Snap-on (SNA) 10-K risk factor changes: FY2020 vs FY2019

[removed: We,] [added: In addition to the specific risks above, we,] our franchisees and our customers, may be adversely affected by changing economic conditions, including conditions that may particularly impact specific regions.

We, our franchisees and our customers, and the economy as a whole, also may be affected by future world or local events outside our control, such as tariffs and other trade protection measures put in place by the United States or other countries, acts of terrorism, developments in the war on terrorism, [added: civil unrest,] conflicts in international situations, weather events and natural disasters, outbreaks of infectious [removed: diseases,] [added: diseases such] as [added: the ongoing COVID-19 pandemic, as] well as government-related developments or [removed: issues.][added: issues, including changes in tax laws and regulations.]

In addition, [removed: political and] [added: political,] social [removed: turmoil related to] [added: turmoil,] international conflicts and terrorist acts may put pressure on [added: global] economic [removed: conditions abroad.][added: conditions.]

The [removed: U.K.] [added: United Kingdom (“U.K.”)] formally left the European Union [added: (“Brexit”)] on January 31, 2020, and [removed: is] [added: was] in a transition period [removed: that is currently scheduled to end on] [added: until] December 31, [removed: 2020 (the “transition period”).][added: 2020.]

[removed: Brexit could, among other impacts, disrupt] [added: In addition to disruptions to] trade and the movement of goods, services and people between the U.K. and the European Union or other countries, [added: Brexit, among other impacts, could] lead to additional [added: cost, delays and] volatility in currency exchange rates, as well as create legal and global economic uncertainty.

Associated unexpected price increases could result in an erosion of [removed: the] [added: product] margins [removed: on our products] or require [removed: us] [added: Snap-on] to [removed: pass higher] [added: increase] prices [removed: on] to [removed: our customers.][added: customers to maintain margins.]

*The performance of Snap-on’s mobile tool distribution business depends on the success of its [removed: franchisees and the health of the vehicle repair market.*][added: franchisees.*]

Approximately [removed: 40%] [added: 42%] of our consolidated net revenues in [removed: 2019] [added: 2020] were generated by the Snap-on Tools Group, which consists of Snap-on’s business operations primarily serving vehicle service and repair technicians through the company’s worldwide mobile tool distribution channel.

We believe [removed: our ability to sell] [added: sales of many of] our products [removed: is also] [added: are] dependent on the [added: changing vehicle repair requirements, the] number of vehicles on the road, the [removed: number] [added: general aging] of [removed: miles driven] [added: vehicles] and the [removed: general aging] [added: number] of [removed: vehicles.][added: miles driven.]

These factors affect the frequency, type and amount of service and repair performed on vehicles by technicians, and therefore affect the demand for the number of technicians, the prosperity of technicians and, consequently, the demand technicians have for our tools, other products and services, [removed: and] [added: as well as] the value technicians place on those products and services.

The use of other methods of transportation, including more frequent use of public [removed: transportation,] [added: transportation in the future,] could result in a decrease in the use of privately operated vehicles.

If circumstances surrounding our customers’ ability to repay their credit obligations were to deteriorate and result in the write-down or [removed: charge-off] [added: write-off] of such receivables, it would negatively affect our operating results for the relevant period and, if large, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

[removed: We maintain] [added: The company maintains] allowances for credit losses for receivables to provide for defaults and [removed: nonperformance, which represent an estimate of losses on our receivables portfolios.][added: nonperformance.]

The determination of the appropriate levels of the allowances for credit losses involves a high degree of subjectivity and [removed: judgment,] [added: judgement,] and requires the company to make estimates of [removed: current] credit risks, which may undergo material [removed: changes.][added: changes as a result of economic conditions and other factors.]

The [added: company’s] allowances may not be adequate to cover actual losses, and future allowances for credit losses could materially and adversely affect our financial condition, results of operations and cash flows.

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 13 | | |

At times, world financial markets have been unstable and subject to [removed: uncertainty.][added: uncertainty, such as during the COVID-19 pandemic in 2020.]

Furthermore, a portion of our indebtedness bears interest at rates that fluctuate with changes in certain short-term prevailing interest rates, including [removed: LIBOR.][added: the London Interbank Offer Rate (“LIBOR”).]

Although the consequences of these developments cannot be predicted at this time, [removed: should a suitable replacement for LIBOR not be available,] the rates under our variable rate indebtedness could increase and access to capital could be limited.

In association with initiatives to better integrate business units, rationalize [added: our] operating footprint and improve responsiveness to franchisees and customers, Snap-on is continually [removed: replacing and] enhancing its global Enterprise Resource Planning (ERP) management information systems.

[removed: *Changes to legislation] [added: *Legislation] and regulations [removed: may] [added: relating to our business and the countries where we operate, as well as any changes to such legislation or regulations, in addition to new compliance obligations or a failure to maintain existing compliance requirements, may, if significant,] affect our business, reputation, results of operations and financial condition.*

Significant changes to legislative and regulatory [removed: activity] [added: activity,] and compliance burdens, including those associated with: (i) sales to our government, military and defense contractor customers; and (ii) classification of third parties, including our franchisees, as independent from the company, as well as the manner in which they are applied, could significantly impact our business and the economy as a whole.

In addition to potentially increasing the costs and other requirements of doing business due to compliance obligations, new laws and regulations, or changes to existing laws and regulations, as well as the enforcement thereof, may affect the relationships between creditors and debtors, inhibit the rights of creditors to collect amounts owed to them, expand liability for certain actions or [removed: inactions,] [added: inaction,] or limit the types of financial products or services offered, any or all of which could have a material adverse effect on our financial condition, results of operations and cash flows.

These developments, and other potential future legislation and regulations, [removed: as well as the factors in the strict regulatory environment,] including the [removed: growing international] [added: increasing global] regulation of privacy rights, may also adversely affect the customers to which, and the markets into which, we sell our products, and increase our costs and otherwise negatively affect our business, reputation, results of operations and financial condition, including in ways that cannot yet be foreseen.

*Risks associated with the disruption of manufacturing operations could adversely affect [added: our] profitability or competitive position.*

Any prolonged disruption in the operations of our existing manufacturing facilities, whether due to technical or labor difficulties, facility consolidation or closure actions, lack of raw material or component availability, destruction of or damage to any facility (as a result of natural disasters, weather events, use and storage of hazardous materials, acts of war, [removed: sabotage] [added: sabotage,] or terrorism, [added: civil unrest] or other events), or other reasons, [added: including outbreaks of infectious diseases, such as the current COVID-19 pandemic,] could have a material adverse effect on our business, financial condition, results of operations and cash flows.

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 15 | | |

Our competitors’ new products may beat our products to market, be more [removed: effective with] [added: effective, contain] more features, be less expensive than our products, and/or render our products obsolete.

See Note [removed: 11] [added: 12] to the Consolidated Financial Statements for further information on the company’s pension plans.

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 17 | | |

*Foreign operations are subject to political, [removed: economic, currency exchange] [added: economic] and other risks that could adversely affect our business, financial condition, results of operations and cash flows.*

Approximately [removed: 31%] [added: 30%] of our revenues in [removed: 2019] [added: 2020] were generated outside of the United States.

These risks and uncertainties include political, economic and social instability, such as acts of war, civil disturbance or acts of terrorism, local labor conditions, [removed: Brexit-related developments,] trade relations with China, changes in government policies and regulations, including imposition or increases in withholding and other taxes on remittances and other payments by international subsidiaries, as well as [removed: the] exposure to liabilities under [added: anti-bribery and] anti-corruption laws in various countries, such as the U.S. Foreign Corrupt Practices Act, currency volatility, transportation delays or interruptions, sovereign debt uncertainties and difficulties in enforcement of contract and intellectual property rights, [added: reputational risks related to, among other factors, different standards and practices among countries,] as well as natural [removed: disasters.][added: disasters and outbreaks of infectious diseases.]

Substantial fluctuations in the value of the U.S. dollar [added: or other transactional currencies] could have a significant impact on the company’s financial condition and results of operations.

Due to the subjectivity of tax laws [added: in and] between [removed: those] jurisdictions, as well as the subjectivity of factual interpretations, our estimates of income tax liabilities may differ from actual payments or assessments.

We have taken steps in the past, and expect to take additional steps in the future, intended to improve customer service and drive further efficiencies [removed: and] [added: as well as] reduce costs, some of which could be disruptive to our [removed: business.][added: business or adversely impact our results in certain periods.]

- Continuing to implement [removed: efficiency and] productivity initiatives throughout the company to drive further efficiencies and reduce [added: energy and other operating] costs;

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 19 | | |

Risk related to COVID-19 and Other Infectious Diseases

*The COVID-19 pandemic has adversely affected, and is expected to continue to pose risks to our business, results of operations, financial condition and cash flows, and other epidemics or outbreaks of infectious diseases may have a similar impact.*

We face risks related to outbreaks of infectious diseases, including the ongoing COVID-19 pandemic.

COVID-19 spread across the globe during 2020 and continues to impact economic activity worldwide.

COVID-19 caused disruption and volatility in the global capital markets, and authored an economic slowdown during 2020.

The COVID-19 pandemic and its associated economic uncertainty negatively impacted Snap-on’s sales volumes in 2020 in most geographies and across a variety of customers, including those in automotive repair with the impact most pronounced in the first and second quarters of 2020.

In response to COVID-19, national and local governments around the world instituted certain measures, including travel bans, prohibitions on group events and gatherings, shutdowns of certain businesses, curfews, shelter-in-place orders and recommendations to practice social distancing.

These measures resulted in attenuating activity and, in some cases, required temporary closures of certain of our facilities, among other impacts in 2020.

The duration of these measures may be extended and additional measures may be imposed to combat the COVID-19 pandemic or future outbreaks of infectious diseases.

Among the effects of COVID-19, and potential effects of other similar outbreaks, on the company include, but are not limited to, the following:

- Reduced consumer and investor confidence, instability in the credit and financial markets, volatile corporate profits, and reduced business and consumer spending, which may adversely affect our results of operations by reducing our sales, margins and/or net income as a result of a slowdown in customer orders or order cancellations.

In addition, volatility in the financial markets could increase the cost of capital and/or limit its availability.

- Economic uncertainties that make it difficult for our franchisees, customers, suppliers and the company to accurately forecast and plan future business activities.

- As a result of government orders and social distancing, some of our franchisees would be expected to make fewer in-person sales calls during any such outbreak reflecting the reluctance of some customers to receive franchisee visits.

Further, shelter-in-place orders could cause vehicle owners to temporarily refrain from bringing cars to repair shops.

To the extent that there is significantly reduced driving due to shelter-in-place and similar orders and the aftermath of such orders, there could be fewer repairs and there could be a decrease in demand for our products; in addition, some repair shops may not be able to stay in business if these conditions continue to exist for an extended period of time.

- The potential to weaken the financial position of some of our customers, including customers utilizing our financing programs.

If circumstances surrounding our customers’ financial capabilities were to deteriorate, write-downs or write-offs could negatively affect our operating results and, if large, or ongoing for extended periods, could have a material adverse effect on our business, financial condition, results of operations and cash flow.

- Disruptions could occur to our supply chain in connection with the sourcing of materials from geographic areas that continue to be impacted by an outbreak and by efforts to contain its spread.

- Volatility related to pension plan assets.

While our plan assets are broadly diversified, there are inherent market risks associated with investments.

We may need to make additional contributions to address an increase in obligations and/or a loss in plan assets as a result of the combination of declining market interest rates and/or past or future plan asset investment losses, which could adversely impact our financial condition, results of operations and cash flows.

- The need to incur additional restructuring charges to optimize our cost structure.

To the extent the COVID-19 pandemic, or a future outbreak, adversely affects our business, financial condition, results of operations and cash flows, it may also heighten many of the other risks described in this section.

The ultimate impact of COVID-19, as well as future outbreaks of infectious diseases, on our business, results of operations, financial condition and cash flows is dependent on future developments, including the duration of the pandemic and the related length of its impact on the global economy, which are uncertain and cannot be predicted at this time.

Business Risks

*The sales of many of our products are dependent on the health of the vehicle repair market and the changing requirements of vehicle repair.*

The U.K. and the European Union reached an agreement regarding Brexit on December 24, 2020.

As part of the agreement, there will be a new series of customs and regulatory checks, including rules of origin and stringent local content requirements.

There will also be restrictions on the free movement of people and temporary visas for work-related purposes are being re-introduced.

The implications of Brexit, or how such implications are expected to affect Snap-on, continue to be reviewed by the company.

Operational Risks

In addition, outbreaks of infectious diseases, weather events or other circumstances beyond our control could also impact the availability of raw materials.

These risks may be heightened as greater numbers of associates work remotely in response to safety measures adopted to address the COVID-19 pandemic.

Financial Risks

These allowances represent an estimate of losses over the remaining contractual lives of our receivables which include current market conditions and estimates for reasonable and supportable forecasts, when appropriate.

*Foreign operations are subject to currency exchange, inflation, interest and other risks that could adversely affect our business, financial condition, results of operations and cash flows.*

The United States (“U.S.”) Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee composed of large U.S. financial institutions, is considering replacing the U.S. dollar LIBOR with a new index, the Secured Overnight Financing Rate (“SOFR”), calculated using short-term repurchase agreements backed by Treasury securities.

Legal and Regulatory Risks

| | | | | | | | | |

In 2016, the United Kingdom voted in a referendum to exit the European Union (“Brexit”), which resulted in significant currency exchange rate fluctuations and volatility.

During the transition period, the U.K. essentially remains in the European Union’s customs union and single market.

Negotiations continue to determine the terms of Brexit.

Given the lack of comparable precedent and the status of the negotiations, the implications of Brexit, or how such implications might affect Snap-on, continue to remain unclear at this time.

In 2018, Canada, Mexico and the United States negotiated the United States-Mexico-Canada Agreement (the “USMCA”), which is intended to update and replace the North American Free Trade Agreement (“NAFTA”).

The USMCA must be ratified by all three countries before it becomes fully effective.

Mexico and the U.S. ratified the USMCA in 2019 and January 2020, respectively; however, timing of the potential ratification of the USMCA by Canada is currently unknown.

While the USMCA is somewhat similar to NAFTA, it contains several new compliance obligations addressing such issues as rules of origin, labor standard, certificate of origin documentation and de minimis thresholds, as well as new policies on labor and environmental standards, intellectual property protections and some digital trade provisions.

Snap-on is currently analyzing the expected impact of the USMCA.

While certain aspects of the USMCA are expected to be positive, others, including potentially higher regulatory compliance costs, may have an adverse impact on our business.

These and other matters significantly impacting the regulation of trade could adversely affect our business and results of operations.

Our financial services portfolio represents a significant portion of the company’s assets.

The Tax Cuts and Jobs Act in the United States (the “Tax Act”), which made significant changes to the U.S. Tax Code and affects, among other items, the company’s tax rate, previously unremitted foreign earnings and valuations of deferred tax assets and liabilities.

If new guidance is issued on the Tax Act, depending on the circumstances, this (and other) tax legislation could adversely affect our results of operations.

[removed: We] [added: By safely pursuing opportunities in the COVID-19 environment, we] believe our [removed: 2019] [added: 2020] operating results demonstrate our [added: continued] commitment to providing repeatability and reliability to a wide range of professional customers performing critical [added: and essential] tasks in workplaces of [removed: consequence, while managing headwinds in certain end markets and geographies, particularly in Europe.][added: consequence.]

Leveraging capabilities already demonstrated in the automotive repair arena, our [removed: “coherent growth”] strategy [removed: focuses] [added: continued to focus] on developing and expanding our professional customer base, not only in automotive repair, but in adjacent markets, additional geographies and other areas, including [removed: in] critical industries, where the cost and penalties for failure can be high.

- Further extending to critical industries, where we continued to grow our lines of products customized for specific industries, including through [removed: further integration of] acquisitions; and

- Building in emerging markets, where we continued to [removed: build] [added: maintain] manufacturing capacity, [removed: focused] [added: as well as refine] product lines and distribution [removed: capability.][added: capabilities.]

Our strategic priorities and plans for [removed: 2020] [added: 2021] involve continuing to build on our Snap-on Value Creation Processes – our suite of strategic principles and processes we employ every day designed to create value, and employed in the areas of safety, quality, customer connection, innovation and rapid continuous improvement (“Rapid Continuous Improvement” or “RCI”).

On August 7, 2019, Snap-on acquired Cognitran Limited (“Cognitran”) for a [removed: preliminary] cash purchase price of [removed: $30.4] [added: $30.6] million (or [removed: $29.4] [added: $29.6] million, net of cash [removed: acquired).][added: acquired), which reflects a $0.2 million working capital adjustment finalized in fiscal 2020.]

| [removed: 26] [added: 50] | | | SNAP-ON INCORPORATED | | | | | |

For segment reporting purposes, the results of operations and assets of [added: Sigmavision,] Cognitran and TMB have been included in the Repair Systems & Information Group since the respective acquisition dates, and the results of operations and assets of [added: AutoCrib and] Power Hawk [removed: and Fastorq] have been included in the Commercial & Industrial Group since the respective acquisition dates.

Fiscal [removed: 2018] [added: 2019] as Compared to Fiscal [removed: 2017][added: 2018]

A discussion regarding our financial condition and results of operations for fiscal [removed: 2018] [added: 2019] compared to fiscal [removed: 2017] [added: 2018] can be found under “Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on the Form 10-K for the fiscal year ended December [removed: 29, 2018,] [added: 28, 2019,] which was filed with the SEC on February [removed: 14, 2019,] [added: 13, 2020,] and is available on the SEC’s website at www.sec.gov as well as in the “Investors” section of our corporate website at www.snapon.com.

Operating earnings before financial services of [removed: $716.4] [added: $631.9] million in [removed: 2019,] [added: 2020,] including [removed: $18.5] [added: $12.5] million of [added: exit and disposal (“restructuring”) charges, $11.9 million of direct costs associated with COVID-19 and $13.1 million of] unfavorable foreign currency [removed: effects and] [added: effects, compared to $716.4 million in 2019, which included] an $11.6 million benefit from [removed: the] [added: a legal] settlement [removed: of] [added: in] a patent-related litigation matter that was being appealed (the [removed: “2019 legal settlement”), decreased $9.6 million, or 1.3%, as compared to $726.0 million last year.][added: “legal settlement”).]

As a percentage of net sales, operating earnings before financial services of [removed: 19.2% in 2019] [added: 17.6%,] compared to [removed: 19.4%] [added: 19.2%] last year.

As a percentage of revenues, operating earnings of [removed: 23.7%] [added: 22.3%,] compared to [removed: 23.5%] [added: 23.7%] last year.

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 27 | | |

| *Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)* | | | | | | | | | [removed: | | |]

Net earnings attributable to Snap-on in 2019 [removed: of] [added: were] $693.5 million, or $12.41 per diluted [removed: share, increased $13.6] [added: share and included an $8.7] million, or [removed: $0.54] [added: $0.15] per diluted share, [added: after-tax benefit] from [removed: $679.9 million, or $11.87 per diluted share, in 2018.][added: the legal settlement.]

[removed: In 2019, net] [added: Net] earnings attributable to Snap-on [added: in 2019 were $693.5 million, or $12.41 per diluted share, and] included [added: an] $8.7 million, or $0.15 per diluted share, [removed: for the] after-tax benefit [removed: related to] [added: from] the [removed: 2019] legal settlement.

The organic sales [removed: increase] [added: decrease] primarily includes a [removed: high single-digit gain in the segment’s power tools operations, a] mid single-digit [removed: gain] [added: decline] in the [removed: specialty tools business] [added: segment’s Asia Pacific operations] and a low single-digit [removed: gain] [added: decline] in sales to customers in critical [removed: industries.][added: industries, partially offset by a double-digit increase in sales in the segment’s European-based hand tools business.]

[removed: Operating earnings] [added: Gross margin] of [removed: $188.7 million] [added: 48.0%] in [removed: 2019, decreased $10.6 million, or 5.3%,] [added: the quarter improved 80 bps] from [removed: 2018 levels,] [added: 2019] primarily due to [removed: $3.3 million] [added: the impact] of [removed: unfavorable foreign currency effects, increased sales in lower gross margin businesses and] higher [removed: material] [added: sales volumes] and [removed: other costs, partially offset by] benefits from the company’s RCI [removed: initiatives.][added: initiatives, partially offset by 30 bps of unfavorable foreign currency effects.]

The Commercial & Industrial Group intends to continue building on the following strategic priorities in [removed: 2020:][added: 2021:]

The organic sales increase reflects a low single-digit [removed: increase] [added: gain] in the [removed: segment’s] U.S. franchise operations, partially offset by a low single-digit decline in the segment’s international operations.

In [removed: 2020,] [added: 2021,] the Snap-on Tools Group intends to continue these initiatives, with specific focus on the following:

The [removed: Repair] [added: Repair] Systems [removed: & Information Group] [added: & Information Group] consists of business operations serving other professional vehicle repair customers worldwide, primarily owners and managers of independent repair shops and OEM [removed: dealerships] [added: dealerships,] through direct and distributor channels.

Segment net sales of [removed: $1,334.5 million in 2019 compared to $1,334.4] [added: $1,238.2] million in [removed: 2018,] [added: 2020,] reflecting a [removed: $15.1] [added: $97.6] million, or [removed: 1.1%,] [added: 7.3%,] organic sales [removed: gain] [added: decline] and [removed: $4.4] [added: $4.8] million of [removed: acquisition-related sales, mostly] [added: unfavorable foreign currency translation, partially] offset by [removed: $19.4] [added: $6.1] million of [removed: unfavorable foreign currency translation.][added: acquisition-related sales, compared to $1,334.5 million in 2019.]

The organic sales increase [removed: primarily] includes [removed: low single-digit gains] [added: a double-digit gain] in sales to OEM dealerships and [added: a high single-digit increase] in sales of diagnostic and repair information products to independent repair shop owners and [removed: managers.][added: managers, partially offset by a low single-digit decrease in sales of undercar equipment.]

[removed: Operating] [added: Financial services operating] earnings of [removed: $342.7] [added: $248.6] million in [removed: 2019,] [added: 2020,] including [removed: $3.9] [added: $0.1] million of unfavorable foreign currency effects, increased [removed: $0.1 million] [added: $2.7 million, or 1.1%,] from [removed: 2018] [added: 2019] levels.

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 29 | | |

The Repair Systems & Information Group intends to focus on the following strategic priorities in [removed: 2020:][added: 2021:]

[removed: In recent years,] Snap-on [removed: has grown] [added: continues to grow] its financial services portfolio by providing financing for [removed: new] finance and contract receivables originated by our global financial services operations.

Financial Services intends to focus on the following strategic priorities in [removed: 2020:][added: 2021:]

Net cash provided by operating activities of [removed: $674.6] [added: $1,008.6] million in [removed: 2019 decreased $89.9] [added: 2020 increased $334.0] million from [removed: $764.5] [added: $674.6] million in [removed: 2018.][added: 2019.]

The [removed: $89.9] [added: $334.0] million [removed: decrease] [added: increase] is primarily due to [removed: $110.8] [added: $430.2] million from net changes in operating assets and liabilities, partially offset by [removed: $15.0] [added: a $64.8] million [removed: of higher] [added: decrease in] net earnings.

Net cash used by investing activities of [removed: $210.2] [added: $187.8] million in [removed: 2018] [added: 2020] included additions to finance receivables of [removed: $865.6] [added: $835.0] million, partially offset by collections of [removed: $747.7 million, as well as a total of $3.0 million for the acquisition of Fastorq.][added: $750.3 million.]

Capital expenditures in [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] totaled [removed: $99.4] [added: $65.6] million and [removed: $90.9] [added: $99.4] million, respectively.

Capital expenditures in both years included continued investments [added: related] to [removed: support] the company’s execution of its strategic growth initiatives and Value Creation Processes around safety, quality, customer connection, innovation and RCI.

These amounts were partially offset by Snap-on’s sale, on [removed: February 20, 2018,] [added: April 27, 2020,] of [removed: $400] [added: $500] million of [removed: the] unsecured [removed: 4.10%] [added: 3.10%] notes that mature on [removed: March] [added: May] 1, [removed: 2048] [added: 2050] (the [removed: “2048] [added: “2050] Notes”) at a discount, from which Snap-on received [removed: $395.4] [added: $489.9] million of net proceeds, reflecting [removed: $3.5] [added: $4.4] million of transaction [removed: costs.][added: costs, and $55.8 million of proceeds from stock purchase and option plan exercises.]

Net cash used by financing activities [added: of $84.3 million] in [removed: 2018 also] [added: 2020] included [removed: $284.1 million for the repurchase of 1,769,000 shares of Snap-on’s common stock, and $192.0] [added: $243.3] million for dividend payments to shareholders, [removed: partially offset by $55.5 million of proceeds from stock purchase and option plan exercises and $4.9] [added: $187.2] million [added: for repayments] of [removed: proceeds from a net increase in] notes payable and other short-term [removed: borrowings.][added: borrowings and $174.3 million for the repurchase of 1,109,000 shares of Snap-on’s common stock.]

Unless otherwise indicated, references in this [removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations] [added: document] to “fiscal [removed: 2019”] [added: 2020”] or [removed: “2019”] [added: “2020”] refer to the fiscal year ended [removed: December 28, 2019;] [added: January 2, 2021;] references to “fiscal [removed: 2018”] [added: 2019”] or [removed: “2018”] [added: “2019”] refer to the fiscal year ended December [removed: 29, 2018;] [added: 28, 2019;] and references to “fiscal [removed: 2017”] [added: 2018”] or [removed: “2017”] [added: “2018”] refer to the fiscal year ended December [removed: 30, 2017.][added: 29, 2018.]

References in this document to [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] year end refer to [added: January 2, 2021,] December 28, 2019, [added: and] December 29, 2018, [removed: and December 30, 2017,] respectively.

Snap-on’s [removed: 2019, 2018] [added: 2019] and [removed: 2017] [added: 2018] fiscal years each contained 52 weeks of operating results.

In 2020, the COVID-19 pandemic impacted the company’s sales and earnings as a result of decreased activity in the first half of the year.

On September 28, 2020, Snap-on acquired substantially all of the assets of AutoCrib, Inc. (“AutoCrib”) for a cash purchase price of $35.4 million.

AutoCrib, based in Tustin, California, designs, manufactures and markets asset and tool control solutions.

The acquisition of AutoCrib complemented and expanded Snap-on’s existing tool control offering to customers in a variety of industrial applications, including aerospace, automotive, military, natural resources and general industry.

On January 31, 2020, Snap-on acquired substantially all of the assets related to the TreadReader product line from Sigmavision Limited (“Sigmavision”) for a cash purchase price of $5.9 million.

Sigmavision designs and manufactures handheld devices and drive-over ramps that provide tire information for use in the automotive industry.

The acquisition of the TreadReader product line enhanced and expanded Snap-on’s existing capabilities in serving vehicle repair facilities and expanded the company’s presence with repair shop owners and managers.

Snap-on’s 2020 fiscal year contained 53 weeks of operating results with the extra week occurring in the fourth quarter.

The impact of the additional week of operations in fiscal 2020 was not material to Snap-on’s full year or fourth quarter total revenues or net earnings.

Impact of COVID-19

As discussed in Part I, Item 1A: Risk Factors, the company faces risks related to outbreaks of infectious diseases, including the ongoing COVID-19 pandemic, which caused disruption and volatility in the global capital markets and authored an economic slowdown.

In response to COVID-19, national and local governments around the world instituted certain measures, including travel bans, prohibitions on group events and gatherings, shutdowns of certain businesses, curfews, shelter-in-place orders and recommendations to practice social distancing.

The challenges posed by the COVID-19 pandemic on the global economy increased significantly in the first quarter of 2020, impacting Snap-on’s sales volumes in most geographies and across a variety of customers, including those in automotive repair.

In addition, the impact of economic uncertainty caused by COVID-19 led to an increase in the credit reserve requirements for the company’s financial services portfolio.

During the second quarter of 2020, the COVID-19 pandemic and associated government measures to limit the spread of the virus heavily impacted Snap-on’s sales and earnings and, as anticipated, resulted in substantially lower performance in that period as compared to 2019.

The company accommodated its operations to the virus environment, continuing without significant disruption to serve its franchisees and other professional customers as they performed essential work, while taking what it believes to be appropriate measures to ensure the health and safety of its personnel.

Snap-on also provided direct assistance to its franchisees as they accommodated the turbulence caused by the virus to enable continued service to their essential technician customers.

As a result of these accommodations, the impact of the virus on operations lessened as the year progressed.

The company has invested in offsetting the virus impact, including absorbing temporary closures of certain facilities, wages for quarantined associates, event cancellation fees, as well as other related costs (collectively, “direct COVID-19-related costs” or “direct costs associated with COVID-19”).

Snap-on has generally maintained its headcount, manufacturing capacity and product development, in anticipation of the return to pre-COVID-19 demand levels.

The company’s supply chain and distribution channels have not been materially impacted by the pandemic, and the company has taken steps to ensure access to raw materials and components, but it cannot provide assurances with respect to the future due to the evolving nature of the pandemic.

The ultimate impact of COVID-19 on our business, results of operations, financial condition and cash flows is dependent on future developments, including the duration of the pandemic and the related length of its impact on the global economy, which are uncertain and cannot be predicted at this time.

Consolidated net sales of $3,592.5 million in 2020, reflecting a $140.9 million, or 3.8%, decrease in organic sales and $10.9 million of unfavorable foreign currency translation, partially offset by $14.3 million of acquisition-related sales, compared to $3,730.0 million in 2019.

The lower sales volume is primarily due to decreased activity in the first half of the year as a result of the initial economic impact associated with the COVID-19 pandemic.

Operating earnings of $880.5 million in 2020, including $12.5 million of restructuring charges, $11.9 million of direct costs associated with COVID-19 and $13.2 million of unfavorable foreign currency effects, compared to $962.3 million last year, which included the benefit from the $11.6 million legal settlement.

Net earnings attributable to Snap-on in 2020 of $627.0 million, or $11.44 per diluted share, included a $10.3 million, or $0.19 per diluted share, after-tax charge related to restructuring actions.

| *Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)* | | | | | | | | |

Segment net sales of $1,234.6 million in 2020, reflecting a $115.8 million, or 8.6%, organic sales decline and $3.5 million of unfavorable currency translation, partially offset by $8.2 million of acquisition-related sales, compared to $1,345.7 million in 2019.

Operating earnings of $153.7 million in 2020, including $6.5 million of direct costs associated with COVID-19, $6.4 million of restructuring charges and $5.8 million of unfavorable foreign currency effects, compared to $188.7 million in 2019.

Segment net sales of $1,643.9 million in 2020, reflecting a $32.8 million, or 2.0%, organic sales gain, partially offset by $1.8 million of unfavorable foreign currency translation, compared to $1,612.9 million in 2019.

Operating earnings of $267.7 million in 2020, including $3.5 million of direct costs associated with COVID-19, $0.6 million of restructuring charges and $5.4 million of unfavorable foreign currency effects, compared to $245.8 million in 2019.

The organic sales decrease includes double-digit declines in both sales of undercar equipment and in sales to OEM dealerships.

Sales of diagnostic and repair information products to independent repair shop owners and managers were essentially flat.

Operating earnings of $298.0 million in 2020, including $5.5 million of costs related to restructuring actions, $1.2 million of direct costs associated with COVID-19 and $1.9 million of unfavorable foreign currency effects, compared to $342.7 million in 2019.

Financial Services revenue was $349.7 million in 2020 and $337.7 million in 2019.

Originations of $1,036.6 million in 2020 increased $4.8 million, or 0.5%, from 2019 levels.

Operating earnings from financial services in 2020 of $248.6 million, compared to $245.9 million last year.

In 2020, financial services expenses included higher provisions for credit losses related to the company’s adoption of ASU No. 2016-13, *Financial Instruments - Credit Losses (Topic 326*), and $2.6 million of higher credit reserve requirements associated with the COVID-19 pandemic, which were recorded in the first quarter of 2020.

Net cash used by investing activities of $187.8 million in 2020 included additions to finance receivables of $835.0 million, partially offset by collections of $750.3 million, as well as a total of $41.5 million for the acquisitions of Sigmavision and AutoCrib and a $0.2 million working capital adjustment for the 2019 Cognitran acquisition.

| *Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)* | | | | | | | | |

The preliminary purchase price is subject to change based upon finalization of a working capital adjustment that is expected to be completed in the first quarter of 2020.

On January 31, 2018, Snap-on acquired substantially all of the assets of George A.

Sturdevant, Inc. (d/b/a Fastorq) for a cash purchase price of $3.0 million.

Fastorq, based in New Caney, Texas, designs, assembles and distributes hydraulic torque and hydraulic tensioning products for use in critical industries.

The acquisition of the Fastorq product line complemented and increased Snap-on’s existing torque product offering and broadened its established capabilities in serving in critical industries.

Consolidated net sales of $3,730.0 million in 2019 decreased $10.7 million, or 0.3%, from 2018 levels, reflecting a $45.4 million, or 1.2%, increase in organic sales and $7.5 million of acquisition-related sales, more than offset by $63.6 million of unfavorable foreign currency translation.

Fiscal 2018 results included a $4.3 million benefit related to a legal settlement in an employment-related litigation matter that was being appealed (the “2018 legal settlement”).

Operating earnings of $962.3 million in 2019, including $19.8 million of unfavorable foreign currency effects and an $11.6 million benefit for the 2019 legal settlement, increased $6.2 million, or 0.6% from $956.1 million last year.

In 2018, operating earnings included a $4.3 million benefit from the 2018 legal settlement.

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

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

Net earnings attributable to Snap-on in 2018 included $3.2 million, or $0.06 per diluted share, for the after-tax benefit related to the 2018 legal settlement, as well as a $4.1 million, or $0.07 per diluted share, after-tax net gain associated with a treasury lock settlement of $10.0 million related to the issuance of debt, partially offset by $5.9 million of expense related to the early extinguishment of debt (collectively, the “net debt items”), partially offset by $3.9 million, or $0.07 per diluted share, of tax expense for guidance associated with the U.S. Tax Cuts and Jobs Act (the “Tax Act”) or (“tax charge”).

*Impact of the Tax Act*

On December 22, 2017, the U.S. government passed the Tax Act.

The Tax Act made broad and complex changes to the U.S. tax code, including, but not limited to: (i) reducing the U.S. federal corporate tax rate to 21 percent; (ii) requiring companies to pay a one-time transition tax on certain unremitted earnings of foreign subsidiaries; and (iii) bonus depreciation that will allow for full expensing of qualified property.

The Tax Act also established new tax laws that include, but are not limited to: (i) the reduction of the U.S. federal corporate tax rate discussed above; (ii) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (iii) a new provision designed to tax global intangible low-taxed income (“GILTI”); (iv) the repeal of the domestic production activity deductions; (v) limitations on the deductibility of certain executive compensation; (vi) limitations on the use of foreign tax credits to reduce the U.S. income tax liability; and (vii) a new provision that allows a domestic corporation an immediate deduction for a portion of its foreign derived intangible income (“FDII”).

The Securities and Exchange Commission staff issued Staff Accounting Bulletin (“SAB”) 118, which provided guidance on accounting for the tax effects of the Tax Act, for the company’s year ended December 30, 2017.

SAB 118 provided a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the related accounting under Accounting Standards Codification (“ASC”) 740, *Accounting for Income Taxes*.

In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete.

To the extent that a company’s accounting for a certain income tax effect of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements.

If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

The company’s accounting for certain elements of the Tax Act was incomplete as of December 30, 2017.

However, the company was able to make reasonable estimates of the effects and, therefore, recorded provisional estimates for these items.

In connection with its initial analysis of the impact of the Tax Act, the company recorded a provisional discrete net tax expense of $7.0 million in the fiscal year ended December 31, 2017.

This provisional estimate consisted of a net expense of $13.7 million for the one-time transition tax and a net benefit of $6.7 million related to revaluation of deferred tax assets and liabilities, caused by the new lower corporate tax rate.

To determine the transition tax, the company determined the amount of post-1986 accumulated earnings and profits of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings.

While the company was able to make a reasonable estimate of the transition tax for 2017, it continued to gather additional information to more precisely compute the final amount reported on its 2017 U.S. federal tax return which was filed in October 2018.

The actual transition tax was $8.3 million greater than the company’s initial estimate and was included in income tax expense for 2018.

Likewise, while the company was able to make a reasonable estimate of the impact of the reduction to the corporate tax rate, it was affected by other analyses related to the Tax Act, including, but not limited to, the state tax effect of adjustments made to federal temporary differences.

During 2018, the company recorded additional net tax benefits of $4.4 million attributable to pension contributions made in 2018 that were deductible for 2017 at the higher 35% federal tax rate and other changes to the 2017 tax provision related to the Tax Act and subsequently-issued tax guidance.

Due to the complexity of the new GILTI tax rules, the company continued to evaluate this provision of the Tax Act and the application of ASC 740 throughout 2018.

Under GAAP, the company is allowed to make an accounting policy choice to either: (i) treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”); or (ii) factor in such amounts into a company’s measurement of its deferred taxes (the “deferred method”).

The company selected to apply the “period cost method” to account for the new GILTI tax, and treated it as a current-period expense for 2019 and 2018.

Segment net sales of $1,345.7 million in 2019 increased $2.4 million, or 0.2%, from 2018 levels, reflecting a $32.2 million, or 2.5%, organic sales gain and $3.1 million of acquisition-related sales, mostly offset by $32.9 million of unfavorable foreign currency translation.

Segment net sales of $1,612.9 million in 2019 decreased $0.9 million, or 0.1%, from 2018 levels, reflecting a $14.7 million, or 0.9%, organic sales gain, more than offset by $15.6 million of unfavorable foreign currency translation.

Operating earnings of $245.8 million in 2019 decreased $18.4 million, or 7.0%, from 2018 levels primarily due to $11.3 million of unfavorable foreign currency effects and higher field support investments.

While sales challenges existed in certain geographies throughout 2019, the Snap-on Tools Group remained focused on its fundamental, strategic initiatives to strengthen the franchise network and enhance franchisee profitability.

Financial Services revenue was $337.7 million in 2019 and $329.7 million in 2018; originations of $1,031.8 million in 2019 decreased $25.7 million, or 2.4%, from 2018 levels.

In 2019, operating earnings from financial services of $245.9 million, including $1.3 million of unfavorable foreign currency effects, increased $15.8 million, or 6.9%, from $230.1 million last year, primarily reflecting the growth of the portfolio and improved portfolio performance, which resulted in lower provisions for credit losses.

Net cash used by financing activities of $502.2 million in 2018 included repayments of $250 million of the unsecured 4.25% notes, due January 16, 2018 (the “2018 Notes”), at maturity, and $200 million of the unsecured 6.70% notes that were scheduled to mature on March 1, 2019 (the “2019 Notes”), as well as a $7.8 million loss on early extinguishment of debt.

See Note [removed: 10] [added: 11] to the Consolidated Financial Statements for information on foreign currency risk management.

See Note [removed: 10] [added: 11] to the Consolidated Financial Statements for information on interest rate risk management.

The estimated maximum potential one-day loss in fair value, calculated using the VAR model, as of [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] year end was [removed: $9.9] [added: $13.9] million and [removed: $7.7] [added: $9.9] million, respectively, on interest rate-sensitive financial instruments, and [removed: $0.2] [added: $0.1] million and [removed: $0.1] [added: $0.2] million, respectively, on foreign currency-sensitive financial instruments.

See Note [removed: 10] [added: 11] to the Consolidated Financial Statements for additional information on stock-based deferred compensation risk management.

[removed: Snap-on continually monitors its exposure in these markets; for example,] [added: In addition,] the company is monitoring the [removed: potential] effects of the United Kingdom’s exit from the European Union, although it is too soon to know what effects this might have on the world economy or the company.

Associated unexpected price increases could result in an erosion of [removed: the] [added: product] margins [removed: on our products] or require [removed: us] [added: Snap-on] to [removed: pass higher] [added: increase] prices to [removed: Snap-on’s customers.][added: customers to maintain margins.]

Snap-on believes its ability to sell product is also dependent on the [added: changing vehicle repair requirements, the] number of vehicles on the road, the [removed: number] [added: general aging] of [removed: miles driven] [added: vehicles] and the [removed: general aging] [added: number] of [removed: vehicles.][added: miles driven.]

| | | | 2020 ANNUAL REPORT | | | 51 | | |

Snap-on continually monitors its exposure in these markets.

For example, the company is monitoring the impact of and developments related to the COVID-19 pandemic, which has created global economic uncertainty.

| 50 | | | SNAP-ON INCORPORATED | | | | | |

The company began with the development of the original Snap-on interchangeable socket set in 1920 and subsequently pioneered mobile tool distribution in the automotive repair market, where [removed: well stocked] [added: well-stocked] vans sell to professional vehicle technicians at their place of business.

Snap-on’s Financial Services customer segment includes: (i) franchisees’ customers, principally serving vehicle repair technicians, and Snap-on customers who require financing for the purchase or lease of tools and diagnostics and equipment products on an extended-term payment plan; and (ii) franchisees who require financing [added: options] for vehicle [removed: leases] and business [removed: loans.][added: needs.]

See Note [removed: 19] [added: 20] to the Consolidated Financial Statements for information on business segments and foreign operations.

On August 7, 2019, Snap-on acquired Cognitran Limited (“Cognitran”) for a [removed: preliminary] cash purchase price of [removed: $30.4] [added: $30.6] million (or [removed: $29.4] [added: $29.6] million, net of cash acquired).

For segment reporting purposes, the results of operations and assets of [removed: Cognitran, TMB] [added: Sigmavision, Cognitran] and [removed: BTC] [added: TMB] have been included in the Repair Systems & Information Group since the respective acquisition dates, and the results of operations and assets of [added: AutoCrib,] Power [removed: Hawk, Fastorq, TCS] [added: Hawk] and [removed: Norbar] [added: Fastorq] have been included in the Commercial & Industrial Group since the respective acquisition dates.

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 5 | | |

| | | | | | | Net Sales | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| *(Amounts in millions)* | | | | | | [removed: 2019 | | | | | | 2018 | | | | | | 2017] [added: 2020] | | | | | | [added: 2019] | | | | | | [added: 2018] | | |

| Product Category: | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Tools | | | | | | $ | [removed: 2,017.5] [added: 1,984.7] | | | | | $ | [removed: 2,021.2] [added: 2,017.5] | | | | | $ | [removed: 1,946.7 | | | | | | | | | | | |] [added: 2,021.2] | |

| Diagnostics, information and management systems | | | | | | [removed: 827.5 | | | | | | 797.9 | | | | | | 800.4] [added: 783.8] | | | | | | [added: 827.5] | | | | | | [added: 797.9] | | |

| Equipment | | | | | | [removed: 885.0 | | | | | | 921.6 | | | | | | 939.8] [added: 824.0] | | | | | | [added: 885.0] | | | | | | [added: 921.6] | | |

| | | | | | | $ | [removed: 3,730.0] [added: 3,592.5] | | | | | $ | [removed: 3,740.7] [added: 3,730.0] | | | | | $ | [removed: 3,686.9 | | | | | | | | | | | |] [added: 3,740.7] | |

Products include wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane [removed: systems,] [added: equipment,] collision repair equipment, vehicle air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers and hoists.

| Names | | | | | | Products and Services | | | [removed: | | |]

| Snap-on | | | | | | Hand tools, power tools, tool storage products (including tool control software and hardware), diagnostics, certain equipment and related accessories, mobile tool stores, websites, electronic parts catalogs, warranty analytics solutions, business management systems and services, OEM specialty tools and equipment development and distribution, and OEM facilitation services | | | [removed: | | |]

| ATI | | | | | | Aircraft hand tools and machine tools | | | [removed: | | |]

| autoVHC | | | | | | Vehicle inspection and training services | | | [removed: | | |]

| BAHCO | | | | | | Saw blades, cutting tools, pruning tools, hand tools, power tools and tool [removed: storage | | |] [added: storage, including tool control systems] | | |

| Blackhawk | | | | | | Collision repair equipment | | | [removed: | | |]

| Blue-Point | | | | | | Hand tools, power tools, tool storage, diagnostics, certain equipment and related accessories | | | [removed: | | |]

| Cartec | | | | | | Safety testing, brake testers, test lane equipment, dynamometers, suspension testers, emission testers and other equipment | | | [removed: | | |]

| Car-O-Liner | | | | | | Collision repair equipment, and information and truck alignment systems | | | [removed: | | |]

| CDI | | | | | | Torque tools | | | [removed: | | |]

| Challenger | | | | | | Vehicle lifts | | | [removed: | | |]

| Cognitran | | | | | | OEM SaaS products | | | [removed: | | |]

| Ecotechnics | | | | | | Vehicle air conditioning service equipment | | | [removed: | | |]

| Fastorq | | | | | | Hydraulic torque and tensioning products | | | [removed: | | |]

| Fish and Hook | | | | | | Saw blades, cutting tools, pruning tools, hand tools, power tools and tool storage | | | [removed: | | |]

| Hofmann | | | | | | Wheel balancers, vehicle lifts, tire changers, wheel aligners, brake testers and test lane equipment | | | [removed: | | |]

| Irimo | | | | | | Saw blades, cutting tools, hand tools, power tools and tool storage | | | [removed: | | |]

| John Bean | | | | | | Wheel balancers, vehicle lifts, tire changers, wheel aligners, brake testers and test lane equipment | | | [removed: | | |]

| Josam | | | | | | Heavy duty alignment and collision repair solutions | | | [removed: | | |]

| Lindström | | | | | | Hand tools | | | [removed: | | |]

| Mitchell1 | | | | | | Repair and service information, shop management systems and business services | | | [removed: | | |]

| Nexiq | | | | | | Diagnostic tools, information and program distributions for fleet and heavy duty equipment | | | [removed: | | |]

| Norbar | | | | | | Torque tools | | | [removed: | | |]

| Power Hawk | | | | | | Rescue tools and related equipment for military, government, fire and rescue | | | [removed: | | |]

| Pro-Cut | | | | | | Brake service equipment and accessories | | | [removed: | | |]

| Sandflex | | | | | | Hacksaw blades, bandsaws, saw blades, hole saws and reciprocating saw blades | | | [removed: | | |]

Snap-on has continued to expand its business throughout the years via acquisitions.

Below are acquisitions completed in the last three fiscal years:

On September 28, 2020, Snap-on acquired substantially all of the assets of AutoCrib, Inc. (“AutoCrib”) for a cash purchase price of $35.4 million.

AutoCrib, based in Tustin, California, designs, manufactures and markets asset and tool control solutions.

The acquisition of AutoCrib complemented and expanded Snap-on’s existing tool control offering to customers in a variety of industrial applications, including aerospace, automotive, military, natural resources and general industry.

On January 31, 2020, Snap-on acquired substantially all of the assets related to the TreadReader product line from Sigmavision Limited (“Sigmavision”) for a cash purchase price of $5.9 million.

Sigmavision designs and manufactures handheld devices and drive-over ramps that provide tire information for use in the automotive industry.

The acquisition of the TreadReader product line enhanced and expanded Snap-on’s existing capabilities in serving vehicle repair facilities and expanded the company’s presence with repair shop owners and managers.

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

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

| AutoCrib | | | | | | Asset and tool control systems | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| TreadReader | | | | | | Automotive tire drive-over ramps and handheld devices | | |

| | | | | | | | | |

Snap-on was incorporated under the laws of the state of Wisconsin in 1920 and reincorporated under the laws of the state of Delaware in 1930.

The preliminary purchase price is subject to change based upon finalization of a working capital adjustment that is expected to be completed in the first quarter of 2020.

On July 28, 2017, Snap-on acquired Torque Control Specialists Pty Ltd (“TCS”) for a cash purchase price of $3.6 million (or $3.5 million, net of cash acquired).

TCS, based in Adelaide, Australia, distributes a full range of torque products, including wrenches, multipliers and calibrators, for use in critical industries.

The acquisition of TCS enhanced and expanded Snap-on’s capabilities in providing solutions that address torque requirements, which are increasingly essential to critical mechanical performance.

On May 4, 2017, Snap-on acquired Norbar Torque Tools Holdings Limited, along with its U.S. and Chinese joint ventures (“Norbar”), for a cash purchase price of $71.6 million (or $69.9 million, net of cash acquired).

Norbar, based in Banbury, U.K., designs and manufactures a full range of torque products, including wrenches, multipliers and calibrators, for use in critical industries.

The acquisition of Norbar enhanced and expanded Snap-on’s capabilities in providing solutions that address torque requirements.

On January 30, 2017, Snap-on acquired BTC Global Limited (“BTC”) for a cash purchase price of $9.2 million.

BTC, based in Crewe, U.K., designs and implements automotive vehicle inspection and management software for OEM franchise repair shops.

The acquisition of BTC enhanced Snap-on’s capabilities to grow enterprise revenues and add increased productivity for repair workshops.

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

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

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

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

Environmental

Employees

Snap-on employed approximately 12,800 people at the end of January 2020 and 12,600 people at the end of January 2019.

The year-over-year increase in employees reflects acquisitions during 2019.

The number of covered union employees whose contracts expire over the next five years approximates 1,825 employees in 2020, 650 employees in 2021, and 175 employees in 2022; there are no contracts currently scheduled to expire in 2023 or 2024.

There can be no assurance that these and other future contracts with Snap-on’s unions will be renegotiated upon terms acceptable to Snap-on.

Working Capital

Snap-on did not have a significant backlog of orders at 2019 year end.

In recent years, Snap-on has been using its working capital to fund, in part, the growth of the company’s financial services portfolio, increased inventory to support new product introductions and the acquisitions discussed above.

Snap-on’s liquidity and capital resources and use of working capital are discussed herein in “Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Paramount to the company’s commitment to integrity and social responsibility is the manner in which Snap-on treats its employees and the way in which others within its supply chain treat their employees.

In addition, Snap-on is committed to non-negotiable product and workplace safety.

For the fiscal year ended [removed: December 28, 2019,] [added: January 2, 2021,] or

| Delaware | | | | | | | | | | | | [removed: | | | | | |] 39-0622040 | | |

| *(State of incorporation)* | | | | | | | | | | | | [removed: | | | | | |] *(I.R.S. Employer Identification No.)* | | |

| 2801 80th Street | | | Kenosha | | | Wisconsin | | | | | | 53143 | | | [removed: | | | | | |]

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

The aggregate market value of voting and non-voting common equity held by non-affiliates (excludes [removed: 667,320] [added: 710,101] shares held by directors and executive officers) computed by reference to the price [removed: ($165.64)] [added: ($133.56)] at which common equity was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter (June [removed: 28, 2019)] [added: 26, 2020)] was [removed: $9.0] [added: $7.2] billion.

The number of shares of Common Stock ($1.00 par value) of the registrant outstanding as of February [removed: 7, 2020,] [added: 5, 2021,] was [removed: 54,659,446] [added: 54,203,094] shares.

Part III of this Annual Report on Form 10-K incorporates by reference certain information that will be set forth in Snap-on’s Proxy Statement, which is expected to first be mailed to shareholders on or about March [removed: 11, 2020,] [added: 12, 2021,] prepared for the Annual Meeting of Shareholders scheduled for April [removed: 23, 2020.][added: 29, 2021.]

| | | | | | | Page | | | [removed: | | |]

| PART I | | | | | | | | | [removed: | | |]

| [Item [removed: 1](#i_0_13) | | | [Business](#i_0_13)] [added: 1](#ia8d1390c271349b7b4007d6009c2ae0f_13)] | | | [removed: [4](#i_0_13)] [added: [Business](#ia8d1390c271349b7b4007d6009c2ae0f_13)] | | | [added: [4](#ia8d1390c271349b7b4007d6009c2ae0f_13)] | | |

| [Item [removed: 1A](#i_0_16)] [added: 1A](#ia8d1390c271349b7b4007d6009c2ae0f_16)] | | | [Risk [removed: Factors](#i_0_16) | | | [12](#i_0_16)] [added: Factors](#ia8d1390c271349b7b4007d6009c2ae0f_16)] | | | [added: [12](#ia8d1390c271349b7b4007d6009c2ae0f_16)] | | |

| [Item [removed: 1B](#i_0_19)] [added: 1B](#ia8d1390c271349b7b4007d6009c2ae0f_19)] | | | [Unresolved Staff [removed: Comments](#i_0_19) | | | [20](#i_0_19)] [added: Comments](#ia8d1390c271349b7b4007d6009c2ae0f_19)] | | | [added: [21](#ia8d1390c271349b7b4007d6009c2ae0f_19)] | | |

| [Item [removed: 2](#i_0_22) | | | [Properties](#i_0_22)] [added: 2](#ia8d1390c271349b7b4007d6009c2ae0f_22)] | | | [removed: [20](#i_0_22)] [added: [Properties](#ia8d1390c271349b7b4007d6009c2ae0f_22)] | | | [added: [21](#ia8d1390c271349b7b4007d6009c2ae0f_22)] | | |

| [Item [removed: 3](#i_0_25)] [added: 3](#ia8d1390c271349b7b4007d6009c2ae0f_25)] | | | [Legal [removed: Proceedings](#i_0_25) | | | [22](#i_0_25)] [added: Proceedings](#ia8d1390c271349b7b4007d6009c2ae0f_25)] | | | [added: [23](#ia8d1390c271349b7b4007d6009c2ae0f_25)] | | |

| [Item [removed: 4](#i_0_28)] [added: 4](#ia8d1390c271349b7b4007d6009c2ae0f_28)] | | | [Mine Safety [removed: Disclosures](#i_0_28) | | | [22](#i_0_28)] [added: Disclosures](#ia8d1390c271349b7b4007d6009c2ae0f_28)] | | | [added: [23](#ia8d1390c271349b7b4007d6009c2ae0f_28)] | | |

| PART II | | | | | | | | | [removed: | | |]

| [Item [removed: 5](#i_0_34)] [added: 5](#ia8d1390c271349b7b4007d6009c2ae0f_34)] | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i_0_34) | | | [22](#i_0_34)] [added: Securities](#ia8d1390c271349b7b4007d6009c2ae0f_34)] | | | [added: [23](#ia8d1390c271349b7b4007d6009c2ae0f_34)] | | |

| [Item [removed: 6](#i_0_37)] [added: 6](#ia8d1390c271349b7b4007d6009c2ae0f_37)] | | | [Selected Financial [removed: Data](#i_0_37) | | | [25](#i_0_37)] [added: Data](#ia8d1390c271349b7b4007d6009c2ae0f_37)] | | | [added: [26](#ia8d1390c271349b7b4007d6009c2ae0f_37)] | | |

| [Item [removed: 7](#i_0_40)] [added: 7](#ia8d1390c271349b7b4007d6009c2ae0f_40)] | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i_0_40) | | | [26](#i_0_40)] [added: Operations](#ia8d1390c271349b7b4007d6009c2ae0f_40)] | | | [added: [27](#ia8d1390c271349b7b4007d6009c2ae0f_40)] | | |

| [Item [removed: 7A](#i_0_52)] [added: 7A](#ia8d1390c271349b7b4007d6009c2ae0f_52)] | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i_0_52) | | | [50](#i_0_52)] [added: Risk](#ia8d1390c271349b7b4007d6009c2ae0f_52)] | | | [added: [51](#ia8d1390c271349b7b4007d6009c2ae0f_52)] | | |

| [Item [removed: 8](#i_0_55)] [added: 8](#ia8d1390c271349b7b4007d6009c2ae0f_55)] | | | [Financial Statements and Supplementary [removed: Data](#i_0_55) | | | [51](#i_0_55)] [added: Data](#ia8d1390c271349b7b4007d6009c2ae0f_55)] | | | [added: [52](#ia8d1390c271349b7b4007d6009c2ae0f_55)] | | |

| [Item [removed: 9](#i_0_58)] [added: 9](#ia8d1390c271349b7b4007d6009c2ae0f_58)] | | | [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#i_0_58) | | | [51](#i_0_58)] [added: Disclosure](#ia8d1390c271349b7b4007d6009c2ae0f_58)] | | | [added: [52](#ia8d1390c271349b7b4007d6009c2ae0f_58)] | | |

| [Item [removed: 9A](#i_0_61)] [added: 9A](#ia8d1390c271349b7b4007d6009c2ae0f_61)] | | | [Controls and [removed: Procedures](#i_0_61) | | | [52](#i_0_61)] [added: Procedures](#ia8d1390c271349b7b4007d6009c2ae0f_61)] | | | [added: [53](#ia8d1390c271349b7b4007d6009c2ae0f_61)] | | |

| [Item [removed: 9B](#i_0_64)] [added: 9B](#ia8d1390c271349b7b4007d6009c2ae0f_64)] | | | [Other [removed: Information](#i_0_64) | | | [54](#i_0_64)] [added: Information](#ia8d1390c271349b7b4007d6009c2ae0f_64)] | | | [added: [55](#ia8d1390c271349b7b4007d6009c2ae0f_64)] | | |

| PART III | | | | | | | | | [removed: | | |]

| [Item [removed: 10](#i_0_70)] [added: 10](#ia8d1390c271349b7b4007d6009c2ae0f_70)] | | | [Directors, Executive Officers and Corporate [removed: Governance](#i_0_70) | | | [54](#i_0_70)] [added: Governance](#ia8d1390c271349b7b4007d6009c2ae0f_70)] | | | [added: [55](#ia8d1390c271349b7b4007d6009c2ae0f_70)] | | |

| [Item [removed: 11](#i_0_73)] [added: 11](#ia8d1390c271349b7b4007d6009c2ae0f_73)] | | | [Executive [removed: Compensation](#i_0_73) | | | [55](#i_0_73)] [added: Compensation](#ia8d1390c271349b7b4007d6009c2ae0f_73)] | | | [added: [56](#ia8d1390c271349b7b4007d6009c2ae0f_73)] | | |

| [Item [removed: 12](#i_0_76)] [added: 12](#ia8d1390c271349b7b4007d6009c2ae0f_76)] | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i_0_76) | | | [55](#i_0_76)] [added: Matters](#ia8d1390c271349b7b4007d6009c2ae0f_76)] | | | [added: [56](#ia8d1390c271349b7b4007d6009c2ae0f_76)] | | |

| [Item [removed: 13](#i_0_79)] [added: 13](#ia8d1390c271349b7b4007d6009c2ae0f_79)] | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i_0_79) | | | [55](#i_0_79)] [added: Independence](#ia8d1390c271349b7b4007d6009c2ae0f_79)] | | | [added: [56](#ia8d1390c271349b7b4007d6009c2ae0f_79)] | | |

| [Item [removed: 14](#i_0_82)] [added: 14](#ia8d1390c271349b7b4007d6009c2ae0f_82)] | | | [Principal Accounting Fees and [removed: Services](#i_0_82) | | | [55](#i_0_82)] [added: Services](#ia8d1390c271349b7b4007d6009c2ae0f_82)] | | | [added: [56](#ia8d1390c271349b7b4007d6009c2ae0f_82)] | | |

| PART IV | | | | | | | | | [removed: | | |]

| [Item [removed: 15](#i_0_88)] [added: 15](#ia8d1390c271349b7b4007d6009c2ae0f_88)] | | | [Exhibits, Financial Statement [removed: Schedules](#i_0_88) | | | [56](#i_0_88)] [added: Schedules](#ia8d1390c271349b7b4007d6009c2ae0f_88)] | | | [added: [56](#ia8d1390c271349b7b4007d6009c2ae0f_88)] | | |

| [Item [removed: 16](#i_0_103)] [added: 16](#ia8d1390c271349b7b4007d6009c2ae0f_103)] | | | [Form 10-K [removed: Summary](#i_0_103) | | | [58](#i_0_103)] [added: Summary](#ia8d1390c271349b7b4007d6009c2ae0f_103)] | | | [added: [59](#ia8d1390c271349b7b4007d6009c2ae0f_103)] | | |

| Consent of Independent Registered Public Accounting Firm | | | | | | [removed: | | | 122] [added: 125] | | |

These risks also include [added: the impact of governmental actions related thereto on Snap-on’s business, as well as] uncertainties related to Snap-on’s capability to implement future strategies with respect to its existing businesses, its ability to refine its brand and franchise strategies, retain and attract franchisees, further enhance service and value to franchisees and thereby help improve their sales and profitability, introduce successful new products, successfully pursue, complete and integrate acquisitions, as well as its ability to withstand disruption arising from natural disasters, planned facility closures or other labor interruptions, the effects of external negative factors, including adverse developments in world financial markets, [added: developments related to tariffs and other trade issues or disputes,] weakness in certain areas of the global economy (including as a result of the United Kingdom’s exit from the European [removed: Union),] [added: Union] and [added: the COVID-19 pandemic), and] significant changes in the current competitive environment, inflation, interest rates and other monetary and market fluctuations, changes in tax rates, laws and regulations as well as uncertainty surrounding potential changes, and the impact of energy and raw material supply and pricing, including steel [removed: and gasoline, as well as tariffs and other trade protection measures put in place by the] [added: (as a result of] U.S. [added: tariffs imposed on certain steel imports] or [removed: other countries,] [added: otherwise) and gasoline,] the amount, rate and growth of Snap-on’s general and administrative expenses, including health care and postretirement [removed: costs,] [added: costs (resulting from, among other matters, U.S. health care legislation and its ongoing implementation or reform),] continuing and potentially increasing required contributions to pension and postretirement plans, the impacts of non-strategic business and/or product line rationalizations, and the effects on business as a result of new legislation, regulations or government-related developments or issues, risks associated with data security and technological systems and protections, potential reputational damages and costs related to [removed: litigation,] [added: litigation as well as an inability to assure that costs will be reduced or eliminated on appeal,] the [added: impact of changes in financial accounting standards, the] ability to effectively manage [removed: personnel,] [added: human capital resources,] and other world or local events outside Snap-on’s control, including terrorist [removed: disruptions.][added: disruptions, other outbreaks of infectious diseases and civil unrest.]

Unless otherwise indicated, references in this document to “fiscal [removed: 2019”] [added: 2020”] or [removed: “2019”] [added: “2020”] refer to the fiscal year ended [removed: December 28, 2019;] [added: January 2, 2021;] references to “fiscal [removed: 2018”] [added: 2019”] or [removed: “2018”] [added: “2019”] refer to the fiscal year ended December [removed: 29, 2018;] [added: 28, 2019;] and references to “fiscal [removed: 2017”] [added: 2018”] or [removed: “2017”] [added: “2018”] refer to the fiscal year ended December [removed: 30, 2017.][added: 29, 2018.]

Snap-on’s [removed: 2019, 2018] [added: 2019] and [removed: 2017] [added: 2018] fiscal years each contained 52 weeks of operating results.

References in this document to [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] year end refer to [added: January 2, 2021,] December 28, 2019, [added: and] December 29, 2018, [removed: and December 30, 2017,] respectively.

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 3 | | |

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

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

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| [Signatures](#ia8d1390c271349b7b4007d6009c2ae0f_190) | | | | | | [120](#ia8d1390c271349b7b4007d6009c2ae0f_190) | | |

| | | | | | | | | |

| | | | | | | | | |

| Certifications | | | | | | 126 | | |

| | | | | | | | | |

These risks include the evolving impact and unknown duration of the coronavirus (“COVID-19”) pandemic, which has the potential to amplify the impact of the other risks facing the company.

Snap-on’s 2020 fiscal year contained 53 weeks of operating results with the extra week occurring in the fourth quarter.

| | | | | | | | | |

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

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

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

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

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

| [Signatures](#i_0_226) | | | | | | | | | [117](#i_0_226) | | |

| Certifications | | | | | | | | | 123 | | |

Snap-on’s facilities in the United States occupy approximately [removed: 3.8] [added: 3.9] million square feet, of which [removed: 74%] [added: 75%] is owned, including its corporate and general office facility located in Kenosha, Wisconsin.

Snap-on’s facilities outside the United States occupy approximately [removed: 4.6] [added: 4.5] million square feet, of which approximately 73% is owned.

See Note [removed: 16] [added: 17] to the Consolidated Financial Statements for information on the company’s operating and finance leases.

| [removed: 20] [added: 22] | | | SNAP-ON INCORPORATED | | | | | |

The following table provides information about our corporate headquarters and financial services operations, and each of Snap-on’s principal active manufacturing locations, distribution centers and software development locations (exceeding 50,000 square feet) as of [removed: 2019] [added: 2020] year end:

| Location | | | | | | Principal Property Use | | | | | | Owned/Leased | | | | | | Segment* | | | [removed: | | | | | | | | |]

| *U.S. Locations:* | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | |]

| Elkmont, Alabama | | | | | | Manufacturing | | | | | | Owned | | | | | | SOT | | | [removed: | | | | | | | | |]

| Conway, Arkansas | | | | | | Manufacturing and distribution | | | | | | Owned | | | | | | RS&I | | | [removed: | | | | | | | | |]

| City of Industry, California | | | | | | Manufacturing | | | | | | Leased | | | | | | C&I | | | [removed: | | | | | | | | |]

| San Diego, California | | | | | | Software development | | | | | | Owned | | | | | | RS&I | | | [removed: | | | | | | | | |]

| San Jose, California | | | | | | Software development | | | | | | Leased | | | | | | RS&I | | | [removed: | | | | | | | | |]

| Columbus, Georgia | | | | | | Distribution | | | | | | Owned | | | | | | C&I | | | [removed: | | | | | | | | |]

| Crystal Lake, Illinois | | | | | | Distribution | | | | | | Owned and leased | | | | | | SOT | | | [removed: | | | | | | | | |]

| Libertyville, Illinois | | | | | | Financial services | | | | | | Leased | | | | | | FS | | | [removed: | | | | | | | | |]

| Algona, Iowa | | | | | | Manufacturing and distribution | | | | | | Owned [removed: and leased] | | | | | | SOT | | | [removed: | | | | | | | | |]

| Louisville, Kentucky | | | | | | Manufacturing and distribution | | | | | | Leased | | | | | | RS&I | | | [removed: | | | | | | | | |]

| Olive Branch, Mississippi | | | | | | Distribution | | | | | | Owned | | | | | | SOT | | | [removed: | | | | | | | | |]

| Carson City, Nevada | | | | | | Distribution | | | | | | Owned and leased | | | | | | SOT | | | [removed: | | | | | | | | |]

| Murphy, North Carolina | | | | | | Manufacturing and distribution | | | | | | Owned and leased | | | | | | C&I | | | [removed: | | | | | | | | |]

| Richfield, Ohio | | | | | | Software development | | | | | | Owned | | | | | | RS&I | | | [removed: | | | | | | | | |]

| Robesonia, Pennsylvania | | | | | | Distribution | | | | | | Owned | | | | | | SOT | | | [removed: | | | | | | | | |]

| Elizabethton, Tennessee | | | | | | Manufacturing | | | | | | Owned | | | | | | SOT | | | [removed: | | | | | | | | |]

| Kenosha, Wisconsin | | | | | | Distribution and corporate | | | | | | Owned | | | | | | SOT, C&I, RS&I | | | [removed: | | | | | | | | |]

| Milwaukee, Wisconsin | | | | | | Manufacturing | | | | | | Owned | | | | | | SOT | | | [removed: | | | | | | | | |]

| *Non-U.S. Locations:* | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | |]

| Santo Tome, Argentina | | | | | | Manufacturing | | | | | | Owned | | | | | | C&I | | | [removed: | | | | | | | | |]

| New South Wales, Australia | | | | | | Distribution and financial services | | | | | | Leased | | | | | | SOT, FS | | | [removed: | | | | | | | | |]

| Minsk, Belarus | | | | | | Manufacturing | | | | | | Owned | | | | | | C&I | | | [removed: | | | | | | | | |]

| Santa Bárbara d’Oeste, Brazil | | | | | | Manufacturing and distribution | | | | | | Owned | | | | | | RS&I | | | [removed: | | | | | | | | |]

| Calgary, Canada | | | | | | Distribution | | | | | | Leased | | | | | | SOT | | | [removed: | | | | | | | | |]

| Mississauga, Canada | | | | | | Distribution | | | | | | Leased | | | | | | SOT, RS&I | | | [removed: | | | | | | | | |]

| Beijing, China | | | | | | Manufacturing and distribution | | | | | | Leased | | | | | | C&I | | | [removed: | | | | | | | | |]

| Kunshan, China | | | | | | Manufacturing | | | | | | Owned | | | | | | C&I | | | [removed: | | | | | | | | |]

| Xiaoshan, China | | | | | | Manufacturing | | | | | | Owned | | | | | | C&I | | | [removed: | | | | | | | | |]

| Banbury, England | | | | | | Manufacturing and distribution | | | | | | Owned | | | | | | C&I | | | [removed: | | | | | | | | |]

| Bramley, England | | | | | | Manufacturing | | | | | | Owned | | | | | | C&I | | | [removed: | | | | | | | | |]

| Kettering, England | | | | | | Distribution and financial services | | | | | | Owned and leased | | | | | | SOT, C&I, FS | | | [removed: | | | | | | | | |]

| Sopron, Hungary | | | | | | Manufacturing | | | | | | Owned | | | | | | RS&I | | | [removed: | | | | | | | | |]

| Correggio, Italy | | | | | | Manufacturing | | | | | | Owned | | | | | | RS&I | | | [removed: | | | | | | | | |]

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

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

| Tustin, California | | | | | | Manufacturing and distribution | | | | | | Leased | | | | | | C&I | | |

| Pleasant Prairie, Wisconsin | | | | | | Distribution | | | | | | Owned | | | | | | SOT, C&I, RS&I | | |

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

C&I – Commercial & Industrial Group SOT – Snap-on Tools Group RS&I – Repair Systems & Information Group FS – Financial Services

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

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

C&I – Commercial & Industrial Group

SOT – Snap-on Tools Group

RS&I – Repair Systems & Information Group

FS – Financial Services

Snap-on had [removed: 54,650,224] [added: 54,102,099] shares of common stock outstanding as of [removed: 2019] [added: 2020] year end.

Snap-on’s stock is listed on the New York Stock Exchange under the ticker symbol “SNA.” At February [removed: 7, 2020,] [added: 5, 2021,] there were [removed: 4,540] [added: 4,400] registered holders of Snap-on common stock.

The following chart discloses information regarding the shares of Snap-on’s common stock repurchased by the company during the fourth quarter of fiscal [removed: 2019,] [added: 2020,] all of which were purchased pursuant to the Board’s authorizations that the company has publicly announced.

| Total/Average | | | | | | [removed: 435,000] [added: 460,000] | | | | | | [removed: $163.64] [added: $171.00] | | | | | | [removed: 435,000] [added: 460,000] | | | | | | N/A | | |

* Subject to further adjustment pursuant to the 1996 Authorization described below, as of [removed: December 28, 2019,] [added: January 2, 2021,] the approximate value of shares that may yet be purchased pursuant to the outstanding Board authorizations discussed below is [removed: $359.6] [added: $275.7] million.

When calculating the approximate value of shares that the company may yet purchase under the 1996 Authorization, the company assumed a price of [removed: $166.64, $158.89] [added: $169.39, $172.92] and [removed: $169.20] [added: $171.14] per share of common stock as of the end of the fiscal [removed: 2019] [added: 2020] months ended October [removed: 26, 2019,] [added: 24, 2020,] November [removed: 23, 2019,] [added: 21, 2020,] and [removed: December 28, 2019,] [added: January 2, 2021,] respectively.

The following chart discloses information regarding transactions in shares of Snap-on’s common stock by Citibank, N.A. (“Citibank”) during the fourth quarter of [removed: 2019] [added: 2020] pursuant to a prepaid equity forward agreement (the “Agreement”) with Citibank that is intended to reduce the impact of market risk associated with the stock-based portion of the company’s deferred compensation plans.

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 23 | | |

The graph below illustrates the cumulative total shareholder return on Snap-on common stock since December 31, [removed: 2014,] [added: 2015,] of a $100 investment, assuming that dividends were reinvested quarterly.

[removed: ][added: ]

| December 31, [removed: 2014] [added: 2015] | | | | | | $100.00 | | | | | | $100.00 | | | | | | $100.00 | | |

| 09/27/20 to 10/24/20 | | | | | | — | | | | | | — | | | | | | — | | | | | | $307.2 million | | |

| 10/25/19 to 11/21/20 | | | | | | 250,000 | | | | | | $165.61 | | | | | | 250,000 | | | | | | $283.9 million | | |

| 11/22/20 to 1/2/21 | | | | | | 210,000 | | | | | | $177.42 | | | | | | 210,000 | | | | | | $275.7 million | | |

| 09/27/20 to 10/24/20 | | | | | | — | | | | | | — | | |

| 10/25/19 to 11/21/20 | | | | | | 14,000 | | | | | | $172.37 | | |

| 11/22/20 to 1/2/21 | | | | | | 5,900 | | | | | | $171.10 | | |

| Total/Average | | | | | | 19,900 | | | | | | $171.99 | | |

| December 31, 2016 | | | | | | $101.54 | | | | | | $118.86 | | | | | | $111.96 | | |

| December 31, 2017 | | | | | | $105.24 | | | | | | $143.86 | | | | | | $136.40 | | |

| December 31, 2018 | | | | | | $89.61 | | | | | | $124.74 | | | | | | $130.42 | | |

| December 31, 2019 | | | | | | $107.12 | | | | | | $161.38 | | | | | | $171.49 | | |

| December 31, 2020 | | | | | | $111.42 | | | | | | $179.23 | | | | | | $203.04 | | |

| | | | 2020 ANNUAL REPORT | | | 25 | | |

| 09/29/19 to 10/26/19 | | | | | | 80,000 | | | | | | $164.34 | | | | | | 80,000 | | | | | | $380.9 million | | |

| 10/27/19 to 11/23/19 | | | | | | 290,000 | | | | | | $164.02 | | | | | | 290,000 | | | | | | $354.8 million | | |

| 11/24/19 to 12/28/19 | | | | | | 65,000 | | | | | | $161.12 | | | | | | 65,000 | | | | | | $359.6 million | | |

| 22 | | | SNAP-ON INCORPORATED | | | | | |

| 09/29/19 to 10/26/19 | | | | | | 12,900 | | | | | | $159.81 | | |

| 10/27/19 to 11/23/19 | | | | | | 2,000 | | | | | | $168.34 | | |

| 11/24/19 to 12/28/19 | | | | | | 3,500 | | | | | | $169.34 | | |

| Total/Average | | | | | | 18,400 | | | | | | $162.55 | | |

| December 31, 2015 | | | | | | $127.13 | | | | | | $97.47 | | | | | | $101.38 | | |

| December 31, 2016 | | | | | | $129.08 | | | | | | $115.85 | | | | | | $113.51 | | |

| December 31, 2017 | | | | | | $133.79 | | | | | | $140.22 | | | | | | $138.29 | | |

| December 31, 2018 | | | | | | $113.92 | | | | | | $121.58 | | | | | | $132.23 | | |

| December 31, 2019 | | | | | | $136.18 | | | | | | $157.29 | | | | | | $173.86 | | |

| *Five-year Data* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | |]

| *(Amounts in millions, except per share data)* | | | | | | | | | [added: 2020] | | | [added: | | |] 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | | [removed: | | | 2015 | | |]

| Results of Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | |]

| Net sales | | | | | | | | | [removed: | | |] $ | [removed: 3,730.0] [added: 3,592.5] | | | | | $ | [removed: 3,740.7] [added: 3,730.0] | | | | | $ | [removed: 3,686.9] [added: 3,740.7] | | | | | $ | [removed: 3,430.4] [added: 3,686.9] | | | | | $ | [removed: 3,352.8] [added: 3,430.4] | |

| Gross profit | | | | | | | | | [added: 1,748.5] | | | [added: | | |] 1,844.0 | | | | | | 1,870.0 | | | | | | 1,825.9 | | | | | | 1,710.4 | | | [removed: | | | 1,649.3 | | |]

| Operating expenses | | | | | | | | | [added: 1,116.6] | | | [added: | | |] 1,127.6 | | | | | | 1,144.0 | | | | | | 1,161.3 | | | | | | 1,048.0 | | | [removed: | | | 1,041.3 | | |]

| Operating earnings before financial services | | | | | | | | | [added: 631.9] | | | [added: | | |] 716.4 | | | | | | 726.0 | | | | | | 664.6 | | | | | | 662.4 | | | [removed: | | | 608.0 | | |]

| Financial services revenue | | | | | | | | | [added: 349.7] | | | [added: | | |] 337.7 | | | | | | 329.7 | | | | | | 313.4 | | | | | | 281.4 | | | [removed: | | | 240.3 | | |]

| Financial services expenses | | | | | | | | | [added: 101.1] | | | [added: | | |] 91.8 | | | | | | 99.6 | | | | | | 95.9 | | | | | | 82.7 | | | [removed: | | | 70.1 | | |]

| Operating earnings from financial services | | | | | | | | | [added: 248.6] | | | [added: | | |] 245.9 | | | | | | 230.1 | | | | | | 217.5 | | | | | | 198.7 | | | [removed: | | | 170.2 | | |]

| Operating earnings | | | | | | | | | [added: 880.5] | | | [added: | | |] 962.3 | | | | | | 956.1 | | | | | | 882.1 | | | | | | 861.1 | | | [removed: | | | 778.2 | | |]

| Interest expense | | | | | | | | | [added: 54.0] | | | [added: | | |] 49.0 | | | | | | 50.4 | | | | | | 52.4 | | | | | | 52.2 | | | [removed: | | | 51.9 | | |]

| Earnings before income taxes and equity earnings | | | | | | | | | [added: 835.2] | | | [added: | | |] 922.1 | | | | | | 909.9 | | | | | | 821.9 | | | | | | 801.4 | | | [removed: | | | 710.5 | | |]

| Income tax expense | | | | | | | | | [added: 189.1] | | | [added: | | |] 211.8 | | | | | | 214.4 | | | | | | 250.9 | | | | | | 244.3 | | | [removed: | | | 221.2 | | |]

| Earnings before equity earnings | | | | | | | | | [added: 646.1] | | | [added: | | |] 710.3 | | | | | | 695.5 | | | | | | 571.0 | | | | | | 557.1 | | | [removed: | | | 489.3 | | |]

| Equity earnings, net of tax | | | | | | | | | [added: 0.3] | | | [added: | | |] 0.9 | | | | | | 0.7 | | | | | | 1.2 | | | | | | 2.5 | | | [removed: | | | 1.3 | | |]

| Net earnings | | | | | | | | | [added: 646.4] | | | [added: | | |] 711.2 | | | | | | 696.2 | | | | | | 572.2 | | | | | | 559.6 | | | [removed: | | | 490.6 | | |]

| Net earnings attributable to noncontrolling interests | | | | | | | | | [added: (19.4)] | | | [added: | | |] (17.7) | | | | | | (16.3) | | | | | | (14.5) | | | | | | (13.2) | | | [removed: | | | (11.9) | | |]

| Net earnings attributable to Snap-on | | | | | | | | | [added: 627.0] | | | [added: | | |] 693.5 | | | | | | 679.9 | | | | | | 557.7 | | | | | | 546.4 | | | [removed: | | | 478.7 | | |]

| Financial Position | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | |]

| Cash and cash equivalents | | | | | | | | | [removed: | | |] $ | [removed: 184.5] [added: 923.4] | | | | | $ | [removed: 140.9] [added: 184.5] | | | | | $ | [removed: 92.0] [added: 140.9] | | | | | $ | [removed: 77.6] [added: 92.0] | | | | | $ | [removed: 92.8] [added: 77.6] | |

| Trade and other accounts receivable – net | | | | | | | | | [added: 640.7] | | | [added: | | |] 694.6 | | | | | | 692.6 | | | | | | 675.6 | | | | | | 598.8 | | | [removed: | | | 562.5 | | |]

| Finance receivables – net (current) | | | | | | | | | [added: 530.2] | | | [added: | | |] 530.1 | | | | | | 518.5 | | | | | | 505.4 | | | | | | 472.5 | | | [removed: | | | 447.3 | | |]

| Contract receivables – net (current) | | | | | | | | | [added: 112.5] | | | [added: | | |] 100.7 | | | | | | 98.3 | | | | | | 96.8 | | | | | | 88.1 | | | [removed: | | | 82.1 | | |]

| Inventories – net | | | | | | | | | [added: 746.5] | | | [added: | | |] 760.4 | | | | | | 673.8 | | | | | | 638.8 | | | | | | 530.5 | | | [removed: | | | 497.8 | | |]

| Property and equipment – net | | | | | | | | | [added: 526.2] | | | [added: | | |] 521.5 | | | | | | 495.1 | | | | | | 484.4 | | | | | | 425.2 | | | [removed: | | | 413.5 | | |]

| Long-term finance receivables – net | | | | | | | | | [added: 1,136.3] | | | [added: | | |] 1,103.5 | | | | | | 1,074.4 | | | | | | 1,039.2 | | | | | | 934.5 | | | [removed: | | | 772.7 | | |]

| Long-term contract receivables – net | | | | | | | | | [added: 374.7] | | | [added: | | |] 360.1 | | | | | | 344.9 | | | | | | 322.6 | | | | | | 286.7 | | | [removed: | | | 266.6 | | |]

| Total [removed: assets*] [added: assets] | | | | | | | | | [added: 6,557.3] | | | [added: | | |] 5,693.5 | | | | | | 5,373.1 | | | | | | 5,249.1 | | | | | | 4,723.2 | | | [removed: | | | 4,331.1 | | |]

| Notes payable and current maturities of long-term debt | | | | | | | | | [added: 268.5] | | | [added: | | |] 202.9 | | | | | | 186.3 | | | | | | 433.2 | | | | | | 301.4 | | | [removed: | | | 18.4 | | |]

| Accounts payable | | | | | | | | | [added: 222.9] | | | [added: | | |] 198.5 | | | | | | 201.1 | | | | | | 178.2 | | | | | | 170.9 | | | [removed: | | | 148.3 | | |]

| Long-term debt | | | | | | | | | [added: 1,182.1] | | | [added: | | |] 946.9 | | | | | | 946.0 | | | | | | 753.6 | | | | | | 708.8 | | | [removed: | | | 861.7 | | |]

| Total debt | | | | | | | | | [added: 1,450.6] | | | [added: | | |] 1,149.8 | | | | | | 1,132.3 | | | | | | 1,186.8 | | | | | | 1,010.2 | | | [removed: | | | 880.1 | | |]

| Total shareholders’ equity attributable to Snap-on | | | | | | | | | [added: 3,824.9] | | | [added: | | |] 3,409.1 | | | | | | 3,098.8 | | | | | | 2,953.9 | | | | | | 2,617.2 | | | [removed: | | | 2,412.7 | | |]

| Common Share Summary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | |]

| Weighted-average shares outstanding – diluted | | | | | | | | | [added: 54.8] | | | [added: | | |] 55.9 | | | | | | 57.3 | | | | | | 58.6 | | | | | | 59.4 | | | [removed: | | | 59.1 | | |]

| Net earnings per share attributable to Snap-on: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | |]

| Basic | | | | | | | | | [removed: | | |] $ | [removed: 12.59] [added: 11.55] | | | | | $ | [removed: 12.08] [added: 12.59] | | | | | $ | [removed: 9.72] [added: 12.08] | | | | | $ | [removed: 9.40] [added: 9.72] | | | | | $ | [removed: 8.24] [added: 9.40] | |

| Diluted | | | | | | | | | [added: 11.44] | | | [added: | | |] 12.41 | | | | | | 11.87 | | | | | | 9.52 | | | | | | 9.20 | | | [removed: | | | 8.10 | | |]

| Cash dividends paid per share | | | | | | | | | [added: 4.47] | | | [added: | | |] 3.93 | | | | | | 3.41 | | | | | | 2.95 | | | | | | 2.54 | | | [removed: | | | 2.20 | | |]

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

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

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

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

| 26 | | | SNAP-ON INCORPORATED | | | | | |

| | | | | | | | | |

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

| | | | | | | | | |

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

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

*In 2019, Snap-on adopted ASU 2016-02, *Leases (Topic 842)*, which requires the recognition of lease assets and lease liabilities on the balance sheet.

Topic 842 was applied using the modified retrospective approach; as such, prior periods have not been adjusted to reflect this adoption.

See Note 1 and Note 16 to the Consolidated Financial Statements for further information on the effect of the adoption of this ASU.

| | | | 2019 ANNUAL REPORT | | | 25 | | |

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

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

| 52 | | | SNAP-ON INCORPORATED | | | | | |

| | | | 2019 ANNUAL REPORT | | | 51 | | |

In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), the company’s management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of the company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of [removed: December 28, 2019.][added: January 2, 2021.]

Based upon their evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of [removed: December 28, 2019,] [added: January 2, 2021,] to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission rules and forms, and to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

There [removed: were no other changes] [added: has not been any change] in [added: the company’s] internal [removed: controls] [added: control over financial reporting] during the quarter ended [removed: December 28, 2019,] [added: January 2, 2021,] that [removed: have] [added: has] materially affected, or [removed: are] [added: is] reasonably likely to materially affect, the company’s internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)).

Based on this assessment, the company’s management believes that, as of [removed: December 28, 2019,] [added: January 2, 2021,] our internal control over financial reporting was effective at a reasonable assurance level.

The company’s internal control over financial reporting as of [removed: December 28, 2019,] [added: January 2, 2021,] has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in its attestation report, which is included herein.

| [removed: 52] [added: 54] | | | SNAP-ON INCORPORATED | | | | | |

We have audited the internal control over financial reporting of Snap-on Incorporated and subsidiaries (the “Company”) as of [removed: December 28, 2019,] [added: January 2, 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of [removed: December 28, 2019,] [added: January 2, 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements as of and for the year ended [removed: December 28, 2019,] [added: January 2, 2021,] of the Company and our report dated February [removed: 13, 2020,] [added: 11, 2021,] expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s adoption of Accounting Standard Update No. [removed: 2016-02, Leases] [added: 2016-13, *Financial Instruments – Credit Losses*] (Topic [removed: 842).][added: 326).]

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 53 | | |

| February 11, 2021 | | | | | | | | |

During the quarter ended December 28, 2019, the company completed the design of new controls and the modifications to existing controls as part of its efforts to adopt ASU No. 2016-13, *Financial Instruments - Credit Losses (Topic 326)*, which is effective for the company’s 2020 fiscal year.

The company’s additional controls over financial reporting include implementing a system that allows the company to calculate the company-wide provisions for credit losses on finance and contract receivables for the financial presentation mandated by the new standard, as well as to provide additional disclosure information.

| February 13, 2020 | | | | | | | | |

Incorporated by reference to [added: the] sections entitled “Item 1: Election of Directors,” “Corporate Governance Practices and Board Information” and “Other Information” in Snap-on’s [removed: 2020] [added: 2021] Annual Meeting Proxy Statement, which is expected to be mailed to shareholders on or about March [removed: 11, 2020] [added: 12, 2021] (the [removed: “2020] [added: “2021] Proxy Statement”).

The Section 16(a) filing compliance disclosure pursuant to Item 405 of Regulation S-K is contained in Snap-on’s [removed: 2020] [added: 2021] Proxy Statement in the section entitled “Other Information – Delinquent Section 16(a) Reports,” and is incorporated herein by reference.

Information regarding Snap-on’s executive officers, including their ages, business experience (for at least the last five years) and titles as of [removed: December 28, 2019,] [added: January 2, 2021,] is presented below:

Pinchuk* [removed: (73)] [added: (74)] – Chairman of the Board of Directors since 2009, President and Chief Executive Officer since December 2007, and President and Chief Operating Officer during 2007.

Pagliari* [removed: (65)] [added: (66)] – Senior Vice President – Finance and Chief Financial Officer since 2010.

Arregui* [removed: (54) -] [added: (55) –] Senior Vice President and President – Commercial Group since 2019, President, SNA Europe from 2015 to 2019, and Vice President, SNA Europe Operations from 2008 to 2015.

Banerjee* [removed: (69)] [added: (70)] – Senior Vice President, Human Resources and Chief Development Officer since 2015, and President, Commercial Group from 2011 to 2015.

*Iain Boyd* [removed: (57)] [added: (58)] – Vice [removed: President,] [added: President –] Operations Development since 2015.

Vice [removed: President –] [added: President,] Human Resources from 2007 to 2015.

Chambers* [removed: (55)] [added: (56)] – Senior Vice President and President – Snap-on Tools Group since 2019, President, Commercial Group from 2015 to 2019 and [removed: President -] [added: President,] Equipment from 2014 to 2015.

Lemerand* [removed: (57)] [added: (58)] – Vice President and Chief Information Officer since 2017.

Miller* [removed: (49)] [added: (50)] – Vice President, General Counsel and Secretary since 2018.

Strege* [removed: (62)] [added: (63)] – Vice President and Controller since 2017.

Ward* [removed: (67)] [added: (68)] *–* Senior Vice President and President – Repair Systems & Information Group since 2010.

| | | | 2020 ANNUAL REPORT | | | 55 | | |

| 54 | | | SNAP-ON INCORPORATED | | | | | |

The information required by Item 11 is contained in Snap-on’s [removed: 2020] [added: 2021] Proxy Statement in the sections entitled “Executive Compensation,” “Board Compensation,” “Compensation Committee Report,” and “Other Information” and is incorporated herein by reference.

The [removed: additional] information required by Item 12 is contained in Snap-on’s [removed: 2020] [added: 2021] Proxy Statement in the sections entitled “Executive Compensation,” “Security Ownership of Certain Beneficial Owners and Management,” [removed: and] “Other [removed: Information,”] [added: Information”] and [added: “Item 4: Approval of the Amendment to, and Restatement of, the Snap-on Incorporated 2011 Incentive Stock and Awards Plan,” and] is incorporated herein by reference.

The following table sets forth information about Snap-on’s equity compensation plans at 2019 year end:

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

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

| Plan category | | | | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | | | | | Weighted-average exercise price of outstanding options, warrants and rights (b) | | | | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | | |

| Equity compensation plans approved by security holders | | | | | | 3,592,966 (1) | | | | | | $ 137.32 (2) | | | | | | 2,913,774 (3) | | |

| Equity compensation plans not approved by security holders | | | | | | 64,977 (4) | | | | | | Not Applicable | | | | | | – (5) | | |

| Total | | | | | | 3,657,943 | | | | | | $ 137.32 (2) | | | | | | 2,913,774 (5) | | |

(1)Includes (i) options to acquire 168,153 shares granted under the 2001 Incentive Stock and Awards Plan (the “2001 Plan”); (ii) options and stock appreciation rights to acquire 3,396,086 shares granted under the 2011 Incentive Stock and Awards Plan (the “2011 Plan,” and collectively with the 2001 Plan, the “Incentive Plans”); and (iii) 28,727 shares represented by deferred share units under the Directors’ Fee Plan.

Excludes 50,528 shares issuable in connection with the vesting of restricted stock units and restricted stock under the 2001 Plan, and 138,218 shares issuable in connection with the vesting of performance share awards, restricted stock units and restricted stock under the 2011 Plan.

Also excludes shares of common stock that may be issuable under the employee and franchisee stock purchase plans.

(2)Reflects only the weighted-average exercise price of outstanding stock options and stock appreciation rights granted under the Incentive Plans and does not include shares represented by deferred share units under the Directors’ Fee Plan and shares issuable in connection with the vesting of restricted stock units or performance units under the Incentive Plans for which there are no exercise prices.

(3)Includes (i) 2,024,642 shares reserved for issuance under the 2011 Plan; (ii) 184,146 shares reserved for issuance under the Directors’ Fee Plan; and (iii) 704,986 shares reserved for issuance under the employee stock purchase plan.

(4)Consists of deferred share units under Snap-on’s Deferred Compensation Plan, which allows elected and appointed officers of Snap-on to defer all or a percentage of their respective annual salary and/or incentive compensation.

The deferred share units are payable in shares of Snap-on common stock on a one-for-one basis and are calculated at fair market value.

Shares of common stock delivered under the Deferred Compensation Plan are previously issued shares reacquired and held by Snap-on.

(5)The Deferred Compensation Plan provides that Snap-on will make available, as and when required, a sufficient number of shares of common stock to meet the needs of the plan.

It further provides that such shares shall be previously issued shares reacquired and held by Snap-on.

Incorporated by reference to the sections entitled “Corporate Governance Practices and Board Information – Board Information” and “Other Information – Transactions with the Company” in Snap-on’s [removed: 2020] [added: 2021] Proxy Statement.

Incorporated by reference to the section entitled “Deloitte & Touche LLP Fee Disclosure” in Snap-on’s [removed: 2020] [added: 2021] Proxy Statement.

| | | | | | | | | |

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

| | | | 2019 ANNUAL REPORT | | | 55 | | |

Unless otherwise indicated, references to “fiscal [removed: 2019”] [added: 2020”] or [removed: “2019”] [added: “2020”] refer to the fiscal year ended [removed: December 28, 2019;] [added: January 2, 2021;] references to “fiscal [removed: 2018”] [added: 2019”] or [removed: “2018”] [added: “2019”] refer to the fiscal year ended December [removed: 29, 2018;] [added: 28, 2019;] and references to “fiscal [removed: 2017”] [added: 2018”] or [removed: “2017”] [added: “2018”] refer to the fiscal year ended December [removed: 30, 2017.][added: 29, 2018.]

References to [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] year end refer to [added: January 2, 2021,] December 28, 2019, [added: and] December 29, 2018, [removed: and December 30, 2017,] respectively.

- Consolidated Statements of Earnings for the [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] fiscal years.

- Consolidated Statements of Comprehensive Income for the [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] fiscal years.

- Consolidated Balance Sheets as of [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] year end.

- Consolidated Statements of Equity for the [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] fiscal years.

- Consolidated Statements of Cash Flows for the [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] fiscal years.

List of [removed: Exhibits(*)][added: Exhibits(*)]

| | | | | | | (b) | | | | | | [Bylaws of Snap-on Incorporated, as amended and restated as of April [removed: 26, 2018] [added: 6, 2020] (incorporated by reference to Exhibit 3.1 to Snap-on’s Current Report on Form 8-K dated April [removed: 26, 2018] [added: 6, 2020] (Commission File No. [removed: 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312518139316/d574362dex31.htm)] [added: 1-7724))](https://www.sec.gov/Archives/edgar/data/91440/000119312520099701/d898543dex31.htm)] | | |

| | | | | | | (b) | | | | | | [removed: [Officer](http://www.sec.gov/Archives/edgar/data/91440/000089706909001316/cmw4454b.htm)[’](http://www.sec.gov/Archives/edgar/data/91440/000089706909001316/cmw4454b.htm)[s] [added: [Officer’s] Certificate, dated as of August 14, 2009, providing for the $250,000,000 6.125% Notes due 2021 [removed: (the](http://www.sec.gov/Archives/edgar/data/91440/000089706909001316/cmw4454b.htm) [“](http://www.sec.gov/Archives/edgar/data/91440/000089706909001316/cmw4454b.htm)[2021 Notes](http://www.sec.gov/Archives/edgar/data/91440/000089706909001316/cmw4454b.htm)[”](http://www.sec.gov/Archives/edgar/data/91440/000089706909001316/cmw4454b.htm)[)] [added: (the “2021 Notes”)] (incorporated by reference to Exhibit 4.1 to [removed: Snap-on](http://www.sec.gov/Archives/edgar/data/91440/000089706909001316/cmw4454b.htm)[’](http://www.sec.gov/Archives/edgar/data/91440/000089706909001316/cmw4454b.htm)[s] [added: Snap-on’s] Current Report on Form 8-K dated August 11, 2009 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000089706909001316/cmw4454b.htm) | | |

| | | | | | | (c) | | | | | | [removed: [Officer](http://www.sec.gov/Archives/edgar/data/91440/000119312517049758/d351106dex42.htm)[’](http://www.sec.gov/Archives/edgar/data/91440/000119312517049758/d351106dex42.htm)[s] [added: [Officer’s] Certificate, dated as of February 21, 2017, providing for the $300,000,000 3.25% Notes due 2027 [removed: (the](http://www.sec.gov/Archives/edgar/data/91440/000119312517049758/d351106dex42.htm) [“](http://www.sec.gov/Archives/edgar/data/91440/000119312517049758/d351106dex42.htm)[2027 Notes](http://www.sec.gov/Archives/edgar/data/91440/000119312517049758/d351106dex42.htm)[”](http://www.sec.gov/Archives/edgar/data/91440/000119312517049758/d351106dex42.htm)[)] [added: (the “2027 Notes”)] (incorporated by reference to Exhibit 4.2 to [removed: Snap-on](http://www.sec.gov/Archives/edgar/data/91440/000119312517049758/d351106dex42.htm)[’](http://www.sec.gov/Archives/edgar/data/91440/000119312517049758/d351106dex42.htm)[s] [added: Snap-on’s] Current Report on Form 8-K dated February 15, 2017 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312517049758/d351106dex42.htm) | | |

| | | | | | | [removed: (e)] [added: (f)] | | | | | | Description of Securities | | |

| | | | | | | [removed: (e)(1)] [added: (f)(5)] | | | | | | [Description of [removed: Common Stock](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e1.htm)] [added: 2050 Notes](https://www.sec.gov/Archives/edgar/data/91440/000009144021000005/sna_fy20x10kxexhibit4f5.htm)] | | |

Except for the foregoing, Snap-on and its subsidiaries have no unregistered long-term debt agreement for which the related outstanding debt exceeds 10% of consolidated total assets as of [removed: December 28, 2019.][added: January 2, 2021.]

| (10) | | | | | | Material Contracts | | | | | | | | | | | | [removed: | | |]

| | | | | | | (a) | | | | | | [Amended and Restated Snap-on Incorporated 2001 Incentive Stock and Awards Plan (Amended and Restated as of April 27, 2006, as further amended on August 6, 2009) (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended October 3, 2009 (Commission File No. 1-7724)) (superseded except as to outstanding awards)](http://www.sec.gov/Archives/edgar/data/91440/000119312509217103/dex101.htm) | | | | | | [removed: | | |]

| | | | | | | (b) | | | | | | [Snap-on Incorporated 2011 Incentive Stock and Awards Plan (As Amended and Restated) (incorporated by reference to Exhibit 10(b) to Snap-on’s Annual Report on Form 10-K for the fiscal year ended December 30, 2017 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312518047130/d491312dex10b.htm) | | | | | | [removed: | | |]

| | | | | | | (c) | | | | | | [Form of Restated Executive Agreement between Snap-on Incorporated and each of its executive officers (incorporated by reference to Exhibit 10(c) to Snap-on’s Annual Report on Form 10-K for the fiscal year ended December 30, 2017 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312518047130/d491312dex10c.htm) | | | | | | [removed: | | |]

| | | | | | | (d)(1) | | | | | | [Form of Indemnification Agreement between Snap-on Incorporated and certain executive officers (incorporated by reference to Exhibit 10.1 to Snap-on’s Annual Report on Form 10-K for the fiscal year ended January 1, 2011 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312511038686/dex10d1.htm) | | | | | | [removed: | | |]

| | | | | | | (d)(2) | | | | | | [Form of Indemnification Agreement between Snap-on Incorporated and directors (incorporated by reference to Exhibit 10.1 to Snap-on’s Annual Report on Form 10-K for the fiscal year ended January 1, 2011 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312511038686/dex10d2.htm) | | | | | | [removed: | | |]

| | | | | | | (e)(1) | | | | | | [Amended and Restated Snap-on Incorporated Directors’ 1993 Fee Plan (as amended through August 5, 2010) (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended October 2, 2010 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312510234336/dex101.htm) | | | | | | [removed: | | |]

| | | | | | | (e)(2) | | | | | | [Amendment to Amended and Restated Snap-on Incorporated Directors’ 1993 Fee Plan (incorporated by reference to Exhibit 10(e)(2) to Snap-on’s Annual Report on Form 10-K for the fiscal year ended December 28, 2013 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312514054235/d640970dex10e2.htm) | | | | | | [removed: | | |]

| | | | | | | (f)(1) | | | | | | [Snap-on Incorporated Deferred Compensation Plan (as amended and restated as of September 1, 2011) (incorporated by reference to Exhibit 10(g) to Snap-on’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312512064510/d261304dex10g.htm) | | | | | | [removed: | | |]

| | | | | | | (f)(2) | | | | | | [Amendment to Snap-on Incorporated Deferred Compensation Plan (incorporated by reference to Exhibit 10(f)(2) to Snap-on’s Annual Report on Form 10-K for the fiscal year ended December 28, 2013 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312514054235/d640970dex10f2.htm) | | | | | | [removed: | | |]

| | | | | | | (g) | | | | | | [Snap-on Incorporated Supplemental Retirement Plan for Officers (as amended through June 11, 2010) (incorporated by reference to Exhibit 10.2 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended July 3, 2010 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312510168916/dex102.htm) | | | | | | [removed: | | |]

| | | | | | | (h) | | | | | | [Form of Non-Qualified Stock Option Agreement under the 2001 Incentive Stock and Awards Plan (and accompanying Non-Qualified Stock Option Grant Offer Letter) (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2007 (Commission File No. 1-7724)) (superseded except as to outstanding awards)](http://www.sec.gov/Archives/edgar/data/91440/000110465907030712/a07-11842_1ex10d1.htm) | | | | | | [removed: | | |]

| | | | | | | (i) | | | | | | [Form of Restricted Stock Unit Agreement for Directors under the 2001 Incentive Stock and Awards Plan (and accompanying Restricted Stock Unit Offer Letter) (incorporated by reference to Exhibit 10.2 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended October 3, 2009 (Commission File No. 1-7724)) (superseded except as to outstanding awards)](http://www.sec.gov/Archives/edgar/data/91440/000119312509217103/dex102.htm) | | | | | | [removed: | | |]

| | | | | | | (j) | | | | | | [Form of Non-Qualified Stock Option Agreement under the 2011 Incentive Stock and Awards Plan (and accompanying Non-Qualified Stock Option Grant Offer Letter) (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended October 1, 2011 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312511275890/d234288dex101.htm) | | | | | | [removed: | | |]

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 57 | | |

| | | | | | | (k) | | | | | | [Form of Performance Share Unit Award Agreement under the 2011 Incentive Stock and Awards Plan (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312512170165/d319660dex101.htm) | | | | | | [removed: | | |]

| | | | | | | (l) | | | | | | [Form of Restricted Unit Award Agreement for Executive Officers under the 2011 Incentive Stock and Awards Plan (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312512170165/d319660dex102.htm) | | | | | | [removed: | | |]

| | | | | | | (m) | | | | | | [Form of Restricted Unit Award Agreement for Directors under the 2011 Incentive Stock and Awards Plan (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312512170165/d319660dex103.htm) | | | | | | [removed: | | |]

| | | | | | | (n) | | | | | | [Form of Restricted Stock Award Agreement for Directors under the 2011 Incentive Stock and Awards Plan (incorporated by reference to Exhibit 10.1 to Snap-on’s Quarterly Report on Form 10-Q for the quarterly period ended March 30, 2013 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312513160206/d507261dex101.htm) | | | | | | [removed: | | |]

| | | | | | | [removed: (o)] [added: (p)] | | | | | | [Third Amended and Restated Five Year Credit Agreement, dated as of September 16, 2019, among Snap-on Incorporated and the lenders and agents listed on the signature pages thereof, and JPMorgan Chase Bank, N.A., Citibank N.A. and U.S. Bank National Association as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.1 to Snap-on’s Current Report on Form 8-K dated September 16, 2019 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000119312519247311/d805398dex101.htm) | | | | | | [removed: | | |]

| (14) | | | | | | [Snap-on Incorporated Section 406 of the Sarbanes-Oxley Act Code of Ethics (incorporated by reference to Exhibit 10(aa) to Snap-on’s Annual Report on Form 10-K for the fiscal year ended January 3, 2004 (Commission File No. 1-7724))](http://www.sec.gov/Archives/edgar/data/91440/000089706904000644/cmw550l.htm) | | | | | | | | | | | | [removed: | | |]

| (21) | | | | | | [Subsidiaries of the [removed: Corporation](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19ex21.htm) | | |] [added: Corporation](https://www.sec.gov/Archives/edgar/data/91440/000009144021000005/snafy20ex21.htm)] | | | | | | | | | | | |

| (23) | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19ex23.htm) | | |] [added: Firm](https://www.sec.gov/Archives/edgar/data/91440/000009144021000005/snafy20ex23.htm)] | | | | | | | | | | | |

| (31.1) | | | | | | [Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19ex311.htm) | | |] [added: 2002](https://www.sec.gov/Archives/edgar/data/91440/000009144021000005/snafy20ex311.htm)] | | | | | | | | | | | |

| (31.2) | | | | | | [Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19ex312.htm) | | |] [added: 2002](https://www.sec.gov/Archives/edgar/data/91440/000009144021000005/snafy20ex312.htm)] | | | | | | | | | | | |

| (32.1) | | | | | | [Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19ex321.htm) | | |] [added: 2002](https://www.sec.gov/Archives/edgar/data/91440/000009144021000005/snafy20ex321.htm)] | | | | | | | | | | | |

| | | | | | | (e) | | | | | | [Officer’s Certificate, dated as of April 30, 2020, providing for the $500,000,000 3.10% Notes due 2050 (the “2050 Notes”) (incorporated by reference to Exhibit 4.2 to Snap‑on’s Current Report on Form 8‑K dated April 27, 2020 (Commission File No. 1-7724))](https://www.sec.gov/Archives/edgar/data/91440/000119312520128786/d868937dex42.htm) | | |

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

| | | | | | | (f)(1) | | | | | | [Description of Common Stock](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e1.htm) [](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e1.htm)[(incorporated by reference to Exhibit 4(e)(1) to Snap‑on](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e1.htm)[’](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e1.htm)[s Annual Report on Form](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e1.htm) [10](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e1.htm)[‑K](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e1.htm) [for the fiscal year ended December 28, 2019](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e1.htm) [(Commission File No. 1-7724)](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e1.htm)[)](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e1.htm) | | |

| | | | | | | (f)(2) | | | | | | [Description of 2021 Notes](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e2.htm) [](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e2.htm)[(incorporated by reference to Exhibit 4(e)(](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e2.htm)[2](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e2.htm)[) to Snap‑on](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e2.htm)[’](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e2.htm)[s Annual Report on Form 10‑K for the fiscal year ended December 28, 2019 (Commission File No. 1-7724))](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e2.htm) | | |

| | | | | | | (f)(3) | | | | | | [Description of 2027 Notes](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e3.htm) [](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e3.htm)[(incorporated by reference to Exhibit 4(e)(](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e3.htm)[3](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e3.htm)[) to Snap‑on](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e3.htm)[’](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e3.htm)[s Annual Report on Form 10‑K for the fiscal year ended December 28, 2019 (Commission File No. 1-7724))](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e3.htm) | | |

| | | | | | | (f)(4) | | | | | | [Description of 2048 Notes](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e4.htm) [](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e4.htm)[(incorporated by reference to Exhibit 4(e)(](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e4.htm)[4](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e4.htm)[) to Snap‑on](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e4.htm)[’](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e4.htm)[s Annual Report on Form 10‑K for the fiscal year ended December 28, 2019 (Commission File No. 1-7724))](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e4.htm) | | |

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

| | | | | | | | | |

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

| 58 | | | SNAP-ON INCORPORATED | | | | | |

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

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

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

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

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

| | | | | | | (o) | | | | | | [Form of Restricted Stock Unit Award Agreement for Executive Officers and Key Employees under the 2011 Incentive Stock and Awards Plan](https://www.sec.gov/Archives/edgar/data/91440/000009144021000005/sna_fy20x10kxexhibit10o.htm) *[(form of award agreement consistent with the terms of the 2011 Incentive Stock and Awards Plan)](https://www.sec.gov/Archives/edgar/data/91440/000009144021000005/sna_fy20x10kxexhibit10o.htm)*[](https://www.sec.gov/Archives/edgar/data/91440/000009144021000005/sna_fy20x10kxexhibit10o.htm) | | | | | |

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

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

| | | | | | | (q) | | | | | | [Underwriting Agreement, dated as of April 27, 2020, among Snap-on Incorporated, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and U.S. Bancorp Investments, Inc., as representatives of the several underwriters named therein (incorporated by reference to Exhibit 1.1 to Snap-on’s Current Report on Form 8-K dated April 27, 2020 (Commission File No. 1-7724))](https://www.sec.gov/Archives/edgar/data/91440/000119312520128786/d868937dex11.htm) | | | | | |

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

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

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

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

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

| | | | | | | (e)(2) | | | | | | [Description of 2021 Notes](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e2.htm) | | |

| | | | | | | (e)(3) | | | | | | [Description of 2027 Notes](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e3.htm) | | |

| | | | | | | (e)(4) | | | | | | [Description of 2048 Notes](https://www.sec.gov/Archives/edgar/data/91440/000009144020000004/snafy19exhibit4e4.htm) | | |

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

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

| [removed: 58] [added: SNAP-ON INCORPORATED] | | | [removed: SNAP-ON INCORPORATED] | | | | | | [added: | | | | | | | | | | | | | | |]

We have audited the accompanying consolidated balance sheets of Snap-on Incorporated and subsidiaries (the “Company”) as of [added: January 2, 2021, and] December 28, 2019, and [removed: December 29, 2018, and] the related consolidated statements of earnings, comprehensive income, equity, and cash flows for each of the three years in the period ended [removed: December 28, 2019,] [added: January 2, 2021,] and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of [added: January 2, 2021, and] December 28, 2019, and [removed: December 29, 2018, and] the results of its operations and its cash flows for each of the three years in the period ended [removed: December 28, 2019,] [added: January 2, 2021,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of [removed: December 28, 2019,] [added: January 2, 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 13, 2020,] [added: 11, 2021,] expressed an unqualified opinion on the Company’s internal control over financial reporting.

Change in Accounting [removed: Principle][added: Principles]

[removed: As discussed in Note 1 to the consolidated financial statements, the] [added: The] Company changed its method of accounting for leases in the year ended December 28, 2019 due to the adoption of Accounting Standard Update No. 2016-02, *Leases* (Topic 842) under the modified retrospective adoption method.

At [removed: December 28, 2019,] [added: January 2, 2021,] these loans totaled [removed: $1,695.5] [added: $1,742.8] million with an allowance of [removed: $61.9] [added: $76.3] million recorded against the receivables.

| | | | [removed: 2019] [added: 2020] ANNUAL REPORT | | | 59 | | |

Evaluating the judgments related to the finance receivable allowance for [removed: doubtful accounts] [added: credit losses] is subjective and requires auditor judgment to effectively evaluate whether management’s judgments were reasonable.

Our audit procedures related to the finance receivables allowance for [removed: doubtful accounts] [added: credit losses] balance included the following procedures, among others:

- We tested the [removed: design] [added: design, implementation] and operating effectiveness of management’s controls over the allowance for [removed: doubtful accounts] [added: credit losses] including controls over [removed: data integrity.][added: the completeness and accuracy of underlying data.]

- We performed a [removed: trending analysis] [added: retrospective review] based on net losses as compared to [removed: movements] [added: estimates] in the Company’s allowance to highlight any inconsistencies.