Fastenal (FAST) 10-K risk factor changes: FY2022 vs FY2021

[removed: Company Specific] [added: Company-Specific] Risks

Products that we sell may expose us to potential material liability for property damage, environmental damage, personal injury, or death linked to the use of those products by our customers. Some of our customers operate in challenging industries [removed: where] [added: in which] there is a material risk of catastrophic events.

If any of these events are linked to the use [removed: by our customers] of any of our [removed: products,] [added: products by our customers,] claims could be brought against us by those customers, by governmental authorities, and by third parties who are injured or damaged as a result of such events.

Our ability to successfully [removed: attract] [added: attract, develop,] and retain qualified personnel to staff our selling locations could impact labor costs, sales at existing selling locations, and the successful execution of our growth drivers. Our success depends in part on our ability to attract, motivate, and retain a sufficient number of qualified employees, including inside and outside branch associates, Onsite managers, national account sales representatives, and support personnel, who understand and appreciate our culture and are able to adequately represent this culture to our customers.

While we have taken and continue to undertake significant steps to protect our customer and confidential information, a compromise of our data security systems or those of businesses [added: with which] we interact with could result in information related to our customers or business being obtained by unauthorized persons.

There can be no assurance that we will not experience a cyber security incident that may materially impact our [removed: consolidated financial statements.][added: business.]

New privacy security laws and regulations, including the European Union General Data Protection Regulation 2016, the California Consumer Protection Act, and other similar [removed: state] privacy laws, pose increasingly complex compliance challenges, which may increase compliance costs, and any failure to comply with data privacy laws and regulations could result in significant penalties.

Still, information systems are vulnerable to natural disasters, power losses, unauthorized access, [added: telecommunication failures, and other problems.]

If critical information systems fail or these systems or related software or services are otherwise unavailable, [removed: or] if we experience extended delays or unexpected expenses in securing, developing, and otherwise implementing technology solutions to support our growth and operations, [added: or if certain insurance coverages are limited in their capabilities or affordability,] it could adversely affect our profitability and/or ability to grow.

The ability to adequately protect our intellectual property or successfully defend against infringement claims by others may have an adverse impact on operations. Our business relies on the use, [removed: validity] [added: validity,] and continued protection of certain proprietary information and intellectual property, which [removed: includes] [added: include] current and future patents, trade secrets, trademarks, service marks, copyrights, and confidentiality [removed: agreements] [added: agreements,] as well as license and sublicense agreements to use intellectual property owned by affiliated entities or third parties.

In addition, we may be subject to claims that we have infringed on the intellectual property rights of others, which could subject us to liability, require us to obtain licenses to use those rights at significant [removed: cost] [added: cost,] or otherwise cause us to modify our operations.

Changes in customer or product mix, downward pressure on sales prices, and changes in volume or timing of orders have caused and could [added: continue to] cause our gross profit percentage to fluctuate or decline in the future. Changes in our customer [removed: or] [added: and] product mix have caused our gross profit percentage to decline and could cause our gross profit percentage to further fluctuate or decline.

Similarly, [removed: in recent years, revenues from] national accounts [removed: and/or] [added: and] Onsite [removed: customers, which] [added: customers] typically have [added: a] lower gross profit [removed: margins] [added: percentage than smaller customers] by virtue of their scale, available business, and broader offering of products which typically have lower gross [removed: margins, have tended to grow faster than revenues from smaller customers.][added: profit percentages.]

[removed: However, whether] [added: Whether] and to what extent this adverse mix impact will result in a decline of our gross profit percentage in any given year will depend on the extent to which they [removed: are, or] are [removed: not,] offset by positive impacts to gross profit [removed: margin] [added: percentage] during such year.

Setting aside [removed: these] [added: the circumstances of any given year] or [removed: other unusual circumstances,] [added: period,] however, customer and product mix have contributed to the decline [removed: in] [added: of] our gross profit percentage over time and will likely continue to [removed: affect] [added: reduce] our gross profit percentage into the foreseeable future.

We may not be able to pass [removed: rising] [added: higher] product costs [added: along] to customers if those customers have ready product or supplier alternatives in the marketplace.

In addition, market variables, such as labor rates, energy costs, [removed: and] legal costs, [added: and health care costs,] could move in such a way as to cause us to not be able to manage our operating and administrative expenses in a way that would enable us to leverage our revenue growth into higher net earnings.

Failure to implement an effective Environmental, Social, and Governance (ESG) strategy could result in financial losses or a tarnished corporate [removed: reputation. Customers, suppliers, employees, community partners, shareholders, and regulatory agencies are increasingly requesting disclosure and action relating to ESG performance and objectives.][added: reputation.]

An [added: actual or perceived] inability to satisfactorily address the concerns [added: and disclosure expectations] of our stakeholders could adversely affect our corporate reputation, image, identity, brand equity, and status, which [removed: in turn] could hurt our ability to retain and acquire customers and [removed: employees or] [added: employees, lead to penalties for non-compliance, and/or] negatively impact the price performance of our common stock.

[removed: Increasing] [added: Furthermore, increasing] reporting and [removed: operational] [added: operating] regulations around ESG matters may result in higher operating expenses and/or capital expenditures that could reduce our profitability and/or cash flow.

Any [added: system of] internal [removed: control system,] [added: controls,] no matter how well designed and operated, can only provide reasonable, not absolute, assurance that the objectives of the control system are met.

Further, the design of a [removed: control] system [added: of controls] must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all [added: systems of] internal [removed: control systems,] [added: controls,] internal [removed: control] [added: controls] over business processes and financial reporting may not prevent or detect fraud or misstatements.

Any failure to maintain an effective system of internal [removed: control] [added: controls] over business processes and financial reporting could limit our ability to report our financial results accurately and timely or to detect and prevent fraud, and could expose us to litigation, economic [removed: loss] [added: loss,] or adversely affect the market price of our common stock.

In recent years, we have increased the resources devoted to [removed: our growth drivers,] [added: developing a multi-dimensional, differentiated service offering,] including [removed: FMI,] [added: our Digital Footprint (which incorporates our FMI and e-procurement capabilities),] Onsites, national accounts, [removed: digital solutions, and our] international [removed: operations.][added: capabilities, and process and consumption analytics.]

Failure to achieve any of our goals regarding [removed: FMI,] [added: our Digital Footprint,] Onsites, national accounts, [removed: digital solutions, and] international [removed: operations,] [added: capabilities, analytics,] or other growth drivers could negatively impact our long-term sales [added: and profit] growth.

[removed: Further,] [added: In addition,] failure to identify appropriate targets for [added: the growth drivers of] our [removed: Onsite channel and FMI tools] [added: business] or failure to persuade the appropriate targets to adopt these offerings once identified may adversely impact our [removed: goals regarding the number of new Onsite locations we are able to open or the number of FMI installations we are able to deploy.][added: internally developed and/or externally communicated deployment objectives.]

[removed: Our competitive advantage in FMI Solutions, which includes industrial vending (FASTVend) and bin stock (FASTStock and FASTBin) tools could be eliminated and, in the case of FASTVend, the loss of key suppliers of equipment and services] [added: Certain circumstances] could [removed: be impactful and result in failure] [added: lead] to [removed: deploy devices.] [added: a short-term inability to promote and/or install our FMI solutions.] We believe we have a competitive advantage in industrial vending and bin stock due to our hardware and software, our local branch presence (allowing us to service devices and bins more rapidly and with less burden on our customers), our depth of products that lend themselves to being dispensed through industrial vending devices or bin stocks, and, in North America, our distribution strength.

While [removed: these] devices, software, and services can be obtained from other sources, loss of our current suppliers could be disruptive and could result in [removed: us failing] [added: our failure] to meet [removed: our] [added: short- or long-term] goals related to the [removed: number] [added: numbers] of [added: FASTVend] devices we are able to [removed: deploy in the next twelve to eighteen months.][added: deploy.]

Similarly, the emergence of [removed: on-line] [added: online] retailers, whether as extensions of our traditional competition or in the form of major, non-traditional competitors, could result in easier [added: and quicker price discovery and the adoption of aggressive pricing strategies and sales methods.]

We may not be successful in integrating acquisitions and achieving intended benefits and synergies. [removed: We have completed several acquisitions] [added: Historically, the vast majority] of [removed: businesses in recent years.][added: our growth has been organic.]

[removed: We] [added: However, we have completed several acquisitions over the last decade and] expect to continue to pursue strategic acquisitions that we believe will either expand or complement our business in new or existing markets or further enhance the value and offerings we are able to provide to our existing or future potential customers.

This is often referred to as a price-to-earnings [removed: (or P/E)] [added: (P/E)] ratio.

[removed: However, to] the extent [removed: that we fail to successfully execute] our [removed: growth strategies and/or poorly navigate the risks that surround our business, including those described throughout this section, or to the extent our] industry (industrial distribution, or industrial stocks in general) loses favor in the marketplace, there can be no assurance that investors will continue to afford a premium multiple to our earnings which could adversely affect our stock price.

In addition, although our board of directors has authorized share purchase programs and we purchased shares in [added: 2022,] 2020, [removed: 2018,] and prior years through these programs, we may discontinue doing so at any time.

A downturn in the economy or in the principal markets served by us and other factors may affect customer spending, which could harm our operating results. In general, our sales [removed: represent] [added: are the result of planned and unplanned customer] spending on [removed: discretionary items or consumption needs by our customers.][added: products used in production of final goods, infrastructure construction, and/or the maintenance of facilities.]

- impact of higher sustained global temperatures (global [removed: warming)][added: warming),]

A downturn in either the national or local [removed: economy] [added: economies] where we operate, or in the principal markets served by us, or changes in any of the other factors described above, could negatively impact sales at our in-market locations, sales through our other selling channels, and the level of profitability of those in-market locations and other selling channels.

Our suppliers could discontinue [added: or experience disruption in] selling products manufactured in foreign countries at any time for reasons that may or may not be in our control or our [removed: suppliers'] [added: suppliers’] control, including foreign government regulations, domestic government regulations, disruption in trade relationships and agreements, political unrest, war, disease, [added: labor availability,] or [removed: changes] [added: change] in local economic conditions.

Changes in energy costs and the cost of raw materials used in our products could impact our net sales, cost of sales, gross profit percentage, distribution expenses, and occupancy expenses, which may result in lower operating income. [removed: Costs] [added: Our suppliers can experience significant fluctuation over time in the cost] of raw materials [removed: used in our products] (e.g., steel, [removed: plastic) and energy costs can fluctuate significantly over time.][added: plastic, etc.) used to produce their products.]

For example, we have experienced a long-term increase in the proportion of our sales attributable to both non-fastener products and national accounts and Onsite customers.

Non-fastener products typically have a lower gross profit percentage than fasteners because in many cases non-fastener products are less technical, have shorter supply chains, and are easier to transport.

For instance, in 2022, we executed initiatives intended to drive key account penetration, which resulted in relative growth in our national account and Onsite customers and a decline in our gross profit percentage from customer mix.

In contrast, the strength of the manufacturing economy in 2022 resulted in relatively faster growth in our more economically cyclical fastener product line over our non-fastener product lines, resulting in an increase in our gross profit percentage from product mix.

There are other variables that could cause our gross profit percentage to decline, including downward pressure on sales prices due to deflation, pressure from customers to reduce costs, or increased competition.

We could experience reductions in the volume of purchases we make from our suppliers, which could reduce supplier volume allowances.

Customers, suppliers, employees, community partners, shareholders, and regulatory agencies are increasingly scrutinizing our ESG disclosures and practices and factoring the social impact of our policies and practices into whether and how they engage with us.

Our ability to achieve any ESG objective is subject to numerous risks, many of which are outside of our control.

Examples of such risks include:

- the availability and cost of low- or non-carbon-based energy sources;

- the evolving regulatory requirements affecting ESG standards or disclosures;

- the availability of suppliers that can meet sustainability, diversity, and other ESG standards that we may set;

- the availability of effective and acceptable emission offset technologies or strategies in the event such tools will be necessary to achieve overall emission reduction and mitigation goals;

- our ability to recruit, develop, and retain diverse talent in our labor markets; and

- the success of our organic growth and acquisitions and dispositions of businesses or operations.

For instance, a lack of customer access during the COVID-19 pandemic in 2020 and 2021 resulted in signings of Onsites and FMI devices, both important indicators of future sales growth, being below target levels for those years, which had adverse implications on sales growth in 2022.

Our competitive advantage in FMI solutions, which includes industrial vending (FASTVend) and bin stock (FASTStock and FASTBin) tools could be eliminated and, in the case of FASTVend, the loss of key suppliers of equipment and services could be impactful and result in failure to deploy devices.

Certain circumstances may reduce short-term customer receptivity to adopting our FMI services.

For instance, when economic activity slows, some customers may prioritize managing existing operations over adopting new technologies until business circumstances change.

For instance, in 2020 and 2021 we experienced a slowdown in the signing of FMI devices as customers limited access to decision-makers and facilities to minimize risks related to the COVID-19 pandemic.

Our stock price will fluctuate, and at times these fluctuations may be volatile.

The prices of markets and individual equities tend to fluctuate.

These fluctuations commonly reflect events, many of which may be fully or partially outside of our control, that may change investor's perception of our future earnings growth prospects, including changes in economic conditions, ability to execute business strategy, the impacts of public policy, investor sentiment, competitive dynamics, and many other factors.

While the sources of stock price fluctuation can be common across companies, the magnitude of these fluctuations can vary for different companies.

This is commonly measured by beta, which is an individual stock’s volatility in relation to the overall market.

Our stock price has traditionally had a high beta value, which means fluctuations in the price of our shares will often be sharper than what is experienced by broader market indices.

We can provide no assurance that the above-average historical volatility of our stock versus the broader market will moderate.

Volatility in our stock price could also result in the filing of securities class action litigation, which could result in substantial costs and the diversion of our management's time, attention, and resources.

However, to the extent that we fail to successfully execute our growth strategies and/or poorly navigate the risks that surround our business, including those described throughout this section, or to

- changes in the value of local currencies relative to our functional currency, the United States dollar,

In 2022, we experienced a weakening in the value of many local currencies relative to the United States dollar.

As a result, in certain international markets our relatively healthy local currency sales were weak or weakened in certain international markets when reported in our functional currency.

This was particularly pronounced in Europe.

In 2022, a loosening of China’s "zero tolerance" COVID-19 domestic policy, and the resulting surge in infections, caused a weakening in local currency results in our Chinese and Southeast Asian markets.

In 2022, the Russo-Ukrainian war adversely affected European energy markets and business activity, resulting in a weakening of sales growth in local currency for our Continental European business unit.

We experienced this in 2021 and 2022, as a strong recovery in global product demand following the COVID-19 pandemic created disruptions due to a shortage of shipping capacity and the effect of labor capacity restraints on the ability to produce sufficient goods in a timely manner.

We and our customers experienced a shortage of certain products and elevated transportation costs as a result.

They can also experience significant fluctuation in the cost of energy consumed in their production processes and in the cost of fuel consumed to transport their products.

We also consume energy and fuel in our own operations, and can experience direct and significant fluctuation in our own costs.

We experienced resource inflation in 2021 and 2022, as a strong recovery in global demand following the COVID-19 pandemic created tightness in the market for certain raw materials and energy.

telecommunication failures, and other problems.

For example, the portion of our sales attributable to fasteners has been decreasing for approximately twenty-five years.

That has adversely affected our gross profit percentage as our non-fastener products generally carry lower gross profit margins than our fastener products.

For instance, in 2020, our gross profit margin declined significantly as the pandemic generated significant sales of certain products, such as PPE and sanitizer, that have traditionally lower gross profit margins.

Conversely, as business conditions normalized in 2021, sales of these products declined versus the prior year, which more than offset our traditional mix-related margin pressure and resulted in improvement of our gross profit margin.

Other variables that could cause our gross margin to decline include downward pressure on sales prices, changes in the volume or timing of our orders, and/or an inability to pass higher product costs on to customers.

We can experience downward pressure on sales prices as a result of deflation, pressure from customers to reduce costs, or increased competition.

Reductions in our volume of purchases can adversely impact gross profit by reducing supplier volume allowances.

For instance, over the last five years we have included shareholder proposals in our proxy statement seeking specific actions around social and governance policy and reporting.

We have also seen an increase in customer requests for information pertaining to diversity and environmental policy, including that our scores with various third-party ESG rating organizations achieve a certain threshold.

In fact, the COVID-19 pandemic has made gaining access to customers more challenging due to both alternative work arrangements to manage risk of infection in workplaces and due to shifts in priorities to short-term crisis management and away from long-term strategic planning.

This has resulted in our signings of Onsites and FMI installations, both important indicators of future sales growth, to be below target levels in 2020 and 2021.

In addition, as we experienced in 2020 and 2021, our ability to deploy our FMI solutions at targeted levels could be limited by events similar to the COVID-19 pandemic if customers shift their energy to addressing short-term disruptions instead of long-term strategic planning.

and quicker price discovery and the adoption of aggressive pricing strategies and sales methods.

This risk was demonstrated in 2021.

As economic confidence and general business conditions recovered from the COVID-related downturn in 2020, spending for industrial supplies to companies engaged in construction and the manufacture of components, capital goods, and heavy equipment expanded sharply.

This produced a resumption of growth in key cyclical product lines, such as fasteners, that had declined the preceding year (only partly offset by reduced sales of COVID\-related supplies to government, healthcare, and warehousing customers).

At the same time, we believe our growth was restrained by other economic factors.

These include: (1) difficulty adding labor resources, potentially due to low unemployment, concerns about the pandemic, and government stimulus support; (2) supply chain disruption due to constraints for certain raw material and component availability, production capacity, shipping capacity, and labor availability; and (3) the impact of inflation for raw materials, manufactured components, transportation services, and labor.

These trends were evident throughout 2021.

We experienced this in 2021 as a lack of shipping and labor capacity, caused primarily by the strong recovery in global product demand but exacerbated by continued pandemic-related workforce disruption, constrained our ability to efficiently import supplies and increased shipping costs significantly.

Increases in these costs result in increased production costs for our suppliers.

The fuel costs of our distribution and branch operations have fluctuated as well.

This was a meaningful issue in 2021, when costs for metals, particularly steel, fuels, and overseas shipping services increased sharply to reflect strong demand, and labor constraints.

While we typically try to pass higher supplier prices and fuel costs through to our customers or to modify our activities to mitigate the impact, including in 2021, we may not be successful, particularly if supplier prices or fuel costs rise rapidly.

If we have

The ongoing occurrence of the COVID-19 pandemic, or any other such widespread public health crisis, could have a material adverse effect on our business, results of operations, and financial condition. The onset of the COVID-19 pandemic in early 2020 impacted our business due to government authorities and customers imposing facility closures, work-from-home orders, social distancing protocols, and/or other restrictions.

In 2021, though the pandemic continued to impact United States and world populations in the form of high infection and hospitalization rates, including from new variants of COVID-19, this effect on our business and financial condition was secondary to the re-opening and recovery of the global economy.

Even so, the continued public health concerns resulting from the COVID-19 pandemic continue to create significant uncertainty, economic disruption, and volatility, all of which have impacted and may continue to impact our business.

We may be required to take significant actions to mitigate future outbreaks, including, but not limited to, facility closures and work-from-home policies, and/or customer activity may be affected by their own mitigation actions.

This could adversely affect our business, results of operations, and financial condition.

There can be no

The most significant recent example of this is the comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the Tax Act), which was enacted in the United States in December 2017.

However, in September 2021, the Ways and Means Committee of the United States House of Representatives published tax proposals that, if ultimately enacted as proposed, could result in higher tax payments as a result of higher corporate tax rates and higher taxes on earnings from foreign jurisdictions.

This was a factor most recently in 2020.

The turmoil that came with the onset of the COVID-19 pandemic did not have a significant adverse impact on our liquidity or borrowing costs given our low level of indebtedness at that time.

However, the availability of funds tightened and credit spreads on corporate debt increased.

On March 5, 2021, the U.K. Financial Conduct Authority announced that

immediately after December 31, 2021, publication of certain LIBOR settings would permanently cease, with most other LIBOR settings, including 1 month, 3 month, and 6 month LIBOR settings ceasing on June 30, 2023.

Our Credit Facility currently uses LIBOR as a reference rate, and, while there are customary LIBOR replacement provisions in our Credit Facility, the transition to alternatives to LIBOR could be modestly disruptive to the credit markets.

This section of this [added: Form] 10-K generally discusses [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] items and year-to-year comparisons [removed: between 2021] [added: for the current year] and [removed: 2020.][added: the prior year.]

Discussions of [removed: 2019 items and year-to-date comparisons between] 2020 [removed: and 2019 that are not included in this Form 10-K,] [added: items] can be found in 'Management's Discussion and Analysis of Financial Condition and Results of Operations' in Part II, Item 7 of our annual report on Form 10-K for the fiscal year ended December 31, [removed: 2020.][added: 2021.]

We distribute these supplies through a network of [removed: over 3,200] [added: approximately 3,300] in-market locations.

The manufacturing market includes sales of products for both original equipment manufacturing (OEM), where our products are consumed in the final products of our customers, and manufacturing, repair and operations (MRO), where [removed: are] [added: our] products are consumed to support the facilities and ongoing operations of our customers.

Geographically, our branches, Onsite locations, and customers are primarily located in North [removed: America.][added: America, though we continue to grow our non-North American presence as well.]

It is helpful to appreciate several aspects of our marketplace: [removed: (1) It's] [added: First, it is] big.

[removed: (2) Many] [added: Second, many] of the products we sell are individually inexpensive, but the cost and time to manage, procure, and transport these products can be quite meaningful.

[removed: (4) Many] [added: Third, many] customers prefer to reduce their number of [added: MRO and OEM] suppliers to simplify their business, while also utilizing various technologies and models (including our local branches when they need something quickly or unexpectedly) to improve availability and reduce waste.

[removed: (5) We] [added: Lastly, we] believe the markets are efficient.

Our approach to addressing these aspects of our marketplace is captured in our [removed: motto] [added: tagline] Where Industry Meets [removed: Innovation*™*.][added: Innovation™.]

The table below summarizes our absolute and full-time equivalent (FTE; based on 40 hours per week) employee headcount, our investments in in-market locations (defined as the sum of the total number of branch locations and the total number of active Onsite locations), and weighted FMI [added: devices] at the end of the periods presented and the percentage change compared to the end of the prior period.

| | | | Q4 [removed: 2021] [added: 2022] | | | | | | Q4 [removed: 2020] [added: 2021] | | | | | | Twelve-month % Change | | |

| In-market locations \- absolute employee headcount | | | [removed: 12,464] [added: 13,410] | | | | | | [removed: 12,680] [added: 12,464] | | | | | | [removed: \-1.7] [added: 7.6] | | % |

| In-market locations - FTE employee headcount | | | [removed: 11,337] [added: 12,017] | | | | | | [removed: 11,260] [added: 11,337] | | | | | | [removed: 0.7] [added: 6.0] | | % |

| Total absolute employee headcount | | | [removed: 20,507] [added: 22,386] | | | | | | [removed: 20,365] [added: 20,507] | | | | | | [removed: 0.7] [added: 9.2] | | % |

| Total FTE employee headcount [added: (1)] | | | [removed: 18,370] [added: 19,854] | | | | | | [removed: 17,836] [added: 18,334] | | | | | | [removed: 3.0] [added: 8.3] | | % |

| Number of branch locations | | | [removed: 1,793] [added: 1,683] | | | | | | [removed: 2,003] [added: 1,793] | | | | | | [removed: \-10.5] [added: \-6.1] | | % |

| Number of active Onsite locations | | | [removed: 1,416] [added: 1,623] | | | | | | [removed: 1,265] [added: 1,416] | | | | | | [removed: 11.9] [added: 14.6] | | % |

| Number of in-market locations | | | [removed: 3,209] [added: 3,306] | | | | | | [removed: 3,268] [added: 3,209] | | | | | | [removed: \-1.8] [added: 3.0] | | % |

| Weighted FMI devices (MEU installed count) [removed: (1)] [added: (2)] | | | [removed: 92,874] [added: 102,151] | | | | | | [removed: 83,951] [added: 92,874] | | | | | | [removed: 10.6] [added: 10.0] | | % |

[removed: (1)] [added: | (2) | | |] This number excludes approximately [removed: 12,000] [added: 6,500] non-weighted devices that are part of our locker lease program. [added: | | |]

During the last twelve months, we increased our total FTE employee headcount by [removed: 534.][added: 1,520.]

This reflects an increase in our in-market and non-in-market selling FTE employee headcount of [removed: 230] [added: 1,063] to support growth in the marketplace and sales initiatives targeting customer acquisition.

We had an increase in our distribution center FTE employee headcount of [removed: 149] [added: 231] to support increasing product throughput at our facilities and to expand our local inventory fulfillment terminals (LIFTs).

[removed: We had an] increase in our remaining FTE employee headcount of [removed: 155] [added: 226] that relates primarily to personnel investments in information [removed: technology] [added: technology, manufacturing,] and operational support, such as purchasing and product development.

We opened [removed: two branches] [added: one branch] in the fourth quarter of [removed: 2021] [added: 2022] and closed [removed: 68 branches,] [added: 34,] net of conversions.

We activated [removed: 65] [added: 76] Onsite locations in the fourth quarter of [removed: 2021] [added: 2022] and closed [removed: 16,] [added: 20,] net of conversions.

In [removed: 2021,] [added: 2022,] we opened [removed: ten] [added: 12] branches and closed [removed: 220,] [added: 122,] net of conversions.

In [removed: 2021,] [added: 2022,] we activated [removed: 242] [added: 306] Onsite locations and closed [removed: 91,] [added: 99,] net of conversions.

In any period, the number of closings [removed: tend] [added: tends] to reflect [removed: both] normal churn in our business, whether due to redefining or exiting customer relationships, the shutting or relocation of customer facilities that host our locations, or a customer decision, as well as our ongoing review of underperforming locations.

| | | | [removed: | | | 2021] [added: 2021] | | | | | | 2020 | | | [removed: | | | 2019 | | |]

| Net sales | | | [removed: | | |] 100.0 | | % | | | | 100.0 | | % | [removed: | | | 100.0 | | % |]

| Gross profit | | | [removed: | | | 46.2 | | % | | | | 45.5] [added: 46.2] | | % | | | | [removed: 47.2] [added: 45.5] | | % |

| Operating and administrative expenses | | | [removed: | | | 26.0 | | % | | | | 25.3] [added: 26.0] | | % | | | | [removed: 27.3] [added: 25.3] | | % |

| Operating income | | | [removed: | | | 20.3 | | % | | | | 20.2] [added: 20.3] | | % | | | | [removed: 19.8] [added: 20.2] | | % |

| Net interest expense | | | [removed: | | |] \-0.2 | | % | | | | \-0.2 | | % | [removed: | | | \-0.3 | | % |]

| Earnings before income taxes | | | [removed: | | | 20.1 | | % | | | |] 20.1 | | % | | | | [removed: 19.6] [added: 20.1] | | % |

| Note – Amounts may not foot due to rounding difference. | | | | | | | | | | | | [removed: | | | | | | | | |]

| | | | [removed: 2021] [added: 2021] | | | | | | 2020 | | | [removed: | | | 2019 | | |]

| Net sales | | | [removed: $] [added: $] | [removed: 6,010.9] [added: 6,010.9] | | | | | 5,647.3 | | | [removed: | | | 5,333.7 | | |]

The following table presents a performance summary of our results of operations for the periods ended December 31:

| Net sales | | | $ | 6,980.6 | | | | | 6,010.9 | | | | | | 16.1 | | % | | | | $ | 5,647.3 | | | | | 6.4 | | % |

| Daily sales | | | $ | 27.5 | | | | | 23.8 | | | | | | 15.7 | | % | | | | $ | 22.1 | | | | | 7.3 | | % |

| Gross profit | | | $ | 3,215.8 | | | | | 2,777.2 | | | | | | 15.8 | | % | | | | $ | 2,567.8 | | | | | 8.2 | | % |

| *% of net sales* | | | 46.1 | | % | | | | *46.2* | | *%* | | | | | | | | | | *45.5* | | *%* | | | | | | |

| Operating and administrative expenses | | | $ | 1,762.2 | | | | | 1,559.8 | | | | | | 13.0 | | % | | | | $ | 1,426.0 | | | | | 9.4 | | % |

| % of net sales | | | 25.2 | | % | | | | *26.0* | | *%* | | | | | | | | | | *25.3* | | *%* | | | | | | |

| Operating income | | | $ | 1,453.6 | | | | | 1,217.4 | | | | | | 19.4 | | % | | | | $ | 1,141.8 | | | | | 6.6 | | % |

| *% of net sales* | | | 20.8 | | % | | | | *20.3* | | *%* | | | | | | | | | | *20.2* | | *%* | | | | | | |

| Earnings before income taxes | | | $ | 1,440.0 | | | | | 1,207.8 | | | | | | 19.2 | | % | | | | $ | 1,132.7 | | | | | 6.6 | | % |

| Net earnings | | | $ | 1,086.9 | | | | | 925.0 | | | | | | 17.5 | | % | | | | $ | 859.1 | | | | | 7.7 | | % |

We would characterize 2022 as reflecting the normalization of the business cycle relative to the pandemic-impacted years of 2020 and 2021.

While we did experience some slowing in business activity over the course of the year, customer demand was generally healthy throughout, resulting in good unit growth.

Incremental pricing from actions taken at the end of 2021 and the start of 2022 further contributed to our growth, though over the course of the year we saw the inflationary pressures and supply chain constraints that catalyzed our pricing actions largely dissipate.

This normalization in business activity also resulted in improved signings of Onsites and FMI devices, which approached pre-pandemic levels.

These factors more than offset challenges in our smaller non-North American markets, where the effects of the Russo-Ukrainian War and China's evolving COVID-19 policies weighed on growth.

This growth, combined with improvements to our efficiency stemming from growth in our Digital Footprint and changes to our go-to-market strategies, allowed us to expand our operating margins in the period.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| (1) | | | Due to a calculation error, organizational support personnel was overstated by 36 FTE in the fourth quarter of 2021, with total non-selling FTE and total FTE being overstated by the same amount. These figures have been corrected in this Form 10-K. Adjusting for this error, total FTE in 2021 would have been down by an additional 0.2% for year-to-date growth. | | |

| | | | | | |

We had an

CURRENT YEAR RESULTS ENDED 2022

| | | | 2022 | | | | | | 2021 | | |

| Gross profit | | | 46.1 | | % | | | | 46.2 | | % |

| Operating and administrative expenses | | | 25.2 | | % | | | | 26.0 | | % |

| Operating income | | | 20.8 | | % | | | | 20.3 | | % |

| Earnings before income taxes | | | 20.6 | | % | | | | 20.1 | | % |

| | | | 2022 | | | | | | 2021 | | |

| Net sales | | | $ | 6,980.6 | | | | | 6,010.9 | | |

| Percentage change | | | 16.1 | | % | | | | 6.4 | | % |

| Daily sales | | | $ | 27.5 | | | | | 23.8 | | |

| Percentage change | | | 15.7 | | % | | | | 7.3 | | % |

| Daily sales impact of currency fluctuations | | | \-0.5 | | % | | | | 0.6 | | % |

The increase in net sales noted above for 2022 was due to higher unit sales of MRO and OEM supplies to traditional manufacturing and construction customers and higher pricing as further set forth below.

Higher unit sales in 2022 were a result of healthy economic activity throughout the period, though we did observe some moderation in demand as the year progressed.

This moderation in demand, combined with more difficult year-over-year comparisons as the year progressed, produced daily sales growth of 18.1% in the first half of 2022, daily sales growth of 13.3% in the second half of 2022, and daily sales growth of 8.0% in December 2022.

Growth was led by our manufacturing customers, with particular strength in markets involved with commodity and capital goods production.

Our non-residential construction customers grew on an annual basis, but turned slightly negative in the fourth quarter.

We believe the relative underperformance of this customer category reflects deliberate shifts in our branch strategy that de-emphasized walk-in and over-the-counter transactions.

Italicized discussions throughout Item 7 of this Form 10-K indicate discussions of financial condition and results of operations in 2020.

(3) Purchasing professionals often expend disproportionate effort managing the high stock keeping unit (SKU) count of low-volume, low value MRO supplies which is better allocated to their higher volume, higher value OEM supplies.

Impact of COVID-19 on Our Business

In the second quarter of 2020, the impacts of the COVID-19 pandemic on our business were dramatic in two respects.

First, local and national actions taken, such as stay-at-home mandates, reduced business activity sharply as many customers either closed their locations or operated at significantly diminished capacity.

This effect was illustrated in a significant decline in sales for our fastener products.

Second, social actions taken to mitigate the effects of the pandemic produced significant demand for personal protection equipment (PPE) and sanitation products, generating significant sales of such products not only to certain traditional customers but also to state and local government entities as well as front line responders.

This effect was illustrated by a significant increase in sales for our safety products.

During that period, improved sales of PPE and sanitation products

more than offset the general economic weakness.

These dynamics affected our business throughout the second quarter of 2020, but the effects were greatest in April, with sequential improvements in May and June as business restrictions gradually eased.

The pandemic continued to have a significant impact on our business in the third and fourth quarters of 2020.

The marketplace broadly, and Fastenal specifically, continued to operate with certain modifications to balance re-opening with employee and customer safety.

However, most of the markets in which we operate began to normalize in the second half of 2020.

This improved the outlook of the manufacturing and construction customers that support our traditional branch and Onsite business and moderated the level of demand for PPE and sanitation products that we experienced at the onset of the pandemic.

The sequential gains in economic activity that we experienced in the latter part of the second quarter of 2020 continued through the third and fourth quarters of 2020.

In 2021, we saw several distinct business patterns, which mostly persisted throughout the period.

First, economic normalization continued, resulting in strong demand from our traditional manufacturing and non-residential construction customers.

Second, the pandemic continued, with ebbs and flows in infections during the year.

This resulted in businesses, including Fastenal, continuing to take steps to promote workforce and customer health and safety.

However, in contrast to the early part of 2020, the pandemic was not primarily responsible for plant shutdowns or production cuts; companies navigated the pandemic mostly without curtailing operations.

Third, this combination of strong demand coupled with ongoing adaptations to the pandemic resulted in a number of stresses accompanying economic growth: supply chain disruption, labor force constraints, and product and shipping inflation.

As a result, while the economic backdrop was solid throughout 2021, satisfying customer demand was challenged by difficulty in procuring materials, retaining sufficient part- and full-time labor to service existing customers and acquire new ones, and offsetting inflation.

We exited 2021 with each of those dynamics still largely intact.

At the height of the pandemic, and consistent with broader social trends, we took steps to safeguard the health of our employees and customers.

This included closing facilities to outside personnel, adjusting work schedules, spaces and technologies to allow for social distancing, providing ample PPE and cleaning supplies, and having formal mitigation policies in the event of infection.

These precautions allowed our operations to continue to function effectively.

At the end of 2021, our operations were operating mostly normally, although we continue to practice social distancing within our facilities, make PPE and cleaning supplies available, and follow our mitigation policies when an infection is identified.

The pandemic has not precipitated any issues with our internal controls, financial health, or liquidity, with substantially all of our $700.0 bank revolver available for use.

There remains significant uncertainty concerning the duration of the COVID-19 pandemic as well as the severity of any future infection surges.

As a result, future events deriving from COVID-19 may negatively impact sales and gross margin due to, among other things: limitations on the ability of our suppliers to manufacture, or procure from manufacturers, the products we sell; an inability to meet delivery requirements and commitments; limitations on the ability of our employees to perform their work due to illness caused by the pandemic or local, state, or federal orders requiring employees to remain at home; limitations on the ability of carriers to deliver our products to customers; limitations on the ability of our customers to conduct their business and purchase our products and services; and limitations on the ability of our customers to pay us on a timely basis.

We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state, or local authorities or that we determine are in the best interests of our employees, customers, suppliers, and shareholders.

While we are unable to determine or predict the nature, duration, or scope of the overall impact the COVID-19 pandemic will have on our business, results of operations, liquidity, or capital resources, we believe that it is important to share where our company stands today, how our response to COVID-19 is progressing, and how our operations and financial condition may change as the fight against COVID-19 progresses.

Net sales increased $363.4, or 6.4%, in 2021 relative to 2020.

Our gross profit increased $209.5, or 8.2%, in 2021 relative to 2020, and as a percentage of net sales increased to 46.2% in 2021 from 45.5% in 2020.

Our operating income increased $75.6, or 6.6%, in 2021 relative to 2020, and as a percentage of net sales increased to 20.3% in 2021 from 20.2% in 2020.

Our net earnings in 2021 were $925.0, an increase of 7.7% when compared to 2020.

Our diluted net earnings per share were $1.60 in 2021 compared to $1.49 in 2020, an increase of 7.4%.

The year 2021 was marked by a number of trends.

Favorably, we experienced strong demand from our traditional manufacturing and non-residential construction customers.

During [removed: 2021,] [added: 2022,] changes in foreign currency exchange rates [removed: increased] [added: decreased] our reported net sales by [removed: $37.4] [added: $37.5] with the estimated effect on our net earnings being immaterial.

[removed: Commodity steel pricing – We buy and sell various types of steel products; these] [added: These] products consist primarily of different types of threaded fasteners and related hardware.

[removed: Based on our ability to pass these higher costs on,] [added: We estimate] the [removed: estimated] effect on our net earnings was immaterial in [removed: 2021.][added: 2022.]

During [removed: 2021,] [added: 2022,] the price of energy as reflected in many market indexes increased as economic activity improved, which contributed to higher costs for fuel in our vehicles and utilities at our facilities.

In [removed: 2021,] [added: 2022,] our estimated net earnings exposure for [removed: commodity energy prices] [added: materials for which fossil fuels are feedstock] was immaterial.

During [removed: 2021,] [added: 2022,] prices for fossil fuels were generally [removed: higher] [added: higher,] which caused us to experience higher prices for products with high chemical or plastic content.

[removed: *During 2020, although fossil fuel prices were generally lower we experienced stable, not lower, prices for products with high chemical or plastic content.*] We believe that over time these risks are mitigated in part by our ability to pass freight and product costs to our customers, the efficiency of our trucking distribution network, and the ability, over time, to manage our occupancy costs related to the heating and cooling of our facilities through better efficiency.

As a result, changes in [removed: LIBOR] [added: such rates] can affect our operating results and liquidity to the extent we do not have effective interest rate swap arrangements in place.

A one percentage point increase [removed: in LIBOR] [added: to our floating rate debt] in [removed: 2021] [added: 2022] would have resulted in approximately [removed: $0.2] [added: $1.6] of additional interest expense.

CURRENT YEAR RESULTS ENDED 2022

Commodity steel pricing – We buy and sell various types of steel.

During 2022, and particularly in the latter half of 2022, the price of steel as reflected in many market indexes began to decrease.

Due to our long supply chain, changes that we experienced in 2022 do not immediately impact our earnings results.

In fact, we were not able to fully compensate for higher costs through higher prices in 2022, resulting in a modestly negative impact to our gross margin percentage in 2022.

We believe we were able to mitigate the effect of higher fuel costs by increasing freight charges in 2022, and as a result our estimated net earnings exposure for commodity energy prices was immaterial.

Interest rates - Loans under our Credit Facility bear interest at floating rates.

Italicized discussions throughout Item 7A of this Form 10-K indicate discussions of market risks in 2020.

*During 2020, changes in foreign currency exchange rates decreased our reported net sales by $5.7 with the estimated effect on our net earnings being immaterial.*

During 2021, the price of steel as reflected in many market indexes increased, which contributed to cost inflation in our steel-based products.

*During 2020, the price of commodity steel as reflected in many market indexes fell sharply early in the year as business activity declined in response to actions to address the COVID-19 pandemic, recovered sharply as business activity rebounded, and finished 2020 above the preceding year end levels.*

*During 2020, prices for energy were mostly lower as business activity declined in response to actions to address the COVID-19 pandemic.

As a result, we experienced lower costs for fuel for our vehicles and utilities for our facilities.*

In 2021, our estimated net earnings exposure for materials for which fossil fuels are feedstock was immaterial.

Interest rates - Loans under our Credit Facility bear interest at floating rates tied to LIBOR (or, if LIBOR is no longer available, at a replacement rate to be determined by the administrative agent for the Credit Facility and consented to by us).

The year end is December 31, [removed: 2021] [added: 2022] unless additional years are included or noted.

We began with a marketing strategy of supplying threaded fasteners to customers through a branch network in small, [removed: medium-sized,] [added: medium,] and, in subsequent years, large cities.

The large majority of our transactions are [removed: business-to-business, though we also have some walk-in retail business.][added: business-to-business.]

At the end of [removed: 2021,] [added: 2022,] we had [removed: 3,209] [added: 3,306] in-market locations (defined in the table below) in 25 countries supported by 15 distribution centers in North America (12 in the United States, two in Canada, and one in Mexico), and one in Europe, and we employed [removed: 20,507] [added: 22,386] people.

Many of our customers engage with us through eCommerce, but [added: in] most [removed: of our sales through this channel are with] [added: cases these] customers [removed: that use] [added: are utilizing] eCommerce to supplement our service through our other channels.

The following table [removed: shows our consolidated net sales for] [added: shows, as of the end of] each of the last [removed: ten] [added: 10] fiscal [removed: years;] [added: years, our consolidated net sales;] the number of branch, Onsite, and total in-market [removed: locations at the end of each of the last ten fiscal years;] [added: locations;] their respective sales, as well as the average monthly sales per location that were generated from our branch and Onsite locations; and our revenue generated from non-traditional sources:

| | | | [removed: 2021] [added: 2022] | | | [added: 2021 | | |] 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 [removed: | | | 2012] [added: (1)] | | |

| Net sales | | | $ | [removed: 6,010.9] [added: 6,980.6] | | [added: 6,010.9 | | |] 5,647.3 | | | 5,333.7 | | | 4,965.1 | | | 4,390.5 | | | 3,962.0 | | | 3,869.2 | | | 3,733.5 | | | 3,326.1 | | | [removed: 3,133.6 | | |]

| Branch locations | | | [removed: 1,793] [added: 1,683] | | | [added: 1,793 | | |] 2,003 | | | 2,114 | | | 2,227 | | | 2,383 | | | 2,503 | | | 2,622 | | | 2,637 | | | 2,687 | | | [removed: 2,652 | | |]

| Branch [removed: revenue(1)] [added: revenue (2)] | | | $ | [removed: 3,726.2] [added: 4,161.6] | | [added: 3,726.2 | | |] 3,587.1 | | | 3,660.1 | | | 3,625.8 | | | 3,399.6 | | | 3,198.1 | | | 3,281.8 | | | 3,225.3 | | | [removed: | | |] [added: —] | | |

| Average [added: monthly] sales per branch [removed: location(2)] [added: location (3)] | | | $ | [removed: 163.6] [added: 199.5] | | [added: 163.6 | | |] 145.2 | | | 140.5 | | | 131.1 | | | 116.0 | | | 104.0 | | | 104.0 | | | 101.0 | | | [removed: | | |] [added: —] | | |

| Onsite [removed: locations(3)] [added: locations] | | | [removed: 1,416] [added: 1,623] | | | [added: 1,416 | | |] 1,265 | | | 1,114 | | | 894 | | | 605 | | | 401 | | | 264 | | | 214 | | | [removed: | | |] [added: —] | | |

| Onsite [removed: revenue(1)] [added: revenue (2)] | | | $ | [removed: 1,898.0] [added: 2,465.5] | | [added: 1,898.0 | | |] 1,485.6 | | | 1,391.7 | | | 1,081.7 | | | 770.2 | | | 569.2 | | | 454.3 | | | 387.7 | | | [removed: | | |] [added: —] | | |

| Average [added: monthly] sales per Onsite [removed: location(2)] [added: location (3)] | | | $ | [removed: 118.0] [added: 135.2] | | [added: 118.0 | | |] 104.1 | | | 115.5 | | | 120.3 | | | 127.6 | | | 142.7 | | | 158.4 | | | 157.6 | | | [removed: | | |] [added: —] | | |

| Other [removed: revenue(4)] [added: revenue (4)] | | | $ | [removed: 386.7] [added: 353.5] | | [added: 386.7 | | |] 574.6 | | | 281.9 | | | 257.6 | | | 220.7 | | | 194.7 | | | 133.1 | | | 120.5 | | | [removed: | | |] [added: —] | | |

| Total in-market [removed: locations(5)] [added: locations (5)] | | | [removed: 3,209] [added: 3,306] | | | [added: 3,209 | | |] 3,268 | | | 3,228 | | | 3,121 | | | 2,988 | | | 2,904 | | | 2,886 | | | 2,851 | | | 2,687 | | | [removed: 2,652 | | |]

[removed: (1)] [added: | (2) | | |] Revenues attributable to our traditional and international branch [removed: locations,] [added: locations (both of which are defined below),] and our Onsite locations, respectively. [added: | | |]

[removed: (2)] [added: | (3) | | |] Average sales per month considers the average active base of branches and Onsites, respectively, in the given year, factoring in the beginning and ending location count, divided by total revenues attributable to our branch and Onsite locations, further divided by [removed: twelve] [added: 12] months, respectively. [added: This information is presented in thousands. | | |]

[removed: While such] [added: | (1) | | | Onsite] locations have existed since [removed: 1992,] [added: 1992; however,] we did not specifically track their number until we identified our Onsite program as a growth driver in 2014. [added: Therefore, Onsite, branch, and other revenue, and average monthly sales per location are intentionally omitted for 2013. | | |]

[added: |] (4) [added: | | |] This portion of revenue is generated outside of our traditional in-market location presence, examples of which include revenues arising from our custom in-house manufacturing, industrial services, leased locker arrangements, and other non-traditional sources of revenue. [added: In 2020, this included the effects of COVID-19, one response to which was substantial sales of pandemic-related products that were direct-shipped (versus sold through our in-market locations) as a means of delivering critical supplies more quickly. | | |]

[added: |] (5) [added: | | |] 'In-market locations' is defined as the sum of the total number of branch locations and the total number of Onsite locations. [added: | | |]

[removed: Today] [added: Today,] we believe there are few companies that offer our North American in-market location coverage.

In [removed: 2021,] [added: 2022,] roughly 52% of our sales and 50% of our in-market locations were in major Metropolitan Statistical Areas (MSAs) (populations in the United States and Canada greater than 500,000 people), while 21% of our sales and 19% of our in-market locations were in small MSAs (populations under 500,000 people), and 27% of our sales and 31% of our in-market locations were not in an MSA.

[removed: 1.)] [added: 1)] A 'traditional branch' typically services a wide variety of customers, including our larger national and regional accounts as well as retail customers.

At the end of [removed: 2021,] [added: 2022,] we had [removed: 1,649] [added: 1,538] traditional branches in the United States and Canada, and they represented [removed: 56.8%] [added: 55.0%] of [removed: total] [added: net] sales.

Certain locations are Customer Service Branches (CSBs), which tend to feature a showroom, regular hours during which [removed: it is] [added: they are] open to the public, and our standard stocking model of products designed for contractors.

These tend to appear and function more like an industrial supply house and stocking location and tend not to have transactions with non-account or retail-like customers unless it is a [removed: will call] [added: will-call] arrangement related to an online transaction.

At the end of [removed: 2021, 35%] [added: 2022, 20%] of our traditional branches operated as a CSB and [removed: 65%] [added: 80%] operated as a CFC.

[removed: 2.)] [added: 2)] An 'international branch' is the format we typically deploy outside the United States and Canada.

Since then, we have continued to expand our global [removed: footprint] [added: footprint,] and at the end of [removed: 2021,] [added: 2022,] we operated in 23 countries outside of the United States and Canada.

At the end of [removed: 2021,] [added: 2022,] we had [removed: 144] [added: 145] international branches operating outside the U.S. and Canada, and they represented [removed: 5.2%] [added: 4.6%] of [removed: total] [added: net] sales.

However, in each year since 2013, the company has experienced a net decline in its total branch count including net declines of [removed: 210] [added: 110] branches in [removed: 2021.][added: 2022.]

Our total decline since 2013 is [removed: 894] [added: 1,004] branches.

The model is best suited [removed: to] [added: for] larger companies, though we believe we can provide a higher degree of service at a lower level of revenue than most of our competitors.

It has been our experience that [added: the] sales mix at our Onsite locations produces a lower gross profit percentage than at our branch locations, but we gain revenue with the customer and our cost to serve is lower.

We have identified over [removed: 15,000] [added: 12,000] manufacturing and construction customer locations in [removed: the United States] [added: North America] with potential to implement the Onsite service model.

However, as awareness of our capabilities has grown, we have identified additional Onsite [added: potential with certain agencies of state, provincial, and local government customers, and academia.]

We also believe as we follow our existing national account customers outside the United [removed: States] [added: States,] our market potential for Onsite solutions will continue to expand.

The international opportunity is substantial, but our speed is limited by [removed: the] [added: our] relatively underdeveloped infrastructure in comparison to the United States.

We had [removed: 1,416] [added: 1,623] Onsite locations as of December 31, [removed: 2021, and they] [added: 2022, which] represented [removed: 31.6%] [added: 35.3%] of [removed: total] [added: net] sales, and signed [added: 356,] 274, [removed: 223,] and [removed: 362] [added: 223] new Onsite locations [added: (referred to herein as signings)] in [added: 2022,] 2021, [removed: 2020,] and [removed: 2019,] [added: 2020,] respectively.

Over time, how and where we engage our customers has expanded and evolved.

Today we sell a broader range of industrial and construction supplies spanning more than nine major product lines through a global network of in-market locations utilizing diverse technologies such as vending devices, bin stock devices, and eCommerce.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

We did not achieve that level of signings in 2022, though we increased our signings substantially from the prior year and were just below our pre-pandemic signings in 2019.

Our goal for Onsite signings in 2023 is 375 to 400.

| Starting Branches | | | 1,484 | | | 173 | | | 63 | | | 1,720 | | | | | | 5 | | | 20 | | | 48 | | | 73 | | | 1,793 | | |

| Ending Branches | | | 1,369 | | | 169 | | | 66 | | | 1,604 | | | | | | 5 | | | 22 | | | 52 | | | 79 | | | 1,683 | | |

| Starting Onsites | | | 1,184 | | | 89 | | | 89 | | | 1,362 | | | | | | 15 | | | 17 | | | 22 | | | 54 | | | 1,416 | | |

| Opened Onsites | | | 248 | | | 21 | | | 23 | | | 292 | | | | | | 1 | | | 6 | | | 7 | | | 14 | | | 306 | | |

| Ending Onsites | | | 1,338 | | | 107 | | | 111 | | | 1,556 | | | | | | 16 | | | 23 | | | 28 | | | 67 | | | 1,623 | | |

| In-Market Locations - 12/31/22 | | | 2,707 | | | 276 | | | 177 | | | 3,160 | | | | | | 21 | | | 45 | | | 80 | | | 146 | | | 3,306 | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| (1) | | | Includes the United States, the Dominican Republic, Guam, and Puerto Rico. | | |

| (5) | | | The United States includes the Dominican Republic, Guam, and Puerto Rico which were previously grouped with other geographical regions. Prior period figures in the above table may differ slightly from those previously disclosed due to this minor change in reporting. | | |

smaller fixed cost burden but have greater leverage of its employee-related expenses.

These technologies come in three forms: (1) scales that utilize a high-precision weight sensor system to measure the exact quantity on hand in real time, notifying Fastenal to replenish when inventory hits an established minimum; (2) infrared that uses infrared sensors lining individual bins to provide real-time visibility of approximate quantity and inventory values, notifying Fastenal to replenish when inventory hits an established minimum threshold; and (3) RFID, which is a Kanban system that utilizes RFID tags so that when an empty bin is removed from the rack and placed in a replenishment zone (also part of the same racking system) and a notification is sent to Fastenal to refill the order.

Benefits include reduced consumption, reduced purchase orders, reduced product handling, and 24-hour product availability.

Similar to Onsite, we did not achieve that level of signings in 2022, though we increased our signings substantially from the prior year and were just below our pre-pandemic signings in 2019.

a customer's view into our managed service model.

Our Digital Footprint represented 49.3% of sales in 2022.

Our greatest opportunity lies with the deployment of efficient and effective supply chain programs.

We are focused on addressing the four key components of people, products, processes, and technology to support this model.

In 2018, we began to deploy Local Inventory Fulfillment Terminals (LIFTs), which were once small distribution facilities situated where we had a dense population of FMI devices.

However, today, we have shifted our focus to position them into our existing distribution centers.

and predictable service to our customer's FMI devices, and free up time for our sales personnel to focus on customer penetration and acquisition.

In the past we have utilized a base inventory model for all of our branches, and such a model still exists in a smaller subset of our locations.

Increasingly, however, branches primarily stock inventory that is deemed to be appropriate by the district and branch personnel to service the customers within their selling territory.

During 2022, we had a single supplier that accounted for 5% of our inventory purchases, whereas all remaining suppliers fell below that threshold.

Our national accounts program is aimed at creating contractual partnerships that are dedicated to curating supply chain solutions in the OEM and MRO space.

These contractual programs are intended for multi-site companies and are created to drive value in the form of greater efficiency and productivity for them.

The scale and scope of the OEM and MRO products that these companies need to manage is very complex and costly.

We believe that our broad product offering coupled with our ability to execute and curate a dedicated service model for each of their sites provides us with a unique advantage and allows us to provide them with a total cost of ownership benefit.

In 2022, we averaged 119,583 active accounts per month and approximately 99.2% of the sales in our in-market locations are derived from our active accounts (the remainder was from walk-in or infrequent, non-account, and small account customers).

Traditionally, our in-market locations, which until recently consisted primarily of traditional and international branches, prioritized acquiring additional active accounts and expanding the products and services sold to new and existing active accounts as a means of growing sales.

Over time it became clear that the pursuit of smaller accounts consumed significant organizational energy and the large majority of new active accounts did not meaningfully increase in size.

Since 2020, our in-market locations have prioritized ‘key accounts’, which is defined as any customer account with purchase activity of at least $2,000 per month.

Over time, that mandate has expanded to a broader range of industrial and construction supplies spanning more than nine major product lines.

How we engage with our customers has similarly evolved to include Onsites, Fastenal Managed Inventory and eCommerce.

This information is presented in thousands.

(3) Onsite information prior to 2014 is intentionally omitted.

The significant increase in other revenue in 2020 largely reflects the onset of the COVID-19 pandemic in that period and the substantial sales of pandemic-related products that we direct-shipped (versus selling through our in-market locations) as a means of delivering critical supplies more quickly.

The decline in other revenue in 2021 largely reflects the absence of such direct-shipped revenue as the supply chain for such products stabilized.

potential with certain agencies of state, provincial and local government customers and academia.

These conditions remain in force at the beginning of 2022.

It is our intention to sign 375 to 400 new Onsites in 2022, though achieving this may require some relief in the factors described above.

| In-Market Locations - 12/31/19 | | | 2,731 | | | 254 | | | 146 | | | 3,131 | | | | | | 15 | | | 25 | | | 57 | | | 97 | | | 3,228 | | |

| Starting Branches | | | 1,806 | | | 183 | | | 64 | | | 2,053 | | | | | | 6 | | | 14 | | | 41 | | | 61 | | | 2,114 | | |

| Starting Onsites | | | 925 | | | 71 | | | 82 | | | 1,078 | | | | | | 9 | | | 11 | | | 16 | | | 36 | | | 1,114 | | |

| Opened Onsites | | | 211 | | | 16 | | | 18 | | | 245 | | | | | | 6 | | | 1 | | | 5 | | | 12 | | | 257 | | |

| Starting Branches | | | 1,689 | | | 179 | | | 66 | | | 1,934 | | | | | | 5 | | | 19 | | | 45 | | | 69 | | | 2,003 | | |

| Starting Onsites | | | 1,044 | | | 81 | | | 93 | | | 1,218 | | | | | | 15 | | | 12 | | | 20 | | | 47 | | | 1,265 | | |

(1) Mexico, Puerto Rico, and Dominican Republic

branch base.

These technologies come in three forms: (1) Scales utilize a high-precision weight sensor system to measure the exact quantity on hand in real time, automatically sending an order to Fastenal when inventory hits an established minimum.

(2) Infrared uses infrared sensors lining individual bins to provide real-time visibility of approximate quantity and inventory values, automatically sending an order to Fastenal when inventory hits an established minimum threshold.

(3) RFID is a Kanban system that utilizes RFID tags so that when an empty bin is removed from the rack and placed in a replenishment zone (also part of the same racking system) an automatic refill order is generated.

These are either configurable or are available in multiple

We acknowledge that achieving this may require some relief in the factors that negatively impacted our efforts in the preceding two years.

We also have 'eProcurement Solutions'.

These solutions provide system-to-system exchange of electronic

Our Digital Footprint represented 42.7% of sales in 2021, the first year in which we explicitly measured it.

We operate fifteen regional distribution centers in North America.

In 2018, we began to deploy Local Inventory Fulfillment Terminals (LIFTs).

These are small distribution facilities situated where we have a dense population of FMI devices.

and acquisition.

As the economics of a LIFT depend on device and sales density, there will be geographic areas, particularly in non-MSAs, where supporting an FMI platform will remain the responsibility of local branch personnel.

The COVID-19 pandemic uniquely impacted our safety supplies product line.

In 2020, we saw substantial growth based on our ability to quickly source and deliver supplies, such as disposable masks, gloves, and gowns that were critical for governments, health care providers, and businesses to increase employee safety while maintaining operations.

In 2021, we experienced a decline as better industrial growth was more than offset by a decline in demand for pandemic-related supplies that reflected the stabilization of the supply chain for critical products.

However, we also believe the net effect of the pandemic has been to increase safety products as a percentage of product sales as safety protocols at many of our customers are likely to be sustained into the future.

fasteners; and (2) non-fastener data is more comparable to information reported by our peers, who do not generally have our significant mix of fastener business.

Our private label brand sales as a percentage of our total non-fastener sales declined in 2020, reflecting strong growth of COVID-related supplies, which were not sold under a private label brand, and recession-related weak safety demand from traditional manufacturing and construction customers, many of which are marketed under a private label brand.

The performance of our private label brands in 2021 more closely resembled trends that preceded 2020, where we have typically experienced an increase in sales of private label products as a percentage of total non-fastener sales through specific sales channels such as Onsite locations, branches, and vending.

All branches stock a base inventory and may expand beyond preset inventory levels as deemed appropriate by the district and branch personnel.

No single supplier accounted for more than 5% of our inventory purchases in 2021.

In 1995, we developed a national accounts program aimed at making our products and services more competitive with customers that operate multiple facilities.

A description of our legal proceedings, if any, is contained in [Note [removed: 1](#i2ed65f529e4d4582846cfc03b6e9e140_130)[0](#i2ed65f529e4d4582846cfc03b6e9e140_130)] [added: 10](#i71b8e53d2ffa4217a334bc08a6e2f5c9_127)] of the Notes to Consolidated Financial Statements.

For the fiscal year ended December 31, [removed: 2021][added: 2022]

| [removed: | | |] 2001 Theurer Boulevard, Winona, Minnesota | | | | | | 55987-1500 | | | [removed: | | |]

| [removed: | | |] (Address of principal executive offices) | | | | | | (Zip Code) | | | [removed: | | |]

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities [removed: Act Yes x No o][added: Act.]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the [removed: Exchange Act Yes o No x][added: Act.]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the [removed: Exchange] Act).

The aggregate market value of the Common Stock held by non-affiliates of the registrant as of June 30, [removed: 2021,] [added: 2022,] the last business day of the registrant's most recently completed second fiscal quarter, was [removed: $29,835,146,952,] [added: $28,635,820,712,] based on the closing price of the registrant's Common Stock on that date.

For purposes of determining this number, all executive officers and directors of the registrant as of June 30, [removed: 2021] [added: 2022] are considered to be affiliates of the registrant.

As of January [removed: 21, 2022,] [added: 20, 2023,] the registrant had [removed: 575,550,072] [added: 570,833,585] shares of Common Stock issued and outstanding.

| Item 1. | | | | | | [removed: [Business](#i2ed65f529e4d4582846cfc03b6e9e140_25)] [added: [Business](#i71b8e53d2ffa4217a334bc08a6e2f5c9_25)] | | | [removed: [3](#i2ed65f529e4d4582846cfc03b6e9e140_25)] [added: [2](#i71b8e53d2ffa4217a334bc08a6e2f5c9_25)] | | |

| Item 1A. | | | | | | [Risk [removed: Factors](#i2ed65f529e4d4582846cfc03b6e9e140_28)] [added: Factors](#i71b8e53d2ffa4217a334bc08a6e2f5c9_28)] | | | [removed: [16](#i2ed65f529e4d4582846cfc03b6e9e140_28)] [added: [16](#i71b8e53d2ffa4217a334bc08a6e2f5c9_28)] | | |

| Item 1B. | | | | | | [Unresolved Staff [removed: Comments](#i2ed65f529e4d4582846cfc03b6e9e140_31)] [added: Comments](#i71b8e53d2ffa4217a334bc08a6e2f5c9_31)] | | | [removed: [23](#i2ed65f529e4d4582846cfc03b6e9e140_31)] [added: [23](#i71b8e53d2ffa4217a334bc08a6e2f5c9_31)] | | |

| Item 2. | | | | | | [removed: [Properties](#i2ed65f529e4d4582846cfc03b6e9e140_34)] [added: [Properties](#i71b8e53d2ffa4217a334bc08a6e2f5c9_34)] | | | [removed: [24](#i2ed65f529e4d4582846cfc03b6e9e140_34)] [added: [24](#i71b8e53d2ffa4217a334bc08a6e2f5c9_34)] | | |

| Item 3. | | | | | | [Legal [removed: Proceedings](#i2ed65f529e4d4582846cfc03b6e9e140_37)] [added: Proceedings](#i71b8e53d2ffa4217a334bc08a6e2f5c9_37)] | | | [removed: [25](#i2ed65f529e4d4582846cfc03b6e9e140_37)] [added: [25](#i71b8e53d2ffa4217a334bc08a6e2f5c9_37)] | | |

| Item 4. | | | | | | [Mine Safety [removed: Disclosures](#i2ed65f529e4d4582846cfc03b6e9e140_40)] [added: Disclosures](#i71b8e53d2ffa4217a334bc08a6e2f5c9_40)] | | | [removed: [25](#i2ed65f529e4d4582846cfc03b6e9e140_40)] [added: [25](#i71b8e53d2ffa4217a334bc08a6e2f5c9_40)] | | |

| Item 5. | | | | | | [Market for [removed: Registrant](#i2ed65f529e4d4582846cfc03b6e9e140_46)['](#i2ed65f529e4d4582846cfc03b6e9e140_46)[s] [added: Registrant's] Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity [removed: Securities](#i2ed65f529e4d4582846cfc03b6e9e140_46)] [added: Securities](#i71b8e53d2ffa4217a334bc08a6e2f5c9_46)] | | | [removed: [26](#i2ed65f529e4d4582846cfc03b6e9e140_46)] [added: [26](#i71b8e53d2ffa4217a334bc08a6e2f5c9_46)] | | |

| Item 7. | | | | | | [removed: [Management](#i2ed65f529e4d4582846cfc03b6e9e140_52)['](#i2ed65f529e4d4582846cfc03b6e9e140_52)[s] [added: [Management's] Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i2ed65f529e4d4582846cfc03b6e9e140_52)] [added: Operations](#i71b8e53d2ffa4217a334bc08a6e2f5c9_52)] | | | [removed: [28](#i2ed65f529e4d4582846cfc03b6e9e140_52)] [added: [28](#i71b8e53d2ffa4217a334bc08a6e2f5c9_52)] | | |

| Item 7A. | | | | | | [Quantitative and Qualitative Disclosures About Market [removed: Risks](#i2ed65f529e4d4582846cfc03b6e9e140_76)] [added: Risk](#i71b8e53d2ffa4217a334bc08a6e2f5c9_76)] | | | [removed: [45](#i2ed65f529e4d4582846cfc03b6e9e140_76)] [added: [50](#i71b8e53d2ffa4217a334bc08a6e2f5c9_76)] | | |

| Item 8. | | | | | | [Financial Statements and Supplementary [removed: Data](#i2ed65f529e4d4582846cfc03b6e9e140_79)] [added: Data](#i71b8e53d2ffa4217a334bc08a6e2f5c9_79)] | | | [removed: [46](#i2ed65f529e4d4582846cfc03b6e9e140_79)] [added: [51](#i71b8e53d2ffa4217a334bc08a6e2f5c9_79)] | | |

| Item 9. | | | | | | [Changes in and Disagreements [removed: with] [added: With] Accountants on Accounting and Financial [removed: Disclosure](#i2ed65f529e4d4582846cfc03b6e9e140_139)] [added: Disclosure](#i71b8e53d2ffa4217a334bc08a6e2f5c9_133)] | | | [removed: [66](#i2ed65f529e4d4582846cfc03b6e9e140_139)] [added: [71](#i71b8e53d2ffa4217a334bc08a6e2f5c9_133)] | | |

| Item 9A. | | | | | | [Controls and [removed: Procedures](#i2ed65f529e4d4582846cfc03b6e9e140_142)] [added: Procedures](#i71b8e53d2ffa4217a334bc08a6e2f5c9_136)] | | | [removed: [66](#i2ed65f529e4d4582846cfc03b6e9e140_142)] [added: [71](#i71b8e53d2ffa4217a334bc08a6e2f5c9_136)] | | |

| Item 9B. | | | | | | [Other [removed: Information](#i2ed65f529e4d4582846cfc03b6e9e140_145)] [added: Information](#i71b8e53d2ffa4217a334bc08a6e2f5c9_139)] | | | [removed: [67](#i2ed65f529e4d4582846cfc03b6e9e140_145)] [added: [72](#i71b8e53d2ffa4217a334bc08a6e2f5c9_139)] | | |

| Item 9C. | | | | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i2ed65f529e4d4582846cfc03b6e9e140_1491)] [added: Inspections](#i71b8e53d2ffa4217a334bc08a6e2f5c9_142)] | | | [removed: [67](#i2ed65f529e4d4582846cfc03b6e9e140_1491)] [added: [72](#i71b8e53d2ffa4217a334bc08a6e2f5c9_142)] | | |

| Item 10. | | | | | | [Directors, Executive Officers, and Corporate [removed: Governance](#i2ed65f529e4d4582846cfc03b6e9e140_151)] [added: Governance](#i71b8e53d2ffa4217a334bc08a6e2f5c9_148)] | | | [removed: [67](#i2ed65f529e4d4582846cfc03b6e9e140_151)] [added: [72](#i71b8e53d2ffa4217a334bc08a6e2f5c9_148)] | | |

| Item 11. | | | | | | [Executive [removed: Compensation](#i2ed65f529e4d4582846cfc03b6e9e140_154)] [added: Compensation](#i71b8e53d2ffa4217a334bc08a6e2f5c9_151)] | | | [removed: [69](#i2ed65f529e4d4582846cfc03b6e9e140_154)] [added: [74](#i71b8e53d2ffa4217a334bc08a6e2f5c9_151)] | | |

| Item 12. | | | | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i2ed65f529e4d4582846cfc03b6e9e140_157)] [added: Matters](#i71b8e53d2ffa4217a334bc08a6e2f5c9_154)] | | | [removed: [69](#i2ed65f529e4d4582846cfc03b6e9e140_157)] [added: [74](#i71b8e53d2ffa4217a334bc08a6e2f5c9_154)] | | |

| Item 13. | | | | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i2ed65f529e4d4582846cfc03b6e9e140_160)] [added: Independence](#i71b8e53d2ffa4217a334bc08a6e2f5c9_157)] | | | [removed: [69](#i2ed65f529e4d4582846cfc03b6e9e140_160)] [added: [74](#i71b8e53d2ffa4217a334bc08a6e2f5c9_157)] | | |

| Item 14. | | | | | | [Principal Accountant Fees and [removed: Services](#i2ed65f529e4d4582846cfc03b6e9e140_163)] [added: Services](#i71b8e53d2ffa4217a334bc08a6e2f5c9_160)] | | | [removed: [69](#i2ed65f529e4d4582846cfc03b6e9e140_163)] [added: [74](#i71b8e53d2ffa4217a334bc08a6e2f5c9_160)] | | |

| Item 15. | | | | | | [Exhibits and Financial Statement [removed: Schedules](#i2ed65f529e4d4582846cfc03b6e9e140_169)] [added: Schedules](#i71b8e53d2ffa4217a334bc08a6e2f5c9_166)] | | | [removed: [70](#i2ed65f529e4d4582846cfc03b6e9e140_169)] [added: [75](#i71b8e53d2ffa4217a334bc08a6e2f5c9_166)] | | |

| Item 16. | | | | | | [Form 10-K [removed: Summary](#i2ed65f529e4d4582846cfc03b6e9e140_172)] [added: Summary](#i71b8e53d2ffa4217a334bc08a6e2f5c9_1536)] | | | [removed: [71](#i2ed65f529e4d4582846cfc03b6e9e140_172)] [added: [77](#i71b8e53d2ffa4217a334bc08a6e2f5c9_1536)] | | |

Portions of our Proxy Statement for the annual meeting of shareholders to be held Saturday, April [removed: 23, 2022] [added: 22, 2023] (Proxy Statement) are incorporated by reference in Part III.

Our forward-looking statements generally relate to our expectations regarding the business environment in which we operate, our projections of future [removed: performance,] [added: performance and opportunities for growth based on potential market opportunities,] our perceived marketplace opportunities, our strategies, goals, mission and vision, and our expectations about [added: matters including] capital expenditures, tax rates, inventory levels, [added: liquidity, liabilities from tax positions, the performance of our fastener business in comparison to our non-fastener business,] in-market locations and signings of Onsite locations and new machine equivalent units for Fastenal Managed Inventory (FMI) (including bin stock and industrial [removed: vending),] [added: vending) and the competitive advantages they offer,] our digital solutions and other product offerings, national accounts as a percentage of overall sales, the advantages of our integrated physical and virtual model, growth in safety products as a percentage of product [removed: sales and] [added: sales,] the amount of FMI revenue that we may be able to service through local inventory fulfillment [removed: terminals.][added: terminals, and the ability of our competitors to replicate our distribution capabilities.]

Factors that could cause our actual results to differ from those discussed in the forward-looking statements include, but are not limited to, economic downturns (including economic downturns as a result of global pandemics, including the [removed: ongoing] COVID-19 pandemic), weakness in the manufacturing or commercial construction industries, competitive pressure on selling prices, changes in trade policies or tariffs, changes in our current mix of products, customers, or geographic locations, changes in our average branch size, changes in our purchasing patterns, changes in customer needs, changes in fuel or commodity prices, product and transportation inflation, inclement weather, changes in foreign currency exchange rates, difficulty in adapting our business model to different foreign business environments, failure to accurately predict the market potential of our business strategies, the introduction or expansion of new business strategies, increased competition [removed: in] [added: (including with respect to our] FMI or [removed: Onsite,] [added: Onsite operations),] difficulty in maintaining installation quality as our industrial vending business expands, the failure to meet our goals and expectations regarding expansion of our FMI or Onsite operations, changes in the implementation objectives of our business strategies, difficulty in hiring, relocating, training, or retaining qualified personnel, difficulty in controlling operating expenses, difficulty in collecting receivables or accurately predicting future inventory needs, [removed: dramatic] changes in sales trends, changes in supplier production lead times, changes in our cash position or our need to make capital expenditures, credit market [removed: volatility,] [added: volatility and increases in interest rates,] changes in tax law or the impact of discrete items on future tax rates, changes in the availability or price of commercial real estate, changes in the nature, price, or availability of distribution, supply chain, or other technology (including software licensed from third parties) and services related to that technology, difficulty in obtaining continued business from new safety product customers, [removed: cyber-security] [added: cyber security] incidents, potential liability and reputational damage that can arise if our products are defective, and other risks and uncertainties detailed in this Form 10-K under the heading 'Item 1A.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

Yes o No x

Yes x No o

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b).

| | | | | | | [PART I](#i71b8e53d2ffa4217a334bc08a6e2f5c9_22) | | | | | |

| | | | | | | [PART II](#i71b8e53d2ffa4217a334bc08a6e2f5c9_43) | | | | | |

| Item 6. | | | | | | [Reserved](#i71b8e53d2ffa4217a334bc08a6e2f5c9_49) | | | [27](#i71b8e53d2ffa4217a334bc08a6e2f5c9_49) | | |

| | | | | | | [PART III](#i71b8e53d2ffa4217a334bc08a6e2f5c9_145) | | | | | |

| | | | | | | [PART IV](#i71b8e53d2ffa4217a334bc08a6e2f5c9_163) | | | | | |

| | | | | | | [Signatures](#i71b8e53d2ffa4217a334bc08a6e2f5c9_175) | | | [78](#i71b8e53d2ffa4217a334bc08a6e2f5c9_175) | | |

References to daily sales rate (DSR) change may reflect either growth (positive) or contraction (negative) for the applicable period.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | [PART I](#i2ed65f529e4d4582846cfc03b6e9e140_22) | | | | | |

| | | | | | | [PART II](#i2ed65f529e4d4582846cfc03b6e9e140_43) | | | | | |

| Item 6. | | | | | | [Removed and Reserved](#i2ed65f529e4d4582846cfc03b6e9e140_49) | | | [27](#i2ed65f529e4d4582846cfc03b6e9e140_49) | | |

| | | | | | | [PART III](#i2ed65f529e4d4582846cfc03b6e9e140_148) | | | | | |

| | | | | | | [PART IV](#i2ed65f529e4d4582846cfc03b6e9e140_166) | | | | | |

| | | | | | | [Signatures](#i2ed65f529e4d4582846cfc03b6e9e140_178) | | | [73](#i2ed65f529e4d4582846cfc03b6e9e140_178) | | |

STOCK SPLIT

All information contained in this Form 10-K reflects the two-for-one stock split in 2019.

Note – Information in this section is as of December 31, [removed: 2021,] [added: 2022,] unless otherwise noted.

| Scranton, Pennsylvania | | | Distribution center [removed: (3)] | | | | | | 104,000 | | | | | | [removed: 222,000] [added: 187,000] | | |

| Denton, Texas | | | Distribution center [removed: (4)] [added: (3)] | | | | | | 41,000 | | | [removed: (5)] [added: (4)] | | | 206,000 | | |

| High Point, North Carolina | | | Distribution center (two buildings) [removed: (6)] [added: (5)] | | | | | | 132,000 | | | | | | 829,000 | | |

| Dordrecht, Netherlands | | | Distribution center | | | X | | | — | | | | | | [removed: 44,000] [added: 38,000] | | |

| Shanghai, China | | | Local re-distribution center | | | X | | | — | | | | | | [removed: 17,000] [added: 15,000] | | |

[added: |] (1) [added: | | |] Total number of tote locations for small parts storage included in facilities with an ASRS. [added: | | |]

[added: |] (2) [added: | | |] This property contains an ASRS with capacity of 52,000 pallet locations, in addition to the 547,000 tote locations for small parts. [added: | | |]

[added: |] (3) [added: | | |] Approximately [removed: 36,000] [added: 30,000] square feet is leased space for distribution related activities. [added: In 2022, we began a project to add square footage and add additional ASRS to this property. | | |]

[removed: (5)] [added: | (4) | | |] This facility contains an ASRS with capacity of 14,000 pallet locations, in addition to the 41,000 tote locations for small parts. [added: | | |]

[removed: (6)] [added: | (5) | | |] In [removed: late] December 2018, we purchased an additional distribution center in High Point, North Carolina with approximately 750,000 total square feet. [added: Approximately 395,000 square feet will be leased by the building's previous owner until December 2024. We currently utilize approximately 355,000 square feet for distribution activities. | | |]

| Winona, Minnesota | | | Manufacturing facility | | | | | | [removed: 100,000] [added: 121,000] | | |

| Wallingford, Connecticut | | | Manufacturing facility | | | | | | [removed: 187,000] [added: 177,000] | | |

| [removed: Modrice,] [added: Brno-Lisen,] Czech Republic | | | Manufacturing facility | | | X | | | [removed: 18,000] [added: 20,000] | | |

| Winona, Minnesota | | | Multiple facilities for office space, storage, and packaging operations | | | | | | [removed: 262,000] [added: 421,000] | | |

| Bangalore, India | | | International information technology office | | | X | | | [removed: 15,000] [added: 45,000] | | |

In addition, we own [removed: 165] [added: 157] buildings that house our in-market locations in various cities throughout North America.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

(4) Approximately 30,000 square feet is leased space for distribution related activities.

Approximately 395,000 square feet will be leased by the building's previous owner until December 2022.

We currently utilize approximately 355,000 square feet for distribution activities.

As of January [removed: 21, 2022,] [added: 20, 2023,] there were approximately 1,000 record holders of our common stock, which [removed: includes] [added: include] nominees or broker dealers holding stock on behalf of an estimated [removed: 411,000] [added: 424,000] beneficial owners.

The table below sets forth information regarding purchases of our common stock during each of the last three months of [removed: 2021:][added: 2022:]

| Period | | | Total Number of Shares Purchased | | | | | | Average Price Paid per Share | | | | | | [removed: | | |] Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | | | | | | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1) | | |

| October 1-31, [removed: 2021 | | | 0] [added: 2022] | | | [added: 2,000,000] | | | [removed: —] | | | [added: $46.62] | | | | | | [removed: 0] [added: 2,000,000] | | | | | | [removed: 3,200,000] [added: 6,200,000] | | |

| November 1-30, [removed: 2021] [added: 2022] | | | 0 | | | | | | [removed: — | | |] [added: $0.00] | | | | | | 0 | | | | | | [removed: 3,200,000] [added: 6,200,000] | | |

| December 1-31, [removed: 2021] [added: 2022] | | | 0 | | | | | | [removed: — | | |] [added: $0.00] | | | | | | 0 | | | | | | [removed: 3,200,000] [added: 6,200,000] | | |

| Total | | | [removed: 0 | | |] [added: 2,000,000] | | | [removed: —] | | | [added: $46.62] | | | | | | [removed: 0] [added: 2,000,000] | | | | | | [removed: 3,200,000] [added: 6,200,000] | | |

[added: | (1) | | |] As of December 31, [removed: 2021,] [added: 2022,] we had remaining authority to repurchase [removed: 3,200,000] [added: 6,200,000] shares under [removed: this] [added: the July 12, 2022] authorization. [added: This authorization does not have an expiration date. | | |]

Set forth below is a graph comparing, for the five years ended December 31, [removed: 2021,] [added: 2022,] the yearly cumulative total shareholder return on our common stock with the yearly cumulative total shareholder return of the S&P 500 Index and the Dow Jones US Industrial Suppliers Index.

The comparison of total shareholder returns in the performance graph assumes that $100 was invested on December 31, [removed: 2016] [added: 2017] in Fastenal Company, the S&P 500 Index, and the Dow Jones US Industrial Suppliers Index, and that dividends were reinvested when and as paid.

[removed: ][added: ]

| | | | | | | [removed: 2016] [added: 2017] | | | | | | [removed: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | (a) | | | | | | (b) | | | | | | (c) | | | | | | (d) | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Fastenal Company | | | $ | | | 100.00 | | | | | | 98.43 | | | | | | 142.76 | | | | | | 194.97 | | | | | | 261.33 | | | | | | 197.72 | | |

| S&P 500 Index | | | | | | 100.00 | | | | | | 95.62 | | | | | | 125.72 | | | | | | 148.85 | | | | | | 191.58 | | | | | | 156.88 | | |

| Dow Jones US Industrial Suppliers Index | | | | | | 100.00 | | | | | | 97.58 | | | | | | 129.03 | | | | | | 163.14 | | | | | | 217.97 | | | | | | 189.21 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | (a) | | | | | | (b) | | | | | | | | | (c) | | | | | | (d) | | |

(1) On July 11, 2017, our board of directors established a new authorization for us to repurchase up to 10,000,000 shares of our common stock.

The repurchase program has no expiration date.

| Fastenal Company | | | $ | | | 100.00 | | | | | | 119.67 | | | | | | 117.79 | | | | | | 170.84 | | | | | | 233.32 | | | | | | 312.73 | | |

| S&P 500 Index | | | | | | 100.00 | | | | | | 121.83 | | | | | | 116.49 | | | | | | 153.17 | | | | | | 181.35 | | | | | | 233.41 | | |

| Dow Jones US Industrial Suppliers Index | | | | | | 100.00 | | | | | | 104.26 | | | | | | 101.75 | | | | | | 134.53 | | | | | | 170.10 | | | | | | 227.27 | | |

We have audited the accompanying consolidated balance sheets of Fastenal Company and subsidiaries (the Company) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of earnings, comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2021] [added: 2022] and the related notes and financial statement schedule [removed: listed in the table of contents at Item 15] [added: II - valuation and qualifying accounts] (collectively, the consolidated financial statements).

We also have audited the Company's internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework* *(2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2021,] [added: 2022,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2021] [added: 2022] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

As disclosed in the consolidated balance sheet, the Company held [removed: $1,523.6] [added: $1,708.0] million of inventory, the majority of which was held at [removed: 3,209] [added: 3,306] in-market locations, as of December 31, [removed: 2021.][added: 2022.]

- Historical inventory locations we have visited and [added: the] results of prior physical counts;

- The Company's inventory cycle count results, including the results of monitoring and compliance with the cycle [removed: count program by in-market location.][added: counting program.]

| | | | [removed: 2021] [added: 2022] | | | | | | [added: 2021 | | | | | |] 2020 | | |

| Cash and cash equivalents | | | $ | [removed: 236.2] [added: 230.1] | | | | | [removed: 245.7] [added: 236.2] | | |

| Trade accounts receivable, net of allowance for credit losses of [removed: $12.0] [added: $8.3] and [removed: $12.3,] [added: $12.0,] respectively | | | [removed: 900.2] [added: 1,013.2] | | | | | | [removed: 769.4] [added: 900.2] | | |

| Inventories | | | [removed: 1,523.6] [added: 1,708.0] | | | | | | [removed: 1,337.5] [added: 1,523.6] | | |

| Prepaid income taxes | | | [removed: 8.5] [added: 8.1] | | | | | | [removed: 6.7] [added: 8.5] | | |

| Other current assets | | | [removed: 188.1] [added: 165.4] | | | | | | [removed: 140.3] [added: 188.1] | | |

| Total current assets | | | [removed: 2,856.6] [added: 3,124.8] | | | | | | [removed: 2,499.6] [added: 2,856.6] | | |

| Property and equipment, net | | | [removed: 1,019.2] [added: 1,010.0] | | | | | | [removed: 1,030.7] [added: 1,019.2] | | |

| Operating lease right-of-use assets | | | [removed: 242.3] [added: 243.0] | | | | | | [removed: 243.0] [added: 242.3] | | |

| Other assets | | | [removed: 180.9] [added: 170.8] | | | | | | [removed: 191.4] [added: 180.9] | | |

| Total assets | | | $ | [removed: 4,299.0] [added: 4,548.6] | | | | | [removed: 3,964.7] [added: 4,299.0] | | |

| Current portion of debt | | | $ | [removed: 60.0] [added: 201.8] | | | | | [removed: 40.0] [added: 60.0] | | |

| Accounts payable | | | [removed: 233.1] [added: 255.0] | | | | | | [removed: 207.0] [added: 233.1] | | |

| Accrued expenses | | | [removed: 298.3] [added: 241.1] | | | | | | [removed: 272.1] [added: 298.3] | | |

| Current portion of operating lease liabilities | | | [removed: 90.8] [added: 91.9] | | | | | | [removed: 93.6] [added: 90.8] | | |

| Total current liabilities | | | [removed: 682.2] [added: 789.8] | | | | | | [removed: 612.7] [added: 682.2] | | |

| Long-term debt | | | [removed: 330.0] [added: 353.2] | | | | | | [removed: 365.0] [added: 330.0] | | |

| Operating lease liabilities | | | [removed: 156.0] [added: 155.2] | | | | | | [removed: 151.5] [added: 156.0] | | |

| Deferred income taxes | | | [removed: 88.6] [added: 83.7] | | | | | | [removed: 102.3] [added: 88.6] | | |

| Common stock: $0.01 par value, 800,000,000 shares authorized, [removed: 575,464,682] [added: 570,811,674] and [removed: 574,159,575] [added: 575,464,682] shares issued and outstanding, respectively | | | [removed: 5.8] [added: 5.7] | | | | | | [removed: 5.7] [added: 5.8] | | |

| Additional paid-in capital | | | [removed: 96.2] [added: 3.6] | | | | | | [removed: 59.1] [added: 96.2] | | |

| Retained earnings | | | [removed: 2,970.9] [added: 3,218.7] | | | | | | [removed: 2,689.6] [added: 2,970.9] | | |

| Accumulated other comprehensive loss | | | [removed: (30.7)] [added: (64.8)] | | | | | | [removed: (21.2)] [added: (30.7)] | | |

| Total stockholders' equity | | | [removed: 3,042.2] [added: $] | [added: 3,163.2] | | | | | [added: 3,042.2 | | | | | |] 2,733.2 | | |

| Total liabilities and stockholders' equity | | | $ | [removed: 4,299.0] [added: 4,548.6] | | | | | [removed: 3,964.7] [added: 4,299.0] | | |

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Net sales | | | $ | [removed: 6,010.9] [added: 6,980.6] | | | | | [removed: 5,647.3] [added: 6,010.9] | | | | | | [removed: 5,333.7] [added: 5,647.3] | | |

| Cost of sales | | | [removed: 3,233.7] [added: 3,764.8] | | | | | | [removed: 3,079.5] [added: 3,233.7] | | | | | | [removed: 2,818.3] [added: 3,079.5] | | |

| Gross profit | | | [removed: 2,777.2] [added: 3,215.8] | | | | | | [removed: 2,567.8] [added: 2,777.2] | | | | | | [removed: 2,515.4] [added: 2,567.8] | | |

| Operating and administrative expenses | | | [removed: 1,559.8] [added: 1,762.2] | | | | | | [removed: 1,426.0] [added: 1,559.8] | | | | | | [removed: 1,458.2] [added: 1,426.0] | | |

| Operating income | | | [removed: 1,217.4] [added: 1,453.6] | | | | | | [removed: 1,141.8] [added: 1,217.4] | | | | | | [removed: 1,057.2] [added: 1,141.8] | | |

| Interest income | | | [removed: 0.1] [added: 0.7] | | | | | | [removed: 0.6] [added: 0.1] | | | | | | [removed: 0.4] [added: 0.6] | | |

| Interest expense | | | [removed: (9.7)] [added: (14.3)] | | | | | | (9.7) | | | | | | [removed: (13.9)] [added: (9.7)] | | |

February 7, 2023

| | | | 2022 | | | | | | 2021 | | |

| Other long-term liabilities | | | 3.5 | | | | | | — | | |

| Net earnings | | | 1,086.9 | | | | | | 925.0 | | | | | | 859.1 | | |

| Translation adjustment upon merger of foreign subsidiary | | | 0.9 | | | | | | — | | | | | | — | | |

| Purchases of common stock | | | (128.7) | | | | | | — | | | | | | — | | |

| Net earnings | | | $ | 1,086.9 | | | | | 925.0 | | | | | | 859.1 | | |

| Stock-based compensation | | | 7.2 | | | | | | 5.6 | | | | | | 5.7 | | |

| Purchases of common stock | | | (237.8) | | | | | | — | | | | | | (52.0) | | |

| Cash dividends paid | | | (711.3) | | | | | | (643.7) | | | | | | (803.4) | | |

In December 2022, the FASB issued ASU 2022-06, *Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848*, which extended the date to December 31, 2024.

On September 28, 2022, we amended and restated our unsecured revolving credit agreement.

At the same time, we also amended our master note agreement.

As a result of those amendments, our floating rate debt no longer references a LIBOR based benchmark rate.

Therefore, we will not be electing the optional practical expedients associated with this ASU.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

| | | | | | | | | | 2,311.4 | | | | | | 2,197.2 | | |

| | | | | | | | | | | | |

| | | | 2022 | | | | | | 2021 | | |

| | | | | | | | | | | | |

| | | | 2022 | | | | | | 2021 | | |

In 2020, we paid aggregate annual cash dividends per share of $1.40, which included a special, one-time dividend of $0.40 per share.

| January 3, 2022 | | | 713,438 | | | | | | $ | 62.00 | | | | | $ | 61.980 | | | | | 683,369 | | | | | | 53,355 | | |

| January 4, 2021 | | | 741,510 | | | | | | $ | 48.00 | | | | | $ | 47.650 | | | | | 671,201 | | | | | | 26,643 | | |

| January 2, 2020 | | | 902,263 | | | | | | $ | 38.00 | | | | | $ | 37.230 | | | | | 772,002 | | | | | | 266,122 | | |

| January 2, 2019 | | | 1,316,924 | | | | | | $ | 26.00 | | | | | $ | 25.705 | | | | | 935,052 | | | | | | 406,580 | | |

| January 2, 2018 | | | 1,087,936 | | | | | | $ | 27.50 | | | | | $ | 27.270 | | | | | 689,133 | | | | | | 417,667 | | |

| January 3, 2017 | | | 1,529,578 | | | | | | $ | 23.50 | | | | | $ | 23.475 | | | | | 670,372 | | | | | | 512,248 | | |

| April 19, 2016 | | | 1,690,880 | | | | | | $ | 23.00 | | | | | $ | 22.870 | | | | | 493,803 | | | | | | 371,455 | | |

| April 21, 2015 | | | 1,786,440 | | | | | | $ | 21.00 | | | | | $ | 20.630 | | | | | 349,910 | | | | | | 273,672 | | |

| April 22, 2014 | | | 1,910,000 | | | | | | $ | 28.00 | | | | | $ | 25.265 | | | | | 109,894 | | | | | | 109,894 | | |

| Total | | | 11,678,969 | | | | | | | | | | | | | | | | | | 5,374,736 | | | | | | 2,437,636 | | |

| January 3, 2022 | | | 1.3% | | | | | | 5.00 | | | | | | 1.7% | | | | | | 28.52 | | % | | | | $ | 13.68 | |

| Outstanding as of January 1, 2022 | | | 5,173,270 | | | | | | $ | 30.23 | | | | | 6.08 | | |

| Granted | | | 713,438 | | | | | | $ | 62.00 | | | | | 9.00 | | |

| Exercised | | | (346,992) | | | | | | $ | 26.78 | | | | | | | |

| Outstanding as of December 31, 2022 | | | 5,374,736 | | | | | | $ | 34.37 | | | | | 5.66 | | |

| Exercisable as of December 31, 2022 | | | 2,437,636 | | | | | | $ | 27.14 | | | | | 4.30 | | |

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

February 7, 2022

| Payments of dividends | | | (643.7) | | | | | | (803.4) | | | | | | (498.6) | | |

If

Impact of COVID-19

The COVID-19 pandemic has likely influenced various trends the company is currently experiencing.

These include supply chain disruptions and labor shortages, and a modest shift in our mix to include more safety products.

Evaluating 2021 is challenging given the impacts of the pandemic on the company in the year-earlier period.

However, in contrast to much of the preceding one to two years, we are currently seeing a narrower impact on our business related directly to the COVID-19 pandemic, as economic activity has recovered and customer and product mix has reverted back to close to pre-pandemic levels.

We believe current financial results are more reflective of traditional economic and marketplace dynamics than of pandemic-related issues such as facility restrictions, labor force illness, and personal protective equipment (PPE) demand.

The primary exception to this normalization trend is in the signings of our Onsite and Fastenal Managed Inventory (FMI), which have yet to recover to pre-pandemic levels.

To the extent that COVID-19 infections and/or interventions continue to meaningfully influence the marketplace, on a national, local, or business-specific basis, this can either directly impact or indirectly influence access to customer facilities and decision-makers, and lengthen the sales cycle for certain of our solutions.

However, it is possible the COVID-19 pandemic, particularly in light of variant strains of the virus, could further impact our operations and the operations of our suppliers and vendors as a result of quarantines, facility closures, illnesses, and travel and logistics restrictions.

The extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the resumption of high levels of infection and hospitalization, the resulting impact on our customers, suppliers, and vendors, the remedial actions and stimulus measures adopted by federal, state, and local governments, and to what extent normal economic and operating conditions are impacted.

We cannot reasonably estimate the future impact at this time.

Stock Split

On April 17, 2019, the board of directors approved a two-for-one stock split of the company's outstanding common stock.

Holders of the company's common stock, par value $0.01 per share, at the close of business on May 2, 2019, received one

additional share of common stock for every share of common stock they owned.

The stock split took effect at the close of business on May 22, 2019.

All historical common stock share and per share information for all periods presented in the accompanying consolidated financial statements and notes thereto have been retroactively adjusted to reflect the stock split.

Immaterial Revision

The prior period balances for additional paid-in capital and common stock have been updated in both the Consolidated Balance Sheets and Consolidated Statements of Stockholders' Equity to reflect the impact of an immaterial correction which reclassified $2.9 from additional paid-in capital to common stock in connection with the 2019 stock split.

We are currently evaluating the impact of the new guidance on our consolidated financial statements; however, we have determined that, of our current debt commitments as outlined in detail in Note 9 'Debt Commitments', only the obligations described under Unsecured Revolving Credit Facility in Note 9 would be impacted by ASU 2020-04.

Our Senior Unsecured Promissory Notes Payable described in Note 9 each have fixed interest rates.

During 2019, no single customer represented 5% or more of our consolidated net sales.

Long-lived assets consist of net property and equipment, operating lease right-of-use assets, deposits, goodwill, and other net intangibles.

| | | | | | | | | | 2,197.2 | | | | | | 2,084.6 | | |

(1) Includes the deferral of $30.0 in payroll taxes resulting from the CARES Act in 2020.

| January 4, 2021 | | | 741,510 | | | | | | $48.00 | | | | | | $47.650 | | | | | | 711,199 | | | | | | 26,643 | | |

| January 2, 2020 | | | 902,263 | | | | | | $38.00 | | | | | | $37.230 | | | | | | 846,225 | | | | | | 24,964 | | |

| January 2, 2019 | | | 1,316,924 | | | | | | $26.00 | | | | | | $25.705 | | | | | | 1,017,660 | | | | | | 268,714 | | |

| January 2, 2018 | | | 1,087,936 | | | | | | $27.50 | | | | | | $27.270 | | | | | | 743,788 | | | | | | 318,052 | | |

| January 3, 2017 | | | 1,529,578 | | | | | | $23.50 | | | | | | $23.475 | | | | | | 732,180 | | | | | | 363,406 | | |

| April 19, 2016 | | | 1,690,880 | | | | | | $23.00 | | | | | | $22.870 | | | | | | 524,119 | | | | | | 331,739 | | |

| April 21, 2015 | | | 1,786,440 | | | | | | $21.00 | | | | | | $20.630 | | | | | | 403,736 | | | | | | 240,908 | | |

| April 22, 2014 | | | 1,910,000 | | | | | | $28.00 | | | | | | $25.265 | | | | | | 186,391 | | | | | | 111,407 | | |

| April 16, 2013 | | | 410,000 | | | | | | $27.00 | | | | | | $24.625 | | | | | | 7,972 | | | | | | 7,972 | | |

| Total | | | 11,375,531 | | | | | | | | | | | | | | | | | | 5,173,270 | | | | | | 1,693,805 | | |

| April 16, 2013 | | | 0.7% | | | | | | 5.00 | | | | | | 1.6% | | | | | | 37.42 | | % | | | | $6.33 | | |

| Outstanding as of January 1, 2020 | | | 6,807,217 | | | | | | $ | 24.89 | | | | | 6.09 | | |

The attestation report required under [removed: this item] [added: Item 9A] is contained earlier in this Form 10-K under the heading 'Item 8, Financial Statements and Supplementary Data'.

Based on our assessment and those criteria, management believes that the company maintained effective internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

| President and Chief Executive Officer | | | | | | [added: Senior] Executive Vice President and Chief Financial Officer | | |

| February 7, 2023 | | | | | | | | |

| February 7, 2022 | | | | | | | | |

| Daniel L. Florness | | | 1996 | | | | | | [removed: 58] [added: 59] | | | | | | President, Chief Executive Officer, and Director | | |

| William J. Drazkowski | | | 1995 | | | | | | [removed: 50] [added: 51] | | | | | | Executive Vice President – Sales | | |

| James C. Jansen | | | 1992 | | | | | | [removed: 51] [added: 52] | | | | | | Executive Vice President – Manufacturing | | |

| Holden Lewis | | | 2016 | | | | | | [removed: 52] [added: 53] | | | | | | [added: Senior] Executive Vice President and Chief Financial Officer | | |

| Sheryl A. Lisowski | | | 1994 | | | | | | [removed: 54] [added: 55] | | | | | | Executive Vice President – Chief Accounting Officer and Treasurer | | |

| Charles S. Miller | | | 1999 | | | | | | [removed: 47] [added: 48] | | | | | | Senior Executive Vice President – Sales | | |

| Terry M. Owen | | | 1999 | | | | | | [removed: 53] [added: 54] | | | | | | Senior Executive Vice President – Sales Operations | | |

| John L. Soderberg | | | 1993 | | | | | | [removed: 50] [added: 51] | | | | | | Senior Executive Vice President – Information Technology | | |

| Jeffery M. Watts | | | 1996 | | | | | | [removed: 50] [added: 51] | | | | | | Executive Vice President – International Sales | | |

| Reyne K. Wisecup | | | 1988 | | | | | | [removed: 58] [added: 59] | | | | | | Senior Executive Vice President – Human Resources and Director | | |

From December 2002 to December 2015, Mr. Florness was [removed: an] [added: our] executive vice president and [removed: our] chief financial officer.

Mr. Lewis has been our [added: senior] executive vice president and chief financial officer [added: of Fastenal] since [removed: August 2016.][added: December 2022.]

Mr. Owen's responsibilities include oversight of our eCommerce, marketing, national accounts sales, government sales, FAST Solutions® (Onsite and FMI), [removed: our Mansco division,] manufacturing, distribution, transportation, product development, supplier development, procurement, and supply chain.

Ms. Wisecup has been our senior executive vice president – human resources [removed: since] [added: from] December [removed: 2016.][added: 2016 through February 2023, when she will retire from that position.]

As chief financial officer, Mr. Lewis manages the company’s finance, accounting and audit functions, and plays a central role in effectively executing and communicating company strategy, with a concentration on profitability, efficiency, and assets.

He also oversees the company’s M&A and Investor Relations efforts.

From August 2016 to December 2022, Mr. Lewis served as our executive vice president and chief financial officer.

He joined the company following a long career as a senior equity analyst covering industrials, including Fastenal, for full-service investment banks.

Mr. Lewis held various senior roles with a variety of organizations in the investment banking industry from 1994 to July 2016.

From April 2016 to July 2016, Mr. Lewis was a senior vice president/equity research-industrial technology with FBR Capital Markets & Co. (a full-service investment bank).

From September 2014 to January 2016, Mr. Lewis was a managing director/equity research-industrial technology with Oppenheimer & Co Inc. (a full-service investment bank).

From August 2002 to August 2014, Mr. Lewis was a managing director/equity research-industrial manufacturing & distribution with BB&T Capital Markets, a division of BB&T Securities LLC (a full-service investment bank).

Prior to August 2002, Mr. Lewis held similar roles with various other organizations since 1994.

In each of Mr. Lewis' positions prior to joining Fastenal, he was responsible for studying the strategic and financial direction of companies for the purpose of making investment recommendations to institutional clients.

[added: |] (1) [added: | | |] Reflects stock option awards issued and issuable in the future under our Fastenal Company Stock Option Plan and our Fastenal Company Non-Employee Director Stock Option Plan. [added: | | |]

| Equity compensation plans approved by security holders (1) | | | 5,374,736 | | | | | | $ | 34.37 | | | | | 11,644,818 | | |

| Total | | | 5,374,736 | | | | | | | | | | | | 11,644,818 | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Equity compensation plans approved by security holders (1) | | | 5,173,270 | | | | | | $ | 30.23 | | | | | 12,193,276 | | |

| Total | | | 5,173,270 | | | | | | | | | | | | 12,193,276 | | |

Consolidated Balance Sheets as of December 31, [removed: 2021] [added: 2022] and [removed: 2020][added: 2021]

Consolidated Statements of Earnings for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

Consolidated Statements of Comprehensive Income for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

Consolidated Statements of Stockholders' Equity for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

Consolidated Statements of Cash Flows for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

| [added: | | |] Exhibit Number | | | | | | Description of Document | | |

| [added: | | |] 3.1 | | | | | | [Restated Articles of Incorporation of Fastenal Company, as amended (incorporated by reference to Exhibit 3.1 to Fastenal [removed: Company](https://www.sec.gov/Archives/edgar/data/815556/000081555619000032/ex_314232019amendedarticle.htm)['](https://www.sec.gov/Archives/edgar/data/815556/000081555619000032/ex_314232019amendedarticle.htm)[s] [added: Company's] Form 8-K dated as of April [removed: 23,] [added: 22,] 2019)](https://www.sec.gov/Archives/edgar/data/815556/000081555619000032/ex_314232019amendedarticle.htm) | | |

| [added: | | |] 3.2 | | | | | | [Restated By-Laws of Fastenal Company (incorporated by reference to Exhibit 3.2 to Fastenal [removed: Company](http://www.sec.gov/Archives/edgar/data/815556/000081555619000007/exhibit32restatedbylaws.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000081555619000007/exhibit32restatedbylaws.htm)[s] [added: Company's] Form 8-K dated as of January 17, 2019)](http://www.sec.gov/Archives/edgar/data/815556/000081555619000007/exhibit32restatedbylaws.htm) | | |

| [added: | | |] 4.1 | | | | | | [Form of Senior Notes due [removed: July 20, 2022] [added: March 1, 2024] (incorporated by reference to Exhibit [removed: 4.2] [added: 4.1] to Fastenal [removed: Company](http://www.sec.gov/Archives/edgar/data/815556/000081555616000115/exhibit42.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000081555616000115/exhibit42.htm)[s] [added: Company's] Form [removed: 8‑K dated as of July 20, 2016)](http://www.sec.gov/Archives/edgar/data/815556/000081555616000115/exhibit42.htm)] [added: 10-Q for the quarter ended March 31, 2017)](http://www.sec.gov/Archives/edgar/data/815556/000081555617000021/fast33117ex_41.htm)] | | |

| [removed: 4.2] | | | [added: 4.4] | | | [added: | | |] [Form of Senior Notes due [removed: March 1, 2024] [added: May 15, 2027] (incorporated by reference to Exhibit [removed: 4.1] [added: 4.2] to Fastenal [removed: Company](http://www.sec.gov/Archives/edgar/data/815556/000081555617000021/fast33117ex_41.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000081555617000021/fast33117ex_41.htm)[s] [added: Company's] Form 10-Q for the quarter ended [removed: March 31, 2017)](http://www.sec.gov/Archives/edgar/data/815556/000081555617000021/fast33117ex_41.htm)] [added: June 30, 2020)](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex42.htm)] | | |

| [removed: 4.3] | | | [added: 4.2] | | | [added: | | |] [Description of Capital [removed: Stock](https://www.sec.gov/Archives/edgar/data/815556/000081555622000009/fast1231202110-kexhibit043.htm)] [added: Stock](https://www.sec.gov/Archives/edgar/data/815556/000081555623000009/fast1231202210-kexhibit042.htm)] | | |

| [removed: 4.4] | | | [added: 4.3] | | | [added: | | |] [Form of Senior Notes due May 15, 2025 (incorporated by reference to Exhibit 4.1 to Fastenal [removed: Company](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex41.htm)['](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex41.htm)[s] [added: Company's] Form 10-Q for the quarter ended June 30, 2020)](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex41.htm) | | |

| [added: | | |] 4.5 | | | | | | [Form of Senior Notes due [removed: May 15, 2027] [added: June 24, 2023] (incorporated by reference to Exhibit [removed: 4.2] [added: 4.3] to Fastenal [removed: Company](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex42.htm)['](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex42.htm)[s] [added: Company's] Form 10-Q for the quarter ended June 30, [removed: 2020)](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex42.htm)] [added: 2020)](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex43.htm)] | | |

| [added: | | |] 4.6 | | | | | | [Form of Senior Notes due June 24, [removed: 2023] [added: 2026] (incorporated by reference to Exhibit [removed: 4.3] [added: 4.4] to Fastenal [removed: Company](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex43.htm)['](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex43.htm)[s] [added: Company's] Form 10-Q for the quarter ended June 30, [removed: 2020)](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex43.htm)] [added: 2020)](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex44.htm)] | | |

| [added: | | |] 4.7 | | | | | | [Form of Senior Notes due June 24, [removed: 2026] [added: 2030] (incorporated by reference to Exhibit [removed: 4.4] [added: 4.5] to Fastenal [removed: Company](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex44.htm)['](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex44.htm)[s] [added: Company's] Form 10-Q for the quarter ended June 30, [removed: 2020)](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex44.htm)] [added: 2020)](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex45.htm)] | | |

| [added: | | |] 10.1 | | | | | | [Bonus Program for Executive [removed: Officers*](https://www.sec.gov/Archives/edgar/data/815556/000081555622000009/fast1231202110-kexhibit101.htm)] [added: Officers*](https://www.sec.gov/Archives/edgar/data/815556/000081555623000009/fast1231202210-kexhibit101.htm)] | | |

| [added: | | |] 10.2 | | | | | | [Fastenal Company Stock Option Plan as amended and restated effective as of December 12, 2014 (incorporated by reference to Exhibit 10.1 to Fastenal [removed: Company](http://www.sec.gov/Archives/edgar/data/815556/000081555614000073/exhibit101stockoptionplana.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000081555614000073/exhibit101stockoptionplana.htm)[s] [added: Company's] Form 8-K dated December 17, 2014)*](http://www.sec.gov/Archives/edgar/data/815556/000081555614000073/exhibit101stockoptionplana.htm) | | |

| [added: | | |] 10.3 | | | | | | [Fastenal Company Incentive Plan (incorporated by reference to Appendix A to Fastenal [removed: Company](http://www.sec.gov/Archives/edgar/data/815556/000119312512074269/d296107ddef14a.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000119312512074269/d296107ddef14a.htm)[s] [added: Company's] Proxy Statement dated February 23, 2012)*](http://www.sec.gov/Archives/edgar/data/815556/000119312512074269/d296107ddef14a.htm) | | |

| [added: | | |] 10.5 | | | | | | [removed: [Credit] [added: [Amended and Restated Credit] Agreement, dated as of [removed: May 1, 2015,] [added: September 28, 2022, by and] among Fastenal Company, the Lenders [removed: from time to time] party thereto, and Wells Fargo Bank, National Association, as Administrative [removed: Agent, Swingline Lender and Issuing Lender] [added: Agent] (incorporated by reference to Exhibit 10.1 to Fastenal [removed: Company](http://www.sec.gov/Archives/edgar/data/815556/000081555615000036/exhibit10105012015creditag.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000081555615000036/exhibit10105012015creditag.htm)[s] [added: Company's] Form 8-K dated [removed: May 5, 2015).](http://www.sec.gov/Archives/edgar/data/815556/000081555615000036/exhibit10105012015creditag.htm)] [added: as of September 30, 2022).](https://www.sec.gov/Archives/edgar/data/815556/000081555622000036/exhibit101.htm)] | | |

| [added: | | |] 10.6 | | | | | | [First Amendment to [added: Amended and Restated] Credit Agreement, dated as of [removed: November 23, 2015,] [added: January 20, 2023, by and] among Fastenal Company, the Lenders [removed: from time to time] party thereto, and Wells Fargo Bank, National Association, as Administrative [removed: Agent (incorporated by reference to Exhibit 10.1 to Fastenal Company](http://www.sec.gov/Archives/edgar/data/815556/000081555615000074/exhibit101amendment11232015.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000081555615000074/exhibit101amendment11232015.htm)[s Form 8-K dated November 25, 2015).](http://www.sec.gov/Archives/edgar/data/815556/000081555615000074/exhibit101amendment11232015.htm)] [added: Agent.](https://www.sec.gov/Archives/edgar/data/815556/000081555623000009/fast1231202210-kexhibit106.htm)] | | |

| [removed: 10.9] | | | [added: 10.7] | | | [added: | | |] [Master Note Agreement dated as of July 20, 2016 by and among (i) Fastenal Company, (ii) Metropolitan Life Insurance Company, NYL Investors LLC and PGIM, Inc. (formerly known as Prudential Investment Management, Inc.), as investor group representatives (each, [removed: an](http://www.sec.gov/Archives/edgar/data/815556/000081555616000115/exhibit101agreement07202016.htm) ['](http://www.sec.gov/Archives/edgar/data/815556/000081555616000115/exhibit101agreement07202016.htm)[Investor] [added: an 'Investor] Group [removed: Representative](http://www.sec.gov/Archives/edgar/data/815556/000081555616000115/exhibit101agreement07202016.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000081555616000115/exhibit101agreement07202016.htm)[),] [added: Representative'),] and (iii) Metropolitan Life Insurance Company (in its capacity as a purchaser of notes under such Master Note Agreement) and/or affiliates of any Investor Group Representative who become purchasers of notes under such Master Note Agreement (incorporated by reference to Exhibit 10.1 to Fastenal Company’s Form 8-K dated as of July 20, 2016).](http://www.sec.gov/Archives/edgar/data/815556/000081555616000115/exhibit101agreement07202016.htm) | | |

| [removed: 10.10] | | | [added: 10.8] | | | [added: | | |] [Omnibus First Amendment to Master Note Agreement and Subsidiary Guaranty Agreement dated as of November 30, 2018 by and among Fastenal Company, Fastenal Company Purchasing, and Fastenal IP Company, on one hand, and Metropolitan Life Insurance Company, NYL Investors LLC, PGIM, Inc., and each holder of Notes that are signatory thereto, on the other hand (incorporated by reference to Exhibit 10.2 to Fastenal [removed: Company](http://www.sec.gov/Archives/edgar/data/815556/000081555618000052/exhibit102-firstamendmentt.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000081555618000052/exhibit102-firstamendmentt.htm)[s] [added: Company's] Form 8-K dated December 3, 2018).](http://www.sec.gov/Archives/edgar/data/815556/000081555618000052/exhibit102-firstamendmentt.htm) | | |

| [removed: 10.11] | | | [added: 10.9] | | | [added: | | |] [Consent, Waiver and Agreement to Master Note Agreement dated as of June 10, 2020 by and among Fastenal Company, Fastenal Company Purchasing, and Fastenal IP Company, on the one hand, and Metropolitan Life Insurance Company, MetLife Investment Management, LLC, NYL Investors LLC, PGIM, Inc. and each holder of Notes that are signatory thereto, on the other hand (incorporated by reference to Exhibit 10.1 to Fastenal [removed: Company](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex101.htm)['](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex101.htm)[s] [added: Company's] Form 10-Q for the quarter ended June 30, 2020).](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex101.htm) | | |

| [added: | | |] 21 | | | | | | [List of [removed: Subsidiaries](https://www.sec.gov/Archives/edgar/data/815556/000081555622000009/fast1231202110-kexhibit21.htm)] [added: Subsidiaries](https://www.sec.gov/Archives/edgar/data/815556/000081555623000009/fast1231202210-kexhibit21.htm)] | | |

| [added: | | |] 23 | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/815556/000081555622000009/fast1231202110-kexhibit23.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/815556/000081555623000009/fast1231202210-kexhibit23.htm)] | | |

| [added: | | |] 31 | | | | | | [Certifications under Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/815556/000081555622000009/fast1231202110-kexhibit31.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/815556/000081555623000009/fast1231202210-kexhibit31.htm)] | | |

| [added: | | |] 32 | | | | | | [Certification under Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/815556/000081555622000009/fast1231202110-kexhibit32.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/815556/000081555623000009/fast1231202210-kexhibit32.htm)] | | |

| [added: | | |] 101 | | | | | | The following financial statements from the Annual Report on Form 10-K for the year ended December 31, [removed: 2021,] [added: 2022,] formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Earnings, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Stockholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements. | | |

| [added: | | |] 104 | | | | | | The cover page from the Annual Report on Form 10-K for the year ended December 31, [removed: 2021,] [added: 2022,] formatted in Inline XBRL. | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | 10.4 | | | | | | [Fastenal Company Non-Employee Director Stock Option Plan as amended and restated effective December 20, 2021.*](https://www.sec.gov/Archives/edgar/data/815556/000081555622000011/fast1231202110-kaexhibit104.htm) | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Exhibit Number | | | | | | Description of Document | | |

| | | | 10.10 | | | | | | [Omnibus Second Amendment to Master Note Agreement and Subsidiary Guaranty Agreement dated as of September 28, 2022 by and among Fastenal Company, Fastenal Company Purchasing, and Fastenal IP Company, on one hand, and Metropolitan Life Insurance Company, MetLife Investment Management, LLC, NYL Investors LLC, PGIM, Inc., and each holder of Notes that is a signatory thereto, on the other hand (incorporated by reference to Exhibit 10.2 to Fastenal Company's Form 8-K dated as of September 30, 2022).](https://www.sec.gov/Archives/edgar/data/815556/000081555622000036/exhibit102.htm) | | |

FASTENAL COMPANY

Schedule II—Valuation and Qualifying Accounts

Years ended December 31, 2022, 2021, and 2020

(Amounts in millions)

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Description | | | Balance at Beginning of Year | | | | | | "Additions/(Reductions)" to Costs and Expenses | | | | | | "Other" Additions (Deductions) | | | | | | "Less" Deductions | | | | | | Balance at End of Year | | |

| Year ended December 31, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Allowance for credit losses | | | $ | 12.0 | | | | | (1.8) | | | | | | — | | | | | | 1.9 | | | | | | 8.3 | | |

| Insurance reserves | | | $ | 35.7 | | | | | 78.2 | | | (1) | | | — | | | | | | 73.5 | | | (2) | | | 40.4 | | |

| Year ended December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Allowance for credit losses | | | $ | 12.3 | | | | | 2.5 | | | | | | — | | | | | | 2.8 | | | | | | 12.0 | | |

| Insurance reserves | | | $ | 41.0 | | | | | 78.6 | | | (1) | | | — | | | | | | 83.9 | | | (2) | | | 35.7 | | |

| Year ended December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Allowance for credit losses | | | $ | 10.9 | | | | | 7.5 | | | | | | — | | | | | | 6.1 | | | | | | 12.3 | | |

| Insurance reserves | | | $ | 41.1 | | | | | 72.1 | | | (1) | | | — | | | | | | 72.2 | | | (2) | | | 41.0 | | |

(1) Includes costs and expenses incurred for premiums and claims related to health and general insurance.

(2) Includes costs and expenses paid for premiums and claims related to health and general insurance.

See accompanying Report of Independent Registered Public Accounting Firm incorporated herein by reference.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 4.8 | | | | | | [Form of Senior Notes due June 24, 2030 (incorporated by reference to Exhibit 4.5 to Fastenal Company](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex45.htm)['](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex45.htm)[s Form 10-Q for the quarter ended June 30, 2020)](https://www.sec.gov/Archives/edgar/data/815556/000081555620000056/fast6302020ex45.htm) | | |

| 10.4 | | | | | | [Fastenal Company Non-Employee Director Stock Option Plan (incorporated by reference to Exhibit 99 to Fastenal Company](http://www.sec.gov/Archives/edgar/data/815556/000081555618000026/exhibit99-nonxemployeedire.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000081555618000026/exhibit99-nonxemployeedire.htm)[s Registration Statement on Form S-8 filed on April 25, 2018).*](http://www.sec.gov/Archives/edgar/data/815556/000081555618000026/exhibit99-nonxemployeedire.htm) | | |

| 10.7 | | | | | | [Second Amendment to Credit Agreement, dated as of March 10, 2017, by and among Fastenal Company, the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (incorporated by reference to Exhibit 10.1 to Fastenal Company](http://www.sec.gov/Archives/edgar/data/815556/000081555617000015/exhibit101creditfacilityse.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000081555617000015/exhibit101creditfacilityse.htm)[s Form 8-K dated as of March 14, 2017).](http://www.sec.gov/Archives/edgar/data/815556/000081555617000015/exhibit101creditfacilityse.htm) | | |

| 10.8 | | | | | | [Third Amendment to Credit Agreement dated as of November 30, 2018 among Fastenal Company, the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (incorporated by reference to Exhibit 10.1 to Fastenal Company](http://www.sec.gov/Archives/edgar/data/815556/000081555618000052/exhibit101-thirdamendmentt.htm)['](http://www.sec.gov/Archives/edgar/data/815556/000081555618000052/exhibit101-thirdamendmentt.htm)[s Form 8‑K dated December 3, 2018).](http://www.sec.gov/Archives/edgar/data/815556/000081555618000052/exhibit101-thirdamendmentt.htm) | | |

| Date: | | | | | | February 7, [removed: 2022] [added: 2023] | | |

| Daniel L. Florness, President and Chief Executive Officer (Principal Executive Officer), and Director | | | | | | | | | Holden Lewis, [added: Senior] Executive Vice President and Chief Financial Officer (Principal Financial Officer) | | |

| Date: | | | | | | February 7, 2023 | | |

FASTENAL COMPANY

Schedule II—Valuation and Qualifying Accounts

Years ended December 31, 2021, 2020, and 2019

(Amounts in millions)

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Description | | | Balance at Beginning of Year | | | | | | "Additions" Charged to Costs and Expenses | | | | | | "Other" Additions (Deductions) | | | | | | "Less" Deductions | | | | | | Balance at End of Year | | |

| Year ended December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Allowance for credit losses | | | $ | 12.3 | | | | | 2.5 | | | | | | — | | | | | | 2.8 | | | | | | 12.0 | | |

| Insurance reserves | | | $ | 41.0 | | | | | 78.6 | | | (1) | | | — | | | | | | 83.9 | | | (2) | | | 35.7 | | |

| Year ended December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Allowance for credit losses | | | $ | 10.9 | | | | | 7.5 | | | | | | — | | | | | | 6.1 | | | | | | 12.3 | | |

| Insurance reserves | | | $ | 41.1 | | | | | 72.1 | | | (1) | | | — | | | | | | 72.2 | | | (2) | | | 41.0 | | |

| Year ended December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Allowance for credit losses | | | $ | 12.8 | | | | | 5.5 | | | | | | — | | | | | | 7.4 | | | | | | 10.9 | | |