10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended July 2, 2022

OR

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

For the transition period from                                                   to                                                          

Commission File Number 1-7724

Snap-on Incorporated

(Exact name of registrant as specified in its charter)

Delaware			39-0622040
(State of incorporation)			(I.R.S. Employer Identification No.)
2801 80th Street,	Kenosha,	Wisconsin	53143
(Address of principal executive offices)			(Zip code)

(262) 656-5200

(Registrant’s telephone number, including area code)

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

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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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

Class	Outstanding at July 15, 2022
Common Stock, $1.00 par value	53,267,889 shares

TABLE OF CONTENTS 

		Page
Part I: Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Statements of Earnings (unaudited) – Three and Six Months Ended July 2, 2022, and July 3, 2021	3
	Condensed Consolidated Statements of Comprehensive Income (unaudited) – Three and Six Months Ended July 2, 2022, and July 3, 2021	4
	Condensed Consolidated Balance Sheets (unaudited) – July 2, 2022, and January 1, 2022	5
	Condensed Consolidated Statements of Equity (unaudited) – Three and Six Months Ended July 2, 2022, and July 3, 2021	7
	Condensed Consolidated Statements of Cash Flows (unaudited) – Six Months Ended July 2, 2022, and July 3, 2021	9
	Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54
Item 4.	Controls and Procedures	55
Part II: Other Information
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 6.	Exhibits	58
	Signatures	59

2

PART I. FINANCIAL INFORMATION

Item 1: Financial Statements

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in millions, except per share data)

(Unaudited)

	Three Months Ended				Six Months Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net sales	$	1,136.6	$	1,081.4	$	2,234.4	$	2,106.0
Cost of goods sold	(583.1)		(538.3)		(1,146.6)		(1,049.3)
Gross profit	553.5		543.1		1,087.8		1,056.7
Operating expenses	(306.9)		(326.0)		(618.1)		(638.7)
Operating earnings before financial services	246.6		217.1		469.7		418.0
Financial services revenue	86.4		86.9		174.1		175.5
Financial services expenses	(21.1)		(18.0)		(38.4)		(41.3)
Operating earnings from financial services	65.3		68.9		135.7		134.2
Operating earnings	311.9		286.0		605.4		552.2
Interest expense	(11.7)		(14.3)		(23.3)		(28.6)
Other income (expense) – net	9.3		3.4		17.6		7.7
Earnings before income taxes and equity earnings	309.5		275.1		599.7		531.3
Income tax expense	(72.3)		(62.9)		(139.8)		(122.0)
Earnings before equity earnings	237.2		212.2		459.9		409.3
Equity earnings, net of tax	—		1.0		—		1.5
Net earnings	237.2		213.2		459.9		410.8
Net earnings attributable to noncontrolling interests	(5.7)		(5.2)		(11.0)		(10.2)
Net earnings attributable to Snap-on Incorporated	$	231.5	$	208.0	$	448.9	$	400.6
Net earnings per share attributable to Snap-on Incorporated:
Basic	$	4.34	$	3.85	$	8.41	$	7.40
Diluted	4.27		3.76		8.27		7.26
Weighted-average shares outstanding:
Basic	53.3		54.0		53.4		54.1
Effect of dilutive securities	0.9		1.3		0.9		1.1
Diluted	54.2		55.3		54.3		55.2
Dividends declared per common share	$	1.42	$	1.23	$	2.84	$	2.46

See Notes to Condensed Consolidated Financial Statements.

3

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in millions)

(Unaudited)

 

	Three Months Ended				Six Months Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Comprehensive income (loss):
Net earnings	$	237.2	$	213.2	$	459.9	$	410.8
Other comprehensive income (loss):
Foreign currency translation	(110.3)		20.2		(120.0)		(8.8)
Reclassification of foreign currency translation loss from sale of equity interest to net earnings	—		(1.0)		—		(1.0)
Unrealized cash flow hedges, net of tax:
Reclassification of cash flow hedges to net earnings	(0.4)		(0.4)		(0.8)		(0.8)
Defined benefit pension and postretirement plans:
Amortization of net unrecognized losses	4.7		9.1		9.2		18.2
Income tax benefit	(1.1)		(2.3)		(2.2)		(4.5)
Net of tax	3.6		6.8		7.0		13.7
Total comprehensive income	$	130.1	$	238.8	$	346.1	$	413.9
Comprehensive income attributable to noncontrolling interests	(5.7)		(5.2)		(11.0)		(10.2)
Comprehensive income attributable to Snap-on Incorporated	$	124.4	$	233.6	$	335.1	$	403.7

See Notes to Condensed Consolidated Financial Statements.

4

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in millions, except share data)

(Unaudited)

	July 2, 2022		January 1, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	812.9	$	780.0
Trade and other accounts receivable – net	729.1		682.3
Finance receivables – net	547.0		542.3
Contract receivables – net	98.3		110.4
Inventories – net	893.3		803.8
Prepaid expenses and other assets	150.1		134.6
Total current assets	3,230.7		3,053.4
Property and equipment:
Land	32.5		33.8
Buildings and improvements	419.1		434.4
Machinery, equipment and computer software	1,058.5		1,059.2
Property and equipment – gross	1,510.1		1,527.4
Accumulated depreciation and amortization	(1,006.6)		(1,009.2)
Property and equipment – net	503.5		518.2
Operating lease right-of-use assets	56.6		51.9
Deferred income tax assets	67.5		49.5
Long-term finance receivables – net	1,127.0		1,114.0
Long-term contract receivables – net	375.4		378.2
Goodwill	1,046.0		1,116.5
Other intangibles – net	283.5		301.7
Other assets	174.1		176.3
Total assets	$	6,864.3	$	6,759.7

See Notes to Condensed Consolidated Financial Statements.

5

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in millions, except share data)

(Unaudited)

	July 2, 2022		January 1, 2022
LIABILITIES AND EQUITY
Current liabilities:
Notes payable	$	18.8	$	17.4
Accounts payable	308.5		277.6
Accrued benefits	59.2		67.4
Accrued compensation	81.6		114.8
Franchisee deposits	77.5		80.7
Other accrued liabilities	440.5		424.3
Total current liabilities	986.1		982.2
Long-term debt	1,183.4		1,182.9
Deferred income tax liabilities	102.2		122.7
Retiree health care benefits	29.7		31.1
Pension liabilities	83.1		104.9
Operating lease liabilities	39.7		34.2
Other long-term liabilities	93.3		97.9
Total liabilities	2,517.5		2,555.9
Commitments and contingencies (Note 15)
Equity
Shareholders’ equity attributable to Snap-on Incorporated:
Preferred stock (authorized 15,000,000 shares of $1 par value; none outstanding)	—		—
Common stock (authorized 250,000,000 shares of $1 par value; issued 67,444,855 and 67,438,129 shares, respectively)	67.4		67.4
Additional paid-in capital	488.1		472.7
Retained earnings	5,996.2		5,699.9
Accumulated other comprehensive loss	(457.7)		(343.9)
Treasury stock at cost (14,177,040 and 14,008,479 shares, respectively)	(1,769.6)		(1,714.2)
Total shareholders’ equity attributable to Snap-on Incorporated	4,324.4		4,181.9
Noncontrolling interests	22.4		21.9
Total equity	4,346.8		4,203.8
Total liabilities and equity	$	6,864.3	$	6,759.7

See Notes to Condensed Consolidated Financial Statements.

6

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Amounts in millions, except share data)

(Unaudited)

The following summarizes the changes in total equity for the three month period ended July 2, 2022:

	Shareholders’ Equity Attributable to Snap-on Incorporated
	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total Equity
Balance at April 2, 2022	$	67.4	$	474.7	$	5,841.0	$	(350.6)	$	(1,734.2)	$	22.3	$	4,320.6
Net Earnings for the three months ended July 2, 2022	—		—		231.5		—		—		5.7		237.2
Other comprehensive loss	—		—		—		(107.1)		—		—		(107.1)
Cash dividends – $1.42 per share	—		—		(75.7)		—		—		—		(75.7)
Stock compensation plans	—		13.4		—		—		18.4		—		31.8
Share repurchases – 251,000 shares	—		—		—		—		(53.8)		—		(53.8)
Other	—		—		(0.6)		—		—		(5.6)		(6.2)
Balance at July 2, 2022	$	67.4	$	488.1	$	5,996.2	$	(457.7)	$	(1,769.6)	$	22.4	$	4,346.8

The following summarizes the changes in total equity for the six month period ended July 2, 2022:

	Shareholders’ Equity Attributable to Snap-on Incorporated
	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total Equity
Balance at January 1, 2022	$	67.4	$	472.7	$	5,699.9	$	(343.9)	$	(1,714.2)	$	21.9	$	4,203.8
Net Earnings for the six months ended July 2, 2022	—		—		448.9		—		—		11.0		459.9
Other comprehensive loss	—		—		—		(113.8)		—		—		(113.8)
Cash dividends – $2.84 per share	—		—		(151.4)		—		—		—		(151.4)
Stock compensation plans	—		15.4		—		—		27.2		—		42.6
Share repurchases – 387,000 shares	—		—		—		—		(82.6)		—		(82.6)
Other	—		—		(1.2)		—		—		(10.5)		(11.7)
Balance at July 2, 2022	$	67.4	$	488.1	$	5,996.2	$	(457.7)	$	(1,769.6)	$	22.4	$	4,346.8

See Notes to Condensed Consolidated Financial Statements.

7

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Amounts in millions, except share data)

(Unaudited)

The following summarizes the changes in total equity for the three month period ended July 3, 2021:

	Shareholders’ Equity Attributable to Snap-on Incorporated
	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Noncontrolling Interests		Total Equity
Balance at April 3, 2021	$	67.4	$	419.7	$	5,282.5	$	(388.3)	$	(1,505.3)	$	21.9	$	3,897.9
Net Earnings for the three months ended July 3, 2021	—		—		208.0		—		—		5.2		213.2
Other comprehensive income	—		—		—		25.6		—		—		25.6
Cash dividends – $1.23 per share	—		—		(66.7)		—		—		—		(66.7)
Stock compensation plans	—		41.4		—		—		56.8		—		98.2
Share repurchases – 566,900 shares	—		—		—		—		(137.4)		—		(137.4)
Other	—		—		(0.3)		—		—		(5.0)		(5.3)
Balance at Balance at July 3, 2021	$	67.4	$	461.1	$	5,423.5	$	(362.7)	$	(1,585.9)	$	22.1	$	4,025.5

The following summarizes the changes in total equity for the six month period ended July 3, 2021:

	Shareholders’ Equity Attributable to Snap-on Incorporated
	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Noncontrolling Interests		Total Equity
Balance at January 2, 2021	$	67.4	$	391.7	$	5,156.9	$	(365.8)	$	(1,425.3)	$	21.7	$	3,846.6
Net Earnings for the six months ended July 3, 2021	—		—		400.6		—		—		10.2		410.8
Other comprehensive income	—		—		—		3.1		—		—		3.1
Cash dividends – $2.46 per share	—		—		(133.4)		—		—		—		(133.4)
Stock compensation plans	—		69.4		—		—		128.7		—		198.1
Share repurchases – 1,288,900 shares	—		—		—		—		(289.3)		—		(289.3)
Other	—		—		(0.6)		—		—		(9.8)		(10.4)
Balance at Balance at July 3, 2021	$	67.4	$	461.1	$	5,423.5	$	(362.7)	$	(1,585.9)	$	22.1	$	4,025.5

See Notes to Condensed Consolidated Financial Statements.

8

SNAP-ON INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in millions)

(Unaudited)

	Six Months Ended
	July 2, 2022		July 3, 2021
Operating activities:
Net earnings	$	459.9	$	410.8
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation	36.7		37.9
Amortization of other intangibles	14.4		12.3
Provision for losses on finance receivables	15.4		17.9
Provision for losses on non-finance receivables	6.7		8.1
Stock-based compensation expense	17.5		23.8
Deferred income tax provision (benefit)	(7.1)		4.0
Loss (gain) on sales of assets	(2.9)		1.4
Changes in operating assets and liabilities, net of effects of acquisitions:
Trade and other accounts receivable	(73.7)		(4.0)
Contract receivables	10.4		4.5
Inventories	(123.4)		(16.1)
Prepaid expenses and other assets	(23.4)		(14.3)
Accounts payable	42.1		59.5
Accruals and other liabilities	(37.9)		11.7
Net cash provided by operating activities	334.7		557.5
Investing activities:
Additions to finance receivables	(469.6)		(454.5)
Collections of finance receivables	426.2		447.9
Capital expenditures	(41.5)		(37.6)
Acquisitions of businesses, net of cash acquired	0.5		(195.8)
Disposals of property and equipment	4.2		1.4
Other	(0.2)		1.7
Net cash used by investing activities	(80.4)		(236.9)
Financing activities:
Net increase in other short-term borrowings	2.8		2.9
Cash dividends paid	(151.4)		(133.4)
Purchases of treasury stock	(82.6)		(289.3)
Proceeds from stock purchase and option plans	29.2		154.8
Other	(16.5)		(13.9)
Net cash used by financing activities	(218.5)		(278.9)
Effect of exchange rate changes on cash and cash equivalents	(2.9)		0.8
Increase in cash and cash equivalents	32.9		42.5
Cash and cash equivalents at beginning of year	780.0		923.4
Cash and cash equivalents at end of period	$	812.9	$	965.9
Supplemental cash flow disclosures:
Cash paid for interest	$	(22.4)	$	(27.9)
Net cash paid for income taxes	(129.2)		(126.6)

See Notes to Condensed Consolidated Financial Statements.

9

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1: Summary of Accounting Policies

Principles of consolidation and presentation

The Condensed Consolidated Financial Statements include the accounts of Snap-on Incorporated and its wholly owned and majority-owned subsidiaries (collectively, “Snap-on” or the “company”). These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included in Snap-on’s 2021 Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (“2021 year end”). The company’s 2022 fiscal second quarter ended on July 2, 2022; the 2021 fiscal second quarter ended on July 3, 2021. The company’s 2022 and 2021 fiscal second quarters each contained 13 weeks of operating results. Snap-on’s Condensed Consolidated Financial Statements are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”).

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the Condensed Consolidated Financial Statements for the three and six month periods ended July 2, 2022, and July 3, 2021, have been made. Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Financial Instruments

The fair value of the company’s derivative financial instruments is generally determined using quoted prices in active markets for similar assets and liabilities. The carrying value of the company’s non-derivative financial instruments either approximates fair value, due to their short-term nature, or the amount disclosed for fair value is based upon a discounted cash flow analysis or quoted market values. See Note 10 for further information on financial instruments.

New Accounting Standards

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326) – Troubled Debt Restructurings and Vintage Disclosures, which requires enhanced disclosure of certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty while eliminating certain current recognition and measurement accounting guidance. This ASU also requires the disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases. ASU No. 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years; this ASU allows for early adoption in any interim period after issuance of the update. The adoption of this ASU is not expected to have a material impact on Snap-on’s Consolidated Financial Statements.

Note 2: Revenue Recognition

Snap-on recognizes revenue from the sale of tools, diagnostics, equipment, and related services based on when control of the product passes to the customer or the service is provided and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services.

10

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Revenue Disaggregation: The following table shows the consolidated revenues by revenue source:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Revenue from contracts with customers	$	1,130.5	$	1,075.3	$	2,222.4	$	2,094.1
Other revenues	6.1		6.1		12.0		11.9
Total net sales	1,136.6		1,081.4		2,234.4		2,106.0
Financial services revenue	86.4		86.9		174.1		175.5
Total revenues	$	1,223.0	$	1,168.3	$	2,408.5	$	2,281.5

Snap-on evaluates the performance of its operating segments based on segment revenues, including both external and intersegment net sales, and segment operating earnings. Snap-on accounts for both intersegment sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments. Intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results.

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

	For the Three Months Ended July 2, 2022
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	128.7	$	460.3	$	254.7	$	—	$	—	$	843.7
Europe	73.1		36.4		60.4		—		—		169.9
All other	74.3		23.9		24.8		—		—		123.0
External net sales	276.1		520.6		339.9		—		—		1,136.6
Intersegment net sales	83.0		—		76.9		—		(159.9)		—
Total net sales	359.1		520.6		416.8		—		(159.9)		1,136.6
Financial services revenue	—		—		—		86.4		—		86.4
Total revenue	$	359.1	$	520.6	$	416.8	$	86.4	$	(159.9)	$	1,223.0

	For the Six Months Ended July 2, 2022
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	242.4	$	908.1	$	497.5	$	—	$	—	$	1,648.0
Europe	154.9		76.5		122.3		—		—		353.7
All other	140.0		48.1		44.6		—		—		232.7
External net sales	537.3		1,032.7		664.4		—		—		2,234.4
Intersegment net sales	161.9		—		150.6		—		(312.5)		—
Total net sales	699.2		1,032.7		815.0		—		(312.5)		2,234.4
Financial services revenue	—		—		—		174.1		—		174.1
Total revenue	$	699.2	$	1,032.7	$	815.0	$	174.1	$	(312.5)	$	2,408.5
* North America is comprised of the United States, Canada and Mexico.

11

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

	For the Three Months Ended July 3, 2021
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	126.6	$	416.3	$	236.8	$	—	$	—	$	779.7
Europe	79.2		43.8		66.5		—		—		189.5
All other	68.9		24.0		19.3		—		—		112.2
External net sales	274.7		484.1		322.6		—		—		1,081.4
Intersegment net sales	75.8		—		76.0		—		(151.8)		—
Total net sales	350.5		484.1		398.6		—		(151.8)		1,081.4
Financial services revenue	—		—		—		86.9		—		86.9
Total revenue	$	350.5	$	484.1	$	398.6	$	86.9	$	(151.8)	$	1,168.3

	For the Six Months Ended July 3, 2021
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	244.6	$	824.4	$	437.7	$	—	$	—	$	1,506.7
Europe	163.5		88.0		127.1		—		—		378.6
All other	137.7		50.0		33.0		—		—		220.7
External net sales	545.8		962.4		597.8		—		—		2,106.0
Intersegment net sales	150.4		—		148.4		—		(298.8)		—
Total net sales	696.2		962.4		746.2		—		(298.8)		2,106.0
Financial services revenue	—		—		—		175.5		—		175.5
Total revenue	$	696.2	$	962.4	$	746.2	$	175.5	$	(298.8)	$	2,281.5
* North America is comprised of the United States, Canada and Mexico.

12

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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

	For the Three Months Ended July 2, 2022
	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	$	25.2	$	520.6	$	339.9	$	—	$	—	$	885.7
All other professionals	250.9		—		—		—		—		250.9
External net sales	276.1		520.6		339.9		—		—		1,136.6
Intersegment net sales	83.0		—		76.9		—		(159.9)		—
Total net sales	359.1		520.6		416.8		—		(159.9)		1,136.6
Financial services revenue	—		—		—		86.4		—		86.4
Total revenue	$	359.1	$	520.6	$	416.8	$	86.4	$	(159.9)	$	1,223.0

	For the Six Months Ended July 2, 2022
	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	$	49.1	$	1,032.7	$	664.4	$	—	$	—	$	1,746.2
All other professionals	488.2		—		—		—		—		488.2
External net sales	537.3		1,032.7		664.4		—		—		2,234.4
Intersegment net sales	161.9		—		150.6		—		(312.5)		—
Total net sales	699.2		1,032.7		815.0		—		(312.5)		2,234.4
Financial services revenue	—		—		—		174.1		—		174.1
Total revenue	$	699.2	$	1,032.7	$	815.0	$	174.1	$	(312.5)	$	2,408.5

	For the Three Months Ended July 3, 2021
	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	$	25.7	$	484.1	$	322.6	$	—	$	—	$	832.4
All other professionals	249.0		—		—		—		—		249.0
External net sales	274.7		484.1		322.6		—		—		1,081.4
Intersegment net sales	75.8		—		76.0		—		(151.8)		—
Total net sales	350.5		484.1		398.6		—		(151.8)		1,081.4
Financial services revenue	—		—		—		86.9		—		86.9
Total revenue	$	350.5	$	484.1	$	398.6	$	86.9	$	(151.8)	$	1,168.3

13

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

	For the Six Months Ended July 3, 2021
	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	$	49.8	$	962.4	$	597.8	$	—	$	—	$	1,610.0
All other professionals	496.0		—		—		—		—		496.0
External net sales	545.8		962.4		597.8		—		—		2,106.0
Intersegment net sales	150.4		—		148.4		—		(298.8)		—
Total net sales	696.2		962.4		746.2		—		(298.8)		2,106.0
Financial services revenue	—		—		—		175.5		—		175.5
Total revenue	$	696.2	$	962.4	$	746.2	$	175.5	$	(298.8)	$	2,281.5

Nature of Goods and Services: Snap-on derives net sales from a broad line of products and complementary services that are grouped into three categories: (i) tools; (ii) diagnostics, information and management systems; and (iii) equipment. The tools product category includes hand tools, power tools, tool storage products and other similar products. The diagnostics, information and management systems product category includes handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer (“OEM”) purchasing facilitation services, and warranty management systems and analytics to help OEM dealership service and repair shops (“OEM dealerships”) manage and track performance. The equipment product category includes solutions for the service of vehicles and industrial equipment. Snap-on supports the sale of its diagnostics and vehicle service shop equipment by offering training programs as well as after-sales support to its customers. Through its financial services businesses, Snap‑on derives revenue from various financing programs designed to facilitate the sales of its products and support its franchise business.

Approximately 90% of Snap-on’s net sales are products sold at a point in time through ship-and-bill performance obligations that also include repair services. The remaining sales revenue is earned over time primarily for software subscriptions, other subscription service agreements and extended warranty programs.

Snap-on enters into contracts related to the selling of tools, diagnostics, repair information, equipment and related services. At contract inception, an assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, Snap-on considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Contracts with customers are comprised of customer purchase orders, invoices and written contracts.

For certain performance obligations related to software subscriptions, extended warranty and other subscription agreements that are settled over time Snap-on has elected not to disclose the value of unsatisfied performance obligations for: (i) contracts that have an original expected length of one year or less; (ii) contracts where revenue is recognized as invoiced; and (iii) contracts with variable consideration related to unsatisfied performance obligations. The remaining duration of these unsatisfied performance obligations range from one month up to 60 months.  Snap-on had approximately $188.0 million of long-term contracts that have fixed consideration that extends beyond one year as of July 2, 2022. Snap-on expects to recognize approximately 60% of these contracts as revenue by the end of fiscal 2023, an additional 35% by the end of fiscal 2025, and the balance thereafter. 

14

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Contract Liabilities: Contract liabilities are recorded when cash payments are received in advance of Snap-on’s performance.  The timing of payment is typically on a monthly, quarterly or annual basis. The balance of total contract liabilities was $65.9 million and $63.8 million at July 2, 2022, and January 1, 2022, respectively.  The current portion of contract liabilities is included in “Other accrued liabilities” and the non-current portion of such liabilities is included in “Other long-term liabilities” on the accompanying Condensed Consolidated Balance Sheets.  During the three and six months ended July 2, 2022, Snap-on recognized revenue of $10.3 million and $44.9 million, respectively, that was included in the $63.8 million contract liability balance at January 1, 2022, which was primarily from the amortization of software subscriptions, extended warranties and other subscription agreements.

Note 3: Acquisitions

On August 1, 2021, Snap-on acquired AutoCrib EMEA GmbH (“AutoCrib Germany”), a former independent distributor, for a cash purchase price of $4.4 million (or $4.2 million, net of cash acquired). AutoCrib Germany, based in Hamburg, Germany, distributes asset and tool control solutions for a variety of aerospace, automotive, military, natural resources and general industry operations. In the first quarter of 2022, the company completed the purchase accounting valuations for the acquired net assets of AutoCrib Germany. The $3.3 million excess of the purchase price over the fair value of the net assets acquired is recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets.

On July 1, 2021, Snap-on exchanged its 35% equity interest in Deville S.A., valued at $21.8 million, for 100% ownership of Secateurs Pradines (“Pradines”), a wholly owned subsidiary of Deville S.A. with a fair value of $20.2 million (or $15.7 million, net of cash acquired), which reflects a $0.5 million purchase accounting adjustment finalized in the second quarter of 2022, and cash of $1.6 million. Pradines, located in Bauge-en-Anjou, France, designs and manufactures horticultural hand tools for professionals and individuals. The $10.2 million excess of the purchase price over the fair value of net assets acquired is recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets.

On February 26, 2021, Snap-on acquired Dealer-FX Group, Inc. (“Dealer-FX”) for a cash purchase price of $200.1 million (or $200.0 million, net of cash acquired). Dealer-FX, based in Markham, Ontario, is a leading developer, marketer and provider of service operations software solutions for automotive OEM customers and their dealers. Dealer-FX specializes in software as a service (SaaS) management systems, communications platforms, extensive data integrations, and offers a digitalized solution that increases productivity and enhances the vehicle owners’ experience. In the first quarter of 2022, the company completed the purchase accounting valuations for the acquired net assets of Dealer-FX, and recorded $32.6 million of net deferred tax changes. The $118.2 million excess of the purchase price over the fair value of the net assets acquired is recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets.

For segment reporting purposes, the results of operations and assets of Dealer-FX have been included in the Repair Systems & Information Group since the acquisition date, and the results of operations and assets of AutoCrib Germany and Pradines 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 were neither significant nor material to Snap-on’s results of operations or financial position. See Note 6 for further information on goodwill and other intangible assets.

Note 4: Receivables

Trade and Other Accounts Receivable: Snap-on’s trade and other accounts receivable primarily arise from the sale of tools, diagnostics, and equipment products to a broad range of industrial and commercial customers and to Snap-on’s independent franchise van channel with payment terms generally ranging from 30 to 120 days.

The components of Snap-on’s trade and other accounts receivable as of July 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Trade and other accounts receivable	$	757.2	$	709.6
Allowances for credit losses	(28.1)		(27.3)
Total trade and other accounts receivable – net	$	729.1	$	682.3

15

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The following is a rollforward of the allowances for credit losses related to trade and other accounts receivable for the three and six months ended July 2, 2022, and July 3, 2021:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Allowances for credit losses:
Beginning of period	$	28.4	$	25.8	$	27.3	$	26.3
Provision for credit losses	2.9		5.4		6.6		7.3
Charge-offs	(2.2)		(2.1)		(5.2)		(4.2)
Recoveries	—		—		0.1		—
Currency translation	(1.0)		0.4		(0.7)		0.1
End of period	$	28.1	$	29.5	$	28.1	$	29.5

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 Condensed Consolidated Statements of Earnings.

Finance receivables are comprised of extended-term payment contracts to both technicians and independent shop owners (i.e., franchisees’ customers) to enable them to purchase tools, diagnostics, and equipment products on an extended-term payment plan, with average payment terms of approximately four years.

Contract receivables, with payment terms of up to ten 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.

16

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The components of Snap-on’s current finance and contract receivables as of July 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance installment receivables	$	562.6	$	557.0
Finance lease receivables, net of unearned finance charges of $0.7 million and $1.3 million, respectively	4.2		7.1
Total finance receivables	566.8		564.1
Contract installment receivables	42.8		55.2
Contract lease receivables, net of unearned finance charges of $18.4 million and $18.7 million, respectively	57.3		57.3
Total contract receivables	100.1		112.5
Total	666.9		676.6
Allowances for credit losses:
Finance installment receivables	(19.8)		(21.7)
Finance lease receivables	—		(0.1)
Total finance allowance for credit losses	(19.8)		(21.8)
Contract installment receivables	(0.7)		(0.9)
Contract lease receivables	(1.1)		(1.2)
Total contract allowance for credit losses	(1.8)		(2.1)
Total allowance for credit losses	(21.6)		(23.9)
Total current finance and contract receivables – net	$	645.3	$	652.7
Finance receivables – net	$	547.0	$	542.3
Contract receivables – net	98.3		110.4
Total current finance and contract receivables – net	$	645.3	$	652.7

17

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The components of Snap-on’s finance and contract receivables with payment terms beyond one year as of July 2, 2022, and January 1, 2022, are as follows: 

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance installment receivables	$	1,166.1	$	1,155.3
Finance lease receivables, net of unearned finance charges of $0.3 million and $0.5 million, respectively	2.4		4.2
Total finance receivables	1,168.5		1,159.5
Contract installment receivables	196.7		197.1
Contract lease receivables, net of unearned finance charges of $29.6 million and $30.3 million, respectively	184.1		187.4
Total contract receivables	380.8		384.5
Total	1,549.3		1,544.0
Allowances for credit losses:
Finance installment receivables	(41.5)		(45.4)
Finance lease receivables	—		(0.1)
Total finance allowance for credit losses	(41.5)		(45.5)
Contract installment receivables	(3.2)		(3.2)
Contract lease receivables	(2.2)		(3.1)
Total contract allowance for credit losses	(5.4)		(6.3)
Total allowance for credit losses	(46.9)		(51.8)
Total long-term finance and contract receivables – net	$	1,502.4	$	1,492.2
Finance receivables – net	$	1,127.0	$	1,114.0
Contract receivables – net	375.4		378.2
Total long-term finance and contract receivables – net	$	1,502.4	$	1,492.2

Credit quality: The company’s receivable portfolio is comprised of two portfolio segments, finance and contract receivables, which are the same segments used to estimate expected credit losses reported in the allowance for credit losses. The amortized cost basis for finance and contract receivables is the amount originated adjusted for applicable accrued interest and net of deferred fees or costs, collection of cash, and write-offs. The 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.

18

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

For finance and contract receivables, Snap-on assesses quantitative and qualitative factors through the use of credit quality indicators consisting primarily of collection experience and related internal metrics. Delinquency is the primary indicator of credit quality for finance and contract receivables. Snap-on conducts monthly reviews of credit and collection performance for both the finance and contract receivable portfolios focusing on data such as delinquency trends, nonaccrual receivables, and write-off and recovery activity. These reviews allow for the formulation of collection strategies and potential collection policy modifications in response to changing risk profiles in the finance and contract receivable portfolios. The other internal metrics include credit exposure by customer and delinquency classification to further monitor changing risk profiles. The company maintains a system that aggregates credit exposure and provides delinquency data by days past due aging categories. A receivable 30 days or more past due is considered delinquent. However, customers are monitored prior to becoming 30 days past due.

The amortized cost basis of finance and contract receivables by origination year as of July 2, 2022, are as follows:

(Amounts in millions)	2022		2021		2020		2019		2018		Prior		Total
Finance Receivables:
Delinquent	$	2.9	$	16.5	$	11.3	$	5.4	$	2.8	$	1.4	$	40.3
Non-delinquent	747.6		572.2		247.7		89.3		30.7		7.5		1,695.0
Total Finance receivables	$	750.5	$	588.7	$	259.0	$	94.7	$	33.5	$	8.9	$	1,735.3
Contract receivables:
Delinquent	$	0.2	$	0.7	$	0.7	$	0.9	$	0.3	$	0.2	$	3.0
Non-delinquent	83.8		138.5		101.0		71.3		44.5		38.8		477.9
Total Contract receivables	$	84.0	$	139.2	$	101.7	$	72.2	$	44.8	$	39.0	$	480.9

Allowance for credit losses: The allowance for credit losses utilizes an expected credit loss objective for the recognition of credit losses on receivables over the contractual life using historical experience, asset specific risk characteristics, current conditions, reasonable and supportable forecasts, and the appropriate reversion period, when applicable.

The allowance for credit losses is maintained at a level that is considered adequate to cover credit-related losses on the receivables. Management performs detailed reviews of its receivables on a monthly and/or quarterly basis to assess the adequacy of the allowance and determine if any impairment has occurred. 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 agreement. Amounts determined to be uncollectable are charged directly against the allowance, while amounts recovered on previously written-off accounts increase the allowance. For both finance and contract receivables, net write-offs include the principal amount of losses written off as well as written-off accrued interest and fees, and recourse from franchisees on finance receivables. Recovered interest and fees previously written off are recorded through the allowance for credit losses and increase the allowance. Finance receivables are assessed for write-off when an account becomes 120 days past due and are written off typically within 60 days of asset repossession. Contract receivables related to equipment leases are generally written off when an account becomes 150 days past due, while contract receivables related to franchise finance and van leases are generally written off up to 180 days past the asset return date. For finance and contract receivables, customer bankruptcies are generally written off upon notification that the associated debt is not being reaffirmed or, in any event, no later than 180 days past due. Changes to the allowances for credit losses are maintained through adjustments to the provision 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 methodology (“WARM”). The WARM methodology calculates the average annual write-off rate and applies it to the remaining term of the receivables. The WARM method is used since the contract receivables have limited loss experience over generally longer terms and, therefore, the predictive loss patterns are more difficult to estimate.

19

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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 allowance for credit losses is adjusted each period for changes in the credit risk and expected lifetime credit losses.

The following is a rollforward of the allowances for credit losses for finance and contract receivables for the three and six months ended July 2, 2022, and July 3, 2021:

 

	Three Months Ended July 2, 2022				Six Months Ended July 2, 2022
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Allowances for credit losses:
Beginning of period	$	62.5	$	7.7	$	67.3	$	8.4
Provision for credit losses	9.1		—		15.4		0.1
Charge-offs	(12.8)		(0.6)		(26.2)		(1.4)
Recoveries	2.7		0.1		5.0		0.1
Currency translation	(0.2)		—		(0.2)		—
End of period	$	61.3	$	7.2	$	61.3	$	7.2

	Three Months Ended July 3, 2021				Six Months Ended July 3, 2021
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Allowances for credit losses:
Beginning of period	$	75.3	$	9.2	$	76.3	$	9.0
Provision for credit losses	6.6		0.1		17.9		0.8
Charge-offs	(12.4)		(0.5)		(27.3)		(1.1)
Recoveries	2.8		0.2		5.4		0.3
Currency translation	—		—		—		—
End of period	$	72.3	$	9.0	$	72.3	$	9.0

Past due: Depending on the contract, payments for finance and contract receivables are due on a monthly or weekly basis. Weekly payments are converted into a monthly equivalent for purposes of calculating delinquency. Delinquencies are assessed at the end of each month following the monthly equivalent contractual payment due date. The entire receivable balance of a contract is considered delinquent when contractual payments become 30 days past due. Removal from delinquent status occurs when the cumulative amount of monthly contractual payments then due have been received by the company.

It is the general practice of Snap-on’s financial services business not to engage in contract or loan modifications. In limited instances, Snap-on’s financial services business may modify certain receivables in troubled debt restructurings. The amount and number of restructured finance and contract receivables as of July 2, 2022, and January 1, 2022, were immaterial to both the financial services portfolio and the company’s results of operations and financial position.

20

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The aging of finance and contract receivables as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions)	30-59 Days Past Due		60-90 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Total Not Past Due		Total		Greater Than 90 Days Past Due and Accruing
July 2, 2022:
Finance receivables	$	15.1	$	9.6	$	15.6	$	40.3	$	1,695.0	$	1,735.3	$	13.3
Contract receivables	1.4		0.3		1.3		3.0		477.9		480.9		0.2
January 1, 2022:
Finance receivables	$	16.0	$	10.5	$	18.0	$	44.5	$	1,679.1	$	1,723.6	$	16.0
Contract receivables	1.7		0.9		0.9		3.5		493.5		497.0		0.1

Nonaccrual: SOC maintains the accrual of interest income during the progression through the various stages of delinquency prior to processing for write-off. At the time of write-off, the entire balance including the accrued but unpaid interest income amount is recorded as a loss.

Finance receivables are generally placed on nonaccrual status (nonaccrual of interest and other fees): (i) when a customer is placed on repossession status; (ii) upon receipt of notification of bankruptcy; (iii) upon notification of the death of a customer; or (iv) in other instances in which management concludes collectability is not reasonably assured.

Contract receivables are generally placed on nonaccrual status: (i) when a receivable is more than 90 days past due or at the point a customer’s account is placed on terminated status regardless of its delinquency status; (ii) upon notification of the death of a customer; or (iii) in other instances in which management concludes collectability is not reasonably assured.

The accrual of interest and other fees is resumed when the finance or contract receivable becomes contractually current and collection of all remaining contractual amounts due is reasonably assured. A receivable may have credit losses when it is expected that all amounts related to the receivable will not be collected according to the contractual terms of the applicable agreement. Such finance and contract receivables are covered by the company’s respective allowances for credit losses and are written-off against the allowances when appropriate.

The amount of finance and contract receivables on nonaccrual status as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance receivables	$	8.7	$	7.7
Contract receivables	4.1		2.7

Note 5: Inventories

Inventories by major classification are as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finished goods	$	756.7	$	686.5
Work in progress	69.7		64.3
Raw materials	157.6		140.2
Total FIFO value	984.0		891.0
Excess of current cost over LIFO cost	(90.7)		(87.2)
Total inventories – net	$	893.3	$	803.8

21

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 61% and 60% of total inventories as of July 2, 2022, and January 1, 2022, respectively. The company accounts for its non-U.S. inventory on the FIFO method. As of July 2, 2022, approximately 36% of the company’s U.S. inventory was accounted for using the FIFO method and 64% was accounted for using the last-in, first-out (“LIFO”) method. There were no LIFO inventory liquidations in the three and six months ended July 2, 2022, or July 3, 2021.

Note 6: Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by segment for the six months ended July 2, 2022, are as follows:

(Amounts in millions)	Commercial & Industrial Group		Snap-on Tools Group		Repair Systems & Information Group		Total
Balance as of January 1, 2022	$	325.8	$	12.4	$	778.3	$	1,116.5
Currency translation	(22.7)		—		(14.7)		(37.4)
Acquisition-related adjustments	(0.5)		—		(32.6)		(33.1)
Balance as of July 2, 2022	$	302.6	$	12.4	$	731.0	$	1,046.0

Goodwill of $1,046.0 million as of July 2, 2022, included $118.2 million from the acquisition of Dealer-FX, $10.2 million from the acquisition of Pradines and $3.3 million from the acquisition of AutoCrib Germany. In the first quarter of 2022, the purchase accounting valuations for the acquired net assets, including deferred tax assets, of Dealer-FX were completed, resulting in a reduction of goodwill of $32.6 million from 2021 year end. In the second quarter of 2022, the purchase accounting valuations for the acquired net assets of Pradines were completed, resulting in a reduction of goodwill of $0.5 million from 2021 year end. The goodwill from Dealer-FX is included in the Repair Systems & Information Group and the goodwill from Pradines and AutoCrib Germany is included in the Commercial & Industrial Group. See Note 3 for additional information on acquisitions.

Additional disclosures related to other intangible assets are as follows:

	July 2, 2022				January 1, 2022
(Amounts in millions)	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Amortized other intangible assets:
Customer relationships	$	212.6	$	(145.1)	$	217.8	$	(142.1)
Developed technology	35.9		(24.3)		36.6		(23.2)
Internally developed software	180.6		(138.0)		182.7		(139.1)
Patents	46.4		(25.0)		45.7		(25.1)
Trademarks	3.8		(2.3)		3.9		(2.3)
Other	7.9		(4.0)		8.3		(4.1)
Total	487.2		(338.7)		495.0		(335.9)
Non-amortized trademarks	135.0		—		142.6		—
Total other intangible assets	$	622.2	$	(338.7)	$	637.6	$	(335.9)

As of July 2, 2022, the gross carrying value of intangible assets includes $28.4 million of customer relationships, $14.8 million of developed technology and a $17.7 million non-amortized trademark related to the Dealer-FX acquisition.

22

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Snap-on completed its annual impairment testing of goodwill and other indefinite-lived intangible assets in the second quarter of 2022, and the testing did not result in any impairment. Provision 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 significant and long-term deterioration in macroeconomic, industry and market conditions, the loss of key customers, changes in technology or markets, significant changes in key personnel or litigation, a significant and sustained decrease in share price and/or other events, including effects from the sale or disposal of a reporting unit. As of July 2, 2022, the company had no accumulated impairment losses.

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

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

Snap-on is amortizing its customer relationships on both an accelerated and straight-line basis over a 14 year weighted-average life; the remaining intangibles are amortized on a straight-line basis. The weighted-average amortization period for all amortizable intangibles on a combined basis is 12 years.

The company’s customer relationships generally have contractual terms of three to five years and are typically renewed without significant cost to the company. The weighted-average 14 year life for customer relationships is based on the company’s historical renewal experience. Intangible asset renewal costs are expensed as incurred.

The aggregate amortization expense was $7.2 million and $14.4 million for the respective three and six month periods ended July 2, 2022, and $6.3 million and $12.3 million for the respective three and six month periods ended July 3, 2021. Based on current levels of amortizable intangible assets and estimated weighted-average useful lives, estimated annual amortization expense is expected to be $28.4 million in 2022, $25.8 million in 2023, $19.6 million in 2024, $14.1 million in 2025, $10.9 million in 2026, and $9.7 million in 2027.

Note 7: Exit and Disposal Activities

Snap-on did not record any costs for exit and disposal activities for each of the three and six month periods ended July 2, 2022, and July 3, 2021.

Snap-on’s exit and disposal accrual activity for the first six months of 2022 is as follows:

	Balance at		First Quarter				Balance at		Second Quarter				Balance at
(Amounts in millions)	January 1, 2022		Provision		Usage		April 2, 2022		Provision		Usage		July 2, 2022
Severance costs:
Commercial & Industrial Group	$	4.3	$	—	$	(0.5)	$	3.8	$	—	$	(0.4)	$	3.4
Snap-on Tools Group	0.3		—		—		0.3		—		—		0.3
Repair System & Information Group	2.4		—		(0.4)		2.0		—		(0.3)		1.7
Total	$	7.0	$	—	$	(0.9)	$	6.1	$	—	$	(0.7)	$	5.4

As of July 2, 2022, the company expects that approximately $3.2 million of the $5.4 million exit and disposal accrual will be utilized in 2022, and the remainder thereafter, primarily for longer-term severance payments.

Snap-on expects to fund the remaining cash requirements of its exit and disposal activities with available cash on hand, cash flows from operating activities and borrowings under the company’s existing credit facilities. The estimated costs for the exit and disposal activities were based on management’s best business judgement under prevailing circumstances.

23

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 8: Income Taxes

Snap-on’s effective income tax rate on earnings attributable to Snap-on was 23.7% and 23.4% in the respective first six month periods of 2022 and 2021. 

Snap-on and its subsidiaries file income tax returns in the United States and in various state, local and foreign jurisdictions. It is reasonably possible that certain unrecognized tax benefits may either be settled with taxing authorities or the statutes of limitations for such items may lapse within the next 12 months, causing Snap-on’s gross unrecognized tax benefits to decrease by a range of zero to $4.2 million. Over the next 12 months, Snap-on anticipates taking certain tax positions on various tax returns for which the related tax benefit does not meet the recognition threshold. Accordingly, Snap-on’s gross unrecognized tax benefits may increase by a range of zero to $0.8 million over the next 12 months for uncertain tax positions expected to be taken in future tax filings.

Note 9: Short-term and Long-term Debt

Short-term and long-term debt as of July 2, 2022, and January 1, 2022, consisted of the following:

(Amounts in millions)	July 2, 2022		January 1, 2022
3.25% unsecured notes due 2027	$	300.0	$	300.0
4.10% unsecured notes due 2048	400.0		400.0
3.10% unsecured notes due 2050	500.0		500.0
Other*	2.2		0.3
	1,202.2		1,200.3
Less: notes payable	(18.8)		(17.4)
Total long-term debt	$	1,183.4	$	1,182.9

* Includes unamortized debt issuance costs.

Notes payable of $18.8 million as of July 2, 2022, compared to $17.4 million as of 2021 year end.

Snap-on has an $800 million multi-currency revolving credit facility that terminates on September 16, 2024 (the “Credit Facility”); no amounts were outstanding under the Credit Facility as of July 2, 2022. Borrowings under the Credit Facility bear interest at varying rates based on either: (i) Snap-on’s then-current, long-term debt ratings; or (ii) Snap-on’s then-current ratio of consolidated debt net of certain cash adjustments (“Consolidated Net Debt”) to earnings before interest, taxes, depreciation, amortization and certain other adjustments for the preceding four fiscal quarters then ended (the “Consolidated Net Debt to EBITDA Ratio”). The Credit Facility’s financial covenant requires that Snap-on maintain, as of each fiscal quarter end, either (i) a ratio not greater than 0.60 to 1.00 of Consolidated Net Debt to the sum of Consolidated Net Debt plus total equity and less accumulated other comprehensive income or loss (the “Leverage Ratio”); or (ii) a Consolidated Net Debt to EBITDA Ratio not greater than 3.50 to 1.00. Snap-on may, up to two times during any five-year period during the term of the Credit Facility (including any extensions thereof), elect to increase the maximum Leverage Ratio to 0.65 to 1.00 and/or increase the maximum Consolidated Net Debt to EBITDA Ratio to 4.00 to 1.00 for four consecutive fiscal quarters in connection with certain material acquisitions (as defined in the related credit agreement). As of July 2, 2022, the company’s actual ratios of 0.09 and 0.34, respectively, were both within the permitted ranges set forth in this financial covenant. Snap-on generally issues commercial paper to fund its financing needs on a short-term basis and uses the Credit Facility as back-up liquidity to support such commercial paper issuances. As of July 2, 2022, there were no commercial paper issuances outstanding.

24

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 10: Financial Instruments

Derivatives: All derivative instruments are reported in the Condensed Consolidated Financial Statements at fair value. Changes in the fair value of derivatives are recorded each period in earnings or on the accompanying Condensed Consolidated Balance Sheets, depending on whether the derivative is designated and effective as part of a hedged transaction. Gains or losses on derivative instruments recorded in earnings are presented in the same Condensed Consolidated Statement of Earnings line that is used to present the earnings effect of the hedged item. Gains or losses on derivative instruments in accumulated other comprehensive income (loss) (“Accumulated OCI”) are reclassified to earnings in the period in which earnings are affected by the underlying hedged item.

The criteria used to determine if hedge accounting treatment is appropriate are: (i) the designation of the hedge to an underlying exposure; (ii) whether or not overall risk is being reduced; and (iii) if there is a correlation between the value of the derivative instrument and the underlying hedged item. Once a derivative contract is entered into, Snap-on designates the derivative as a fair value hedge, a cash flow hedge, a hedge of a net investment in a foreign operation, or a natural hedging instrument whose change in fair value is recognized as an economic hedge against changes in the value of the hedged item. Snap-on does not use derivative instruments for speculative or trading purposes.

Snap-on is exposed to global market risks, including the effects of changes in foreign currency exchange rates, interest rates, and the company’s stock price. The company uses derivatives to manage financial exposures that occur in the normal course of business. The primary risks managed by using derivative instruments are foreign currency risk, interest rate risk and stock-based deferred compensation risk.

Foreign Currency Risk Management: Snap-on has significant international operations and is subject to certain risks inherent with foreign operations, including currency fluctuations. Foreign currency exchange risk exists to the extent that Snap-on has payment obligations or receipts denominated in currencies other than the functional currency, including intercompany loans denominated in foreign currencies. To manage these exposures, Snap-on identifies naturally offsetting positions and then purchases hedging instruments to protect the residual net exposures. Snap-on manages most of these exposures on a consolidated basis, which allows for netting of certain exposures to take advantage of natural offsets. Foreign currency forward contracts (“foreign currency forwards”) are used to hedge the net exposures. Gains or losses on net foreign currency hedges are intended to offset losses or gains on the underlying net exposures in an effort to reduce the earnings volatility resulting from fluctuating foreign currency exchange rates. Snap-on’s foreign currency forwards are typically not designated as hedges. The fair value changes of these contracts are reported in earnings as foreign exchange gain or loss, which is included in “Other income (expense) - net” on the accompanying Condensed Consolidated Statements of Earnings. See Note 17 for additional information on Other income (expense) - net.

Interest Rate Risk Management: Snap-on aims to control funding costs by managing 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 Condensed Consolidated Statements of Earnings. The change in the fair value of the derivative is recorded in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheets. There were no outstanding interest rate swaps as of both July 2, 2022, and January 1, 2022.

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 Condensed Consolidated Statements of Earnings. There were no treasury locks outstanding as of both July 2, 2022, and January 1, 2022.

25

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Stock-based Deferred Compensation Risk Management: Snap-on aims to manage market risk associated with the stock-based portion of its deferred compensation plans through the use of prepaid equity forward agreements (“equity forwards”). Equity forwards are used to aid in offsetting the potential mark-to-market effect on stock-based deferred compensation from changes in Snap-on’s stock price. Since stock-based deferred compensation liabilities increase as the company’s stock price rises and decrease as the company’s stock price declines, the equity forwards are intended to mitigate the potential impact on deferred compensation expense that may result from such mark-to-market changes. As of July 2, 2022, Snap-on had equity forwards in place intended to manage market risk with respect to 71,200 shares of Snap-on common stock associated with its deferred compensation plans.

Counterparty Risk: Snap-on is exposed to credit losses in the event of non-performance by the counterparties to its various financial agreements, including its foreign currency forward contracts, interest rate swap agreements, treasury lock agreements and prepaid equity forward agreements. Snap-on does not obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of the counterparties and generally enters into agreements with financial institution counterparties with a credit rating of A- or better. Snap-on does not anticipate non-performance by its counterparties, but cannot provide assurances.

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

	July 2, 2022				January 1, 2022
(Amounts in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Finance receivables – net	$	1,674.0	$	1,954.1	$	1,656.3	$	1,988.6
Contract receivables – net	473.7		508.1		488.6		542.5
Long-term debt and notes payable	1,202.2		1,066.3		1,200.3		1,339.7

The following methods and assumptions were 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 was 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. 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.

26

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 11: Pension Plans

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

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Service cost	$	6.3	$	6.9	$	13.4	$	14.4
Interest cost	11.2		10.5		22.3		21.1
Expected return on plan assets	(25.4)		(23.5)		(49.9)		(47.1)
Amortization of unrecognized loss	4.7		9.1		9.2		18.2
Net periodic pension (benefit) cost	$	(3.2)	$	3.0	$	(5.0)	$	6.6

The components of net periodic pension (benefit) cost, other than the service cost component, are included in “Other income (expense) - net” on the accompanying Condensed Consolidated Statements of Earnings. See Note 17 for additional information on other income (expense) - net.

Snap-on intends to make contributions of $9.4 million to its foreign pension plans and $9.5 million to its domestic pension plans in 2022, as required by law. Depending on market and other conditions, Snap-on may make discretionary cash contributions to its pension plans in 2022.

Note 12: Postretirement Health Care Plans

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

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Interest cost	$	0.3	$	0.3	$	0.6	$	0.6
Expected return on plan assets	(0.1)		(0.2)		(0.3)		(0.4)
Net periodic postretirement health care cost	$	0.2	$	0.1	$	0.3	$	0.2

The components of net periodic postretirement health care cost are included in “Other income (expense) - net” on the accompanying Condensed Consolidated Statements of Earnings. See Note 17 for additional information on other income (expense) - net.

Note 13: Stock-based Compensation and Other Stock Plans

The 2011 Incentive Stock and Awards Plan (the “2011 Plan”) provides for the grant of stock options, performance share units (“PSUs”), stock appreciation rights (“SARs”) and restricted stock awards (which may be designated as “restricted stock units” or “RSUs”). As of July 2, 2022, the 2011 Plan had 3,116,594 shares available for future grants. The company uses treasury stock to deliver shares under the 2011 Plan.

Net stock-based compensation expense was $8.5 million and $17.5 million for the respective three and six month periods ended July 2, 2022, and $11.5 million and $23.8 million for the respective three and six month periods ended July 3, 2021. Cash received from stock purchase and option plan exercises during the respective three and six month periods ended July 2, 2022, totaled $23.4 million and $29.2 million. Cash received from stock purchase and option plan exercises during the respective three and six month periods ended July 3, 2021, totaled $61.8 million and $154.8 million. The tax benefit realized from both the exercise and vesting of share-based payment arrangements was $1.8 million and $3.9 million for the respective three and six month periods ended July 2, 2022, and $6.2 million and $13.9 million for the respective three and six month periods ended July 3, 2021.

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 ten years. Stock option grants vest ratably on the first, second and third anniversaries of the date of grant.

27

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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 options granted are expected to be outstanding. Expected volatility is based on the historical volatility of the company’s stock for the length of time corresponding to the expected term of the option. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock as of the date of grant. The risk-free interest rate is based on the U.S. treasury yield curve on the grant date for the expected term of the option.

The following weighted-average assumptions were used in calculating the fair value of stock options granted during the three month period ended July 2, 2022, and the six month periods ended July 2, 2022 and July 3, 2021, using the Black-Scholes valuation model; no stock options were granted during the three month period ended July 3, 2021:

	Three Months Ended		Six Months Ended
	July 2, 2022	July 3, 2021	July 2, 2022	July 3, 2021
Expected term of option (in years)	3.74	N/A	5.14	5.33
Expected volatility factor	23.12%	N/A	22.61%	21.80%
Expected dividend yield	2.73%	N/A	2.68%	2.59%
Risk-free interest rate	2.73%	N/A	2.00%	0.67%

A summary of stock option activity as of and for the six months ended July 2, 2022, is presented below:

	Shares (in thousands)	Exercise Price Per Share*		Remaining Contractual Term* (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2022	2,432	$	151.32
Granted	289	211.41
Exercised	(118)	131.85
Forfeited or expired	(16)	183.40
Outstanding at July 2, 2022	2,587	158.72		5.7	$	106.0
Exercisable at July 2, 2022	1,954	147.97		4.7	98.2

* Weighted-average

The weighted-average grant date fair value of options granted during the six months ended July 2, 2022, and July 3, 2021, was $34.35 and $26.19, respectively. The intrinsic value of options exercised was $7.4 million and $10.2 million during the respective three and six month periods ended July 2, 2022, and $28.1 million and $58.9 million during the respective three and six month periods ended July 3, 2021. The fair value of stock options vested was $10.5 million and $12.5 million during the respective six month periods ended July 2, 2022, and July 3, 2021.

As of July 2, 2022, there was $14.9 million of unrecognized compensation cost related to non-vested stock options that is expected to be recognized as a charge to earnings over a weighted-average period of 1.8 years.

Performance Share Units and Restricted Stock Units: PSUs are earned and expensed using the fair value of the award over a contractual term of three years based on the company’s performance. Vesting of the PSUs is dependent upon performance relative to pre-defined goals for revenue growth and return on net assets for the applicable performance period. For performance achieved above specified levels, the recipient may earn additional shares of stock, not to exceed 100% of the number of performance awards initially granted. The PSUs have a three-year performance period based on the results of the consolidated financial metrics of the company.

Time-based RSUs are earned and expensed using the fair value of the award over the contractual term of three years. Vesting of the time-based RSUs is dependent upon continued employment over the 3-year cliff vesting period.

28

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The fair value of PSUs and 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 awards granted during the six months ended July 2, 2022, and July 3, 2021, was $206.58 and $187.12, respectively. PSUs related to 46,217 shares were paid out during the six months ended July 2, 2022. There were no PSUs paid out during the six months ended July 3, 2021. Earned PSUs vest and are generally paid out following the conclusion of the applicable performance period upon approval by the Organization and Executive Compensation Committee of the company’s Board of Directors (the “Board”).

Changes to the company’s non-vested PSUs and RSUs during the six months ended July 2, 2022, are as follows:

	Shares (in thousands)	Fair Value Price per Share*
Non-vested PSUs and RSUs at January 1, 2022	215	$	180.29
Granted	111	206.58
Vested	—	—
Cancellations and other	(6)	192.40
Non-vested PSUs and RSUs at July 2, 2022	320	189.21

* Weighted-average

As of July 2, 2022, there was $33.6 million of unrecognized compensation cost related to non-vested PSUs and RSUs that are expected to be recognized as a charge to earnings over a weighted-average period of 1.6 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 ten 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.

The fair value of stock-settled SARs is estimated on the date of grant using the Black-Scholes valuation model. The fair value of cash-settled SARs is revalued (mark-to-market) each reporting period using the Black-Scholes valuation model based on Snap-on’s period-end stock price. The company uses historical data regarding SARs exercise and forfeiture behaviors for different participating groups to estimate the expected term of the SARs granted based on the period of time that similar instruments granted are expected to be outstanding. Expected volatility is based on the historical volatility of the company’s stock for the length of time corresponding to the expected term of the SARs. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock as of the date of grant (for stock-settled SARs) or reporting date (for cash-settled SARs). The risk-free interest rate is based on the U.S. treasury yield curve in effect as of the grant date (for stock-settled SARs) or reporting date (for cash-settled SARs) for the length of time corresponding to the expected term of the SARs.

29

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The following weighted-average assumptions were used in calculating the fair value of stock-settled SARs granted during the six months ended July 2, 2022, and July 3, 2021, using the Black-Scholes valuation model:

	Six Months Ended
	July 2, 2022	July 3, 2021
Expected term of stock-settled SARs (in years)	4.02	3.94
Expected volatility factor	23.09%	22.50%
Expected dividend yield	2.68%	2.59%
Risk-free interest rate	1.96%	0.19%

A summary of stock-settled SARs as of and for the six months ended July 2, 2022, are as follows:

	Stock-settled SARs (in thousands)	Exercise Price Per Share*		Remaining Contractual Term* (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2022	397	$	160.09
Granted	75	211.67
Exercised	(11)	153.13
Forfeited or expired	(41)	168.44
Outstanding at July 2, 2022	420	168.65		6.7	$	13.4
Exercisable at July 2, 2022	273	154.97		5.5	11.8

* Weighted-average

The weighted-average grant date fair value of stock-settled SARs granted during the six months ended July 2, 2022, and July 3, 2021, was $32.63 and $24.05, respectively. The intrinsic value of stock-settled SARs exercised was $0.5 million and $0.7 million during the respective three and six month periods ended July 2, 2022, and $0.8 million and $3.0 million during the respective three and six month periods ended July 3, 2021. The fair value of stock-settled SARs vested was $2.0 million and $2.1 million during the respective six month periods ended July 2, 2022, and July 3, 2021.

As of July 2, 2022, there was $3.4 million of unrecognized compensation cost related to non-vested stock-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of 1.9 years.

The following weighted-average assumptions were used in calculating the fair value of cash-settled SARs granted during the six months ended July 2, 2022, and July 3, 2021, using the Black-Scholes valuation model:

	Six Months Ended
	July 2, 2022	July 3, 2021
Expected term of cash-settled SARs (in years)	3.58	3.59
Expected volatility factor	23.68%	22.49%
Expected dividend yield	2.87%	2.20%
Risk-free interest rate	2.85%	0.45%

The intrinsic value of cash-settled SARs exercised was $0.2 million and $0.6 million during the respective three and six month periods ended July 2, 2022, and $0.1 million and $0.6 million during the respective three and six month periods ended July 3, 2021. The fair value of cash-settled SARs vested was $0.1 million for both the six month periods ended July 2, 2022, and July 3, 2021.

30

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Changes to the company’s non-vested cash-settled SARs during the six months ended July 2, 2022, are as follows:

	Cash-settled SARs (in thousands)	Fair Value Price per Share*
Non-vested cash-settled SARs at January 1, 2022	2	$	47.13
Granted	1	31.67
Vested	(1)	41.69
Non-vested cash-settled SARs at July 2, 2022	2	34.56

* Weighted-average

As of July 2, 2022, there was $0.1 million of unrecognized compensation cost related to non-vested cash-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of 1.9 years.

Restricted Stock Awards – Non-employee Directors: The company awarded 6,525 shares and 6,858 shares of restricted stock to non-employee directors for the respective six month periods ended July 2, 2022, and July 3, 2021. The fair value of the restricted stock awards is expensed over a one-year vesting period based on the fair value on the date of grant. All restrictions generally lapse upon the earlier of the first anniversary of the grant date, the recipient’s death or disability or in the event of a change in control, as defined in the 2011 Plan. 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.

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 price of the stock on the beginning date (May 15) or ending date (the following May 14) of each plan year. For the six month periods ended July 2, 2022, and July 3, 2021, issuances under this plan totaled 18,464 shares and 82,286 shares, respectively. As of July 2, 2022, shares reserved for issuance under this plan totaled 578,811 shares and Snap-on held participant contributions of approximately $0.4 million. Participants are able to withdraw from the plan at any time prior to the ending date and receive back all contributions made during the plan year. Compensation expense for plan participants was zero for both the three and six month periods ended July 2, 2022, and $4.8 million and $9.6 million for the respective three and six month periods ended July 3, 2021.

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 price of the stock on the beginning date (May 15) or ending date (the following May 14) of each plan year. For the six month periods ended July 2, 2022, and July 3, 2021, issuances under this plan totaled 44,937 shares and 143,388 shares, respectively. As of July 2, 2022, shares reserved for issuance under this plan totaled 225,225 shares and Snap-on held participant contributions of approximately $0.9 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 zero for both the three and six month periods ended July 2, 2022, and $11.3 million and $16.7 million for the respective three and six month periods ended July 3, 2021.

Note 14: Earnings Per Share

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

	Three Months Ended		Six Months Ended
	July 2, 2022	July 3, 2021	July 2, 2022	July 3, 2021
Weighted-average common shares outstanding	53,312,259	54,051,436	53,354,487	54,117,937
Effect of dilutive securities	926,548	1,256,296	920,924	1,094,874
Weighted-average common shares outstanding, assuming dilution	54,238,807	55,307,732	54,275,411	55,212,811

31

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The dilutive effect of the potential exercise of outstanding options and stock-settled SARs to purchase common shares is calculated using the treasury stock method. As of both July 2, 2022, and July 3, 2021, there were no awards outstanding that were anti-dilutive. Performance-based equity awards are included in the diluted earnings per share calculation based on the attainment of the applicable performance metrics to date.

Note 15: Commitments and Contingencies

Snap-on provides product warranties for specific product lines and accrues for estimated future warranty cost in the period in which the sale is recorded. Snap-on calculates its accrual requirements based on historic warranty loss experience that is periodically adjusted for recent actual experience, including the timing of claims during the warranty period and actual costs incurred.

Snap-on’s product warranty accrual activity for the three and six months ended July 2, 2022, and July 3, 2021, is as follows:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Warranty reserve:
Beginning of period	$	16.5	$	18.3	$	17.3	$	17.6
Additions	3.2		3.8		5.4		7.9
Usage	(3.7)		(3.6)		(6.7)		(7.0)
End of period	$	16.0	$	18.5	$	16.0	$	18.5

Snap-on is involved in various legal matters that are being litigated and/or settled in the ordinary course of business. Although it is not possible to predict the outcome of legal matters, management believes that the results of all legal matters will not have a material impact on Snap-on’s consolidated financial position, results of operations or cash flows.

Note 16: Leases

Lessee Accounting: Supplemental balance sheet information related to leases as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance leases:
Property and equipment - gross	$	19.0	$	22.3
Accumulated depreciation and amortization	(15.4)		(17.4)
Property and equipment - net	$	3.6	$	4.9
Other accrued liabilities	$	2.1	$	2.4
Other long-term liabilities	2.9		4.5
Total finance lease liabilities	$	5.0	$	6.9
Operating leases:
Operating lease right-of-use assets	$	56.6	$	51.9
Other accrued liabilities	$	19.0	$	19.6
Operating lease liabilities	39.7		34.2
Total operating lease liabilities	$	58.7	$	53.8

32

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Lessor Accounting: Snap-on’s Financial Services business offers its customers lease financing for the lease of tools, diagnostics, and equipment products and to franchisees who require financing for vehicle leases. Sales-type leases are included in both “Finance receivables - net” and “Long-term finance receivables - net” and also in both “Contract receivables - net” and “Long-term contract receivables - net” on the accompanying Condensed Consolidated Balance Sheets.

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

Note 17: Other Income (Expense) – Net

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

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Interest income	$	1.6	$	0.4	$	2.1	$	0.8
Net foreign exchange gain (loss)	(1.6)		0.2		(2.6)		—
Net periodic pension and postretirement benefits – non-service	9.3		3.8		18.1		7.6
Foreign currency translation loss from sale of equity interest	—		(1.0)		—		(1.0)
Other	—		—		—		0.3
Total other income (expense) – net	$	9.3	$	3.4	$	17.6	$	7.7

Note 18: Accumulated Other Comprehensive Income (Loss)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended July 2, 2022:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of April 2, 2022	$	(154.8)	$	8.5	$	(204.3)	$	(350.6)
Other comprehensive loss before reclassifications	(110.3)		—		—		(110.3)
Amounts reclassified from Accumulated OCI	—		(0.4)		3.6		3.2
Net other comprehensive income (loss)	(110.3)		(0.4)		3.6		(107.1)
Balance as of July 2, 2022	$	(265.1)	$	8.1	$	(200.7)	$	(457.7)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the six months ended July 2, 2022:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of January 1, 2022	$	(145.1)	$	8.9	$	(207.7)	$	(343.9)
Other comprehensive loss before reclassifications	(120.0)		—		—		(120.0)
Amounts reclassified from Accumulated OCI	—		(0.8)		7.0		6.2
Net other comprehensive income (loss)	(120.0)		(0.8)		7.0		(113.8)
Balance as of July 2, 2022	$	(265.1)	$	8.1	$	(200.7)	$	(457.7)

33

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended July 3, 2021:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of April 3, 2021	$	(103.7)	$	10.1	$	(294.7)	$	(388.3)
Other comprehensive income before reclassifications	20.2		—		—		20.2
Amounts reclassified from Accumulated OCI	(1.0)		(0.4)		6.8		5.4
Net other comprehensive income (loss)	19.2		(0.4)		6.8		25.6
Balance as of July 3, 2021	$	(84.5)	$	9.7	$	(287.9)	$	(362.7)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the six months ended July 3, 2021:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of January 2, 2021	$	(74.7)	$	10.5	$	(301.6)	$	(365.8)
Other comprehensive loss before reclassifications	(8.8)		—		—		(8.8)
Amounts reclassified from Accumulated OCI	(1.0)		(0.8)		13.7		11.9
Net other comprehensive income (loss)	(9.8)		(0.8)		13.7		3.1
Balance as of July 3, 2021	$	(84.5)	$	9.7	$	(287.9)	$	(362.7)

34

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The reclassifications out of Accumulated OCI for the three and six month periods ended July 2, 2022, and July 3, 2021, are as follows:

	Amount Reclassified from Accumulated OCI
	Three Months Ended				Six Months Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021		Statement of Earnings Presentation
(Amounts in millions)
Foreign currency loss from sale of equity interest:
Foreign currency	$	—	$	1.0	$	—	$	1.0	Other income (expense) - net
Income tax expense	—		—		—		—		Income tax expense
Net of tax	—		1.0		—		1.0
Gains on cash flow hedges:
Treasury locks	$	0.4	$	0.4	$	0.8	$	0.8	Interest expense
Income tax expense	—		—		—		—		Income tax expense
Net of tax	0.4		0.4		0.8		0.8
Amortization of net unrecognized losses	$	(4.7)	$	(9.1)	$	(9.2)	$	(18.2)	See footnote below*
Income tax benefit	1.1		2.3		2.2		4.5		Income tax expense
Net of tax	(3.6)		(6.8)		(7.0)		(13.7)
Total reclassifications for the period, net of tax	$	(3.2)	$	(5.4)	$	(6.2)	$	(11.9)

* 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 further information.

Note 19: Segments

Snap-on’s business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. Snap-on’s reportable business segments are: (i) the Commercial & Industrial Group; (ii) 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, power generation, transportation and technical education market segments (collectively, “critical industries”), primarily through direct and distributor channels. The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians through the company’s worldwide 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 its operating segments based on segment revenues, including both external and intersegment net sales, and segment operating earnings. Snap-on accounts for intersegment sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments. Identifiable assets by segment are those assets used in the respective reportable segment’s operations. Corporate assets consist of cash and cash equivalents (excluding cash held at Financial Services), deferred income taxes and certain other assets. Intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results.

35

SNAP-ON INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Financial Data by Segment:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net sales:
Commercial & Industrial Group	$	359.1	$	350.5	$	699.2	$	696.2
Snap-on Tools Group	520.6		484.1		1,032.7		962.4
Repair Systems & Information Group	416.8		398.6		815.0		746.2
Segment net sales	1,296.5		1,233.2		2,546.9		2,404.8
Intersegment eliminations	(159.9)		(151.8)		(312.5)		(298.8)
Total net sales	1,136.6		1,081.4		2,234.4		2,106.0
Financial Services revenue	86.4		86.9		174.1		175.5
Total revenues	$	1,223.0	$	1,168.3	$	2,408.5	$	2,281.5
Operating earnings:
Commercial & Industrial Group	$	51.7	$	55.5	$	97.4	$	106.2
Snap-on Tools Group	124.4		103.5		240.4		202.4
Repair Systems & Information Group	95.7		86.7		187.3		168.1
Financial Services	65.3		68.9		135.7		134.2
Segment operating earnings	337.1		314.6		660.8		610.9
Corporate	(25.2)		(28.6)		(55.4)		(58.7)
Operating earnings	311.9		286.0		605.4		552.2
Interest expense	(11.7)		(14.3)		(23.3)		(28.6)
Other income (expense) – net	9.3		3.4		17.6		7.7
Earnings before income taxes and equity earnings	$	309.5	$	275.1	$	599.7	$	531.3

(Amounts in millions)	July 2, 2022		January 1, 2022
Assets:
Commercial & Industrial Group	$	1,204.6	$	1,209.3
Snap-on Tools Group	842.3		791.4
Repair Systems & Information Group	1,630.1		1,624.3
Financial Services	2,164.3		2,163.6
Total assets from reportable segments	5,841.3		5,788.6
Corporate	1,107.8		1,039.7
Elimination of intersegment receivables	(84.8)		(68.6)
Total assets	$	6,864.3	$	6,759.7

36

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

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

Caution Regarding Forward-Looking Statements:

Statements in this document that are not historical facts, including statements that (i) are in the future tense, (ii) include the words “expects,” “plans,” “targets,” “estimates,” “believes,” “anticipates,” or similar words that reference Snap-on Incorporated (“Snap-on” or “the company”) or its management, (iii) are specifically identified as forward-looking, or (iv) describe Snap‑on’s or management’s future outlook, plans, estimates, objectives or goals, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Snap-on cautions the reader that any forward-looking statements included in this document that are based upon assumptions and estimates were developed by management in good faith and are subject to risks, uncertainties or other factors that could cause (and in some cases have caused) actual results to differ materially from those described in any such statement. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results or regarded as a representation by the company or its management that the projected results will be achieved. For those forward-looking statements, Snap-on cautions the reader that numerous important factors, such as those listed below, the factors discussed in its Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (“2021 year end”), and those discussed in this document, could affect the company’s actual results and could cause its actual consolidated results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, Snap-on.

Risks and uncertainties include, without limitation:

•The evolving impact and unknown duration of the ongoing coronavirus (“COVID-19”) pandemic, as well as the effects of governmental actions related thereto on Snap-on’s business, which has the potential to amplify the impact of the other risks facing the company;

•Uncertainties related to estimates, assumptions and projections generally;

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

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

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

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

•Risks related to pursuing, completing and integrating acquisitions;

•Snap-on’s ability to withstand disruption arising from natural disasters, including climate-related events or other unusual occurrences, impacting our operations;

•The impact of labor interruptions or challenges;

•Snap-on’s ability to successfully manage planned facility closures or to withstand disruptions from unexpected closures;

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

•Weakness in certain geographic areas, including as a result of armed conflicts, localized recessions, and the impact of matters related to the United Kingdom’s exit from the European Union;

•Significant changes in the current competitive environment;

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

•Changes in tax rates, laws and regulations as well as uncertainty surrounding potential changes;

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

•Snap-on’s ability to successfully manage changes in prices and the availability of energy sources, including gasoline;

37

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

•The amount, rate and growth of Snap-on’s general and administrative expenses, including health care and postretirement costs, and continuing and potentially increasing required contributions to pension and postretirement plans;

•The effects of new requirements, legislation, regulations or government-related developments or issues, as well as third party actions, including those addressing climate change;

•Risks associated with data security and technological systems and protections, including the effects of new legislation, regulations or government-related developments;

•Potential reputational damages and costs related to litigation;

•The ability to effectively manage human capital resources; and

•Other world or local events outside Snap-on’s control, including terrorist disruptions, other outbreaks of infectious diseases and civil unrest.

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

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

Non-GAAP Measures

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

Recent Acquisitions

On August 1, 2021, Snap-on acquired AutoCrib EMEA GmbH (“AutoCrib Germany”), for a cash purchase price of $4.4 million (or $4.2 million, net of cash acquired). AutoCrib Germany, based in Hamburg, Germany, distributes asset and tool control solutions for a variety of aerospace, automotive, military, natural resources and general industry operations. The acquisition of AutoCrib Germany, a former independent distributor, enhanced and expanded Snap-on’s capabilities in providing solutions for the company’s existing tool control offerings.

On July 1, 2021, Snap-on exchanged its 35% equity interest in Deville S.A., valued at $21.8 million, for 100% ownership of Secateurs Pradines (“Pradines”), a wholly owned subsidiary of Deville S.A. with a fair value of $20.2 million (or $15.7 million, net of cash acquired), and cash of $1.6 million. Pradines, located in Bauge-en-Anjou, France, designs and manufactures horticultural hand tools for professionals and individuals. Pradines has been the primary supplier of pruning products to Snap-on and the acquisition allows the company to improve and expand its pruning tool offering.

On February 26, 2021, Snap-on acquired Dealer-FX Group, Inc. (“Dealer-FX”) for a cash purchase price of $200.1 million (or $200.0 million, net of cash acquired). Dealer-FX, based in Markham, Ontario, is a leading developer, marketer and provider of service operations software solutions for automotive original equipment manufacturer (“OEM”) customers and their dealers. Dealer-FX specializes in software as a service (SaaS) management systems, communications platforms, extensive data integrations, and offers a digitalized solution that increases productivity and enhances the vehicle owners’ experience. The acquisition of Dealer-FX complemented and expanded Snap-on’s existing OEM and dealership business that provides electronic parts catalogs, essential tool and diagnostic programs, and custom analytics to OEMs and dealerships.

38

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

For segment reporting purposes, the results of operations and assets of Dealer-FX has been included in the Repair Systems & Information Group since the acquisition date, and the results of operations and assets of AutoCrib Germany and Pradines 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 were neither significant nor material to Snap-on’s results of operations or financial position.

Effect of COVID-19

Our markets and our operations possess and, indeed, have demonstrated considerable resilience against the effects of the pandemic. The company sustained the accommodation of its operations to the virus environment, continuing without significant disruption to serve its franchisees and other professional customers as they performed their essential work, while taking what it believes to be appropriate measures to ensure the health and safety of its people. Throughout the pandemic, Snap-on has generally maintained its workforce and manufacturing capacity, as well as its investments in brand building and product development. As the global supply chain inefficiencies and associated cost increases caused by the COVID-19 pandemic have developed, the company has taken steps to ensure access to raw materials, components and purchased finished goods, and to provide for counterbalancing price and efficiency offsets. See also Part I, Item 1A: Risk Factors in Snap-on’s 2021 Form 10-K for an additional discussion of risks related to COVID-19 and Other Infectious Diseases.

39

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

RESULTS OF OPERATIONS

Results of operations for the three months ended July 2, 2022, and July 3, 2021, are as follows:

	Three Months Ended
(Amounts in millions)	July 2, 2022				July 3, 2021				Change
Net sales	$	1,136.6	100.0	%	$	1,081.4	100.0	%	$	55.2	5.1	%
Cost of goods sold	(583.1)		(51.3)	%	(538.3)		(49.8)	%	(44.8)		(8.3)	%
Gross profit	553.5		48.7	%	543.1		50.2	%	10.4		1.9	%
Operating expenses	(306.9)		(27.0)	%	(326.0)		(30.1)	%	19.1		5.9	%
Operating earnings before financial services	246.6		21.7	%	217.1		20.1	%	29.5		13.6	%
Financial services revenue	86.4		100.0	%	86.9		100.0	%	(0.5)		(0.6)	%
Financial services expenses	(21.1)		(24.4)	%	(18.0)		(20.7)	%	(3.1)		(17.2)	%
Operating earnings from financial services	65.3		75.6	%	68.9		79.3	%	(3.6)		(5.2)	%
Operating earnings	311.9		25.5	%	286.0		24.5	%	25.9		9.1	%
Interest expense	(11.7)		(1.0)	%	(14.3)		(1.2)	%	2.6		18.2	%
Other income (expense) – net	9.3		0.8	%	3.4		0.2	%	5.9		NM
Earnings before income taxes and equity earnings	309.5		25.3	%	275.1		23.5	%	34.4		12.5	%
Income tax expense	(72.3)		(5.9)	%	(62.9)		(5.3)	%	(9.4)		(14.9)	%
Earnings before equity earnings	237.2		19.4	%	212.2		18.2	%	25.0		11.8	%
Equity earnings, net of tax	—		—		1.0		—		(1.0)		NM
Net earnings	237.2		19.4	%	213.2		18.2	%	24.0		11.3	%
Net earnings attributable to noncontrolling interests	(5.7)		(0.5)	%	(5.2)		(0.4)	%	(0.5)		(9.6)	%
Net earnings attributable to Snap-on Inc.	$	231.5	18.9	%	$	208.0	17.8	%	$	23.5	11.3	%

NM: Not meaningful

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

Net sales of $1,136.6 million in the second quarter of 2022 increased $55.2 million, or 5.1%, from 2021 levels, reflecting an $87.6 million, or 8.4%, organic gain, partially offset by $32.4 million of unfavorable foreign currency translation.

Gross profit of $553.5 million in the second quarter of 2022 increased $10.4 million, or 1.9%, compared to $543.1 million last year. Gross margin (gross profit as a percentage of net sales) of 48.7% in the quarter declined 150 basis points (100 basis points (“bps”) equals 1.0 percent) from the second quarter of 2021 primarily due to higher material and other costs, partially offset by higher sales volumes and pricing actions, benefits from the company’s “Rapid Continuous Improvement” or “RCI” initiatives, and 30 bps of favorable foreign currency effects.

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

Operating expenses of $306.9 million in the second quarter of 2022 compared to $326.0 million last year. Operating expenses as a percentage of net sales of 27.0% improved 310 bps from last year primarily due to the higher sales volumes, savings from RCI initiatives, and lower costs associated with stock-based expenses.

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(continued)

Operating earnings before financial services of $246.6 million in the second quarter of 2022 increased $29.5 million, or 13.6%, compared to $217.1 million in the second quarter of 2021. As a percentage of net sales, operating earnings before financial services of 21.7% compared to 20.1% last year.

Financial services revenue of $86.4 million in the second quarter of 2022 compared to $86.9 million last year. Financial services operating earnings of $65.3 million in the period compared to $68.9 million in 2021.

Operating earnings of $311.9 million in the second quarter of 2022 increased $25.9 million, or 9.1%, compared to $286.0 million last year. As a percentage of revenues (net sales plus financial services revenue), operating earnings of 25.5% in the quarter compared to 24.5% last year.

Interest expense in the second quarter of 2022 decreased $2.6 million compared to last year. See Note 9 to the Condensed Consolidated Financial Statements for information on Snap-on’s debt and credit facilities.

Other income (expense) – net primarily includes net gains and losses associated with hedging and currency exchange rate transactions, non-service components of net periodic benefit costs, and interest income. See Note 17 to the Condensed Consolidated Financial Statements for information on Other income (expense) – net.

Snap-on’s effective income tax rate on earnings attributable to Snap-on was 23.8% in the second quarter of 2022 and 23.3% in the second quarter of 2021. See Note 8 to the Condensed Consolidated Financial Statements for information on income taxes.

Net earnings attributable to Snap-on in the second quarter of 2022 were $231.5 million, or $4.27 per diluted share. Net earnings attributable to Snap-on in the second quarter of 2021 were $208.0 million, or $3.76 per diluted share.

Results of operations for the six months ended July 2, 2022, and July 3, 2021, are as follows:

	Six Months Ended
(Amounts in millions)	July 2, 2022				July 3, 2021				Change
Net sales	$	2,234.4	100.0	%	$	2,106.0	100.0	%	$	128.4	6.1	%
Cost of goods sold	(1,146.6)		(51.3)	%	(1,049.3)		(49.8)	%	(97.3)		(9.3)	%
Gross profit	1,087.8		48.7	%	1,056.7		50.2	%	31.1		2.9	%
Operating expenses	(618.1)		(27.7)	%	(638.7)		(30.4)	%	20.6		3.2	%
Operating earnings before financial services	469.7		21.0	%	418.0		19.8	%	51.7		12.4	%
Financial services revenue	174.1		100.0	%	175.5		100.0	%	(1.4)		(0.8)	%
Financial services expenses	(38.4)		(22.1)	%	(41.3)		(23.5)	%	2.9		7.0	%
Operating earnings from financial services	135.7		77.9	%	134.2		76.5	%	1.5		1.1	%
Operating earnings	605.4		25.1	%	552.2		24.2	%	53.2		9.6	%
Interest expense	(23.3)		(0.9)	%	(28.6)		(1.2)	%	5.3		18.5	%
Other income (expense) – net	17.6		0.7	%	7.7		0.3	%	9.9		NM
Earnings before income taxes and equity earnings	599.7		24.9	%	531.3		23.3	%	68.4		12.9	%
Income tax expense	(139.8)		(5.8)	%	(122.0)		(5.4)	%	(17.8)		(14.6)	%
Earnings before equity earnings	459.9		19.1	%	409.3		17.9	%	50.6		12.4	%
Equity earnings, net of tax	—		—		1.5		0.1	%	(1.5)		NM
Net earnings	459.9		19.1	%	410.8		18.0	%	49.1		12.0	%
Net earnings attributable to noncontrolling interests	(11.0)		(0.5)	%	(10.2)		(0.4)	%	(0.8)		(7.8)	%
Net earnings attributable to Snap-on Inc.	$	448.9	18.6	%	$	400.6	17.6	%	$	48.3	12.1	%

NM: Not meaningful

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

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(continued)

Net sales of $2,234.4 million in the first six months of 2022 increased $128.4 million, or 6.1%, from 2021 levels, reflecting a $168.0 million, or 8.2%, organic gain and $8.5 million of acquisition-related sales, partially offset by $48.1 million of unfavorable foreign currency translation.

Gross profit of $1,087.8 million in the first six months of 2022 increased $31.1 million, or 2.9%, compared to $1,056.7 million last year. Gross margin of 48.7% in the quarter declined 150 bps from last year primarily due to higher material and other costs, partially offset by higher sales volumes and pricing actions, benefits from the company’s RCI initiatives, and 30 bps of favorable foreign currency effects.

Operating expenses of $618.1 million in the first six months of 2022 compared to $638.7 million last year. Operating expenses as a percentage of net sales of 27.7% improved 270 bps from last year primarily due to the higher sales volumes, savings from RCI initiatives, and lower costs associated with stock-based expenses; these improvements were partially offset by 20 bps of unfavorable acquisition effects.

Operating earnings before financial services of $469.7 million in the first six months of 2022 increased $51.7 million, or 12.4%, compared to $418.0 million in 2021. As a percentage of net sales, operating earnings before financial services of 21.0% compared to 19.8% last year.

Financial services revenue of $174.1 million in the first six months of 2022 compared to $175.5 million last year. Financial services operating earnings of $135.7 million in the period compared to $134.2 million in 2021.

Operating earnings of $605.4 million in the first six months of 2022 increased $53.2 million, or 9.6%, compared to $552.2 million last year. As a percentage of revenues, operating earnings of 25.1% in the quarter compared to 24.2% last year.

Interest expense in the first six months of 2022 decreased $5.3 million compared to last year. See Note 9 to the Condensed Consolidated Financial Statements for information on Snap-on’s debt and credit facilities.

Other income (expense) – net primarily includes net gains and losses associated with hedging and currency exchange rate transactions, non-service components of net periodic benefit costs, and interest income. See Note 17 to the Condensed Consolidated Financial Statements for information on Other income (expense) – net.

Snap-on’s effective income tax rate on earnings attributable to Snap-on was 23.7% in the first six months of 2022 and 23.4% in 2021. See Note 8 to the Condensed Consolidated Financial Statements for information on income taxes.

Net earnings attributable to Snap-on in the first six months of 2022 were $448.9 million, or $8.27 per diluted share. Net earnings attributable to Snap-on in the first six months of 2021 were $400.6 million, or $7.26 per diluted share.

Segment Results

Snap-on’s business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. Snap-on’s reportable business segments are: (i) the Commercial & Industrial Group; (ii) the Snap-on Tools Group; (iii) the Repair Systems & Information Group; and (iv) Financial Services. 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, power generation, transportation and technical education market segments (collectively, “critical industries”), primarily through direct and distributor channels. The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians through the company’s worldwide 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 its operating segments based on segment revenues, including both external and intersegment net sales, and segment operating earnings. Snap-on accounts for intersegment sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments. Identifiable assets by segment are those assets used in the respective reportable segment’s operations. Corporate assets consist of cash and cash equivalents (excluding cash held at Financial Services), deferred income taxes and certain other assets. Intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results.

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Commercial & Industrial Group

	Three Months Ended
(Amounts in millions)	July 2, 2022				July 3, 2021				Change
External net sales	$	276.1	76.9	%	$	274.7	78.4	%	$	1.4	0.5	%
Intersegment net sales	83.0		23.1	%	75.8		21.6	%	7.2		9.5	%
Segment net sales	359.1		100.0	%	350.5		100.0	%	8.6		2.5	%
Cost of goods sold	(225.3)		(62.7)	%	(212.0)		(60.5)	%	(13.3)		(6.3)	%
Gross profit	133.8		37.3	%	138.5		39.5	%	(4.7)		(3.4)	%
Operating expenses	(82.1)		(22.9)	%	(83.0)		(23.7)	%	0.9		1.1	%
Segment operating earnings	$	51.7	14.4	%	$	55.5	15.8	%	$	(3.8)	(6.8)	%

Segment net sales of $359.1 million in the second quarter of 2022 increased $8.6 million, or 2.5%, from 2021 levels, reflecting a $25.3 million, or 7.6%, organic sales increase, partially offset by $16.7 million of unfavorable foreign currency translation. The organic increase primarily reflects double-digit gains in the segment’s European-based hand tools business and Asia Pacific operations, as well as a mid single-digit increase in sales to customers in critical industries.

Segment gross margin in the second quarter of 37.3% declined 220 bps from last year, primarily due to increased material and other costs, partially offset by benefits from the higher sales volumes and pricing actions, as well as from the segment’s RCI initiatives.

Segment operating expenses as a percentage of sales in the second quarter of 22.9% improved 80 bps as compared to 2021 primarily due to the effects of higher sales volumes.

As a result of these factors, segment operating earnings of $51.7 million in the second quarter of 2022, including $2.0 million of unfavorable foreign currency effects, decreased $3.8 million, or 6.8%, compared to $55.5 million in 2021. Operating margin (segment operating earnings as a percentage of segment net sales) for the Commercial & Industrial Group of 14.4% in the second quarter of 2022 compared to 15.8% in 2021.

	Six Months Ended
(Amounts in millions)	July 2, 2022				July 3, 2021				Change
External net sales	$	537.3	76.8	%	$	545.8	78.4	%	$	(8.5)	(1.6)	%
Intersegment net sales	161.9		23.2	%	150.4		21.6	%	11.5		7.6	%
Segment net sales	699.2		100.0	%	696.2		100.0	%	3.0		0.4	%
Cost of goods sold	(441.7)		(63.2)	%	(423.8)		(60.9)	%	(17.9)		(4.2)	%
Gross profit	257.5		36.8	%	272.4		39.1	%	(14.9)		(5.5)	%
Operating expenses	(160.1)		(22.9)	%	(166.2)		(23.8)	%	6.1		3.7	%
Segment operating earnings	$	97.4	13.9	%	$	106.2	15.3	%	$	(8.8)	(8.3)	%

Segment net sales of $699.2 million in the first six months of 2022 increased $3.0 million, or 0.4%, from 2021 levels, reflecting a $28.9 million, or 4.3%, organic sales increase, partially offset by $25.9 million of unfavorable foreign currency translation. The organic gain primarily reflects a double-digit increase in the segment’s Asia Pacific operations and a high single-digit gain in the segment’s European-based hand tools business. Sales to customers in critical industries were essentially flat, as higher sales to general industry and technical education customers were offset by lower activity with the military.

Segment gross margin in the first six months of 36.8% declined 230 bps from last year, primarily due to increased material and other costs and 20 bps of unfavorable foreign currency effects, partially offset by benefits from the higher sales volumes and pricing actions, as well as from the segment’s RCI initiatives.

Segment operating expenses as a percentage of sales in the first six months of 22.9% improved 90 bps as compared to 2021 primarily due to the effects of higher sales volumes.

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As a result of these factors, segment operating earnings of $97.4 million in the first six months of 2022, including $4.2 million of unfavorable foreign currency effects, decreased $8.8 million, or 8.3%, compared to $106.2 million in 2021. Operating margin for the Commercial & Industrial Group of 13.9% in the first six months of 2022 compared to 15.3% in 2021.

Snap-on Tools Group

	Three Months Ended
(Amounts in millions)	July 2, 2022				July 3, 2021				Change
Segment net sales	$	520.6	100.0	%	$	484.1	100.0	%	$	36.5	7.5	%
Cost of goods sold	(281.1)		(54.0)	%	(257.6)		(53.2)	%	(23.5)		(9.1)	%
Gross profit	239.5		46.0	%	226.5		46.8	%	13.0		5.7	%
Operating expenses	(115.1)		(22.1)	%	(123.0)		(25.4)	%	7.9		6.4	%
Segment operating earnings	$	124.4	23.9	%	$	103.5	21.4	%	$	20.9	20.2	%

Segment net sales of $520.6 million in the second quarter of 2022 increased $36.5 million, or 7.5%, from 2021 levels, reflecting a $44.2 million, or 9.3%, organic sales gain, partially offset by $7.7 million of unfavorable foreign currency translation. The organic increase is due to a double-digit gain in the U.S. franchise business and a low single-digit increase in the segment’s international operations.

Segment gross margin in the second quarter of 46.0% declined 80 bps from last year primarily due to increased material and other costs and 10 bps of unfavorable foreign currency effects, which were partially offset by benefits from the higher sales volumes and pricing actions.

Segment operating expenses as a percentage of net sales in the second quarter of 22.1% improved 330 bps from last year and included the effects of lower expenses related to the company’s franchisee stock purchase plan, benefits from higher sales volumes, and savings associated with RCI initiatives.

As a result of these factors, segment operating earnings of $124.4 million in the second quarter of 2022, including $2.2 million of unfavorable foreign currency effects, increased $20.9 million, or 20.2%, compared to $103.5 million in 2021. Operating margin for the Snap-on Tools Group of 23.9% in the second quarter of 2022 compared to 21.4% last year.

	Six Months Ended
(Amounts in millions)	July 2, 2022				July 3, 2021				Change
Segment net sales	$	1,032.7	100.0	%	$	962.4	100.0	%	$	70.3	7.3	%
Cost of goods sold	(560.0)		(54.2)	%	(516.2)		(53.6)	%	(43.8)		(8.5)	%
Gross profit	472.7		45.8	%	446.2		46.4	%	26.5		5.9	%
Operating expenses	(232.3)		(22.5)	%	(243.8)		(25.4)	%	11.5		4.7	%
Segment operating earnings	$	240.4	23.3	%	$	202.4	21.0	%	$	38.0	18.8	%

Segment net sales of $1,032.7 million in the first six months of 2022 increased $70.3 million, or 7.3%, from 2021 levels, reflecting an $81.0 million, or 8.5%, organic sales gain, partially offset by $10.7 million of unfavorable foreign currency translation. The organic increase included a double-digit gain in the U.S. franchise business, while sales in the segment’s international operations were essentially flat.

Segment gross margin in the first six months of 45.8% declined 60 bps from last year primarily due to increased material and other costs, which were partially offset by benefits from the higher sales volumes and pricing actions.

Segment operating expenses as a percentage of net sales in the first six months of 22.5% improved 290 bps from last year and included the effects of lower expenses related to the company’s franchisee stock purchase plan, benefits from higher sales volumes, and savings associated with RCI initiatives.

As a result of these factors, segment operating earnings of $240.4 million in the first six months of 2022, including $1.4 million of unfavorable foreign currency effects, increased $38.0 million, or 18.8%, compared to $202.4 million in 2021. Operating margin for the Snap-on Tools Group of 23.3% in the first six months of 2022 compared to 21.0% last year.

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(continued)

Repair Systems & Information Group

	Three Months Ended
(Amounts in millions)	July 2, 2022				July 3, 2021				Change
External net sales	$	339.9	81.5	%	$	322.6	80.9	%	$	17.3	5.4	%
Intersegment net sales	76.9		18.5	%	76.0		19.1	%	0.9		1.2	%
Segment net sales	416.8		100.0	%	398.6		100.0	%	18.2		4.6	%
Cost of goods sold	(236.6)		(56.8)	%	(220.5)		(55.3)	%	(16.1)		(7.3)	%
Gross profit	180.2		43.2	%	178.1		44.7	%	2.1		1.2	%
Operating expenses	(84.5)		(20.2)	%	(91.4)		(22.9)	%	6.9		7.5	%
Segment operating earnings	$	95.7	23.0	%	$	86.7	21.8	%	$	9.0	10.4	%

Segment net sales of $416.8 million in the second quarter of 2022 increased $18.2 million, or 4.6%, from 2021 levels, reflecting a $27.4 million, or 7.0%, organic sales increase, partially offset by $9.2 million of unfavorable foreign currency translation. The organic gain included a double-digit increase in sales of undercar equipment and a low single-digit gain in sales of diagnostic and repair information products to independent repair shop owners and managers, while activity with OEM dealerships was essentially flat.

Segment gross margin in the second quarter of 43.2% declined 150 bps from last year primarily due to higher material and other costs, and increased sales in lower gross margin businesses. These declines were partially offset by benefits from pricing actions and savings from RCI initiatives, as well as 50 bps of favorable foreign currency effects.

Segment operating expenses as a percentage of net sales in the second quarter of 20.2%, improved 270 bps from 2021 primarily due to benefits from sales volume leverage, including higher activity in lower expense businesses, and savings from RCI initiatives.

As a result of these factors, segment operating earnings of $95.7 million in the second quarter of 2022, including $1.2 million of favorable foreign currency effects, increased $9.0 million, or 10.4%, from $86.7 million in 2021. Operating margin for the Repair Systems & Information Group of 23.0% in the second quarter of 2022 compared to 21.8% last year.

	Six Months Ended
(Amounts in millions)	July 2, 2022				July 3, 2021				Change
External net sales	$	664.4	81.5	%	$	597.8	80.1	%	$	66.6	11.1	%
Intersegment net sales	150.6		18.5	%	148.4		19.9	%	2.2		1.5	%
Segment net sales	815.0		100.0	%	746.2		100.0	%	68.8		9.2	%
Cost of goods sold	(457.4)		(56.1)	%	(408.1)		(54.7)	%	(49.3)		(12.1)	%
Gross profit	357.6		43.9	%	338.1		45.3	%	19.5		5.8	%
Operating expenses	(170.3)		(20.9)	%	(170.0)		(22.8)	%	(0.3)		(0.2)	%
Segment operating earnings	$	187.3	23.0	%	$	168.1	22.5	%	$	19.2	11.4	%

Segment net sales of $815.0 million in the first six months of 2022 increased $68.8 million, or 9.2%, from 2021 levels, reflecting a $73.1 million, or 10.0%, organic sales increase and $8.5 million of acquisition-related sales, partially offset by $12.8 million of unfavorable foreign currency translation. The organic gain is comprised of a double-digit increase in sales of undercar equipment, a high single-digit gain in activity with OEM dealerships, and a low single-digit increase in sales of diagnostic and repair information products to independent repair shop owners and managers.

Segment gross margin in the first six months of 43.9% declined 140 bps from last year primarily due to higher material and other costs, and increased sales in lower gross margin businesses. These declines were partially offset by benefits from pricing actions and savings from RCI initiatives, as well as 40 bps of favorable foreign currency effects and 20 bps from acquisitions.

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Segment operating expenses as a percentage of net sales in the first six months of 20.9%, improved 190 bps from 2021 primarily due to benefits from sales volume leverage, including higher activity in lower expense businesses, and savings from RCI initiatives. These improvements were partially offset by 50 bps of unfavorable acquisition effects in 2022.

As a result of these factors, segment operating earnings of $187.3 million in the first six months of 2022, including $2.1 million of favorable foreign currency effects, increased $19.2 million, or 11.4%, from $168.1 million in 2021. Operating margin for the Repair Systems & Information Group of 23.0% in the first six months of 2022 compared to 22.5% last year.

Financial Services

	Three Months Ended
(Amounts in millions)	July 2, 2022				July 3, 2021				Change
Financial services revenue	$	86.4	100.0	%	$	86.9	100.0	%	$	(0.5)	(0.6)	%
Financial services expenses	(21.1)		(24.4)	%	(18.0)		(20.7)	%	(3.1)		(17.2)	%
Segment operating earnings	$	65.3	75.6	%	$	68.9	79.3	%	$	(3.6)	(5.2)	%

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 in the second quarter of 2022 decreased $0.5 million, or 0.6%, from 2021. In both the second quarters of 2022 and 2021, the average yields on finance receivables and contract receivables were 17.5% and 8.5%, respectively. Originations of $307.6 million in the second quarter of 2022 increased $21.8 million, or 7.6%, from 2021 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 the second quarter of 2022 increased primarily due to higher provisions for credit losses as compared to those recorded in the second quarter of 2021. As a percentage of the average financial services portfolio, expenses were 1.0% in the second quarter of 2022 and 0.8% in 2021.

Segment operating earnings in the second quarter of 2022, including $0.6 million of unfavorable foreign currency effects, decreased $3.6 million, or 5.2%, from 2021 levels.

	Six Months Ended
(Amounts in millions)	July 2, 2022				July 3, 2021				Change
Financial services revenue	$	174.1	100.0	%	$	175.5	100.0	%	$	(1.4)	(0.8)	%
Financial services expenses	(38.4)		(22.1)	%	(41.3)		(23.5)	%	2.9		7.0	%
Segment operating earnings	$	135.7	77.9	%	$	134.2	76.5	%	$	1.5	1.1	%

Financial services revenue in the first six months of 2022 decreased $1.4 million, or 0.8%, from 2021. In both the first six months of 2022 and 2021, the average yield on finance receivables was 17.5%. In the first six months of 2022 and 2021, the respective average yields on contract receivables were 8.5% and 8.4%. Originations of $553.2 million in the first six months of 2022 increased $5.6 million, or 1.0%, from 2021 levels.

Financial services expenses in the first six months of 2022 decreased primarily due to lower provisions for credit losses as compared to those recorded in the first six months of 2021. As a percentage of the average financial services portfolio, expenses were 1.7% in the first six months of 2022 and 1.9% in 2021.

Segment operating earnings in the first six months of 2022, including $0.8 million of unfavorable foreign currency effects, increased $1.5 million, or 1.1%, from 2021 levels.

46

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OF OPERATIONS

(continued)

Corporate

Snap-on’s second quarter 2022 general corporate expenses of $25.2 million decreased $3.4 million from $28.6 million last year, primarily due to lower stock-based compensation, including costs associated with the company’s employee stock purchase plan. Snap-on’s general corporate expenses in the first six months 2022 of $55.4 million decreased $3.3 million from $58.7 million last year, as lower stock-based compensation was partially offset by other cost increases.

Non-GAAP Supplemental Data

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

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

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the three months ended July 2, 2022, and July 3, 2021, are as follows:

	Operations*				Financial Services
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net sales	$	1,136.6	$	1,081.4	$	—	$	—
Cost of goods sold	(583.1)		(538.3)		—		—
Gross profit	553.5		543.1		—		—
Operating expenses	(306.9)		(326.0)		—		—
Operating earnings before financial services	246.6		217.1		—		—
Financial services revenue	—		—		86.4		86.9
Financial services expenses	—		—		(21.1)		(18.0)
Operating earnings from financial services	—		—		65.3		68.9
Operating earnings	246.6		217.1		65.3		68.9
Interest expense	(11.7)		(14.2)		—		(0.1)
Intersegment interest income (expense) – net	14.9		14.8		(14.9)		(14.8)
Other income (expense) – net	9.2		3.3		0.1		0.1
Earnings before income taxes and equity earnings	259.0		221.0		50.5		54.1
Income tax expense	(59.3)		(49.2)		(13.0)		(13.7)
Earnings before equity earnings	199.7		171.8		37.5		40.4
Financial services – net earnings attributable to Snap-on	37.5		40.4		—		—
Equity earnings, net of tax	—		1.0		—		—
Net earnings	237.2		213.2		37.5		40.4
Net earnings attributable to noncontrolling interests	(5.7)		(5.2)		—		—
Net earnings attributable to Snap-on	$	231.5	$	208.0	$	37.5	$	40.4

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

47

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the six months ended July 2, 2022, and July 3, 2021, are as follows:

	Operations*				Financial Services
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net sales	$	2,234.4	$	2,106.0	$	—	$	—
Cost of goods sold	(1,146.6)		(1,049.3)		—		—
Gross profit	1,087.8		1,056.7		—		—
Operating expenses	(618.1)		(638.7)		—		—
Operating earnings before financial services	469.7		418.0		—		—
Financial services revenue	—		—		174.1		175.5
Financial services expenses	—		—		(38.4)		(41.3)
Operating earnings from financial services	—		—		135.7		134.2
Operating earnings	469.7		418.0		135.7		134.2
Interest expense	(23.3)		(28.5)		—		(0.1)
Intersegment interest income (expense) – net	29.8		29.2		(29.8)		(29.2)
Other income (expense) – net	17.5		7.6		0.1		0.1
Earnings before income taxes and equity earnings	493.7		426.3		106.0		105.0
Income tax expense	(112.5)		(95.7)		(27.3)		(26.3)
Earnings before equity earnings	381.2		330.6		78.7		78.7
Financial services – net earnings attributable to Snap-on	78.7		78.7		—		—
Equity earnings, net of tax	—		1.5		—		—
Net earnings	459.9		410.8		78.7		78.7
Net earnings attributable to noncontrolling interests	(11.0)		(10.2)		—		—
Net earnings attributable to Snap-on	$	448.9	$	400.6	$	78.7	$	78.7

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

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Balance Sheet information as of July 2, 2022, and January 1, 2022, is as follows:

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OF OPERATIONS

(continued)

	Operations*				Financial Services
(Amounts in millions)	July 2, 2022		January 1, 2022		July 2, 2022		January 1, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	812.6	$	779.9	$	0.3	$	0.1
Intersegment receivables	14.1		12.5		—		—
Trade and other accounts receivable – net	728.5		681.7		0.6		0.6
Finance receivables – net	—		—		547.0		542.3
Contract receivables – net	6.1		6.4		92.2		104.0
Inventories – net	893.3		803.8		—		—
Prepaid expenses and other assets	153.4		136.8		6.4		7.4
Total current assets	2,608.0		2,421.1		646.5		654.4
Property and equipment – net	501.8		516.5		1.7		1.7
Operating lease right-of-use assets	55.0		50.0		1.6		1.9
Investment in Financial Services	350.3		350.6		—		—
Deferred income tax assets	46.2		26.5		21.3		23.0
Intersegment long-term notes receivable	568.3		570.1		—		—
Long-term finance receivables – net	—		—		1,127.0		1,114.0
Long-term contract receivables – net	9.4		9.7		366.0		368.5
Goodwill	1,046.0		1,116.5		—		—
Other intangibles – net	283.5		301.7		—		—
Other assets	186.6		188.6		0.2		0.1
Total assets	$	5,655.1	$	5,551.3	$	2,164.3	$	2,163.6

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

49

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

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

	Operations*				Financial Services
(Amounts in millions)	July 2, 2022		January 1, 2022		July 2, 2022		January 1, 2022
LIABILITIES AND EQUITY
Current liabilities:
Notes payable	$	18.8	$	17.4	$	—	$	—
Accounts payable	306.8		276.6		1.7		1.0
Intersegment payables	—		—		14.1		12.5
Accrued benefits	59.2		67.4		—		—
Accrued compensation	79.4		110.9		2.2		3.9
Franchisee deposits	77.5		80.7		—		—
Other accrued liabilities	421.4		407.1		28.8		26.8
Total current liabilities	963.1		960.1		46.8		44.2
Long-term debt and intersegment long-term debt	—		—		1,751.7		1,753.0
Deferred income tax liabilities	102.2		122.7		—		—
Retiree health care benefits	29.7		31.1		—		—
Pension liabilities	83.1		104.9		—		—
Operating lease liabilities	38.3		32.5		1.4		1.7
Other long-term liabilities	91.9		96.2		14.1		14.1
Total liabilities	1,308.3		1,347.5		1,814.0		1,813.0
Total shareholders’ equity attributable to Snap-on	4,324.4		4,181.9		350.3		350.6
Noncontrolling interests	22.4		21.9		—		—
Total equity	4,346.8		4,203.8		350.3		350.6
Total liabilities and equity	$	5,655.1	$	5,551.3	$	2,164.3	$	2,163.6

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

50

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Liquidity and Capital Resources

Snap-on’s growth has historically been funded by a combination of cash provided by operating activities and debt financing. Snap-on believes that its cash from operations and collections of finance receivables, coupled with its sources of borrowings and available cash on hand, are sufficient to fund its currently anticipated requirements for scheduled debt repayments, payments of interest and dividends, new receivables originated by our financial services businesses, capital expenditures, working capital, the funding of pension plans, and funding for share repurchases and acquisitions, if and as they arise.

Due to Snap-on’s credit rating over the years, external funds have been available at an acceptable cost. As of July 15, 2022, Snap-on’s long-term debt and commercial paper were rated, respectively, A2 and P-1 by Moody’s Investors Service; A- and A-2 by Standard & Poor’s; and A and F1 by Fitch Ratings. Snap-on believes that its current credit arrangements are sound and that the strength of its balance sheet affords the company the financial flexibility, including through access to financial markets for potential new financing, to respond to both internal growth opportunities and those available through acquisitions. However, Snap-on cannot provide any assurance that financing will be available in the future on acceptable terms, or that its debt ratings will not decrease.

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

As of July 2, 2022, working capital (current assets less current liabilities) of $2,244.6 million increased $173.4 million from $2,071.2 million as of January 1, 2022 (fiscal 2021 year end), primarily as a result of the net changes discussed below.

The following represents the company’s working capital position as of July 2, 2022, and January 1, 2022:

(Amounts in millions)	July 2, 2022		January 1, 2022
Cash and cash equivalents	$	812.9	$	780.0
Trade and other accounts receivable – net	729.1		682.3
Finance receivables – net	547.0		542.3
Contract receivables – net	98.3		110.4
Inventories – net	893.3		803.8
Prepaid expenses and other assets	150.1		134.6
Total current assets	3,230.7		3,053.4
Notes payable	(18.8)		(17.4)
Accounts payable	(308.5)		(277.6)
Other current liabilities	(658.8)		(687.2)
Total current liabilities	(986.1)		(982.2)
Working capital	$	2,244.6	$	2,071.2

Cash and cash equivalents of $812.9 million as of July 2, 2022, increased $32.9 million from 2021 year-end levels primarily due to: (i) $426.2 million of cash from collections of finance receivables; (ii) $334.7 million of cash generated from operations; (iii) $29.2 million of cash proceeds from stock purchase and option plan exercises; and (iv) $2.8 million of net proceeds from other short-term borrowings. These increases in cash and cash equivalents were partially offset by: (i) the funding of $469.6 million of new finance receivables; (ii) dividend payments to shareholders of $151.4 million; (iii) the repurchase of 387,000 shares of the company’s common stock for $82.6 million; and (iv) the funding of $41.5 million of capital expenditures.

Of the $812.9 million of cash and cash equivalents as of July 2, 2022, $264.0 million was held outside of the United States. Snap-on maintains non-U.S. funds in its foreign operations to: (i) provide adequate working capital; (ii) satisfy various regulatory requirements; and/or (iii) take advantage of business expansion opportunities as they arise. Although the Tax Cuts and Jobs Act (“Tax Act”) generally eliminated U.S. federal taxation of dividends from foreign subsidiaries, such dividends may still be subject to state income taxation and foreign withholding taxes. Snap-on periodically evaluates its cash held outside the United States and may pursue opportunities to repatriate certain foreign cash amounts to the extent that it can be accomplished in a tax efficient manner.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Trade and other accounts receivable – net of $729.1 million as of July 2, 2022, increased $46.8 million from 2021 year-end levels primarily due to higher sales, partially offset by $16.8 million of foreign currency translation. Days sales outstanding (trade and other accounts receivable – net as of the respective period end, divided by the respective trailing 12 months sales, times 360 days) was 60 days at July 2, 2022, and 58 days at January 1, 2022.

The current portions of net finance and contract receivables of $645.3 million as of July 2, 2022, compared to $652.7 million at 2021 year end. The long-term portions of net finance and contract receivables of $1,502.4 million as of July 2, 2022, compared to $1,492.2 million at 2021 year end. The combined $2.8 million increase in net current and long-term finance and contract receivables over 2021 year-end levels is primarily due to an increase in net receivable originations, partially offset by $14.6 million of foreign currency translation.

Inventories – net of $893.3 million as of July 2, 2022, increased $89.5 million from 2021 year-end levels primarily to support higher customer demand and new product innovation, partially offset by $27.3 million of foreign currency translation. Inventory turns (trailing 12 months of cost of goods sold, divided by the average of the beginning and ending inventory balance for the trailing 12 months) were 2.7 turns and 2.8 turns as of July 2, 2022, and January 1, 2022, respectively. Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 61% and 60% of total inventories as of July 2, 2022, and January 1, 2022, respectively. All other inventories are accounted for using the last-in, first-out (“LIFO”) method. The company’s LIFO reserve was $90.7 million and $87.2 million as of July 2, 2022, and January 1, 2022, respectively.

Notes payable of $18.8 million as of July 2, 2022, compared to $17.4 million as of 2021 year end.

Accounts payable of $308.5 million as of July 2, 2022, increased $30.9 million from 2021 year-end levels primarily due to the timing of payments, partially offset by $7.1 million of foreign currency translation.

Other accrued liabilities of $440.5 million as of July 2, 2022, increased $16.2 million from 2021 year-end levels primarily due to higher tax accruals, partially offset by $10.8 million of foreign currency translation.

Long-term debt of $1,183.4 million as of July 2, 2022, consisted of: (i) $300 million of unsecured 3.25% notes that mature on March 1, 2027 (the “2027 Notes”); (ii) $400 million of unsecured 4.10% notes that mature on March 1, 2048 (the “2048 Notes”); and (iii) $500 million of 3.10% notes that mature on May 1, 2050 (“the 2050 Notes”), partially offset by $16.6 million of unamortized debt issuance costs.

Snap-on has an $800 million multi-currency revolving credit facility that terminates on September 16, 2024 (the “Credit Facility”); no amounts were outstanding under the Credit Facility as of July 2, 2022. Borrowings under the Credit Facility bear interest at varying rates based on either: (i) Snap-on’s then-current, long-term debt ratings; or (ii) Snap-on’s then-current ratio of consolidated debt net of certain cash adjustments (“Consolidated Net Debt”) to earnings before interest, taxes, depreciation, amortization and certain other adjustments for the preceding four fiscal quarters then ended (the “Consolidated Net Debt to EBITDA Ratio”). The Credit Facility’s financial covenant requires that Snap-on maintain, as of each fiscal quarter end, either (i) a ratio not greater than 0.60 to 1.00 of Consolidated Net Debt to the sum of Consolidated Net Debt plus total equity and less accumulated other comprehensive income or loss (the “Leverage Ratio”); or (ii) a Consolidated Net Debt to EBITDA Ratio not greater than 3.50 to 1.00. Snap-on may, up to two times during any five-year period during the term of the Credit Facility (including any extensions thereof), elect to increase the maximum Leverage Ratio to 0.65 to 1.00 and/or increase the maximum Consolidated Net Debt to EBITDA Ratio to 4.00 to 1.00 for four consecutive fiscal quarters in connection with certain material acquisitions (as defined in the related credit agreement). As of July 2, 2022, the company’s actual ratios of 0.09 and 0.34 respectively, were both within the permitted ranges set forth in this financial covenant. Snap-on generally issues commercial paper to fund its financing needs on a short-term basis and uses the Credit Facility as back-up liquidity to support such commercial paper issuances. As of July 2, 2022, there were no commercial paper issuances outstanding.

52

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Snap-on believes it has sufficient available cash and access to both committed and uncommitted credit facilities to cover its expected funding needs on both a short-term and long-term basis. Snap-on manages its aggregate short-term borrowings so as not to exceed its availability under the Credit Facility. Snap-on believes that it can access short-term debt markets, predominantly through commercial paper issuances and existing lines of credit, to fund its short-term requirements and to ensure near-term liquidity. Snap-on regularly monitors the credit and financial markets and, if it believes conditions are favorable, it may take advantage of such conditions to issue long-term debt to further improve its liquidity and capital resources. Near-term liquidity requirements for Snap-on include payments of interest and dividends, funding to support new receivables originated by our financial services businesses, capital expenditures, working capital, the funding of pension plans, and funding for share repurchases and acquisitions, if and as they arise. Snap-on intends to make contributions of $9.4 million to its foreign pension plans and $9.5 million to its domestic pension plans in 2022, as required by law. Depending on market and other conditions, Snap-on may make discretionary cash contributions to its pension plans in 2022.

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

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

Operating Activities

Net cash provided by operating activities was $334.7 million and $557.5 million in the first six months of 2022 and 2021, respectively. The $222.8 million year-over-year decrease in net cash provided by operating activities primarily reflects a $247.2 million decrease from net changes in operating assets and liabilities, partially offset by a $49.1 million increase in net earnings.

Investing Activities

Net cash used by investing activities of $80.4 million in the first six months of 2022 included additions to finance receivables of $469.6 million, offset by collections of $426.2 million. Net cash used by investing activities of $236.9 million in the first six months of 2021 included additions to finance receivables of $454.5 million, offset by collections of $447.9 million. Finance receivables are comprised of extended-term installment payment contracts to both technicians and independent shop owners (i.e., franchisees’ customers) to enable them to purchase tools, diagnostics, and equipment products on an extended-term payment plan, with average payment terms of approximately four years.

Net cash used by investing activities in the respective first six months of 2022 and 2021 also included $0.5 million of cash provided by and $195.8 million of cash used for acquisitions. See Note 3 to the Condensed Consolidated Financial Statements for information about acquisitions.

Capital expenditures were $41.5 million and $37.6 million in the first six months of 2022 and 2021, respectively. Capital expenditures in both years included continued investments related to the company’s execution of its strategic Value Creation Processes around safety, quality, customer connection, innovation and RCI.

Financing Activities

Net cash used by financing activities of $218.5 million in the first six months of 2022 included net proceeds from other short-term borrowings of $2.8 million. Net cash used by financing activities of $278.9 million in the first six months of 2021 included net proceeds from other short-term borrowings of $2.9 million.

Proceeds from stock purchase and option plan exercises totaled $29.2 million and $154.8 million in the first six months of 2022 and 2021, respectively. In the first six months of 2022, Snap-on repurchased 387,000 shares of its common stock for $82.6 million under its previously announced share repurchase programs. In the first six months of 2021, Snap-on repurchased 1,288,900 shares of its common stock for $289.3 million under its previously announced share repurchase programs. As of July 2, 2022, Snap-on had remaining availability to repurchase up to an additional $420.8 million in common stock pursuant to its Board’s authorizations. The repurchase of Snap-on common stock to offset dilution related to equity plan issuances or for other corporate purposes is at the company’s discretion, subject to prevailing financial and market conditions. Snap‑on believes that its cash generated from operations, available cash on hand, and funds available from its credit facilities, will be sufficient to fund the company’s additional share repurchases, if any.

53

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

(continued)

Snap-on has paid consecutive quarterly cash dividends, without interruption or reduction, since 1939. Cash dividends totaled $151.4 million and $133.4 million in the first six months of 2022 and 2021, respectively. On November 4, 2021, the Board increased the quarterly cash dividend by 15.4% to $1.42 per share ($5.68 per share annualized). Snap-on believes that its cash generated from operations, available cash on hand, and funds available from its credit facilities, will be sufficient to pay dividends.

Critical Accounting Policies and Estimates

Snap-on’s discussion of its critical accounting policies and estimates, contained in its Annual Report on Form 10-K for the fiscal year ended January 1, 2022, have not materially changed since the report was filed.

Outlook

COVID-19 and its subsequent variants, as well as supply chain inefficiencies, continue to impact economic activity worldwide in 2022. The company believes that our markets and our operations possess and, indeed, have demonstrated considerable resilience against the impact of the virus and that there will be ongoing advancement even in the midst of the turbulence. The trajectory, however, may be uncertain due to the evolving nature of the situation.

Snap-on expects to make continued progress in 2022 along its defined runways for coherent growth, leveraging capabilities already demonstrated in the automotive repair arena and developing and expanding its professional customer base, not only in automotive repair, but in adjacent markets, additional geographies and other areas, including extending in critical industries, where the cost and penalties for failure can be high. In pursuit of these initiatives, the company anticipates that capital expenditures in 2022 will be in a range of $90 million to $100 million, of which $41.5 million was incurred in the first six months of the year. Snap-on continues to respond to the global macroeconomic challenges through its RCI process and other cost reduction initiatives.

Snap-on currently anticipates that its full year 2022 effective income tax rate will be in the range of 23% to 24%.

54

Item 3: Quantitative and Qualitative Disclosures About Market Risk

There has been no significant change in the company’s exposure to market risk during the second quarter of 2022. Refer to Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in the company’s Annual Report on Form 10-K for the year ended January 1, 2022 for further discussion.

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. Treasury lock agreements are used from time to time to manage the potential change in interest rates in anticipation of the issuance of fixed rate debt. See Note 10 to the Condensed Consolidated Financial Statements for information on interest rate risk management.

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

The estimated maximum potential net one-day loss in fair value, calculated using the VAR model, as of July 2, 2022, was $28.9 million, consisting of a $29.0 million loss on interest rate-sensitive financial instruments and a $0.1 million gain on foreign currency-sensitive financial instruments. The VAR model is a risk management tool and does not purport to represent actual losses in fair value that will be incurred by Snap-on, nor does it consider the potential effect of favorable changes in market factors.

Item 4: Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Snap-on maintains a system of disclosure controls and procedures that is designed to provide reasonable assurance that material information relating to the company and its consolidated subsidiaries is timely communicated to the officers who certify Snap-on’s financial reports and to other members of senior management and the Board, as appropriate.

In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), the company’s management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of the company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of July 2, 2022. Based upon their evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of July 2, 2022, to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission rules and forms, and to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control

There has not been any change in the company’s internal control over financial reporting during the quarter ended July 2, 2022, that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)).

55

PART II. OTHER INFORMATION

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

Issuer Purchases of Equity Securities

The following chart discloses information regarding the shares of Snap-on’s common stock repurchased by the company during the second quarter of fiscal 2022, all of which were purchased pursuant to the Board’s authorizations that the company has publicly announced. Snap-on has undertaken stock repurchases from time to time to offset dilution related to equity plan issuances or for other corporate purposes, as well as when the company believes market conditions are favorable. The repurchase of Snap-on common stock is at the company’s discretion, subject to prevailing financial and market conditions, and pursuant to the Board’s authorizations that the company has publicly announced.

Period	Shares purchased	Average price per share	Shares purchased as part of publicly announced plans or programs	Approximate value of shares that may yet be purchased under publicly announced plans or programs*
04/03/2022 to 04/30/2022	40,000	$219.39	40,000	$441.3 million
05/01/2022 to 05/28/2022	121,000	$216.24	121,000	$430.3 million
05/29/2022 to 07/02/2022	90,000	$209.19	90,000	$420.8 million
Total/Average	251,000	$214.21	251,000	N/A
N/A: Not applicable

* Subject to further adjustment pursuant to the 1996 Authorization described below, as of July 2, 2022, the approximate value of shares that may yet be

purchased pursuant to the outstanding Board authorizations discussed below is $420.8 million.

•In 1996, the Board authorized the company to repurchase shares of the company’s common stock from time to time in the open market or in privately negotiated transactions (the “1996 Authorization”). The 1996 Authorization allows the repurchase of up to the number of shares issued or delivered from treasury from time to time under the various plans the company has in place that call for the issuance of the company’s common stock. Because the number of shares that are purchased pursuant to the 1996 Authorization will change from time to time as (i) the company issues shares under its various plans; and (ii) shares are repurchased pursuant to this authorization, the number of shares authorized to be repurchased will vary from time to time. The 1996 Authorization will expire when terminated by the Board. When calculating the approximate value of shares that the company may yet purchase under the 1996 Authorization, the company assumed a price of $212.49, $222.90 and $198.24 per share of common stock as of the end of the respective fiscal 2022 months ended April 30, 2022, May 28, 2022, and July 2, 2022.

•On November 4, 2021, the Board authorized the repurchase of up to $500 million of the company’s common stock (the “2021 Authorization”). The 2021 Authorization will expire when the aggregate repurchase price limit is met, unless terminated earlier by the Board.

56

Other Purchases or Sales of Equity Securities

The following chart discloses information regarding transactions in shares of Snap-on’s common stock by Citibank, N.A. (“Citibank”) during the second quarter of 2022 pursuant to a prepaid equity forward agreement (the “Agreement”) with Citibank that is intended to reduce the impact of market risk associated with the stock-based portion of the company’s deferred compensation plans. The company’s stock-based deferred compensation liabilities, which are impacted by changes in the company’s stock price, increase as the company’s stock price rises and decrease as the company’s stock price declines. Pursuant to the Agreement, Citibank may purchase or sell shares of the company’s common stock (for Citibank’s account) in the market or in privately negotiated transactions. The Agreement has no stated expiration date and does not provide for Snap-on to purchase or repurchase its shares.

Citibank Purchases (Sales) of Snap-on Stock
Period	Shares purchased (sold)	Average Price per Share
04/03/2022 to 04/30/2022	(3,300)	$220.00
05/01/2022 to 05/28/2022	—	—
05/29/2022 to 07/02/2022	500	$221.04
Total/Average	(2,800)	$220.14

57

Item 6: Exhibits
Exhibit 31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
Exhibit 101.SCH	Inline XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
Exhibit 104	Cover page Inline XBRL data (contained in Exhibit 101)

58

SIGNATURES

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

 

	SNAP-ON INCORPORATED
Date: July 21, 2022	/s/ Aldo J. Pagliari
	Aldo J. Pagliari, Principal Financial Officer,
	Senior Vice President – Finance and
	Chief Financial Officer

59

EX-31.1

EXHIBIT 31.1

Certification of the Chief Executive Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Nicholas T. Pinchuk, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Snap-on Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 21, 2022

/s/ Nicholas T. Pinchuk

Nicholas T. Pinchuk

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of the Principal Financial Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Aldo J. Pagliari, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Snap-on Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 21, 2022

/s/ Aldo J. Pagliari

Aldo J. Pagliari

Principal Financial Officer

EX-32.1

EXHIBIT 32.1

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Snap-on Incorporated (the “Company”) on Form 10-Q for the period ended July 2, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Nicholas T. Pinchuk as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Nicholas T. Pinchuk

Nicholas T. Pinchuk

Chief Executive Officer

July 21, 2022

EX-32.2

EXHIBIT 32.2

Certification of Principal Financial Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Snap-on Incorporated (the “Company”) on Form 10-Q for the period ended July 2, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Aldo J. Pagliari as Principal Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Aldo J. Pagliari

Aldo J. Pagliari

Principal Financial Officer

July 21, 2022

XML

Cover - shares	6 Months Ended
	Jul. 02, 2022	Jul. 15, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 02, 2022
Document Transition Report	false
Entity File Number	1-7724
Entity Registrant Name	Snap-on Inc
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	39-0622040
Entity Address, Address Line One	2801 80th Street,
Entity Address, City or Town	Kenosha,
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53143
City Area Code	262
Local Phone Number	656-5200
Title of 12(b) Security	Common Stock, $1.00 par value
Trading Symbol	SNA
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		53,267,889
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000091440
Current Fiscal Year End Date	--12-31

XML

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Net sales	$ 1,223.0	$ 1,168.3	$ 2,408.5	$ 2,281.5
Operating earnings	311.9	286.0	605.4	552.2
Interest expense	(11.7)	(14.3)	(23.3)	(28.6)
Other income (expense) – net	9.3	3.4	17.6	7.7
Earnings before income taxes and equity earnings	309.5	275.1	599.7	531.3
Income tax expense	(72.3)	(62.9)	(139.8)	(122.0)
Earnings before equity earnings	237.2	212.2	459.9	409.3
Equity earnings, net of tax	0.0	1.0	0.0	1.5
Net earnings	237.2	213.2	459.9	410.8
Net earnings attributable to noncontrolling interests	(5.7)	(5.2)	(11.0)	(10.2)
Net earnings attributable to Snap-on Incorporated	$ 231.5	$ 208.0	$ 448.9	$ 400.6
Net earnings per share attributable to Snap-on Incorporated:
Basic (in dollars per share)	$ 4.34	$ 3.85	$ 8.41	$ 7.40
Diluted (in dollars per share)	$ 4.27	$ 3.76	$ 8.27	$ 7.26
Weighted-average shares outstanding:
Basic (in shares)	53.3	54.0	53.4	54.1
Effect of dilutive securities (in shares)	0.9	1.3	0.9	1.1
Diluted (in shares)	54.2	55.3	54.3	55.2
Dividends declared per common share (in dollars per share)	$ 1.42	$ 1.23	$ 2.84	$ 2.46
Total net sales
Net sales	$ 1,136.6	$ 1,081.4	$ 2,234.4	$ 2,106.0
Cost of goods sold	(583.1)	(538.3)	(1,146.6)	(1,049.3)
Gross profit	553.5	543.1	1,087.8	1,056.7
Operating expenses	(306.9)	(326.0)	(618.1)	(638.7)
Operating earnings	246.6	217.1	469.7	418.0
Financial services revenue
Net sales	86.4	86.9	174.1	175.5
Cost of goods sold	(21.1)	(18.0)	(38.4)	(41.3)
Operating earnings	$ 65.3	$ 68.9	$ 135.7	$ 134.2

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Comprehensive income (loss):
Net earnings	$ 237.2	$ 213.2	$ 459.9	$ 410.8
Other comprehensive income (loss):
Foreign currency translation	(110.3)	20.2	(120.0)	(8.8)
Reclassification of foreign currency translation loss from sale of equity interest to net earnings	0.0	(1.0)	0.0	(1.0)
Unrealized cash flow hedges, net of tax:
Reclassification of cash flow hedges to net earnings	(0.4)	(0.4)	(0.8)	(0.8)
Defined benefit pension and postretirement plans:
Amortization of net unrecognized losses	4.7	9.1	9.2	18.2
Income tax benefit	(1.1)	(2.3)	(2.2)	(4.5)
Net of tax	3.6	6.8	7.0	13.7
Total comprehensive income	130.1	238.8	346.1	413.9
Comprehensive income attributable to noncontrolling interests	(5.7)	(5.2)	(11.0)	(10.2)
Comprehensive income attributable to Snap-on Incorporated	$ 124.4	$ 233.6	$ 335.1	$ 403.7

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Current assets:
Cash and cash equivalents	$ 812.9	$ 780.0
Trade and other accounts receivable – net	729.1	682.3
Finance receivables and contract receivables - net	645.3	652.7
Inventories – net	893.3	803.8
Prepaid expenses and other assets	150.1	134.6
Total current assets	3,230.7	3,053.4
Property and equipment:
Property and equipment – gross	1,510.1	1,527.4
Accumulated depreciation and amortization	(1,006.6)	(1,009.2)
Property and equipment – net	503.5	518.2
Operating lease right-of-use assets	56.6	51.9
Deferred income tax assets	67.5	49.5
Long-term finance receivables and contract receivables - net	1,502.4	1,492.2
Goodwill	1,046.0	1,116.5
Other intangibles – net	283.5	301.7
Other assets	174.1	176.3
Total assets	6,864.3	6,759.7
Current liabilities:
Notes payable	18.8	17.4
Accounts payable	308.5	277.6
Accrued benefits	59.2	67.4
Accrued compensation	81.6	114.8
Franchisee deposits	77.5	80.7
Other accrued liabilities	440.5	424.3
Total current liabilities	986.1	982.2
Long-term debt	1,183.4	1,182.9
Deferred income tax liabilities	102.2	122.7
Retiree health care benefits	29.7	31.1
Pension liabilities	83.1	104.9
Operating lease liabilities	39.7	34.2
Other long-term liabilities	93.3	97.9
Total liabilities	2,517.5	2,555.9
Commitments and contingencies
Shareholders’ equity attributable to Snap-on Incorporated:
Preferred stock (authorized 15,000,000 shares of $1 par value; none outstanding)	0.0	0.0
Common stock (authorized 250,000,000 shares of $1 par value; issued 67,444,855 and 67,438,129 shares, respectively)	67.4	67.4
Additional paid-in capital	488.1	472.7
Retained earnings	5,996.2	5,699.9
Accumulated other comprehensive loss	(457.7)	(343.9)
Treasury stock at cost (14,177,040 and 14,008,479 shares, respectively)	(1,769.6)	(1,714.2)
Total shareholders’ equity attributable to Snap-on Incorporated	4,324.4	4,181.9
Noncontrolling interests	22.4	21.9
Total equity	4,346.8	4,203.8
Total liabilities and equity	6,864.3	6,759.7
Land
Property and equipment:
Property and equipment – gross	32.5	33.8
Buildings and improvements
Property and equipment:
Property and equipment – gross	419.1	434.4
Machinery, equipment and computer software
Property and equipment:
Property and equipment – gross	1,058.5	1,059.2
Finance Receivables
Current assets:
Finance receivables and contract receivables - net	547.0	542.3
Property and equipment:
Long-term finance receivables and contract receivables - net	1,127.0	1,114.0
Contract Receivables
Current assets:
Finance receivables and contract receivables - net	98.3	110.4
Property and equipment:
Long-term finance receivables and contract receivables - net	$ 375.4	$ 378.2

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jul. 02, 2022	Jan. 01, 2022
Statement of Financial Position [Abstract]
Preferred stock, shares authorized (in shares)	15,000,000	15,000,000
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares outstanding (in shares)	0	0
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares issued (in shares)	67,444,855	67,438,129
Treasury stock shares at cost (in shares)	14,177,040	14,008,479

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Noncontrolling Interests
Beginning balance at Jan. 02, 2021	$ 3,846.6	$ 67.4	$ 391.7	$ 5,156.9	$ (365.8)	$ (1,425.3)	$ 21.7
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	410.8			400.6			10.2
Other comprehensive income (loss)	3.1				3.1
Cash dividends	(133.4)			(133.4)
Stock compensation plans	198.1		69.4			128.7
Share repurchases	(289.3)					(289.3)
Other	(10.4)			(0.6)			(9.8)
Ending balance at Jul. 03, 2021	4,025.5	67.4	461.1	5,423.5	(362.7)	(1,585.9)	22.1
Beginning balance at Apr. 03, 2021	3,897.9	67.4	419.7	5,282.5	(388.3)	(1,505.3)	21.9
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	213.2			208.0			5.2
Other comprehensive income (loss)	25.6				25.6
Cash dividends	(66.7)			(66.7)
Stock compensation plans	98.2		41.4			56.8
Share repurchases	(137.4)					(137.4)
Other	(5.3)			(0.3)			(5.0)
Ending balance at Jul. 03, 2021	4,025.5	67.4	461.1	5,423.5	(362.7)	(1,585.9)	22.1
Beginning balance at Jan. 01, 2022	4,203.8	67.4	472.7	5,699.9	(343.9)	(1,714.2)	21.9
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	459.9			448.9			11.0
Other comprehensive income (loss)	(113.8)				(113.8)
Cash dividends	(151.4)			(151.4)
Stock compensation plans	42.6		15.4			27.2
Share repurchases	(82.6)					(82.6)
Other	(11.7)			(1.2)			(10.5)
Ending balance at Jul. 02, 2022	4,346.8	67.4	488.1	5,996.2	(457.7)	(1,769.6)	22.4
Beginning balance at Apr. 02, 2022	4,320.6	67.4	474.7	5,841.0	(350.6)	(1,734.2)	22.3
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	237.2			231.5			5.7
Other comprehensive income (loss)	(107.1)				(107.1)
Cash dividends	(75.7)			(75.7)
Stock compensation plans	31.8		13.4			18.4
Share repurchases	(53.8)					(53.8)
Other	(6.2)			(0.6)			(5.6)
Ending balance at Jul. 02, 2022	$ 4,346.8	$ 67.4	$ 488.1	$ 5,996.2	$ (457.7)	$ (1,769.6)	$ 22.4

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Statement of Stockholders' Equity [Abstract]
Cash dividends per share (in dollars per share)	$ 1.42	$ 1.23	$ 2.84	$ 2.46
Share repurchases (in shares)	251,000	566,900	387,000	1,288,900

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Operating activities:
Net earnings	$ 459.9	$ 410.8
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation	36.7	37.9
Amortization of other intangibles	14.4	12.3
Provision for credit losses	15.4	17.9
Provision for losses on non-finance receivables	6.7	8.1
Stock-based compensation expense	17.5	23.8
Deferred income tax provision (benefit)	(7.1)	4.0
Loss (gain) on sales of assets	(2.9)	1.4
Changes in operating assets and liabilities, net of effects of acquisitions:
Trade and other accounts receivable	(73.7)	(4.0)
Contract receivables	10.4	4.5
Inventories	(123.4)	(16.1)
Prepaid expenses and other assets	(23.4)	(14.3)
Accounts payable	42.1	59.5
Accruals and other liabilities	(37.9)	11.7
Net cash provided by operating activities	334.7	557.5
Investing activities:
Additions to finance receivables	(469.6)	(454.5)
Collections of finance receivables	426.2	447.9
Capital expenditures	(41.5)	(37.6)
Acquisitions of businesses, net of cash acquired	0.5	(195.8)
Disposals of property and equipment	4.2	1.4
Other	(0.2)	1.7
Net cash used by investing activities	(80.4)	(236.9)
Financing activities:
Net increase in other short-term borrowings	2.8	2.9
Cash dividends paid	(151.4)	(133.4)
Purchases of treasury stock	(82.6)	(289.3)
Proceeds from stock purchase and option plans	29.2	154.8
Other	(16.5)	(13.9)
Net cash used by financing activities	(218.5)	(278.9)
Effect of exchange rate changes on cash and cash equivalents	(2.9)	0.8
Increase in cash and cash equivalents	32.9	42.5
Cash and cash equivalents at beginning of year	780.0	923.4
Cash and cash equivalents at end of period	812.9	965.9
Supplemental cash flow disclosures:
Cash paid for interest	(22.4)	(27.9)
Net cash paid for income taxes	$ (129.2)	$ (126.6)

XML

Summary of Accounting Policies

6 Months Ended

Jul. 02, 2022

Accounting Policies [Abstract]

Summary of Accounting Policies

Summary of Accounting Policies

Principles of consolidation and presentation

The Condensed Consolidated Financial Statements include the accounts of Snap-on Incorporated and its wholly owned and majority-owned subsidiaries (collectively, “Snap-on” or the “company”). These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included in Snap-on’s 2021 Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (“2021 year end”). The company’s 2022 fiscal second quarter ended on July 2, 2022; the 2021 fiscal second quarter ended on July 3, 2021. The company’s 2022 and 2021 fiscal second quarters each contained 13 weeks of operating results. Snap-on’s Condensed Consolidated Financial Statements are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”).

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the Condensed Consolidated Financial Statements for the three and six month periods ended July 2, 2022, and July 3, 2021, have been made. Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Financial Instruments

The fair value of the company’s derivative financial instruments is generally determined using quoted prices in active markets for similar assets and liabilities. The carrying value of the company’s non-derivative financial instruments either approximates fair value, due to their short-term nature, or the amount disclosed for fair value is based upon a discounted cash flow analysis or quoted market values. See Note 10 for further information on financial instruments.

New Accounting Standards

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326) – Troubled Debt Restructurings and Vintage Disclosures, which requires enhanced disclosure of certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty while eliminating certain current recognition and measurement accounting guidance. This ASU also requires the disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases. ASU No. 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years; this ASU allows for early adoption in any interim period after issuance of the update. The adoption of this ASU is not expected to have a material impact on Snap-on’s Consolidated Financial Statements.

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Revenue Recognition

6 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue RecognitionSnap-on recognizes revenue from the sale of tools, diagnostics, equipment, and related services based on when control of the product passes to the customer or the service is provided and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services.

Revenue Disaggregation: The following table shows the consolidated revenues by revenue source:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Revenue from contracts with customers	$	1,130.5	$	1,075.3	$	2,222.4	$	2,094.1
Other revenues	6.1		6.1		12.0		11.9
Total net sales	1,136.6		1,081.4		2,234.4		2,106.0
Financial services revenue	86.4		86.9		174.1		175.5
Total revenues	$	1,223.0	$	1,168.3	$	2,408.5	$	2,281.5

Snap-on evaluates the performance of its operating segments based on segment revenues, including both external and intersegment net sales, and segment operating earnings. Snap-on accounts for both intersegment sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments. Intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results.

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

	For the Three Months Ended July 2, 2022
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	128.7	$	460.3	$	254.7	$	—	$	—	$	843.7
Europe	73.1		36.4		60.4		—		—		169.9
All other	74.3		23.9		24.8		—		—		123.0
External net sales	276.1		520.6		339.9		—		—		1,136.6
Intersegment net sales	83.0		—		76.9		—		(159.9)		—
Total net sales	359.1		520.6		416.8		—		(159.9)		1,136.6
Financial services revenue	—		—		—		86.4		—		86.4
Total revenue	$	359.1	$	520.6	$	416.8	$	86.4	$	(159.9)	$	1,223.0

	For the Six Months Ended July 2, 2022
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	242.4	$	908.1	$	497.5	$	—	$	—	$	1,648.0
Europe	154.9		76.5		122.3		—		—		353.7
All other	140.0		48.1		44.6		—		—		232.7
External net sales	537.3		1,032.7		664.4		—		—		2,234.4
Intersegment net sales	161.9		—		150.6		—		(312.5)		—
Total net sales	699.2		1,032.7		815.0		—		(312.5)		2,234.4
Financial services revenue	—		—		—		174.1		—		174.1
Total revenue	$	699.2	$	1,032.7	$	815.0	$	174.1	$	(312.5)	$	2,408.5
* North America is comprised of the United States, Canada and Mexico.

	For the Three Months Ended July 3, 2021
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	126.6	$	416.3	$	236.8	$	—	$	—	$	779.7
Europe	79.2		43.8		66.5		—		—		189.5
All other	68.9		24.0		19.3		—		—		112.2
External net sales	274.7		484.1		322.6		—		—		1,081.4
Intersegment net sales	75.8		—		76.0		—		(151.8)		—
Total net sales	350.5		484.1		398.6		—		(151.8)		1,081.4
Financial services revenue	—		—		—		86.9		—		86.9
Total revenue	$	350.5	$	484.1	$	398.6	$	86.9	$	(151.8)	$	1,168.3

	For the Six Months Ended July 3, 2021
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	244.6	$	824.4	$	437.7	$	—	$	—	$	1,506.7
Europe	163.5		88.0		127.1		—		—		378.6
All other	137.7		50.0		33.0		—		—		220.7
External net sales	545.8		962.4		597.8		—		—		2,106.0
Intersegment net sales	150.4		—		148.4		—		(298.8)		—
Total net sales	696.2		962.4		746.2		—		(298.8)		2,106.0
Financial services revenue	—		—		—		175.5		—		175.5
Total revenue	$	696.2	$	962.4	$	746.2	$	175.5	$	(298.8)	$	2,281.5
* North America is comprised of the United States, Canada and Mexico.

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

	For the Three Months Ended July 2, 2022
	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	$	25.2	$	520.6	$	339.9	$	—	$	—	$	885.7
All other professionals	250.9		—		—		—		—		250.9
External net sales	276.1		520.6		339.9		—		—		1,136.6
Intersegment net sales	83.0		—		76.9		—		(159.9)		—
Total net sales	359.1		520.6		416.8		—		(159.9)		1,136.6
Financial services revenue	—		—		—		86.4		—		86.4
Total revenue	$	359.1	$	520.6	$	416.8	$	86.4	$	(159.9)	$	1,223.0

	For the Six Months Ended July 2, 2022
	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	$	49.1	$	1,032.7	$	664.4	$	—	$	—	$	1,746.2
All other professionals	488.2		—		—		—		—		488.2
External net sales	537.3		1,032.7		664.4		—		—		2,234.4
Intersegment net sales	161.9		—		150.6		—		(312.5)		—
Total net sales	699.2		1,032.7		815.0		—		(312.5)		2,234.4
Financial services revenue	—		—		—		174.1		—		174.1
Total revenue	$	699.2	$	1,032.7	$	815.0	$	174.1	$	(312.5)	$	2,408.5

	For the Three Months Ended July 3, 2021
	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	$	25.7	$	484.1	$	322.6	$	—	$	—	$	832.4
All other professionals	249.0		—		—		—		—		249.0
External net sales	274.7		484.1		322.6		—		—		1,081.4
Intersegment net sales	75.8		—		76.0		—		(151.8)		—
Total net sales	350.5		484.1		398.6		—		(151.8)		1,081.4
Financial services revenue	—		—		—		86.9		—		86.9
Total revenue	$	350.5	$	484.1	$	398.6	$	86.9	$	(151.8)	$	1,168.3

	For the Six Months Ended July 3, 2021
	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	$	49.8	$	962.4	$	597.8	$	—	$	—	$	1,610.0
All other professionals	496.0		—		—		—		—		496.0
External net sales	545.8		962.4		597.8		—		—		2,106.0
Intersegment net sales	150.4		—		148.4		—		(298.8)		—
Total net sales	696.2		962.4		746.2		—		(298.8)		2,106.0
Financial services revenue	—		—		—		175.5		—		175.5
Total revenue	$	696.2	$	962.4	$	746.2	$	175.5	$	(298.8)	$	2,281.5

Nature of Goods and Services: Snap-on derives net sales from a broad line of products and complementary services that are grouped into three categories: (i) tools; (ii) diagnostics, information and management systems; and (iii) equipment. The tools product category includes hand tools, power tools, tool storage products and other similar products. The diagnostics, information and management systems product category includes handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer (“OEM”) purchasing facilitation services, and warranty management systems and analytics to help OEM dealership service and repair shops (“OEM dealerships”) manage and track performance. The equipment product category includes solutions for the service of vehicles and industrial equipment. Snap-on supports the sale of its diagnostics and vehicle service shop equipment by offering training programs as well as after-sales support to its customers. Through its financial services businesses, Snap‑on derives revenue from various financing programs designed to facilitate the sales of its products and support its franchise business.

Approximately 90% of Snap-on’s net sales are products sold at a point in time through ship-and-bill performance obligations that also include repair services. The remaining sales revenue is earned over time primarily for software subscriptions, other subscription service agreements and extended warranty programs.

Snap-on enters into contracts related to the selling of tools, diagnostics, repair information, equipment and related services. At contract inception, an assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, Snap-on considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Contracts with customers are comprised of customer purchase orders, invoices and written contracts.

For certain performance obligations related to software subscriptions, extended warranty and other subscription agreements that are settled over time Snap-on has elected not to disclose the value of unsatisfied performance obligations for: (i) contracts that have an original expected length of one year or less; (ii) contracts where revenue is recognized as invoiced; and (iii) contracts with variable consideration related to unsatisfied performance obligations. The remaining duration of these unsatisfied performance obligations range from one month up to 60 months.  Snap-on had approximately $188.0 million of long-term contracts that have fixed consideration that extends beyond one year as of July 2, 2022. Snap-on expects to recognize approximately 60% of these contracts as revenue by the end of fiscal 2023, an additional 35% by the end of fiscal 2025, and the balance thereafter. 

Contract Liabilities: Contract liabilities are recorded when cash payments are received in advance of Snap-on’s performance.  The timing of payment is typically on a monthly, quarterly or annual basis. The balance of total contract liabilities was $65.9 million and $63.8 million at July 2, 2022, and January 1, 2022, respectively.  The current portion of contract liabilities is included in “Other accrued liabilities” and the non-current portion of such liabilities is included in “Other long-term liabilities” on the accompanying Condensed Consolidated Balance Sheets.  During the three and six months ended July 2, 2022, Snap-on recognized revenue of $10.3 million and $44.9 million, respectively, that was included in the $63.8 million contract liability balance at January 1, 2022, which was primarily from the amortization of software subscriptions, extended warranties and other subscription agreements.

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Acquisitions

6 Months Ended

Jul. 02, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Acquisitions

On August 1, 2021, Snap-on acquired AutoCrib EMEA GmbH (“AutoCrib Germany”), a former independent distributor, for a cash purchase price of $4.4 million (or $4.2 million, net of cash acquired). AutoCrib Germany, based in Hamburg, Germany, distributes asset and tool control solutions for a variety of aerospace, automotive, military, natural resources and general industry operations. In the first quarter of 2022, the company completed the purchase accounting valuations for the acquired net assets of AutoCrib Germany. The $3.3 million excess of the purchase price over the fair value of the net assets acquired is recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets.

On July 1, 2021, Snap-on exchanged its 35% equity interest in Deville S.A., valued at $21.8 million, for 100% ownership of Secateurs Pradines (“Pradines”), a wholly owned subsidiary of Deville S.A. with a fair value of $20.2 million (or $15.7 million, net of cash acquired), which reflects a $0.5 million purchase accounting adjustment finalized in the second quarter of 2022, and cash of $1.6 million. Pradines, located in Bauge-en-Anjou, France, designs and manufactures horticultural hand tools for professionals and individuals. The $10.2 million excess of the purchase price over the fair value of net assets acquired is recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets.

On February 26, 2021, Snap-on acquired Dealer-FX Group, Inc. (“Dealer-FX”) for a cash purchase price of $200.1 million (or $200.0 million, net of cash acquired). Dealer-FX, based in Markham, Ontario, is a leading developer, marketer and provider of service operations software solutions for automotive OEM customers and their dealers. Dealer-FX specializes in software as a service (SaaS) management systems, communications platforms, extensive data integrations, and offers a digitalized solution that increases productivity and enhances the vehicle owners’ experience. In the first quarter of 2022, the company completed the purchase accounting valuations for the acquired net assets of Dealer-FX, and recorded $32.6 million of net deferred tax changes. The $118.2 million excess of the purchase price over the fair value of the net assets acquired is recorded in “Goodwill” on the accompanying Condensed Consolidated Balance Sheets.

For segment reporting purposes, the results of operations and assets of Dealer-FX have been included in the Repair Systems & Information Group since the acquisition date, and the results of operations and assets of AutoCrib Germany and Pradines 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 were neither significant nor material to Snap-on’s results of operations or financial position. See Note 6 for further information on goodwill and other intangible assets.

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Receivables

6 Months Ended

Jul. 02, 2022

Receivables [Abstract]

Receivables

Receivables

Trade and Other Accounts Receivable: Snap-on’s trade and other accounts receivable primarily arise from the sale of tools, diagnostics, and equipment products to a broad range of industrial and commercial customers and to Snap-on’s independent franchise van channel with payment terms generally ranging from 30 to 120 days.

The components of Snap-on’s trade and other accounts receivable as of July 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Trade and other accounts receivable	$	757.2	$	709.6
Allowances for credit losses	(28.1)		(27.3)
Total trade and other accounts receivable – net	$	729.1	$	682.3

The following is a rollforward of the allowances for credit losses related to trade and other accounts receivable for the three and six months ended July 2, 2022, and July 3, 2021:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Allowances for credit losses:
Beginning of period	$	28.4	$	25.8	$	27.3	$	26.3
Provision for credit losses	2.9		5.4		6.6		7.3
Charge-offs	(2.2)		(2.1)		(5.2)		(4.2)
Recoveries	—		—		0.1		—
Currency translation	(1.0)		0.4		(0.7)		0.1
End of period	$	28.1	$	29.5	$	28.1	$	29.5

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 Condensed Consolidated Statements of Earnings.

Finance receivables are comprised of extended-term payment contracts to both technicians and independent shop owners (i.e., franchisees’ customers) to enable them to purchase tools, diagnostics, and equipment products on an extended-term payment plan, with average payment terms of approximately four years.

Contract receivables, with payment terms of up to ten years, are comprised of extended-term payment contracts to a broad base of customers worldwide, including shop owners, both independents and national chains, for their purchase of tools, diagnostics, and equipment products, as well as extended-term contracts to franchisees to meet a number of financing needs, including working capital loans, loans to enable new franchisees to fund the purchase of the franchise and van leases, or the expansion of an existing franchise. Finance and contract receivables are generally secured by the underlying tools, diagnostics and/or equipment products financed and, for contracts to franchisees, other franchisee assets.

The components of Snap-on’s current finance and contract receivables as of July 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance installment receivables	$	562.6	$	557.0
Finance lease receivables, net of unearned finance charges of $0.7 million and $1.3 million, respectively	4.2		7.1
Total finance receivables	566.8		564.1
Contract installment receivables	42.8		55.2
Contract lease receivables, net of unearned finance charges of $18.4 million and $18.7 million, respectively	57.3		57.3
Total contract receivables	100.1		112.5
Total	666.9		676.6
Allowances for credit losses:
Finance installment receivables	(19.8)		(21.7)
Finance lease receivables	—		(0.1)
Total finance allowance for credit losses	(19.8)		(21.8)
Contract installment receivables	(0.7)		(0.9)
Contract lease receivables	(1.1)		(1.2)
Total contract allowance for credit losses	(1.8)		(2.1)
Total allowance for credit losses	(21.6)		(23.9)
Total current finance and contract receivables – net	$	645.3	$	652.7
Finance receivables – net	$	547.0	$	542.3
Contract receivables – net	98.3		110.4
Total current finance and contract receivables – net	$	645.3	$	652.7

The components of Snap-on’s finance and contract receivables with payment terms beyond one year as of July 2, 2022, and January 1, 2022, are as follows: 

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance installment receivables	$	1,166.1	$	1,155.3
Finance lease receivables, net of unearned finance charges of $0.3 million and $0.5 million, respectively	2.4		4.2
Total finance receivables	1,168.5		1,159.5
Contract installment receivables	196.7		197.1
Contract lease receivables, net of unearned finance charges of $29.6 million and $30.3 million, respectively	184.1		187.4
Total contract receivables	380.8		384.5
Total	1,549.3		1,544.0
Allowances for credit losses:
Finance installment receivables	(41.5)		(45.4)
Finance lease receivables	—		(0.1)
Total finance allowance for credit losses	(41.5)		(45.5)
Contract installment receivables	(3.2)		(3.2)
Contract lease receivables	(2.2)		(3.1)
Total contract allowance for credit losses	(5.4)		(6.3)
Total allowance for credit losses	(46.9)		(51.8)
Total long-term finance and contract receivables – net	$	1,502.4	$	1,492.2
Finance receivables – net	$	1,127.0	$	1,114.0
Contract receivables – net	375.4		378.2
Total long-term finance and contract receivables – net	$	1,502.4	$	1,492.2

Credit quality: The company’s receivable portfolio is comprised of two portfolio segments, finance and contract receivables, which are the same segments used to estimate expected credit losses reported in the allowance for credit losses. The amortized cost basis for finance and contract receivables is the amount originated adjusted for applicable accrued interest and net of deferred fees or costs, collection of cash, and write-offs. The 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 collection experience and related internal metrics. Delinquency is the primary indicator of credit quality for finance and contract receivables. Snap-on conducts monthly reviews of credit and collection performance for both the finance and contract receivable portfolios focusing on data such as delinquency trends, nonaccrual receivables, and write-off and recovery activity. These reviews allow for the formulation of collection strategies and potential collection policy modifications in response to changing risk profiles in the finance and contract receivable portfolios. The other internal metrics include credit exposure by customer and delinquency classification to further monitor changing risk profiles. The company maintains a system that aggregates credit exposure and provides delinquency data by days past due aging categories. A receivable 30 days or more past due is considered delinquent. However, customers are monitored prior to becoming 30 days past due.

The amortized cost basis of finance and contract receivables by origination year as of July 2, 2022, are as follows:

(Amounts in millions)	2022		2021		2020		2019		2018		Prior		Total
Finance Receivables:
Delinquent	$	2.9	$	16.5	$	11.3	$	5.4	$	2.8	$	1.4	$	40.3
Non-delinquent	747.6		572.2		247.7		89.3		30.7		7.5		1,695.0
Total Finance receivables	$	750.5	$	588.7	$	259.0	$	94.7	$	33.5	$	8.9	$	1,735.3
Contract receivables:
Delinquent	$	0.2	$	0.7	$	0.7	$	0.9	$	0.3	$	0.2	$	3.0
Non-delinquent	83.8		138.5		101.0		71.3		44.5		38.8		477.9
Total Contract receivables	$	84.0	$	139.2	$	101.7	$	72.2	$	44.8	$	39.0	$	480.9

Allowance for credit losses: The allowance for credit losses utilizes an expected credit loss objective for the recognition of credit losses on receivables over the contractual life using historical experience, asset specific risk characteristics, current conditions, reasonable and supportable forecasts, and the appropriate reversion period, when applicable.

The allowance for credit losses is maintained at a level that is considered adequate to cover credit-related losses on the receivables. Management performs detailed reviews of its receivables on a monthly and/or quarterly basis to assess the adequacy of the allowance and determine if any impairment has occurred. 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 agreement. Amounts determined to be uncollectable are charged directly against the allowance, while amounts recovered on previously written-off accounts increase the allowance. For both finance and contract receivables, net write-offs include the principal amount of losses written off as well as written-off accrued interest and fees, and recourse from franchisees on finance receivables. Recovered interest and fees previously written off are recorded through the allowance for credit losses and increase the allowance. Finance receivables are assessed for write-off when an account becomes 120 days past due and are written off typically within 60 days of asset repossession. Contract receivables related to equipment leases are generally written off when an account becomes 150 days past due, while contract receivables related to franchise finance and van leases are generally written off up to 180 days past the asset return date. For finance and contract receivables, customer bankruptcies are generally written off upon notification that the associated debt is not being reaffirmed or, in any event, no later than 180 days past due. Changes to the allowances for credit losses are maintained through adjustments to the provision 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 methodology (“WARM”). The WARM methodology calculates the average annual write-off rate and applies it to the remaining term of the receivables. The WARM method is used since the 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 allowance for credit losses is adjusted each period for changes in the credit risk and expected lifetime credit losses.

The following is a rollforward of the allowances for credit losses for finance and contract receivables for the three and six months ended July 2, 2022, and July 3, 2021:

 

	Three Months Ended July 2, 2022				Six Months Ended July 2, 2022
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Allowances for credit losses:
Beginning of period	$	62.5	$	7.7	$	67.3	$	8.4
Provision for credit losses	9.1		—		15.4		0.1
Charge-offs	(12.8)		(0.6)		(26.2)		(1.4)
Recoveries	2.7		0.1		5.0		0.1
Currency translation	(0.2)		—		(0.2)		—
End of period	$	61.3	$	7.2	$	61.3	$	7.2

	Three Months Ended July 3, 2021				Six Months Ended July 3, 2021
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Allowances for credit losses:
Beginning of period	$	75.3	$	9.2	$	76.3	$	9.0
Provision for credit losses	6.6		0.1		17.9		0.8
Charge-offs	(12.4)		(0.5)		(27.3)		(1.1)
Recoveries	2.8		0.2		5.4		0.3
Currency translation	—		—		—		—
End of period	$	72.3	$	9.0	$	72.3	$	9.0

Past due: Depending on the contract, payments for finance and contract receivables are due on a monthly or weekly basis. Weekly payments are converted into a monthly equivalent for purposes of calculating delinquency. Delinquencies are assessed at the end of each month following the monthly equivalent contractual payment due date. The entire receivable balance of a contract is considered delinquent when contractual payments become 30 days past due. Removal from delinquent status occurs when the cumulative amount of monthly contractual payments then due have been received by the company.

It is the general practice of Snap-on’s financial services business not to engage in contract or loan modifications. In limited instances, Snap-on’s financial services business may modify certain receivables in troubled debt restructurings. The amount and number of restructured finance and contract receivables as of July 2, 2022, and January 1, 2022, were immaterial to both the financial services portfolio and the company’s results of operations and financial position.

The aging of finance and contract receivables as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions)	30-59 Days Past Due		60-90 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Total Not Past Due		Total		Greater Than 90 Days Past Due and Accruing
July 2, 2022:
Finance receivables	$	15.1	$	9.6	$	15.6	$	40.3	$	1,695.0	$	1,735.3	$	13.3
Contract receivables	1.4		0.3		1.3		3.0		477.9		480.9		0.2
January 1, 2022:
Finance receivables	$	16.0	$	10.5	$	18.0	$	44.5	$	1,679.1	$	1,723.6	$	16.0
Contract receivables	1.7		0.9		0.9		3.5		493.5		497.0		0.1

Nonaccrual: SOC maintains the accrual of interest income during the progression through the various stages of delinquency prior to processing for write-off. At the time of write-off, the entire balance including the accrued but unpaid interest income amount is recorded as a loss.

Finance receivables are generally placed on nonaccrual status (nonaccrual of interest and other fees): (i) when a customer is placed on repossession status; (ii) upon receipt of notification of bankruptcy; (iii) upon notification of the death of a customer; or (iv) in other instances in which management concludes collectability is not reasonably assured.

Contract receivables are generally placed on nonaccrual status: (i) when a receivable is more than 90 days past due or at the point a customer’s account is placed on terminated status regardless of its delinquency status; (ii) upon notification of the death of a customer; or (iii) in other instances in which management concludes collectability is not reasonably assured.

The accrual of interest and other fees is resumed when the finance or contract receivable becomes contractually current and collection of all remaining contractual amounts due is reasonably assured. A receivable may have credit losses when it is expected that all amounts related to the receivable will not be collected according to the contractual terms of the applicable agreement. Such finance and contract receivables are covered by the company’s respective allowances for credit losses and are written-off against the allowances when appropriate.

The amount of finance and contract receivables on nonaccrual status as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance receivables	$	8.7	$	7.7
Contract receivables	4.1		2.7

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Inventories

6 Months Ended

Jul. 02, 2022

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories by major classification are as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finished goods	$	756.7	$	686.5
Work in progress	69.7		64.3
Raw materials	157.6		140.2
Total FIFO value	984.0		891.0
Excess of current cost over LIFO cost	(90.7)		(87.2)
Total inventories – net	$	893.3	$	803.8

Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 61% and 60% of total inventories as of July 2, 2022, and January 1, 2022, respectively. The company accounts for its non-U.S. inventory on the FIFO method. As of July 2, 2022, approximately 36% of the company’s U.S. inventory was accounted for using the FIFO method and 64% was accounted for using the last-in, first-out (“LIFO”) method. There were no LIFO inventory liquidations in the three and six months ended July 2, 2022, or July 3, 2021.

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Goodwill and Other Intangible Assets

6 Months Ended

Jul. 02, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by segment for the six months ended July 2, 2022, are as follows:

(Amounts in millions)	Commercial & Industrial Group		Snap-on Tools Group		Repair Systems & Information Group		Total
Balance as of January 1, 2022	$	325.8	$	12.4	$	778.3	$	1,116.5
Currency translation	(22.7)		—		(14.7)		(37.4)
Acquisition-related adjustments	(0.5)		—		(32.6)		(33.1)
Balance as of July 2, 2022	$	302.6	$	12.4	$	731.0	$	1,046.0

Goodwill of $1,046.0 million as of July 2, 2022, included $118.2 million from the acquisition of Dealer-FX, $10.2 million from the acquisition of Pradines and $3.3 million from the acquisition of AutoCrib Germany. In the first quarter of 2022, the purchase accounting valuations for the acquired net assets, including deferred tax assets, of Dealer-FX were completed, resulting in a reduction of goodwill of $32.6 million from 2021 year end. In the second quarter of 2022, the purchase accounting valuations for the acquired net assets of Pradines were completed, resulting in a reduction of goodwill of $0.5 million from 2021 year end. The goodwill from Dealer-FX is included in the Repair Systems & Information Group and the goodwill from Pradines and AutoCrib Germany is included in the Commercial & Industrial Group. See Note 3 for additional information on acquisitions.

Additional disclosures related to other intangible assets are as follows:

	July 2, 2022				January 1, 2022
(Amounts in millions)	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Amortized other intangible assets:
Customer relationships	$	212.6	$	(145.1)	$	217.8	$	(142.1)
Developed technology	35.9		(24.3)		36.6		(23.2)
Internally developed software	180.6		(138.0)		182.7		(139.1)
Patents	46.4		(25.0)		45.7		(25.1)
Trademarks	3.8		(2.3)		3.9		(2.3)
Other	7.9		(4.0)		8.3		(4.1)
Total	487.2		(338.7)		495.0		(335.9)
Non-amortized trademarks	135.0		—		142.6		—
Total other intangible assets	$	622.2	$	(338.7)	$	637.6	$	(335.9)

As of July 2, 2022, the gross carrying value of intangible assets includes $28.4 million of customer relationships, $14.8 million of developed technology and a $17.7 million non-amortized trademark related to the Dealer-FX acquisition.

Snap-on completed its annual impairment testing of goodwill and other indefinite-lived intangible assets in the second quarter of 2022, and the testing did not result in any impairment. Provision 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 significant and long-term deterioration in macroeconomic, industry and market conditions, the loss of key customers, changes in technology or markets, significant changes in key personnel or litigation, a significant and sustained decrease in share price and/or other events, including effects from the sale or disposal of a reporting unit. As of July 2, 2022, the company had no accumulated impairment losses.

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

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

Snap-on is amortizing its customer relationships on both an accelerated and straight-line basis over a 14 year weighted-average life; the remaining intangibles are amortized on a straight-line basis. The weighted-average amortization period for all amortizable intangibles on a combined basis is 12 years.

The company’s customer relationships generally have contractual terms of three to five years and are typically renewed without significant cost to the company. The weighted-average 14 year life for customer relationships is based on the company’s historical renewal experience. Intangible asset renewal costs are expensed as incurred.

The aggregate amortization expense was $7.2 million and $14.4 million for the respective three and six month periods ended July 2, 2022, and $6.3 million and $12.3 million for the respective three and six month periods ended July 3, 2021. Based on current levels of amortizable intangible assets and estimated weighted-average useful lives, estimated annual amortization expense is expected to be $28.4 million in 2022, $25.8 million in 2023, $19.6 million in 2024, $14.1 million in 2025, $10.9 million in 2026, and $9.7 million in 2027.

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Exit and Disposal Activities

6 Months Ended

Jul. 02, 2022

Restructuring and Related Activities [Abstract]

Exit and Disposal Activities

Exit and Disposal Activities

Snap-on did not record any costs for exit and disposal activities for each of the three and six month periods ended July 2, 2022, and July 3, 2021.

Snap-on’s exit and disposal accrual activity for the first six months of 2022 is as follows:

	Balance at		First Quarter				Balance at		Second Quarter				Balance at
(Amounts in millions)	January 1, 2022		Provision		Usage		April 2, 2022		Provision		Usage		July 2, 2022
Severance costs:
Commercial & Industrial Group	$	4.3	$	—	$	(0.5)	$	3.8	$	—	$	(0.4)	$	3.4
Snap-on Tools Group	0.3		—		—		0.3		—		—		0.3
Repair System & Information Group	2.4		—		(0.4)		2.0		—		(0.3)		1.7
Total	$	7.0	$	—	$	(0.9)	$	6.1	$	—	$	(0.7)	$	5.4

As of July 2, 2022, the company expects that approximately $3.2 million of the $5.4 million exit and disposal accrual will be utilized in 2022, and the remainder thereafter, primarily for longer-term severance payments.

Snap-on expects to fund the remaining cash requirements of its exit and disposal activities with available cash on hand, cash flows from operating activities and borrowings under the company’s existing credit facilities. The estimated costs for the exit and disposal activities were based on management’s best business judgement under prevailing circumstances.

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Income Taxes

6 Months Ended

Jul. 02, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Snap-on’s effective income tax rate on earnings attributable to Snap-on was 23.7% and 23.4% in the respective first six month periods of 2022 and 2021. 

Snap-on and its subsidiaries file income tax returns in the United States and in various state, local and foreign jurisdictions. It is reasonably possible that certain unrecognized tax benefits may either be settled with taxing authorities or the statutes of limitations for such items may lapse within the next 12 months, causing Snap-on’s gross unrecognized tax benefits to decrease by a range of zero to $4.2 million. Over the next 12 months, Snap-on anticipates taking certain tax positions on various tax returns for which the related tax benefit does not meet the recognition threshold. Accordingly, Snap-on’s gross unrecognized tax benefits may increase by a range of zero to $0.8 million over the next 12 months for uncertain tax positions expected to be taken in future tax filings.

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Short-term and Long-term Debt

6 Months Ended

Jul. 02, 2022

Debt Disclosure [Abstract]

Short-term and Long-term Debt

Short-term and Long-term Debt

Short-term and long-term debt as of July 2, 2022, and January 1, 2022, consisted of the following:

(Amounts in millions)	July 2, 2022		January 1, 2022
3.25% unsecured notes due 2027	$	300.0	$	300.0
4.10% unsecured notes due 2048	400.0		400.0
3.10% unsecured notes due 2050	500.0		500.0
Other*	2.2		0.3
	1,202.2		1,200.3
Less: notes payable	(18.8)		(17.4)
Total long-term debt	$	1,183.4	$	1,182.9

* Includes unamortized debt issuance costs.

Notes payable of $18.8 million as of July 2, 2022, compared to $17.4 million as of 2021 year end.

Snap-on has an $800 million multi-currency revolving credit facility that terminates on September 16, 2024 (the “Credit Facility”); no amounts were outstanding under the Credit Facility as of July 2, 2022. Borrowings under the Credit Facility bear interest at varying rates based on either: (i) Snap-on’s then-current, long-term debt ratings; or (ii) Snap-on’s then-current ratio of consolidated debt net of certain cash adjustments (“Consolidated Net Debt”) to earnings before interest, taxes, depreciation, amortization and certain other adjustments for the preceding four fiscal quarters then ended (the “Consolidated Net Debt to EBITDA Ratio”). The Credit Facility’s financial covenant requires that Snap-on maintain, as of each fiscal quarter end, either (i) a ratio not greater than 0.60 to 1.00 of Consolidated Net Debt to the sum of Consolidated Net Debt plus total equity and less accumulated other comprehensive income or loss (the “Leverage Ratio”); or (ii) a Consolidated Net Debt to EBITDA Ratio not greater than 3.50 to 1.00. Snap-on may, up to two times during any five-year period during the term of the Credit Facility (including any extensions thereof), elect to increase the maximum Leverage Ratio to 0.65 to 1.00 and/or increase the maximum Consolidated Net Debt to EBITDA Ratio to 4.00 to 1.00 for four consecutive fiscal quarters in connection with certain material acquisitions (as defined in the related credit agreement). As of July 2, 2022, the company’s actual ratios of 0.09 and 0.34, respectively, were both within the permitted ranges set forth in this financial covenant. Snap-on generally issues commercial paper to fund its financing needs on a short-term basis and uses the Credit Facility as back-up liquidity to support such commercial paper issuances. As of July 2, 2022, there were no commercial paper issuances outstanding.

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Financial Instruments

6 Months Ended

Jul. 02, 2022

Investments, All Other Investments [Abstract]

Financial Instruments

Financial Instruments

Derivatives: All derivative instruments are reported in the Condensed Consolidated Financial Statements at fair value. Changes in the fair value of derivatives are recorded each period in earnings or on the accompanying Condensed Consolidated Balance Sheets, depending on whether the derivative is designated and effective as part of a hedged transaction. Gains or losses on derivative instruments recorded in earnings are presented in the same Condensed Consolidated Statement of Earnings line that is used to present the earnings effect of the hedged item. Gains or losses on derivative instruments in accumulated other comprehensive income (loss) (“Accumulated OCI”) are reclassified to earnings in the period in which earnings are affected by the underlying hedged item.

The criteria used to determine if hedge accounting treatment is appropriate are: (i) the designation of the hedge to an underlying exposure; (ii) whether or not overall risk is being reduced; and (iii) if there is a correlation between the value of the derivative instrument and the underlying hedged item. Once a derivative contract is entered into, Snap-on designates the derivative as a fair value hedge, a cash flow hedge, a hedge of a net investment in a foreign operation, or a natural hedging instrument whose change in fair value is recognized as an economic hedge against changes in the value of the hedged item. Snap-on does not use derivative instruments for speculative or trading purposes.

Snap-on is exposed to global market risks, including the effects of changes in foreign currency exchange rates, interest rates, and the company’s stock price. The company uses derivatives to manage financial exposures that occur in the normal course of business. The primary risks managed by using derivative instruments are foreign currency risk, interest rate risk and stock-based deferred compensation risk.

Foreign Currency Risk Management: Snap-on has significant international operations and is subject to certain risks inherent with foreign operations, including currency fluctuations. Foreign currency exchange risk exists to the extent that Snap-on has payment obligations or receipts denominated in currencies other than the functional currency, including intercompany loans denominated in foreign currencies. To manage these exposures, Snap-on identifies naturally offsetting positions and then purchases hedging instruments to protect the residual net exposures. Snap-on manages most of these exposures on a consolidated basis, which allows for netting of certain exposures to take advantage of natural offsets. Foreign currency forward contracts (“foreign currency forwards”) are used to hedge the net exposures. Gains or losses on net foreign currency hedges are intended to offset losses or gains on the underlying net exposures in an effort to reduce the earnings volatility resulting from fluctuating foreign currency exchange rates. Snap-on’s foreign currency forwards are typically not designated as hedges. The fair value changes of these contracts are reported in earnings as foreign exchange gain or loss, which is included in “Other income (expense) - net” on the accompanying Condensed Consolidated Statements of Earnings. See Note 17 for additional information on Other income (expense) - net.

Interest Rate Risk Management: Snap-on aims to control funding costs by managing 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 Condensed Consolidated Statements of Earnings. The change in the fair value of the derivative is recorded in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheets. There were no outstanding interest rate swaps as of both July 2, 2022, and January 1, 2022.

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 Condensed Consolidated Statements of Earnings. There were no treasury locks outstanding as of both July 2, 2022, and January 1, 2022.

Stock-based Deferred Compensation Risk Management: Snap-on aims to manage market risk associated with the stock-based portion of its deferred compensation plans through the use of prepaid equity forward agreements (“equity forwards”). Equity forwards are used to aid in offsetting the potential mark-to-market effect on stock-based deferred compensation from changes in Snap-on’s stock price. Since stock-based deferred compensation liabilities increase as the company’s stock price rises and decrease as the company’s stock price declines, the equity forwards are intended to mitigate the potential impact on deferred compensation expense that may result from such mark-to-market changes. As of July 2, 2022, Snap-on had equity forwards in place intended to manage market risk with respect to 71,200 shares of Snap-on common stock associated with its deferred compensation plans.

Counterparty Risk: Snap-on is exposed to credit losses in the event of non-performance by the counterparties to its various financial agreements, including its foreign currency forward contracts, interest rate swap agreements, treasury lock agreements and prepaid equity forward agreements. Snap-on does not obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of the counterparties and generally enters into agreements with financial institution counterparties with a credit rating of A- or better. Snap-on does not anticipate non-performance by its counterparties, but cannot provide assurances.

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

	July 2, 2022				January 1, 2022
(Amounts in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Finance receivables – net	$	1,674.0	$	1,954.1	$	1,656.3	$	1,988.6
Contract receivables – net	473.7		508.1		488.6		542.5
Long-term debt and notes payable	1,202.2		1,066.3		1,200.3		1,339.7

The following methods and assumptions were 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 was 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. 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.

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Pension Plans

6 Months Ended

Jul. 02, 2022

Retirement Benefits [Abstract]

Pension Plans

Pension Plans

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

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Service cost	$	6.3	$	6.9	$	13.4	$	14.4
Interest cost	11.2		10.5		22.3		21.1
Expected return on plan assets	(25.4)		(23.5)		(49.9)		(47.1)
Amortization of unrecognized loss	4.7		9.1		9.2		18.2
Net periodic pension (benefit) cost	$	(3.2)	$	3.0	$	(5.0)	$	6.6

The components of net periodic pension (benefit) cost, other than the service cost component, are included in “Other income (expense) - net” on the accompanying Condensed Consolidated Statements of Earnings. See Note 17 for additional information on other income (expense) - net.

Snap-on intends to make contributions of $9.4 million to its foreign pension plans and $9.5 million to its domestic pension plans in 2022, as required by law. Depending on market and other conditions, Snap-on may make discretionary cash contributions to its pension plans in 2022.

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Postretirement Health Care Plans

6 Months Ended

Jul. 02, 2022

Postemployment Benefits [Abstract]

Postretirement Health Care Plans

Postretirement Health Care Plans

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

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Interest cost	$	0.3	$	0.3	$	0.6	$	0.6
Expected return on plan assets	(0.1)		(0.2)		(0.3)		(0.4)
Net periodic postretirement health care cost	$	0.2	$	0.1	$	0.3	$	0.2

The components of net periodic postretirement health care cost are included in “Other income (expense) - net” on the accompanying Condensed Consolidated Statements of Earnings. See Note 17 for additional information on other income (expense) - net.

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Stock-based Compensation and Other Stock Plans

6 Months Ended

Jul. 02, 2022

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation and Other Stock Plans

Stock-based Compensation and Other Stock Plans

The 2011 Incentive Stock and Awards Plan (the “2011 Plan”) provides for the grant of stock options, performance share units (“PSUs”), stock appreciation rights (“SARs”) and restricted stock awards (which may be designated as “restricted stock units” or “RSUs”). As of July 2, 2022, the 2011 Plan had 3,116,594 shares available for future grants. The company uses treasury stock to deliver shares under the 2011 Plan.

Net stock-based compensation expense was $8.5 million and $17.5 million for the respective three and six month periods ended July 2, 2022, and $11.5 million and $23.8 million for the respective three and six month periods ended July 3, 2021. Cash received from stock purchase and option plan exercises during the respective three and six month periods ended July 2, 2022, totaled $23.4 million and $29.2 million. Cash received from stock purchase and option plan exercises during the respective three and six month periods ended July 3, 2021, totaled $61.8 million and $154.8 million. The tax benefit realized from both the exercise and vesting of share-based payment arrangements was $1.8 million and $3.9 million for the respective three and six month periods ended July 2, 2022, and $6.2 million and $13.9 million for the respective three and six month periods ended July 3, 2021.

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 ten 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 options granted are expected to be outstanding. Expected volatility is based on the historical volatility of the company’s stock for the length of time corresponding to the expected term of the option. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock as of the date of grant. The risk-free interest rate is based on the U.S. treasury yield curve on the grant date for the expected term of the option.

The following weighted-average assumptions were used in calculating the fair value of stock options granted during the three month period ended July 2, 2022, and the six month periods ended July 2, 2022 and July 3, 2021, using the Black-Scholes valuation model; no stock options were granted during the three month period ended July 3, 2021:

	Three Months Ended		Six Months Ended
	July 2, 2022	July 3, 2021	July 2, 2022	July 3, 2021
Expected term of option (in years)	3.74	N/A	5.14	5.33
Expected volatility factor	23.12%	N/A	22.61%	21.80%
Expected dividend yield	2.73%	N/A	2.68%	2.59%
Risk-free interest rate	2.73%	N/A	2.00%	0.67%

A summary of stock option activity as of and for the six months ended July 2, 2022, is presented below:

	Shares (in thousands)	Exercise Price Per Share*		Remaining Contractual Term* (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2022	2,432	$	151.32
Granted	289	211.41
Exercised	(118)	131.85
Forfeited or expired	(16)	183.40
Outstanding at July 2, 2022	2,587	158.72		5.7	$	106.0
Exercisable at July 2, 2022	1,954	147.97		4.7	98.2

* Weighted-average

The weighted-average grant date fair value of options granted during the six months ended July 2, 2022, and July 3, 2021, was $34.35 and $26.19, respectively. The intrinsic value of options exercised was $7.4 million and $10.2 million during the respective three and six month periods ended July 2, 2022, and $28.1 million and $58.9 million during the respective three and six month periods ended July 3, 2021. The fair value of stock options vested was $10.5 million and $12.5 million during the respective six month periods ended July 2, 2022, and July 3, 2021.

As of July 2, 2022, there was $14.9 million of unrecognized compensation cost related to non-vested stock options that is expected to be recognized as a charge to earnings over a weighted-average period of 1.8 years.

Performance Share Units and Restricted Stock Units: PSUs are earned and expensed using the fair value of the award over a contractual term of three years based on the company’s performance. Vesting of the PSUs is dependent upon performance relative to pre-defined goals for revenue growth and return on net assets for the applicable performance period. For performance achieved above specified levels, the recipient may earn additional shares of stock, not to exceed 100% of the number of performance awards initially granted. The PSUs have a three-year performance period based on the results of the consolidated financial metrics of the company.

Time-based RSUs are earned and expensed using the fair value of the award over the contractual term of three years. Vesting of the time-based RSUs is dependent upon continued employment over the 3-year cliff vesting period.

The fair value of PSUs and 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 awards granted during the six months ended July 2, 2022, and July 3, 2021, was $206.58 and $187.12, respectively. PSUs related to 46,217 shares were paid out during the six months ended July 2, 2022. There were no PSUs paid out during the six months ended July 3, 2021. Earned PSUs vest and are generally paid out following the conclusion of the applicable performance period upon approval by the Organization and Executive Compensation Committee of the company’s Board of Directors (the “Board”).

Changes to the company’s non-vested PSUs and RSUs during the six months ended July 2, 2022, are as follows:

	Shares (in thousands)	Fair Value Price per Share*
Non-vested PSUs and RSUs at January 1, 2022	215	$	180.29
Granted	111	206.58
Vested	—	—
Cancellations and other	(6)	192.40
Non-vested PSUs and RSUs at July 2, 2022	320	189.21

* Weighted-average

As of July 2, 2022, there was $33.6 million of unrecognized compensation cost related to non-vested PSUs and RSUs that are expected to be recognized as a charge to earnings over a weighted-average period of 1.6 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 ten 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.

The fair value of stock-settled SARs is estimated on the date of grant using the Black-Scholes valuation model. The fair value of cash-settled SARs is revalued (mark-to-market) each reporting period using the Black-Scholes valuation model based on Snap-on’s period-end stock price. The company uses historical data regarding SARs exercise and forfeiture behaviors for different participating groups to estimate the expected term of the SARs granted based on the period of time that similar instruments granted are expected to be outstanding. Expected volatility is based on the historical volatility of the company’s stock for the length of time corresponding to the expected term of the SARs. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock as of the date of grant (for stock-settled SARs) or reporting date (for cash-settled SARs). The risk-free interest rate is based on the U.S. treasury yield curve in effect as of the grant date (for stock-settled SARs) or reporting date (for cash-settled SARs) for the length of time corresponding to the expected term of the SARs.

The following weighted-average assumptions were used in calculating the fair value of stock-settled SARs granted during the six months ended July 2, 2022, and July 3, 2021, using the Black-Scholes valuation model:

	Six Months Ended
	July 2, 2022	July 3, 2021
Expected term of stock-settled SARs (in years)	4.02	3.94
Expected volatility factor	23.09%	22.50%
Expected dividend yield	2.68%	2.59%
Risk-free interest rate	1.96%	0.19%

A summary of stock-settled SARs as of and for the six months ended July 2, 2022, are as follows:

	Stock-settled SARs (in thousands)	Exercise Price Per Share*		Remaining Contractual Term* (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2022	397	$	160.09
Granted	75	211.67
Exercised	(11)	153.13
Forfeited or expired	(41)	168.44
Outstanding at July 2, 2022	420	168.65		6.7	$	13.4
Exercisable at July 2, 2022	273	154.97		5.5	11.8

* Weighted-average

The weighted-average grant date fair value of stock-settled SARs granted during the six months ended July 2, 2022, and July 3, 2021, was $32.63 and $24.05, respectively. The intrinsic value of stock-settled SARs exercised was $0.5 million and $0.7 million during the respective three and six month periods ended July 2, 2022, and $0.8 million and $3.0 million during the respective three and six month periods ended July 3, 2021. The fair value of stock-settled SARs vested was $2.0 million and $2.1 million during the respective six month periods ended July 2, 2022, and July 3, 2021.

As of July 2, 2022, there was $3.4 million of unrecognized compensation cost related to non-vested stock-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of 1.9 years.

The following weighted-average assumptions were used in calculating the fair value of cash-settled SARs granted during the six months ended July 2, 2022, and July 3, 2021, using the Black-Scholes valuation model:

	Six Months Ended
	July 2, 2022	July 3, 2021
Expected term of cash-settled SARs (in years)	3.58	3.59
Expected volatility factor	23.68%	22.49%
Expected dividend yield	2.87%	2.20%
Risk-free interest rate	2.85%	0.45%

The intrinsic value of cash-settled SARs exercised was $0.2 million and $0.6 million during the respective three and six month periods ended July 2, 2022, and $0.1 million and $0.6 million during the respective three and six month periods ended July 3, 2021. The fair value of cash-settled SARs vested was $0.1 million for both the six month periods ended July 2, 2022, and July 3, 2021.

Changes to the company’s non-vested cash-settled SARs during the six months ended July 2, 2022, are as follows:

	Cash-settled SARs (in thousands)	Fair Value Price per Share*
Non-vested cash-settled SARs at January 1, 2022	2	$	47.13
Granted	1	31.67
Vested	(1)	41.69
Non-vested cash-settled SARs at July 2, 2022	2	34.56

* Weighted-average

As of July 2, 2022, there was $0.1 million of unrecognized compensation cost related to non-vested cash-settled SARs that is expected to be recognized as a charge to earnings over a weighted-average period of 1.9 years.

Restricted Stock Awards – Non-employee Directors: The company awarded 6,525 shares and 6,858 shares of restricted stock to non-employee directors for the respective six month periods ended July 2, 2022, and July 3, 2021. The fair value of the restricted stock awards is expensed over a one-year vesting period based on the fair value on the date of grant. All restrictions generally lapse upon the earlier of the first anniversary of the grant date, the recipient’s death or disability or in the event of a change in control, as defined in the 2011 Plan. 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.

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 price of the stock on the beginning date (May 15) or ending date (the following May 14) of each plan year. For the six month periods ended July 2, 2022, and July 3, 2021, issuances under this plan totaled 18,464 shares and 82,286 shares, respectively. As of July 2, 2022, shares reserved for issuance under this plan totaled 578,811 shares and Snap-on held participant contributions of approximately $0.4 million. Participants are able to withdraw from the plan at any time prior to the ending date and receive back all contributions made during the plan year. Compensation expense for plan participants was zero for both the three and six month periods ended July 2, 2022, and $4.8 million and $9.6 million for the respective three and six month periods ended July 3, 2021.

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 price of the stock on the beginning date (May 15) or ending date (the following May 14) of each plan year. For the six month periods ended July 2, 2022, and July 3, 2021, issuances under this plan totaled 44,937 shares and 143,388 shares, respectively. As of July 2, 2022, shares reserved for issuance under this plan totaled 225,225 shares and Snap-on held participant contributions of approximately $0.9 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 zero for both the three and six month periods ended July 2, 2022, and $11.3 million and $16.7 million for the respective three and six month periods ended July 3, 2021.

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Earnings Per Share

6 Months Ended

Jul. 02, 2022

Earnings Per Share [Abstract]

Earnings Per Share

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

	Three Months Ended		Six Months Ended
	July 2, 2022	July 3, 2021	July 2, 2022	July 3, 2021
Weighted-average common shares outstanding	53,312,259	54,051,436	53,354,487	54,117,937
Effect of dilutive securities	926,548	1,256,296	920,924	1,094,874
Weighted-average common shares outstanding, assuming dilution	54,238,807	55,307,732	54,275,411	55,212,811

The dilutive effect of the potential exercise of outstanding options and stock-settled SARs to purchase common shares is calculated using the treasury stock method. As of both July 2, 2022, and July 3, 2021, there were no awards outstanding that were anti-dilutive. Performance-based equity awards are included in the diluted earnings per share calculation based on the attainment of the applicable performance metrics to date.

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Commitments and Contingencies

6 Months Ended

Jul. 02, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Snap-on provides product warranties for specific product lines and accrues for estimated future warranty cost in the period in which the sale is recorded. Snap-on calculates its accrual requirements based on historic warranty loss experience that is periodically adjusted for recent actual experience, including the timing of claims during the warranty period and actual costs incurred.

Snap-on’s product warranty accrual activity for the three and six months ended July 2, 2022, and July 3, 2021, is as follows:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Warranty reserve:
Beginning of period	$	16.5	$	18.3	$	17.3	$	17.6
Additions	3.2		3.8		5.4		7.9
Usage	(3.7)		(3.6)		(6.7)		(7.0)
End of period	$	16.0	$	18.5	$	16.0	$	18.5

Snap-on is involved in various legal matters that are being litigated and/or settled in the ordinary course of business. 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.

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Leases

6 Months Ended

Jul. 02, 2022

Leases [Abstract]

Leases

Leases

Lessee Accounting: Supplemental balance sheet information related to leases as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance leases:
Property and equipment - gross	$	19.0	$	22.3
Accumulated depreciation and amortization	(15.4)		(17.4)
Property and equipment - net	$	3.6	$	4.9
Other accrued liabilities	$	2.1	$	2.4
Other long-term liabilities	2.9		4.5
Total finance lease liabilities	$	5.0	$	6.9
Operating leases:
Operating lease right-of-use assets	$	56.6	$	51.9
Other accrued liabilities	$	19.0	$	19.6
Operating lease liabilities	39.7		34.2
Total operating lease liabilities	$	58.7	$	53.8

Lessor Accounting: Snap-on’s Financial Services business offers its customers lease financing for the lease of tools, diagnostics, and equipment products and to franchisees who require financing for vehicle leases. Sales-type leases are included in both “Finance receivables - net” and “Long-term finance receivables - net” and also in both “Contract receivables - net” and “Long-term contract receivables - net” on the accompanying Condensed Consolidated Balance Sheets.

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

Leases

Leases

Lessee Accounting: Supplemental balance sheet information related to leases as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance leases:
Property and equipment - gross	$	19.0	$	22.3
Accumulated depreciation and amortization	(15.4)		(17.4)
Property and equipment - net	$	3.6	$	4.9
Other accrued liabilities	$	2.1	$	2.4
Other long-term liabilities	2.9		4.5
Total finance lease liabilities	$	5.0	$	6.9
Operating leases:
Operating lease right-of-use assets	$	56.6	$	51.9
Other accrued liabilities	$	19.0	$	19.6
Operating lease liabilities	39.7		34.2
Total operating lease liabilities	$	58.7	$	53.8

Lessor Accounting: Snap-on’s Financial Services business offers its customers lease financing for the lease of tools, diagnostics, and equipment products and to franchisees who require financing for vehicle leases. Sales-type leases are included in both “Finance receivables - net” and “Long-term finance receivables - net” and also in both “Contract receivables - net” and “Long-term contract receivables - net” on the accompanying Condensed Consolidated Balance Sheets.

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

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Other Income (Expense) - Net

6 Months Ended

Jul. 02, 2022

Other Income and Expenses [Abstract]

Other Income (Expense) - Net

Other Income (Expense) – Net

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

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Interest income	$	1.6	$	0.4	$	2.1	$	0.8
Net foreign exchange gain (loss)	(1.6)		0.2		(2.6)		—
Net periodic pension and postretirement benefits – non-service	9.3		3.8		18.1		7.6
Foreign currency translation loss from sale of equity interest	—		(1.0)		—		(1.0)
Other	—		—		—		0.3
Total other income (expense) – net	$	9.3	$	3.4	$	17.6	$	7.7

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jul. 02, 2022

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended July 2, 2022:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of April 2, 2022	$	(154.8)	$	8.5	$	(204.3)	$	(350.6)
Other comprehensive loss before reclassifications	(110.3)		—		—		(110.3)
Amounts reclassified from Accumulated OCI	—		(0.4)		3.6		3.2
Net other comprehensive income (loss)	(110.3)		(0.4)		3.6		(107.1)
Balance as of July 2, 2022	$	(265.1)	$	8.1	$	(200.7)	$	(457.7)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the six months ended July 2, 2022:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of January 1, 2022	$	(145.1)	$	8.9	$	(207.7)	$	(343.9)
Other comprehensive loss before reclassifications	(120.0)		—		—		(120.0)
Amounts reclassified from Accumulated OCI	—		(0.8)		7.0		6.2
Net other comprehensive income (loss)	(120.0)		(0.8)		7.0		(113.8)
Balance as of July 2, 2022	$	(265.1)	$	8.1	$	(200.7)	$	(457.7)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended July 3, 2021:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of April 3, 2021	$	(103.7)	$	10.1	$	(294.7)	$	(388.3)
Other comprehensive income before reclassifications	20.2		—		—		20.2
Amounts reclassified from Accumulated OCI	(1.0)		(0.4)		6.8		5.4
Net other comprehensive income (loss)	19.2		(0.4)		6.8		25.6
Balance as of July 3, 2021	$	(84.5)	$	9.7	$	(287.9)	$	(362.7)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the six months ended July 3, 2021:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of January 2, 2021	$	(74.7)	$	10.5	$	(301.6)	$	(365.8)
Other comprehensive loss before reclassifications	(8.8)		—		—		(8.8)
Amounts reclassified from Accumulated OCI	(1.0)		(0.8)		13.7		11.9
Net other comprehensive income (loss)	(9.8)		(0.8)		13.7		3.1
Balance as of July 3, 2021	$	(84.5)	$	9.7	$	(287.9)	$	(362.7)

The reclassifications out of Accumulated OCI for the three and six month periods ended July 2, 2022, and July 3, 2021, are as follows:

	Amount Reclassified from Accumulated OCI
	Three Months Ended				Six Months Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021		Statement of Earnings Presentation
(Amounts in millions)
Foreign currency loss from sale of equity interest:
Foreign currency	$	—	$	1.0	$	—	$	1.0	Other income (expense) - net
Income tax expense	—		—		—		—		Income tax expense
Net of tax	—		1.0		—		1.0
Gains on cash flow hedges:
Treasury locks	$	0.4	$	0.4	$	0.8	$	0.8	Interest expense
Income tax expense	—		—		—		—		Income tax expense
Net of tax	0.4		0.4		0.8		0.8
Amortization of net unrecognized losses	$	(4.7)	$	(9.1)	$	(9.2)	$	(18.2)	See footnote below*
Income tax benefit	1.1		2.3		2.2		4.5		Income tax expense
Net of tax	(3.6)		(6.8)		(7.0)		(13.7)
Total reclassifications for the period, net of tax	$	(3.2)	$	(5.4)	$	(6.2)	$	(11.9)

* 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 further information.

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Segments

6 Months Ended

Jul. 02, 2022

Segment Reporting [Abstract]

Segments

Segments

Snap-on’s business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. Snap-on’s reportable business segments are: (i) the Commercial & Industrial Group; (ii) 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, power generation, transportation and technical education market segments (collectively, “critical industries”), primarily through direct and distributor channels. The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians through the company’s worldwide 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 its operating segments based on segment revenues, including both external and intersegment net sales, and segment operating earnings. Snap-on accounts for intersegment sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments. Identifiable assets by segment are those assets used in the respective reportable segment’s operations. Corporate assets consist of cash and cash equivalents (excluding cash held at Financial Services), deferred income taxes and certain other assets. Intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results.

Financial Data by Segment:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net sales:
Commercial & Industrial Group	$	359.1	$	350.5	$	699.2	$	696.2
Snap-on Tools Group	520.6		484.1		1,032.7		962.4
Repair Systems & Information Group	416.8		398.6		815.0		746.2
Segment net sales	1,296.5		1,233.2		2,546.9		2,404.8
Intersegment eliminations	(159.9)		(151.8)		(312.5)		(298.8)
Total net sales	1,136.6		1,081.4		2,234.4		2,106.0
Financial Services revenue	86.4		86.9		174.1		175.5
Total revenues	$	1,223.0	$	1,168.3	$	2,408.5	$	2,281.5
Operating earnings:
Commercial & Industrial Group	$	51.7	$	55.5	$	97.4	$	106.2
Snap-on Tools Group	124.4		103.5		240.4		202.4
Repair Systems & Information Group	95.7		86.7		187.3		168.1
Financial Services	65.3		68.9		135.7		134.2
Segment operating earnings	337.1		314.6		660.8		610.9
Corporate	(25.2)		(28.6)		(55.4)		(58.7)
Operating earnings	311.9		286.0		605.4		552.2
Interest expense	(11.7)		(14.3)		(23.3)		(28.6)
Other income (expense) – net	9.3		3.4		17.6		7.7
Earnings before income taxes and equity earnings	$	309.5	$	275.1	$	599.7	$	531.3

(Amounts in millions)	July 2, 2022		January 1, 2022
Assets:
Commercial & Industrial Group	$	1,204.6	$	1,209.3
Snap-on Tools Group	842.3		791.4
Repair Systems & Information Group	1,630.1		1,624.3
Financial Services	2,164.3		2,163.6
Total assets from reportable segments	5,841.3		5,788.6
Corporate	1,107.8		1,039.7
Elimination of intersegment receivables	(84.8)		(68.6)
Total assets	$	6,864.3	$	6,759.7

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Summary of Accounting Policies - (Policies)

6 Months Ended

Jul. 02, 2022

Accounting Policies [Abstract]

Principles of consolidation and presentation

Principles of consolidation and presentation

The Condensed Consolidated Financial Statements include the accounts of Snap-on Incorporated and its wholly owned and majority-owned subsidiaries (collectively, “Snap-on” or the “company”). These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included in Snap-on’s 2021 Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (“2021 year end”). The company’s 2022 fiscal second quarter ended on July 2, 2022; the 2021 fiscal second quarter ended on July 3, 2021. The company’s 2022 and 2021 fiscal second quarters each contained 13 weeks of operating results. Snap-on’s Condensed Consolidated Financial Statements are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”).

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the Condensed Consolidated Financial Statements for the three and six month periods ended July 2, 2022, and July 3, 2021, have been made. Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Financial Instruments

Financial Instruments

The fair value of the company’s derivative financial instruments is generally determined using quoted prices in active markets for similar assets and liabilities. The carrying value of the company’s non-derivative financial instruments either approximates fair value, due to their short-term nature, or the amount disclosed for fair value is based upon a discounted cash flow analysis or quoted market values. See Note 10 for further information on financial instruments.

New Accounting Standards

New Accounting Standards

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326) – Troubled Debt Restructurings and Vintage Disclosures, which requires enhanced disclosure of certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty while eliminating certain current recognition and measurement accounting guidance. This ASU also requires the disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases. ASU No. 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years; this ASU allows for early adoption in any interim period after issuance of the update. The adoption of this ASU is not expected to have a material impact on Snap-on’s Consolidated Financial Statements.

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Revenue Recognition - (Tables)

6 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table shows the consolidated revenues by revenue source:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Revenue from contracts with customers	$	1,130.5	$	1,075.3	$	2,222.4	$	2,094.1
Other revenues	6.1		6.1		12.0		11.9
Total net sales	1,136.6		1,081.4		2,234.4		2,106.0
Financial services revenue	86.4		86.9		174.1		175.5
Total revenues	$	1,223.0	$	1,168.3	$	2,408.5	$	2,281.5

Snap-on evaluates the performance of its operating segments based on segment revenues, including both external and intersegment net sales, and segment operating earnings. Snap-on accounts for both intersegment sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments. Intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results.

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

	For the Three Months Ended July 2, 2022
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	128.7	$	460.3	$	254.7	$	—	$	—	$	843.7
Europe	73.1		36.4		60.4		—		—		169.9
All other	74.3		23.9		24.8		—		—		123.0
External net sales	276.1		520.6		339.9		—		—		1,136.6
Intersegment net sales	83.0		—		76.9		—		(159.9)		—
Total net sales	359.1		520.6		416.8		—		(159.9)		1,136.6
Financial services revenue	—		—		—		86.4		—		86.4
Total revenue	$	359.1	$	520.6	$	416.8	$	86.4	$	(159.9)	$	1,223.0

	For the Six Months Ended July 2, 2022
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	242.4	$	908.1	$	497.5	$	—	$	—	$	1,648.0
Europe	154.9		76.5		122.3		—		—		353.7
All other	140.0		48.1		44.6		—		—		232.7
External net sales	537.3		1,032.7		664.4		—		—		2,234.4
Intersegment net sales	161.9		—		150.6		—		(312.5)		—
Total net sales	699.2		1,032.7		815.0		—		(312.5)		2,234.4
Financial services revenue	—		—		—		174.1		—		174.1
Total revenue	$	699.2	$	1,032.7	$	815.0	$	174.1	$	(312.5)	$	2,408.5
* North America is comprised of the United States, Canada and Mexico.

	For the Three Months Ended July 3, 2021
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	126.6	$	416.3	$	236.8	$	—	$	—	$	779.7
Europe	79.2		43.8		66.5		—		—		189.5
All other	68.9		24.0		19.3		—		—		112.2
External net sales	274.7		484.1		322.6		—		—		1,081.4
Intersegment net sales	75.8		—		76.0		—		(151.8)		—
Total net sales	350.5		484.1		398.6		—		(151.8)		1,081.4
Financial services revenue	—		—		—		86.9		—		86.9
Total revenue	$	350.5	$	484.1	$	398.6	$	86.9	$	(151.8)	$	1,168.3

	For the Six Months Ended July 3, 2021
	Commercial		Snap-on		Repair Systems
	& Industrial		Tools		& Information		Financial				Snap-on
(Amounts in millions)	Group		Group		Group		Services		Eliminations		Incorporated
Net sales:
North America*	$	244.6	$	824.4	$	437.7	$	—	$	—	$	1,506.7
Europe	163.5		88.0		127.1		—		—		378.6
All other	137.7		50.0		33.0		—		—		220.7
External net sales	545.8		962.4		597.8		—		—		2,106.0
Intersegment net sales	150.4		—		148.4		—		(298.8)		—
Total net sales	696.2		962.4		746.2		—		(298.8)		2,106.0
Financial services revenue	—		—		—		175.5		—		175.5
Total revenue	$	696.2	$	962.4	$	746.2	$	175.5	$	(298.8)	$	2,281.5
* North America is comprised of the United States, Canada and Mexico.

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

	For the Three Months Ended July 2, 2022
	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	$	25.2	$	520.6	$	339.9	$	—	$	—	$	885.7
All other professionals	250.9		—		—		—		—		250.9
External net sales	276.1		520.6		339.9		—		—		1,136.6
Intersegment net sales	83.0		—		76.9		—		(159.9)		—
Total net sales	359.1		520.6		416.8		—		(159.9)		1,136.6
Financial services revenue	—		—		—		86.4		—		86.4
Total revenue	$	359.1	$	520.6	$	416.8	$	86.4	$	(159.9)	$	1,223.0

	For the Six Months Ended July 2, 2022
	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	$	49.1	$	1,032.7	$	664.4	$	—	$	—	$	1,746.2
All other professionals	488.2		—		—		—		—		488.2
External net sales	537.3		1,032.7		664.4		—		—		2,234.4
Intersegment net sales	161.9		—		150.6		—		(312.5)		—
Total net sales	699.2		1,032.7		815.0		—		(312.5)		2,234.4
Financial services revenue	—		—		—		174.1		—		174.1
Total revenue	$	699.2	$	1,032.7	$	815.0	$	174.1	$	(312.5)	$	2,408.5

	For the Three Months Ended July 3, 2021
	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	$	25.7	$	484.1	$	322.6	$	—	$	—	$	832.4
All other professionals	249.0		—		—		—		—		249.0
External net sales	274.7		484.1		322.6		—		—		1,081.4
Intersegment net sales	75.8		—		76.0		—		(151.8)		—
Total net sales	350.5		484.1		398.6		—		(151.8)		1,081.4
Financial services revenue	—		—		—		86.9		—		86.9
Total revenue	$	350.5	$	484.1	$	398.6	$	86.9	$	(151.8)	$	1,168.3

	For the Six Months Ended July 3, 2021
	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	$	49.8	$	962.4	$	597.8	$	—	$	—	$	1,610.0
All other professionals	496.0		—		—		—		—		496.0
External net sales	545.8		962.4		597.8		—		—		2,106.0
Intersegment net sales	150.4		—		148.4		—		(298.8)		—
Total net sales	696.2		962.4		746.2		—		(298.8)		2,106.0
Financial services revenue	—		—		—		175.5		—		175.5
Total revenue	$	696.2	$	962.4	$	746.2	$	175.5	$	(298.8)	$	2,281.5

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Receivables - (Tables)

6 Months Ended

Jul. 02, 2022

Receivables [Abstract]

Components of Trade and Other Accounts Receivable

The components of Snap-on’s trade and other accounts receivable as of July 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Trade and other accounts receivable	$	757.2	$	709.6
Allowances for credit losses	(28.1)		(27.3)
Total trade and other accounts receivable – net	$	729.1	$	682.3

Accounts Receivable, Allowance for Credit Loss

The following is a rollforward of the allowances for credit losses related to trade and other accounts receivable for the three and six months ended July 2, 2022, and July 3, 2021:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Allowances for credit losses:
Beginning of period	$	28.4	$	25.8	$	27.3	$	26.3
Provision for credit losses	2.9		5.4		6.6		7.3
Charge-offs	(2.2)		(2.1)		(5.2)		(4.2)
Recoveries	—		—		0.1		—
Currency translation	(1.0)		0.4		(0.7)		0.1
End of period	$	28.1	$	29.5	$	28.1	$	29.5

Components of Finance and Contract Receivables, Current and Beyond One Year

The components of Snap-on’s current finance and contract receivables as of July 2, 2022, and January 1, 2022, are as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance installment receivables	$	562.6	$	557.0
Finance lease receivables, net of unearned finance charges of $0.7 million and $1.3 million, respectively	4.2		7.1
Total finance receivables	566.8		564.1
Contract installment receivables	42.8		55.2
Contract lease receivables, net of unearned finance charges of $18.4 million and $18.7 million, respectively	57.3		57.3
Total contract receivables	100.1		112.5
Total	666.9		676.6
Allowances for credit losses:
Finance installment receivables	(19.8)		(21.7)
Finance lease receivables	—		(0.1)
Total finance allowance for credit losses	(19.8)		(21.8)
Contract installment receivables	(0.7)		(0.9)
Contract lease receivables	(1.1)		(1.2)
Total contract allowance for credit losses	(1.8)		(2.1)
Total allowance for credit losses	(21.6)		(23.9)
Total current finance and contract receivables – net	$	645.3	$	652.7
Finance receivables – net	$	547.0	$	542.3
Contract receivables – net	98.3		110.4
Total current finance and contract receivables – net	$	645.3	$	652.7

The components of Snap-on’s finance and contract receivables with payment terms beyond one year as of July 2, 2022, and January 1, 2022, are as follows: 

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance installment receivables	$	1,166.1	$	1,155.3
Finance lease receivables, net of unearned finance charges of $0.3 million and $0.5 million, respectively	2.4		4.2
Total finance receivables	1,168.5		1,159.5
Contract installment receivables	196.7		197.1
Contract lease receivables, net of unearned finance charges of $29.6 million and $30.3 million, respectively	184.1		187.4
Total contract receivables	380.8		384.5
Total	1,549.3		1,544.0
Allowances for credit losses:
Finance installment receivables	(41.5)		(45.4)
Finance lease receivables	—		(0.1)
Total finance allowance for credit losses	(41.5)		(45.5)
Contract installment receivables	(3.2)		(3.2)
Contract lease receivables	(2.2)		(3.1)
Total contract allowance for credit losses	(5.4)		(6.3)
Total allowance for credit losses	(46.9)		(51.8)
Total long-term finance and contract receivables – net	$	1,502.4	$	1,492.2
Finance receivables – net	$	1,127.0	$	1,114.0
Contract receivables – net	375.4		378.2
Total long-term finance and contract receivables – net	$	1,502.4	$	1,492.2

Financing Receivable Credit Quality Indicators

The amortized cost basis of finance and contract receivables by origination year as of July 2, 2022, are as follows:

(Amounts in millions)	2022		2021		2020		2019		2018		Prior		Total
Finance Receivables:
Delinquent	$	2.9	$	16.5	$	11.3	$	5.4	$	2.8	$	1.4	$	40.3
Non-delinquent	747.6		572.2		247.7		89.3		30.7		7.5		1,695.0
Total Finance receivables	$	750.5	$	588.7	$	259.0	$	94.7	$	33.5	$	8.9	$	1,735.3
Contract receivables:
Delinquent	$	0.2	$	0.7	$	0.7	$	0.9	$	0.3	$	0.2	$	3.0
Non-delinquent	83.8		138.5		101.0		71.3		44.5		38.8		477.9
Total Contract receivables	$	84.0	$	139.2	$	101.7	$	72.2	$	44.8	$	39.0	$	480.9

Financing Receivable, Allowance for Credit Loss

The following is a rollforward of the allowances for credit losses for finance and contract receivables for the three and six months ended July 2, 2022, and July 3, 2021:

 

	Three Months Ended July 2, 2022				Six Months Ended July 2, 2022
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Allowances for credit losses:
Beginning of period	$	62.5	$	7.7	$	67.3	$	8.4
Provision for credit losses	9.1		—		15.4		0.1
Charge-offs	(12.8)		(0.6)		(26.2)		(1.4)
Recoveries	2.7		0.1		5.0		0.1
Currency translation	(0.2)		—		(0.2)		—
End of period	$	61.3	$	7.2	$	61.3	$	7.2

	Three Months Ended July 3, 2021				Six Months Ended July 3, 2021
(Amounts in millions)	Finance Receivables		Contract Receivables		Finance Receivables		Contract Receivables
Allowances for credit losses:
Beginning of period	$	75.3	$	9.2	$	76.3	$	9.0
Provision for credit losses	6.6		0.1		17.9		0.8
Charge-offs	(12.4)		(0.5)		(27.3)		(1.1)
Recoveries	2.8		0.2		5.4		0.3
Currency translation	—		—		—		—
End of period	$	72.3	$	9.0	$	72.3	$	9.0

Aging of Finance and Contract Receivables

The aging of finance and contract receivables as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions)	30-59 Days Past Due		60-90 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Total Not Past Due		Total		Greater Than 90 Days Past Due and Accruing
July 2, 2022:
Finance receivables	$	15.1	$	9.6	$	15.6	$	40.3	$	1,695.0	$	1,735.3	$	13.3
Contract receivables	1.4		0.3		1.3		3.0		477.9		480.9		0.2
January 1, 2022:
Finance receivables	$	16.0	$	10.5	$	18.0	$	44.5	$	1,679.1	$	1,723.6	$	16.0
Contract receivables	1.7		0.9		0.9		3.5		493.5		497.0		0.1

Schedule of Finance and Contract Receivables on Nonaccrual Status

The amount of finance and contract receivables on nonaccrual status as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance receivables	$	8.7	$	7.7
Contract receivables	4.1		2.7

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Inventories - (Tables)

6 Months Ended

Jul. 02, 2022

Inventory Disclosure [Abstract]

Schedule of Inventories by Major Classification

Inventories by major classification are as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finished goods	$	756.7	$	686.5
Work in progress	69.7		64.3
Raw materials	157.6		140.2
Total FIFO value	984.0		891.0
Excess of current cost over LIFO cost	(90.7)		(87.2)
Total inventories – net	$	893.3	$	803.8

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Goodwill and Other Intangible Assets - (Tables)

6 Months Ended

Jul. 02, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill by Segment

The changes in the carrying amount of goodwill by segment for the six months ended July 2, 2022, are as follows:

(Amounts in millions)	Commercial & Industrial Group		Snap-on Tools Group		Repair Systems & Information Group		Total
Balance as of January 1, 2022	$	325.8	$	12.4	$	778.3	$	1,116.5
Currency translation	(22.7)		—		(14.7)		(37.4)
Acquisition-related adjustments	(0.5)		—		(32.6)		(33.1)
Balance as of July 2, 2022	$	302.6	$	12.4	$	731.0	$	1,046.0

Other Intangible Assets by Major Class

Additional disclosures related to other intangible assets are as follows:

	July 2, 2022				January 1, 2022
(Amounts in millions)	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Amortized other intangible assets:
Customer relationships	$	212.6	$	(145.1)	$	217.8	$	(142.1)
Developed technology	35.9		(24.3)		36.6		(23.2)
Internally developed software	180.6		(138.0)		182.7		(139.1)
Patents	46.4		(25.0)		45.7		(25.1)
Trademarks	3.8		(2.3)		3.9		(2.3)
Other	7.9		(4.0)		8.3		(4.1)
Total	487.2		(338.7)		495.0		(335.9)
Non-amortized trademarks	135.0		—		142.6		—
Total other intangible assets	$	622.2	$	(338.7)	$	637.6	$	(335.9)

Weighted-Average Amortization Period by Major Class

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

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

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Exit and Disposal Activities (Tables)

6 Months Ended

Jul. 02, 2022

Restructuring and Related Activities [Abstract]

Schedule of Exit and Disposal Accrual Activity

Snap-on’s exit and disposal accrual activity for the first six months of 2022 is as follows:

	Balance at		First Quarter				Balance at		Second Quarter				Balance at
(Amounts in millions)	January 1, 2022		Provision		Usage		April 2, 2022		Provision		Usage		July 2, 2022
Severance costs:
Commercial & Industrial Group	$	4.3	$	—	$	(0.5)	$	3.8	$	—	$	(0.4)	$	3.4
Snap-on Tools Group	0.3		—		—		0.3		—		—		0.3
Repair System & Information Group	2.4		—		(0.4)		2.0		—		(0.3)		1.7
Total	$	7.0	$	—	$	(0.9)	$	6.1	$	—	$	(0.7)	$	5.4

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Short-term and Long-term Debt - (Tables)

6 Months Ended

Jul. 02, 2022

Debt Disclosure [Abstract]

Schedule of Short-term and Long-term Debt

Short-term and long-term debt as of July 2, 2022, and January 1, 2022, consisted of the following:

(Amounts in millions)	July 2, 2022		January 1, 2022
3.25% unsecured notes due 2027	$	300.0	$	300.0
4.10% unsecured notes due 2048	400.0		400.0
3.10% unsecured notes due 2050	500.0		500.0
Other*	2.2		0.3
	1,202.2		1,200.3
Less: notes payable	(18.8)		(17.4)
Total long-term debt	$	1,183.4	$	1,182.9

* Includes unamortized debt issuance costs.

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Financial Instruments - (Tables)

6 Months Ended

Jul. 02, 2022

Investments, All Other Investments [Abstract]

Fair Values of Financial Instruments Not Approximating Carrying Values in Financial Statements

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

	July 2, 2022				January 1, 2022
(Amounts in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Finance receivables – net	$	1,674.0	$	1,954.1	$	1,656.3	$	1,988.6
Contract receivables – net	473.7		508.1		488.6		542.5
Long-term debt and notes payable	1,202.2		1,066.3		1,200.3		1,339.7

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Pension Plans - (Tables)

6 Months Ended

Jul. 02, 2022

Retirement Benefits [Abstract]

Schedule of Net Periodic Pension (Benefit) Cost

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

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Service cost	$	6.3	$	6.9	$	13.4	$	14.4
Interest cost	11.2		10.5		22.3		21.1
Expected return on plan assets	(25.4)		(23.5)		(49.9)		(47.1)
Amortization of unrecognized loss	4.7		9.1		9.2		18.2
Net periodic pension (benefit) cost	$	(3.2)	$	3.0	$	(5.0)	$	6.6

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Postretirement Health Care Plans - (Tables)

6 Months Ended

Jul. 02, 2022

Postemployment Benefits [Abstract]

Schedule of Net Periodic Postretirement Health Care Cost

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

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Interest cost	$	0.3	$	0.3	$	0.6	$	0.6
Expected return on plan assets	(0.1)		(0.2)		(0.3)		(0.4)
Net periodic postretirement health care cost	$	0.2	$	0.1	$	0.3	$	0.2

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Stock-based Compensation and Other Stock Plans - (Tables)

6 Months Ended

Jul. 02, 2022

Share-Based Payment Arrangement [Abstract]

Summary of Weighted-Average Assumptions of Fair Value Granted Using Black-Scholes Valuation Model

The following weighted-average assumptions were used in calculating the fair value of stock options granted during the three month period ended July 2, 2022, and the six month periods ended July 2, 2022 and July 3, 2021, using the Black-Scholes valuation model; no stock options were granted during the three month period ended July 3, 2021:

	Three Months Ended		Six Months Ended
	July 2, 2022	July 3, 2021	July 2, 2022	July 3, 2021
Expected term of option (in years)	3.74	N/A	5.14	5.33
Expected volatility factor	23.12%	N/A	22.61%	21.80%
Expected dividend yield	2.73%	N/A	2.68%	2.59%
Risk-free interest rate	2.73%	N/A	2.00%	0.67%

Summary of Stock Option Activity

A summary of stock option activity as of and for the six months ended July 2, 2022, is presented below:

	Shares (in thousands)	Exercise Price Per Share*		Remaining Contractual Term* (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2022	2,432	$	151.32
Granted	289	211.41
Exercised	(118)	131.85
Forfeited or expired	(16)	183.40
Outstanding at July 2, 2022	2,587	158.72		5.7	$	106.0
Exercisable at July 2, 2022	1,954	147.97		4.7	98.2

* Weighted-average

Summary of Changes in Non-Vested Performance Awards

Changes to the company’s non-vested PSUs and RSUs during the six months ended July 2, 2022, are as follows:

	Shares (in thousands)	Fair Value Price per Share*
Non-vested PSUs and RSUs at January 1, 2022	215	$	180.29
Granted	111	206.58
Vested	—	—
Cancellations and other	(6)	192.40
Non-vested PSUs and RSUs at July 2, 2022	320	189.21

* Weighted-average

Summary of Weighted-Average Assumptions of Fair Value Granted Using Black-Scholes Valuation Model

The following weighted-average assumptions were used in calculating the fair value of stock-settled SARs granted during the six months ended July 2, 2022, and July 3, 2021, using the Black-Scholes valuation model:

	Six Months Ended
	July 2, 2022	July 3, 2021
Expected term of stock-settled SARs (in years)	4.02	3.94
Expected volatility factor	23.09%	22.50%
Expected dividend yield	2.68%	2.59%
Risk-free interest rate	1.96%	0.19%

The following weighted-average assumptions were used in calculating the fair value of cash-settled SARs granted during the six months ended July 2, 2022, and July 3, 2021, using the Black-Scholes valuation model:

	Six Months Ended
	July 2, 2022	July 3, 2021
Expected term of cash-settled SARs (in years)	3.58	3.59
Expected volatility factor	23.68%	22.49%
Expected dividend yield	2.87%	2.20%
Risk-free interest rate	2.85%	0.45%

Summary of Changes in SARs

A summary of stock-settled SARs as of and for the six months ended July 2, 2022, are as follows:

	Stock-settled SARs (in thousands)	Exercise Price Per Share*		Remaining Contractual Term* (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2022	397	$	160.09
Granted	75	211.67
Exercised	(11)	153.13
Forfeited or expired	(41)	168.44
Outstanding at July 2, 2022	420	168.65		6.7	$	13.4
Exercisable at July 2, 2022	273	154.97		5.5	11.8

* Weighted-average

Changes to the company’s non-vested cash-settled SARs during the six months ended July 2, 2022, are as follows:

	Cash-settled SARs (in thousands)	Fair Value Price per Share*
Non-vested cash-settled SARs at January 1, 2022	2	$	47.13
Granted	1	31.67
Vested	(1)	41.69
Non-vested cash-settled SARs at July 2, 2022	2	34.56

* Weighted-average

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Earnings Per Share - (Tables)

6 Months Ended

Jul. 02, 2022

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Common Share

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

	Three Months Ended		Six Months Ended
	July 2, 2022	July 3, 2021	July 2, 2022	July 3, 2021
Weighted-average common shares outstanding	53,312,259	54,051,436	53,354,487	54,117,937
Effect of dilutive securities	926,548	1,256,296	920,924	1,094,874
Weighted-average common shares outstanding, assuming dilution	54,238,807	55,307,732	54,275,411	55,212,811

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Commitments and Contingencies - (Tables)

6 Months Ended

Jul. 02, 2022

Commitments and Contingencies Disclosure [Abstract]

Summary of Product Warranty Accrual Activity

Snap-on’s product warranty accrual activity for the three and six months ended July 2, 2022, and July 3, 2021, is as follows:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Warranty reserve:
Beginning of period	$	16.5	$	18.3	$	17.3	$	17.6
Additions	3.2		3.8		5.4		7.9
Usage	(3.7)		(3.6)		(6.7)		(7.0)
End of period	$	16.0	$	18.5	$	16.0	$	18.5

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Leases - (Tables)

6 Months Ended

Jul. 02, 2022

Leases [Abstract]

Schedule of Lease Supplemental Balance Sheet Information and Weighted-Average Lease Terms and Discount Rates

Supplemental balance sheet information related to leases as of July 2, 2022, and January 1, 2022, is as follows:

(Amounts in millions)	July 2, 2022		January 1, 2022
Finance leases:
Property and equipment - gross	$	19.0	$	22.3
Accumulated depreciation and amortization	(15.4)		(17.4)
Property and equipment - net	$	3.6	$	4.9
Other accrued liabilities	$	2.1	$	2.4
Other long-term liabilities	2.9		4.5
Total finance lease liabilities	$	5.0	$	6.9
Operating leases:
Operating lease right-of-use assets	$	56.6	$	51.9
Other accrued liabilities	$	19.0	$	19.6
Operating lease liabilities	39.7		34.2
Total operating lease liabilities	$	58.7	$	53.8

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Other Income (Expense) - Net - (Tables)

6 Months Ended

Jul. 02, 2022

Other Income and Expenses [Abstract]

Schedule of Other Income (Expense) - Net

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

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Interest income	$	1.6	$	0.4	$	2.1	$	0.8
Net foreign exchange gain (loss)	(1.6)		0.2		(2.6)		—
Net periodic pension and postretirement benefits – non-service	9.3		3.8		18.1		7.6
Foreign currency translation loss from sale of equity interest	—		(1.0)		—		(1.0)
Other	—		—		—		0.3
Total other income (expense) – net	$	9.3	$	3.4	$	17.6	$	7.7

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Accumulated Other Comprehensive Income (Loss) - (Tables)

6 Months Ended

Jul. 02, 2022

Equity [Abstract]

Net Changes in Accumulated OCI by Component, Net of Tax

The following is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended July 2, 2022:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of April 2, 2022	$	(154.8)	$	8.5	$	(204.3)	$	(350.6)
Other comprehensive loss before reclassifications	(110.3)		—		—		(110.3)
Amounts reclassified from Accumulated OCI	—		(0.4)		3.6		3.2
Net other comprehensive income (loss)	(110.3)		(0.4)		3.6		(107.1)
Balance as of July 2, 2022	$	(265.1)	$	8.1	$	(200.7)	$	(457.7)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the six months ended July 2, 2022:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of January 1, 2022	$	(145.1)	$	8.9	$	(207.7)	$	(343.9)
Other comprehensive loss before reclassifications	(120.0)		—		—		(120.0)
Amounts reclassified from Accumulated OCI	—		(0.8)		7.0		6.2
Net other comprehensive income (loss)	(120.0)		(0.8)		7.0		(113.8)
Balance as of July 2, 2022	$	(265.1)	$	8.1	$	(200.7)	$	(457.7)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the three months ended July 3, 2021:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of April 3, 2021	$	(103.7)	$	10.1	$	(294.7)	$	(388.3)
Other comprehensive income before reclassifications	20.2		—		—		20.2
Amounts reclassified from Accumulated OCI	(1.0)		(0.4)		6.8		5.4
Net other comprehensive income (loss)	19.2		(0.4)		6.8		25.6
Balance as of July 3, 2021	$	(84.5)	$	9.7	$	(287.9)	$	(362.7)

The following is a summary of net changes in Accumulated OCI by component and net of tax for the six months ended July 3, 2021:

(Amounts in millions)	Foreign Currency Translation		Cash Flow Hedges		Defined Benefit Pension and Postretirement Plans		Total
Balance as of January 2, 2021	$	(74.7)	$	10.5	$	(301.6)	$	(365.8)
Other comprehensive loss before reclassifications	(8.8)		—		—		(8.8)
Amounts reclassified from Accumulated OCI	(1.0)		(0.8)		13.7		11.9
Net other comprehensive income (loss)	(9.8)		(0.8)		13.7		3.1
Balance as of July 3, 2021	$	(84.5)	$	9.7	$	(287.9)	$	(362.7)

Reclassifications Out of Accumulated OCI

The reclassifications out of Accumulated OCI for the three and six month periods ended July 2, 2022, and July 3, 2021, are as follows:

	Amount Reclassified from Accumulated OCI
	Three Months Ended				Six Months Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021		Statement of Earnings Presentation
(Amounts in millions)
Foreign currency loss from sale of equity interest:
Foreign currency	$	—	$	1.0	$	—	$	1.0	Other income (expense) - net
Income tax expense	—		—		—		—		Income tax expense
Net of tax	—		1.0		—		1.0
Gains on cash flow hedges:
Treasury locks	$	0.4	$	0.4	$	0.8	$	0.8	Interest expense
Income tax expense	—		—		—		—		Income tax expense
Net of tax	0.4		0.4		0.8		0.8
Amortization of net unrecognized losses	$	(4.7)	$	(9.1)	$	(9.2)	$	(18.2)	See footnote below*
Income tax benefit	1.1		2.3		2.2		4.5		Income tax expense
Net of tax	(3.6)		(6.8)		(7.0)		(13.7)
Total reclassifications for the period, net of tax	$	(3.2)	$	(5.4)	$	(6.2)	$	(11.9)

* 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 further information.

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Segments - (Tables)

6 Months Ended

Jul. 02, 2022

Segment Reporting [Abstract]

Net Sales by Segment

Financial Data by Segment:

	Three Months Ended				Six Months Ended
(Amounts in millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net sales:
Commercial & Industrial Group	$	359.1	$	350.5	$	699.2	$	696.2
Snap-on Tools Group	520.6		484.1		1,032.7		962.4
Repair Systems & Information Group	416.8		398.6		815.0		746.2
Segment net sales	1,296.5		1,233.2		2,546.9		2,404.8
Intersegment eliminations	(159.9)		(151.8)		(312.5)		(298.8)
Total net sales	1,136.6		1,081.4		2,234.4		2,106.0
Financial Services revenue	86.4		86.9		174.1		175.5
Total revenues	$	1,223.0	$	1,168.3	$	2,408.5	$	2,281.5
Operating earnings:
Commercial & Industrial Group	$	51.7	$	55.5	$	97.4	$	106.2
Snap-on Tools Group	124.4		103.5		240.4		202.4
Repair Systems & Information Group	95.7		86.7		187.3		168.1
Financial Services	65.3		68.9		135.7		134.2
Segment operating earnings	337.1		314.6		660.8		610.9
Corporate	(25.2)		(28.6)		(55.4)		(58.7)
Operating earnings	311.9		286.0		605.4		552.2
Interest expense	(11.7)		(14.3)		(23.3)		(28.6)
Other income (expense) – net	9.3		3.4		17.6		7.7
Earnings before income taxes and equity earnings	$	309.5	$	275.1	$	599.7	$	531.3

Assets by Segment

(Amounts in millions)	July 2, 2022		January 1, 2022
Assets:
Commercial & Industrial Group	$	1,204.6	$	1,209.3
Snap-on Tools Group	842.3		791.4
Repair Systems & Information Group	1,630.1		1,624.3
Financial Services	2,164.3		2,163.6
Total assets from reportable segments	5,841.3		5,788.6
Corporate	1,107.8		1,039.7
Elimination of intersegment receivables	(84.8)		(68.6)
Total assets	$	6,864.3	$	6,759.7

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Revenue Recognition - Revenue Disaggregation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	$ 1,130.5	$ 1,075.3	$ 2,222.4	$ 2,094.1
Net sales	1,223.0	1,168.3	2,408.5	2,281.5
Intersegment eliminations
Disaggregation of Revenue [Line Items]
Net sales	(159.9)	(151.8)	(312.5)	(298.8)
Commercial & Industrial Group
Disaggregation of Revenue [Line Items]
Net sales	359.1	350.5	699.2	696.2
Snap-on Tools Group
Disaggregation of Revenue [Line Items]
Net sales	520.6	484.1	1,032.7	962.4
Repair Systems & Information Group
Disaggregation of Revenue [Line Items]
Net sales	416.8	398.6	815.0	746.2
Financial Services
Disaggregation of Revenue [Line Items]
Net sales	86.4	86.9	174.1	175.5
Other revenues
Disaggregation of Revenue [Line Items]
Net sales	6.1	6.1	12.0	11.9
Total net sales
Disaggregation of Revenue [Line Items]
Net sales	1,136.6	1,081.4	2,234.4	2,106.0
Total net sales | Vehicle service professionals
Disaggregation of Revenue [Line Items]
Net sales	885.7	832.4	1,746.2	1,610.0
Total net sales | All other professionals
Disaggregation of Revenue [Line Items]
Net sales	250.9	249.0	488.2	496.0
Total net sales | Intersegment eliminations
Disaggregation of Revenue [Line Items]
Net sales	(159.9)	(151.8)	(312.5)	(298.8)
Total net sales | Operating segments
Disaggregation of Revenue [Line Items]
Net sales	1,296.5	1,233.2	2,546.9	2,404.8
Total net sales | Commercial & Industrial Group
Disaggregation of Revenue [Line Items]
Net sales	276.1	274.7	537.3	545.8
Total net sales | Commercial & Industrial Group | Vehicle service professionals
Disaggregation of Revenue [Line Items]
Net sales	25.2	25.7	49.1	49.8
Total net sales | Commercial & Industrial Group | All other professionals
Disaggregation of Revenue [Line Items]
Net sales	250.9	249.0	488.2	496.0
Total net sales | Commercial & Industrial Group | Intersegment eliminations
Disaggregation of Revenue [Line Items]
Net sales	83.0	75.8	161.9	150.4
Total net sales | Commercial & Industrial Group | Operating segments
Disaggregation of Revenue [Line Items]
Net sales	359.1	350.5	699.2	696.2
Total net sales | Snap-on Tools Group
Disaggregation of Revenue [Line Items]
Net sales	520.6	484.1	1,032.7	962.4
Total net sales | Snap-on Tools Group | Vehicle service professionals
Disaggregation of Revenue [Line Items]
Net sales	520.6	484.1	1,032.7	962.4
Total net sales | Snap-on Tools Group | All other professionals
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Total net sales | Snap-on Tools Group | Intersegment eliminations
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Total net sales | Snap-on Tools Group | Operating segments
Disaggregation of Revenue [Line Items]
Net sales	520.6	484.1	1,032.7	962.4
Total net sales | Repair Systems & Information Group
Disaggregation of Revenue [Line Items]
Net sales	339.9	322.6	664.4	597.8
Total net sales | Repair Systems & Information Group | Vehicle service professionals
Disaggregation of Revenue [Line Items]
Net sales	339.9	322.6	664.4	597.8
Total net sales | Repair Systems & Information Group | All other professionals
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Total net sales | Repair Systems & Information Group | Intersegment eliminations
Disaggregation of Revenue [Line Items]
Net sales	76.9	76.0	150.6	148.4
Total net sales | Repair Systems & Information Group | Operating segments
Disaggregation of Revenue [Line Items]
Net sales	416.8	398.6	815.0	746.2
Total net sales | Financial Services
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Total net sales | Financial Services | Vehicle service professionals
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Total net sales | Financial Services | All other professionals
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Total net sales | Financial Services | Intersegment eliminations
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Total net sales | Financial Services | Operating segments
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Total net sales | North America
Disaggregation of Revenue [Line Items]
Net sales	843.7	779.7	1,648.0	1,506.7
Total net sales | North America | Commercial & Industrial Group
Disaggregation of Revenue [Line Items]
Net sales	128.7	126.6	242.4	244.6
Total net sales | North America | Snap-on Tools Group
Disaggregation of Revenue [Line Items]
Net sales	460.3	416.3	908.1	824.4
Total net sales | North America | Repair Systems & Information Group
Disaggregation of Revenue [Line Items]
Net sales	254.7	236.8	497.5	437.7
Total net sales | North America | Financial Services
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Total net sales | Europe
Disaggregation of Revenue [Line Items]
Net sales	169.9	189.5	353.7	378.6
Total net sales | Europe | Commercial & Industrial Group
Disaggregation of Revenue [Line Items]
Net sales	73.1	79.2	154.9	163.5
Total net sales | Europe | Snap-on Tools Group
Disaggregation of Revenue [Line Items]
Net sales	36.4	43.8	76.5	88.0
Total net sales | Europe | Repair Systems & Information Group
Disaggregation of Revenue [Line Items]
Net sales	60.4	66.5	122.3	127.1
Total net sales | Europe | Financial Services
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Total net sales | All other
Disaggregation of Revenue [Line Items]
Net sales	123.0	112.2	232.7	220.7
Total net sales | All other | Commercial & Industrial Group
Disaggregation of Revenue [Line Items]
Net sales	74.3	68.9	140.0	137.7
Total net sales | All other | Snap-on Tools Group
Disaggregation of Revenue [Line Items]
Net sales	23.9	24.0	48.1	50.0
Total net sales | All other | Repair Systems & Information Group
Disaggregation of Revenue [Line Items]
Net sales	24.8	19.3	44.6	33.0
Total net sales | All other | Financial Services
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Financial services revenue
Disaggregation of Revenue [Line Items]
Net sales	86.4	86.9	174.1	175.5
Financial services revenue | Intersegment eliminations
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Financial services revenue | Commercial & Industrial Group
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Financial services revenue | Snap-on Tools Group
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Financial services revenue | Repair Systems & Information Group
Disaggregation of Revenue [Line Items]
Net sales	0.0	0.0	0.0	0.0
Financial services revenue | Financial Services
Disaggregation of Revenue [Line Items]
Net sales	$ 86.4	$ 86.9	$ 174.1	$ 175.5

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Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jul. 02, 2022	Jul. 02, 2022	Jan. 01, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contractual obligation	$ 188.0	$ 188.0
Contract with customer, liability	65.9	65.9	$ 63.8
Contract with customer, liability, revenue recognized	$ 10.3	$ 44.9
Transferred at Point in Time | Sales Revenue, Net | Ship and Bill Performance Obligations
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Concentration risk, percentage		90.00%

XML

Revenue Recognition - Performance Obligations (Details)	6 Months Ended
	Jul. 02, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue, performance obligation, description of timing	The remaining duration of these unsatisfied performance obligations range from one month up to 60 months.
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-03
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue, remaining performance obligation, percentage of revenue recognized	60.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue, remaining performance obligation, percentage of revenue recognized	35.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	2 years

XML

Acquisitions - Narrative (Details) - USD ($) $ in Millions				3 Months Ended	6 Months Ended
	Aug. 01, 2021	Jul. 01, 2021	Feb. 26, 2021	Jul. 02, 2022	Jul. 02, 2022	Jul. 03, 2021	Jan. 01, 2022
Business Acquisition [Line Items]
Payment to acquire business, net of cash acquired					$ (0.5)	$ 195.8
Goodwill				$ 1,046.0	1,046.0		$ 1,116.5
AutoCrib Germany
Business Acquisition [Line Items]
Cash purchase price of acquisition	$ 4.4
Payment to acquire business, net of cash acquired	$ 4.2
Goodwill				3.3	3.3
Secateurs Pradines
Business Acquisition [Line Items]
Payment to acquire business, net of cash acquired		$ 15.7
Goodwill				10.2	10.2
Business acquisition, percentage of voting interests acquired		100.00%
Consideration transferred, including equity interest		$ 20.2
Goodwill, purchase accounting adjustments				0.5
Other cash payment to acquire business		$ 1.6
Secateurs Pradines | Deville S.A.
Business Acquisition [Line Items]
Equity method investment, ownership percentage		35.00%
Equity method investments		$ 21.8
Dealer-FX
Business Acquisition [Line Items]
Cash purchase price of acquisition			$ 200.1
Payment to acquire business, net of cash acquired			$ 200.0
Goodwill				$ 118.2	118.2
Goodwill, purchase accounting adjustments					$ (32.6)

XML

Receivables - Narrative (Details)	6 Months Ended
	Jul. 02, 2022 portfolio_segment
Financing Receivable, Past Due [Line Items]
Minimum payment term for trade and other accounts receivable (in days)	30 days
Maximum payment term for trade and other accounts receivable (in days)	120 days
Average payment term for finance receivables (in years)	4 years
Maximum payment term for contract receivables (in years)	10 years
Number of portfolio segments	2
Minimum period past due to consider receivable balances as delinquent (in days)	30 days
Minimum period past due to declare receivable as non-accrual status (in days)	90 days
Finance Receivables
Financing Receivable, Past Due [Line Items]
Financing receivable, threshold period past due, writeoff (in days)	120 days
Financing receivable, threshold period after asset repossession, writeoff (in days)	60 days
Contract Receivables | Non-Franchisee
Financing Receivable, Past Due [Line Items]
Financing receivable, threshold period past due, writeoff (in days)	150 days
Contract Receivables | Franchisee
Financing Receivable, Past Due [Line Items]
Financing receivable, threshold period past due, writeoff (in days)	180 days
Financing Receivables And Contract Receivables, Customer Bankruptcy
Financing Receivable, Past Due [Line Items]
Financing receivable, threshold period past due, writeoff (in days)	180 days

XML

Receivables - Components of Trade and Other Accounts Receivable (Details) - USD ($) $ in Millions	Jul. 02, 2022	Apr. 02, 2022	Jan. 01, 2022	Jul. 03, 2021	Apr. 03, 2021	Jan. 02, 2021
Receivables [Abstract]
Trade and other accounts receivable	$ 757.2		$ 709.6
Allowances for credit losses	(28.1)	$ (28.4)	(27.3)	$ (29.5)	$ (25.8)	$ (26.3)
Total trade and other accounts receivable – net	$ 729.1		$ 682.3

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Receivables - Trade and Other Receivables Allowance for Credit Losses Rollforward (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Allowances for credit losses:
Beginning of period	$ 28.4	$ 25.8	$ 27.3	$ 26.3
Provision for credit losses	2.9	5.4	6.6	7.3
Charge-offs	(2.2)	(2.1)	(5.2)	(4.2)
Recoveries	0.0	0.0	0.1	0.0
Currency translation	(1.0)	0.4	(0.7)	0.1
End of period	$ 28.1	$ 29.5	$ 28.1	$ 29.5

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Receivables - Components of Current Finance and Contract Receivables (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Finance and contract receivables, current	$ 666.9	$ 676.6
Allowance for credit losses, current	(21.6)	(23.9)
Total current finance and contract receivables – net	645.3	652.7
Finance Receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Finance and contract receivables, current	566.8	564.1
Allowance for credit losses, current	(19.8)	(21.8)
Total current finance and contract receivables – net	547.0	542.3
Finance Receivables | Finance installment receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Finance and contract receivables, current	562.6	557.0
Allowance for credit losses, current	(19.8)	(21.7)
Finance Receivables | Finance lease receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Unearned finance charges, current	0.7	1.3
Finance and contract receivables, current	4.2	7.1
Allowance for credit losses, current	0.0	(0.1)
Contract Receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Finance and contract receivables, current	100.1	112.5
Allowance for credit losses, current	(1.8)	(2.1)
Total current finance and contract receivables – net	98.3	110.4
Contract Receivables | Finance installment receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Finance and contract receivables, current	42.8	55.2
Allowance for credit losses, current	(0.7)	(0.9)
Contract Receivables | Finance lease receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Unearned finance charges, current	18.4	18.7
Finance and contract receivables, current	57.3	57.3
Allowance for credit losses, current	$ (1.1)	$ (1.2)

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Receivables - Components of Finance and Contract Receivables Beyond One Year (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Long-term finance and contract receivables	$ 1,549.3	$ 1,544.0
Allowance for credit loss, noncurrent	(46.9)	(51.8)
Total long-term finance and contract receivables – net	1,502.4	1,492.2
Finance Receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Long-term finance and contract receivables	1,168.5	1,159.5
Allowance for credit loss, noncurrent	(41.5)	(45.5)
Total long-term finance and contract receivables – net	1,127.0	1,114.0
Finance Receivables | Finance installment receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Long-term finance and contract receivables	1,166.1	1,155.3
Allowance for credit loss, noncurrent	(41.5)	(45.4)
Finance Receivables | Finance lease receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Unearned finance charges, noncurrent	0.3	0.5
Long-term finance and contract receivables	2.4	4.2
Allowance for credit loss, noncurrent	0.0	(0.1)
Contract Receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Long-term finance and contract receivables	380.8	384.5
Allowance for credit loss, noncurrent	(5.4)	(6.3)
Total long-term finance and contract receivables – net	375.4	378.2
Contract Receivables | Finance installment receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Long-term finance and contract receivables	196.7	197.1
Allowance for credit loss, noncurrent	(3.2)	(3.2)
Contract Receivables | Finance lease receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Unearned finance charges, noncurrent	29.6	30.3
Long-term finance and contract receivables	184.1	187.4
Allowance for credit loss, noncurrent	$ (2.2)	$ (3.1)

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Receivables - Schedule of Performing and Nonperforming Finance and Contract Receivables (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Finance Receivables
Financing Receivable, Credit Quality Indicator [Line Items]
2022	$ 750.5
2021	588.7
2020	259.0
2019	94.7
2018	33.5
Prior	8.9
Total	1,735.3	$ 1,723.6
Contract Receivables
Financing Receivable, Credit Quality Indicator [Line Items]
2022	84.0
2021	139.2
2020	101.7
2019	72.2
2018	44.8
Prior	39.0
Total	480.9	$ 497.0
Delinquent | Finance Receivables
Financing Receivable, Credit Quality Indicator [Line Items]
2022	2.9
2021	16.5
2020	11.3
2019	5.4
2018	2.8
Prior	1.4
Total	40.3
Delinquent | Contract Receivables
Financing Receivable, Credit Quality Indicator [Line Items]
2022	0.2
2021	0.7
2020	0.7
2019	0.9
2018	0.3
Prior	0.2
Total	3.0
Non-delinquent | Finance Receivables
Financing Receivable, Credit Quality Indicator [Line Items]
2022	747.6
2021	572.2
2020	247.7
2019	89.3
2018	30.7
Prior	7.5
Total	1,695.0
Non-delinquent | Contract Receivables
Financing Receivable, Credit Quality Indicator [Line Items]
2022	83.8
2021	138.5
2020	101.0
2019	71.3
2018	44.5
Prior	38.8
Total	$ 477.9

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Receivables - Finance and Contract Receivables Allowance for Credit Losses Rollforward (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Allowances for credit losses:
Provision for credit losses			$ 15.4	$ 17.9
Finance Receivables
Allowances for credit losses:
Beginning of period	$ 62.5	$ 75.3	67.3	76.3
Provision for credit losses	9.1	6.6	15.4	17.9
Charge-offs	(12.8)	(12.4)	(26.2)	(27.3)
Recoveries	2.7	2.8	5.0	5.4
Currency translation		0.0	(0.2)	0.0
End of period	61.3	72.3	61.3	72.3
Contract Receivables
Allowances for credit losses:
Beginning of period	7.7	9.2	8.4	9.0
Provision for credit losses	0.0	0.1	0.1	0.8
Charge-offs	(0.6)	(0.5)	(1.4)	(1.1)
Recoveries	0.1	0.2	0.1	0.3
Currency translation		0.0	0.0	0.0
End of period	$ 7.2	$ 9.0	$ 7.2	$ 9.0

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Receivables - Aging of Finance and Contract Receivables (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Finance Receivables
Financing Receivable, Past Due [Line Items]
Total	$ 1,735.3	$ 1,723.6
Greater Than 90 Days Past Due and Accruing	13.3	16.0
Finance Receivables | Total Past Due
Financing Receivable, Past Due [Line Items]
Total	40.3	44.5
Finance Receivables | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Total	15.1	16.0
Finance Receivables | 60-90 Days Past Due
Financing Receivable, Past Due [Line Items]
Total	9.6	10.5
Finance Receivables | Greater Than 90 Days Past Due
Financing Receivable, Past Due [Line Items]
Total	15.6	18.0
Finance Receivables | Total Not Past Due
Financing Receivable, Past Due [Line Items]
Total	1,695.0	1,679.1
Contract Receivables
Financing Receivable, Past Due [Line Items]
Total	480.9	497.0
Greater Than 90 Days Past Due and Accruing	0.2	0.1
Contract Receivables | Total Past Due
Financing Receivable, Past Due [Line Items]
Total	3.0	3.5
Contract Receivables | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Total	1.4	1.7
Contract Receivables | 60-90 Days Past Due
Financing Receivable, Past Due [Line Items]
Total	0.3	0.9
Contract Receivables | Greater Than 90 Days Past Due
Financing Receivable, Past Due [Line Items]
Total	1.3	0.9
Contract Receivables | Total Not Past Due
Financing Receivable, Past Due [Line Items]
Total	$ 477.9	$ 493.5

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Receivables - Schedule of Finance and Contract Receivables on Nonaccrual Status (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Finance Receivables
Financing Receivable, Past Due [Line Items]
Nonaccrual	$ 8.7	$ 7.7
Contract Receivables
Financing Receivable, Past Due [Line Items]
Nonaccrual	$ 4.1	$ 2.7

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Inventories - Schedule of Inventories by Major Classification (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Inventory Disclosure [Abstract]
Finished goods	$ 756.7	$ 686.5
Work in progress	69.7	64.3
Raw materials	157.6	140.2
Total FIFO value	984.0	891.0
Excess of current cost over LIFO cost	(90.7)	(87.2)
Total inventories – net	$ 893.3	$ 803.8

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Inventories - Narrative (Details) - USD ($)	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jan. 01, 2022
Geographic Valuation Methodologies Of Inventory [Line Items]
Percentage of FIFO inventory	61.00%		60.00%
Effect of LIFO inventory liquidation on income	$ 0	$ 0
United States
Geographic Valuation Methodologies Of Inventory [Line Items]
Percentage of FIFO inventory	36.00%
Percentage of LIFO inventory	64.00%

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Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill by Segment (Details) $ in Millions	6 Months Ended
	Jul. 02, 2022 USD ($)
Goodwill [Roll Forward]
Balance as of January 1, 2022	$ 1,116.5
Currency translation	(37.4)
Acquisition-related adjustments	(33.1)
Balance as of July 2, 2022	1,046.0
Commercial & Industrial Group
Goodwill [Roll Forward]
Balance as of January 1, 2022	325.8
Currency translation	(22.7)
Acquisition-related adjustments	(0.5)
Balance as of July 2, 2022	302.6
Snap-on Tools Group
Goodwill [Roll Forward]
Balance as of January 1, 2022	12.4
Currency translation	0.0
Acquisition-related adjustments	0.0
Balance as of July 2, 2022	12.4
Repair Systems & Information Group
Goodwill [Roll Forward]
Balance as of January 1, 2022	778.3
Currency translation	(14.7)
Acquisition-related adjustments	(32.6)
Balance as of July 2, 2022	$ 731.0

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Goodwill and Other Intangible Assets - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021	Jan. 01, 2022
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	$ 1,046,000,000		$ 1,046,000,000		$ 1,116,500,000
Goodwill impairment loss			0
Gross Carrying Value	487,200,000		487,200,000		495,000,000.0
Non-amortized trademarks	135,000,000.0		135,000,000.0		142,600,000
Accumulated impairment losses	0		$ 0
Weighted-average amortization period (in years)			12 years
Aggregate amortization expense	7,200,000	$ 6,300,000	$ 14,400,000	$ 12,300,000
Estimated annual amortization expense for fiscal period 2022	28,400,000		28,400,000
Estimated annual amortization expense for fiscal period 2023	25,800,000		25,800,000
Estimated annual amortization expense for fiscal period 2024	19,600,000		19,600,000
Estimated annual amortization expense for fiscal period 2025	14,100,000		14,100,000
Estimated annual amortization expense for fiscal period 2026	10,900,000		10,900,000
Estimated annual amortization expense for fiscal period 2027	9,700,000		9,700,000
Customer relationships
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Gross Carrying Value	212,600,000		$ 212,600,000		217,800,000
Weighted-average amortization period (in years)			14 years
Customer relationship contractual term, minimum (in years)			3 years
Customer relationship contractual term, maximum (in years)			5 years
Developed technology
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Gross Carrying Value	35,900,000		$ 35,900,000		36,600,000
Weighted-average amortization period (in years)			5 years
Dealer-FX
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	118,200,000		$ 118,200,000
Goodwill, purchase accounting adjustments			32,600,000
Non-amortized trademarks	17,700,000		17,700,000
Dealer-FX | Customer relationships
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Gross Carrying Value	28,400,000		28,400,000
Dealer-FX | Developed technology
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Gross Carrying Value	14,800,000		14,800,000
Secateurs Pradines
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	10,200,000		10,200,000
Goodwill, purchase accounting adjustments	(500,000)
Repair Systems & Information Group
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	731,000,000.0		731,000,000.0		778,300,000
Repair Systems & Information Group | Dealer-FX
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	118,200,000		118,200,000
Commercial & Industrial Group
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	302,600,000		302,600,000		$ 325,800,000
Commercial & Industrial Group | Secateurs Pradines
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	10,200,000		10,200,000
Commercial & Industrial Group | AutoCrib
Acquired Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	$ 3,300,000		$ 3,300,000

XML

Goodwill and Other Intangible Assets - Other Intangible Assets by Major Class (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 487.2	$ 495.0
Non-amortized trademarks	135.0	142.6
Total other intangible assets	622.2	637.6
Accumulated Amortization	(338.7)	(335.9)
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	212.6	217.8
Accumulated Amortization	(145.1)	(142.1)
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	35.9	36.6
Accumulated Amortization	(24.3)	(23.2)
Internally developed software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	180.6	182.7
Accumulated Amortization	(138.0)	(139.1)
Patents
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	46.4	45.7
Accumulated Amortization	(25.0)	(25.1)
Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	3.8	3.9
Accumulated Amortization	(2.3)	(2.3)
Other
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	7.9	8.3
Accumulated Amortization	$ (4.0)	$ (4.1)

XML

Goodwill and Other Intangible Assets - Weighted-Average Amortization Period by Major Class (Details)	6 Months Ended
	Jul. 02, 2022
Finite-Lived Intangible Assets [Line Items]
Weighted-average amortization period (in years)	12 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted-average amortization period (in years)	14 years
Developed technology
Finite-Lived Intangible Assets [Line Items]
Weighted-average amortization period (in years)	5 years
Internally developed software
Finite-Lived Intangible Assets [Line Items]
Weighted-average amortization period (in years)	6 years
Patents
Finite-Lived Intangible Assets [Line Items]
Weighted-average amortization period (in years)	14 years
Trademarks
Finite-Lived Intangible Assets [Line Items]
Weighted-average amortization period (in years)	9 years
Other
Finite-Lived Intangible Assets [Line Items]
Weighted-average amortization period (in years)	39 years

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Exit and Disposal Activities - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Dec. 31, 2022	Jul. 02, 2022	Jul. 03, 2021	Apr. 02, 2022	Jan. 01, 2022
Restructuring Cost and Reserve [Line Items]
Exit and disposal costs	$ 0	$ 0		$ 0	$ 0
Restructuring reserve	$ 5,400,000			$ 5,400,000		$ 6,100,000	$ 7,000,000.0
Forecast
Restructuring Cost and Reserve [Line Items]
Exit and disposal costs			$ 3,200,000

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Exit and Disposal Activities - Accrual Activity (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 02, 2022	Apr. 02, 2022
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	$ 6.1	$ 7.0
Provision	0.0	0.0
Usage	(0.7)	(0.9)
Restructuring reserve, ending balance	5.4	6.1
Commercial & Industrial Group
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	3.8	4.3
Provision	0.0	0.0
Usage	(0.4)	(0.5)
Restructuring reserve, ending balance	3.4	3.8
Snap-on Tools Group
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	0.3	0.3
Provision	0.0	0.0
Usage	0.0	0.0
Restructuring reserve, ending balance	0.3	0.3
Repair Systems & Information Group
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	2.0	2.4
Provision	0.0	0.0
Usage	(0.3)	(0.4)
Restructuring reserve, ending balance	$ 1.7	$ 2.0

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Income Taxes - Narrative (Details) - USD ($)	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Income Tax [Line Items]
Effective income tax rate	23.70%	23.40%
Minimum
Income Tax [Line Items]
Decrease in unrecognized tax benefits	$ 0
Increase in unrecognized tax benefits	0
Maximum
Income Tax [Line Items]
Decrease in unrecognized tax benefits	4,200,000
Increase in unrecognized tax benefits	$ 800,000

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Short-term and Long-term Debt - Summary (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Schedule Of Debt Instruments [Line Items]
Long term debt	$ 1,202.2	$ 1,200.3
Total long-term debt	1,183.4	1,182.9
Less: notes payable
Schedule Of Debt Instruments [Line Items]
Less: notes payable	(18.8)	(17.4)
Other Debt
Schedule Of Debt Instruments [Line Items]
Long term debt	$ 2.2	0.3
3.25% unsecured notes due 2027 | Unsecured Debt
Schedule Of Debt Instruments [Line Items]
Unsecured notes, interest rate	3.25%
Long term debt	$ 300.0	300.0
4.10% unsecured notes due 2048 | Unsecured Debt
Schedule Of Debt Instruments [Line Items]
Unsecured notes, interest rate	4.10%
Long term debt	$ 400.0	400.0
3.10% unsecured notes due 2050 | Unsecured Debt
Schedule Of Debt Instruments [Line Items]
Unsecured notes, interest rate	3.10%
Long term debt	$ 500.0	$ 500.0

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Short-term and Long-term Debt - Narrative (Details)	6 Months Ended
	Jul. 02, 2022 USD ($) revision	Jan. 01, 2022 USD ($)
Schedule Of Debt Instruments [Line Items]
Notes payable	$ 18,800,000	$ 17,400,000
Commercial paper outstanding	0
Five-year Multi-Currency Revolving Credit Facility
Schedule Of Debt Instruments [Line Items]
Revolving credit facility, amount available	800,000,000
Revolving credit facility, outstanding amount	$ 0
Number of allowed revisions to debt ratios | revision	2
Debt maturity, term	5 years
Actual debt-to-capital ratio	0.09
Actual debt-to-income ratio	0.34
Five-year Multi-Currency Revolving Credit Facility | Maximum
Schedule Of Debt Instruments [Line Items]
Maximum limit of required debt-to-capital ratio	0.60
Maximum limit of required debt-to-income ratio	3.50
Five-year Multi-Currency Revolving Credit Facility | Maximum | Material Acquisition
Schedule Of Debt Instruments [Line Items]
Maximum limit of required debt-to-capital ratio	0.65
Maximum limit of required debt-to-income ratio	4.00

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Financial Instruments - Narrative (Details) - USD ($)	Jul. 02, 2022	Jan. 01, 2022
Equity Forwards
Investment Holdings [Line Items]
Equity forwards in place of common stock associated with its deferred compensation plans (in shares)	71,200
Treasury locks
Investment Holdings [Line Items]
Treasury locks outstanding	$ 0	$ 0
Fair Value Hedging
Investment Holdings [Line Items]
Notional amount of interest rate swaps outstanding and designated as fair value hedges	$ 0	$ 0

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Financial Instruments - Fair Values of Financial Instruments Not Approximating Carrying Values in Financial Statements (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt and notes payable	$ 1,202.2	$ 1,200.3
Carrying Value | Finance receivables – net
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance and contract receivables, after allowance for credit loss	1,674.0	1,656.3
Carrying Value | Contract receivables – net
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance and contract receivables, after allowance for credit loss	473.7	488.6
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt and notes payable	1,066.3	1,339.7
Fair Value | Finance receivables – net
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance and contract receivables, after allowance for credit loss	1,954.1	1,988.6
Fair Value | Contract receivables – net
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance and contract receivables, after allowance for credit loss	$ 508.1	$ 542.5

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Pension Plans - Net Periodic Pension (Benefit) Cost (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 6.3	$ 6.9	$ 13.4	$ 14.4
Interest cost	11.2	10.5	22.3	21.1
Expected return on plan assets	(25.4)	(23.5)	(49.9)	(47.1)
Amortization of unrecognized loss	4.7	9.1	9.2	18.2
Net periodic postretirement health care cost	$ (3.2)	$ 3.0	$ (5.0)	$ 6.6

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Pension Plans - Narrative (Details) - Pension Plans, Defined Benefit $ in Millions	Jul. 02, 2022 USD ($)
Foreign Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Expected future employer contributions	$ 9.4
United States Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Expected future employer contributions	$ 9.5

XML

Postretirement Health Care Plans - Net Periodic Postretirement Health Care Cost (Details) - Postretirement Health Coverage - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Postretirement Health Care Plans [Line Items]
Interest cost	$ 0.3	$ 0.3	$ 0.6	$ 0.6
Expected return on plan assets	(0.1)	(0.2)	(0.3)	(0.4)
Net periodic postretirement health care cost	$ 0.2	$ 0.1	$ 0.3	$ 0.2

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Stock-based Compensation and Other Stock Plans - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Net stock-based compensation expense	$ 8.5	$ 11.5	$ 17.5	$ 23.8
Cash received from stock purchase and option plan exercises	23.4	61.8	29.2	154.8
Tax benefit realized from exercise and vesting of share-based payment arrangements	$ 1.8	$ 6.2	$ 3.9	$ 13.9
2011 Incentive Stock and Awards Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant (in shares)	3,116,594		3,116,594

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Stock-based Compensation and Other Stock Plans - Stock Options Narrative (Details) - Stock Option - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average contractual term (in years)			10 years
Granted (in shares)		0	289,000
Weighted-average grant date fair value granted (in dollars per share)			$ 34.35	$ 26.19
Intrinsic value of stock exercised	$ 7.4	$ 28.1	$ 10.2	$ 58.9
Fair value of stock vested			10.5	$ 12.5
Unrecognized compensation cost related to non-vested award	$ 14.9		$ 14.9
Cost expected to be recognized over weighted-average period (in years)			1 year 9 months 18 days

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Stock-based Compensation and Other Stock Plans - Stock Options, Summary of Weighted Average Assumptions of Fair Value Granted Using Black-Scholes Valuation Model (Details) - Stock Option	3 Months Ended	6 Months Ended
	Jul. 02, 2022	Jul. 02, 2022	Jul. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term of option (in years)	3 years 8 months 26 days	5 years 1 month 20 days	5 years 3 months 29 days
Expected volatility factor	23.12%	22.61%	21.80%
Expected dividend yield	2.73%	2.68%	2.59%
Risk-free interest rate	2.73%	2.00%	0.67%

XML

Stock-based Compensation and Other Stock Plans - Summary of Changes in Stock Options (Details) - Stock Option - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended
	Jul. 03, 2021	Jul. 02, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Beginning balance (in shares)		2,432,000
Granted (in shares)	0	289,000
Exercised (in shares)		(118,000)
Forfeited or expired (in shares)		(16,000)
Ending balance (in shares)		2,587,000
Exercisable at end of period (in shares)		1,954,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price
Beginning balance (in dollars per share)		$ 151.32
Granted (in dollars per share)		211.41
Exercised (in dollars per share)		131.85
Forfeited or expired (in dollars per share)		183.40
Ending balance (in dollars per share)		158.72
Exercisable at end of period (in dollars per share)		$ 147.97
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures
Outstanding, remaining contractual term (in years)		5 years 8 months 12 days
Exercisable, remaining contractual term (in years)		4 years 8 months 12 days
Outstanding, aggregate intrinsic value		$ 106.0
Exercisable, aggregate intrinsic value		$ 98.2

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Stock-based Compensation and Other Stock Plans - Performance Share Unit and Restricted Stock Awards Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Performance Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average contractual term (in years)	3 years
Maximum stock percentage to be awarded	100.00%
Performance period	3 years
Weighted-average grant date fair value granted (in dollars per share)	$ 206.58	$ 187.12
Performance awards shares paid out (in shares)	46,217	0
Unrecognized compensation cost related to non-vested award	$ 33.6
Cost expected to be recognized over weighted-average period (in years)	1 year 7 months 6 days
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average contractual term (in years)	3 years
Cliff vesting schedule	3 years

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Stock-based Compensation and Other Stock Plans - Summary of Changes in Non-Vested Performance Awards (Details) - Nonvested Performance Shares shares in Thousands	6 Months Ended
	Jul. 02, 2022 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares) | shares	215
Granted (in shares) | shares	111
Vested (in shares) | shares	0
Cancellations and other (in shares) | shares	(6)
Ending balance (in shares) | shares	320
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 180.29
Granted (in dollars per share) | $ / shares	206.58
Vested (in dollars per share) | $ / shares	0
Cancellations and other (in dollars per share) | $ / shares	192.40
Ending balance (in dollars per share) | $ / shares	$ 189.21

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Stock-based Compensation and Other Stock Plans - Stock Appreciation Rights Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Stock Appreciation Rights (SARs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average contractual term (in years)			10 years
Weighted-average grant date fair value granted (in dollars per share)			$ 31.67
Intrinsic value of stock exercised	$ 0.2	$ 0.1	$ 0.6	$ 0.6
Fair value of stock vested			0.1	$ 0.1
Unrecognized compensation cost related to non-vested award	0.1		$ 0.1
Cost expected to be recognized over weighted-average period (in years)			1 year 10 months 24 days
Stock-Settled SARs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant date fair value granted (in dollars per share)			$ 32.63	$ 24.05
Intrinsic value of stock exercised	0.5	$ 0.8	$ 0.7	$ 3.0
Fair value of stock vested			2.0	$ 2.1
Unrecognized compensation cost related to non-vested award	$ 3.4		$ 3.4
Cost expected to be recognized over weighted-average period (in years)			1 year 10 months 24 days

XML

Stock-based Compensation and Other Stock Plans - Stock-Settled SARs, Summary of Weighted-Average Assumptions of Fair Value Granted Using Black-Scholes Valuation Model (Details) - Stock-Settled SARs	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term of stock-settled SARs (in years)	4 years 7 days	3 years 11 months 8 days
Expected volatility factor	23.09%	22.50%
Expected dividend yield	2.68%	2.59%
Risk-free interest rate	1.96%	0.19%

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Stock-based Compensation and Other Stock Plans - Summary of Changes in Stock-Settled SARs (Details) - Stock-Settled SARs $ / shares in Units, shares in Thousands, $ in Millions	6 Months Ended
	Jul. 02, 2022 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares) | shares	397
Granted (in shares) | shares	75
Exercised (in shares) | shares	(11)
Forfeited or expired (in shares) | shares	(41)
Ending balance (in shares) | shares	420
Exercisable at end of period (in shares) | shares	273
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 160.09
Granted (in dollars per share) | $ / shares	211.67
Exercised (in dollars per share) | $ / shares	153.13
Forfeited or expired (in dollars per share) | $ / shares	168.44
Ending balance (in dollars per share) | $ / shares	168.65
Exercisable at end of period (in dollars per share) | $ / shares	$ 154.97
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
Outstanding, remaining contractual term	6 years 8 months 12 days
Exercisable, remaining contractual term	5 years 6 months
Outstanding, aggregate intrinsic value | $	$ 13.4
Exercisable, aggregate intrinsic value | $	$ 11.8

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Stock-based Compensation and Other Stock Plans - Cash-Settled SARs, Summary of Weighted-Average Assumptions of Fair Value Granted Using Black-Scholes Valuation Model (Details) - Stock Appreciation Rights (SARs)	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	3 years 6 months 29 days	3 years 7 months 2 days
Expected volatility factor	23.68%	22.49%
Expected dividend yield	2.87%	2.20%
Risk-free interest rate	2.85%	0.45%

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Stock-based Compensation and Other Stock Plans - Summary of Changes in Non-Vested Cash-Settled SARs (Details) - Stock Appreciation Rights (SARs) shares in Thousands	6 Months Ended
	Jul. 02, 2022 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares) | shares	2
Granted (in shares) | shares	1
Vested (in shares) | shares	(1)
Ending balance (in shares) | shares	2
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 47.13
Granted (in dollars per share) | $ / shares	31.67
Vested (in dollars per share) | $ / shares	41.69
Ending balance (in dollars per share) | $ / shares	$ 34.56

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Stock-based Compensation and Other Stock Plans - Restricted Stock Awards, Non-employee Directors Narrative (Details) - Restricted Stock - Non Employee Directors - shares	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	6,525	6,858
Vesting period	1 year

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Stock-based Compensation and Other Stock Plans - Employee Stock Purchase Plan Narrative (Details) - Employee Stock - USD ($)	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued in period (in shares)			18,464	82,286
Shares reserved for future issuance (in shares)	578,811		578,811
Participant contributions held	$ 400,000		$ 400,000
Compensation expense	$ 0	$ 4,800,000	$ 0	$ 9,600,000

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Stock-based Compensation and Other Stock Plans - Franchise Stock Purchase Plan Narrative (Details) - Franchise Stock - USD ($)	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued in period (in shares)			44,937	143,388
Shares reserved for future issuance (in shares)	225,225		225,225
Participant contributions held	$ 900,000		$ 900,000
Compensation expense	$ 0	$ 11,300,000	$ 0	$ 16,700,000

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Common Share (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Earnings Per Share [Abstract]
Weighted-average common shares outstanding (in shares)	53.3	54.0	53.4	54.1
Effect of dilutive securities (in shares)	0.9	1.3	0.9	1.1
Diluted (in shares)	54.2	55.3	54.3	55.2

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Earnings Per Share - Narrative (Details) - shares	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Stock-Settled SARs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Outstanding options or stock settled SARs (in shares)	0	0

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Commitments and Contingencies - Summary of Product Warranty Accrual Activity (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Warranty reserve:
Beginning of period	$ 16.5	$ 18.3	$ 17.3	$ 17.6
Additions	3.2	3.8	5.4	7.9
Usage	(3.7)	(3.6)	(6.7)	(7.0)
End of period	$ 16.0	$ 18.5	$ 16.0	$ 18.5

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Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Finance leases:
Property and equipment - gross	$ 19.0	$ 22.3
Accumulated depreciation and amortization	$ (15.4)	$ (17.4)
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization	Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization
Property and equipment - net	$ 3.6	$ 4.9
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other accrued liabilities	Other accrued liabilities
Other accrued liabilities	$ 2.1	$ 2.4
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other long-term liabilities	Other long-term liabilities
Other long-term liabilities	$ 2.9	$ 4.5
Total finance lease liabilities	5.0	6.9
Operating leases:
Operating lease right-of-use assets	$ 56.6	$ 51.9
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other accrued liabilities	Other accrued liabilities
Other accrued liabilities	$ 19.0	$ 19.6
Operating lease liabilities	39.7	34.2
Total operating lease liabilities	$ 58.7	$ 53.8

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Other Income (Expense) - Net - Computation of Other Income (Expense) - Net (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Other Income and Expenses [Abstract]
Interest income	$ 1.6	$ 0.4	$ 2.1	$ 0.8
Net foreign exchange gain (loss)	(1.6)	0.2	(2.6)	0.0
Net periodic pension and postretirement benefits – non-service	9.3	3.8	18.1	7.6
Foreign currency translation loss from sale of equity interest	0.0	(1.0)	0.0	(1.0)
Other	0.0	0.0	0.0	0.3
Total other income (expense) – net	$ 9.3	$ 3.4	$ 17.6	$ 7.7

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Accumulated Other Comprehensive Income (Loss) - Net Changes in Accumulated OCI by Component, Net of Tax (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 4,320.6	$ 3,897.9	$ 4,203.8	$ 3,846.6
Other comprehensive loss before reclassifications	(110.3)	20.2	(120.0)	(8.8)
Amounts reclassified from Accumulated OCI	3.2	5.4	6.2	11.9
Net other comprehensive income (loss)	(107.1)	25.6	(113.8)	3.1
Ending balance	4,346.8	4,025.5	4,346.8	4,025.5
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(350.6)	(388.3)	(343.9)	(365.8)
Net other comprehensive income (loss)	(107.1)	25.6	(113.8)	3.1
Ending balance	(457.7)	(362.7)	(457.7)	(362.7)
Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(154.8)	(103.7)	(145.1)	(74.7)
Other comprehensive loss before reclassifications	(110.3)	20.2	(120.0)	(8.8)
Amounts reclassified from Accumulated OCI	0.0	(1.0)	0.0	(1.0)
Net other comprehensive income (loss)	(110.3)	19.2	(120.0)	(9.8)
Ending balance	(265.1)	(84.5)	(265.1)	(84.5)
Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	8.5	10.1	8.9	10.5
Other comprehensive loss before reclassifications	0.0	0.0	0.0	0.0
Amounts reclassified from Accumulated OCI	(0.4)	(0.4)	(0.8)	(0.8)
Net other comprehensive income (loss)	(0.4)	(0.4)	(0.8)	(0.8)
Ending balance	8.1	9.7	8.1	9.7
Defined Benefit Pension and Postretirement Plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(204.3)	(294.7)	(207.7)	(301.6)
Other comprehensive loss before reclassifications	0.0	0.0	0.0	0.0
Amounts reclassified from Accumulated OCI	3.6	6.8	7.0	13.7
Net other comprehensive income (loss)	3.6	6.8	7.0	13.7
Ending balance	$ (200.7)	$ (287.9)	$ (200.7)	$ (287.9)

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Accumulated Other Comprehensive Income (Loss) - Reclassifications Out of Accumulated OCI (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Gains on cash flow hedges:
Other income (expense) - net	$ 9.3	$ 3.4	$ 17.6	$ 7.7
Income tax expense	(72.3)	(62.9)	(139.8)	(122.0)
Interest expense	(11.7)	(14.3)	(23.3)	(28.6)
Net earnings	237.2	213.2	459.9	410.8
Reclassification out of AOCI
Gains on cash flow hedges:
Net earnings	(3.2)	(5.4)	(6.2)	(11.9)
Sale Of Equity Interest | Reclassification out of AOCI
Gains on cash flow hedges:
Other income (expense) - net	0.0	1.0	0.0	1.0
Income tax expense	0.0	0.0	0.0	0.0
Net earnings	0.0	1.0	0.0	1.0
Cash Flow Hedges | Reclassification out of AOCI
Gains on cash flow hedges:
Income tax expense	0.0	0.0	0.0	0.0
Interest expense	0.4	0.4	0.8	0.8
Net earnings	0.4	0.4	0.8	0.8
Defined Benefit Pension and Postretirement Plans | Reclassification out of AOCI
Gains on cash flow hedges:
Other income (expense) - net	(4.7)	(9.1)	(9.2)	(18.2)
Income tax expense	1.1	2.3	2.2	4.5
Net earnings	$ (3.6)	$ (6.8)	$ (7.0)	$ (13.7)

XML

Segments - Net Sales by Segment (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Segment Reporting Information [Line Items]
Total revenues	$ 1,223.0	$ 1,168.3	$ 2,408.5	$ 2,281.5
Operating earnings	311.9	286.0	605.4	552.2
Interest expense	(11.7)	(14.3)	(23.3)	(28.6)
Other income (expense) – net	9.3	3.4	17.6	7.7
Earnings before income taxes and equity earnings	309.5	275.1	599.7	531.3
Commercial & Industrial Group
Segment Reporting Information [Line Items]
Total revenues	359.1	350.5	699.2	696.2
Snap-on Tools Group
Segment Reporting Information [Line Items]
Total revenues	520.6	484.1	1,032.7	962.4
Repair Systems & Information Group
Segment Reporting Information [Line Items]
Total revenues	416.8	398.6	815.0	746.2
Financial Services
Segment Reporting Information [Line Items]
Total revenues	86.4	86.9	174.1	175.5
Operating segments
Segment Reporting Information [Line Items]
Operating earnings	337.1	314.6	660.8	610.9
Intersegment eliminations
Segment Reporting Information [Line Items]
Total revenues	(159.9)	(151.8)	(312.5)	(298.8)
Corporate
Segment Reporting Information [Line Items]
Operating earnings	25.2	28.6	55.4	58.7
Total net sales
Segment Reporting Information [Line Items]
Total revenues	1,136.6	1,081.4	2,234.4	2,106.0
Operating earnings	246.6	217.1	469.7	418.0
Total net sales | Commercial & Industrial Group
Segment Reporting Information [Line Items]
Total revenues	276.1	274.7	537.3	545.8
Total net sales | Snap-on Tools Group
Segment Reporting Information [Line Items]
Total revenues	520.6	484.1	1,032.7	962.4
Total net sales | Repair Systems & Information Group
Segment Reporting Information [Line Items]
Total revenues	339.9	322.6	664.4	597.8
Total net sales | Financial Services
Segment Reporting Information [Line Items]
Total revenues	0.0	0.0	0.0	0.0
Total net sales | Operating segments
Segment Reporting Information [Line Items]
Total revenues	1,296.5	1,233.2	2,546.9	2,404.8
Total net sales | Operating segments | Commercial & Industrial Group
Segment Reporting Information [Line Items]
Total revenues	359.1	350.5	699.2	696.2
Operating earnings	51.7	55.5	97.4	106.2
Total net sales | Operating segments | Snap-on Tools Group
Segment Reporting Information [Line Items]
Total revenues	520.6	484.1	1,032.7	962.4
Operating earnings	124.4	103.5	240.4	202.4
Total net sales | Operating segments | Repair Systems & Information Group
Segment Reporting Information [Line Items]
Total revenues	416.8	398.6	815.0	746.2
Operating earnings	95.7	86.7	187.3	168.1
Total net sales | Operating segments | Financial Services
Segment Reporting Information [Line Items]
Total revenues	0.0	0.0	0.0	0.0
Total net sales | Intersegment eliminations
Segment Reporting Information [Line Items]
Total revenues	(159.9)	(151.8)	(312.5)	(298.8)
Total net sales | Intersegment eliminations | Commercial & Industrial Group
Segment Reporting Information [Line Items]
Total revenues	83.0	75.8	161.9	150.4
Total net sales | Intersegment eliminations | Snap-on Tools Group
Segment Reporting Information [Line Items]
Total revenues	0.0	0.0	0.0	0.0
Total net sales | Intersegment eliminations | Repair Systems & Information Group
Segment Reporting Information [Line Items]
Total revenues	76.9	76.0	150.6	148.4
Total net sales | Intersegment eliminations | Financial Services
Segment Reporting Information [Line Items]
Total revenues	0.0	0.0	0.0	0.0
Financial services revenue
Segment Reporting Information [Line Items]
Total revenues	86.4	86.9	174.1	175.5
Operating earnings	65.3	68.9	135.7	134.2
Financial services revenue | Commercial & Industrial Group
Segment Reporting Information [Line Items]
Total revenues	0.0	0.0	0.0	0.0
Financial services revenue | Snap-on Tools Group
Segment Reporting Information [Line Items]
Total revenues	0.0	0.0	0.0	0.0
Financial services revenue | Repair Systems & Information Group
Segment Reporting Information [Line Items]
Total revenues	0.0	0.0	0.0	0.0
Financial services revenue | Financial Services
Segment Reporting Information [Line Items]
Total revenues	86.4	86.9	174.1	175.5
Financial services revenue | Operating segments | Financial Services
Segment Reporting Information [Line Items]
Operating earnings	65.3	68.9	135.7	134.2
Financial services revenue | Intersegment eliminations
Segment Reporting Information [Line Items]
Total revenues	$ 0.0	$ 0.0	$ 0.0	$ 0.0

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Segments - Assets by Segment (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Segment Reporting Information [Line Items]
Assets	$ 6,864.3	$ 6,759.7
Operating segments
Segment Reporting Information [Line Items]
Assets	5,841.3	5,788.6
Operating segments | Commercial & Industrial Group
Segment Reporting Information [Line Items]
Assets	1,204.6	1,209.3
Operating segments | Snap-on Tools Group
Segment Reporting Information [Line Items]
Assets	842.3	791.4
Operating segments | Repair Systems & Information Group
Segment Reporting Information [Line Items]
Assets	1,630.1	1,624.3
Operating segments | Financial Services
Segment Reporting Information [Line Items]
Assets	2,164.3	2,163.6
Corporate
Segment Reporting Information [Line Items]
Assets	1,107.8	1,039.7
Elimination of intersegment receivables
Segment Reporting Information [Line Items]
Assets	$ (84.8)	$ (68.6)