365 added · 365 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
Segment o perating earnings of $500.8 million in 2025, including a $22.0 million benefit from the 2025 legal settlement, compared to $455.2 million in 2024. 30 SNAP-ON INCORPORATED The Repair Systems & Information Group intends to focus on the following strategic priorities in 2026: • Extending the product offering with new products and services, thereby providing more to sell to repair shop owners and managers; • Continuing software and hardware upgrades to further improve functionality, performance and efficiency; • Further building our proprietary databases to enhance software solutions, including using artificial intelligence (“AI”) to accelerate expansion in that arena; • Advancing productivity through RCI initiatives and the optimization of resources; and • Increasing geographic penetration, including in emerging markets.
The company’s methodologies for valuing goodwill are applied consistently on a year-over-year basis; the assumptions used in performing the second quarter 2025 impairment calculations were evaluated in light of then-current market and business conditions.
Based on the company’s second quarter 2025 impairment testing, and assuming a hypothetical 10% decrease in the estimated fair values of each of its 11 reporting units, the hypothetical fair value of each of the company’s 11 reporting units would have been greater than its carrying value.
Snap-on completed its annual impairment testing of goodwill in the second quarter of 2025, the results of which did not result in any impairment.
The company has determined that its reporting units for testing goodwill impairment are its operating segments or components of an operating segment that constitute a business for which discrete financial information is available and for which segment management regularly reviews the operating results.
Should the operations of the businesses with which goodwill is associated incur significant and unanticipated changes in circumstances, such as declines in profitability and cash flow due to long-term deterioration in macroeconomic, industry and market conditions, the loss of key customers, changes in technology or markets, changes in key personnel or litigation, a sustained decrease in share price and/or other events, some or all of the recorded goodwill could be subject to impairment and could result in a material adverse effect on Snap-on’s financial position or results of operations.
In the event the fair value of a reporting unit is less than the carrying value, including goodwill, the company would then record an impairment charge based on the excess of a reporting units carrying amount over its fair value.
Operating earnings before financial services of $1,045.9 million in 2025, including a $22.0 million benefit from the settlement of a legal matter (the “2025 legal settlement”), compared to $1,068.8 million in 2024, which included a $22.5 million benefit for the final payments received associated with a separate legal matter (the “2024 legal payments”) .
The effects of the benefits from the 2025 legal settlement and the 2024 legal payments (collectively, the “legal items”) were included in operating expenses, operating earnings before financial services, and operating earnings in 2025 and 2024, respectively.
As a percentage of revenues (net sales plus financial services revenue), operating earnings were 25.8% compared to 26.3% last year. 2025 ANNUAL REPORT 29 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Net earnings attributable to Snap-on of $1,016.9 million, or $19.19 per diluted share, in 2025, included a $16.2 million, or $0.31 per diluted share, after-tax benefit from the 2025 legal settlement and an $18.5 million, or $0.35 per diluted share, after-tax year-over-year increase in non-service net periodic benefit costs.
Segment net sales of $1,457.5 million in 2025 represented a decrease of $19.3 million, or 1.3%, from 2024 levels, reflecting a $30.9 million, or 2.1%, organic sales decline, partially offset by $11.6 million of favorable foreign currency translation.
The Commercial & Industrial Group intends to focus on the following strategic priorities in 2026: • Expanding our business with existing customers and reaching new customers in critical industries and other market segments; • Leveraging our investments in emerging markets to support growth initiatives; • Broadening our product offering designed particularly for critical industry segments; • Increasing our customer-connection-driven understanding of work across multiple industries; • Investing in innovation that, guided by that understanding of work, delivers an ongoing stream of productivity-enhancing custom-engineered solutions; and • Continuing to reduce structural and operating costs, as well as improve efficiencies, through RCI initiatives.
No longer disclosed
Risks and uncertainties include, without limitation: • Uncertainties related to estimates, assumptions and projections generally; • The timing and progress with which Snap-on can attain value through its Snap-on Value Creation Processes, including its ability to (i) realize efficiencies and savings from its rapid continuous improvement and other cost reduction initiatives, (ii) improve workforce productivity, (iii) achieve improvements in the company’s manufacturing footprint and greater efficiencies in its supply chain, and (iv) enhance machine maintenance, plant productivity and manufacturing line set-up and change-over practices, any or all of which could result in production inefficiencies, higher costs and/or lost revenues; • Snap-on’s capability to successfully implement future strategies with respect to its existing businesses, including increasing or optimizing selling, designing, or manufacturing capacity; • Snap-on’s ability to refine its brand and franchise strategies, retain and attract franchisees, and further enhance service and value to franchisees in order to help improve the sales and profitability of franchisees; • The company’s ability to introduce successful new products; • Inflation, interest rate changes and other monetary and market fluctuations; • Price and supply fluctuations related to raw materials, components and certain purchased finished goods, such as steel, plastics, and electronics; • The effects of external economic factors, including adverse developments in world financial markets, disruptions related to tariffs and other trade or sanctions issues, and global supply chain inefficiencies, including as a result of the ongoing war in Ukraine, as well as conflicts in the Middle East and other regions; • Significant changes in the current competitive environment; • Risks related to pursuing, completing and integrating acquisitions; • Snap-on’s ability to successfully manage changes in prices and the availability of energy; • The company’s ability to withstand disruption arising from natural disasters, including climate-related events or other unusual occurrences; • Risks associated with data security and technological systems and protections, including the effects of cyber incidents and from new legislation, regulations or government-related developments; • Snap-on’s ability to effectively manage human capital resources; • The impact of production and sourcing challenges, including labor interruptions and supply chain disruptions, to both Snap-on and relevant third parties; • Weakness in certain geographic areas, including as a result of localized recessions; • Changes in tax rates, laws and regulations as well as uncertainty surrounding potential changes; • The amount, rate and growth of health care and postretirement costs, including continuing and potentially increasing required contributions to pension and postretirement plans; • The effects of new or changing requirements, legislation, regulations or government-related developments or issues, as well as third party actions, including those addressing climate change; 2024 ANNUAL REPORT 3 • Potential reputational damages and costs related to litigation; • The impact of outbreaks of infectious diseases as well as the effects of governmental actions related thereto on Snap‑on’s business, which could have the potential to amplify the impact of the other risks facing the company; and • Other world or local events outside Snap-on’s control, including terrorist disruptions, armed conflicts and civil unrest.
As previously disclosed, in 2022, the company experienced and responded to a cyber incident that did not have a significant impact on the results of our operations.
For example, if significant increases in fuel economy requirements or changes to vehicle emissions requirements for internal combustion engine vehicles were imposed, there could be a decrease in demand for such vehicles and a reduction in miles driven, which could adversely impact the demand for certain of our products and services.
Snap-on’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Proxy Statements on Schedule 14A and Current Reports on Form 8-K, as well as any amendments to those reports, are made available to the public at no charge through the “Investors” section of the company’s website at www.snapon.com .
Item 1A: Risk Factors In evaluating the company, careful consideration should be given to the following risk factors, in addition to the other information included in this Annual Report on Form 10-K, including the Consolidated Financial Statements and the related notes.
In addition, technological developments and enhancements of products and service offerings in our industry may require our expanded use of artificial intelligence (“AI”); if we are unable to keep pace with the rate of these and other developments, our ability to effectively compete could be adversely affected.
Should the economic environment in our non-U.S. markets deteriorate from current levels, our results of operations and financial position could be materially impacted, including as a result of the effects of potential impairment write-downs of goodwill and/or other intangible assets related to these businesses. 14 SNAP-ON INCORPORATED The Russian invasion of Ukraine and the ongoing conflict in the region has led to sanctions and actions taken against Russia and Belarus by the United States, the United Kingdom, the European Union and others.
Risks related to this situation include supply chain inefficiencies, price increases and shortages of raw materials and components, increased trade sanctions, exchange rate volatility, energy shortages in Europe, an increase in cybersecurity incidents, and potential impairment of certain assets.
Our information systems, like those of other companies and our third-party service providers, are susceptible to malicious damage, intrusions and outages due to, among other events, viruses, cyber attacks, industrial espionage, phishing attempts, hacking, break-ins and similar events, as well as other breaches of security, natural disasters, power loss or telecommunications failures.
Techniques used to breach information technology systems are growing in sophistication from emerging technologies, such as advanced forms of AI, and increasingly come from threat actors of all types, including individuals, criminal organizations and state-sponsored operatives.
In response to the evolving cyber threat environment, we continue to invest in data security and address these risks and uncertainties by implementing security technologies, internal controls, network and data center resiliency, and redundancy and recovery processes, as well as by securing insurance.
Future cyber events, however, could cause us to lose customers and/or revenue and could require us to incur significant expense to remediate, including as a result of legal or regulatory claims, proceedings, fines or penalties, and could also damage our reputation.