected according to the contractual terms of the applicable agreement. Such finance and contract receivables are covered by the company’s respective allowances for credit losses and are written off against the allowances when appropriate.
| | $ | | | | Contract receivables | | | | | | |
Note 5:
| | $ | | | | Work in progress | | | | | | |
| Raw materials | | | | | | |
| Total FIFO value | | | | | | |
| Excess of current cost over LIFO cost | | () | | | () | |
| Total inventories – net | | $ | | | | $ | | |
Inventories accounted for using the first-in, first-out (“FIFO”) method approximated % and % of total inventories as of 2024 and 2023 year end, respectively. The company accounts for its non-U.S. inventory on the FIFO method. As of 2024 year end, approximately % of the company’s U.S. inventory was accounted for using the FIFO method and % was accounted for using the last-in, first-out (“LIFO”) method. There were LIFO inventory liquidations in 2024, 2023 or 2022.
Note 6:
| | $ | | | | Buildings and improvements | | | | | | |
| Machinery, equipment and computer software | | | | | | |
| Property and equipment – gross | | | | | | |
| Accumulated depreciation | | () | | | () | |
| Property and equipment – net | | $ | | | | $ | | |
to years| Machinery, equipment and computer software | | to years |
million, $ million and $ million in 2024, 2023 and 2022, respectively.
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
Note 7:
| | $ | | | | $ | | | | $ | | | | Currency translation | | | | | | | | | | | | |
| Acquisition adjustments | | | | | | | | | | | | |
| Balance as of 2023 year end | | $ | | | | $ | | | | $ | | | | $ | | |
| Currency translation | | () | | | | | | () | | | () | |
| Acquisition adjustments | | () | | | | | | | | | () | |
| Balance as of 2024 year end | | $ | | | | $ | | | | $ | | | | $ | | |
Goodwill of $ million as of 2024 year end included $ million, from the acquisition of Mountz. In the first quarter of 2024, the purchase accounting valuations for the acquired net assets of Mountz were completed, resulting in a reduction of goodwill of $ million from year end 2023.
Goodwill of $ million as of 2023 year end included $ million, on a preliminary basis, from the acquisition of Mountz and $ million from the acquisition of SAVTEQ. The goodwill from Mountz and SAVTEQ is included in the Commercial & Industrial Group and Repair Systems & Information Group, respectively.
See Note 3 for additional information on acquisitions.
| | $ | () | | | $ | | | | $ | | | | $ | () | | | $ | | | | Developed technology | | | | | () | | | | | | | | | () | | | | |
| Internally developed software | | | | | () | | | | | | | | | () | | | | |
| Patents | | | | | () | | | | | | | | | () | | | | |
| Trademarks | | | | | () | | | | | | | | | () | | | | |
| Other | | | | | () | | | | | | | | | () | | | | |
| Total | | | | | () | | | | | | | | | () | | | | |
| Non-amortized trademarks | | | | | — | | | | | | | | | — | | | | |
| Total other intangible assets | | $ | | | | $ | () | | | $ | | | | $ | | | | $ | () | | | $ | | |
The gross carrying value of customer relationships and non-amortized trademarks as of year end 2024 includes $ million and $ million, respectively, related to the Mountz acquisition.
In 2024, Snap-on retired $ million of customer relationships, $ million of internally developed software and $ million of developed technology that were fully amortized and had reached the end of their useful lives.
Provisions for impairment of goodwill and/or other intangible assets could arise in a future period due to significant and unanticipated changes in circumstances, such as declines in profitability and cash flow due to long-term deterioration in macroeconomic, industry and market conditions, the loss of key customers, changes in technology or markets, changes in key personnel or litigation, a sustained decrease in share price and/or other events. As of 2024 year end, the company had accumulated impairment losses.
| Developed technology | | |
| Internally developed software | | |
| Patents | | |
| Trademarks | | |
| Other | | |
The weighted-average amortization period for all amortizable intangible assets on a combined basis is years. Intangible asset renewal costs are expensed as incurred.
The aggregate amortization expense was $ million in 2024, $ million in 2023 and $ million in 2022. Based on current levels of amortizable intangible assets and estimated weighted-average useful lives, estimated annual amortization expense is expected to be $ million in 2025, $ million in 2026, $ million in 2027, $ million in 2028, and $ million in 2029.
Note 8:
| | $ | | | | $ | | | | Foreign | | | | | | | | | |
| Total | | $ | | | | $ | | | | $ | | |
| | $ | | | | $ | | | | Foreign | | | | | | | | | |
| State | | | | | | | | | |
| Total current | | | | | | | | | |
| Deferred: | | | | | | |
| Federal | | () | | | () | | | () | |
| Foreign | | | | | () | | | () | |
| State | | | | | () | | | | |
| Total deferred | | () | | | () | | | () | |
| Total income tax provision | | $ | | | | $ | | | | $ | | |
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| % | | % | | Increase (decrease) in tax rate resulting from: | | | | | | |
| State income taxes, net of federal benefit | | | | | | |
| Noncontrolling interests | | () | | () | | () |
| Repatriation of foreign earnings | | () | | () | | () |
| Change in valuation allowance for deferred tax assets | | | | | | |
| Adjustments to tax accruals and reserves | | () | | () | | () |
| Foreign rate differences | | | | | | |
|
| Excess tax benefits related to equity compensation | | () | | () | | () |
|
| Other | | () | | () | | () |
| Effective tax rate | | % | | % | | % |
Snap-on’s effective income tax rate on earnings attributable to Snap-on Incorporated was % in 2024, % in 2023, and % in 2022.
| | $ | | | | $ | | | | Accruals not currently deductible | | | | | | | | | |
| Tax credit carryforward | | | | | | | | | |
| Employee benefits | | | | | | | | | |
| Net operating losses | | | | | | | | | |
| Depreciation and amortization | | () | | | () | | | () | |
| Valuation allowance | | () | | | () | | | () | |
| Equity-based compensation | | | | | | | | | |
| Undistributed non-U.S. earnings | | () | | | () | | | () | |
|
|
|
| Less: notes payable | | () | | | () | |
| Total long-term debt | | $ | | | | $ | | |
| | | | | | | | | | | | | | |
| | | | |
| * Includes unamortized debt issuance costs and issuance discounts. | |
Snap-on’s long-term debt and notes payable maturities in the next five years include a $ million note that matures in 2027.
Average notes payable outstanding were $ million and $ million in 2024 and 2023, respectively. The 2024 weighted-average interest rate on such borrowings of % compared with % in 2023. At 2024 year end, the weighted-average rate on outstanding notes payable of % compared with % in 2023.
Snap-on has a $ million multicurrency revolving credit facility that terminates on September 12, 2028 (the “Credit Facility”). The Credit Facility contains an accordion feature that, subject to certain customary conditions, may allow the maximum commitment to be increased by up to $ million with the approval of the lenders providing additional commitments. amounts were borrowed or outstanding under the Credit Facility during the years ended and as of December 28, 2024 or December 30, 2023.
Borrowings under the Credit Facility bear interest at varying rates based on either: (i) Snap-on’s then-current, long-term debt ratings; or (ii) Snap-on’s then-current ratio of consolidated debt net of certain cash adjustments (“Consolidated Net Debt”) to earnings before interest, taxes, depreciation, amortization and certain other adjustments for the preceding four fiscal quarters then ended (the “Consolidated Net Debt to EBITDA Ratio”). The Credit Facility’s financial covenant requires that Snap-on maintain, as of each fiscal quarter end, either (i) a ratio not greater than to 1.00 of Consolidated Net Debt to the sum of Consolidated Net Debt plus total equity and less accumulated other comprehensive income or loss (the “Leverage Ratio”); or (ii) a Consolidated Net Debt to EBITDA Ratio not greater than to 1.00. Snap-on may, up to times during any period during the term of the Credit Facility (including any extensions thereof), elect to increase the maximum Leverage Ratio to to 1.00 and/or increase the maximum Consolidated Net Debt to EBITDA Ratio to to 1.00 for four consecutive fiscal quarters in connection with certain material acquisitions (as defined in the related credit agreement). As of December 28, 2024, the company’s consolidated cash balance, net of certain adjustments, exceeded consolidated debt resulting in actual ratios of () and (), respectively. Both ratios are within the permitted ranges set forth in this financial covenant.
Snap-on generally issues commercial paper to fund its financing needs on a short-term basis and uses the Credit Facility as back-up liquidity to support such commercial paper issuances. There was commercial paper issued or outstanding during the years ended and as of December 28, 2024 or December 30, 2023.
Note 10:
million of net foreign currency forward buy contracts outstanding comprised of buy contracts including $ million in British pounds, $ million in Swedish kronor, $ million in Hong Kong dollars, $ million in euros, $ million in Chinese renminbi, $ million in Australian dollars, $ million in Singapore dollars, $ million in Norwegian kroner, and $ million in other currencies, and sell contracts including $ million in Canadian dollars, $ million in Indian rupees, and $ million in other currencies. As of 2023 year end, Snap-on had $ million of net foreign currency forward buy contracts outstanding comprised of buy contracts including $ million in British pounds, $ million in Swedish kronor, $ million in Hong Kong dollars, $ million in Chinese renminbi, $ million in Australian dollars, $ million in Singapore dollars, $ million in Norwegian kroner, $ million in Danish kroner, and $ million in other currencies, and sell contracts including $ million in Canadian dollars, $ million in euros, $ million in Hungarian forints, $ million in Indian rupees, and $ million in other currencies.Interest rate risk management: Snap-on may manage the exposure created by the differing maturities and interest rate structures of Snap-on’s borrowings through the use of interest rate swap agreements (“interest rate swaps”) and treasury lock agreements (“treasury locks”).
Interest rate swaps: Snap-on may enter into interest rate swaps to manage risks associated with changing interest rates related to the company’s fixed rate borrowings. Interest rate swaps are accounted for as fair value hedges. The differentials paid or received on interest rate swaps are recognized as adjustments to “Interest expense” on the accompanying Consolidated Statements of Earnings. The change in the fair value of the derivative is recorded in “Long-term debt” on the accompanying Consolidated Balance Sheets. There were no outstanding interest rate swaps as of both 2024 and 2023 year end.
Treasury locks: Snap-on may use treasury locks to manage the potential change in interest rates in anticipation of the issuance of fixed rate debt. Treasury locks are accounted for as cash flow hedges. The differentials to be paid or received on treasury locks related to the anticipated issuance of fixed rate debt are initially recorded in Accumulated OCI for derivative instruments that are designated and qualify as cash flow hedges. Upon the issuance of debt, the related amount in Accumulated OCI is released over the term of the debt and recognized as an adjustment to interest expense on the Consolidated Statements of Earnings. There were treasury locks outstanding as of both 2024 and 2023 year end. See Note 17 for additional information on Other income (expense) – net.
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
Counterparty risk: Snap-on is exposed to credit losses in the event of non-performance by the counterparties to its various financial agreements, including its foreign currency forward contracts, interest rate swap agreements, treasury lock agreements and prepaid equity forward agreements. Snap-on does not obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of the counterparties and generally enters into agreements with financial institution counterparties with a credit rating of A- or better. Snap-on does not anticipate non-performance by its counterparties, but cannot provide assurances.
Fair value measurements: The fair value measurement hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority (“Level 1”) to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority (“Level 3”) to unobservable inputs. Fair value measurements primarily based on observable market information are given a “Level 2” priority.
Snap-on has derivative assets and liabilities related to foreign currency forwards and equity forwards that are measured at Level 2 fair value on a recurring basis.
| | $ | — | | | $ | | | | $ | — | | | Foreign currency forwards | | Other accrued liabilities | | — | | | | | | — | | | | |
| Equity forwards | | Prepaid expenses and other current assets | | | | | — | | | | | | — | |
| | | |
|
|
|
|
|
|
|
|
|
|
|
During the next 12 months, Snap-on expects to reclassify into earnings net gains from Accumulated OCI of approximately $ million after tax at the time the underlying hedge transactions are realized.
) | | $ | | | | $ | () | |
Net exposures | | Other income
(expense) – net | | | | | () | | | | |
| | | | | | | | |
Equity forwards | | Operating expenses | | $ | | | | $ | | | | $ | | |
Stock-based deferred compensation liabilities | | Operating expenses | | () | | | () | | | () | |
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | $ | | | | $ | | | | Contract receivables – net | | | | | | | | | | | | |
Long-term debt and notes payable | | | | | | | | | | | | |
The following methods and assumptions are used in estimating the fair value of financial instruments:
•Finance and contract receivables include both short-term and long-term receivables. The fair value estimates of finance and contract receivables are derived utilizing discounted cash flow analyses performed on groupings of receivables that are similar in terms of loan type and characteristics. The cash flow analyses consider recent prepayment trends where applicable. The cash flows are discounted over the average life of the receivables using a current market discount rate of a similar term adjusted for credit quality. Significant inputs to the fair value measurements of the receivables are unobservable and, as such, are classified as Level 3.
•Fair value of long-term debt is estimated, using Level 2 fair value measurements, based on quoted market values of Snap-on’s publicly traded senior debt. The carrying value of long-term debt includes unamortized debt issuance costs and issuance discounts. The fair value of notes payable approximates such instruments’ carrying value due to their short-term nature.
•The fair value of all other financial instruments, including trade and other accounts receivable, accounts payable and other financial instruments, approximates such instruments’ carrying value due to their short-term nature.
Note 11:
, with provisions for earlier retirement.
| | $ | | | | Service cost | | | | | | |
| Interest cost | | | | | | |
| Plan participant contributions | | | | | | |
|
| Benefits paid | | () | | | () | |
| Actuarial (gain) loss | | () | | | | |
| Foreign currency impact | | () | | | | |
| Benefit obligation at end of year | | | | | | |
| Change in plan assets: | | | | |
| Fair value of plan assets at beginning of year | | | | | | |
| Return on plan assets | | | | | | |
| Employer contributions | | | | | | |
| Plan participant contributions | | | | | | |
| Benefits paid | | () | | | () | |
| Foreign currency impact | | () | | | | |
| Fair value of plan assets at end of year | | | | | | |
| Funded status at end of year | | $ | | | | $ | | |
The decrease in the defined benefit pension plans benefit obligations in 2024 was primarily due to an increase in the discount rate in 2024 as compared to 2023.
| | $ | | | | Accrued benefits | | () | | | () | |
| Pension liabilities | | () | | | () | |
| Net asset | | $ | | | | $ | | |
million and $ million, respectively | $ | () | | | $ | () | | Prior service cost, net of tax of $ million and $ million, respectively | | () | | | () | |
| Total amount included in Accumulated OCI | | $ | () | | | $ | () | |
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | Fair value of plan assets | | | | | | |
| Pension plans with projected benefit obligations in excess of plans assets: |
| Projected benefit obligation | | $ | | | | $ | | |
| Fair value of plan assets | | | | | | |
| | $ | | | | $ | | | | Interest cost | | | | | | | | | |
| Expected return on plan assets | | () | | | () | | | () | |
| Amortization of unrecognized loss | | | | | | | | | |
| Amortization of prior service cost | | | | | | | | | |
|
| Net periodic benefit cost (credit) | | $ | () | | | $ | () | | | $ | () | |
| | | | | | |
Changes in benefit obligations recognized in OCI, net of tax: | | | | | | |
| Net (gain) loss | | $ | | | | $ | () | | | $ | | |
| Prior service credit | | | | | | | | () | |
| Total recognized in OCI | | $ | | | | $ | () | | | $ | | |
The components of net periodic pension cost (credit), other than the service cost component, are included in “Other income (expense) – net” on the accompanying Consolidated Statements of Earnings. See Note 17 for additional information on Other income (expense) – net.
% | % | | % | | Expected return on plan assets | | % | | % | | % |
| Rate of compensation increase | | % | | % | | % |
| Interest crediting rate - U.S. cash balance plan | | % | | % | | % |
The worldwide weighted-average assumptions used to determine Snap-on’s projected benefit obligation as of 2024 and 2023 year end are as follows:
| | | | | | | | | | | | | | |
| | 2024 | | 2023 |
| Discount rate | | % | | % |
| Rate of compensation increase | | % | | % |
| Interest crediting rate - U.S. cash balance plan | | % | | % |
% represents the single rate that produces the same present value of cash flows as the estimated benefit plan payments. Lowering Snap-on’s domestic discount rate assumption by 50 basis points (100 basis points (“bps”) equals 1.0 percent) would have increased Snap-on’s 2024 domestic pension expense and projected benefit obligation by approximately $ million and $ million, respectively. As of 2024 year end, Snap-on’s domestic projected benefit obligation comprised approximately % of Snap-on’s worldwide projected benefit obligation. The weighted-average discount rate for Snap-on’s foreign pension plans of % represents the single rate that produces the same present value of cash flows as the estimated benefit plan payments. Lowering Snap-on’s foreign discount rate assumption by 50 bps would have increased Snap-on’s 2024 foreign pension expense and projected benefit obligation by approximately $ million and $ million, respectively.
Actuarial gains and losses in excess of 10 percent of the greater of the projected benefit obligation or market-related value of assets are amortized on a straight-line basis over the average remaining service period of active participants or over the average remaining life expectancy for plans with primarily inactive participants. Prior service costs and credits resulting from plan amendments are amortized in equal annual amounts over the average remaining service period of active participants or over the average remaining life expectancy for plans with primarily inactive participants.
As a practical expedient, Snap-on uses the calendar year end as the measurement date for its plans. Snap-on funds its pension plans as required by governmental regulation and may consider discretionary contributions as conditions warrant. Snap‑on intends to make contributions of $ million to its foreign pension plans and $ 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.
| | 2026 | | |
| 2027 | | |
| 2028 | | |
| 2029 | | |
| 2030-2034 | | |
Snap-on’s domestic pension plans have a long-term investment horizon and a total return strategy that emphasizes a capital growth objective. The long-term investment performance objective for Snap-on’s domestic plans’ assets is to achieve net of expense returns that meet or exceed the % domestic long-term return on plan assets assumption used for reporting purposes. Snap-on uses a three-year, market-related value asset method of amortizing the difference between actual and expected returns on its domestic plans’ assets. As of 2024 year end, Snap-on’s domestic pension plans’ assets comprised approximately % of the company’s worldwide pension plan assets.
The basis for determining the overall expected long-term return on plan assets assumption is a nominal returns forecasting method. For each asset class, future returns are estimated by identifying the premium of riskier asset classes over lower risk alternatives. The methodology constructs expected returns using a “building block” approach to the individual components of total return. These forecasts are stated in both nominal and real (after inflation) terms. This process first considers the long-term historical return premium based on the longest set of data available for each asset class. These premiums, which are calculated using the geometric mean, are then adjusted based on current relative valuation levels, macro-economic conditions, and the expected alpha related to active investment management. The asset return assumption is also adjusted by an implicit expense load for estimated administrative and investment-related expenses.
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
Investments are diversified to attempt to minimize the risk of large losses. Since asset allocation is a key determinant of expected investment returns, assets are periodically rebalanced to the targeted allocation to correct significant deviations from the asset allocation policy that are caused by market fluctuations and cash flow. Asset/liability studies are conducted periodically to determine if any revisions to the strategic asset allocation policy are necessary.
% | % | | % | | Debt securities and cash and cash equivalents | | % | | % | | % |
|
| Hedge funds | | % | | % | | % |
| Total | | % | | % | | % |
| | | | | | |
Fair value of plan assets (Amounts in millions) | | | | $ | | | | $ | | |
The fair value measurement hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority (Level 1) to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority (Level 3) to unobservable inputs. Fair value measurements primarily based on observable market information are given a Level 2 priority.
Certain equity and debt securities are valued at quoted per share or unit market prices for which an official close or last trade pricing on an active exchange is available and are categorized as Level 1 in the fair value hierarchy. If quoted market prices are not readily available for specific securities, values are estimated using quoted prices of securities with similar characteristics and are categorized as Level 2 in the fair value hierarchy. Insurance contracts are valued at the present value of the estimated future cash flows promised under the terms of the insurance contracts and are categorized as Level 2 in the fair value hierarchy.
Commingled equity securities and commingled multi-strategy funds are valued at the Net Asset Value (“NAV”) per share or unit multiplied by the number of shares or units held as of the measurement date, as reported by the fund managers. The share or unit price is quoted on a private market and is based on the value of the underlying investments, which are primarily based on observable inputs; such investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
Private equity partnership funds, hedge funds, and real estate and other real assets are valued at the NAV as reported by the fund managers. Private equity partnership funds, certain hedge funds, and certain real estate and other real assets are valued based on the proportionate interest or share of net assets held by the pension plan, which is based on the estimated fair market value of the underlying investments. Certain other hedge funds and real estate and other real assets are valued at the NAV per share or unit multiplied by the number of shares or units held as of the measurement date, based on the estimated value of the underlying investments as reported by the fund managers. These investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy.
The company regularly reviews fund performance directly with its investment advisor and the fund managers, and performs qualitative analysis to corroborate the reasonableness of the reported NAVs. For funds for which the company did not receive a year-end NAV, the company recorded an estimate of the change in fair value for the latest period based on return estimates and other fund activity obtained from the fund managers.
The columns labeled “Investments Measured at NAV” in the following tables reflect certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit a reconciliation of the fair value hierarchy to the pension plan assets.
| | $ | | | | $ | | | | $ | | | | Equity securities: | | | | | | | | |
Domestic | | | | | | | | | | | | |
Foreign | | | | | | | | | | | | |
Commingled funds – domestic | | | | | | | | | | | | |
Commingled funds – foreign | | | | | | | | | | | | |
Private equity partnerships | | | | | | | | | | | | |
| Debt securities: | | | | | | | | |
Government | | | | | | | | | | | | |
Corporate bonds | | | | | | | | | | | | |
| Real estate and other real assets | | | | | | | | | | | | |
| Hedge funds | | | | | | | | | | | | |
| Total | | $ | | | | $ | | | | $ | | | | $ | | |
The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of Snap-on’s domestic pension plans’ assets as of 2023 year end:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Amounts in millions) | | Quoted
Prices for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Investments
Measured at
NAV | | Total |
| Asset category: | | | | | | | | |
| Cash and cash equivalents | | $ | | | | $ | | | | $ | | | | $ | | |
| Equity securities: | | | | | | | | |
Domestic | | | | | | | | | | | | |
Foreign | | | | | | | | | | | | |
Commingled funds – domestic | | | | | | | | | | | | |
Commingled funds – foreign | | | | | | | | | | | | |
Private equity partnerships | | | | | | | | | | | | |
| Debt securities: | | | | | | | | |
Government | | | | | | | | | | | | |
Corporate bonds | | | | | | | | | | | | |
| Real estate and other real assets | | | | | | | | | | | | |
| Hedge funds | | | | | | | | | | | | |
| Total | | $ | | | | $ | | | | $ | | | | $ | | |
Snap-on’s primary investment objective for its foreign pension plans’ assets is to meet the projected obligations to the beneficiaries over a long period of time, and to do so in a manner that is consistent with the company’s risk tolerance. The foreign asset allocation policies consider the company’s financial strength and long-term asset class risk/return expectations, since the obligations are long term in nature. The company believes the foreign pension plans’ assets, which are managed locally by professional investment firms, are well diversified.
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
% | % | | % | | Debt securities* and cash and cash equivalents | | % | | % | | % |
| Insurance contracts | | % | | % | | % |
| Total | | % | | % | | % |
| | | | | | |
Fair value of plan assets (Amounts in millions) | | | | $ | | | | $ | | |
| | | | | | | | | | | | | | |
| | | | |
| * Includes commingled funds - multi-strategy | | | |
The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of Snap-on’s foreign pension plans’ assets as of 2024 year end:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Amounts in millions) | | Quoted
Prices for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Investments
Measured at
NAV | | Total |
| Asset category: | | | | | | | | |
| Cash and cash equivalents | | $ | | | | $ | | | | $ | | | | $ | | |
| Commingled funds – multi-strategy | | | | | | | | | | | | |
| Debt securities: | | | | | | | | |
Government | | | | | | | | | | | | |
Corporate bonds | | | | | | | | | | | | |
| Insurance contracts | | | | | | | | | | | | |
| |
| Total | | $ | | | | $ | | | | $ | | | | $ | | |
The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of Snap-on’s foreign pension plans’ assets as of 2023 year end:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Amounts in millions) | | Quoted
Prices for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Investments
Measured at
NAV | | Total |
| Asset category: | | | | | | | | |
| Cash and cash equivalents | | $ | | | | $ | | | | $ | | | | $ | | |
| Commingled funds – multi-strategy | | | | | | | | | | | | |
| Debt securities: | | | | | | | | |
Government | | | | | | | | | | | | |
Corporate bonds | | | | | | | | | | | | |
| Insurance contracts | | | | | | | | | | | | |
| |
| Total | | $ | | | | $ | | | | $ | | | | $ | | |
million, $ million and $ million, respectively, of expense related to its 401(k) plans.
Note 12:
| | $ | | | | Interest cost | | | | | | |
| Plan participant contributions | | | | | | |
| Benefits paid | | () | | | () | |
| Actuarial gain | | () | | | () | |
| Benefit obligation at end of year | | | | | | |
| Change in plan assets: | | | | |
| Fair value of plan assets at beginning of year | | | | | | |
| Return on plan assets | | | | | | |
| Employer contributions | | | | | | |
| Plan participant contributions | | | | | | |
| Benefits paid | | () | | | () | |
| Fair value of plan assets at end of year | | | | | | |
| Unfunded status at end of year | | $ | () | | | $ | () | |
) | | $ | () | | | Retiree health care benefits | | () | | | () | |
| Net liability | | $ | () | | | $ | () | |
million and $ million, respectively | $ | | | | $ | | |
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | $ | | | | Expected return on plan assets | | () | | | () | | | () | |
| Amortization of unrecognized gain | | () | | | () | | | | |
| Net periodic benefit cost (credit) | | $ | | | | $ | | | | $ | | |
| | | | | | |
| Changes in benefit obligations recognized in OCI, net of tax: | | | | | | |
| Net (gain) loss | | $ | | | | $ | | | | $ | () | |
The components of net periodic postretirement health care cost, other than the service cost component, are included in “Other income (expense) – net” on the accompanying Consolidated Statements of Earnings. See Note 17 for additional information on Other income (expense) – net.
% | % | | % |
The weighted-average discount rate used to determine Snap-on’s accumulated benefit obligation is as follows:
The methodology for selecting the year-end 2024 and 2023 weighted-average discount rate for the company’s domestic postretirement plans was to match the plans’ yearly projected cash flows for benefits and service costs to those of hypothetical bond portfolios using high-quality, AA rated or better, corporate bonds from either Moody’s Investors Service or Standard & Poor’s credit rating agencies available at the measurement date. As a practical expedient, Snap-on uses the calendar year end as the measurement date for its plans.
For 2025, the actuarial calculations assume a pre-65 health care cost trend rate of % and a post-65 health care cost trend rate of %, both decreasing gradually to % in 2047 and thereafter.
| | 2026 | | | |
| 2027 | | | |
| 2028 | | | |
| 2029 | | | |
| 2030-2034 | | | |
% long-term return on plan assets assumption used for reporting purposes. Investments are diversified to attempt to minimize the risk of large losses. Since asset allocation is a key determinant of expected investment returns, assets are periodically rebalanced to the targeted allocation to correct significant deviations from the asset allocation policy that are caused by market fluctuations and cash flow.
The basis for determining the overall expected long-term return on plan assets assumption is a nominal returns forecasting method. For each asset class, future returns are estimated by identifying the premium of riskier asset classes over lower risk alternatives. The methodology constructs expected returns using a “building block” approach to the individual components of total return. These forecasts are stated in both nominal and real (after inflation) terms. This process first considers the long-term historical return premium based on the longest set of data available for each asset class. These premiums, which are calculated using the geometric mean, are then adjusted based on current relative valuation levels and macro-economic conditions. The asset return assumption is also adjusted by an implicit expense load for estimated administrative and investment-related expenses.
% | % | | % | | Equity securities | | % | | % | | % |
| Hedge funds | | % | | % | | % |
| Total | | % | | % | | % |
| | | | | | |
Fair value of plan assets (Amounts in millions) | | | | $ | | | | $ | | |
The fair value measurement hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority (Level 1) to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority (Level 3) to unobservable inputs. Fair value measurements primarily based on observable market information are given a Level 2 priority.
Debt securities are valued at quoted per share or unit market prices for which an official close or last trade pricing on an active exchange is available and are categorized as Level 1 in the fair value hierarchy.
Equity securities are valued at the NAV per share or unit multiplied by the number of shares or units held as of the measurement date, as reported by the fund managers. The share or unit price is quoted on a private market and is based on the value of the underlying investments, which are primarily based on observable inputs; such investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
Hedge funds are stated at the NAV per share or unit (based on the estimated fair market value of the underlying investments) multiplied by the number of shares or units held as of the measurement date, as reported by the fund managers. These investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy.
The company regularly reviews fund performance directly with its investment advisor and the fund managers, and performs qualitative analysis to corroborate the reasonableness of the reported NAVs. For funds for which the company did not receive a year-end NAV, the company recorded an estimate of the change in fair value for the latest period based on return estimates and other fund activity obtained from the fund managers.
The columns labeled “Investments Measured at NAV” in the following tables are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit a reconciliation of the fair value hierarchy to the VEBA plan assets.
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | $ | | | | Debt securities | | | | | | | | | |
| Equity securities | | | | | | | | | |
| Hedge fund | | | | | | | | | |
| Total | | $ | | | | $ | | | | $ | | |
The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of the VEBA plan assets as of 2023 year end:
| | | | | | | | | | | | | | | | | | | | |
| (Amounts in millions) | | Quoted
Prices for
Identical
Assets
(Level 1) | | Investments Measured at
NAV | | Total |
| Asset category: | | | | | | |
| Cash and cash equivalents | | $ | | | | $ | | | | $ | | |
| Debt securities | | | | | | | | | |
| Equity securities | | | | | | | | | |
| Hedge fund | | | | | | | | | |
| Total | | $ | | | | $ | | | | $ | | |
Note 13:
shares available for future grants. The company uses treasury stock to deliver shares under the 2011 Plan.
Net stock-based compensation expense was $ million in 2024, $ million in 2023 and $ million in 2022. Cash received from stock purchase plans and stock option exercises was $ million in 2024, $ million in 2023 and $ million in 2022. The tax benefit realized from both the exercise and vesting of share-based payment arrangements was $ million in 2024, $ million in 2023 and $ million in 2022.
Stock options: Stock options are granted with an exercise price equal to the market value of a share of Snap-on’s common stock on the date of grant and have a contractual term of years. Stock option grants vest ratably on the first, second and third anniversaries of the date of grant.
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model. The company uses historical data regarding stock option exercise and forfeiture behaviors for different participating groups to estimate the period of time that stock options granted are expected to be outstanding. Expected volatility is based on the historical volatility of the company’s stock for the length of time corresponding to the expected term of the stock option. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock as of the date of grant. The risk-free interest rate is based on the U.S. treasury yield curve on the grant date for the expected term of the stock option.
| | | | | Expected volatility factor | | % | | % | | % |
| Expected dividend yield | | % | | % | | % |
| Risk-free interest rate | | % | | % | | % |
| | $ | | | | | | | | Granted | | | | | | | | | | |
| Exercised | | () | | | | | | | | |
| Forfeited or expired | | () | | | | | | | | |
| Outstanding at end of year | | | | | | | | | | $ | | |
| Exercisable at end of year | | | | | | | | | | | |
The weighted-average grant date fair value of stock options granted was $ in 2024, $ in 2023 and $ in 2022. The intrinsic value of stock options exercised was $ million in 2024, $ million in 2023 and $ million in 2022. The fair value of stock options vested was $ million in 2024, $ million in 2023 and $ million in 2022.
As of 2024 year end, there was $ million of unrecognized compensation cost related to non-vested stock options that is expected to be recognized as a charge to earnings over a weighted-average period of years.
Performance share units: PSUs are earned and expensed using the fair value of the award over a contractual term of based on the company’s performance. Vesting of the PSUs is dependent upon performance relative to pre-defined goals for revenue growth and return on net assets for the applicable performance period. For performance achieved above specified levels, the recipient may earn additional shares of stock, not to exceed % of the number of performance awards initially granted. The PSUs have a performance period based on the results of the consolidated financial metrics of the company.
The fair value of PSUs is calculated using the market value of a share of Snap-on’s common stock on the date of grant and assumed forfeitures based on recent historical experience; in recent years, forfeitures have not been significant. The weighted-average grant date fair value of PSUs granted during 2024, 2023 and 2022, was $, $ and $, respectively. Earned PSUs as of year end 2024, 2023, and 2022 totaled shares, shares and shares, respectively. Earned PSUs vest and are generally paid out following the conclusion of the applicable performance period upon approval by the Organization and Executive Compensation Committee of the company’s Board of Directors (the “Board”). PSUs related to shares, shares and shares were paid out in 2024, 2023 and 2022, respectively.
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | Granted | | | | | | |
| Performance assumption change** | | () | | | | |
| Vested | | () | | | | |
| Cancellations and other | | () | | | | |
| Non-vested PSUs at end of year | | | | | | |
| | | | | | | | | | | | | | |
| * Weighted-average | | | | |
| ** Reflects the number of PSUs adjusted based on performance metrics. | |
As of 2024 year end, there was $ million of unrecognized compensation cost related to non-vested PSUs that is expected to be recognized as a charge to earnings over a weighted-average period of years.
Restricted stock units: RSUs are earned and expensed using the fair value of the award over a contractual term of . Vesting of the RSUs is dependent upon continued employment for the cliff vesting period.
The fair value of RSUs is calculated using the market value of a share of Snap-on’s common stock on the date of grant and assumed forfeitures based on recent historical experience; in recent years, forfeitures have not been significant. The weighted-average grant date fair value of RSUs granted during 2024, 2023 and 2022, was $, $ and $, respectively.
| | $ | | | | Granted | | | | | | |
| Vested | | () | | | | |
| Cancellations and other | | () | | | | |
| Non-vested RSUs at end of year | | | | | | |
As of 2024 year end, there was $ million of unrecognized compensation cost related to non-vested RSUs that is expected to be recognized as a charge to earnings over a weighted-average period of years.
Stock appreciation rights: The company also issues stock-settled and cash-settled SARs to certain key non-U.S. employees. SARs have a contractual term of years and vest ratably on the first, second and third anniversaries of the date of grant. SARs are granted with an exercise price equal to the market value of a share of Snap-on’s common stock on the date of grant.
Stock-settled SARs are accounted for as equity instruments and provide for the issuance of Snap-on common stock equal to the amount by which the company’s stock has appreciated over the exercise price. Stock-settled SARs have an effect on dilutive shares and shares outstanding as any appreciation of Snap-on’s common stock value over the exercise price will be settled in shares of common stock. Cash-settled SARs provide for the cash payment of the excess of the fair market value of Snap‑on’s common stock price on the date of exercise over the grant price. Cash-settled SARs have no effect on dilutive shares or shares outstanding as any appreciation of Snap-on’s common stock over the grant price is paid in cash and not in common stock.
| | | | | Expected volatility factor | | % | | % | | % |
| Expected dividend yield | | % | | % | | % |
| Risk-free interest rate | | % | | % | | % |
| | $ | | | | | | | | Granted | | | | | | | | | | |
| Exercised | | () | | | | | | | | |
| Forfeited or expired | | () | | | | | | | | |
| Outstanding at end of year | | | | | | | | | | $ | | |
| Exercisable at end of year | | | | | | | | | | | |
The weighted-average grant date fair value of stock-settled SARs granted was $ in 2024, $ in 2023 and $ in 2022. The intrinsic value of stock-settled SARs exercised was $ million in 2024, $ million in 2023 and $ million in 2022. The fair value of stock-settled SARs vested was $ million in 2024, $ million in 2023 and $ million in 2022.
As of 2024 year end, there was $ million of unrecognized compensation cost related to non-vested stock-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of years.
| | | | | Expected volatility factor | | % | | % | | % |
| Expected dividend yield | | % | | % | | % |
| Risk-free interest rate | | % | | % | | % |
The intrinsic value of cash-settled SARs exercised was in 2024, $ million in 2023 and $ million in 2022. The fair value of cash-settled SARs vested during 2024, 2023 and 2022 was $ million, $ million and $ million, respectively.
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | Granted | | | | | | |
| Vested | | () | | | | |
| Non-vested cash-settled SARs at end of year | | | | | | |
As of 2024 year end, there was $ million of unrecognized compensation cost related to non-vested cash-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of years.
Restricted stock awards – non-employee directors: The company awarded shares, shares and shares of restricted stock to non-employee directors in 2024, 2023 and 2022, respectively. The fair value of the restricted stock awards is expensed over a vesting period based on the fair value on the date of grant. All restrictions on the restricted stock awards generally lapse upon the earlier of the first anniversary of the grant date, the recipient’s death or disability or in the event of a change in control, as defined in the 2011 Plan. If termination of the recipient’s service occurs prior to the first anniversary of the grant date for any reason other than death or disability, the shares of restricted stock would be forfeited, unless otherwise determined by the Board.
Directors’ fee plan: Under the Directors’ 1993 Fee Plan, as amended, non-employee directors may elect to receive up to % of their fees and retainer in shares of Snap-on’s common stock. Directors may elect to defer receipt of all or part of these shares. For 2024, 2023 and 2022, issuances under the Directors’ Fee Plan totaled shares, shares and shares, respectively, of which shares, shares and shares, respectively, were deferred. As of 2024 year end, shares reserved for issuance to directors under this plan totaled shares.
Employee stock purchase plan: Substantially all Snap-on employees in the United States and Canada are eligible to participate in an employee stock purchase plan. The purchase price of the company’s common stock to participants is the lesser of the mean of the high and low prices of the stock on the beginning date (May 15) or ending date (the following May 14) of each plan year. The company records compensation expense when Snap-on’s period-end stock price is greater than the plan purchase price. For 2024, 2023 and 2022, issuances under this plan totaled shares, shares and shares, respectively. As of 2024 year end, shares were reserved for issuance under this plan and Snap-on held participant contributions of approximately $ million. Participants are able to withdraw from the plan at any time prior to the ending date and receive back all contributions made during the plan year. Compensation expense for plan participants was $ million in 2024, $ million in 2023 and $ million in 2022.
Franchisee stock purchase plan: All franchisees in the United States and Canada are eligible to participate in a franchisee stock purchase plan. The purchase price of the company’s common stock to participants is the lesser of the mean of the high and low prices of the stock on the beginning date (May 15) or ending date (the following May 14) of each plan year. The company records mark-to-market expense when Snap-on’s period-end stock price is greater than the plan purchase price. For 2024, 2023 and 2022, issuances under this plan totaled shares, shares and shares, respectively. As of 2024 year end, shares were reserved for issuance under this plan and Snap-on held participant contributions of approximately $ million. Participants are able to withdraw from the plan at any time prior to the ending date and generally receive back all contributions made during the plan year. The company recognized mark-to-market expense of $ million in 2024, $ million in 2023 and $ million in 2022.
Note 14:
shares, shares and shares in 2024, 2023 and 2022, respectively. As of 2024 year end, Snap-on has remaining availability to repurchase up to an additional $ million in common stock pursuant to Board authorizations. The purchase of Snap-on common stock is at the company’s discretion, subject to prevailing financial and market conditions.
million, $ million and $ million, respectively. Cash dividends per share in 2024, 2023 and 2022 were $, $ and $, respectively. On February 13, 2025, the company’s Board declared a quarterly dividend of $ per share, payable on March 10, 2025, to shareholders of record on February 24, 2025.
Note 15:
| | $ | | | | $ | | | | Additions | | | | | | | | | |
| Usage | | () | | | () | | | () | |
| End of year | | $ | | | | $ | | | | $ | | |
Approximately employees, or % of Snap-on’s worldwide workforce, are represented by unions and/or covered under collective bargaining agreements. The number of covered union employees whose contracts expire over the next approximates employees in 2025, employees in 2026, and employees in 2027; there are contracts currently scheduled to expire in 2028 or 2029. In recent years, Snap-on has not experienced any significant work slowdowns, stoppages or other labor disruptions.
In the ordinary course of business, Snap-on is subject to legal disputes that are being litigated and/or settled. The accompanying Consolidated Statements of Earnings for the year ended December 28, 2024, include benefits in “Operating expenses” of $ million for payments received associated with a legal matter; the final payments related to this matter were received in the three months ended June 29, 2024. Although it is not possible to predict the outcome of legal matters, management believes that the results of all legal matters will not have a material impact on Snap-on’s consolidated financial position, results of operations or cash flows.
Note 16:
to years and some include options to extend and/or terminate the lease. The exercise of lease renewal options is at the company’s sole discretion. Certain leases also include options to purchase the leased property. When deemed reasonably certain of exercise, the renewal and purchase options are included in the determination of the lease term and lease payment obligation, respectively. The depreciable life of assets and leasehold improvements are limited to the expected term, unless there is a transfer of title or purchase option reasonably certain of exercise. The company’s lease agreements do not contain any material variable lease payments, material residual value guarantees or any material restrictive covenants.
Right-of-use (“ROU”) assets represent Snap-on’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When readily determinable, Snap-on uses the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, Snap-on uses its country specific incremental borrowing rate based on the information available at the lease commencement date, including the lease term. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Snap-on has lease agreements with lease and non-lease components, which are generally accounted for separately. For all equipment leases, including vehicles, Snap-on accounts for the lease and non-lease components as a single lease component.
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | $ | | | | Interest on lease liabilities | | | | | | | | | |
| Operating lease costs* | | | | | | | | | |
| Total lease costs | | $ | | | | $ | | | | $ | | |
| | | | | | |
| | | | | | | | | | | |
| | |
| * | Includes short-term leases, variable lease costs and sublease income, which are immaterial. |
Supplemental cash flow information related to leases in 2024, 2023 and 2022 is as follows:
| | | | | | | | | | | | | | | | | | | | |
| (Amounts in millions) | | 2024 | | 2023 | | 2022 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | | |
| Financing cash flows from finance leases | | $ | | | | $ | | | | $ | | |
| Operating cash flows from finance leases | | | | | | | | | |
| Operating cash flows from operating leases | | | | | | | | | |
| | | | | | |
| ROU assets obtained in exchange for new lease obligations: | | | | | | |
| Finance lease liabilities | | $ | | | | $ | | | | $ | | |
| Operating lease liabilities | | | | | | | | | |
| | $ | | | | Accumulated depreciation | | () | | | () | |
Property and equipment – net | | | $ | | | | $ | | |
| | | | | | |
| Other accrued liabilities | | | $ | | | | $ | | |
| Other long-term liabilities | | | | | | | |
| Total finance lease liabilities | | | $ | | | | $ | | |
| | | | | | |
| Operating leases: | | | | | |
| Operating lease right-of-use assets | | | $ | | | | $ | | |
| | | | | | |
| Other accrued liabilities | | | $ | | | | $ | | |
| Operating lease liabilities | | | | | | | |
| Total operating lease liabilities | | | $ | | | | $ | | |
| | | | | | |
| | | | | Operating leases | | | | | | |
| | | | | | |
| Weighted-average discount rates: | | | | | | |
| Finance leases | | % | | % | | % |
| Operating leases | | % | | % | | % |
| | $ | | | | 2026 | | | | | | |
| 2027 | | | | | | |
| 2028 | | | | | | |
| 2029 | | | | | | |
| 2030 and thereafter | | | | | | |
| Total lease payments | | | | | | |
| Less: amount representing interest | | () | | | () | |
| Total lease liabilities | | $ | | | | $ | | |
In 2024, Snap-on did not have any significant additional operating or finance leases that have not yet commenced.
Lessor accounting: Snap-on’s Financial Services business offers lease financing to support the sales of tools, diagnostics, and equipment products, as well as vehicle leases for franchisees. Snap-on accounts for its financial services leases as sales-type leases. In certain circumstances, the lessee has the option to terminate the lease. In the event of the lessee’s deteriorated financial condition or default, Snap-on has the right to terminate the lease. The leases contain an end-of-term purchase option that is generally insignificant and is reasonably certain to be exercised by the lessee.
The company recognizes the net investment in the lease as the present value of the lease payments not yet received plus the present value of the unguaranteed residual value, using the interest rate implicit in the lease. The difference between the undiscounted lease payments received over the lease term and the related net investment in the lease is reported as unearned finance charges. Unearned finance charges are amortized to income over the life of the contract and are included as a component of “Financial services revenue” on the accompanying Consolidated Statements of Earnings.
Sales-type leases are included in both “Finance receivables – net” and “Long-term finance receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to . In 2024 and 2023, finance receivables have future minimum lease payments, including unguaranteed residual value, of $ million and $ million, respectively, and unearned finance charges of $ million and $ million, respectively.
Sales-type leases are also included in both “Contract receivables – net” and “Long-term contract receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to . In 2024 and 2023, contract receivables have future minimum lease payments, including unguaranteed residual value, of $ million and $ million, respectively, and unearned finance charges of $ million and $ million, respectively.
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | 2026 | | | |
| 2027 | | | |
| 2028 | | | |
| 2029 | | | |
| 2030 and thereafter | | | |
| Total lease payments | | | |
| Less: unearned finance charges | | () | |
| Net investment in leases | | $ | | |
See Note 4 for additional information on finance and contract receivables.
Note 17:
| | $ | | | | $ | | | | Net foreign exchange loss | | () | | | () | | | () | |
Net periodic pension and postretirement benefits - non-service | | | | | | | | | |
|
| Other | | | | | | | | | |
| Total other income (expense) – net | | $ | | | | $ | | | | $ | | |
Note 18:
) | | $ | | | | $ | () | | | $ | () | | | Other comprehensive income before reclassifications | | | | | | | | | | | | |
| Amounts reclassified from Accumulated OCI | | | | | () | | | | | | () | |
| Net other comprehensive income (loss) | | | | | () | | | | | | | |
| Balance as of 2023 year end | | $ | () | | | $ | | | | $ | () | | | $ | () | |
| Other comprehensive loss before reclassifications | | () | | | | | | () | | | () | |
| Amounts reclassified from Accumulated OCI | | | | | () | | | | | | | |
| Net other comprehensive loss | | () | | | () | | | () | | | () | |
| Balance as of 2024 year end | | $ | () | | | $ | | | | $ | () | | | $ | () | |
| | $ | | | | Interest expense | | Income tax expense | | | | | | | | Income tax expense |
| Net of tax | | | | | | | | |
Amortization of net unrecognized losses and prior service credits | | () | | | () | | | See footnote below* |
| Income tax benefit | | | | | | | | Income tax expense |
| Net of tax | | () | | | () | | | |
| Total reclassifications for the period, net of tax | | $ | () | | | $ | | | | |
| | | | | | | | | | | | | | |
| | | | |
| * | These Accumulated OCI components are included in the computation of net periodic pension and postretirement health care costs; see Note 11 and Note 12 for additional information. |
Note 19:
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | $ | | | | $ | — | | | $ | | | | Intersegment net sales | | | | | | | | | | — | | | | |
| Segment net sales | | | | | | | | | | — | | | | |
| Segment cost of goods sold | () | | | () | | | () | | | — | | | () | |
| Segment gross profit | | | | | | | | | | — | | | | |
| Financial services revenue | — | | | — | | | — | | | | | | | |
| Segment operating and financial services expenses | | | | | | | | | |
| Personnel | () | | | () | | | () | | | () | | | |
| Shipping and handling costs | () | | | () | | | | | | | | | |
| Depreciation and amortization | () | | | () | | | () | | | () | | | |
| Provisions for credit losses | | | | | | | | | | () | | | |
| Other segment expenses* | () | | | () | | | () | | | () | | | |
| Total segment operating and financial services expenses | () | | | () | | | () | | | () | | | () | |
| Segment operating earnings | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | |
| Reconciliation of segment net sales to total net sales and total revenues: | | | | | | |
| Segment net sales | | | | | | | | | $ | | |
| Intersegment eliminations | | | | | | | | | () | |
| Total net sales | | | | | | | | | | |
| Financial services revenue | | | | | | | | | | |
| Total revenues | | | | | | | | | $ | | |
| | | | | | | | | |
| Reconciliation of segment cost of goods sold to cost of goods sold: | | | | | | |
| Segment cost of goods sold | | | | | | | | | $ | () | |
| Intersegment eliminations | | | | | | | | | | |
| Cost of goods sold | | | | | | | | | $ | () | |
| | | | | | | | | |
| Reconciliation of segment operating earnings to operating earnings and | | | | |
| earnings before income taxes: | | | | | | | | | |
| Segment operating earnings | | | | | | | | | $ | | |
| Corporate operating expenses | | | | | | | | | () | |
| Operating earnings | | | | | | | | | | |
| Interest expense | | | | | | | | | () | |
| Other income (expense) – net | | | | | | | | | | |
| Earnings before income taxes | | | | | | | | | $ | | |
| | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| * | Other segment expenses primarily include: | | | |
| Commercial & Industrial Group - shared service allocations; technology, travel and marketing expenses. |
| Snap-on Tools Group - franchisee support costs, shared service allocations and technology expenses. |
| Repair Systems & Information Group - technology, travel, professional fee and marketing expenses; shared service allocations. |
| Financial Services - customer support and technology expenses. |
| | $ | | | | $ | | | | $ | — | | | $ | | |
| Intersegment net sales | | | | | | | | | | — | | | | |
| Segment net sales | | | | | | | | | | — | | | | |
| Segment cost of goods sold | () | | | () | | | () | | | — | | | () | |
| Segment gross profit | | | | | | | | | | — | | | | |
| Financial services revenue | — | | | — | | | — | | | | | | | |
| Segment operating and financial services expenses | | | | | | | | | |
| Personnel | () | | | () | | | () | | | () | | | |
| Shipping and handling and other freight expenses | () | | | () | | | | | | | | | |
| Depreciation and amortization | () | | | () | | | () | | | () | | | |
| Provisions for credit losses | | | | | | | | | | () | | | |
| Other segment expenses* | () | | | () | | | () | | | () | | | |
| Total segment operating and financial services expenses | () | | | () | | | () | | | () | | | () | |
| Segment operating earnings | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | |
| Reconciliation of segment net sales to total net sales and total revenues: | | | | | | |
| Segment net sales | | | | | | | | | $ | | |
| Intersegment eliminations | | | | | | | | | () | |
| Total net sales | | | | | | | | | | |
| Financial services revenue | | | | | | | | | | |
| Total revenues | | | | | | | | | $ | | |
| | | | | | | | | |
| Reconciliation of segment cost of goods sold to cost of goods sold: | | | | | | |
| Segment cost of goods sold | | | | | | | | | $ | () | |
| Intersegment eliminations | | | | | | | | | | |
| Cost of goods sold | | | | | | | | | $ | () | |
| | | | | | | | | |
| Reconciliation of segment operating earnings to operating earnings and | | | | |
| earnings before income taxes: | | | | | | | | | |
| Segment operating earnings | | | | | | | | | $ | | |
| Corporate operating expenses | | | | | | | | | () | |
| Operating earnings | | | | | | | | | | |
| Interest expense | | | | | | | | | () | |
| Other income (expense) – net | | | | | | | | | | |
| Earnings before income taxes | | | | | | | | | $ | | |
| | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| * | Other segment expenses primarily include: | | | |
| Commercial & Industrial Group - shared service allocations; technology, travel and marketing expenses. |
| Snap-on Tools Group - franchisee support costs, shared service allocations and technology expenses. |
| Repair Systems & Information Group - technology, travel, professional fee and marketing expenses; shared service allocations. |
| Financial Services - customer support and technology expenses. |
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | $ | | | | $ | — | | | $ | | |
| Intersegment net sales | | | | | | | | | | — | | | | |
| Segment net sales | | | | | | | | | | — | | | | |
| Segment cost of goods sold | () | | | () | | | () | | | — | | | () | |
| Segment gross profit | | | | | | | | | | — | | | | |
| Financial services revenue | — | | | — | | | — | | | | | | | |
| Segment operating and financial services expenses | | | | | | | | | |
| Personnel | () | | | () | | | () | | | () | | | |
| Shipping and handling and other freight expenses | () | | | () | | | | | | | | | |
| Depreciation and amortization | () | | | () | | | () | | | () | | | |
| Provisions for credit losses | | | | | | | | | | () | | | |
| Other segment expenses* | () | | | () | | | () | | | () | | | |
| Total segment operating and financial services expenses | () | | | () | | | () | | | () | | | () | |
| Segment operating earnings | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | |
| Reconciliation of segment net sales to total net sales and total revenues: | | | | | | |
| Segment net sales | | | | | | | | | $ | | |
| Intersegment eliminations | | | | | | | | | () | |
| Total net sales | | | | | | | | | | |
| Financial services revenue | | | | | | | | | | |
| Total revenues | | | | | | | | | $ | | |
| | | | | | | | | |
| Reconciliation of segment cost of goods sold to cost of goods sold: | | | | | | |
| Segment cost of goods sold | | | | | | | | | $ | () | |
| Intersegment eliminations | | | | | | | | | | |
| Cost of goods sold | | | | | | | | | $ | () | |
| | | | | | | | | |
| Reconciliation of segment operating earnings to operating earnings and | | | | |
| earnings before income taxes: | | | | | | | | | |
| Segment operating earnings | | | | | | | | | $ | | |
| Corporate operating expenses | | | | | | | | | () | |
| Operating earnings | | | | | | | | | | |
| Interest expense | | | | | | | | | () | |
| Other income (expense) – net | | | | | | | | | | |
| Earnings before income taxes | | | | | | | | | $ | | |
| | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| * | Other segment expenses primarily include: | | | |
| Commercial & Industrial Group - shared service allocations; technology, travel and marketing expenses. |
| Snap-on Tools Group - franchisee support costs, shared service allocations and technology expenses. |
| Repair Systems & Information Group - technology, travel, professional fee, and marketing expenses; shared service allocations. |
| Financial Services - customer support and technology expenses. |
| | $ | | | | $ | | |
| Snap-on Tools Group | | | | | | | | | |
| Repair Systems & Information Group | | | | | | | | | |
| Financial Services | | | | | | | | | |
| Total from reportable segments | | | | | | | | | |
| Corporate | | | | | | | | | |
| Total capital expenditures | | $ | | | | $ | | | | $ | | |
| | | | | | |
| Depreciation and amortization: | | | | | | |
| Commercial & Industrial Group | | $ | | | | $ | | | | $ | | |
| Snap-on Tools Group | | | | | | | | | |
| Repair Systems & Information Group | | | | | | | | | |
| Financial Services | | | | | | | | | |
| Total from reportable segments | | | | | | | | | |
| Corporate | | | | | | | | | |
| Total depreciation and amortization | | $ | | | | $ | | | | $ | | |
| | $ | | | | $ | | | | Europe | | | | | | | | | |
| All other | | | | | | | | | |
| Total revenues | | $ | | | | $ | | | | $ | | |
| | | | | | |
| (Amounts in millions) | | 2024 | | 2023 |
| Assets: | | | | |
| Commercial & Industrial Group | | $ | | | | $ | | |
| Snap-on Tools Group | | | | | | |
| Repair Systems & Information Group | | | | | | |
| Financial Services | | | | | | |
| Total assets from reportable segments | | | | | | |
| Corporate | | | | | | |
| Elimination of intersegment receivables | | () | | | () | |
| Total assets | | $ | | | | $ | | |
| | | | | | |
| Long-lived assets:** | | | | |
| United States | | $ | | | | $ | | |
| Europe | | | | | | |
| All other | | | | | | |
| Total long-lived assets | | $ | | | | $ | | |
| | | | | | | | | | | | | | |
| | | |
| * | Revenues are attributed to countries based on origin of the sale. |
| ** | Long-lived assets consist of Property and equipment – net and Operating lease right-of-use assets. |
| | | | | | | | |
| | |
| Notes to Consolidated Financial Statements (continued) | | |
| | $ | | | | $ | | | | Diagnostics, information and management systems | | | | | | | | | |
| Equipment | | | | | | | | | |
| Total net sales | | | | | | | | | |
| Financial services revenue | | | | | | | | | |
| Total revenues | | $ | | | | $ | | | | $ | | |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Snap-on has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| SNAP-ON INCORPORATED | | | | | |
| | | |
| By: | | /s/ Nicholas T. Pinchuk | | | | Date: | February 13, 2025 |
| | Nicholas T. Pinchuk, Chairman, President
and Chief Executive Officer | | | | | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Snap-on and in the capacities and on the date indicated.
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | /s/ Nicholas T. Pinchuk | | | | Date: | February 13, 2025 |
| | Nicholas T. Pinchuk, Chairman, President
and Chief Executive Officer | | | | | |
| | | |
| | /s/ Aldo J. Pagliari | | | | Date: | February 13, 2025 |
| | Aldo J. Pagliari, Principal Financial Officer, Senior
Vice President – Finance and Chief Financial Officer | | | | | |
| | | |
| | /s/ Marty V. Ozolins | | | | Date: | February 13, 2025 |
| | Marty V. Ozolins, Principal Accounting Officer,
Vice President and Controller | | | | | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Snap-on and in the capacities and on the date indicated.
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| By: | | /s/ David C. Adams | | | | Date: | February 13, 2025 |
| | David C. Adams, Director | | | | | |
| | | |
| By: | | /s/ Karen L. Daniel | | | | Date: | February 13, 2025 |
| | Karen L. Daniel, Director | | | | | |
| | | |
| By: | | /s/ Ruth Ann M. Gillis | | | | Date: | February 13, 2025 |
| | Ruth Ann M. Gillis, Director | | | | | |
| | | |
| By: | | /s/ James P. Holden | | | | Date: | February 13, 2025 |
| | James P. Holden, Director | | | | | |
| | | |
| By: | | /s/ Nathan J. Jones | | | | Date: | February 13, 2025 |
| | Nathan J. Jones, Director | | | | | |
| | | |
| By: | | /s/ Henry W. Knueppel | | | | Date: | February 13, 2025 |
| | Henry W. Knueppel, Director | | | | | |
| | | |
| By: | | /s/ W. Dudley Lehman | | | | Date: | February 13, 2025 |
| | W. Dudley Lehman, Director | | | | | |
| | | |
| By: | | /s/ Nicholas T. Pinchuk | | | | Date: | February 13, 2025 |
| | Nicholas T. Pinchuk, Director | | | | | |
| | | |
| By: | | /s/ Gregg M. Sherrill | | | | Date: | February 13, 2025 |
| | Gregg M. Sherrill, Director | | | | | |
| | | |
| By: | | /s/ Donald J. Stebbins | | | | Date: | February 13, 2025 |
| | Donald J. Stebbins, Director | | | | | |
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