Table	of	Contents

# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

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

# For	the	fiscal	year	ended	December	29,	2012,	or

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

# Commission	File	Number	1-7724

# (Exact	name	of	registrant	as	specified	in	its	charter)

Delaware

(State	of	incorporation)

(Address	of	principal	executive	offices)

(I.R.S.	Employer	Identification	No.)

(Zip	code)

(Registrant's	telephone	number,	including	area	code)

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

Common	stock,	$1.00	par	value

Name	of	each	exchange	on	which	registered

New	York	Stock	Exchange

Securities	registered	pursuant	to	Section	12(g)	of	the	Act:	None

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.		Yes		x		No		¨

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	15(d)	of	the	Act.				Yes		¨				No		x

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

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	Web	site,	if	any,	every	Interactive	Data	File	required	to	be submitted	and	posted	pursuant	to	Rule	405	of	Regulation	S-T	(§232.405	of	this	chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was required	to	submit	and	post	such	files).				Yes		x				No		¨

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	(§229.405	of	this	chapter)	is	not	contained	herein,	and	will	not	be contained,	to	the	best	of	registrant's	knowledge,	in	a	definitive	proxy	or	information	statement	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment to	this	Form	10-K.		¨

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

Large	accelerated	filer		x				Accelerated	filer		¨					Non-accelerated	filer		¨					Smaller	reporting	company		¨

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

The	aggregate	market	value	of	voting	and	non-voting	common	equity	held	by	non-affiliates	(excludes	161,546	shares	held	by	directors	and	executive	officers)	computed by	reference	to	the	price	($62.25)	at	which	common	equity	was	last	sold	as	of	the	last	business	day	of	the	registrant's	most	recently	completed	second	fiscal	quarter	(June 30,	2012)	was	$3.6	billion.

# DOCUMENTS	INCORPORATED	BY	REFERENCE

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	12,	2013,	prepared	for	the	Annual	Meeting	of	Shareholders	scheduled	for	April	25,	2013.

|  |  | Page |
| :--- | :--- | :--- |
| PART\tI |  |  |
| Item\t1 | \t\t Business | 4 |
| Item\t1A | \t\t Risk\tFactors | 11 |
| Item\t1B | \t\t Unresolved\tStaff\tComments | 18 |
| Item\t2 | \t\t Properties | 18 |
| Item\t3 | \t\t Legal\tProceedings | 20 |
| Item\t4 | \t\t Mine\tSafety\tDisclosures | 20 |
| PART\tII |  |  |
| Item\t5 | \t\t Market\tfor\tRegistrant's\tCommon\tEquity,\tRelated\tStockholder\tMatters\tand\tIssuer\tPurchases\tof\tEquity\tSecurities | 20 |
| Item\t6 | \t\t Selected\tFinancial\tData | 23 |
| Item\t7 | \t\t Management's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 24 |
| Item\t7A | \t\t Quantitative\tand\tQualitative\tDisclosures\tAbout\tMarket\tRisk | 55 |
| Item\t8 | \t\t Financial\tStatements\tand\tSupplementary\tData | 56 |
| Item\t9 | \t\t Changes\tin\tand\tDisagreements\tWith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | 56 |
| Item\t9A | \t\t Controls\tand\tProcedures | 57 |
| Item\t9B | \t\t Other\tInformation | 59 |
| PART\tIII |  |  |
| Item\t10 | \t\t Directors,\tExecutive\tOfficers\tand\tCorporate\tGovernance | 59 |
| Item\t11 | \t\t Executive\tCompensation | 60 |
| Item\t12 | \t\t Security\tOwnership\tof\tCertain\tBeneficial\tOwners\tand\tManagement\tand\tRelated\tStockholder\tMatters | 60 |
| Item\t13 | \t\t Certain\tRelationships\tand\tRelated\tTransactions,\tand\tDirector\tIndependence | 61 |
| Item\t14 | \t\t Principal\tAccounting\tFees\tand\tServices | 61 |
| PART\tIV |  |  |
| Item\t15 | \t\t Exhibits,\tFinancial\tStatement\tSchedules | 61 |
| Signatures |  | 108 |
| Exhibit\tIndex |  | 110 |
| Computation\tof\tRatio\tof\tEarnings\tto\tFixed\tCharges | Computation\tof\tRatio\tof\tEarnings\tto\tFixed\tCharges | 114 |
| Consent\tof\tIndependent\tRegistered\tPublic\tAccounting\tFirm | Consent\tof\tIndependent\tRegistered\tPublic\tAccounting\tFirm | 117 |
| Certifications |  | 118 |

# PART	I

# Safe	Harbor

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

These	risks	and	uncertainties	include,	without	limitation,	uncertainties	related	to	estimates,	statements,	assumptions	and	projections	generally,	and	the	timing	and progress	with	which	Snap-on	can	attain	value	through	its	Snap-on	Value	Creation	Processes,	including	its	ability	to	realize	efficiencies	and	savings	from	its	rapid continuous	 improvement	 and	 other	 cost	 reduction	 initiatives,	 improve	 workforce	 productivity,	 implement	 reductions	 in	 workforce,	 achieve	 improvements	 in	 the company's	manufacturing	footprint	and	greater	efficiencies	in	its	supply	chain,	and	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.	These	risks	also	include	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	continuing	uncertainty	in	world	financial	markets,	weakness	in	certain	areas	of	the	global	economy,	and significant	changes	in	the	current	competitive	environment,	inflation,	interest	rates	and	other	monetary	and	market	fluctuations,	changes	in	tax	rates	and	regulations,	and the	impact	of	energy	and	raw	material	supply	and	pricing,	including	steel	and	gasoline,	the	amount,	rate	and	growth	of	Snap-on's	general	and	administrative	expenses, including	health	care	and	postretirement	costs	(resulting	from,	among	other	matters,	U.S.	health	care	legislation	and	reforms),	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	and	regulations,	risks	associated	with	 technological	systems	and	protections,	and	other	world	or	 local	events	outside	Snap-on's	control, including	terrorist	disruptions.	Snap-on	disclaims	any	responsibility	to	update	any	forward-looking	statement	provided	in	this	document,	except	as	required	by	law.

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

2012	ANNUAL	REPORT

# Item	1:	Business

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.	Snap-on	is	a	leading global	innovator,	manufacturer	and	marketer	of	tools,	equipment,	diagnostics,	repair	information	and	systems	solutions	for	professional	users	performing	critical	tasks. Products	and	services	include	hand	and	power	tools,	tool	storage,	diagnostic	software,	information	and	management	systems,	shop	equipment	and	other	solutions	for vehicle	dealerships	and	repair	centers,	as	well	as	for	customers	in	industries,	including	aviation	and	aerospace,	agriculture,	construction,	government	and	military, mining,	natural	resources,	power	generation	and	technical	education.	Snap-on	also	derives	income	from	various	financing	programs	to	facilitate	the	sales	of	its	products.

Snap-on	markets	its	products	and	brands	through	multiple	distribution	sales	channels	in	more	than	130	countries.	Snap-on's	largest	geographic	markets	include	the United	States,	the	United	Kingdom,	Canada,	Germany,	Australia,	Japan,	France,	Sweden,	Spain,	the	Russian	Federation,	Brazil,	China,	Italy,	the	Netherlands,	Argentina, Indonesia,	Denmark,	Norway,	Mexico	and	India.	Snap-on	reaches	its	customers	through	the	company's	franchisee,	company-direct,	distributor	and	internet	channels. Snap-on	originated	the	mobile	van	tool	distribution	channel	in	the	automotive	repair	market.

The	company	began	with	the	development	of	the	original	Snap-on	interchangeable	socket	set	in	1920	and	subsequently	pioneered	mobile	van	tool	distribution,	where fully	stocked	vans	sell	to	professional	vehicle	technicians	at	their	place	of	business.	For	many	decades,	the	company	was	viewed	primarily	as	a	hand	tool	company selling	through	vans	to	vehicle	technicians.	In	recent	years,	Snap-on	has	defined	its	value	proposition	more	broadly,	extending	its	reach	"beyond	the	garage"	to	deliver	a broad	array	of	unique	solutions	 that	make	work	easier	for	serious	professionals	performing	critical	 tasks.	Building	upon	capabilities	already	demonstrated	 in	 the automotive	repair	arena,	the	company's	"coherent	growth"	strategy	focuses	on	developing	and	expanding	its	professional	customer	base	in	adjacent	markets,	additional geographies	and	other	areas,	including	in	critical	industries,	where	the	cost	and	penalties	for	failure	can	be	high.	In	addition	to	its	coherent	growth	strategy,	Snap-on	is committed	to	its	"Value	Creation	Processes"	–	a	set	of	strategic	principles	and	processes	designed	to	create	value	and	employed	in	the	areas	of	(i)	safety;	(ii)	quality; (iii)	customer	connection;	(iv)	innovation;	and	(v)	rapid	continuous	improvement	("RCI").

Snap-on's	 primary	 customer	 segments	 include:	 (i)	 commercial	 and	 industrial	 customers,	 including	 professionals	 in	 critical	 industries	 and	 emerging	 markets; (ii)	professional	vehicle	repair	technicians	who	purchase	products	through	the	company's	worldwide	mobile	tool	distribution	network;	and	(iii)	other	professional customers	related	to	vehicle	repair,	including	owners	and	managers	of	independent	and	original	equipment	manufacturer	("OEM")	dealership	service	and	repair	shops. Snap-on's	Financial	Services	customer	segment	offers	financing	options	that	include	(i)	loans	to	franchisees'	customers	and	Snap-on's	industrial	and	other	customers	for the	purchase	or	lease	of	tools,	equipment	and	diagnostic	products	on	an	extended	term	payment	plan;	and	(ii)	business	loans	and	vehicle	leases	to	franchisees.

Snap-on's	business	segments	are	based	on	the	organization	structure	used	by	management	for	making	operating	and	investment	decisions	and	for	assessing	performance. Snap-on's	reportable	business	segments	are:	(i)	the	Commercial	&	Industrial	Group;	(ii)	the	Snap-on	Tools	Group;	(iii)	the	Repair	Systems	&	Information	Group;	and (iv)	Financial	Services.	The	Commercial	&	Industrial	Group	consists	of	business	operations	serving	a	broad	range	of	industrial	and	commercial	customers	worldwide, primarily	through	direct	and	distributor	channels.	The	Snap-on	Tools	Group	consists	of	business	operations	primarily	serving	vehicle	repair	technicians	through	the company's	worldwide	mobile	tool	distribution	channel.	The	Repair	Systems	&	Information	Group	consists	of	business	operations	serving	other	professional	vehicle repair	customers	worldwide,	primarily	owners	and	managers	of	independent	repair	shops	and	OEM	dealership	service	and	repair	shops,	through	direct	and	distributor channels.	Financial	Services	consists	of	the	business	operations	of	Snap-on	Credit	LLC	("SOC"),	the	company's	financial	services	business	in	the	United	States,	and Snap-on's	other	financial	services	subsidiaries	in	those	international	markets	where	Snap-on	has	franchise	operations.	See	Note	17	to	the	Consolidated	Financial Statements	for	information	on	business	segments	and	foreign	operations.

Snap-on	evaluates	the	performance	of	its	operating	segments	based	on	segment	revenues,	including	both	external	and	intersegment	net	sales,	and	segment	operating earnings.	 Snap-on	 accounts	 for	 intersegment	 sales	 and	 transfers	 based	 primarily	 on	 standard	 costs	 with	 reasonable	 mark-ups	 established	 between	 the	 segments. Identifiable	assets	by	segment	are	those	assets	used	in	the	respective	reportable	segment's	operations.	Corporate	assets	consist	of	cash	and	cash	equivalents	(excluding cash	held	at	Financial	Services),	deferred	income	taxes,	pension	assets	and	certain	other	assets.	All	significant	intersegment	amounts	are	eliminated	to	arrive	at	Snap- on's	consolidated	financial	results.

# SNAP-ON	INCORPORATED

# Information	Available	on	the	Company's	Web	Site

Additional	information	regarding	Snap-on	and	its	products	is	available	on	the	company's	web	site	at	www.snapon.com.	Snap-on	 is	not	 including	 the	 information contained	on	its	web	site	as	a	part	of,	or	incorporating	it	by	reference	into,	this	Annual	Report	on	Form	10-K.	Snap-on's	Annual	Reports	on	Form	10-K,	Quarterly Reports	on	Form	10-Q,	Definitive	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,	other	than	an	investor's	own	internet	access	charges,	through	the	Investor	Information	section	of	the	company's	web	site	at	www.snapon.com. Snap-on	makes	such	material	available	on	its	web	site	as	soon	as	reasonably	practicable	after	it	electronically	files	such	material	with,	or	furnishes	it	to,	the	Securities and	Exchange	Commission	("SEC").	Copies	of	any	materials	the	company	files	with	the	SEC	can	also	be	obtained	free	of	charge	through	the	SEC's	web	site	at www.sec.gov.	The	SEC's	Public	Reference	Room	can	be	contacted	at	100	F	Street,	N.E.,	Washington,	D.C.	20549,	or	by	calling	1-800-732-0330.	In	addition,	Snap-on's (i)	charters	for	the	Audit,	Corporate	Governance	and	Nominating,	and	Organization	and	Executive	Compensation	Committees	of	the	company's	Board	of	Directors; (ii)	Corporate	Governance	Guidelines;	and	(iii)	Code	of	Business	Conduct	and	Ethics	are	available	on	Snap-on's	web	site.	Snap-on	will	also	post	any	amendments	to these	documents,	or	information	about	any	waivers	granted	to	directors	or	executive	officers	with	respect	to	the	Code	of	Business	Conduct	and	Ethics,	on	the	company's web	site	at	www.snapon.com.

# Products	and	Services

# Tools,	Diagnostics	and	Repair	Information,	and	Equipment

Snap-on	offers	a	broad	line	of	products	and	complementary	services	that	are	grouped	into	three	product	categories:	(i)	tools;	(ii)	diagnostics	and	repair	information;	and (iii)	equipment.	Further	product	line	information	is	not	presented	as	it	is	not	practicable	to	do	so.	The	following	table	shows	the	consolidated	net	sales	of	these	product categories	for	the	last	three	years:

| (Amounts	in	millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Product\tCategory: |  |  |  |
| Tools | \t\t\t\t$1,729.4 | \t\t\t\t$1,667.3 | \t\t\t\t$1,545.1 |
| Diagnostics\tand\trepair\tinformation | 619.8 | 613.7 | 563.3 |
| Equipment | 588.7 | 573.2 | 510.8 |
|  | \t\t\t\t$\t\t2,937.9 | \t\t\t\t$\t\t2,854.2 | \t\t\t\t$\t\t2,619.2 |

The	tools	product	category	includes	hand	tools,	power	tools	and	tool	storage	products.	Hand	tools	include	wrenches,	sockets,	ratchet	wrenches,	pliers,	screwdrivers, punches	and	chisels,	saws	and	cutting	tools,	pruning	tools,	torque	measuring	instruments	and	other	similar	products.	Power	tools	include	cordless	(battery),	pneumatic (air),	hydraulic,	and	corded	(electric)	tools,	such	as	impact	wrenches,	ratchets,	chisels,	drills,	sanders,	polishers	and	similar	products.	Tool	storage	includes	tool	chests, roll	cabinets,	tool	control	systems	and	other	similar	products.	The	majority	of	products	are	manufactured	by	Snap-on	and,	in	completing	the	product	offering,	other	items are	purchased	from	external	manufacturers.

The	diagnostics	and	repair	information	product	category	includes	handheld	and	PC-based	diagnostic	products,	service	and	repair	information	products,	diagnostic software	solutions,	electronic	parts	catalogs,	business	management	systems	and	services,	point-of-sale	systems,	integrated	systems	for	vehicle	service	shops,	OEM purchasing	facilitation	services,	and	warranty	management	systems	and	analytics	to	help	OEM	dealership	service	and	repair	shops	manage	and	track	performance.

The	equipment	product	category	includes	solutions	for	the	diagnosis	and	service	of	vehicles	and	industrial	equipment.	Products	include	wheel	alignment	equipment, wheel	balancers,	tire	changers,	vehicle	lifts,	test	lane	systems,	collision	repair	equipment,	air	conditioning	service	equipment,	brake	service	equipment,	fluid	exchange equipment,	transmission	troubleshooting	equipment,	safety	testing	equipment,	battery	chargers	and	hoists.

Snap-on	supports	the	sale	of	its	diagnostics	and	vehicle	service	shop	equipment	by	offering	training	programs	as	well	as	after	sales	support	for	its	customers,	primarily focusing	on	the	technologies	and	the	application	of	specific	products	developed	and	marketed	by	Snap-on.

Products	are	marketed	under	a	number	of	brand	names	and	trademarks,	many	of	which	are	well	known	in	the	vehicle	service	and	industrial	markets	served.	Some	of	the major	trade	names	and	trademarks	and	the	products	and	services	with	which	they	are	associated	include	the	following:

# Financial	Services

Snap-on	also	generates	revenue	from	various	financing	activities	that	include:	(i)	loans	to	franchisees'	customers	and	the	company's	industrial	and	other	customers	for the	purchase	or	lease	of	tools,	equipment	and	diagnostic	products	on	an	extended	term	payment	plan;	and	(ii)	business	loans	and	vehicle	leases	to	franchisees.	The decision	to	finance	through	Snap-on	or	another	financing	entity	is	solely	at	the	customer's	election.	When	assessing	customers	for	potential	financing,	Snap-on	considers various	factors	including	financial	condition,	collateral,	debt-servicing	ability,	past	payment	experience	and	credit	bureau	information.

In	the	United	States,	Snap-on	offers	financing	through	SOC	and	provides	financing	for	the	majority	of	new	contracts	originated	by	SOC.	Financing	revenue	from	new contract	originations	owned	and	serviced	by	SOC	is	recognized	by	SOC	over	the	life	of	the	contracts,	with	interest	computed	on	the	average	daily	balances	of	the underlying	contracts.	Prior	to	July	2009,	SOC	operated	as	a	financial	services	joint	venture	with	CIT	Group	Inc.	("CIT"),	in	which	CIT	was	the	exclusive	purchaser	of the	financing	contracts	originated	by	SOC	in	the	United	States.	For	contracts	sold	to	CIT,	SOC	continues	to	service	the	contracts	for	a	servicing	fee,	with	such	revenue recognized	over	the	remaining	contractual	term	of	the	loans.

# International

Snap-on	also	offers	financing	to	its	franchisees	and	customer	networks	through	its	international	finance	subsidiaries	located	in	Canada,	the	United	Kingdom,	Germany, Australia	and	Puerto	Rico.	Snap-on's	international	finance	subsidiaries	own	and	service	the	loans	originated	through	their	financing	programs.	Financing	revenue	from these	contracts	is	recognized	over	the	contractual	term	of	the	loans,	with	interest	computed	on	the	average	daily	balances	of	the	underlying	contracts.

# Other

Franchise	fee	revenue,	including	nominal,	non-refundable	initial	and	ongoing	monthly	fees	(primarily	for	sales	and	business	training,	and	marketing	and	product promotion	programs),	is	recognized	as	the	fees	are	earned.	Franchise	fee	revenue	totaled	$9.9	million,	$8.8	million	and	$9.0	million	in	fiscal	2012,	2011	and	2010, respectively.

# Sales	and	Distribution

Snap-on	markets	and	distributes	its	products	and	related	services	principally	to	professional	tool	and	equipment	users	around	the	world.	The	two	largest	market	sectors are	the	vehicle	service	and	repair	sector	and	the	industrial	sector.

# Vehicle	Service	and	Repair	Sector

The	 vehicle	 service	 and	 repair	 sector	 has	 three	 main	 customer	 groups:	 (i)	 professional	 technicians	 who	 purchase	 tools,	 equipment	 and	 diagnostic	 products	 for themselves;	(ii)	other	professional	customers	related	to	vehicle	repair,	including	owners	and	managers	of	independent	and	OEM	dealership	service	and	repair	shops	who purchase	tools,	equipment	and	diagnostic	products	for	use	by	multiple	technicians	within	a	service	or	repair	facility;	and	(iii)	OEMs.

Snap-on	provides	innovative	tool,	equipment	and	business	solutions,	as	well	as	technical	sales	support	and	training,	designed	to	meet	technicians'	evolving	needs.	Snap- on's	mobile	tool	van	distribution	system	offers	technicians	the	convenience	of	purchasing	quality	tools	at	their	place	of	business	with	minimal	disruption	of	their	work routine.	Snap-on	also	provides	owners	and	managers	of	shops,	where	technicians	work,	with	tools,	diagnostic	equipment,	repair	and	service	information,	including electronic	parts	catalogs	and	shop	management	products.	Snap-on's	OEM	facilitation	business	provides	OEMs	with	products	and	services	including	tools,	consulting and	facilitation	services,	which	include	product	procurement,	distribution	and	administrative	support	to	customers	for	their	dealership	equipment	programs.

Major	challenges	in	the	vehicle	service	and	repair	sector	include	the	increasing	rate	of	technological	change	within	motor	vehicles,	vehicle	population	growth,	vehicle life	and	the	resulting	effects	on	the	businesses	of	both	our	suppliers	and	customers	due	to	these	changes.	Snap-on	believes	it	is	a	meaningful	participant	in	the	market sector	for	vehicle	service	and	repair.

# Industrial	Sector

Snap-on	markets	its	products	and	services	globally	to	a	broad	cross-section	of	commercial	and	industrial	customers,	including	maintenance	and	repair	operations; manufacturing	and	assembly	facilities;	various	government	agencies,	facilities	and	operations,	including	military	operations;	vocational	and	technical	schools;	aerospace and	aviation;	OEM	and	service	and	repair	customers;	oil	and	gas	developers;	mining	operations;	energy	and	power	generation	equipment	fabricators	and	operators; agriculture;	infrastructure	construction	companies;	and	other	customers	that	require	instrumentation,	service	tools	and/or	equipment	for	their	product	and	business	needs.

The	industrial	sector	for	Snap-on	has	achieved	growth	in	recent	years	by	providing	value-added	products	and	services	to	an	increasingly	expanding	global	base	of customers	in	critical	industries,	particularly	those	in	the	market	segments	of	natural	resources,	aerospace,	government	and	technical	education.	Through	its	experienced and	dispersed	sales	organization,	industrial	"solutioneers"	develop	unique	and	highly	valued	productivity	solutions	for	customers	worldwide	that	leverage	Snap-on's product,	service	and	development	capabilities.

Major	challenges	in	the	industrial	sector	include	a	highly	competitive,	cost-conscious	environment,	and	a	trend	toward	customers	making	many	of	their	tool	and equipment	purchases	through	one	integrated	supplier.	Snap-on	believes	it	is	a	meaningful	participant	in	the	market	sector	for	industrial	tools	and	equipment.

# Distribution	Channels

Snap-on	serves	customers	primarily	through	the	following	channels	of	distribution:	(i)	the	mobile	van	channel;	(ii)	company	direct	sales;	(iii)	distributors;	and	(iv)	e- commerce.	The	following	discussion	summarizes	Snap-on's	general	approach	for	each	channel,	and	is	not	intended	to	be	all-inclusive.

# Mobile	Van	Channel

In	the	United	States,	a	significant	portion	of	sales	to	the	vehicle	service	and	repair	sector	is	conducted	through	Snap-on's	mobile	franchise	van	channel.	Snap-on's franchisees	 primarily	 serve	 vehicle	 repair	 technicians	 and	 vehicle	 service	 shop	 owners,	 generally	 providing	 weekly	 contact	 at	 the	 customer's	 place	 of	 business. Franchisees'	sales	are	concentrated	in	hand	and	power	tools,	tool	storage	products	and	shop	equipment,	and	diagnostic	and	repair	information	products,	which	can	easily be	transported	in	a	van	and	demonstrated	during	a	brief	sales	call.	Franchisees	purchase	Snap-on's	products	at	a	discount	from	suggested	list	prices	and	resell	them	at prices	established	by	the	franchisee.	U.S.	franchisees	are	provided	a	list	of	places	of	business	that	serves	as	the	basis	of	the	franchisee's	sales	route.

Snap-on	also	has	offered	an	option	termed	the	"Gateway	Franchise	Program"	to	potential	U.S.	franchisees,	including	those	that	did	not	meet	the	standard	franchise qualification	requirements.	Gateway	Franchise	Program	participants	have	less	upfront	investment	and	are	provided	an	initial	base	level	of	consigned	inventory	from Snap-on	to	assist	them	in	gaining	experience	and	building	equity	toward	the	future	purchase	of	a	standard	franchise.	Snap-on	also	provides	certain	franchisees	the opportunity	to	add	vans	to	their	franchise	or	to	add	a	limited	number	of	additional	franchises.	Snap-on	charges	nominal	initial	and	ongoing	monthly	franchise	fees.	Since 1991,	written	franchise	agreements	have	been	entered	into	with	all	new	U.S.	franchisees	and	most	pre-1991	independent	franchisees.	As	of	2012	year	end,	there	were 3,209	vans	operated	by	U.S.	franchisees	(approximately	97%)	with	written	franchise	agreements,	or	individuals	employed	by	such	franchisees,	as	compared	with	3,177 vans	(approximately	97%)	as	of	2011	year	end.

In	addition	to	its	mobile	van	channel	in	the	United	States,	Snap-on	has	replicated	its	U.S.	franchise	van	distribution	model	in	certain	other	countries	including	Australia, Canada,	Germany,	Japan,	the	United	Kingdom,	the	Netherlands,	South	Africa,	New	Zealand,	Belgium	and	Ireland.	In	many	of	these	markets,	as	in	the	United	States, purchase	decisions	are	generally	made	or	influenced	by	professional	vehicle	service	technicians	as	well	as	shop	owners	and	managers.	As	of	2012	year	end,	Snap-on's worldwide	mobile	van	count	was	approximately	4,800,	including	approximately	3,500	vans	in	the	United	States.

Through	SOC,	financing	is	available	to	U.S.	franchisees,	including	financing	for	van	and	truck	leases,	working	capital	loans,	and	loans	to	enable	new	franchisees	to	fund the	purchase	of	the	franchise.	In	many	international	markets,	Snap-on	offers	a	variety	of	financing	options	to	its	franchisees	and/or	customer	networks	through	its international	finance	subsidiaries.	The	decision	to	finance	through	Snap-on	or	another	financing	entity	is	solely	at	the	customer's	election.

Snap-on	supports	its	franchisees	with	a	field	organization	of	regional	offices,	franchise	performance	teams,	Diagnostic	Sales	Developers	("DSDs"),	customer	care centers	and	distribution	centers.	Snap-on	also	provides	sales	and	business	training,	and	marketing	and	product	promotion	programs,	as	well	as	customer	and	franchisee financing	programs	through	SOC	and	the	company's	international	finance	subsidiaries,	all	of	which	are	designed	to	strengthen	franchisee	sales.	In	North	America,	the United	States	National	Franchise	Advisory	Council	and	the	Canadian	National	Franchise	Advisory	Council,	both	of	which	are	composed	primarily	of	franchisees	that are	elected	by	franchisees,	assist	Snap-on	in	identifying	and	implementing	enhancements	to	the	franchise	program.

In	the	United	States,	franchisees	work	closely	with	DSDs.	DSDs	train	franchisees	on	the	sale	of	higher-price-point	diagnostics	and	demonstrate	and	sell	vehicle	service shop	management	and	information	systems.	DSDs	work	independently	and	with	franchisees	to	identify	and	generate	sales	among	vehicle	service	technicians,	shop owners	and	managers.	DSDs	are	Snap-on	employees	who	are	compensated	through	a	combination	of	base	salary	and	commission;	a	franchisee	receives	a	brokerage	fee from	certain	sales	made	by	the	DSDs	to	the	franchisee's	customers.	Most	products	sold	through	franchisees	and	DSDs	are	sold	under	the	Snap-on,	Blue-Point	and ShopKey	brand	names.

Snap-on	also	has	a	company-owned	van	program	in	the	United	States	that	is	designed	to:	(i)	provide	another	pool	of	potential	franchisees	and	field	organization personnel;	(ii)	service	customers	in	select	new	and/or	open	routes	not	currently	serviced	by	franchisees;	and	(iii)	allow	Snap-on	to	pilot	new	sales	and	promotional	ideas prior	to	introducing	them	to	franchisees.	As	of	2012	year	end,	company-owned	vans	comprised	approximately	5%	of	the	total	U.S.	van	population;	Snap-on	may	elect	to increase	or	reduce	the	number	of	company-owned	vans	in	the	future.

# Company	Direct	Sales

A	significant	proportion	of	shop	equipment	sales	in	North	America	under	the	John	Bean,	Hofmann	and	Blackhawk	brands,	diagnostic	products	under	the	Snap-on	brand and	information	products	under	the	Mitchell1	brand	are	made	by	direct	and	independent	sales	forces	that	have	responsibility	for	national	and	other	accounts.	As	the vehicle	 service	 and	 repair	 sector	 consolidates	 (with	 more	 business	 conducted	 by	 national	 chains	 and	 franchised	 service	 centers),	 Snap-on	 believes	 these	 larger organizations	can	be	serviced	most	effectively	by	sales	people	who	can	demonstrate	and	sell	the	full	line	of	equipment	and	diagnostic	products	and	services.	Snap-on also	sells	these	products	and	services	directly	to	OEMs	and	their	franchised	dealers.

Snap-on	brand	tools	and	equipment	are	marketed	to	industrial	and	governmental	customers	in	the	United	States	through	both	industrial	sales	representatives,	who	are employees,	and	 independent	 industrial	distributors.	Outside	of	 the	United	States,	 industrial	sales	are	also	conducted	 through	other	 independent	distributors.	Sales representatives	focus	on	industrial	customers	whose	main	purchase	criteria	are	quality	and	service.	As	of	2012	year	end,	Snap-on	had	industrial	sales	representatives	in the	United	States	(including	Puerto	Rico),	Australia,	Canada,	Japan,	Mexico	and	various	European,	Asian,	Latin	American	and	Middle	Eastern	countries,	with	the United	States	representing	the	majority	of	Snap-on's	total	industrial	sales.

Snap-on	also	sells	software,	services	and	solutions	to	the	automotive,	power	equipment	and	sports	segments.	Products	and	services	are	marketed	to	targeted	groups, including	OEMs	and	their	dealerships	and	individual	repair	shops.	To	effectively	reach	OEMs,	such	as	General	Motors	Company,	Daimler	AG,	Ford	Motor	Company, Chrysler	Group	LLC,	Toyota	Motor	Corporation,	John	Deere	(Deere	&	Company),	CNH	Global	N.V.,	JC	Bamford	Excavators	Ltd.	(JCB),	and	Yamaha	Corporation, Snap-on	has	deployed	focused	business	teams	globally.

# Distributors

Sales	of	certain	tools	and	equipment	are	made	through	independent	distributors	who	purchase	the	items	from	Snap-on	and	resell	them	to	end	users.	Hand	tools	under	the BAHCO,	Fish	and	Hook,	and	Lindström	brands	and	trade	names,	for	example,	are	sold	through	distributors	in	Europe,	North	and	South	America,	Asia	and	certain	other parts	of	the	world.	Wheel	service	and	other	vehicle	service	equipment	are	sold	through	distributors	primarily	under	brands	including	Hofmann,	John	Bean,	Cartec	and Blackhawk.	Diagnostics	and	equipment	are	marketed	through	distributors	in	South	America	and	Asia,	and	through	both	a	direct	sales	force	and	distributors	in	Europe under	the	Snap-on,	Sun,	BAHCO	and	Blue-Point	brands.

# E-commerce

Snap-on's	e-commerce	development	initiatives	allow	Snap-on	to	combine	the	capabilities	of	the	internet	with	Snap-on's	existing	brand	sales	and	distribution	strengths	to reach	new	and	under-served	customer	segments.	Snap-on	offers	current	and	prospective	customers	online,	around-the-clock	access	to	research	and	purchase	products through	its	public	internet	web	site	at	www.snapon.com.	The	site	features	an	online	catalog	containing	nearly	15,000	products,	including	Snap-on	hand	tools,	power tools,	tool	storage	units	and	diagnostic	equipment	available	to	consumers	and	professionals	in	the	United	States,	the	United	Kingdom,	Canada	and	Australia.	As	of	2012 year	end,	Snap-on	had	more	than	900,000	registered	users,	including	approximately	51,000	industrial	accounts.	E-commerce	and	certain	other	system	enhancement initiatives	are	designed	to	improve	productivity	and	further	leverage	the	one-on-one	relationships	and	service	Snap-on	has	with	its	current	and	prospective	customers. Through	business-to-business	and	business-to-consumer	capabilities,	Snap-on	and	its	franchisees	are	enhancing	communications	with	customers	on	a	real-time,	24	hour, 7	day	a	week	basis.

# Competition

Snap-on	competes	on	the	basis	of	its	product	quality	and	performance,	product	line	breadth	and	depth,	service,	brand	awareness	and	imagery,	technological	innovation and	availability	of	financing	(through	SOC	or	its	international	finance	subsidiaries).	While	no	single	company	competes	with	Snap-on	across	all	of	its	product	lines	and distribution	channels,	various	companies	compete	in	one	or	more	product	categories	and/or	distribution	channels.

Snap-on	believes	it	is	a	leading	manufacturer	and	distributor	of	professional	tools,	tool	storage,	diagnostics,	equipment,	repair	software	and	solutions,	offering	a	broad line	of	these	products	to	both	vehicle	service	and	industrial	marketplaces.	Various	competitors	target	and	sell	to	professional	technicians	in	the	automotive	service	and repair	sector	through	the	mobile	van	channel;	Snap-on	also	competes	with	companies	that	sell	tools	and	equipment	to	automotive	technicians	through	retail	stores	and online,	auto	parts	supply	outlets,	and	tool	supply	warehouses/distributorships.	Within	the	power	tools	category	and	the	industrial	sector,	Snap-on	has	various	other competitors,	including	companies	with	offerings	that	overlap	with	other	areas	discussed	herein.	Major	competitors	selling	diagnostics,	shop	equipment	and	information to	automotive	dealerships	and	independent	repair	shops	include	OEMs	and	their	proprietary	electronic	parts	catalogs,	diagnostics	and	information	systems,	as	well	as other	companies	that	offer	products	serving	this	sector.

# Raw	Materials	and	Purchased	Product

Snap-on's	supply	of	raw	materials	and	purchased	components	are	generally	and	readily	available	from	numerous	suppliers.	Snap-on	believes	it	has	secured	an	ample supply	of	both	bar	and	coil	steel	for	the	near	future	to	ensure	stable	supply	to	meet	material	demands.	The	company	does	not	currently	anticipate	experiencing	any significant	impact	in	2013	from	steel	pricing	or	availability	issues.

# Patents,	Trademarks	and	Other	Intellectual	Property

Snap-on	vigorously	pursues	and	relies	on	patent	protection	 to	protect	 its	 intellectual	property	and	position	 in	 its	markets.	As	of	2012	year	end,	Snap-on	and	 its subsidiaries	held	over	600	active	and	pending	patents	in	the	United	States	and	over	1,500	active	and	pending	patents	outside	of	the	United	States.	Sales	relating	to	any single	patent	did	not	represent	a	material	portion	of	Snap-on's	revenues	in	any	of	the	last	three	years.

Examples	of	products	that	have	features	or	designs	that	benefit	from	patent	protection	include	wheel	alignment	systems,	wheel	balancers,	tire	changers,	lifts,	test	lanes, sealed	ratchets,	electronic	torque	instruments,	ratcheting	screwdrivers,	emissions-sensing	devices	and	diagnostic	equipment.

Much	of	the	technology	used	in	the	manufacture	of	vehicle	service	tools	and	equipment	is	in	the	public	domain.	Snap-on	relies	primarily	on	trade	secret	protection	to protect	proprietary	processes	used	in	manufacturing.	Methods	and	processes	are	patented	when	appropriate.	Copyright	protection	is	also	utilized	when	appropriate.

Trademarks	used	by	Snap-on	are	of	continuing	importance	to	Snap-on	in	the	marketplace.	Trademarks	have	been	registered	in	the	United	States	and	more	than	100	other countries,	and	additional	applications	for	trademark	registrations	are	pending.	Snap-on	vigorously	polices	proper	use	of	its	trademarks.	Snap-on's	right	to	manufacture and	sell	certain	products	is	dependent	upon	licenses	from	others;	however,	these	products	under	license	do	not	represent	a	material	portion	of	Snap-on's	net	sales.

Domain	names	have	become	a	valuable	corporate	asset	for	companies	around	the	world,	including	Snap-on.	Domain	names	often	contain	a	trademark	or	service	mark	or even	a	corporate	name	and	are	often	considered	intellectual	property.	The	recognition	and	value	of	the	Snap-on	name,	trademark	and	domain	name	are	core	strengths	of the	company.

Snap-on	strategically	licenses	the	Snap-on	brand	to	carefully	selected	manufacturing	and	distribution	companies	for	items	such	as	apparel,	work	boots,	lighting	and	a variety	of	other	goods,	in	order	to	further	build	equity	and	market	presence	for	the	company's	strongest	brand.

# Environmental

Snap-on	is	subject	to	various	environmental	laws,	ordinances,	regulations,	and	other	requirements	of	government	authorities	in	the	United	States	and	other	nations.	At Snap-on,	these	environmental	liabilities	are	managed	through	the	Snap-on	Environmental,	Health	and	Safety	Management	System	("EH	&	SMS"),	which	is	applied worldwide.	The	system	is	based	upon	continual	improvement	and	is	certified	to	ISO	14001:2004	and	OHSAS	18001:2007,	verified	through	Det	Norske	Veritas	(DNV) Certification,	Inc.

Snap-on	believes	that	it	complies	with	applicable	environmental	control	requirements	in	its	operations.	Expenditures	on	environmental	matters	through	EH	&	SMS	have not	had,	and	Snap-on	does	not	for	the	foreseeable	future	expect	them	to	have,	a	material	effect	upon	Snap-on's	capital	expenditures,	earnings	or	competitive	position.

# Employees

Snap-on	employed	approximately	11,200	people	at	the	end	of	January	2013;	Snap-on	employed	approximately	11,500	people	at	the	end	of	January	2012.

Approximately	2,700	employees,	or	24%	of	Snap-on's	worldwide	workforce,	are	represented	by	unions	and/or	covered	under	collective	bargaining	agreements.	The number	of	covered	union	employees	whose	contracts	expire	within	 the	next	five	years	approximates	900	employees	 in	2013;	1,350	employees	 in	2014;	and	50 employees	in	2015.	There	are	no	contracts	currently	scheduled	to	expire	in	2016	or	2017.	In	recent	years,	Snap-on	has	not	experienced	any	significant	work	slow-downs, stoppages	or	other	labor	disruptions.

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

Most	of	Snap-on's	businesses	are	not	seasonal	and	their	inventory	needs	are	relatively	constant.	Snap-on	did	not	have	a	significant	backlog	of	orders	at	2012	year	end.	In recent	years,	Snap-on	has	been	using	its	working	capital	to	fund,	in	part,	the	growth	of	the	on-book	receivables	originated	by	SOC.

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."

As	of	2012	year	end,	neither	Snap-on	nor	any	of	its	segments	depend	on	any	single	customer,	small	group	of	customers	or	government	for	any	material	part	of	its revenues.

# 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.	Each	of	these	risk	factors	could	adversely	affect	the	company's	business,	operating results,	cash	flows	and/or	financial	condition,	as	well	as	adversely	affect	the	value	of	an	investment	in	the	company's	common	stock.

# Economic	conditions	and	world	events	could	affect	our	operating	results.

We,	our	franchisees	and	our	customers,	may	continue	to	be	adversely	affected	by	challenging	economic	conditions,	including	conditions	that	may	particularly	impact specific	regions,	such	as	Europe,	which	approximated	21%	of	our	revenues	 in	2012.	These	conditions	may	result	 in	reduced	consumer	and	 investor	confidence, instability	in	the	credit	and	financial	markets,	volatile	corporate	profits,	and	reduced	business,	as	well	as	consumer,	spending.	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	acts	of	terrorism,	developments	in	the	war	on	terrorism, conflicts	in	international	situations	and	natural	disasters.	These	factors	may	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,	impact	the	availability	of	raw	materials	and/or	the	supply	chain,	and	could	potentially	lead	to	future	impairment of	our	intangible	assets.	In	addition,	political	and	social	turmoil	related	to	international	conflicts	and	terrorist	acts	may	put	pressure	on	economic	conditions	abroad. Unstable	political,	social	and	economic	conditions	may	make	it	difficult	for	our	franchisees,	customers,	suppliers	and	us	to	accurately	forecast	and	plan	future	business activities.	If	such	conditions	persist,	our	business,	financial	condition,	results	of	operations	and	cash	flows	could	be	negatively	affected.

Raw	material	and	energy	price	fluctuations	and	shortages	(including	steel	and	various	fuel	sources)	could	adversely	affect	the	ability	to	obtain	needed	manufacturing materials	and	could	adversely	affect	our	results	of	operations.

The	principal	raw	material	used	in	the	manufacture	of	our	products	is	steel,	which	we	purchase	in	competitive,	price-sensitive	markets.	To	meet	Snap-on's	high	quality standards,	our	steel	needs	range	from	specialized	alloys,	which	are	available	only	from	a	limited	group	of	approved	suppliers,	to	commodity	types	of	alloys.	These	raw materials	have	historically	exhibited	price	and	demand	fluctuations	of	a	cyclical	nature.	Some	of	these	materials	have	been,	and	in	the	future	may	be,	in	short	supply, particularly	in	the	event	of	a	general	economic	recovery,	mill	shut	downs	or	production	cut	backs.	As	some	steel	alloys	require	specialized	manufacturing	procedures,	we could	experience	inventory	shortages	if	we	were	required	to	use	an	alternative	manufacturer	on	short	notice.	Additionally,	unexpected	price	increases	for	other	raw materials	could	result	in	higher	prices	to	our	customers	or	an	erosion	of	the	margins	on	our	products.

We	believe	our	ability	to	sell	our	products	is	also	dependent	on	the	number	of	vehicles	on	the	road,	the	number	of	miles	driven	and	the	general	aging	of	vehicles.	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	the	technicians	and,	subsequently,	the	demand	technicians	have	for	our	tools,	other	products	and	services,	and	the	value	technicians	place	on	those products	and	services.	To	the	extent	that	the	prices	of	gasoline	and	other	petroleum-based	fuels	increase,	as	they	have	at	times	in	recent	years,	consumers	may	turn	to other	methods	of	transportation,	including	more	frequent	use	of	public	transportation,	which	could	result	in	a	decrease	in	the	use	of	privately	operated	vehicles.	A decrease	in	the	use	of	privately	operated	vehicles	may	lead	to	fewer	repairs	and	less	demand	for	our	products.

We	use	various	energy	sources	to	transport,	produce	and	distribute	products,	and	some	of	our	products	have	components	that	are	petroleum	based.	Petroleum	and	energy prices	have	periodically	increased	significantly	over	short	periods	of	time;	further	volatility	and	changes	may	be	caused	by	market	fluctuations,	supply	and	demand, currency	fluctuation,	production	and	transportation	disruption,	world	events	and	changes	in	governmental	programs.	Energy	price	increases	raise	both	our	operating costs	and	the	costs	of	our	materials,	and	we	may	not	be	able	to	increase	our	prices	enough	to	offset	these	costs.	Higher	prices	also	may	reduce	the	level	of	future customer	orders	and	our	profitability.

Exposure	to	credit	risks	of	customers	and	resellers	may	make	it	difficult	to	collect	receivables	and	could	adversely	affect	operating	results	and	financial	condition.

Industry	and	economic	conditions	have	the	potential	to	weaken	the	financial	position	of	some	of	our	customers.	If	circumstances	surrounding	our	customers'	ability	to repay	their	credit	obligations	were	to	deteriorate	and	result	in	the	write-down	or	write-off	of	such	receivables,	it	would	negatively	affect	our	operating	results	for	the period	in	which	they	occur	and,	if	large,	could	have	a	material	adverse	effect	on	our	business,	financial	condition,	results	of	operations	and	cash	flows.

# Regulatory	changes	related	to	financial	services	operations	could	adversely	affect	operating	results	and	financial	condition.

Financial	services	businesses	of	all	kinds	are	subject	to	increasing	regulation.	In	addition	to	potentially	increasing	the	costs	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,	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.

# New	and	stricter	legislation	and	regulations	may	affect	our	business	and	results	of	operations.

Increased	legislative	and	regulatory	activity	and	burdens,	and	a	more	stringent	manner	in	which	they	are	applied	(particularly	in	the	United	States),	could	significantly impact	our	business	and	the	economy	as	a	whole.	For	example,	the	Affordable	Care	Act	(the	"ACA"),	which	was	adopted	in	2010	and	is	being	phased	in	over	several years,	significantly	affects	the	provision	of	both	health	care	services	and	benefits	in	the	United	States;	the	ACA	may	impact	our	cost	of	providing	our	employees	and retirees	with	health	insurance	and/or	benefits,	and	may	also	impact	various	other	aspects	of	our	business.	The	ACA	did	not	have	a	material	impact	on	our	fiscal	2012, 2011	or	2010	financial	results;	however,	we	are	continuing	to	assess	the	impact	of	the	ACA	on	our	health	care	benefit	costs.	Also,	the	Dodd-Frank	Wall	Street	Reform and	Consumer	Protection	Act	of	2010	(the	"Dodd-Frank	Act")	may	affect,	among	other	matters,	our	financial	services	businesses	by	requiring	changes	in	the	way	in which	we	provide	credit	or	by	otherwise	increasing	the	expenses	of	that	operation,	as	well	as	the	costs	related	to	corporate	governance,	sourcing	compliance,	disclosures and	general	securities	law	compliance.

These	developments,	and	other	potential	future	legislation	and	regulations,	as	well	as	the	increasingly	strict	regulatory	environment,	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,	financial	condition	or	results of	operations,	including	in	ways	that	cannot	yet	be	foreseen.

The	performance	of	Snap-on's	mobile	van	tool	distribution	business	depends	on	the	success	of	its	franchisees.

Approximately	41%	of	our	2012	revenues	were	generated	by	the	Snap-on	Tools	Group,	which	consists	of	Snap-on's	business	operations	serving	the	worldwide	van channel.	Except	in	limited	circumstances,	each	of	our	mobile	tool	vans	is	operated	by	a	franchisee	pursuant	to	a	franchise	agreement.	Snap-on's	success	is	dependent	on its	relationships	with	franchisees,	individually	and	collectively,	as	they	are	the	primary	sales	and	service	link	between	the	company	and	vehicle	service	and	repair technicians,	who	are	an	important	class	of	end	users	for	Snap-on's	products	and	services.	If	our	franchisees	are	not	successful,	or	if	we	do	not	maintain	an	effective relationship	with	our	franchisees,	the	delivery	of	products,	the	collection	of	receivables	and/or	our	relationship	with	end	users	could	be	adversely	affected	and	thereby negatively	impact	our	business,	financial	condition,	results	of	operations	and	cash	flows.

In	addition,	if	we	are	unable	to	maintain	effective	relationships	with	franchisees,	Snap-on	or	the	franchisees	may	choose	to	terminate	the	relationship,	which	may	result in	(i)	open	routes,	in	which	end-user	customers	are	not	provided	reliable	service;	(ii)	litigation	resulting	from	termination;	(iii)	reduced	collections	or	increased	write-offs of	franchisee	receivables	owed	to	Snap-on;	and/or	(iv)	reduced	collections	or	increased	write-offs	of	extended	credit	contracts	and,	to	a	lesser	extent,	lease	contracts	that are	collected	by	franchisees	on	behalf	of	SOC.

Instability	and	uncertainty	in	the	credit	and	financial	markets	could	adversely	impact	the	availability	of	credit	that	we	and	our	customers	need	to	operate	our	businesses.

We	depend	upon	the	availability	of	credit	to	operate	our	business,	including	the	financing	of	receivables	from	end-user	customers	that	are	originated	by	our	financial services	businesses.	Our	end-user	customers,	franchisees	and	suppliers	also	require	access	to	credit	for	their	businesses.	Instability	and	uncertainty	in	the	credit	and financial	markets	could	adversely	impact	the	availability	of	future	financing	and	the	terms	on	which	it	might	be	available	to	Snap-on,	its	end-user	customers,	franchisees and	suppliers.	Inability	to	access	credit	markets,	or	a	deterioration	in	the	terms	on	which	financing	might	be	available,	could	have	an	adverse	impact	on	our	business, financial	condition,	results	of	operations	and	cash	flows.

# Increasing	our	financial	leverage	could	affect	our	operations	and	profitability.

The	company's	leverage	ratio	may	affect	both	our	availability	of	additional	capital	resources	as	well	as	our	operations	in	several	ways,	including:

•The	terms	on	which	credit	may	be	available	to	us	could	be	less	attractive,	both	in	the	economic	terms	of	the	credit	and	the	covenants	stipulated	by	the	credit terms;

•The	possible	lack	of	availability	of	additional	credit;

•	 Higher	levels	of	interest	expense	to	service	outstanding	debt;

•The	possibility	of	additional	borrowings	in	the	future	to	repay	our	indebtedness	when	it	comes	due;	and

•The	possible	diversion	of	capital	resources	from	other	uses.

While	we	believe	we	will	have	the	ability	to	service	our	debt	and	obtain	additional	resources	in	the	future	if	and	when	needed,	that	will	depend	upon	our	results	of operations	and	financial	position	at	the	time,	the	then-current	state	of	the	credit	and	financial	markets,	and	other	factors	that	may	be	beyond	our	control.	Therefore,	we cannot	give	assurances	that	credit	will	be	available	on	terms	that	we	consider	attractive,	or	at	all,	if	and	when	necessary	or	beneficial	to	us.

Failure	to	achieve	expected	investment	returns	on	pension	plan	assets,	as	well	as	changes	in	interest	rates,	could	adversely	impact	our	results	of	operations,	financial position	and	cash	flows.

Snap-on	sponsors	various	defined	benefit	pension	plans	(the	"pension	plans").	The	assets	of	the	pension	plans	are	broadly	diversified	in	an	attempt	to	mitigate	the	risk	of a	large	loss.	The	assets	are	invested	in	equity	securities,	debt	securities,	real	estate	and	other	real	assets,	hedge	funds,	other	alternative	investments	and	cash.	Required funding	for	the	company's	domestic	defined	benefit	pension	plans	is	determined	in	accordance	with	guidelines	set	forth	in	the	federal	Employee	Retirement	Income Security	Act	(ERISA);	foreign	defined	benefit	pension	plans	are	funded	in	accordance	with	local	statutes	or	practice.	Additional	contributions	to	enhance	the	funded status	of	the	pension	plans	can	be	made	at	the	company's	discretion.	However,	there	can	be	no	assurance	that	the	value	of	the	pension	plan	assets,	or	the	investment returns	on	those	plan	assets,	will	be	sufficient	to	meet	the	future	benefit	obligations	of	such	plans.	In	addition,	during	periods	of	adverse	investment	market	conditions and	declining	interest	rates,	the	company	may	be	required	to	make	additional	cash	contributions	to	the	plans	that	could	reduce	our	financial	flexibility.

Our	pension	plan	obligations	are	affected	by	changes	in	market	interest	rates.	Significant	fluctuations	in	market	interest	rates	have	added,	and	may	further	add,	volatility to	our	pension	plan	obligations.	In	recent	years,	declining	market	interest	rates	have	increased	our	pension	plan	obligations;	if	market	interest	rates	continue	to	decline, our	pension	plan	obligations	will	increase.	While	our	plan	assets	are	broadly	diversified,	there	are	inherent	market	risks	associated	with	investments;	if	adverse	market conditions	occur,	our	plan	assets	could	incur	significant	or	material	losses.	Since	we	may	need	to	make	additional	contributions	to	address	an	increase	in	obligations and/or	a	loss	in	plan	assets,	the	combination	of	declining	market	interest	rates	and/or	past	or	future	plan	asset	investment	losses	could	adversely	impact	our	financial position,	results	of	operations	and	cash	flows.

The	company's	pension	plan	expense	is	comprised	of	the	following	factors:	(i)	service	cost;	(ii)	interest	on	projected	benefit	obligations;	(iii)	the	expected	return	on	plan assets;	(iv)	the	amortization	of	prior	service	costs	(and	credits);	(v)	the	effects	of	actuarial	gains	and	losses;	and	(vi)	settlement/curtailment	costs,	when	applicable.	The accounting	for	pensions	involves	the	estimation	of	a	number	of	factors	that	are	highly	uncertain.	Certain	factors,	such	as	the	interest	cost	and	the	expected	return	on	plan assets,	are	impacted	by	changes	in	market	interest	rates	and	the	value	of	plan	assets.	A	significant	decrease	in	market	interest	rates	and	a	decrease	in	the	fair	value	of	plan assets	would	increase	net	pension	expense	and	may	adversely	affect	the	company's	future	results	of	operations.	See	Note	11	to	the	Consolidated	Financial	Statements	for further	information	on	the	company's	pension	plans.

Our	inability	to	provide	acceptable	financing	alternatives	to	end-user	customers	and	franchisees	could	adversely	impact	our	operating	results.

An	integral	component	of	our	business	and	profitability	is	our	ability	to	offer	competitive	financing	alternatives	to	end-user	customers	and	franchisees.	The	lack	of	our ability	to	obtain	capital	resources	or	other	financing	to	support	our	on-book	receivables	on	terms	that	we	believe	are	attractive,	whether	resulting	from	the	state	of	the financial	markets,	our	own	operating	performance,	or	other	factors,	would	negatively	affect	our	operating	results	and	financial	condition.	Adverse	fluctuations	in	interest rates	and/or	our	ability	to	provide	competitive	financing	programs	for	other	reasons	could	also	have	an	adverse	impact	on	our	revenue	and	profitability.

The	steps	taken	to	restructure	operations,	rationalize	operating	footprint,	lower	operating	expenses	and	achieve	greater	efficiencies	in	the	supply	chain	could	disrupt business.

We	have	taken	steps	in	the	past,	and	expect	to	take	additional	steps	in	2013,	intended	to	improve	customer	service	and	drive	further	efficiencies	and	reduce	costs,	some of	which	could	be	disruptive	to	our	business.	These	actions,	collectively	across	our	operating	groups,	are	focused	on	the	following:

•	 Continuing	to	invest	in	initiatives	focused	on	building	a	strong	sales	and	operating	presence	in	emerging	growth	markets;

•	 Continuing	to	enhance	service	and	value	to	our	franchisees	and	customers;

•	 Continuing	 to	 implement	 efficiency	 and	 productivity	 initiatives	 (collectively	 "Rapid	 Continuous Improvement"	 or	 "RCI initiatives") throughout the organization	to	drive	further	efficiencies	and	reduce	costs;

•	 Continuing	 on	 the	 company's	 existing	 path	 to	 improve and transform global	 manufacturing and the supply chain into a	 market-demand-based replenishment	system	with	lower	costs;

•	 Continuing	to	invest	in	developing	and	marketing	new,	innovative,	higher-value-added	products	and	advanced	technologies;

•Extending	our	products	and	services	into	additional	and/or	adjacent	markets	or	to	new	customers;	and

•	 Continuing	to	provide	financing	for,	and	grow	our	portfolio	of,	on-book	receivables	within	our	financial	services	businesses.

We	believe	that	by	executing	on	these	focus	areas,	and	continuing	our	commitment	to	new	innovative	products	and	RCI	initiatives	to	drive	higher	levels	of	productivity and	lower	costs,	the	company	and	its	franchisees	may	realize	stronger	growth	and	profitability.	However,	failure	to	succeed	in	the	implementation	of	any	or	all	of	these actions	could	result	in	an	inability	to	achieve	our	financial	goals	and	could	be	disruptive	to	the	business.

In	addition,	future	reductions	to	headcount	and	other	cost	reduction	measures	may	result	in	the	loss	of	technical	expertise	that	could	adversely	affect	our	research	and development	efforts	as	well	as	our	ability	to	meet	product	development	schedules.	Efforts	to	reduce	components	of	expense	could	result	in	the	recording	of	charges	for inventory	and	technology-related	write-offs,	workforce	reduction	costs	or	other	charges	relating	to	the	consolidation	or	closure	of	facilities.	If	we	were	to	incur	a substantial	charge	to	further	these	efforts,	our	earnings	per	share	would	be	adversely	affected	in	such	period.	If	we	are	unable	to	effectively	manage	our	cost	reduction and	restructuring	efforts,	our	business,	financial	condition,	results	of	operations	and	cash	flows	could	be	negatively	affected.

Failure	to	maintain	effective	distribution	of	products	and	services	could	adversely	impact	revenue,	gross	margin	and	profitability.

We	use	a	variety	of	distribution	methods	to	sell	our	products	and	services.	Successfully	managing	the	interaction	of	our	distribution	efforts	to	reach	various	potential customer	segments	for	our	products	and	services	is	a	complex	process.	Moreover,	since	each	distribution	method	has	distinct	risks,	costs	and	gross	margins,	our	failure to	implement	the	most	advantageous	balance	in	the	delivery	model	for	our	products	and	services	could	adversely	affect	our	revenue	and	gross	margins	and	therefore	our profitability.

Risks	associated	with	the	disruption	of	manufacturing	operations	could	adversely	affect	profitability	or	competitive	position.

We	manufacture	a	significant	portion	of	the	products	we	sell.	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,	use	and	storage	of	hazardous	materials	or	other	events),	or	other	reasons,	could	have	a	material	adverse	effect	on	our	business,	financial	condition, results	of	operations	and	cash	flows.

The inability to	continue to introduce	new	products that	respond to	customer	needs	and	achieve	market	acceptance	could	result in lower	revenues	and	reduced profitability.

Sales	from	new	products	represent	a	significant	portion	of	our	net	sales	and	are	expected	to	continue	to	represent	a	significant	component	of	our	future	net	sales.	We	may not	 be	 able	 to	 compete	 effectively	 unless	 we	 continue	 to	 enhance	 existing	 products	 or	 introduce	 new	 products	 to	 the	 marketplace	 in	 a	 timely	 manner.	 Product improvements	and	new	product	introductions	require	significant	financial	and	other	resources	including	significant	planning,	design,	development,	and	testing	at	the technological,	product	and	manufacturing	process	levels.	Our	competitors'	new	products	may	beat	our	products	to	market,	be	more	effective	with	more	features,	be	less expensive	than	our	products,	and/or	render	our	products	obsolete.	Any	new	products	that	we	develop	may	not	receive	market	acceptance	or	otherwise	generate	any meaningful	net	sales	or	profits	for	us	relative	to	our	expectations	based	on,	among	other	things,	existing	and	anticipated	investments	in	manufacturing	capacity	and commitments	to	fund	advertising,	marketing,	promotional	programs	and	research	and	development.

# The	global	tool,	equipment,	and	diagnostics	and	repair	information	industries	are	competitive.

We	face	strong	competition	in	all	of	our	market	segments.	Price	competition	in	our	various	industries	is	intense	and	pricing	pressures	from	competitors	and	customers are	increasing.	In	general,	as	a	manufacturer	and	marketer	of	premium	products	and	services,	the	expectations	of	Snap-on's	customers	and	its	franchisees	are	high	and increasing.	Any	inability	to	maintain	customer	satisfaction	could	diminish	Snap-on's	premium	image	and	reputation	and	could	result	in	a	lessening	of	our	ability	to command	premium	pricing.	We	expect	that	the	level	of	competition	will	remain	high	in	the	future,	which	could	limit	our	ability	to	maintain	or	increase	market	share	or profitability.

Product	liability	claims	and	litigation	could	affect	our	business,	reputation,	financial	condition,	results	of	operations	and	cash	flows.

The	products	that	we	design	and/or	manufacture	can	lead	to	product	liability	claims	being	filed	against	us.	To	the	extent	that	plaintiffs	are	successful	in	showing	that defects	in	the	design	or	manufacture	of	our	products	led	to	personal	injury	or	property	damage,	we	may	be	subject	to	claims	for	damages.	Although	we	are	insured	for damages	above	a	certain	amount,	we	bear	the	costs	and	expenses	associated	with	defending	claims,	including	frivolous	lawsuits,	and	are	responsible	for	damages	below the	insurance	retention	amount.	As	a	manufacturer,	we	can	be	subject	to	the	costs	and	potential	negative	publicity	of	product	recalls,	which	could	impact	our	results.

# Information technology infrastructure	and	security	are	critical to	supporting	business	objectives; failure	of	our information technology infrastructure to	operate effectively	could	adversely	affect	our	business.

We	depend	heavily	on	information	technology	infrastructure	to	achieve	our	business	objectives.	If	a	problem	occurs	that	impairs	or	compromises	this	infrastructure, including	due	to	security	breaches	or	malicious	attacks,	or	during	systems	upgrades	and/or	new	systems	implementations,	the	resulting	disruption	could	impede	our ability	to	record	or	process	orders,	manufacture	and	ship	in	a	timely	manner,	protect	sensitive	data	of	the	company,	our	customers,	our	suppliers	and	business	partners,	or otherwise	carry	on	business	in	the	normal	course.	Any	such	events	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	claims	or	proceedings.

In	association	with	initiatives	to	better	integrate	business	units,	rationalize	operating	footprint	and	improve	responsiveness	to	franchisees	and	customers,	Snap-on	is continually	replacing	and	enhancing	its	global	Enterprise	Resource	Planning	(ERP)	management	information	systems.	As	we	integrate,	implement	and	deploy	new information	technology	processes	and	a	common	information	infrastructure	across	our	global	operations,	we	could	experience	disruptions	in	our	business	that	could have	an	adverse	effect	on	our	business,	financial	condition,	results	of	operations	and	cash	flows.

The	recognition	of	impairment	charges	on	goodwill	or	other	intangible	assets	would	adversely	impact	our	future	financial	position	and	results	of	operations.

We	have	a	substantial	amount	of	goodwill	and	purchased	intangible	assets,	almost	all	of	which	are	booked	in	the	Commercial	&	Industrial	and	Repair	Systems	& Information	Groups.	We	are	required	to	perform	impairment	tests	on	our	goodwill	and	other	intangibles	annually	or	at	any	time	when	events	occur	that	could	impact	the value	of	our	business	segments.	Our	determination	of	whether	impairment	has	occurred	is	based	on	a	comparison	of	each	of	our	reporting	units'	fair	market	value	with its	carrying	value.	Significant	and	unanticipated	changes	in	circumstances,	such	as	significant	and	long-term	adverse	changes	in	business	climate,	including	in	Europe, adverse	actions	by	regulators,	unanticipated	competition,	the	loss	of	key	customers,	and/or	changes	in	technology	or	markets,	could	require	a	provision	for	impairment	in a	future	period	that	could	substantially	impact	our	reported	earnings	and	reduce	our	consolidated	net	worth	and	shareholders'	equity.	Should	the	economic	environment in	these	markets	deteriorate,	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.

# Failure	to	adequately	protect	intellectual	property	could	adversely	affect	our	business.

Intellectual	property	rights	are	an	important	and	integral	component	of	our	business.	We	attempt	to	protect	our	intellectual	property	rights	through	a	combination	of patent,	trademark,	copyright	and	trade	secret	laws,	as	well	as	licensing	agreements	and	third-party	nondisclosure	and	assignment	agreements.	Adverse	determinations	in a	judicial	or	administrative	proceeding	could	prevent	us	from	manufacturing	and	selling	our	products	or	prevent	us	from	stopping	others	from	manufacturing	and	selling competing	products.	Failure	to	obtain	or	maintain	adequate	protection	of	our	intellectual	property	rights	for	any	reason	could	have	a	material	adverse	effect	on	our business.

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

The	reporting	currency	for	Snap-on's	consolidated	financial	statements	 is	 the	U.S.	dollar.	Certain	of	 the	company's	assets,	 liabilities,	expenses	and	revenues	are denominated	in	currencies	other	than	the	U.S.	dollar.	In	preparing	Snap-on's	Consolidated	Financial	Statements,	those	assets,	liabilities,	expenses	and	revenues	are translated	into	U.S.	dollars	at	applicable	exchange	rates.	Increases	or	decreases	in	exchange	rates	between	the	U.S.	dollar	and	other	currencies	affect	the	U.S.	dollar value	of	those	items,	as	reflected	in	the	Consolidated	Financial	Statements.	Substantial	fluctuations	in	the	value	of	the	U.S.	dollar	could	have	a	significant	impact	on	the company's	financial	condition	and	results	of	operations.

Approximately	38%	of	our	revenues	in	2012	were	generated	outside	of	the	United	States.	Future	growth	rates	and	success	of	our	business	depends	in	large	part	on continued	 growth	 in	 our	 non-U.S.	 operations,	 including	 growth	 in	 emerging	 markets	 and	 critical	 industries.	 Numerous	 risks	 and	 uncertainties	 affect	 our	 non- U.S.	operations.	These	risks	and	uncertainties	include	political,	economic	and	social	instability,	such	as	acts	of	war,	civil	disturbance	or	acts	of	terrorism,	local	labor conditions,	changes	in	government	policies	and	regulations,	including	imposition	or	increases	in	withholding	and	other	taxes	on	remittances	and	other	payments	by international	 subsidiaries,	 currency	 instability,	 transportation	 delays	 or	 interruptions,	 sovereign	 debt	 uncertainties	 and	 difficulties	 in	 enforcement	 of	 contract	 and intellectual	property	rights,	as	well	as	natural	disasters.	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.

We	are	also	affected	by	changes	in	inflation	rates	and	interest	rates.	Additionally,	cash	generated	in	non-U.S.	jurisdictions	may	be	difficult	to	repatriate	to	the	United States	in	a	tax-efficient	manner.	Our	foreign	operations	are	also	subject	to	other	risks	and	challenges,	such	as	the	need	to	staff	and	manage	diverse	workforces,	respond	to the	needs	of	multiple	national	and	international	marketplaces,	and	differing	business	climates	and	cultures	in	various	countries.

Our	operations	expose	us	to	the	risk	of	environmental	liabilities,	costs,	litigation	and	violations	that	could	adversely	affect	our	financial	condition,	results	of	operations and	reputation.

Certain	of	our	operations	are	subject	to	environmental	laws	and	regulations	in	the	jurisdictions	in	which	they	operate,	which	impose	limitations	on	the	discharge	of pollutants	into	the	ground,	air	and	water	and	establish	standards	for	the	generation,	treatment,	use,	storage	and	disposal	of	hazardous	wastes.	We	must	also	comply	with various	health	and	safety	regulations	in	the	United	States	and	abroad	in	connection	with	our	operations.	Failure	to	comply	with	any	of	these	laws	could	result	in	civil	and criminal,	monetary	and	non-monetary	penalties	and	damage	to	our	reputation.	In	addition,	we	may	incur	costs	related	to	remedial	efforts	or	alleged	environmental damage	associated	with	past	or	current	waste	disposal	practices.	Legislation	has	been	proposed,	and	governmental	regulatory	action	has	been	both	proposed	and	taken, that	may	significantly	impact	environmental	compliance	in	the	United	States;	these	actions	could	increase	our	costs	of	production	by	raising	the	cost	of	energy	as	well	as by	further	restricting	emissions	or	other	processes	that	we	currently	use	in	our	operations.	We	cannot	provide	assurance	that	our	costs	of	complying	with	current	or future	environmental	protection	and	health	and	safety	laws	will	not	exceed	our	estimates.

# Legal	disputes	could	adversely	affect	our	business,	reputation,	financial	condition,	results	of	operations	and	cash	flows.

From	time	to	time	we	are	subject	to	legal	disputes	that	are	being	litigated	and/or	settled	in	the	ordinary	course	of	business.	Disputes	or	future	lawsuits	could	result	in	the diversion	of	management's	time	and	attention	away	from	business	operations.	Additionally,	negative	developments	with	respect	to	legal	disputes	and	the	costs	incurred in	defending	ourselves	could	have	an	adverse	impact	on	the	company	and	its	reputation.	Adverse	outcomes	or	settlements	could	also	require	us	to	pay	damages, potentially	in	excess	of	amounts	reserved,	or	incur	liability	for	other	remedies	that	could	have	a	material	adverse	effect	on	our	business,	financial	condition,	results	of operations	and	cash	flows.

The	inability	to	successfully	defend	claims	from	taxing	authorities	could	adversely	affect	our	financial	condition,	results	of	operations	and	cash	flows.

We	conduct	business	in	many	countries,	which	requires	us	to	interpret	the	income	tax	laws	and	rulings	in	each	of	those	taxing	jurisdictions.	Due	to	the	subjectivity	of	tax laws	between	those	jurisdictions,	as	well	as	the	subjectivity	of	factual	interpretations,	our	estimates	of	income	tax	liabilities	may	differ	from	actual	payments	or assessments.	Claims	from	taxing	authorities	related	to	these	differences	could	have	an	adverse	impact	on	our	financial	condition,	results	of	operations	and	cash	flows.

Compliance	with	new	regulations	related	to	conflict	minerals	could	increase	costs	and	affect	the	manufacturing	and	sale	of	our	products.

Pursuant	to	the	Dodd-Frank	Act	and	SEC	rules	related	thereto,	public	companies	are	required	to	disclose	the	use	of	tin,	tantalum,	tungsten	and	gold	(collectively, "conflict	minerals")	mined	from	the	Democratic	Republic	of	the	Congo	and	adjoining	countries	(the	"covered	countries")	if	a	conflict	mineral(s)	is	necessary	to	the functionality	of	a	product	manufactured,	or	contracted	to	be	manufactured,	by	the	company.	The	rules	require	us	to	perform	reasonable	due	diligence	to	determine	if	we know	or	have	reason	to	believe	that	any	of	our	products	contain	conflict	minerals	that	may	have	originated	from	a	covered	country.	While	these	rules	are	currently	the subject	of	a	legal	challenge,	at	the	current	time	we	believe	these	new	disclosure	requirements	will	require	due	diligence	efforts	for	Snap-on's	2013	fiscal	year,	with	the initial	disclosure,	if	applicable,	due	in	May	2014.

Certain	products	or	components	we	obtain	from	our	suppliers	may	contain	some	or	all	of	these	materials.	Because	our	global	supply	chain	is	complex	and	can	have multiple	layers,	we	may	not,	as	a	result	of	our	due	diligence	procedures,	be	able	to	sufficiently	verify	the	origins	of	the	relevant	minerals	used	in	our	products,	which could	lead	to	the	need	for	additional	investigation	and	expense,	and	ultimately	could	have	a	negative	impact	on	our	business	or	reputation.	We	may

also	encounter	challenges	to	satisfy	customers	who	require	that	our	products	be	certified	as	conflict	free,	which	could	place	us	at	a	competitive	disadvantage	if	we	are unable	to	do	so.	Implementation	of	the	rules	could	also	affect	the	sourcing	and	availability	of	some	of	the	minerals	used	in	the	manufacture	of	products	or	components we	obtain	from	our	suppliers,	including	our	ability	to	obtain	products	or	components	in	sufficient	quantities	and/or	at	competitive	prices.

As	a	result,	compliance	and	other	costs	associated	with	the	implementation	of	these	rules	could	have	a	material	adverse	effect	on	our	business	and/or	results	of operations.

# The	accounting	for	certain	stock-based	compensation	awards	could	adversely	affect	our	results	of	operations.

Certain	stock-based	equity	awards	granted	by	the	company,	including	stock	appreciation	rights,	are	subject	to	mark-to-market	accounting	treatment,	which	requires	us	to recognize	changes	in	the	fair	value	of	these	awards	each	period	based	on	the	company's	period-end	stock	price.	Volatility	in	the	company's	stock	price,	including	as	a result	of	macro-economic	conditions	and	other	factors	beyond	our	control,	could	increase	or	decrease	this	expense	in	future	periods.	Depending	on	changes	in	the company's	period-end	stock	price,	the	application	of	mark-to-market	accounting	on	certain	of	our	stock-based	compensation	awards	could	have	an	adverse	effect,	or favorable	benefit,	on	our	financial	condition	and	results	of	operations	in	certain	periods.

# Failure	to	attract	and	retain	qualified	personnel	could	lead	to	a	loss	of	revenue	and/or	profitability.

Snap-on's	success	depends,	in	part,	on	the	efforts	and	abilities	of	its	senior	management	team	and	other	key	employees.	Their	skills,	experience	and	industry	contacts significantly	benefit	our	operations	and	administration.	The	failure	to	attract	and	retain	members	of	our	senior	management	team	and	other	key	employees	could	have	a negative	effect	on	our	operating	results.	In	addition,	transitions	of	important	responsibilities	to	new	individuals	inherently	include	the	possibility	of	disruptions	to	our business	and	operations,	which	could	negatively	affect	our	business,	financial	condition,	results	of	operations	and	cash	flows.

We	may	not	successfully	integrate	businesses	we	acquire,	which	could	have	an	adverse	impact	on	our	business,	financial	condition,	results	of	operations	and	cash	flows.

The	pursuit	of	future	growth	through	acquisitions,	including	participation	in	joint	ventures,	involves	significant	risks	that	could	have	a	material	adverse	effect	on	our business,	financial	condition,	results	of	operations	and	cash	flows.	These	risks	include:

•Loss	of	the	acquired	businesses'	customers;

•Inability	to	integrate	successfully	the	acquired	businesses'	operations;

•Inability	to	coordinate	management	and	integrate	and	retain	employees	of	the	acquired	businesses;

•	 Difficulties	in	implementing	and	maintaining	consistent	standards,	controls,	procedures,	policies	and	information	systems;

•Failure	to	realize	anticipated	synergies,	economies	of	scale	or	other	anticipated	benefits,	or	to	maintain	operating	margins;

•Strain	on	our	personnel,	systems	and	resources,	and	diversion	of	attention	from	other	priorities;

•Incurrence	of	additional	debt	and	related	interest	expense;

•The	dilutive	effect	of	the	issuance	of	additional	equity	securities;

•	 Unforeseen	or	contingent	liabilities	of	the	acquired	businesses;	and

•Large	write-offs	or	write-downs,	or	the	impairment	of	goodwill	or	other	intangible	assets.

# Item	1B:	Unresolved	Staff	Comments

# None.

# Item	2:	Properties

Snap-on	maintains	leased	and	owned	manufacturing	(including	software	products),	warehouse,	distribution,	research	and	development	and	office	facilities	throughout the	world.	Snap-on	believes	that	its	facilities	currently	in	use	are	suitable	and	have	adequate	capacity	to	meet	its	present	and	foreseeable	future	demand.	Snap-on's facilities	in	the	United	States	occupy	approximately	3.1	million	square	feet,	of	which	78%	is	owned,	including	its	corporate	and	general	office	facility

located	in	Kenosha,	Wisconsin.	Snap-on's	facilities	outside	the	United	States	occupy	approximately	4.1	million	square	feet,	of	which	approximately	73%	is	owned. Certain	Snap-on	facilities	are	leased	through	operating	and	capital	lease	agreements.	See	Note	15	to	the	Consolidated	Financial	Statements	for	information	on	the company's	operating	and	capital	leases.	Snap-on	management	continually	monitors	the	company's	capacity	needs	and	makes	adjustments	as	dictated	by	market	and other	conditions.

The	following	table	provides	information	about	our	corporate	headquarters	and	financial	services	operations,	and	each	of	Snap-on's	principal	active	manufacturing locations	and	distribution	centers	(exceeding	50,000	square	feet)	as	of	2012	year	end:

| Location | Principal	Property	Use | Owned/Leased | Segment* |
| :--- | :--- | :--- | :--- |
| U.S.\tLocations: |  |  |  |
| Elkmont,\tAlabama | Manufacturing | Owned | SOT |
| Conway,\tArkansas | Manufacturing | Owned | RS&I |
| City\tof\tIndustry,\tCalifornia | Manufacturing | Leased | C&I |
| Poway,\tCalifornia | Manufacturing\tand\tdistribution | Leased | RS&I |
| San\tJose,\tCalifornia | Manufacturing\tand\tdistribution | Leased | RS&I |
| Columbus,\tGeorgia | Distribution | Owned | C&I |
| Crystal\tLake,\tIllinois | Distribution | Owned | SOT |
| Libertyville,\tIllinois | Financial\tservices | Leased | FS |
| Algona,\tIowa | Manufacturing\tand\tdistribution | Owned | SOT |
| Olive\tBranch,\tMississippi | Distribution | Owned | SOT |
| Carson\tCity,\tNevada | Distribution | Owned\tand\tleased | SOT |
| Murphy,\tNorth\tCarolina | Manufacturing\tand\tdistribution | Owned | C&I |
| Richfield,\tOhio | Manufacturing\tand\tdistribution | Owned | RS&I |
| Robesonia,\tPennsylvania | Distribution | Owned | SOT |
| Elizabethton,\tTennessee | Manufacturing | Owned | SOT |
| Kenosha,\tWisconsin | Distribution\tand\tcorporate | Owned | SOT,\tC&I,\tRS&I |
| Milwaukee,\tWisconsin | Manufacturing | Owned | SOT |
| Non-U.S.\tLocations: |  |  |  |
| Santo\tTome,\tArgentina | Manufacturing | Owned | C&I |
| New\tSouth\tWales,\tAustralia | Distribution\tand\tfinancial\tservices | Leased | SOT,\tFS |
| Minsk,\tBelarus | Manufacturing | Owned | C&I |
| Santa\tBárbara\td'Oeste,\tBrazil | Manufacturing\tand\tdistribution | Owned | RS&I |
| Mississauga,\tCanada | Manufacturing\tand\tdistribution | Leased | SOT,\tRS&I |
| Kunshan,\tChina | Manufacturing | Owned | C&I |
| Xiaoshan,\tChina | Manufacturing | Owned | C&I |
| Bramley,\tEngland | Manufacturing | Leased | C&I |
| Kettering,\tEngland | Distribution\tand\tfinancial\tservices | Owned | SOT,\tC&I,\tFS |
| Sopron,\tHungary | Manufacturing | Owned | RS&I |
| Correggio,\tItaly | Manufacturing | Owned | RS&I |
| Tokyo,\tJapan | Distribution | Leased | C&I |
| Helmond,\tthe\tNetherlands | Distribution | Owned | C&I |
| Vila\tdo\tConde,\tPortugal | Manufacturing | Owned | C&I |
| Irun,\tSpain | Manufacturing | Owned | C&I |
| Placencia,\tSpain | Manufacturing | Owned | C&I |
| Vitoria,\tSpain | Manufacturing\tand\tdistribution | Owned | C&I |
| Bollnäs,\tSweden | Manufacturing | Owned | C&I |
| Edsbyn,\tSweden | Manufacturing | Owned | C&I |
| Lidköping,\tSweden | Manufacturing | Owned | C&I |

* Segment	abbreviations:

C&I	–	Commercial	&	Industrial	Group

SOT	–	Snap-on	Tools	Group

RS&I	–	Repair	Systems	&	Information	Group

FS	–	Financial	Services

# Item	3:	Legal	Proceedings

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

# Item	4:	Mine	Safety	Disclosures

Not	applicable.

# PART	II

# Item	5:	Market	for	Registrant's	Common	Equity,	Related	Stockholder	Matters	and	Issuer	Purchases	of	Equity	Securities

Snap-on	had	58,254,796	shares	of	common	stock	outstanding	as	of	2012	year	end.	Snap-on's	stock	is	listed	on	the	New	York	Stock	Exchange	under	the	ticker	symbol "SNA."	At	February	8,	2013,	there	were	5,907	registered	holders	of	Snap-on	common	stock.

The	high	and	low	closing	prices	of	Snap-on's	common	stock	during	each	quarter	for	the	last	two	years	were	as	follows:

| Quarter | High | Low | High | Low |
| :--- | :--- | :--- | :--- | :--- |
| First | \t\t\t\t$\t\t62.18 | \t\t\t\t$\t\t51.12 | \t\t\t\t$\t\t61.28 | \t\t\t\t$\t\t55.03 |
| Second | 64.24 | 57.63 | 63.63 | 55.39 |
| Third | 73.43 | 59.90 | 64.09 | 44.40 |
| Fourth | 80.03 | 71.28 | 56.06 | 42.45 |

Snap-on	has	paid	consecutive	quarterly	cash	dividends,	without	interruption	or	reduction,	since	1939.	Quarterly	dividends	in	2012	were	$0.38	per	share	in	the	fourth quarter	and	$0.34	per	share	in	each	of	the	first	three	quarters	($1.40	per	share	for	the	year).	Quarterly	dividends	in	2011	were	$0.34	per	share	in	the	fourth	quarter	and $0.32	per	share	in	each	of	the	first	three	quarters	($1.30	per	share	for	the	year).	Quarterly	dividends	in	2010	were	$0.32	per	share	in	the	fourth	quarter	and	$0.30	per share	in	each	of	the	first	three	quarters	($1.22	per	share	for	the	year).	Cash	dividends	paid	in	2012,	2011	and	2010	totaled	$81.5	million,	$76.7	million	and	$71.3	million, respectively.	Snap-on's	Board	of	Directors	(the	"Board")	monitors	and	evaluates	the	company's	dividend	practice	quarterly	and	the	Board	may	elect	to	increase, decrease	or	not	pay	a	dividend	on	Snap-on	common	stock	based	upon	the	company's	financial	condition,	results	of	operations,	cash	requirements	and	future	prospects	of Snap-on	and	other	factors	deemed	relevant	by	the	Board.

See	Note	13	to	the	Consolidated	Financial	Statements	for	information	on	securities	authorized	for	issuance	under	equity	compensation	plans.

The	following	chart	discloses	information	regarding	the	shares	of	Snap-on's	common	stock	repurchased	by	the	company	during	the	fourth	quarter	of	fiscal	2012,	all	of which	were	purchased	pursuant	to	the	Board's	authorizations	that	the	company	has	publicly	announced.	Snap-on	has	undertaken	stock	repurchases	from	time	to	time	to offset	dilution	created	by	shares	issued	for	employee	and	franchisee	stock	purchase	plans,	stock	options	and	other	corporate	purposes,	as	well	as	to	repurchase	shares when	the	company	believes	market	conditions	are	favorable.	The	repurchase	of	Snap-on	common	stock	is	at	the	company's	discretion,	subject	to	prevailing	financial and	market	conditions.

# Issuer	Purchases	of	Equity	Securities

|  |  |  | Total	number	of	shares | Approximate	value	of |
| :--- | :--- | :--- | :--- | :--- |
|  | Total\tnumber\tof | Average\tprice | purchased\tas\tpart\tof | shares\tthat\tmay\tyet\tbe |
|  | shares | paid\tper | publicly\tannounced | purchased\tunder\tthe |
| Period | \t\t\t\t\t\t\t\tpurchased | \t\t\t\t\t\t\t\t\t\t\t\tshare | plans\tor\tprograms | plans\tor\tprograms^* |
| 09/30/12\tto\t10/27/12 | – | NA | \t\t\t\t\t\t\t\t– | \t\t\t\t$\t\t183.1\tmillion |
| 10/28/12\tto\t11/24/12 | 200,000 | \t\t\t\t$\t\t76.38 | \t\t\t\t\t\t\t\t200,000 | \t\t\t\t$171.5\tmillion |
| 11/25/12\tto\t12/29/12 | 13,000 | \t\t\t\t$\t\t77.93 | \t\t\t\t\t\t\t\t13,000 | \t\t\t\t$180.9\tmillion |
| Total/Average | \t\t\t\t\t\t\t\t213,000 | \t\t\t\t$\t\t76.47 | \t\t\t\t\t\t\t\t213,000 | N/A |

* Subject	to	further	adjustment	pursuant	to	the	1996	Authorization	described	below,	as	of	December	29,	2012,	the	approximate	value	of	shares	that	may	yet	be	purchased	pursuant	to	the	three	outstanding	Board authorizations	discussed	below	is	$180.9	million.

•In	1996,	the	Board	authorized	the	company	to	repurchase	shares	of	the	company's	common	stock	from	time	to	time	in	the	open	market	or	in	privately	negotiated	transactions	("the	1996	Authorization"). The	1996	Authorization	allows	the	repurchase	of	up	to	the	number	of	shares	issued	or	delivered	from	treasury	from	time	to	time	under	the	various	plans	the	company	has	in	place	that	call	for	the issuance	of	the	company's	common	stock.	Because	the	number	of	shares	that	are	purchased	pursuant	to	the	1996	Authorization	will	change	from	time	to	time	as	(i)	the	company	issues	shares	under	its various	plans;	and	(ii)	shares	are	repurchased	pursuant	to	this	authorization,	the	number	of	shares	authorized	to	be	repurchased	will	vary	from	time	to	time.	The	1996	Authorization	will	expire	when terminated	by	the	Board.	When	calculating	the	approximate	value	of	shares	that	the	company	may	yet	purchase	under	the	1996	Authorization,	the	company	assumed	a	price	of	$76.51,	$77.83	and	$77.34 per	share	of	common	stock	as	of	the	end	of	the	fiscal	2012	months	ended	October	27,	2012,	November	24,	2012,	and	December	29,	2012,	respectively.

•In	1998,	the	Board	authorized	the	repurchase	of	an	aggregate	of	$100	million	of	the	company's	common	stock	("the	1998	Authorization").	The	1998	Authorization	will	expire	when	the	aggregate repurchase	price	limit	is	met,	unless	terminated	earlier	by	the	Board.

•In	1999,	the	Board	authorized	the	repurchase	of	an	aggregate	of	$50	million	of	the	company's	common	stock	("the	1999	Authorization").	The	1999	Authorization	will	expire	when	the	aggregate repurchase	price	limit	is	met,	unless	terminated	earlier	by	the	Board.

# Five-year	Stock	Performance	Graph

The	graph	below	illustrates	the	cumulative	total	shareholder	return	on	Snap-on	common	stock	since	December	31,	2007,	assuming	that	dividends	were	reinvested.	The graph	compares	Snap-on's	performance	to	that	of	the	Standard	&	Poor's	500	Stock	Index	("S&P	500")	and	a	Peer	Group.

# Snap-on	Incorporated	Total	Shareholder	Return	^(1)

| Fiscal	Year	Ended	^(2) | Incorporated | Peer	Group	^(3) | S&P	500 |
| :--- | :--- | :--- | :--- |
| December\t31,\t2007 | \t\t\t\t$\t\t100.00 | \t\t\t\t$\t\t100.00 | \t\t\t\t$\t\t100.00 |
| December\t31,\t2008 | 83.66 | 66.15 | 63.00 |
| December\t31,\t2009 | 93.20 | 84.12 | 79.67 |
| December\t31,\t2010 | 128.21 | 112.02 | 91.67 |
| December\t31,\t2011 | 117.47 | 109.70 | 93.61 |
| December\t31,\t2012 | 187.26 | 129.00 | 108.59 |

(1) Assumes	$100	was	invested	on	December	31,	2007,	and	that	dividends	were	reinvested	quarterly.

(2) The	company's	fiscal	year	ends	on	the	Saturday	that	is	on	or	nearest	to	December	31	of	each	year;	for	ease	of	calculation,	the	fiscal	year	end	is	assumed	to	be	December	31.

(3) The	Peer	Group	consists	of:	Stanley	Black	&	Decker,	Inc.,	Danaher	Corporation,	Emerson	Electric	Co.,	Genuine	Parts	Company,	Newell	Rubbermaid	Inc.,	Pentair	Ltd.,	SPX	Corporation	and	W.W.	Grainger,	Inc. Cooper	Industries	plc,	a	former	member	of	the	Peer	Group,	was	removed,	as	it	was	acquired	by	a	larger,	non-comparable	company	in	2012.

# Item	6:	Selected	Financial	Data

The	selected	financial	data	presented	below	has	been	derived	from,	and	should	be	read	in	conjunction	with,	the	respective	historical	consolidated	financial	statements	of the	company,	including	the	notes	thereto,	and	"Part	II,	Item	7,	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations."

| (Amounts	in	millions,	except	per	share	data) | 2012 | 2011 | 2010 | 2009 | 2008 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Results\tof\tOperations |  |  |  |  |  |
| Net\tsales | \t\t\t\t$\t\t2,937.9 | \t\t\t\t$\t\t2,854.2 | \t\t\t\t$\t\t2,619.2 | \t\t\t\t$\t\t2,362.5 | \t\t\t\t$\t\t2,853.3 |
| Gross\tprofit | 1,390.0 | 1,337.9 | 1,211.1 | 1,057.6 | 1,284.6 |
| Operating\texpenses | 980.3 | 953.7 | 894.1 | 824.4 | 933.1 |
| Operating\tearnings\tbefore\tfinancial\tservices | 409.7 | 384.2 | 317.0 | 233.2 | 351.5 |
| Financial\tservices\trevenue | 161.3 | 124.3 | 62.3 | 58.3 | 81.4 |
| Financial\tservices\texpenses | 54.6 | 51.4 | 47.9 | 40.8 | 44.1 |
| Financial\tservices\t–\tarbitration\tsettlement\tgain | – | 18.0 | – | – | – |
| Operating\tearnings\tfrom\tfinancial\tservices | 106.7 | 90.9 | 14.4 | 17.5 | 37.3 |
| Operating\tearnings | 516.4 | 475.1 | 331.4 | 250.7 | 388.8 |
| Interest\texpense | 55.8 | 61.2 | 54.8 | 47.7 | 33.8 |
| Earnings\tbefore\tincome\ttaxes\tand\tequity\tearnings | 460.2 | 412.9 | 277.4 | 205.3 | 357.8 |
| Income\ttax\texpense | 148.2 | 133.7 | 87.6 | 62.7 | 117.8 |
| Earnings\tbefore\tequity\tearnings | 312.0 | 279.2 | 189.8 | 142.6 | 240.0 |
| Equity\tearnings,\tnet\tof\ttax | 2.6 | 4.6 | 3.2 | 1.1 | 3.6 |
| Net\tearnings | 314.6 | 283.8 | 193.0 | 143.7 | 243.6 |
| Net\tearnings\tattributable\tto\tnoncontrolling\tinterests | (8.5) | (7.5) | (6.5) | (9.5) | (6.9) |
| Net\tearnings\tattributable\tto\tSnap-on\tInc. | 306.1 | 276.3 | 186.5 | 134.2 | 236.7 |
| Financial\tPosition |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | \t\t\t\t$214.5 | \t\t\t\t$185.6 | \t\t\t\t$572.2 | \t\t\t\t$699.4 | \t\t\t\t$115.8 |
| Trade\tand\tother\taccounts\treceivable\t–\tnet | 497.9 | 463.5 | 443.3 | 414.4 | 462.2 |
| Finance\treceivables\t–\tnet | 323.1 | 277.2 | 215.3 | 122.3 | 37.1 |
| Contract\treceivables\t–\tnet | 62.7 | 49.7 | 45.6 | 32.9 | 22.8 |
| Inventories\t–\tnet | 404.2 | 386.4 | 329.4 | 274.7 | 359.2 |
| Current\tassets | 1,669.0 | 1,530.7 | 1,765.5 | 1,676.1 | 1,140.7 |
| Property\tand\tequipment\t–\tnet | 375.2 | 352.9 | 344.0 | 347.8 | 327.8 |
| Total\tassets | 3,902.3 | 3,672.9 | 3,729.4 | 3,447.4 | 2,710.3 |
| Notes\tpayable\tand\tcurrent\tmaturities\tof\tlong-term\tdebt | 5.2 | 16.2 | 216.0 | 164.7 | 12.0 |
| Accounts\tpayable | 142.5 | 124.6 | 146.1 | 119.8 | 126.0 |
| Current\tliabilities | 589.2 | 583.8 | 881.1 | 739.9 | 547.5 |
| Long-term\tdebt | 970.4 | 967.9 | 954.8 | 902.1 | 503.4 |
| Total\tdebt | 975.6 | 984.1 | 1,170.8 | 1,066.8 | 515.4 |
| Total\tshareholders'\tequity\tattributable\tto\tSnap-on\tInc. | 1,802.1 | 1,530.9 | 1,388.5 | 1,290.0 | 1,186.5 |
| Working\tcapital | 1,079.8 | 946.9 | 884.4 | 936.2 | 593.2 |
| Common\tShare\tSummary |  |  |  |  |  |
| Average\tshares\toutstanding\t–\tdiluted | 58.9 | 58.7 | 58.4 | 57.9 | 58.1 |
| Net\tearnings\tper\tshare\tattributable\tto\tSnap-on\tInc.: |  |  |  |  |  |
| Basic | \t\t\t\t$5.26 | \t\t\t\t$4.75 | \t\t\t\t$3.22 | \t\t\t\t$2.33 | \t\t\t\t$4.12 |
| Diluted | 5.20 | 4.71 | 3.19 | 2.32 | 4.07 |
| Cash\tdividends\tpaid\tper\tshare | 1.40 | 1.30 | 1.22 | 1.20 | 1.20 |
| Shareholders'\tequity\tper\tbasic\tshare | 30.96 | 26.30 | 23.94 | 22.36 | 20.63 |
| Fiscal\tyear-end\tper\tshare\tprice | 77.34 | 50.62 | 56.58 | 42.26 | 41.10 |

•Snap-on	terminated	its	financial	services	joint	venture	operating	agreement	with	CIT	in	July	2009	and	subsequently	purchased	CIT's	50%-ownership	interest	in	SOC	for	$8.1	million.	Since	that	time,	Snap-on	has been	providing	financing	for	the	majority	of	new	contracts	originated	by	SOC.	New	contracts	originated	by	SOC	are	reflected	as	finance	and	contract	receivables	on	the	company's	balance	sheet	and	the	company is	recording	the	interest	yield	on	these	receivables	over	the	life	of	the	contracts	as	financial	services	revenue.	Previously,	the	company	recorded	gains	on	contracts	sold	to	CIT	as	financial	services	revenue.

Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations

# Item	7:	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations

# Management	Overview

Unless	otherwise	indicated,	references	in	this	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	to	"fiscal	2012"	or	"2012"	refer to	the	fiscal	year	ended	December	29,	2012;	references	to	"fiscal	2011"	or	"2011"	refer	to	the	fiscal	year	ended	December	31,	2011;	and	references	to	"fiscal	2010"	or "2010"	refer	to	the	fiscal	year	ended	January	1,	2011.	References	in	this	document	to	2012,	2011	and	2010	year	end	refer	to	December	29,	2012,	December	31,	2011, and	January	1,	2011,	respectively.

We	believe	our	2012	operating	performance	evidences	significant	and	continued	progress	on	our	strategic	priorities	and	ongoing	benefits	from	our	Snap-on	Value Creation	Processes	–	a	set	of	strategic	principles	and	processes	designed	to	create	value	and	employed	in	the	areas	of	(i)	safety;	(ii)	quality;	(iii)	customer	connection; (iv)	innovation;	and	(v)	rapid	continuous	improvement.	Further	progress	was	made	in	2012	in	strengthening	our	business	model,	pursuing	geographic	and	customer diversification	and	expanding	our	presence	in	emerging	markets	and	critical	industries.	In	2012,	we	continued	to	invest	in	our	most	important	strategic	growth	initiatives aimed	at	enhancing	the	franchisee	network,	expanding	in	the	vehicle	repair	garage,	extending	in	critical	industries	and	building	in	emerging	markets.	Leveraging capabilities	already	demonstrated	in	the	automotive	repair	arena,	our	"coherent	growth"	strategy	focuses	on	developing	and	expanding	our	professional	customer	base	in both	adjacent	markets,	additional	geographies	and	other	areas,	including	in	critical	industries,	where	the	cost	and	penalties	for	failure	can	be	high.

Our	global	financial	services	operations	continue	to	serve	a	significant	strategic	role	in	providing	financing	options	for	our	franchisees,	their	customers,	and	customers	in other	parts	of	our	business.	We	expect	that	our	global	financial	services	business,	which	includes	both	Snap-on	Credit	LLC	("SOC")	in	the	United	States	and	our	other international	finance	subsidiaries,	will	continue	to	be	a	meaningful	contributor	to	our	operating	earnings.

Net	sales	of	$2,937.9	million	in	2012	increased	$83.7	million,	or	2.9%,	from	2011	levels;	excluding	$46.0	million	of	unfavorable	foreign	currency	translation,	organic (excluding	foreign	currency	translation)	sales	increased	$129.7	million	or	4.6%.	Operating	earnings	before	financial	services	of	$409.7	million	in	2012	were	up	$25.5 million,	 or	 6.6%,	 from	 2011	 levels,	 reflecting	 contributions	 from	 higher	 sales	 and	 improved	 operating	 margins,	 including	 as	 a	 result	 of	 ongoing	 efficiency	 and productivity	initiatives,	as	well	as	benefits	from	restructuring	actions	(collectively,	"Rapid	Continuous	Improvement"	or	"RCI	initiatives").	Operating	earnings	of	$516.4 million	in	2012	increased	$41.3	million,	or	8.7%,	from	operating	earnings	of	$475.1	million	last	year,	which	benefited	from	an	$18.0	million	arbitration	settlement	gain from	the	resolution	of	a	dispute	with	CIT	Group	Inc.	("CIT").	In	2012,	net	earnings	attributable	to	Snap-on	Incorporated	were	$306.1	million,	or	$5.20	per	diluted	share. Net	earnings	attributable	to	Snap-on	Incorporated	in	2011	of	$276.3	million,	or	$4.71	per	diluted	share,	included	$11.1	million	after	tax,	or	$0.19	per	diluted	share,	from the	arbitration	settlement	gain.

In	 the	Commercial	 &	 Industrial	 Group,	 segment	 net	 sales	 of	 $1,125.9	 million	 in	 2012	 increased	 $0.1	 million	 from	 2011	 levels.	 Excluding	 $23.7	 million	 of unfavorable	foreign	currency	translation,	organic	sales	in	2012	increased	$23.8	million,	or	2.2%,	as	higher	sales	to	a	wide	range	of	customers	in	emerging	markets	and critical	industries	were	partially	offset	by	lower	sales	in	the	segment's	European-based	hand	tools	business	as	a	result	of	ongoing	market	weakness	in	that	region. Operating	earnings	of	$127.3	million	in	2012	increased	$3.9	million,	or	3.2%,	from	2011	levels	primarily	due	to	the	higher	organic	sales	and	continued	savings	from RCI	initiatives,	as	well	as	contributions	from	restructuring	initiatives	in	Europe.	In	2012	and	2011,	the	Commercial	&	Industrial	Group	incurred	$8.9	million	and	$5.6 million,	respectively,	of	restructuring	costs,	primarily	intended	to	improve	the	segment's	cost	structure	in	Europe.

The	Commercial	&	Industrial	Group	intends	to	build	on	the	following	strategic	priorities	in	2013:

•	 Continuing	to	invest	in	emerging	market	growth	initiatives,	including	in	China,	India	and	Eastern	Europe;

•Increasing	market	share	by	expanding	our	business	with	existing	customers	and	by	reaching	new	customers	in	critical	industries	and	other	market	segments;

•	 Continuing	to	invest	in	innovation	that	delivers	an	ongoing	stream	of	productivity-enhancing	solutions;	and

•	 Continuing	to	reduce	structural	and	operating	costs	through	RCI	and	restructuring	initiatives.

In	 the	Snap-on	Tools	Group,	 segment	 net	 sales	 of	 $1,272.0	 million	 in	 2012	 increased	 $118.6	 million,	 or	 10.3%,	 from	 2011	 levels;	 excluding	 $4.1	 million	 of unfavorable	foreign	currency	translation,	organic	sales	in	2012	increased	$122.7	million,	or	10.7%,	reflecting	higher	sales	in	both	the	company's	U.S.	and	international franchise	operations.	Operating	earnings	of	$176.4	million	in	2012	increased	$17.9	million,	or	11.3%,	from	2011	levels,	primarily	as	a	result	of	higher	sales,	benefits from	sales	volume	leverage	and	savings	from	ongoing	RCI	and	restructuring	initiatives,	including	contributions	from	the	2011	consolidation	of	the	company's	North American	tool	storage	operations.

The	Snap-on	Tools	Group	made	considerable	progress	in	2012	on	its	fundamental,	strategic	initiatives	to	strengthen	the	group	and	enhance	franchisee	profitability.	In 2013,	the	Snap-on	Tools	Group	intends	to	continue	building	on	the	progress	made	in	2012,	with	specific	initiatives	focused	on	the	following:

•	 Continuing	to	improve	franchisee	productivity,	profitability,	satisfaction	and	commercial	health;

•	 Developing	new	programs	and	products	to	expand	market	coverage	and	penetration;

•	 Continuing	to	invest	in	new	product	innovation	and	development;	and

•Increasing	operational	flexibility	in	back	office	support	functions,	manufacturing	and	the	supply	chain	through	RCI	initiatives	and	investment.

By	focusing	on	these	areas,	we	believe	that	Snap-on,	as	well	as	our	franchisees,	will	have	the	opportunity	to	continue	to	serve	more	customers	more	effectively,	more profitably	and	with	improved	satisfaction.

In	the	Repair	Systems	&	Information	Group,	segment	net	sales	of	$917.1	million	in	2012	decreased	$3.5	million,	or	0.4%,	from	2011	levels;	excluding	$18.7	million of	unfavorable	foreign	currency	translation,	organic	sales	in	2012	increased	$15.2	million	or	1.7%.	The	year-over-year	organic	sales	increase	primarily	reflects	higher sales	of	diagnostics	and	repair	information	products	to	repair	shop	owners	and	managers,	partially	offset	by	reduced	sales	of	undercar	equipment	in	Europe.	Operating earnings	of	$205.7	million	in	2012	increased	$21.0	million,	or	11.4%,	from	2011	levels,	primarily	due	to	savings	from	ongoing	RCI	initiatives.

The	Repair	Systems	&	Information	Group	intends	to	focus	on	the	following	strategic	priorities	in	2013:

•	 Continuing	software	and	hardware	upgrades;

•Expanding	product	range	with	new	products	and	services;

•Leveraging	integration	of	software	solutions;

•	 Continuing	productivity	advancements	through	RCI	initiatives	and	leveraging	of	resources;	and

•Increasing	penetration	in	geographic	markets,	including	emerging	markets.

Financial	Services	revenue	was	$161.3	million	in	2012	and	$124.3	million	in	2011;	originations	of	$677.1	million	in	2012	increased	$71.0	million,	or	11.7%,	from	2011 levels.	Snap-on	has	steadily	grown	its	on-book	finance	portfolio	and	provides	financing	for	the	majority	of	new	loans	originated	by	both	SOC	and	the	company's international	finance	subsidiaries.	As	a	result,	operating	earnings	from	financial	services	of	$106.7	million	in	2012	increased	$15.8	million	from	$90.9	million	last	year, which	included	an	$18.0	million	gain	from	the	2011	arbitration	settlement	with	CIT.

Financial	Services	intends	to	focus	on	the	following	strategic	priorities	in	2013:

•	 Delivering	financial	products	and	services	that	attract	and	sustain	profitable	franchisees	and	support	Snap-on's	strategies	for	expanding	market	coverage and	penetration;

•Improving	our	productivity	levels	and	ensuring	high	quality	in	all	of	our	financial	products	and	processes	through	the	use	of	RCI	initiatives;	and •	 Maintaining	healthy	portfolio	performance	levels.

Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	(continued)

# Cash	Flows

Net	cash	provided	by	operating	activities	was	$329.3	million	in	2012	as	compared	to	$128.5	million	in	2011.	Net	cash	provided	by	operating	activities	of	$128.5	million in	2011	included	the	return	of	$89.8	million	of	cash	withheld	from	CIT	following	the	settlement	of	a	dispute.	In	2011,	Snap-on	recorded	an	$18.0	million	pretax arbitration	settlement	gain	and	paid	$89.8	million	of	cash	to	CIT	representing	$107.8	million	of	cash	previously	withheld	net	of	the	$18.0	million	settlement.	See	Note 15	to	the	Consolidated	Financial	Statements	for	information	on	the	arbitration	settlement.

Net	cash	used	by	investing	activities	of	$173.1	million	in	2012	included	additions	to,	and	collections	of,	finance	receivables	of	$569.6	million	and	$445.5	million, respectively,	as	well	as	$27.0	million	of	proceeds	from	the	sale	of	a	non-strategic	equity	investment	at	book	value	(i.e.,	no	gain	or	loss	on	sale).	Capital	expenditures	in 2012	of	$79.4	million	reflects	continued	investments	related	to	the	company's	execution	of	its	Value	Creation	Processes	around	safety,	quality,	customer	connection, innovation	and	rapid	continuous	improvement.	Capital	expenditures	in	2012	also	included	continued	spending	to	support	the	company's	strategic	growth	initiatives, including	the	expansion	of	manufacturing	capabilities	in	emerging	growth	markets,	as	well	as	in	the	United	States.

Net	cash	used	by	financing	activities	of	$127.0	million	in	2012	included	$81.5	million	for	dividend	payments	to	shareholders	and	$78.1	million	for	the	repurchase	of 1,180,000	shares	of	Snap-on's	common	stock.	These	uses	of	cash	were	partially	offset	by	$46.8	million	of	proceeds	from	stock	purchase	and	option	plan	exercises.	Net cash	used	by	financing	activities	of	$293.7	million	in	2011	included	the	August	2011	repayment	of	$200	million	of	unsecured	notes	upon	maturity	with	available	cash.

# Results	of	Operations

Results	of	operations	for	2012	and	2011	are	as	follows:

| (Amounts	in	millions) | 2012 |  | 2011 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tsales | \t\t\t$2,937.9 | \t\t\t\t\t100.0% | \t\t\t\t$2,854.2 | \t\t\t\t\t100.0% | \t\t\t\t$83.7 | 2.9% |
| Cost\tof\tgoods\tsold | \t\t(1,547.9) | -52.7% | \t\t(1,516.3) | -53.1% | \t\t(31.6) | -2.1% |
| Gross\tprofit | 1,390.0 | 47.3% | 1,337.9 | 46.9% | 52.1 | 3.9% |
| Operating\texpenses | (980.3) | -33.4% | (953.7) | -33.4% | (26.6) | -2.8% |
| Operating\tearnings\tbefore\tfinancial\tservices | 409.7 | 13.9% | 384.2 | 13.5% | 25.5 | 6.6% |
| Financial\tservices\trevenue | 161.3 | 100.0% | 124.3 | 100.0% | 37.0 | 29.8% |
| Financial\tservices\texpenses | (54.6) | -33.8% | (51.4) | -41.4% | (3.2) | -6.2% |
| Operating\tearnings\tfrom\tfinancial\tservices |  |  |  |  |  |  |
| before\tarbitration\tsettlement | 106.7 | 66.2% | 72.9 | 58.6% | 33.8 | 46.4% |
| Arbitration\tsettlement | – | – | 18.0 | 14.5% | (18.0) | NM |
| Operating\tearnings\tfrom\tfinancial\tservices | 106.7 | 66.2% | 90.9 | 73.1% | 15.8 | 17.4% |
| Operating\tearnings | 516.4 | 16.7% | 475.1 | 16.0% | 41.3 | 8.7% |
| Interest\texpense | (55.8) | -1.8% | (61.2) | -2.1% | 5.4 | 8.8% |
| Other\tincome\t(expense)\t–\tnet | (0.4) | – | (1.0) | – | 0.6 | 60.0% |
| Earnings\tbefore\tincome\ttaxes\tand\tequity\tearnings | 460.2 | 14.9% | 412.9 | 13.9% | 47.3 | 11.5% |
| Income\ttax\texpense | (148.2) | -4.8% | (133.7) | -4.5% | (14.5) | \t\t\t\t\t-10.8% |
| Earnings\tbefore\tequity\tearnings | 312.0 | 10.1% | 279.2 | 9.4% | 32.8 | 11.7% |
| Equity\tearnings,\tnet\tof\ttax | 2.6 | 0.1% | 4.6 | 0.1% | (2.0) | -43.5% |
| Net\tearnings | 314.6 | 10.2% | 283.8 | 9.5% | 30.8 | 10.9% |
| Net\tearnings\tattributable\tto\tnoncontrolling\tinterests | (8.5) | -0.3% | (7.5) | -0.2% | (1.0) | -13.3% |
| Net\tearnings\tattributable\tto\tSnap-on\tInc. | \t\t\t$306.1 | 9.9% | \t\t\t\t$276.3 | 9.3% | \t\t\t\t$29.8 | 10.8% |

# NM:	Not	meaningful

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

Net	sales	of	$2,937.9	million	in	2012	increased	$83.7	million,	or	2.9%,	from	2011	levels;	excluding	$46.0	million	of	unfavorable	foreign	currency	translation,	organic sales	increased	$129.7	million	or	4.6%.	Snap-on	has	significant	international	operations	and	is	subject	to	risks	inherent	with	foreign	operations,	including	foreign currency	translation	fluctuations.

Gross	profit	of	$1,390.0	million	in	2012	increased	$52.1	million	as	compared	to	$1,337.9	million	last	year,	and	gross	margin	(gross	profit	as	a	percentage	of	net	sales)	of 47.3%	in	2012	improved	40	basis	points	(100	basis	points	equals	1.0	percent)	from	46.9%	last	year.	The	year-over-year	improvement	in	gross	margin	primarily	reflects savings	from	ongoing	RCI	initiatives	partially	offset	by	$3.3	million	of	higher	restructuring	costs.	Gross	profit	in	2012	reflects	$10.9	million	of	restructuring	costs, including	$6.8	million	for	the	settlement	of	a	pension	plan	following	the	2011	closure	of	the	company's	former	Newmarket,	Canada,	facility;	restructuring	costs	in	2011 totaled	$7.6	million.

Operating	expenses	of	$980.3	million	in	2012	increased	$26.6	million	as	compared	to	$953.7	million	last	year.	As	a	result	of	year-over-year	changes	in	the	company's year-end	stock	price,	operating	expenses	in	2012	included	$14.7	million	of	stock-based	("mark-to-market")	expense;	operating	expenses	in	2011	included	$1.0	million	of mark-to-market	expense.	Restructuring	costs	included	in	operating	expenses	totaled	$5.6	million	and	$4.6	million	in	2012	and	2011,	respectively.	The	operating	expense margin	(operating	expenses	as	a	percentage	of	sales)	of	33.4%	in	2012	was	unchanged	from	2011	as	benefits	from	sales	volume	leverage	and	savings	from	ongoing	RCI initiatives	were	offset	by	higher	mark-to-market	and	other	expenses.

Operating	earnings	before	financial	services	of	$409.7	million	in	2012	increased	$25.5	million	from	2011	levels	despite	$13.7	million	of	higher	mark-to-market	expense. As	a	percentage	of	sales,	operating	earnings	before	financial	services	of	13.9%	in	2012,	which	includes	an	adverse	50	basis	point	impact	from	the	higher	mark-to-market expense,	improved	40	basis	points	from	13.5%	last	year.

In	May	2011,	Snap-on	and	CIT	reached	an	amicable	settlement	of	their	respective	claims	relating	to	payments	during	the	course	of	their	SOC	financial	services	joint venture	and,	in	the	second	quarter	of	2011,	Snap-on	recorded	an	$18.0	million	pretax	($11.1	million	after	tax,	or	$0.19	per	diluted	share)	arbitration	settlement	gain.	The $18.0	million	arbitration	settlement	gain	is	included	in	"Operating	earnings	from	financial	services"	on	the	accompanying	Consolidated	Statement	of	Earnings	for	2011.

Financial	services	operating	earnings	of	$106.7	million	on	revenue	of	$161.3	million	in	2012	compares	with	operating	earnings	(before	arbitration	settlement)	of	$72.9 million	on	revenue	of	$124.3	million	last	year.	The	year-over-year	increases	in	both	revenue	and	operating	earnings	primarily	reflect	the	growth	in	the	company's	on- book	finance	portfolio.	In	2011,	operating	earnings	from	financial	services,	including	the	$18.0	million	arbitration	settlement	gain,	was	$90.9	million.

Operating	earnings	–	The	following	non-GAAP	financial	data	is	being	provided	as	management	believes	that	the	non-GAAP	measures,	which	exclude	last	year's	$18.0 million	arbitration	settlement	gain,	provide	a	more	meaningful	comparison	of	the	company's	year-over-year	operating	performance.

| As	reported | $		516.4 | 16.7% | $		475.1 | 16.0% | $		41.3 | 8.7% |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Less:\tArbitration\tsettlement\tgain | – | – | (18.0) | -0.7% | 18.0 | NM |
| Excluding\tarbitration\tsettlement\tgain | \t\t\t\t$516.4 | \t\t\t\t\t16.7% | \t\t\t\t$457.1 | 15.3% | \t\t\t\t$59.3 | \t\t\t\t\t13.0% |

Percentage	Disclosure:	Calculated	as	a	percentage	of	the	sum	of	Net	sales	and	Financial	services	revenue.

Operating	earnings	of	$516.4	million	in	2012	increased	$59.3	million,	or	13.0%,	as	compared	with	operating	earnings	of	$457.1	million,	excluding	last	year's	$18.0 million	arbitration	settlement	gain.	As	a	percentage	of	revenues	(net	sales	plus	financial	services	revenue),	operating	earnings	of	16.7%	in	2012	improved	140	basis points	from	15.3%	(excluding	the	arbitration	settlement	gain)	last	year.	Operating	earnings	in	2011,	including	the	$18.0	million	arbitration	settlement	gain,	were	$475.1 million.

Interest	expense	of	$55.8	million	in	2012	decreased	$5.4	million	from	$61.2	million	last	year	primarily	due	to	lower	average	debt	levels.	See	Note	9	to	the	Consolidated Financial	Statements	for	information	on	Snap-on's	debt	and	credit	facilities.

Other	income	(expense)	–	net	was	expense	of	$0.4	million	in	2012	and	$1.0	million	in	2011.	Other	income	(expense)	–	net	primarily	includes	interest	income	and hedging	and	currency	exchange	rate	transaction	gains	and	losses.	See	Note	16	to	the	Consolidated	Financial	Statements	for	information	on	other	income	(expense)	–	net.

Snap-on's	effective	income	tax	rate	on	earnings	attributable	to	Snap-on	was	32.8%	in	2012	and	33.0%	in	2011.	See	Note	8	to	the	Consolidated	Financial	Statements	for further	information	on	income	taxes.

Net	earnings	attributable	to	Snap-on	in	2012	were	$306.1	million	or	$5.20	per	diluted	share.	Net	earnings	attributable	to	Snap-on	in	2011	of	$276.3	million,	or	$4.71	per diluted	share,	included	an	$11.1	million	after-tax	gain,	or	$0.19	per	diluted	share,	from	the	arbitration	settlement	with	CIT.

# Exit	and	Disposal	Activities

Snap-on	recorded	costs	of	$16.5	million	for	exit	and	disposal	activities	in	2012	as	compared	to	$12.2	million	of	such	costs	in	2011.	See	Note	7	to	the	Consolidated Financial	Statements	for	information	on	Snap-on's	exit	and	disposal	activities.

# Segment	Results

Snap-on's	business	segments	are	based	on	the	organization	structure	used	by	management	for	making	operating	and	investment	decisions	and	for	assessing	performance. Snap-on's	reportable	business	segments	are:	(i)	the	Commercial	&	Industrial	Group;	(ii)	the	Snap-on	Tools	Group;	(iii)	the	Repair	Systems	&	Information	Group;	and (iv)	Financial	Services.	The	Commercial	&	Industrial	Group	consists	of	business	operations	serving	a	broad	range	of	industrial	and	commercial	customers	worldwide, primarily	through	direct	and	distributor	channels.	The	Snap-on	Tools	Group	consists	of	business	operations	primarily	serving	automotive	service	technicians	through	the company's	worldwide	mobile	tool	distribution	channel.	The	Repair	Systems	&	Information	Group	consists	of	business	operations	serving	other	professional	vehicle repair	customers	worldwide,	primarily	owners	and	managers	of	independent	repair	shops	and	original	equipment	manufacturer	("OEM")	dealership	service	and	repair shops,	through	direct	and	distributor	channels.	Financial	Services	consists	of	the	business	operations	of	Snap-on's	finance	subsidiaries.

# Commercial	&	Industrial	Group

| (Amounts	in	millions) | 2012 |  | 2011 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| External\tnet\tsales | \t\t\t\t$940.6 | 83.5% | \t\t\t\t$955.9 | 84.9% | \t\t\t\t$\t\t(15.3) | \t -1.6% |
| Intersegment\tnet\tsales | 185.3 | 16.5% | 169.9 | 15.1% | 15.4 | 9.1% |
| Segment\tnet\tsales | \t\t1,125.9 | \t\t\t\t\t100.0% | 1,125.8 | \t\t\t\t\t100.0% | 0.1 | \tNM |
| Cost\tof\tgoods\tsold | (710.9) | -63.1% | (710.6) | -63.1% | (0.3) | \tNM |
| Gross\tprofit | 415.0 | 36.9% | 415.2 | 36.9% | (0.2) | \tNM |
| Operating\texpenses | (287.7) | -25.6% | (291.8) | -25.9% | 4.1 | 1.4% |
| Segment\toperating\tearnings | \t\t\t\t$127.3 | 11.3% | \t\t\t\t$123.4 | 11.0% | \t\t\t\t$3.9 | 3.2% |

Segment	net	sales	of	$1,125.9	million	in	2012	increased	$0.1	million	from	2011	levels;	excluding	$23.7	million	of	unfavorable	foreign	currency	translation,	organic sales	increased	$23.8	million	or	2.2%.	The	higher	year-over-year	organic	sales	primarily	reflects	a	mid	single-digit	sales	increase	to	customers	in	critical	industries	and	a double-digit	sales	gain	in	the	emerging	markets	of	Asia.	These	increases	were	partially	offset	by	a	mid	single-digit	sales	decline	in	the	segment's	European-based	hand tools	business	as	a	result	of	continued	market	weakness	in	that	region.

Segment	gross	profit	of	$415.0	million	in	2012	compared	with	$415.2	million	last	year,	and	gross	margin	of	36.9%	in	2012	was	unchanged	from	2011.	Gross	profit	in 2012	and	2011	reflects	restructuring	costs	of	$3.6	million	and	$2.9	million,	respectively,	primarily	to	improve	the	segment's	cost	structure	in	Europe.

Segment	operating	expenses	of	$287.7	million	in	2012	decreased	$4.1	million	from	2011	levels.	The	operating	expense	margin	of	25.6%	in	2012	improved	30	basis points	 from	 25.9%	 last	 year	 primarily	 due	 to	 benefits	 from	 organic	 sales	 volume	 leverage	 and	 savings	 from	 ongoing	 RCI	 initiatives,	 partially	 offset	 by	 higher restructuring	costs	in	Europe.	Restructuring	costs	included	in	operating	expenses	were	$5.3	million	and	$2.7	million	in	2012	and	2011,	respectively.

As	a	result	of	these	factors,	segment	operating	earnings	of	$127.3	million	in	2012,	including	$3.3	million	of	higher	year-over-year	restructuring	costs,	increased	$3.9 million,	or	3.2%,	from	2011	levels;	favorable	foreign	currency	effects	in	2012	contributed	$3.9	million.	Operating	margin	(segment	operating	earnings	as	a	percentage	of segment	net	sales)	for	the	Commercial	&	Industrial	Group	of	11.3%	in	2012	increased	30	basis	points	from	11.0%	last	year.

# Snap-on	Tools	Group

| (Amounts	in	millions) | 2012 |  | 2011 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Segment\tnet\tsales | \t\t\t\t$\t\t1,272.0 | \t\t\t\t\t100.0% | \t\t\t\t$\t\t1,153.4 | \t\t\t\t\t100.0% | \t\t\t\t$\t\t118.6 | 10.3% |
| Cost\tof\tgoods\tsold | (728.9) | -57.3% | (647.0) | -56.1% | (81.9) | \t\t\t\t\t-12.7% |
| Gross\tprofit | 543.1 | 42.7% | 506.4 | 43.9% | 36.7 | 7.2% |
| Operating\texpenses | (366.7) | -28.8% | (347.9) | -30.2% | (18.8) | -5.4% |
| Segment\toperating\tearnings | \t\t\t\t$176.4 | 13.9% | \t\t\t\t$158.5 | 13.7% | \t\t\t\t$17.9 | 11.3% |

Segment	net	sales	of	$1,272.0	million	in	2012	increased	$118.6	million,	or	10.3%,	from	2011	levels.	Excluding	$4.1	million	of	unfavorable	foreign	currency	translation, organic	sales	increased	$122.7	million,	or	10.7%,	reflecting	a	double-digit	sales	increase	in	the	company's	U.S.	franchise	operations	and	a	mid	single-digit	sales	increase in	the	company's	international	franchise	operations.

Segment	gross	profit	of	$543.1	million	in	2012	increased	$36.7	million	from	2011	levels.	Gross	margin	of	42.7%	in	2012	decreased	120	basis	points	from	43.9%	last year	 primarily	 due	 to	 increased	 promotional	 programs	 associated	 with	 sales	 gains,	 and	 higher	 restructuring	 costs.	 Gross	 profit	 in	 2012	 reflects	 $7.1	 million	 of restructuring	costs,	including	$6.8	million	for	the	settlement	of	a	pension	plan	following	the	2011	closure	of	the	company's	former	Newmarket,	Canada,	facility; restructuring	costs	in	2011	totaled	$3.7	million.

Segment	operating	expenses	of	$366.7	million	in	2012	increased	$18.8	million	from	2011	levels	primarily	due	to	higher	volume-related	and	other	expenses,	partially offset	by	savings	from	ongoing	RCI	initiatives.	Restructuring	costs	included	in	operating	expenses	were	$0.1	million	and	$0.6	million	in	2012	and	2011,	respectively. The	operating	expense	margin	of	28.8%	in	2012	improved	140	basis	points	from	30.2%	last	year	primarily	due	to	benefits	from	sales	volume	leverage	and	contributions from	ongoing	RCI	initiatives.

As	a	result	of	these	factors,	segment	operating	earnings	of	$176.4	million	in	2012,	including	$2.0	million	of	unfavorable	foreign	currency	effects,	increased	$17.9 million,	or	11.3%,	from	2011	levels.	Operating	margin	for	the	Snap-on	Tools	Group	of	13.9%	in	2012	improved	20	basis	points	from	13.7%	last	year.

# Repair	Systems	&	Information	Group

| (Amounts	in	millions) | 2012 |  | 2011 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| External\tnet\tsales | \t\t\t\t$725.3 | 79.1% | \t\t\t\t$744.9 | 80.9% | \t\t\t\t$\t\t(19.6) | \t\t\t\t\t-2.6% |
| Intersegment\tnet\tsales | 191.8 | 20.9% | 175.7 | 19.1% | 16.1 | 9.2% |
| Segment\tnet\tsales | 917.1 | \t\t\t\t\t100.0% | 920.6 | 100.0% | (3.5) | -0.4% |
| Cost\tof\tgoods\tsold | (485.2) | -52.9% | \t\t(504.3) | -54.8% | 19.1 | 3.8% |
| Gross\tprofit | 431.9 | 47.1% | 416.3 | 45.2% | 15.6 | 3.7% |
| Operating\texpenses | (226.2) | -24.7% | (231.6) | \t\t\t\t\t-25.1% | 5.4 | 2.3% |
| Segment\toperating\tearnings | \t\t\t\t$205.7 | 22.4% | \t\t\t\t$184.7 | 20.1% | \t\t\t\t$21.0 | 11.4% |

Segment	net	sales	of	$917.1	million	in	2012	decreased	$3.5	million,	or	0.4%,	from	2011	levels.	Excluding	$18.7	million	of	unfavorable	foreign	currency	translation, organic	sales	increased	$15.2	million,	or	1.7%,	primarily	due	to	a	mid	single-digit	increase	in	sales	of	diagnostics	and	repair	information	products,	partially	offset	by	a mid	single-digit	decline	in	undercar	equipment	sales	in	Europe.

Segment	gross	profit	of	$431.9	million	in	2012	increased	$15.6	million	from	2011	levels.	Gross	margin	in	2012	of	47.1%	improved	190	basis	points	from	45.2%	last year	primarily	due	to	a	more	favorable	sales	mix	that	included	higher	sales	of	diagnostics	and	repair	information	products	as	well	as	savings	from	ongoing	RCI initiatives.	Gross	profit	in	2012	and	2011	reflects	restructuring	costs	of	$0.2	million	and	$1.0	million,	respectively.

Segment	operating	expenses	of	$226.2	million	in	2012	decreased	$5.4	million	from	2011	levels	and	the	operating	expense	margin	of	24.7%	improved	40	basis	points from	25.1%	last	year	primarily	due	to	contributions	from	ongoing	RCI	initiatives.	Restructuring	costs	included	in	operating	expenses	were	$0.2	million	and	$1.1	million in	2012	and	2011,	respectively.

As	a	result	of	these	factors,	segment	operating	earnings	of	$205.7	million	in	2012,	including	$3.1	million	of	unfavorable	foreign	currency	effects,	increased	$21.0 million,	or	11.4%,	from	2011	levels.	Operating	margin	for	the	Repair	Systems	&	Information	Group	of	22.4%	in	2012	increased	230	basis	points	from	20.1%	last	year.

| (Amounts	in	millions) | 2012 |  | 2011 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Financial\tservices\trevenue | \t\t\t\t$161.3 | \t\t\t\t\t100.0% | \t\t\t\t$124.3 | \t\t\t\t\t100.0% | \t\t\t\t$37.0 | 29.8% |
| Financial\tservices\texpenses | (54.6) | -33.8% | \t\t(51.4) | -41.4% | (3.2) | -6.2% |
| Segment\toperating\tearnings\tbefore\tarbitration\tsettlement | 106.7 | 66.2% | 72.9 | 58.6% | 33.8 | 46.4% |
| Arbitration\tsettlement | – | – | 18.0 | 14.5% | \t\t(18.0) | NM |
| Segment\toperating\tearnings | \t\t\t\t$\t\t106.7 | 66.2% | \t\t\t\t$90.9 | 73.1% | \t\t\t\t$15.8 | \t\t\t\t\t17.4% |

Financial	services	operating	earnings	of	$106.7	million	on	revenue	of	$161.3	million	in	2012	compares	with	operating	earnings	(before	arbitration	settlement)	of	$72.9 million	on	revenue	of	$124.3	million	last	year.	Financial	services	operating	earnings,	including	the	$18.0	million	arbitration	settlement	gain	discussed	above,	were	$90.9 million	 in	 2011.	The	 year-over-year	 increases	 in	 both	 revenue	 and	 operating	 earnings	 primarily	 reflect	 the	 growth	 in	 the	 company's	 on-book	 finance	 portfolio. Originations	of	$677.1	million	in	2012	increased	$71.0	million,	or	11.7%,	from	2011	levels.	See	Notes	1	and	15	to	the	Consolidated	Financial	Statements	for	further information	on	SOC.

Financial	services	expenses	of	$54.6	million	and	$51.4	million	in	2012	and	2011,	respectively,	primarily	include	personnel-related	and	other	general	and	administrative costs	necessary	to	support	the	portfolios	of	receivables	owned	by	Snap-on	and	by	CIT	(collectively,	the	"serviced	portfolio").	These	expenses	are	generally	more dependent	on	the	change	in	size	of	the	serviced	portfolio	than	they	are	on	the	revenue	of	this	segment.	Financial	services	expenses	also	include	doubtful	accounts provisions	for	the	finance	and	contract	receivables	owned	by	Snap-on.	As	a	percentage	of	the	average	serviced	portfolio,	financial	services	expenses	were	5.1%	in	both years.

# Corporate

Snap-on's	general	corporate	expenses	of	$99.7	million	in	2012	increased	$17.3	million	from	$82.4	million	last	year	primarily	due	to	$13.7	million	of	higher	mark-to- market	expense.	As	a	result	of	changes	in	the	company's	year-end	stock	price,	corporate	expenses	in	2012	included	$14.7	million	of	mark-to-market	expense,	while corporate	expenses	in	2011	included	$1.0	million	of	such	expense.

# Fourth	Quarter

Results	of	operations	for	the	fourth	quarters	of	2012	and	2011	are	as	follows:

| (Amounts	in	millions) | 2012 |  | 2011 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tsales | \t\t\t\t$753.2 | \t\t\t\t\t100.0% | \t\t\t\t$736.6 | \t\t\t\t\t100.0% | \t\t\t\t$16.6 | 2.3% |
| Cost\tof\tgoods\tsold | \t\t(401.2) | -53.3% | \t\t(400.8) | -54.4% | (0.4) | -0.1% |
| Gross\tprofit | 352.0 | 46.7% | 335.8 | 45.6% | 16.2 | 4.8% |
| Operating\texpenses | (240.6) | -31.9% | (232.0) | -31.5% | \t\t(8.6) | -3.7% |
| Operating\tearnings\tbefore\tfinancial\tservices | 111.4 | 14.8% | 103.8 | 14.1% | 7.6 | 7.3% |
| Financial\tservices\trevenue | 42.9 | 100.0% | 35.5 | 100.0% | 7.4 | 20.8% |
| Financial\tservices\texpenses | (13.6) | -31.7% | (13.4) | -37.7% | (0.2) | -1.5% |
| Operating\tearnings\tfrom\tfinancial\tservices | 29.3 | 68.3% | 22.1 | 62.3% | 7.2 | 32.6% |
| Operating\tearnings | 140.7 | 17.7% | 125.9 | 16.3% | 14.8 | 11.8% |
| Interest\texpense | (14.4) | -1.8% | (13.5) | -1.8% | (0.9) | -6.7% |
| Other\tincome\t(expense)\t–\tnet | 0.1 | – | (1.0) | -0.1% | 1.1 | NM |
| Earnings\tbefore\tincome\ttaxes\tand\tequity\tearnings | 126.4 | 15.9% | 111.4 | 14.4% | 15.0 | 13.5% |
| Income\ttax\texpense | (39.8) | -5.0% | (36.2) | -4.7% | (3.6) | -9.9% |
| Earnings\tbefore\tequity\tearnings | 86.6 | 10.9% | 75.2 | 9.7% | 11.4 | 15.2% |
| Equity\tearnings,\tnet\tof\ttax | 0.1 | – | 0.9 | 0.1% | (0.8) | NM |
| Net\tearnings | 86.7 | 10.9% | 76.1 | 9.8% | 10.6 | 13.9% |
| Net\tearnings\tattributable\tto\tnoncontrolling\tinterests | (2.1) | -0.3% | (1.8) | -0.2% | (0.3) | \t\t\t\t\t-16.7% |
| Net\tearnings\tattributable\tto\tSnap-on\tInc. | \t\t\t\t$84.6 | 10.6% | \t\t\t\t$74.3 | 9.6% | \t\t\t\t$10.3 | 13.9% |

Net	sales	of	$753.2	million	in	the	fourth	quarter	of	2012	increased	$16.6	million,	or	2.3%,	from	2011	levels;	excluding	$1.9	million	of	unfavorable	foreign	currency translation,	organic	sales	increased	$18.5	million	or	2.5%.

Gross	profit	of	$352.0	million	in	the	fourth	quarter	of	2012	increased	$16.2	million	as	compared	to	$335.8	million	last	year,	and	gross	margin	of	46.7%	in	the	quarter improved	110	basis	points	from	45.6%	last	year.	The	year-over-year	improvement	in	gross	margin	primarily	reflects	savings	from	ongoing	RCI	initiatives	and	lower restructuring	costs.	No	restructuring	costs	were	incurred	in	the	fourth	quarter	of	2012;	gross	profit	in	the	fourth	quarter	of	2011	included	$3.9	million	of	restructuring costs.

Operating	expenses	of	$240.6	million	in	the	fourth	quarter	of	2012	increased	$8.6	million	as	compared	to	$232.0	million	last	year,	primarily	due	to	higher	volume- related	and	other	expenses.	No	restructuring	costs	were	incurred	in	the	fourth	quarter	of	2012;	restructuring	costs	included	in	operating	expenses	totaled	$0.5	million	in the	fourth	quarter	of	2011.	The	fourth-quarter	2012	operating	expense	margin	of	31.9%	increased	40	basis	points	from	31.5%	last	year.

Operating	earnings	before	financial	services	of	$111.4	million	in	the	fourth	quarter	of	2012	increased	$7.6	million	from	2011	levels.	As	a	percentage	of	sales,	operating earnings	before	financial	services	of	14.8%	in	the	quarter	increased	70	basis	points	from	14.1%	last	year.

Financial	services	operating	earnings	of	$29.3	million	on	revenue	of	$42.9	million	in	the	fourth	quarter	of	2012	compares	with	operating	earnings	of	$22.1	million	on revenue	of	$35.5	million	last	year.	The	year-over-year	increases	in	both	revenue	and	operating	earnings	primarily	reflect	the	growth	in	the	company's	on-book	finance portfolio.

Operating	earnings	of	$140.7	million	in	the	fourth	quarter	of	2012	increased	$14.8	million,	or	11.8%,	as	compared	with	operating	earnings	of	$125.9	million	last	year. As	a	percentage	of	revenues,	operating	earnings	of	17.7%	in	the	fourth	quarter	of	2012	improved	140	basis	points	from	16.3%	last	year.

Interest	expense	of	$14.4	million	in	the	fourth	quarter	of	2012	compared	with	interest	expense	of	$13.5	million	last	year.	See	Note	9	to	the	Consolidated	Financial Statements	for	information	on	Snap-on's	debt	and	credit	facilities.

Other	income	(expense)	–	net	was	income	of	$0.1	million	in	the	fourth	quarter	of	2012	as	compared	to	expense	of	$1.0	million	last	year.	See	Note	16	to	the	Consolidated Financial	Statements	for	information	on	other	income	(expense)	–	net.

Snap-on's	effective	income	tax	rate	on	earnings	attributable	to	Snap-on	was	32.0%	in	the	fourth	quarter	of	2012	and	33.0%	in	the	fourth	quarter	of	2011.	See	Note	8	to the	Consolidated	Financial	Statements	for	information	on	income	taxes.

Net	earnings	attributable	to	Snap-on	of	$84.6	million,	or	$1.43	per	diluted	share,	in	the	fourth	quarter	of	2012	compared	with	net	earnings	attributable	to	Snap-on	of $74.3	million,	or	$1.27	per	diluted	share,	in	the	fourth	quarter	of	2011.

| (Amounts	in	millions) | 2012 |  | 2011 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| External\tnet\tsales | \t\t\t\t$236.8 | 85.9% | \t\t\t\t$250.8 | 84.9% | \t\t\t\t$\t\t(14.0) | -5.6% |
| Intersegment\tnet\tsales | 38.8 | 14.1% | 44.6 | 15.1% | (5.8) | -13.0% |
| Segment\tnet\tsales | 275.6 | \t\t\t\t\t100.0% | 295.4 | \t\t\t\t\t100.0% | (19.8) | -6.7% |
| Cost\tof\tgoods\tsold | \t\t(170.6) | -61.9% | \t\t(189.0) | -64.0% | 18.4 | 9.7% |
| Gross\tprofit | 105.0 | 38.1% | 106.4 | 36.0% | (1.4) | -1.3% |
| Operating\texpenses | (73.1) | -26.5% | (73.4) | -24.8% | 0.3 | 0.4% |
| Segment\toperating\tearnings | \t\t\t\t$31.9 | 11.6% | \t\t\t\t$33.0 | 11.2% | \t\t\t\t$(1.1) | \t\t\t\t\t-3.3% |

Segment	net	sales	of	$275.6	million	in	the	fourth	quarter	of	2012	decreased	$19.8	million,	or	6.7%,	from	2011	levels;	excluding	$1.7	million	of	unfavorable	currency translation,	organic	sales	decreased	$18.1	million	or	6.2%.	The	lower	year-over-year	organic	sales	includes	double-digit	declines	in	sales	to	the	military	and	in	the segment's	European-based	hand	tools	business	as	a	result	of	continued	economic	weakness	in	that	region.	These	decreases	were	partially	offset	by	sales	gains	in	other critical	industries,	as	well	as	a	double-digit	sales	gain	to	customers	in	the	emerging	markets	of	Asia.

Segment	gross	profit	of	$105.0	million	in	the	fourth	quarter	of	2012	decreased	$1.4	million	from	2011	levels.	Gross	margin	of	38.1%	in	the	quarter	improved	210	basis points	from	36.0%	last	year	primarily	due	to	lower	restructuring	costs	as	well	as	savings	from	ongoing	RCI	initiatives,	particularly	in	Europe.	No	restructuring	costs were	incurred	in	the	fourth	quarter	of	2012;	gross	profit	in	the	fourth	quarter	of	2011	included	$2.5	million	of	restructuring	costs.

Segment	operating	expenses	of	$73.1	million	in	the	fourth	quarter	of	2012	decreased	$0.3	million	from	2011	levels.	The	operating	expense	margin	of	26.5%	in	the quarter	increased	170	basis	points	from	24.8%	last	year	primarily	as	a	result	of	the	lower	sales.

As	a	result	of	these	factors,	segment	operating	earnings	of	$31.9	million	in	the	fourth	quarter	of	2012,	including	$1.2	million	of	favorable	foreign	currency	effects, decreased	$1.1	million,	or	3.3%,	from	2011	levels.	Operating	margin	for	the	Commercial	&	Industrial	Group	of	11.6%	in	the	fourth	quarter	of	2012	improved	40	basis points	from	11.2%	last	year.

| (Amounts	in	millions) | 2012 |  | 2011 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Segment\tnet\tsales | \t\t\t\t$321.6 | \t\t\t\t\t100.0% | \t\t\t\t$292.8 | 100.0% | \t\t\t\t$28.8 | 9.8% |
| Cost\tof\tgoods\tsold | \t\t(185.8) | -57.8% | \t\t(168.9) | -57.7% | \t\t(16.9) | \t\t\t\t\t-10.0% |
| Gross\tprofit | 135.8 | 42.2% | 123.9 | 42.3% | 11.9 | 9.6% |
| Operating\texpenses | (90.2) | -28.0% | (84.3) | \t\t\t\t\t-28.8% | (5.9) | -7.0% |
| Segment\toperating\tearnings | \t\t\t\t$45.6 | \t\t\t\t14.2% | \t\t\t\t$39.6 | 13.5% | \t\t\t\t$6.0 | 15.2% |

Segment	net	sales	of	$321.6	million	in	the	fourth	quarter	of	2012	increased	$28.8	million,	or	9.8%,	from	2011	levels.	Excluding	$1.4	million	of	favorable	foreign currency	translation,	organic	sales	increased	$27.4	million,	or	9.3%,	reflecting	high	single-digit	sales	increases	across	both	the	company's	U.S.	and	 international franchise	operations.

Segment	gross	profit	of	$135.8	million	in	the	fourth	quarter	of	2012	increased	$11.9	million	from	2011	levels.	Gross	margin	of	42.2%	in	the	quarter	compared	with 42.3%	last	year.	No	restructuring	costs	were	incurred	in	the	fourth	quarter	of	2012;	gross	profit	in	the	fourth	quarter	of	2011	included	$0.3	million	of	restructuring	costs.

Segment	operating	expenses	of	$90.2	million	in	the	fourth	quarter	of	2012	increased	$5.9	million	from	2011	levels	primarily	due	to	higher	volume-related	and	other expenses.	The	operating	expense	margin	of	28.0%	in	the	quarter	improved	80	basis	points	from	28.8%	last	year	primarily	due	to	benefits	from	sales	volume	leverage.

As	a	result	of	these	factors,	segment	operating	earnings	of	$45.6	million	in	the	fourth	quarter	of	2012,	including	$1.2	million	of	unfavorable	foreign	currency	effects, increased	$6.0	million,	or	15.2%,	from	2011	levels.	Operating	margin	for	the	Snap-on	Tools	Group	of	14.2%	in	the	fourth	quarter	of	2012	increased	70	basis	points	from 13.5%	last	year.

| (Amounts	in	millions) | 2012 |  | 2011 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| External\tnet\tsales | \t\t\t\t$194.8 | 80.6% | \t\t\t\t$193.0 | 81.6% | \t\t\t\t$1.8 | 0.9% |
| Intersegment\tnet\tsales | 46.8 | 19.4% | 43.5 | 18.4% | 3.3 | 7.6% |
| Segment\tnet\tsales | 241.6 | \t\t\t\t\t100.0% | 236.5 | \t\t\t\t\t100.0% | 5.1 | 2.2% |
| Cost\tof\tgoods\tsold | \t\t(130.4) | -54.0% | \t\t(131.0) | -55.4% | 0.6 | 0.5% |
| Gross\tprofit | 111.2 | 46.0% | 105.5 | 44.6% | 5.7 | 5.4% |
| Operating\texpenses | (55.8) | -23.1% | (56.3) | -23.8% | 0.5 | 0.9% |
| Segment\toperating\tearnings | \t\t\t\t$55.4 | 22.9% | \t\t\t\t$49.2 | 20.8% | \t\t\t\t$\t\t\t\t\t\t6.2 | \t\t\t\t\t12.6% |

Segment	net	sales	of	$241.6	million	in	the	fourth	quarter	of	2012	increased	$5.1	million,	or	2.2%,	from	2011	levels.	Excluding	$1.6	million	of	unfavorable	foreign currency	translation,	organic	sales	increased	$6.7	million,	or	2.9%,	including	low	single-digit	gains	in	both	sales	of	diagnostics	and	repair	information	products	to	repair shop	owners	and	managers	and	sales	to	OEM	dealerships.

Segment	gross	profit	of	$111.2	million	in	the	fourth	quarter	of	2012	increased	$5.7	million	from	2011	levels.	Gross	margin	of	46.0%	in	the	fourth	quarter	of	2012 improved	140	basis	points	from	44.6%	last	year	primarily	due	to	savings	from	ongoing	RCI	initiatives	and	lower	restructuring	costs.	No	restructuring	costs	were incurred	in	the	fourth	quarter	of	2012;	gross	profit	in	the	fourth	quarter	of	2011	included	$1.1	million	of	restructuring	costs.

Segment	operating	expenses	of	$55.8	million	in	the	fourth	quarter	of	2012	decreased	$0.5	million	from	2011	levels.	The	operating	expense	margin	of	23.1%	in	the quarter	improved	70	basis	points	from	23.8%	last	year	primarily	due	to	benefits	from	sales	volume	leverage	and	contributions	from	ongoing	RCI	initiatives.	No restructuring	costs	were	incurred	in	the	fourth	quarter	of	2012;	restructuring	costs	included	in	operating	expenses	totaled	$0.5	million	in	the	fourth	quarter	of	2011.

As	a	result	of	these	factors,	segment	operating	earnings	of	$55.4	million	in	the	fourth	quarter	of	2012,	including	$0.5	million	of	unfavorable	foreign	currency	effects, increased	$6.2	million,	or	12.6%,	from	2011	levels.	Operating	margin	for	the	Repair	Systems	&	Information	Group	of	22.9%	in	the	fourth	quarter	of	2012	increased	210 basis	points	from	20.8%	last	year.

| (Amounts	in	millions) | 2012 |  | 2011 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Financial\tservices\trevenue | \t\t\t\t$42.9 | \t\t\t\t\t100.0% | \t\t\t\t$35.5 | \t\t\t\t\t100.0% | \t\t\t\t$7.4 | 20.8% |
| Financial\tservices\texpenses | \t\t(13.6) | -31.7% | \t\t(13.4) | -37.7% | \t\t(0.2) | \t\t\t\t\t-1.5% |
| Segment\toperating\tearnings | \t\t\t\t$29.3 | 68.3% | \t\t\t\t$22.1 | 62.3% | \t\t\t\t$7.2 | 32.6% |

Financial	services	operating	earnings	of	$29.3	million	on	revenue	of	$42.9	million	in	the	fourth	quarter	of	2012	compares	with	operating	earnings	of	$22.1	million	on revenue	of	$35.5	million	last	year.	The	year-over-year	increases	in	both	revenue	and	operating	earnings	primarily	reflect	the	growth	in	the	company's	on-book	finance portfolio.	Originations	of	$165.6	million	in	the	fourth	quarter	of	2012	increased	$10.8	million,	or	7.0%,	from	the	prior	year.

Financial	services	expenses	of	$13.6	million	and	$13.4	million	in	the	fourth	quarters	of	2012	and	2011,	respectively,	primarily	include	personnel-related	and	other general	and	administrative	costs	necessary	to	support	the	serviced	portfolio.	These	expenses	are	generally	more	dependent	on	the	change	in	size	of	the	serviced	portfolio than	they	are	on	the	revenue	of	this	segment.	Financial	services	expenses	also	include	doubtful	accounts	provisions	for	the	finance	and	contract	receivables	owned	by Snap-on.	As	a	percentage	of	the	average	serviced	portfolio,	financial	services	expenses	were	1.2%	and	1.3%	in	the	fourth	quarters	of	2012	and	2011,	respectively.

Snap-on's	general	corporate	expenses	of	$21.5	million	in	the	fourth	quarter	of	2012	compared	with	expenses	of	$18.0	million	last	year.

Results	of	operations	for	2011	and	2010	are	as	follows:

| (Amounts	in	millions) | 2011 |  | 2010 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tsales | \t\t\t\t$2,854.2 | 100.0% | \t\t\t\t$2,619.2 | 100.0% | \t\t\t\t$235.0 | 9.0% |
| Cost\tof\tgoods\tsold | \t\t(1,516.3) | -53.1% | \t\t(1,408.1) | -53.8% | \t\t(108.2) | -7.7% |
| Gross\tprofit | 1,337.9 | 46.9% | 1,211.1 | 46.2% | 126.8 | \t\t\t\t\t\t\t10.5% |
| Operating\texpenses | (953.7) | -33.4% | (894.1) | -34.1% | (59.6) | -6.7% |
| Operating\tearnings\tbefore\tfinancial\tservices | 384.2 | 13.5% | 317.0 | 12.1% | 67.2 | 21.2% |
| Financial\tservices\trevenue | 124.3 | \t\t\t\t\t\t\t100.0% | 62.3 | \t\t\t\t\t\t\t100.0% | 62.0 | 99.5% |
| Financial\tservices\texpenses | (51.4) | -41.4% | (47.9) | -76.9% | (3.5) | -7.3% |
| Operating\tearnings\tfrom\tfinancial\tservices\tbefore\tarbitration\tsettlement | 72.9 | 58.6% | 14.4 | 23.1% | 58.5 | NM |
| Arbitration\tsettlement | 18.0 | 14.5% | – | – | 18.0 | NM |
| Operating\tearnings\tfrom\tfinancial\tservices | 90.9 | 73.1% | 14.4 | 23.1% | 76.5 | NM |
| Operating\tearnings | 475.1 | 16.0% | 331.4 | 12.4% | 143.7 | 43.4% |
| Interest\texpense | (61.2) | -2.1% | (54.8) | -2.0% | (6.4) | -11.7% |
| Other\tincome\t(expense)\t–\tnet | (1.0) | – | 0.8 | – | (1.8) | NM |
| Earnings\tbefore\tincome\ttaxes\tand\tequity\tearnings | 412.9 | 13.9% | 277.4 | 10.4% | 135.5 | 48.8% |
| Income\ttax\texpense | (133.7) | -4.5% | (87.6) | -3.3% | (46.1) | -52.6% |
| Earnings\tbefore\tequity\tearnings | 279.2 | 9.4% | 189.8 | 7.1% | 89.4 | 47.1% |
| Equity\tearnings,\tnet\tof\ttax | 4.6 | 0.1% | 3.2 | 0.1% | 1.4 | 43.8% |
| Net\tearnings | 283.8 | 9.5% | 193.0 | 7.2% | 90.8 | 47.0% |
| Net\tearnings\tattributable\tto\tnoncontrolling\tinterests | (7.5) | -0.2% | (6.5) | -0.2% | (1.0) | -15.4% |
| Net\tearnings\tattributable\tto\tSnap-on\tInc. | \t\t\t\t$276.3 | 9.3% | \t\t\t\t$186.5 | 7.0% | \t\t\t\t$89.8 | 48.2% |

Gross	profit	of	$1,337.9	million	in	2011	increased	$126.8	million,	or	10.5%,	as	compared	to	$1,211.1	million	in	2010.	Gross	margin	of	46.9%	in	2011	improved	70	basis points	from	46.2%	in	2010	primarily	due	to	savings	from	ongoing	RCI	initiatives	partially	offset	by	inflationary	and	other	cost	increases.	Restructuring	costs	included	in gross	profit	totaled	$7.6	million	in	2011	as	compared	to	$10.8	million	in	2010.

Operating	expenses	of	$953.7	million	in	2011	increased	$59.6	million,	or	6.7%,	as	compared	to	$894.1	million	in	2010.	The	operating	expense	margin	of	33.4%	in	2011 improved	70	basis	points	from	34.1%	in	2010	primarily	due	to	benefits	from	sales	volume	leverage	and	savings	from	ongoing	RCI	initiatives,	partially	offset	by	$12.2 million	of	expected	higher	pension	expense	(largely	due	to	the	ongoing	amortization	of	investment	losses	incurred	in	2008	and	the	impact	of	declining	discount	rates) and	higher	performance-based	incentive	compensation	expense.	Restructuring	costs	included	in	operating	expenses	totaled	$4.6	million	in	2011	as	compared	to	$3.4 million	in	2010.

In	the	second	quarter	of	2011,	Snap-on	recorded	an	$18.0	million	pretax	arbitration	settlement	gain	($11.1	million	after	tax,	or	$0.19	per	diluted	share)	related	to	its dispute	with	CIT	and	paid	$89.8	million	of	cash	to	CIT,	representing	$107.8	million	of	cash	previously	withheld	net	of	the	$18.0	million	settlement.	The	$18.0	million arbitration	settlement	gain	is	included	in	"Operating	earnings	from	financial	services"	on	the	accompanying	Consolidated	Statement	of	Earnings	for	2011.	See	Note	15 to	the	Consolidated	Financial	Statements	for	information	on	the	arbitration	settlement.

Operating	earnings	from	financial	services	of	$90.9	million	in	2011,	including	the	$18.0	million	arbitration	settlement	gain,	compares	to	operating	earnings	of	$14.4 million	in	2010.	Operating	earnings	from	financial	services	before	arbitration	settlement	was	$72.9	million	on	revenue	of	$124.3	million	in	2011,	as	compared	with operating	earnings	of	$14.4	million	on	revenue	of	$62.3	million	in	2010.	The	year-over-year	increases	in	both	revenue	and	operating	earnings	primarily	reflect	the planned	growth	in	the	company's	on-book	finance	portfolio.

Consolidated	operating	earnings	of	$475.1	million	in	2011	increased	$143.7	million,	or	43.4%,	from	$331.4	million	in	2010.	The	$143.7	million	year-over-year	increase includes	$76.5	million	of	higher	earnings	from	financial	services	(including	the	$18.0	million	arbitration	settlement	gain	mentioned	above)	and	$10.9	million	of favorable	foreign	currency	effects.	As	a	percentage	of	revenues,	operating	earnings	in	2011	of	16.0%	improved	360	basis	points	compared	to	12.4%	in	2010.

Interest	expense	of	$61.2	million	in	2011	increased	$6.4	million	from	2010	levels	primarily	due	to	higher	average	debt	levels,	partially	offset	by	lower	average	interest rates.	See	Note	9	to	the	Consolidated	Financial	Statements	for	information	on	Snap-on's	debt	and	credit	facilities.

Other	income	(expense)	–	net	was	expense	of	$1.0	million	in	2011	as	compared	to	income	of	$0.8	million	in	2010.	See	Note	16	to	the	Consolidated	Financial	Statements for	information	on	other	income	(expense)	–	net.

Snap-on's	effective	income	tax	rate	on	earnings	attributable	to	Snap-on	was	33.0%	in	2011	and	32.3%	in	2010.	The	effective	income	tax	rate	in	2010	reflects	the favorable	settlement	of	certain	tax	audits.	See	Note	8	to	the	Consolidated	Financial	Statements	for	further	information	on	income	taxes.

Net	earnings	attributable	to	Snap-on	in	2011	of	$276.3	million,	or	$4.71	per	diluted	share,	included	an	$11.1	million	after-	tax	gain,	or	$0.19	per	diluted	share,	from	the arbitration	settlement	with	CIT.	In	2010,	net	earnings	attributable	to	Snap-on	were	$186.5	million	or	$3.19	per	diluted	share.

Snap-on	recorded	costs	of	$12.2	million	for	exit	and	disposal	activities	in	2011	as	compared	to	$14.2	million	of	such	costs	in	2010.	See	Note	7	to	the	Consolidated Financial	Statements	for	information	on	Snap-on's	exit	and	disposal	activities.

| (Amounts	in	millions) | 2011 |  | 2010 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| External\tnet\tsales | \t\t\t\t$955.9 | 84.9% | \t\t\t\t$891.3 | 85.0% | \t\t\t\t$64.6 | 7.2% |
| Intersegment\tnet\tsales | 169.9 | 15.1% | 156.9 | 15.0% | 13.0 | 8.3% |
| Segment\tnet\tsales | \t\t1,125.8 | \t\t\t\t\t100.0% | \t\t1,048.2 | \t\t\t\t\t100.0% | 77.6 | 7.4% |
| Cost\tof\tgoods\tsold | (710.6) | -63.1% | (662.7) | -63.2% | (47.9) | \t\t\t\t\t\t\t-7.2% |
| Gross\tprofit | 415.2 | 36.9% | 385.5 | 36.8% | 29.7 | 7.7% |
| Operating\texpenses | (291.8) | -25.9% | (268.6) | -25.6% | \t\t(23.2) | -8.6% |
| Segment\toperating\tearnings | \t\t\t\t$123.4 | 11.0% | \t\t\t\t$116.9 | 11.2% | \t\t\t\t$6.5 | 5.6% |

Segment	net	sales	of	$1,125.8	million	in	2011	increased	$77.6	million,	or	7.4%,	from	2010	levels;	excluding	$30.6	million	of	favorable	foreign	currency	translation, organic	sales	increased	$47.0	million	or	4.4%.	In	2011,	double-digit	sales	gains	to	a	wide	range	of	customers	in	emerging	markets	and	in	critical	industries	were	partially offset	by	double-digit	declines	in	both	sales	to	the	military	and	sales	in	the	southern	regions	of	Europe.

Segment	gross	profit	of	$415.2	million	in	2011	increased	$29.7	million	from	2010	levels.	Gross	margin	of	36.9%	in	2011	improved	10	basis	points	from	36.8%	in	2010 as	contributions	from	higher	sales	volumes	and	savings	from	RCI	initiatives	more	than	offset	inflationary	and	other	cost	increases.

Segment	operating	expenses	of	$291.8	million	in	2011	increased	$23.2	million	from	2010	levels.	The	operating	expense	margin	of	25.9%	in	2011	increased	30	basis points	from	25.6%	in	2010	primarily	due	to	higher	restructuring	and	other	costs.

As	a	result	of	 these	factors,	segment	operating	earnings	of	$123.4	million	 in	2011	 increased	$6.5	million,	or	5.6%,	from	2010	 levels,	 including	$1.4	million	of unfavorable	foreign	currency	effects.	Operating	margin	for	the	Commercial	&	Industrial	Group	of	11.0%	in	2011	declined	20	basis	points	from	11.2%	in	2010.

| (Amounts	in	millions) | 2011 |  | 2010 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Segment\tnet\tsales | \t\t\t\t$\t\t1,153.4 | \t\t\t\t\t100.0% | \t\t\t\t$\t\t1,039.9 | \t\t\t\t\t100.0% | \t\t\t\t$113.5 | \t\t\t\t\t\t\t10.9% |
| Cost\tof\tgoods\tsold | (647.0) | -56.1% | (604.3) | -58.1% | \t\t(42.7) | -7.1% |
| Gross\tprofit | 506.4 | 43.9% | 435.6 | 41.9% | 70.8 | 16.3% |
| Operating\texpenses | (347.9) | -30.2% | (321.6) | -30.9% | (26.3) | -8.2% |
| Segment\toperating\tearnings | \t\t\t\t$158.5 | 13.7% | \t\t\t\t$114.0 | 11.0% | \t\t\t\t$44.5 | 39.0% |

Segment	net	sales	of	$1,153.4	million	in	2011	increased	$113.5	million,	or	10.9%,	from	2010	levels.	Excluding	$16.0	million	of	favorable	foreign	currency	translation, organic	sales	increased	$97.5	million,	or	9.2%,	primarily	due	to	a	double-digit	sales	gain	in	the	United	States.

Segment	gross	profit	of	$506.4	million	in	2011	increased	$70.8	million	from	2010	levels.	Gross	margin	of	43.9%	in	2011	improved	200	basis	points	from	41.9%	in	2010 primarily	due	to	savings	from	RCI	initiatives,	contributions	from	higher	sales,	including	benefits	from	favorable	manufacturing	utilization	as	a	result	of	increased production	levels,	and	favorable	foreign	currency	effects	due	to	the	relatively	weaker	U.S.	dollar.	These	year-over-year	gross	margin	improvements	were	partially	offset by	inflationary	and	other	cost	increases.	Restructuring	costs	included	in	gross	profit	totaled	$3.7	million	in	2011	as	compared	to	$4.9	million	in	2010.	Restructuring	costs incurred	in	both	years	primarily	related	to	the	2011	closure	of	Snap-on's	Newmarket,	Canada,	tool	storage	manufacturing	facility.	In	2011,	Snap-on	consolidated	its North	American	tool	storage	operations	into	its	Algona,	Iowa,	tool	storage	facility;	production	at	the	Newmarket	facility	ceased	at	the	end	of	April	2011.

Segment	operating	expenses	of	$347.9	million	in	2011	increased	$26.3	million	from	2010	levels.	The	operating	expense	margin	of	30.2%	in	2011	improved	70	basis points	from	30.9%	in	2010	primarily	due	to	benefits	from	sales	volume	leverage	and	lower	bad	debt	expense.

As	a	result	of	these	factors,	segment	operating	earnings	of	$158.5	million	in	2011	increased	$44.5	million,	or	39.0%,	from	2010	levels,	including	$10.4	million	of favorable	foreign	currency	effects.	Operating	margin	for	the	Snap-on	Tools	Group	of	13.7%	in	2011	improved	270	basis	points	from	11.0%	in	2010.

| (Amounts	in	millions) | 2011 |  | 2010 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| External\tnet\tsales | \t\t\t\t$744.9 | 80.9% | \t\t\t\t$688.0 | 81.2% | \t\t\t\t$56.9 | 8.3% |
| Intersegment\tnet\tsales | 175.7 | 19.1% | 159.2 | 18.8% | 16.5 | 10.4% |
| Segment\tnet\tsales | 920.6 | 100.0% | 847.2 | 100.0% | 73.4 | 8.7% |
| Cost\tof\tgoods\tsold | (504.3) | -54.8% | \t\t(457.2) | -54.0% | \t\t(47.1) | \t\t\t\t\t-10.3% |
| Gross\tprofit | 416.3 | 45.2% | 390.0 | 46.0% | 26.3 | 6.7% |
| Operating\texpenses | \t\t(231.6) | \t\t\t\t\t-25.1% | (225.6) | \t\t\t\t\t-26.6% | (6.0) | -2.7% |
| Segment\toperating\tearnings | \t\t\t\t$184.7 | 20.1% | \t\t\t\t$164.4 | 19.4% | \t\t\t\t$20.3 | 12.3% |

Segment	net	sales	of	$920.6	million	in	2011	increased	$73.4	million,	or	8.7%,	from	2010	levels.	Excluding	$13.3	million	of	favorable	foreign	currency	translation, organic	sales	increased	$60.1	million,	or	7.0%,	primarily	due	to	a	double-digit	gain	in	essential	tool	and	facilitation	program	sales	to	OEM	dealerships,	and	single-digit sales	gains	of	both	equipment	and	diagnostics	to	repair	shop	owners	and	managers.

Segment	gross	profit	of	$416.3	million	in	2011	increased	$26.3	million	from	2010	levels.	Gross	margin	of	45.2%	in	2011	declined	80	basis	points	from	46.0%	in	2010 as	benefits	from	RCI	initiatives	were	more	than	offset	by	a	shift	in	sales	mix	that	included	higher	volumes	of	lower	margin	essential	tool	and	facilitation	products.

Segment	operating	expenses	of	$231.6	million	in	2011	increased	$6.0	million	from	2010	levels.	The	operating	expense	margin	of	25.1%	in	2011	improved	150	basis points	from	26.6%	in	2010	primarily	due	to	benefits	from	sales	volume	leverage	and	savings	from	RCI	initiatives.

As	a	result	of	these	factors,	segment	operating	earnings	of	$184.7	million	in	2011	increased	$20.3	million,	or	12.3%,	from	2010	levels,	including	$1.2	million	of favorable	foreign	currency	effects.	Operating	margin	for	the	Repair	Systems	&	Information	Group	of	20.1%	in	2011	improved	70	basis	points	from	19.4%	in	2010.

| (Amounts	in	millions) | 2011 |  | 2010 |  | Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Financial\tservices\trevenue | \t\t\t\t$\t\t124.3 | 100.0% | \t\t\t\t$62.3 | 100.0% | \t\t\t\t$62.0 | \t99.5% |
| Financial\tservices\texpenses | (51.4) | \t\t\t\t\t-41.4% | \t\t(47.9) | \t\t\t\t\t-76.9% | \t\t(3.5) | \t -7.3% |
| Segment\toperating\tearnings\tbefore\tarbitration\tsettlement | 72.9 | 58.6% | 14.4 | 23.1% | 58.5 | \tNM |
| Arbitration\tsettlement | 18.0 | 14.5% | – | – | 18.0 | \tNM |
| Segment\toperating\tearnings | \t\t\t\t$90.9 | 73.1% | \t\t\t\t$14.4 | 23.1% | \t\t\t\t$76.5 | \tNM |

Operating	earnings	from	financial	services	before	arbitration	settlement	was	$72.9	million	on	revenue	of	$124.3	million	in	2011,	as	compared	with	operating	earnings	of $14.4	million	on	revenue	of	$62.3	million	in	2010.	Originations	of	$606.1	million	in	2011	increased	$67.9	million,	or	12.6%,	from	2010	levels.	The	year-over-year increases	in	both	revenue	and	operating	earnings	(before	arbitration	settlement)	primarily	reflect	the	planned	growth	in	the	company's	on-book	finance	portfolio. Operating	earnings	from	financial	services	of	$90.9	million	in	2011	included	an	$18.0	million	arbitration	settlement	gain	from	the	resolution	of	a	dispute	with	CIT	and $0.7	million	of	favorable	foreign	currency	effects.	See	Notes	1	and	15	to	the	Consolidated	Financial	Statements	for	further	information	on	SOC.

Financial	services	expenses	of	$51.4	million	and	$47.9	million	in	2011	and	2010,	respectively,	primarily	include	personnel-related	and	other	general	and	administrative costs	necessary	to	support	the	serviced	portfolio.	These	expenses	are	generally	more	dependent	on	the	change	in	size	of	the	serviced	portfolio	than	they	are	on	the revenue	of	this	segment.	Financial	services	expenses	also	include	doubtful	accounts	provisions	for	the	finance	and	contract	receivables	owned	by	Snap-on.	As	a percentage	of	the	average	serviced	portfolio,	financial	services	expenses	were	5.1%	and	4.9%	in	2011	and	2010,	respectively.

Snap-on's	general	corporate	expenses	of	$82.4	million	in	2011	increased	$4.1	million	from	$78.3	million	in	2010	primarily	due	to	increased	performance-based incentive	compensation	expense	and	expected	higher	pension	expense	(largely	due	to	the	ongoing	amortization	of	investment	losses	incurred	in	2008	and	the	impact	of declining	discount	rates),	partially	offset	by	lower	mark-to-market	compensation	and	other	expenses.

# Non-GAAP	Supplemental	Data

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

The	supplemental	Operations	data	reflects	the	results	of	operations	and	financial	position	of	Snap-on's	tools,	diagnostics,	equipment,	software	and	other	non-financial services	operations	with	Financial	Services	on	the	equity	method.	The	supplemental	Financial	Services	data	reflects	the	results	of	operations	and	financial	position	of Snap-on's	U.S.	and	international	financial	services	operations.	The	financing	needs	of	Financial	Services	are	met	through	intersegment	borrowings	from	Snap-on Incorporated	and	cash	generated	from	operations;	Financial	Services	is	charged	interest	expense	on	intersegment	borrowings	at	market	rates.	Long-term	debt	for Operations	includes	the	company's	third	party	external	borrowings,	net	of	intersegment	borrowings	to	Financial	Services.	Income	taxes	are	charged	(credited)	to Financial	Services	on	the	basis	of	the	specific	tax	attributes	generated	by	the	U.S.	and	international	financial	services	businesses.	Transactions	between	the	Operations and	Financial	Services	businesses	were	eliminated	to	arrive	at	the	Consolidated	Financial	Statements.

Supplemental	Consolidating	Data	–	Supplemental	Statements	of	Earnings	information	for	2012,	2011	and	2010	is	as	follows:

|  |  | Operations* |  |  | Financial	Services |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (Amounts\tin\tmillions) | 2012 | 2011 | 2010 | 2012 | 2011 | 2010 |
| Net\tsales | \t\t\t\t$2,937.9 | \t\t\t\t$2,854.2 | \t\t\t\t$2,619.2 | \t\t\t\t$– | \t\t\t\t$– | \t\t\t\t$– |
| Cost\tof\tgoods\tsold | \t\t(1,547.9) | \t\t(1,516.3) | \t\t(1,408.1) | – | – | – |
| Gross\tprofit | 1,390.0 | 1,337.9 | 1,211.1 | – | – | – |
| Operating\texpenses | (980.3) | (953.7) | (894.1) | – | – | – |
| Operating\tearnings\tbefore\tfinancial\tservices | 409.7 | 384.2 | 317.0 | – | – | – |
| Financial\tservices\trevenue | – | – | – | 161.3 | 124.3 | 62.3 |
| Financial\tservices\texpenses | – | – | – | \t\t\t\t(54.6) | (51.4) | (47.9) |
| Operating\tearnings\tfrom\tfinancial\tservices\tbefore\tarbitration\tsettlement | – | – | – | 106.7 | 72.9 | 14.4 |
| Arbitration\tsettlement | – | – | – | – | 18.0 | – |
| Operating\tearnings\tfrom\tfinancial\tservices | – | – | – | 106.7 | 90.9 | 14.4 |
| Operating\tearnings | 409.7 | 384.2 | 317.0 | 106.7 | 90.9 | 14.4 |
| Interest\texpense | (54.0) | (60.0) | (54.4) | (1.8) | (1.2) | (0.4) |
| Intersegment\tinterest\tincome\t(expense)\t–\tnet | 42.4 | 35.8 | 23.9 | (42.4) | \t\t\t\t(35.8) | (23.9) |
| Other\tincome\t(expense)\t–\tnet | (0.4) | (1.0) | 0.9 | – | – | (0.1) |
| Earnings\t(loss)\tbefore\tincome\ttaxes\tand\tequity\tearnings | 397.7 | 359.0 | 287.4 | 62.5 | 53.9 | \t\t\t\t(10.0) |
| Income\ttax\t(expense)\tbenefit | (125.3) | (113.9) | (92.2) | (22.9) | (19.8) | 4.6 |
| Earnings\t(loss)\tbefore\tequity\tearnings | 272.4 | 245.1 | 195.2 | 39.6 | 34.1 | (5.4) |
| Financial\tservices\t–\tnet\tearnings\t(loss)\tattributable\tto\tSnap-on\tIncorporated | 39.6 | 34.1 | (5.4) | – | – | – |
| Equity\tearnings,\tnet\tof\ttax | 2.6 | 4.6 | 3.2 | – | – | – |
| Net\tearnings\t(loss) | 314.6 | 283.8 | 193.0 | 39.6 | 34.1 | (5.4) |
| Net\tearnings\tattributable\tto\tnoncontrolling\tinterests | (8.5) | (7.5) | (6.5) | – | – | – |
| Net\tearnings\t(loss)\tattributable\tto\tSnap-on\tIncorporated | \t\t\t\t$306.1 | \t\t\t\t$276.3 | \t\t\t\t$186.5 | \t\t\t\t$39.6 | \t\t\t\t$34.1 | \t\t\t\t$(5.4) |
| * Snap-on\tIncorporated\twith\tFinancial\tServices\ton\tthe\tequity\tmethod. |  |  |  |  |  |  |
|  | 2012\tANNUAL\tREPORT |  |  |  |  | 41 |

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

Supplemental	Consolidating	Data	–	Supplemental	Balance	Sheet	information	as	of	2012	and	2011	year	end	is	as	follows:

|  | Operations* |  | Financial	Services |  |
| :--- | :--- | :--- | :--- | :--- |
| (Amounts\tin\tmillions) | 2012 | 2011 | 2012 | 2011 |
| ASSETS |  |  |  |  |
| Current\tassets |  |  |  |  |
| Cash\tand\tcash\tequivalents | \t\t\t\t$211.2 | \t\t\t\t$181.1 | \t\t\t\t$3.3 | \t\t\t\t$4.5 |
| Intersegment\treceivables | 14.1 | 10.8 | – | – |
| Trade\tand\tother\taccounts\treceivable\t–\tnet | 497.5 | 463.3 | 0.4 | 0.2 |
| Finance\treceivables\t–\tnet | – | – | 323.1 | 277.2 |
| Contract\treceivables\t–\tnet | 7.4 | 6.5 | 55.3 | 43.2 |
| Inventories\t–\tnet | 404.2 | 386.4 | – | – |
| Deferred\tincome\ttax\tassets | 68.8 | 90.0 | 13.0 | 2.6 |
| Prepaid\texpenses\tand\tother\tassets | 88.3 | 78.1 | 1.0 | 0.9 |
| Total\tcurrent\tassets | 1,291.5 | 1,216.2 | 396.1 | 328.6 |
| Property\tand\tequipment\t–\tnet | 373.2 | 351.9 | 2.0 | 1.0 |
| Investment\tin\tFinancial\tServices | 165.3 | 142.0 | – | – |
| Deferred\tincome\ttax\tassets | 110.2 | 119.8 | 0.2 | 5.4 |
| Long-term\tfinance\treceivables\t–\tnet | – | – | 494.6 | 431.8 |
| Long-term\tcontract\treceivables\t–\tnet | 12.1 | 9.1 | 182.3 | 156.0 |
| Goodwill | 807.4 | 795.8 | – | – |
| Other\tintangibles\t–\tnet | 187.2 | 188.3 | – | – |
| Other\tassets | 65.3 | 83.7 | 1.1 | 1.0 |
| Total\tassets | \t\t\t\t$\t\t3,012.2 | \t\t\t\t$\t\t2,906.8 | \t\t\t\t$\t\t1,076.3 | \t\t\t\t$\t\t923.8 |

Supplemental	Consolidating	Data	–	Balance	Sheet	Information	(continued):

|  | Operations* |  | Financial	Services |  |
| :--- | :--- | :--- | :--- | :--- |
| (Amounts\tin\tmillions) | 2012 | 2011 | 2012 | 2011 |
| LIABILITIES\tAND\tEQUITY |  |  |  |  |
| Current\tliabilities |  |  |  |  |
| Notes\tpayable | \t\t\t\t$5.2 | \t\t\t\t$16.2 | \t\t\t\t$– | \t\t\t\t$– |
| Accounts\tpayable | 142.1 | 124.0 | 0.4 | 0.6 |
| Intersegment\tpayables | – | – | 14.1 | 10.8 |
| Accrued\tbenefits | 50.6 | 48.8 | – | – |
| Accrued\tcompensation | 84.9 | 87.1 | 3.4 | 3.9 |
| Franchisee\tdeposits | 54.7 | 47.3 | – | – |
| Other\taccrued\tliabilities | 207.8 | 229.7 | 46.9 | 31.1 |
| Total\tcurrent\tliabilities | 545.3 | 553.1 | 64.8 | 46.4 |
| Long-term\tdebt\tand\tintersegment\tlong-term\tdebt | 143.2 | 257.6 | 827.2 | 710.3 |
| Deferred\tincome\ttax\tliabilities | 125.7 | 108.0 | 1.4 | 0.1 |
| Retiree\thealth\tcare\tbenefits | 48.4 | 52.8 | – | – |
| Pension\tliabilities | 260.7 | 317.7 | – | – |
| Other\tlong-term\tliabilities | 69.9 | 70.3 | 17.6 | 25.0 |
| Total\tliabilities | 1,193.2 | 1,359.5 | 911.0 | 781.8 |
| Total\tshareholders'\tequity\tattributable\tto\tSnap-on\tInc. | 1,802.1 | 1,530.9 | 165.3 | 142.0 |
| Noncontrolling\tinterests | 16.9 | 16.4 | – | – |
| Total\tequity | 1,819.0 | 1,547.3 | 165.3 | 142.0 |
| Total\tliabilities\tand\tequity | \t\t\t\t$\t\t3,012.2 | \t\t\t\t$\t\t2,906.8 | \t\t\t\t$\t\t1,076.3 | \t\t\t\t$\t\t923.8 |
| * Snap-on\tIncorporated\twith\tFinancial\tServices\ton\tthe\tequity\tmethod. |  |  |  |  |
|  | 2012\tANNUAL\tREPORT |  |  | 43 |

# Liquidity	and	Capital	Resources

Snap-on's	growth	has	historically	been	funded	by	a	combination	of	cash	provided	by	operating	activities	and	debt	financing.	Snap-on	believes	that	its	cash	from operations	and	collections	of	finance	receivables,	coupled	with	its	sources	of	borrowings	and	available	cash	on	hand,	are	sufficient	to	fund	its	currently	anticipated requirements	for	payments	of	interest	and	dividends,	new	loans	originated	by	our	financial	services	businesses,	capital	expenditures,	working	capital,	restructuring activities,	the	funding	of	pension	plans,	and	funding	for	additional	share	repurchases	and	acquisitions,	if	any.	Due	to	Snap-on's	credit	rating	over	the	years,	external funds	have	been	available	at	an	acceptable	cost.	As	of	 the	close	of	business	on	February	8,	2013,	Snap-on's	 long-term	debt	and	commercial	paper	were	rated, respectively,	Baa1	and	P-2	by	Moody's	Investors	Service;	A-	and	A-2	by	Standard	&	Poor's;	and	A-	and	F2	by	Fitch	Ratings.	Snap-on	believes	that	its	current	credit arrangements	are	sound	and	that	the	strength	of	its	balance	sheet	affords	the	company	the	financial	flexibility	to	respond	to	both	internal	growth	opportunities	and	those available	through	acquisitions.	However,	Snap-on	cannot	provide	any	assurances	of	the	availability	of	future	financing	or	the	terms	on	which	it	might	be	available,	or that	its	debt	ratings	may	not	decrease.

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

As	of	2012	year	end,	working	capital	(current	assets	less	current	liabilities)	of	$1,079.8	million	increased	$132.9	million	from	$946.9	million	at	2011	year	end.

The	following	represents	the	company's	working	capital	position	as	of	2012	and	2011	year	end:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Cash\tand\tcash\tequivalents | \t\t\t\t$214.5 | \t\t\t\t$185.6 |
| Trade\tand\tother\taccounts\treceivable\t–\tnet | 497.9 | 463.5 |
| Finance\treceivables\t–\tnet | 323.1 | 277.2 |
| Contract\treceivables\t–\tnet | 62.7 | 49.7 |
| Inventories\t–\tnet | 404.2 | 386.4 |
| Other\tcurrent\tassets | 166.6 | 168.3 |
| Total\tcurrent\tassets | 1,669.0 | 1,530.7 |
| Notes\tpayable | (5.2) | (16.2) |
| Accounts\tpayable | (142.5) | (124.6) |
| Other\tcurrent\tliabilities | (441.5) | (443.0) |
| Total\tcurrent\tliabilities | (589.2) | \t\t(583.8) |
| Working\tcapital | \t\t\t\t$\t\t1,079.8 | \t\t\t\t$946.9 |

Cash	and	cash	equivalents	of	$214.5	million	as	of	2012	year	end	compared	to	cash	and	cash	equivalents	of	$185.6	million	at	2011	year	end.	The	$28.9	million	increase in	cash	and	cash	equivalents	includes	the	impacts	of	(i)	$329.3	million	of	cash	generated	from	operations,	net	of	$73.0	million	of	cash	contributions	(including	$54.7 million	of	discretionary	contributions)	to	the	company's	domestic	pension	plans;	(ii)	$445.5	million	of	cash	from	collections	of	finance	receivables;	(iii)	$46.8	million	of proceeds	from	stock	purchase	and	option	plan	exercises;	and	(iv)	$27.0	million	of	cash	proceeds	from	the	sale	of	a	non-strategic	equity	investment	at	book	value.	These increases	in	cash	and	cash	equivalents	were	partially	offset	by	(i)	the	funding	of	$569.6	million	of	new	finance	originations;	(ii)	dividend	payments	of	$81.5	million; (iii)	the	funding	of	$79.4	million	of	capital	expenditures;	and	(iv)	the	repurchase	of	1,180,000	shares	of	the	company's	common	stock	for	$78.1	million.

Of	the	$214.5	million	of	cash	and	cash	equivalents	as	of	2012	year	end,	$81.4	million	was	held	outside	of	the	United	States.	Snap-on	considers	these	non-U.S.	funds	as permanently	invested	in	its	foreign	operations	to	(i)	provide	adequate	working	capital;	(ii)	satisfy	various	regulatory	requirements;	and/or	(iii)	take	advantage	of	business expansion	opportunities	as	they	arise;	as	such,	the	company	does	not	presently	expect	to	repatriate	these	funds	to	fund	its	U.S.	operations	or	obligations.	The	repatriation of	cash	from	certain	foreign	subsidiaries	could	have	adverse	net	tax	consequences	on	the	company	should	Snap-on	be	required	to	pay	and	record	U.S.	income	taxes	and foreign	withholding	 taxes	on	funds	 that	were	previously	considered	permanently	 invested.	Alternatively,	 the	repatriation	of	such	cash	from	certain	other	foreign subsidiaries	could	result	in	favorable	net	tax	consequences	for	the	company.	Snap-on	periodically	evaluates	opportunities	to	repatriate	certain	foreign	cash	amounts	to	the extent	that	it	does	not	incur	additional	unfavorable	net	tax	consequences.

Trade	and	other	accounts	receivable	–	net	of	$497.9	million	as	of	2012	year	end	increased	$34.4	million	from	prior-year	levels;	excluding	$4.8	million	of	currency translation,	trade	and	other	accounts	receivable	–	net	increased	$29.6	million,	primarily	as	a	result	of	higher	sales.	Days	sales	outstanding	(trade	and	other	accounts receivable	–	net	as	of	the	respective	period	end,	divided	by	the	respective	trailing	12	months	sales,	times	360	days)	was	61	days	at	both	2012	and	2010	year	end,	as compared	to	58	days	at	2011	year	end.

The	current	portions	of	net	finance	and	contract	receivables	of	$385.8	million	as	of	2012	year	end	compared	to	$326.9	million	at	2011	year	end.	The	long-term	portions of	net	finance	and	contract	receivables	of	$689.0	million	as	of	2012	year	end,	compared	to	$596.9	million	at	2011	year	end.	The	combined	$151.0	million	increase	in	net current	and	long-term	finance	and	contract	receivables	over	2011	year-end	levels	primarily	reflects	the	continued	growth	of	the	company's	on-balance-sheet	finance portfolio.

Inventories	of	$404.2	million	as	of	2012	year	end	increased	$17.8	million	from	prior-year	levels,	primarily	to	support	continued	higher	customer	demand,	largely	in	the United	States;	excluding	currency	translation,	inventories	increased	$13.0	million.	As	a	result	of	higher	inventory	levels,	inventory	turns	(trailing	12	months	of	cost	of goods	sold,	divided	by	the	average	of	the	beginning	and	ending	inventory	balance	for	the	trailing	12	months)	of	3.9	as	of	2012	year	end	decreased	from	4.2	turns	as	of 2011	year	end.	Inventories	accounted	for	using	the	first-in,	first-out	("FIFO")	method	as	of	2012	and	2011	year	end	approximated	60%	and	62%,	respectively,	of	total inventories.	All	other	inventories	are	accounted	for	using	the	last-in,	first-out	("LIFO")	method.	The	company's	LIFO	reserve	was	$71.8	million	and	$70.1	million	as	of 2012	and	2011	year	end,	respectively.

Accounts	payable	of	$142.5	million	as	of	2012	year	end	increased	$17.9	million	from	prior-year	levels	primarily	due	to	the	timing	of	payments;	excluding	currency translation	impacts,	accounts	payable	increased	$16.7	million.

Other	accrued	liabilities	of	$247.9	million	as	of	2012	year	end	decreased	$8.0	million	from	prior-year	levels;	excluding	currency	translation	impacts,	other	accrued liabilities	decreased	$9.5	million.

Snap-on	has	a	five-year,	$500	million	multi-currency	revolving	credit	facility	that	terminates	on	December	8,	2016;	as	of	2012	year	end,	no	amounts	were	outstanding under	this	facility.	Borrowings	under	the	$500	million	revolving	credit	facility	bear	interest	at	varying	rates	based	on	Snap-on's	then-current,	long-term	debt	ratings.	The $500	million	revolving	credit	facility's	financial	covenant	requires	that	Snap-on	maintain,	as	of	each	fiscal	quarter	end,	either	(i)	a	ratio	of	total	debt	to	the	sum	of	total debt	plus	equity	(including	noncontrolling	interests)	of	not	greater	than	0.60	to	1.00;	or	(ii)	a	ratio	of	total	debt	to	the	sum	of	net	income	plus	interest	expense,	income taxes,	depreciation,	amortization	and	other	non-cash	or	extraordinary	charges	for	the	preceding	four	fiscal	quarters	then	ended	of	not	greater	than	3.50	to	1.00.	As	of 2012	year	end	the	company's	actual	ratios	of	0.35	and	1.55,	respectively,	were	both	within	the	permitted	ranges	set	forth	in	this	financial	covenant.

Snap-on	also	has	a	364-day	loan	and	servicing	agreement	that	allows	Snap-on	to	borrow	up	to	$200	million	(subject	to	borrowing	base	requirements)	through	the pledging	 of	 finance	 receivables	 under	 an	 asset-backed	 commercial	 paper	 conduit	 facility;	 the	 loan	 and	 servicing	 agreement	 expires	 on	 September	 27,	 2013.	 On September	28,	2012,	as	previously	reported,	the	loan	and	servicing	agreement	was	amended	to,	among	other	things,	(i)	extend	the	expiration	date	of	the	agreement	to September	27,	2013;	(ii)	extend	the	final	payment	dates	for	any	amounts	remaining	outstanding	under	the	agreement	to	September	28,	2015,	or	such	earlier	date	as	may be	prescribed	pursuant	to	the	terms	of	the	agreement;	and	(iii)	change	certain	pricing	terms.	As	of	2012	year	end,	no	amounts	were	outstanding	under	the	loan	and servicing	agreement.

In	addition	to	the	financial	covenant	required	by	the	$500	million	multi-currency	revolving	credit	facility	discussed	above,	Snap-on's	debt	agreements	and	credit facilities,	 including	 the	 $200	 million	 loan	 and	 servicing	 agreement,	 also	 contain	 certain	 usual	 and	 customary	 borrowing,	 affirmative,	 negative	 and	 maintenance covenants.	As	of	2012	year	end,	Snap-on	was	in	compliance	with	all	covenants	of	its	debt	agreements	and	credit	facilities.

Snap-on	believes	that	it	has	sufficient	available	cash	and	access	to	both	committed	and	uncommitted	credit	facilities	to	cover	its	expected	funding	needs	on	both	a	short- term	and	long-term	basis.	Snap-on	manages	its	aggregate	short-term	borrowings	so	as	not	to	exceed	its	availability	under	its	revolving	credit	facilities.	If	the	need	were to	arise,	Snap-on	believes	that	it	could	access	short-term	debt	markets,	predominantly	through	commercial	paper	issuances,	securitizations	(including	its	$200	million loan	and	servicing	agreement	discussed	above)	and	existing	lines	of	credit	to	fund	its	short-term	requirements	and	to	ensure	near-term	liquidity.	Snap-on	regularly monitors	the	credit	and	financial	markets	and,	in	the	future,	may	take	advantage	of	what	it	believes	are	favorable	market	conditions	to	issue	long-term	debt	to	further improve	its	liquidity	and	capital	resources.	Near	term	liquidity	requirements	for	Snap-on	include	payments	of	interest	and	dividends,	funding	to	support	new	loans originated	by	our	financial	services	businesses,	capital	expenditures,	working	capital,	restructuring	activities,	the	funding	of	pension	plans,	and	funding	for	additional share	repurchases	and	acquisitions,	if	any.	Snap-on	intends	to	make	contributions	of	$10.2	million	to	its	foreign	pension	plans	and	$1.6	million	to	its	domestic	pension plans	in	2013,	as	required	by	law.	Depending	on	market	and	other	conditions,	Snap-on	may	elect	to	make	discretionary	cash	contributions	to	its	domestic	pension	plans in	2013.

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

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

# Operating	Activities

Net	cash	provided	by	operating	activities	was	$329.3	million	in	2012,	$128.5	million	in	2011	and	$140.4	million	in	2010.	Net	cash	provided	by	operating	activities	in 2012	primarily	reflects	the	impact	of	net	year-over-year	changes	in	operating	assets	and	liabilities,	as	well	as	higher	net	earnings.	Net	cash	provided	by	operating activities	in	2011	included	the	effect	of	last	year's	return	of	$89.8	million	of	cash	previously	withheld	from	CIT.	In	the	second	quarter	of	2011,	Snap-on	recorded	an $18.0	million	pretax	arbitration	settlement	gain	and	paid	$89.8	million	of	cash	to	CIT	representing	$107.8	million	of	cash	previously	withheld	net	of	the	$18.0	million settlement.	Net	cash	provided	by	operating	activities	in	2012	also	reflects	the	impact	of	$54.7	million	of	discretionary	cash	contributions	to	the	company's	domestic pension	plans;	in	both	2011	and	2010,	Snap-on	made	discretionary	cash	contributions	of	$48.0	million	to	its	domestic	pension	plans.

# Investing	Activities

Net	cash	used	by	investing	activities	of	$173.1	million	in	2012	included	additions	to,	and	collections	of,	finance	receivables	of	$569.6	million	and	$445.5	million, respectively,	as	well	as	$27.0	million	of	proceeds	from	the	sale	of	a	non-strategic	equity	investment	at	book	value.	Net	cash	used	by	investing	activities	of	$219.6 million	in	2011	included	additions	to,	and	collections	of,	finance	receivables	of	$519.1	million	and	$356.9	million,	respectively.	Net	cash	used	by	investing	activities	of $303.0	million in	2010	 included	additions	 to,	and	collections	of,	finance	receivables	of	$497.6	million	and	$245.2	million,	respectively.	Finance	receivables	are comprised	 of	 extended-term	 installment	 loans	 to	 both	 technicians	 and	 independent	 shop	 owners	 (i.e.,	 franchisees'	 customers)	 to	 enable	 them	 to	 purchase	 tools, diagnostics	and	equipment	on	an	extended-term	payment	plan,	generally	with	average	payment	terms	of	32	months.

Capital	expenditures	in	2012,	2011	and	2010	totaled	$79.4	million,	$61.2	million	and	$51.1	million,	respectively.	Capital	expenditures	in	2012	included	continued investments	related	to	the	company's	execution	of	its	strategic	Value	Creation	Processes	around	safety,	quality,	customer	connection,	innovation	and	rapid	continuous improvement.	Capital	expenditures	in	all	three	years	included	spending	to	support	the	company's	strategic	growth	initiatives,	including	the	expansion	of	manufacturing capabilities	in	emerging	growth	markets.	Following	the	2011	construction	of	a	new	engineering	and	research	and	development	facility	in	Kunshan,	China,	the	company completed,	in	2012,	the	construction	of	a	fourth	factory	in	Kunshan,	China.	Capital	expenditures	in	all	three	years	also	included	investments,	particularly	in	the	United States,	in	new	product,	efficiency,	safety	and	cost	reduction	initiatives,	as	well	as	investments	in	new	production

and	machine	tooling	to	enhance	manufacturing	operations,	and	ongoing	replacements	of	manufacturing	and	distribution	equipment.	Capital	spending	in	all	three	years also	included	spending	for	the	replacement	and	enhancement	of	the	company's	global	enterprise	resource	planning	(ERP)	management	information	systems,	as	well	as spending	to	enhance	the	company's	corporate	headquarters	and	research	and	development	facilities	in	Kenosha,	Wisconsin.	Snap-on	believes	that	its	cash	generated from	operations,	as	well	as	 its	available	cash	on	hand	and	funds	available	from	 its	credit	facilities	will	be	sufficient	 to	fund	 the	company's	capital	expenditure requirements	in	2013.

In	2010,	Snap-on	acquired	the	remaining	40%	interest	in	Snap-on	Asia	Manufacturing	(Zhejiang)	Co.,	Ltd.,	the	company's	tool	manufacturing	operation	in	Xiaoshan, China,	for	a	purchase	price	of	$7.7	million	and	$0.1	million	of	transaction	costs;	Snap-on	acquired	the	initial	60%	interest	in	2008.	See	Note	2	to	the	Consolidated Financial	Statements	for	additional	information.

# Financing	Activities

Net	cash	used	by	financing	activities	was	$127.0	million	in	2012.	Net	cash	used	by	financing	activities	of	$293.7	million	in	2011	included	the	August	2011	repayment	of $200	million	of	unsecured	6.25%	notes	upon	maturity	with	available	cash.

In	December	2010,	Snap-on	sold	$250	million	of	unsecured	4.25%	long-term	notes	at	a	discount;	Snap-on	is	using,	and	has	used,	the	$247.7	million	of	proceeds	from the	sale	of	these	notes,	net	of	$1.6	million	of	transaction	costs,	for	general	corporate	purposes,	which	included	working	capital,	capital	expenditures,	repayment	of	all	or	a portion	of	the	company's	$200	million,	6.25%	unsecured	notes	that	matured	in	August	2011,	and	the	financing	of	finance	and	contract	receivables,	primarily	related	to SOC.	In	January	2010,	Snap-on	repaid	$150	million	of	unsecured	floating	rate	debt	upon	maturity	with	available	cash.

Proceeds	from	stock	purchase	and	option	plan	exercises	totaled	$46.8	million	in	2012,	$25.7	million	in	2011	and	$23.7	million	in	2010.	Snap-on	has	undertaken	stock repurchases	from	time	to	time	to	offset	dilution	created	by	shares	issued	for	employee	and	franchisee	stock	purchase	plans,	stock	options	and	other	corporate	purposes. In	2012,	Snap-on	repurchased	1,180,000	shares	of	its	common	stock	for	$78.1	million	under	its	previously	announced	share	repurchase	programs.	As	of	2012	year	end, Snap-on	had	remaining	availability	to	repurchase	up	to	an	additional	$180.9	million	in	common	stock	pursuant	to	its	Board	of	Directors'	(the	"Board")	authorizations. The	purchase	of	Snap-on	common	stock	is	at	the	company's	discretion,	subject	to	prevailing	financial	and	market	conditions.	Snap-on	repurchased	628,000	shares	of	its common	stock	for	$37.4	million	in	2011;	Snap-on	repurchased	152,000	shares	of	its	common	stock	for	$8.7	million	in	2010.	Snap-on	believes	that	its	cash	generated from	operations,	available	cash	on	hand,	and	funds	available	from	its	credit	facilities,	will	be	sufficient	to	fund	the	company's	share	repurchases,	if	any,	in	2013.

Snap-on	has	paid	consecutive	quarterly	cash	dividends,	without	interruption	or	reduction,	since	1939.	Cash	dividends	paid	in	2012,	2011	and	2010	totaled	$81.5	million, $76.7	million	and	$71.3	million,	respectively.	On	November	1,	2012,	the	company	announced	that	its	Board	increased	the	quarterly	cash	dividend	by	11.8%	to	$0.38	per share	($1.52	per	share	per	year).	Quarterly	dividends	declared	in	2012	were	$0.38	per	share	in	the	fourth	quarter	and	$0.34	per	share	in	the	first	three	quarters	($1.40	per share	for	the	year).	Quarterly	dividends	in	2011	were	$0.34	per	share	in	the	fourth	quarter	and	$0.32	per	share	in	the	first	three	quarters	($1.30	per	share	for	the	year). Quarterly	dividends	in	2010	were	$0.32	per	share	in	the	fourth	quarter	and	$0.30	per	share	in	the	first	three	quarters	($1.22	per	share	for	the	year).

Snap-on	believes	that	its	cash	generated	from	operations,	available	cash	on	hand	and	funds	available	from	its	credit	facilities	will	be	sufficient	to	pay	dividends	in	2013.

# Off-Balance-Sheet	Arrangements

Except	as	included	below	in	the	section	labeled	"Contractual	Obligations	and	Commitments"	and	Note	15	to	the	Consolidated	Financial	Statements,	the	company	had	no off-balance-sheet	arrangements	as	of	2012	year	end.

# Contractual	Obligations	and	Commitments

A	summary	of	Snap-on's	future	contractual	obligations	and	commitments	as	of	2012	year	end	are	as	follows:

| (Amounts	in	millions) | Total | 2013 | 2014	–	2015 | 2016	–	2017 | thereafter |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Contractual\tobligations: |  |  |  |  |  |
| Notes\tpayable | \t\t\t\t$5.2 | \t\t\t\t$5.2 | \t\t\t\t$– | \t\t\t\t$– | \t\t\t\t$– |
| Long-term\tdebt | 970.4 | – | 100.0 | 150.0 | 720.4 |
| Interest\ton\tfixed\trate\tdebt | 308.9 | 53.4 | 96.1 | 87.3 | 72.1 |
| Operating\tleases | 83.0 | 23.0 | 30.3 | 14.8 | 14.9 |
| Capital\tleases | 44.1 | 7.7 | 13.9 | 8.1 | 14.4 |
| Purchase\tobligations | 9.4 | 8.6 | 0.8 | – | – |
| Total | \t\t\t\t$\t\t1,421.0 | \t\t\t\t$\t\t97.9 | \t\t\t\t$\t\t241.1 | \t\t\t\t$\t\t260.2 | \t\t\t\t$\t\t821.8 |

Snap-on	 intends	 to	 make	 contributions	 of	 $10.2	 million	 to	 its	 foreign	 pension	 plans	 and	 $1.6	 million	 to	 its	 domestic	 pension	 plans	 in	 2013,	 as	 required	 by law.	Depending	on	market	and	other	conditions,	Snap-on	may	elect	to	make	discretionary	cash	contributions	to	its	domestic	pension	plans	in	2013.	Snap-on	has	not presented	estimated	pension	and	postretirement	funding	contributions	in	the	table	above	as	the	funding	can	vary	from	year	to	year	based	upon	changes	in	the	fair	value of	the	plan	assets	and	actuarial	assumptions;	see	Notes	11	and	12	to	the	Consolidated	Financial	Statements	for	information	on	the	company's	benefit	plans	and payments.

Due	to	the	uncertainty	of	the	timing	of	settlements	with	taxing	authorities,	Snap-on	is	unable	to	make	reasonably	reliable	estimates	of	the	period	of	cash	settlement	of unrecognized	tax	benefits	for	its	remaining	uncertain	tax	liabilities.	As	a	result,	$6.8	million	of	unrecognized	tax	benefits	have	been	excluded	from	the	table	above;	see Note	8	to	the	Consolidated	Financial	Statements	for	information	on	income	taxes.

# Environmental	Matters

Snap-on	is	subject	to	various	federal,	state	and	local	government	requirements	regulating	the	discharge	of	materials	into	the	environment	or	otherwise	relating	to	the protection	of	the	environment.	Snap-on's	policy	is	to	comply	with	these	requirements	and	the	company	believes	that,	as	a	general	matter,	its	policies,	practices	and procedures	are	properly	designed	to	prevent	unreasonable	risk	of	environmental	damage,	and	of	resulting	financial	liability,	in	connection	with	its	business.	Some	risk	of environmental	damage	is,	however,	inherent	in	some	of	Snap-on's	operations	and	products,	as	it	is	with	other	companies	engaged	in	similar	businesses.

Snap-on	is	and	has	been	engaged	in	the	handling,	manufacture,	use	and	disposal	of	many	substances	classified	as	hazardous	or	toxic	by	one	or	more	regulatory	agencies. Snap-on	believes	that,	as	a	general	matter,	its	handling,	manufacture,	use	and	disposal	of	these	substances	are	in	accordance	with	environmental	laws	and	regulations.	It is	 possible,	 however,	 that	 future	 knowledge	 or	 other	 developments,	 such	 as	 improved	 capability	 to	 detect	 substances	 in	 the	 environment	 or	 increasingly	 strict environmental	laws	and	standards	and	enforcement	policies,	could	bring	into	question	the	company's	handling,	manufacture,	use	or	disposal	of	these	substances.

# Affordable	Care	Act

The	Affordable	Care	Act	(the	"ACA"),	which	was	adopted	in	2010	and	is	being	phased	in	over	several	years,	significantly	affects	the	provision	of	both	health	care services	and	benefits	in	the	United	States;	the	ACA	may	impact	our	cost	of	providing	our	employees	and	retirees	with	health	insurance	and/or	benefits,	and	may	also impact	various	other	aspects	of	our	business.	The	ACA	did	not	have	a	material	impact	on	our	fiscal	2012,	2011	or	2010	financial	results;	however,	we	are	continuing	to assess	the	impact	of	the	ACA	on	our	health	care	benefit	costs.

# New	Accounting	Standards

See	Note	1	to	the	Consolidated	Financial	Statements	for	information	on	new	accounting	standards.

# Critical	Accounting	Policies	and	Estimates

The	Consolidated	Financial	Statements	and	related	notes	contain	information	that	is	pertinent	to	management's	discussion	and	analysis.	The	preparation	of	financial statements	in	conformity	with	accounting	principles	generally	accepted	in	the	United	States	of	America	requires	management	to	make	estimates	and	assumptions	that affect	the	reported	amounts	of	assets	and	liabilities,	the	disclosure	of	contingent	assets	and	liabilities	at	the	date	of	the	financial	statements,	and	the	reported	amounts	of revenues	and	expenses	during	the	reporting	period.	These	estimates	are	generally	based	on	historical	experience,	current	conditions	and	on	various	other	assumptions that	are	believed	to	be	reasonable	under	the	circumstances,	the	results	of	which	form	the	basis	for	making	judgments	about	the	carrying	values	of	assets	and	liabilities that	are	not	readily	available	from	other	sources,	as	well	as	identifying	and	assessing	our	accounting	treatment	with	respect	to	commitments	and	contingencies.	Actual results	could	differ	from	those	estimates.

The	company's	significant	accounting	policies	are	described	in	Note	1	to	the	Consolidated	Financial	Statements.

Snap-on	considers	the	following	policies	and	estimates	to	be	the	most	critical	in	understanding	the	judgments	that	are	involved	in	the	preparation	of	the	company's consolidated	financial	statements	and	the	uncertainties	that	could	impact	the	company's	financial	position,	results	of	operations	and	cash	flows.

Revenue	Recognition:	Snap-on	recognizes	revenue	from	the	sale	of	tools,	diagnostics	and	equipment	solutions	when	contract	terms	are	met,	the	price	is	fixed	or determinable,	collectability	is	reasonably	assured	and	a	product	is	shipped	or	risk	of	ownership	has	been	transferred	to	and	accepted	by	the	customer.	For	sales contingent	upon	customer	acceptance,	revenue	recognition	is	deferred	until	such	obligations	are	fulfilled.	Estimated	product	returns	are	recorded	as	a	reduction	in reported	revenues	at	the	time	of	sale	based	upon	historical	product	return	experience	and	gross	profit	margin	adjusted	for	known	trends.	Provisions	for	customer	volume rebates,	discounts	and	allowances	are	also	recorded	as	a	reduction	of	reported	revenues	at	the	time	of	sale	based	on	historical	experience	and	known	trends.	Revenue related	to	maintenance	and	subscription	agreements	is	recognized	over	the	terms	of	the	respective	agreements.

Snap-on	 also	 recognizes	 revenue	 related	 to	 multiple	 element	 arrangements,	 including	 sales	 of	 hardware,	 software	 and	 software-related	 services.	 When	 a	 sales arrangement	contains	multiple	elements,	such	as	hardware	and	software	products	and/or	services,	Snap-on	uses	the	relative	selling	price	method	to	allocate	revenues between	hardware	and	software	elements.	For	software	elements	that	are	not	essential	to	the	hardware's	functionality	and	related	software	post-contract	customer support,	vendor	specific	objective	evidence	("VSOE")	of	fair	value	is	used	to	further	allocate	revenue	to	each	element	based	on	its	relative	fair	value	and,	when necessary,	the	residual	method	is	used	to	assign	value	to	the	delivered	elements	when	VSOE	only	exists	for	the	undelivered	elements.	The	amount	assigned	to	the products	or	services	is	recognized	when	the	product	is	delivered	and/or	when	the	services	are	performed.	In	instances	where	the	product	and/or	services	are	performed over	an	extended	period,	as	is	the	case	with	subscription	agreements	or	the	providing	of	ongoing	support,	revenue	is	generally	recognized	on	a	straight-line	basis	over	the term	of	the	agreement,	which	generally	ranges	from	12	to	60	months.

Franchise	 Fee	 Revenue:	Franchise	fee	revenue,	including	nominal,	non-refundable	initial	fees,	is	recognized	upon	the	granting	of	a	franchise,	which	is	when	the company	has	performed	substantially	all	initial	services	required	by	the	franchise	agreement.	Franchise	fee	revenue	also	includes	ongoing	monthly	fees	(primarily	for sales	and	business	training	and	marketing	and	product	promotion	programs)	that	are	recognized	as	the	fees	are	earned.	Franchise	fee	revenue	totaled	$9.9	million,	$8.8 million	and	$9.0	million	in	fiscal	2012,	2011	and	2010,	respectively.

Financial	Services	Revenue:	Snap-on	also	generates	revenue	from	various	financing	programs	that	include	(i)	loans	to	franchisees'	customers	and	Snap-on's	industrial and	other	customers	for	the	purchase	or	lease	of	tools,	equipment	and	diagnostics	on	an	extended	term	payment	plan;	and	(ii)	business	loans	and	vehicle	leases	to franchisees.	These	financing	programs	are	offered	through	Snap-on's	finance	subsidiaries.	Financial	services	revenue	consists	primarily	of	finance	loan	receivable revenue	and	installment	contract	revenue.	Revenue	from	interest	income	on	the	on-book	financing	portfolio	is	recognized	over	the	life	of	the	contracts,	with	interest computed	on	the	average	daily	balances	of	the	underlying	contracts.	Financial	services	revenue	also	includes	servicing	fee	income	received	from	CIT.	Prior	to	July	2009, SOC	substantially	sold	all	of	its	loan	originations	to	CIT	on	a	limited	recourse	basis,	and	SOC	retained	the	right	to	service	such	loans	for	a	contractual	servicing	fee. Contractual	servicing	fees	from	CIT	were	$1.4	million,	$2.3	million	and	$4.9	million	in	fiscal	2012,	2011	and	2010,	respectively.

The	decision	to	finance	through	Snap-on	or	another	financing	entity	is	solely	at	the	election	of	the	customer.	When	assessing	customers	for	potential	financing,	Snap-on considers	various	factors	regarding	ability	to	pay	including	customers'	financial	condition,	collateral,	debt-servicing	ability,	past	payment	experience	and	credit	bureau information.	For	finance	and	contract	receivables,	Snap-on	assesses	these	factors	through	the	use	of	credit	quality	indicators	consisting	primarily	of	customer	credit	risk scores	combined	with	internal	credit	risk	grades,	collection	experience	and	other	internal	metrics.

Financial	Services	Lease	Arrangements:	Snap-on	accounts	for	its	financial	services	leases	as	direct	financing	or	sales-type	leases.	The	company	determines	the	gross investment	in	the	lease	as	the	present	value	of	the	minimum	lease	payments	using	the	interest	rate	implicit	in	the	lease,	net	of	amounts,	if	any,	included	therein	for executor	costs	to	be	paid	by	Snap-on,	together	with	any	profit	thereon.	The	difference	between	the	gross	investment	in	the	lease	and	the	cost	of	the	leased	property	is reported	as	unearned	finance	charges.	Unearned	finance	charges	are	amortized	to	income	over	the	life	of	the	contract,	with	interest	computed	on	the	average	daily balance	of	the	underlying	contract.	The	default	covenants	included	in	the	lease	arrangements	are	usual	and	customary,	consistent	with	industry	practice,	and	do	not impact	the	lease	classification.	Except	in	circumstances	where	the	company	has	concluded	that	a	lessee's	financial	condition	has	deteriorated,	the	other	default	covenants under	Snap-on's	lease	arrangements	are	objectively	determinable.

Impairment	of	Goodwill	and	Other	Indefinite-lived	Intangible	Assets:	Goodwill	and	other	indefinite-lived	intangible	assets	are	tested	for	impairment	annually	or	more frequently	if	events	or	changes	in	circumstances	indicate	that	the	assets	might	be	impaired.	Annual	impairment	tests	are	performed	by	the	company	in	the	second	quarter of	each	year.

Snap-on	evaluates	the	recoverability	of	goodwill	by	estimating	the	future	discounted	cash	flows	of	the	businesses	to	which	the	goodwill	relates.	Estimated	cash	flows	and related	goodwill	are	grouped	at	the	reporting	unit	level.	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.	Within	its	four	reportable	operating	segments,	the	company	has	identified	11	reporting	units.

Snap-on	evaluates	the	recoverability	of	goodwill	by	utilizing	an	income	approach	that	estimates	the	fair	value	of	the	future	discounted	cash	flows	of	the	reporting	units to	which	the	goodwill	relates.	The	future	projections,	which	are	based	on	both	past	performance	and	the	projections	and	assumptions	used	in	the	company's	operating plans,	are	subject	to	change	as	a	result	of	changing	economic	and	competitive	conditions.	This	approach	reflects	management's	internal	outlook	at	the	reporting	units, which	management	believes	provides	the	best	determination	of	value	due	to	management's	insight	and	experience	with	the	reporting	unit.	Significant	estimates	used	by management	in	the	discounted	cash	flows	methodology	include	estimates	of	future	cash	flows	based	on	expected	growth	rates,	price	increases,	working	capital	levels, expected	benefits	from	RCI	initiatives,	and	a	weighted-average	cost	of	capital	that	reflects	the	specific	risk	profile	of	the	reporting	unit	being	tested.	The	company's methodologies	for	valuing	goodwill	are	applied	consistently	on	a	year-over-year	basis;	 the	assumptions	used	 in	performing	 the	second	quarter	2012	 impairment calculations	were	evaluated	in	light	of	current	market	and	business	conditions.	Snap-on	continues	to	believe	that	the	future	discounted	cash	flow	valuation	model provides	the	most	reasonable	and	meaningful	fair	value	estimate	based	upon	the	reporting	units'	projections	of	future	operating	results	and	cash	flows	and	replicates	how market	participants	would	value	the	company's	reporting	units	in	an	orderly	transaction.

In	the	event	the	fair	value	of	a	reporting	unit	is	less	than	the	carrying	value,	including	goodwill,	the	company	would	then	perform	an	additional	assessment	that	would compare	the	implied	fair	value	of	goodwill	with	the	carrying	amount	of	goodwill.	The	determination	of	implied	fair	value	of	goodwill	would	require	management	to compare	the	estimated	fair	value	of	the	reporting	unit	to	the	estimated	fair	value	of	the	assets	and	liabilities	of	the	reporting	unit;	if	necessary,	the	company	may	consult with	valuation	specialists	to	assist	with	the	assessment	of	the	estimated	fair	value	of	the	assets	and	liabilities	of	the	reporting	unit.	If	the	implied	fair	value	of	the	goodwill is	less	than	the	carrying	value,	an	impairment	loss	would	be	recorded.

Snap-on	also	evaluates	the	recoverability	of	its	indefinite-lived	trademarks	by	utilizing	an	income	approach	that	estimates	the	fair	value	of	the	future	discounted	cash flows	of	each	of	its	trademarks.	The	future	projections,	which	are	based	on	both	past	performance	and	the	projections	and	assumptions	used	in	the	company's	operating plans,	are	subject	to	change	as	a	result	of	changing	economic	and	competitive	conditions.	Significant	estimates	used	by	management	in	the	discounted	cash	flows methodology	include	estimates	of	future	cash	flows	based	on	expected	growth	and	royalty	rates,	expected	synergies,	and	a	weighted-average	cost	of	capital	that	reflects the	specific	risk	profile	of	the	trademark	being	tested.	The	company's	methodologies	for	valuing	trademarks	are	applied	consistently	on	a	year-over-year	basis;	the assumptions	used	in	performing	the	second	quarter	2012	impairment	calculations	were	evaluated	in	light	of	current	market	and	business	conditions.	Snap-on	continues	to believe	that	the	future	discounted	cash	flow	valuation	model	provides	the	most	reasonable	and	meaningful	fair	value	estimate	based	upon	the	trademarks'	projected future	cash	flows	and	replicates	how	market	participants	would	value	the	company's	trademarks	in	an	orderly	transaction.

Inherent	in	fair	value	determinations	are	significant	judgments	and	estimates,	including	material	assumptions	about	future	revenue,	profitability	and	cash	flows,	the company's	operational	plans	and	its	interpretation	of	current	economic	indicators.	Should	the	operations	of	the	businesses	with	which	goodwill	or	other	indefinite-lived intangible	assets	are	associated	incur	significant	declines	in	profitability	and	cash	flow	due	to	significant	and	long-term	deterioration	in	macroeconomic,	industry	and market	conditions,	including	in	Europe,	the	loss	of	key	customers,	changes	in	technology	or	markets,	significant	changes	in	key	personnel	or	litigation,	a	significant	and sustained	decrease	in	share	price	and/or	other	events,	including	effects	from	the	sale	or	disposal	of	a	reporting	unit,	some	or	all	of	the	recorded	goodwill	or	other indefinite-lived	intangible	assets	could	be	subject	to	impairment	and	could	result	in	a	material	adverse	effect	on	Snap-on's	financial	position	or	results	of	operations.

Snap-on	completed	its	annual	impairment	testing	of	goodwill	and	other	indefinite-lived	intangible	assets	in	the	second	quarter	of	2012,	the	results	of	which	did	not	result in	any	impairment.	As	of	2012	year	end,	the	company	has	no	accumulated	impairment	losses.	Although	the	company	consistently	uses	the	same	methods	in	developing the	assumptions	and	estimates	underlying	the	fair	value	calculations,	such	estimates	are	uncertain	by	nature	and	can	vary	from	actual	results.	In	performing	its	annual impairment	testing	the	company	performed	a	sensitivity	analysis	on	the	material	assumptions	used	in	the	discounted	cash	flow	valuation	models	for	each	of	its	11 reporting	units.	Based	on	the	company's	second	quarter	2012	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.	See	Note	6	to	the	Consolidated Financial	Statements	for	further	information	about	goodwill	and	other	intangible	assets.

Impairment	of	Long-lived	and	Amortized	Intangible	Assets:	Snap-on	performs	impairment	evaluations	of	its	long-lived	assets,	including	property,	plant	and	equipment and	intangible	assets	with	finite	lives,	whenever	business	conditions	or	events	indicate	that	those	assets	may	be	impaired.	When	the	estimated	future	undiscounted	cash flows	to	be	generated	by	the	assets	are	less	than	the	carrying	value	of	the	long-lived	assets,	the	assets	are	written	down	to	fair	market	value	and	a	charge	is	recorded	to current	operations.

Significant	and	unanticipated	changes	in	circumstances,	such	as	significant	declines	in	profitability	and	cash	flow	due	to	significant	and	long-term	deterioration	in macroeconomic,	industry	and	market	conditions,	including	in	Europe,	the	loss	of	key	customers,	changes	in	technology	or	markets	and/or	other	events,	including	effects from	the	sale	or	disposal	of	a	reporting	unit,	could	require	a	provision	for	impairment	in	a	future	period.

Allowances	for	Doubtful	Accounts:	Snap-on	maintains	allowances	for	doubtful	accounts	to	absorb	probable	losses	inherent	in	its	portfolio	of	receivables.	The	allowances for	doubtful	accounts	represent	management's	estimate	of	the	losses	inherent	in	the	company's	receivables	portfolio	based	on	ongoing	assessments	and	evaluations	of collectability	and	historical	loss	experience.	In	estimating	losses	inherent	in	each	of	its	receivable	portfolios	(trade,	finance	and	contract	receivables),	Snap-on	uses historical	 loss	 experience	 rates	 by	 portfolio	 and	 applies	 them	 to	 a	 related	 aging	 analysis.	 Determination	 of	 the	 proper	 level	 of	 allowances	 by	 portfolio	 requires management	to	exercise	significant	judgment	about	the	timing,	frequency	and	severity	of	credit	losses	that	could	materially	affect	the	provision	for	credit	losses	and, therefore,	net	income.	The	allowances	for	doubtful	accounts	takes	into	consideration	numerous	quantitative	and	qualitative	factors,	by	loan	type,	including	historical	loss experience,	portfolio	duration,	collection	experience,	delinquency	trends,	economic	conditions	and	credit	risk	quality	as	follows:

•Snap-on	evaluates	the	collectability	of	receivables	based	on	a	combination	of	various	financial	and	qualitative	factors	that	may	affect	the	customers'	ability to	pay.	These	factors	may	include	customers'	financial	condition,	collateral,	debt-servicing	ability,	past	payment	experience	and	credit	bureau	information.

•For	finance	and	contract	receivables,	Snap-on	assesses	quantitative	and	qualitative	factors	through	the	use	of	credit	quality	indicators	consisting	primarily of	customer	credit	risk	scores	combined	with	internal	credit	risk	grades,	collection	experience	and	other	internal	metrics	as	follows:

•	 Credit	risk	–	Customer	credit	risk	is	monitored	regularly	on	an	account	by	account	basis	through	customer	credit	scores	obtained	from	major	credit bureaus	as	well	as	through	the	use	of	internal	proprietary,	custom	scoring	models	used	to	evaluate	each	transaction	at	the	time	of	the	application	for credit	and	by	periodically	updating	those	credit	scores	for	ongoing	monitoring	purposes.	In	addition,	Snap-on	evaluates	credit	quality	through	the use	of	a	loan	risk	grading	measurement	system	that	provides	a	framework	to	analyze	the	finance	and	contract	receivables	on	the	basis	of	risk factors	of	the	individual	obligor	as	well	as	transaction	specific	risk.

•	 Collection	experience	–	Snap-on	conducts	monthly	reviews	of	credit	and	collection	performance	for	each	of	its	finance	and	contract	receivable portfolios	focusing	on	data	such	as	delinquency	trends,	non-performing	assets,	charge-off	and	recovery	activity.	These	reviews	allow	for	the formulation	of	collection	strategies	and	potential	collection	policy	modifications	in	response	to	changing	risk	profiles	in	the	finance	and	contract receivable	portfolios.

•	 Other	internal	metrics	–	Snap-on	maintains	a	system	that	aggregates	credit	exposure	by	customer,	industry,	risk	classification	and	geographical area,	among	other	factors,	to	further	monitor	changing	risk	profiles.

Management	performs	detailed	reviews	of	its	receivables	on	a	monthly	and/or	quarterly	basis	to	assess	the	adequacy	of	the	allowances	based	on	historical	and	current trends	and	other	factors	affecting	credit	losses	and	to	determine	if	any	impairment	has	occurred.	A	receivable	is	impaired	when	it	is	probable	that	all	amounts	related	to the	receivable	will	not	be	collected	according	to	the	contractual	terms	of	the	agreement.	In	circumstances	where	the	company	is	aware	of	a	specific	customer's	inability to	meet	its	financial	obligations,	a	specific	reserve	is	recorded	against	amounts	due	to	reduce	the	net	recognized	receivable	to	the	amount	reasonably	expected	to	be collected.	Additions	to	the	allowances	for	doubtful	accounts	are	maintained	through	adjustments	to	the	provision	for	credit	losses,	which	are	charged	to	current	period earnings;	amounts	determined	to	be	uncollectable	are	charged	directly	against	the	allowances,	while	amounts	recovered	on	previously	charged-off	accounts	increase	the allowances.	Net	charge-offs	include	the	principal	amount	of	losses	charged-off	as	well	as	charged-off	interest	and	fees.	Recovered	interest	and	fees	previously	charged- off	are	recorded	through	the	allowances	for	doubtful	accounts	and	increase	the	allowances.	Finance	receivables	are	assessed	for	charge-off	when	an	account	becomes 120	days	past	due	and	are	charged-off	typically	within	60	days	of	asset	repossession.	Contract	receivables	related	to	equipment	leases	are	generally	charged-off	when	an account	becomes	150	days	past	due,	while	contract	receivables	related	to	franchise	finance	and	van	leases	are	generally	charged-off	up	to	180	days	past	the	asset	return. For	finance	and	contract	receivables,	customer	bankruptcies	are	generally	charged-off	upon	notification	that	the	associated	debt	is	not	being	reaffirmed	or,	in	any	event, no	later	than	180	days	past	due.

Snap-on	does	not	believe	that	its	trade	accounts,	finance	or	contract	receivables	represent	significant	concentrations	of	credit	risk	because	of	the	diversified	portfolio	of individual	customers	and	geographical	areas.	See	Note	3	to	the	Consolidated	Financial	Statements	for	further	information	on	allowances	for	doubtful	accounts.

Excess	and	Obsolete	Inventory:	Snap-on	records	allowances	for	excess	and	obsolete	inventory	based	on	historical	and	estimated	future	demand	and	market	conditions. Allowances	for	raw	materials	are	largely	based	on	an	analysis	of	raw	material	age	and	actual	physical	inspection	of	raw	material	for	fitness	for	use.	As	part	of	evaluating the	adequacy	of	allowances	for	work-in-progress	and	finished	goods,	management	reviews	individual	product	stock-keeping	units	(SKUs)	by	product	category	and product	life	cycle.	Cost	adjustments	for	each	product	category/product	life-cycle	state	are	generally	established	and	maintained	based	on	a	combination	of	historical experience,	forecasted	sales	and	promotions,	technological	obsolescence,	inventory	age	and	other	actual	known	conditions	and	circumstances.	Should	actual	product marketability	and	raw	material	fitness	for	use	be	affected	by	conditions	that	are	different	from	management	estimates,	further	adjustments	to	inventory	allowances	may be	required.

Pension	Benefits:	The	pension	benefit	obligation	and	related	pension	expense	are	calculated	in	accordance	with	U.S.	GAAP	and	are	impacted	by	certain	actuarial assumptions.	Changes	in	these	assumptions	are	primarily	influenced	by	factors	outside	of	Snap-on's	control	and	can	have	a	significant	effect	on	the	amounts	reported	in the	financial	statements.	Snap-on	believes	that	the	two	most	critical	assumptions	are	(i)	the	expected	return	on	plan	assets;	and	(ii)	the	assumed	discount	rate.

Pension	expense	increases	as	the	expected	rate	of	return	on	plan	assets	decreases.	Lowering	the	expected	rate	of	return	assumption	for	Snap-on's	domestic	pension	plan assets	by	50	basis	points	would	have	increased	Snap-on's	2012	domestic	pension	expense	by	approximately	$3.7	million.	Snap-on	uses	a	three-year,	market-related value	asset	method	of	amortizing	the	difference	between	actual	and	expected	returns	on	its	domestic	plans'	assets.

The	objective	of	Snap-on's	discount	rate	assumption	is	to	reflect	the	rate	at	which	the	pension	benefits	could	be	effectively	settled.	In	making	this	determination,	the company	takes	into	account	the	timing	and	amount	of	benefits	that	would	be	available	under	the	plans.	The	discount	rate	assumption	used	to	determine	the	December	29, 2012	projected	benefit	obligation	was	based	on	a	cash	flow	matching	methodology	developed	by	the	company's	outside	actuaries	and	which	incorporates	a	review	of current	economic	conditions.	The	methodology	for	selecting	the	discount	rate	as	of	2012	year	end	was	to	match	the	plans'	yearly	projected	benefit	cash	flows	to	those	of hypothetical	bond	portfolios	using	high-quality,	AA	rated	or	better,	corporate	bonds	from	either	Moody's	Investors	Service	or	Standard	&	Poor's	credit	rating	agencies available	at	the	measurement	date.	This	technique	calculates	bond	portfolios	that	produce	adequate	cash	flows	to	pay	the	plans'	projected	yearly	benefits	and	then	selects the	portfolio	with	the	highest	yield	and	uses	that	yield	as	the	recommended	discount	rate.

The	selection	of	the	4.3%	weighted-average	discount	rate	for	Snap-on's	domestic	pension	plans	as	of	2012	year	end	represents	the	single	rate	that	produces	the	same present	value	of	cash	flows	as	the	estimated	benefit	plan	payments.	Lowering	Snap-on's	domestic	discount	rate	assumption	by	50	basis	points	would	have	increased Snap-on's	2012	domestic	pension	expense	and	projected	benefit	obligations	by	approximately	$6.3	million	and	$60.5	million,	respectively.	As	of	2012	year	end,	Snap- on's	domestic	projected	benefit	obligation	comprised	approximately	82%	of	Snap-on's	worldwide	projected	benefit	obligation.	The	weighted-average	discount	rate	for Snap-on's	foreign	pension	plans	of	4.1%	represents	the	single	rate	that	produces	the	same	present	value	of	cash	flows	as	the	estimated	benefit	plan	payments.	Lowering Snap-on's	foreign	discount	rate	assumption	by	50	basis	points	would	have	increased	Snap-on's	2012	foreign	pension	expense	and	projected	benefit	obligation	by approximately	$1.6	million	and	$21.6	million,	respectively.

Actuarial	gains	and	losses	in	excess	of	10	percent	of	the	greater	of	the	projected	benefit	obligation	or	market-related	value	of	assets	are	amortized	on	a	straight-line	basis over	the	average	remaining	service	period	of	active	participants.	Prior	service	costs	resulting	from	plan	amendments	are	amortized	in	equal	annual	amounts	over	the average	remaining	service	period	of	affected	active	participants	or	over	the	remaining	life	expectancy	of	affected	retired	participants.	See	Note	11	to	the	Consolidated Financial	Statements	for	further	information	on	pension	plans.

Postretirement	Benefits:	Snap-on's	postretirement	benefits	obligation	and	related	expense	are	calculated	in	accordance	with	U.S.	GAAP	and	are	impacted	by	certain actuarial	assumptions,	including	health	care	trend	rates.	As	of	2012	year	end,	a	one-percentage-point	increase	in	the	health	care	cost	trend	rate	for	future	years	would increase	the	accumulated	postretirement	benefit	obligation	by	approximately	$1.3	million	and	the	aggregate	of	the	service	cost	and	interest	cost	components	by	$0.1 million.	Conversely,	a	one-percentage-point	decrease	in	the	health	care	cost	trend	rate	for	future	years	would	decrease	the	accumulated	postretirement	benefit	obligation by	$1.1	million	and	the	aggregate	of	the	service	cost	and	interest	cost	components	by	$0.1	million.	See	Note	12	to	the	Consolidated	Financial	Statements	for	further information	on	postretirement	plans.

Income	Taxes:	Snap-on	records	deferred	income	tax	assets	and	liabilities	for	differences	between	the	book	basis	and	tax	basis	of	the	related	net	assets.	Snap-on	records	a valuation	allowance,	when	appropriate,	to	reduce	its	deferred	tax	assets	if	it	is	more-likely-than-not	that	some	portion	or	all	of	the	deferred	tax	assets	will	not	be realized.	While	the	company	has	considered	future	taxable	income	and	ongoing	prudent	and	feasible	tax	strategies	in	assessing	the	need	for	the	valuation	allowance,	if these	estimates	and	assumptions	change	in	the	future,	the	company	may	be	required	to	adjust	its	valuation	allowance.	This	could	result	in	a	charge	to,	or	an	increase	in, income	in	the	period	such	determination	is	made.

In	addition,	the	company	operates	within	multiple	taxing	jurisdictions	and	is	subject	to	audit	in	these	jurisdictions.	The	company	records	accruals	for	the	estimated outcomes	of	these	audits	and	the	accruals	may	change	in	the	future	due	to	new	developments	in	each	matter.	See	Note	8	to	the	Consolidated	Financial	Statements	for further	information	on	income	taxes.

# Outlook

Snap-on	believes	that	the	continued	advancement	of	its	strategic	framework	will	provide	the	opportunity	to	further	capitalize	on	its	defined	runways	for	coherent	growth and	create	long-term	value	for	its	shareholders.	Growth	opportunities	in	2013	will	focus	on	vehicle	repair	technicians,	repair	shop	owners	and	managers,	critical industries	and	emerging	markets.	For	vehicle	repair	technicians,	the	company	intends	to	continue	to	enhance	its	mobile	tool	distribution	network	by	reaching	more vehicle	repair	technicians,	and	improve	franchisee	productivity,	profitability,	satisfaction	and	commercial	health.	Similarly,	Snap-on	seeks	to	further	expand	its	presence with	repair	shop	owners	and	managers	 through	direct	and	distributor	channels	within	 its	Repair	Systems	&	Information	Group	with	new	and	expanded	product introductions	and	services.	The	company	also	expects,	as	part	of	its	coherent	growth	strategy,	to	continue	rolling	the	Snap-on	brand	"out	of	the	garage,"	providing professional	technicians	in	a	diverse	cross-section	of	critical	industries	with	a	broad	range	of	productivity-enhancing	solutions	suited	to	their	unique	needs.	Snap-on	also intends	to	continue	investing	in	emerging	markets,	including	the	further	expansion	of	its	manufacturing	capabilities	and	product	offerings	in	this	arena.	In	2013,	our financial	services	businesses	will	continue	to	focus	on	delivering	financial	products	and	services	that	attract	and	sustain	profitable	franchisees	and	support	Snap-on's strategies	for	expanding	market	coverage	and	penetration.	Snap-on	believes	that	it	is	well-positioned	to	carry	out	its	growth	plans	and	capitalize	on	positive	long-term trends	in	2013,	however,	global	market	and	economic	conditions	could	impact	the	level	and	timing	of	resources	deployed	in	pursuit	of	these	strategic	initiatives,	and Snap-on's	ability	to	achieve	growth	will	depend	on	these	as	well	as	other	factors	that	could	impact	the	company's	actual	results.

In	2013,	Snap-on	expects	to	continue	with	the	advancement	of	its	strategic	framework	designed	to	enhance	its	mobile	tool	distribution	network,	expand	in	the	vehicle repair	garage,	extend	to	critical	industries	and	build	in	emerging	markets.	In	pursuit	of	these	initiatives,	Snap-on	anticipates	that	capital	expenditures	in	2013	will	be	in	a range	of	$70	million	to	$80	million.	Snap-on	expects	that	its	full	year	2013	effective	income	tax	rate	will	be	comparable	to	its	2012	rate.

# Item	7A:	Quantitative	and	Qualitative	Disclosures	About	Market	Risk

# Market,	Credit	and	Economic	Risks

Market	risk	is	the	potential	economic	loss	that	may	result	from	adverse	changes	in	the	fair	value	of	financial	instruments.	Snap-on	is	exposed	to	market	risk	from changes	in	both	foreign	currency	exchange	rates	and	interest	rates.	Snap-on	monitors	its	exposure	to	these	risks	and	attempts	to	manage	the	underlying	economic exposures	through	the	use	of	financial	instruments	such	as	foreign	currency	forward	contracts,	interest	rate	swap	agreements	and	treasury	lock	agreements.	Snap-on	does not	use	derivative	instruments	for	speculative	or	trading	purposes.	Snap-on's	broad-based	business	activities	help	to	reduce	the	impact	that	volatility	in	any	particular area	or	related	areas	may	have	on	its	operating	earnings	as	a	whole.	Snap-on's	management	takes	an	active	role	in	the	risk	management	process	and	has	developed policies	and	procedures	that	require	specific	administrative	and	business	functions	to	assist	in	the	identification,	assessment	and	control	of	various	risks.

# Foreign	Currency	Risk	Management

Snap-on	has	significant	international	operations	and	is	subject	to	certain	risks	inherent	with	foreign	operations	that	include	currency	fluctuations.	Foreign	exchange	risk exists	to	the	extent	that	Snap-on	has	payment	obligations	or	receipts	denominated	in	currencies	other	than	the	functional	currency,	including	intercompany	loans denominated	in	foreign	currencies.	To	manage	these	exposures,	Snap-on	identifies	naturally	offsetting	positions	and	then	purchases	hedging	instruments	to	protect	the residual	net	exposures.	See	Note	10	to	the	Consolidated	Financial	Statements	for	information	on	foreign	currency	risk	management.

# Interest	Rate	Risk	Management

Snap-on	aims	to	control	funding	costs	by	managing	the	exposure	created	by	the	differing	maturities	and	interest	rate	structures	of	Snap-on's	assets	and	liabilities	through the	use	of	interest	rate	swap	agreements.	Treasury	lock	agreements	are	used	from	time	to	time	to	manage	potential	changes	in	interest	rates	in	anticipation	of	the	issuance or	sale	of	certain	financial	instruments.	See	Note	10	to	the	Consolidated	Financial	Statements	for	information	on	interest	rate	risk	management.

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

The	estimated	maximum	potential	one-day	loss	in	fair	value,	calculated	using	the	VAR	model,	as	of	2012	and	2011	year	end	was	$1.3	million	and	$2.3	million, respectively,	on	interest	rate-sensitive	financial	instruments,	and	$0.4	million	and	$0.6	million,	respectively,	on	foreign	currency-sensitive	financial	instruments.	The VAR	model	is	a	risk	management	tool	and	does	not	purport	to	represent	actual	losses	in	fair	value	that	will	be	incurred	by	Snap-on,	nor	does	it	consider	the	potential effect	of	favorable	changes	in	market	factors.

# Credit	Risk

Credit	risk	is	the	possibility	of	loss	from	a	customer's	failure	to	make	payments	according	to	contract	terms.	Prior	to	granting	credit,	each	customer	is	evaluated,	taking into	consideration	the	borrower's	financial	condition,	collateral,	debt-servicing	capacity,	past	payment	experience,	credit	bureau	information,	and	other	financial	and qualitative	factors	that	may	affect	the	borrower's	ability	to	repay.	Credit	risk	is	also	monitored	regularly	through	the	use	of	internal	proprietary,	custom	scoring	models used	to	evaluate	each	transaction	at	the	time	of	the	application	for	credit	and	by	periodically	updating	those	credit	scores	for	ongoing	monitoring	purposes.	Snap-on evaluates	credit	quality	through	the	use	of	an	internal	proprietary	measuring	system	that	provides	a	framework	to	analyze	finance	and	contract	receivables	on	the	basis	of risk	factors	of	the	individual	obligor	as	well	as	transaction	specific	risk.	Loans	that	have	been	granted	are	typically	monitored	through	an	asset	quality	review	process that	closely	monitors	past	due	accounts	and	initiates	a	progressive	collection	action	process	when	appropriate.	In	addition	to	its	direct	credit	risk	exposure,	Snap-on	also has	credit	risk	exposure	for	certain	SOC-originated	contracts	with	recourse	provisions	related	to	franchisee	van	loans	sold	by	SOC;	as	of	2012	and	2011	year	end,	$13.3 million	and	$13.9	million,	respectively,	of	franchisee	van	loans	contain	a	recourse	provision	to	Snap-on	if	the	loans	become	more	than	90	days	past	due.

# Counterparty	Risk

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

# Economic	Risk

Economic	risk	is	the	possibility	of	loss	resulting	from	economic	instability	in	certain	areas	of	the	world.	Snap-on	continually	monitors	its	exposure	in	these	markets.

As	a	result	of	the	above	market,	credit	and	economic	risks,	net	income	and	revenues	in	any	particular	period	may	not	be	representative	of	full-year	results	and	may	vary significantly	from	year	to	year.	Inflation	has	not	had	a	significant	impact	on	the	company.

# Commodity	Risk

Snap-on	is	a	purchaser	of	certain	commodities	such	as	steel,	natural	gas	and	electricity.	The	company	is	also	a	purchaser	of	components	and	parts	that	are	integrated	into the	company's	end	products,	as	well	as	the	purchaser	of	certain	finished	goods,	all	of	which	may	contain	various	commodities	including	steel,	aluminum	and	others. Snap-on's	supply	of	raw	materials	and	purchased	components	are	generally	and	readily	available	from	numerous	suppliers.

The	principal	raw	material	used	in	the	manufacture	of	the	company's	products	is	steel,	which	the	company	purchases	in	competitive,	price-sensitive	markets.	To	meet Snap-on's	high	quality	standards,	the	company's	steel	needs	range	from	specialized	alloys,	which	are	available	only	from	a	limited	group	of	approved	suppliers,	to commodity	types	of	alloys.	These	raw	materials	have	historically	exhibited	price	and	demand	cyclicality.	Some	of	these	materials	have	been,	and	in	the	future	may	be, in	 short	 supply.	As	 some	 steel	 alloys	 require	 specialized	 manufacturing	 procedures,	 Snap-on	 could	 experience	 inventory	 shortages	 if	 it	 were	 required	 to	 use	 an alternative	manufacturer	on	short	notice.	Additionally,	unexpected	price	increases	could	result	in	higher	prices	to	Snap-on's	customers	or	an	erosion	of	the	margins	on	its products.

Snap-on	believes	its	ability	to	sell	product	is	also	dependent	on	the	number	of	vehicles	on	the	road,	the	number	of	miles	driven	and	the	general	aging	of	vehicles.	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	the	technicians	and,	subsequently,	the	demand	the	technicians	have	for	the	company's	tools,	other	products	and	services,	and	the	value	they	place	on those	products	and	services.	To	the	extent	that	the	prices	of	gasoline	and	other	petroleum-based	fuels	increase,	as	they	have	at	times	in	recent	years,	consumers	may	turn to	other	methods	of	transportation,	including	more	frequent	use	of	public	transportation,	which	could	result	in	a	decrease	in	the	use	of	privately	operated	vehicles.	A decrease	in	the	use	of	privately	operated	vehicles	may	lead	to	fewer	repairs	and	less	demand	for	the	company's	products.

To	the	extent	that	commodity	prices	increase	and	the	company	does	not	have	firm	pricing	agreements	with	its	suppliers,	the	company	may	experience	margin	declines	to the	extent	that	it	is	not	able	to	increase	the	selling	prices	of	its	products.

# Item	8:	Financial	Statements	and	Supplementary	Data

The	financial	statements	and	schedules	are	listed	on	page	61	and	are	incorporated	by	reference	in	this	Item	8.

# Item	9:	Changes	in	and	Disagreements	With	Accountants	on	Accounting	and	Financial	Disclosure

# Item	9A:	Controls	and	Procedures

# Evaluation	of	Disclosure	Controls	and	Procedures

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

In	accordance	with	Rule	13a-15(b)	of	the	Securities	Exchange	Act	of	1934	(the	"Exchange	Act"),	the	company's	management	evaluated,	with	the	participation	of	the Chief	Executive	Officer	and	Chief	Financial	Officer,	the	effectiveness	of	the	design	and	operation	of	the	company's	disclosure	controls	and	procedures	(as	defined	in Rules	13a-15(e)	and	15d-15(e)	under	the	Exchange	Act)	as	of	December	29,	2012.	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	December	29,	2012,	to	ensure	that	information required	to	be	disclosed	by	the	company	in	the	reports	it	files	or	submits	under	the	Exchange	Act	is	recorded,	processed,	summarized	and	reported,	within	the	time period	specified	in	the	Securities	and	Exchange	Commission	rules	and	forms,	and	to	ensure	that	information	required	to	be	disclosed	by	the	company	in	the	reports	it files	or	submits	under	the	Exchange	Act	is	accumulated	and	communicated	to	the	company's	management,	including	its	principal	executive	and	principal	financial officers,	or	persons	performing	similar	functions,	as	appropriate,	to	allow	timely	decisions	regarding	required	disclosure.

# Changes	in	Internal	Control

There	has	not	been	any	change	in	the	company's	internal	control	over	financial	reporting	during	the	quarter	ended	December	29,	2012,	that	has	materially	affected,	or	is reasonably	likely	to	materially	affect,	the	company's	internal	control	over	financial	reporting	(as	such	term	is	defined	in	Exchange	Act	Rules	13a-15(f)	and	15d-15(f)).

# Management's	Report	on	Internal	Control	over	Financial	Reporting

Our	management	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting	(as	defined	in	Exchange	Act	Rules	13a-15(f)	and	15d- 15(f)	under	the	Securities	Exchange	Act	of	1934,	as	amended).	Under	the	supervision	and	with	the	participation	of	our	management,	including	our	Chief	Executive Officer	and	Chief	Financial	Officer,	we	evaluated	the	effectiveness	of	our	internal	control	over	financial	reporting	based	on	the	criteria	set	forth	by	the	Committee	of Sponsoring	Organizations	of	the	Treadway	Commission	in	Internal	Control	–	Integrated	Framework.	Based	on	this	assessment,	the	company's	management	believes that,	as	of	December	29,	2012,	our	internal	control	over	financial	reporting	was	effective	at	a	reasonable	assurance	level.	The	company's	internal	control	over	financial reporting	as	of	December	29,	2012,	has	been	audited	by	Deloitte	&	Touche	LLP,	an	independent	registered	public	accounting	firm,	as	stated	in	their	attestation	report, which	is	included	herein.

Our	management,	including	the	Chief	Executive	Officer	and	Chief	Financial	Officer,	does	not	expect	that	our	internal	control	over	financial	reporting	will	prevent	all error	or	fraud.	Because	of	inherent	limitations,	a	system	of	internal	control	over	financial	reporting	can	provide	only	reasonable	assurance	and	may	not	prevent	or	detect misstatements.	Further,	because	of	changes	in	conditions,	the	effectiveness	of	internal	control	over	financial	reporting	may	vary	over	time.

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

# To	the	Board	of	Directors	and	Shareholders	of Snap-on	Incorporated:

We	have	audited	the	internal	control	over	financial	reporting	of	Snap-on	Incorporated	and	subsidiaries	(the	"Company")	as	of	December	29,	2012,	based	on	criteria established in	Internal	 Control	 – Integrated	 Framework issued	 by	 the	 Committee	 of	 Sponsoring	 Organizations	 of	 the	 Treadway	 Commission.	 The	 Company's management	is	responsible	for	maintaining	effective	internal	control	over	financial	reporting	and	for	its	assessment	of	the	effectiveness	of	internal	control	over	financial reporting,	 included	 in	 the	accompanying	Management's	Report	on	Internal	Control	over	Financial	Reporting.	Our	responsibility	 is	 to	express	an	opinion	on	 the Company's	internal	control	over	financial	reporting	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and perform	the	audit	to	obtain	reasonable	assurance	about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our	audit included	obtaining	an	understanding	of	internal	control	over	financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	testing	and	evaluating	the	design	and operating	effectiveness	of	internal	control	based	on	the	assessed	risk,	and	performing	such	other	procedures	as	we	considered	necessary	in	the	circumstances.	We	believe that	our	audit	provides	a	reasonable	basis	for	our	opinion.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	by,	or	under	the	supervision	of,	the	company's	principal	executive	and	principal	financial officers,	or	persons	performing	similar	functions,	and	effected	by	the	company's	board	of	directors,	management,	and	other	personnel	to	provide	reasonable	assurance regarding	the	reliability	of	financial	reporting	and	the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting principles.	A	company's	internal	control	over	financial	reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records	that,	in	reasonable detail,	accurately	and	fairly	reflect	the	transactions	and	dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are	recorded	as necessary	to	permit	preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company are	being	made	only	in	accordance	with	authorizations	of	management	and	directors	of	the	company;	and	(3)	provide	reasonable	assurance	regarding	prevention	or timely	detection	of	unauthorized	acquisition,	use,	or	disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	the	inherent	limitations	of	internal	control	over	financial	reporting,	including	the	possibility	of	collusion	or	improper	management	override	of	controls, material	misstatements	due	to	error	or	fraud	may	not	be	prevented	or	detected	on	a	timely	basis.	Also,	projections	of	any	evaluation	of	the	effectiveness	of	the	internal control	over	financial	reporting	to	future	periods	are	subject	to	the	risk	that	the	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of compliance	with	the	policies	or	procedures	may	deteriorate.

In	our	opinion,	the	Company	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	December	29,	2012,	based	on	the	criteria established	in	Internal	Control	–	Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.

We	have	also	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	financial	statements	as	of and	for	the	year	ended	December	29,	2012,	of	the	Company	and	our	report	dated	February	14,	2013,	expressed	an	unqualified	opinion	on	those	financial	statements.

/s/	Deloitte	&	Touche	LLP

DELOITTE	&	TOUCHE	LLP Milwaukee,	Wisconsin February	14,	2013

# Item	9B:	Other	Information

# PART	III

# Item	10:	Directors,	Executive	Officers	and	Corporate	Governance

Incorporated	by	reference	to	sections	entitled	"Item	1:	Election	of	Directors,"	"Corporate	Governance	Practices	and	Board	Information"	and	"Other	Information"	in Snap-on's	2013	Annual	Meeting	Proxy	Statement,	which	is	expected	to	be	mailed	to	shareholders	on	or	about	March	12,	2013	(the	"2013	Proxy	Statement").

The	Section	16(a)	filing	compliance	disclosure	pursuant	to	Item	405	of	Regulation	S-K	is	contained	in	Snap-on's	2013	Proxy	Statement	in	the	section	entitled	"Other Information	–	Section	16(a)	Beneficial	Ownership	Reporting	Compliance,"	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	December	29,	2012,	is presented	below:

Nicholas	T.	Pinchuk	(66)	–	Chairman	of	the	Board	of	Directors	since	2009,	President	and	Chief	Executive	Officer	since	December	2007	and	President	and	Chief Operating	Officer	from	April	to	December	2007.	Senior	Vice	President	and	President	–	Worldwide	Commercial	&	Industrial	Group	from	2002	to	2007.	Prior	to	joining Snap-on,	Mr.	Pinchuk	held	various	positions,	including	President	of	Global	Refrigeration	Operations	and	President	of	Asia	Pacific	Operations,	at	Carrier	Corporation,	a producer	of	air	conditioning,	heating	and	refrigeration	systems,	and	a	subsidiary	of	United	Technologies	Corporation.	Mr.	Pinchuk	serves	on	the	board	of	directors	of Columbus	McKinnon	Corporation.

Aldo	J.	Pagliari	(58)	–	Senior	Vice	President	–	Finance	and	Chief	Financial	Officer	since	2010.	President	–	Snap-on	Equipment	from	2007	to	2010,	and	Group Controller	/	Director	of	Finance	–	Commercial	&	Industrial	Group	from	2002	to	2007.

Iain	Boyd	(50)	–	Vice	President	–	Human	Resources	since	2007.	Vice	President,	Human	Resources	–	Snap-on	Tools	Group	from	2004	to	2007.

Constance	R.	Johnsen	(55)	–	Vice	President	and	Controller	since	2003.

Thomas	L.	Kassouf	(60)	–	Senior	Vice	President	and	President	–	Snap-on	Tools	Company	LLC	since	2010.	Senior	Vice	President	and	President	–	Commercial	Division from	2007	to	2010.	President	–	Commercial	Group	from	April	2007	to	December	2007,	and	President	–	Equipment	Worldwide	from	2003	to	2007.

Jeanne	M.	Moreno	(58)	–	Vice	President	and	Chief	Information	Officer	since	2005.

Irwin	M.	Shur	(54)	–	Vice	President,	General	Counsel	and	Secretary	since	2008.	Prior	to	joining	Snap-on,	Mr.	Shur	was	Vice	President	and	General	Counsel	of	Enodis plc,	a	manufacturer	of	equipment	for	the	commercial	foodservice	industry.

Thomas	J.	Ward	(60)	–	Senior	Vice	President	and	President	–	Repair	Systems	&	Information	Group	since	2010.	Senior	Vice	President	and	President	–	Snap-on	Tools Company	LLC	from	2007	to	2010.	Senior	Vice	President	and	President	–	Diagnostics	&	Information	Group	from	2005	to	2007.

There	is	no	family	relationship	among	the	executive	officers	and	there	has	been	no	involvement	in	legal	proceedings	during	the	past	five	years	that	would	be	material	to the	evaluation	of	the	ability	or	integrity	of	any	of	the	executive	officers.	Executive	officers	may	be	elected	by	the	Board	or	appointed	by	the	Chief	Executive	Officer	at the	regular	meeting	of	the	Board	that	follows	the	Annual	Shareholders'	Meeting,	which	is	ordinarily	held	in	April	each	year,	and	at	such	other	times	as	new	positions	are created	or	vacancies	must	be	filled.

# Code	of	Ethics	and	Web	Site	Disclosure

Snap-on	has	adopted	a	written	code	of	ethics	that	applies	to	its	Chief	Executive	Officer,	Chief	Financial	Officer,	Vice	President	and	Controller,	and	all	other	financial officers	and	executives	performing	similar	functions.	Snap-on	has	posted	a	copy	of	the	code	of	ethics	in	the	Investors/Corporate	Governance	section	on	the	company's web	site	at	www.snapon.com.	Snap-on	will	also	post	any	amendments	to	these	documents,	or	information	about	any	waivers	granted	to	directors	or	executive	officers with	respect	to	the	Code	of	Business	Conduct	and	Ethics,	on	the	company's	web	site	at	www.snapon.com.

Snap-on	intends	to	satisfy	the	disclosure	requirements	under	Item	10	of	Form	8-K	regarding	amendments	to,	or	waivers	from,	the	code	of	ethics	by	posting	such information	in	the	"Investors"	section	of	its	corporate	web	site	at	www.snapon.com.

# Item	11:	Executive	Compensation

The	information	required	by	Item	11	is	contained	in	Snap-on's	2013	Proxy	Statement	in	the	sections	entitled	"Executive	Compensation,"	"Board	Compensation," "Compensation	Committee	Report,"	and	"Other	Information"	and	is	incorporated	herein	by	reference.

# Item	12:	Security	Ownership	of	Certain	Beneficial	Owners	and	Management	and	Related	Stockholder	Matters

The	following	table	sets	forth	information	about	Snap-on's	equity	compensation	plans	at	2012	year	end:

| The	following	table	sets	forth	information	about	Snap-on's	equity	compensation	plans	at	2012	year	end: |  |  |  |
| :--- | :--- | :--- | :--- |
|  |  |  | Number\tof\tsecurities\tremaining |
|  | Number\tof\tsecurities\tto | Weighted-average | available\tfor\tfuture\tissuance |
|  | be\tissued\tupon\texercise | exercise\tprice\tof | under\tequity\tcompensation |
|  | of\toutstanding\toptions, | outstanding\toptions, | plans\t(excluding\tsecurities |
|  | warrants\tand\trights | warrants\tand\trights | reflected\tin\tcolumn\t(a)) |
| Plan\tcategory | (a) | (b) | (c) |
| Equity\tcompensation\tplans\tapproved\tby\tsecurity\tholders | \t\t\t\t\t\t\t\t\t\t\t\t\t\t2,229,177\t^(1) | \t\t\t\t$\t\t\t\t\t\t\t\t\t\t\t\t\t50.48\t^(2) | \t\t\t\t5,073,643\t^(3) |
| Equity\tcompensation\tplans\tnot\tapproved\tby\tsecurity\tholders | 62,794\t^(4) | \t\t\t\tNot\tApplicable | –\t\t\t\t\t\t\t\t\t\t\t\t\t(5) |
| Total | 2,291,971 | \t\t\t\t$50.48\t^(2) | 5,073,643\t\t^(5) |

(1) Includes	(i)	options	to	acquire	1,545,744	shares	granted	under	the	2001	Incentive	Stock	and	Awards	Plan;	(ii)	options	to	acquire	614,762	shares	granted	under	the	2011	Incentive	Stock	and	Awards	Plan;	and (iii)	68,671	shares	represented	by	deferred	share	units	under	the	Directors'	Fee	Plan.	Excludes	520,381	and	221,335	shares	issuable	in	connection	with	the	vesting	of	performance	share	awards,	restricted	stock units	and	restricted	stock	under	the	respective	2001	and	2011	Incentive	Stock	and	Awards	Plans	(collectively,	"the	Incentive	Stock	and	Awards	Plans").	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	granted	under	the	Incentive	Stock	and	Awards	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	Stock	and	Awards	Plans	for	which	there	are	no	exercise	prices.	Also excludes	shares	of	common	stock	that	may	be	issuable	under	the	employee	and	franchisee	stock	purchase	plans.

(3) Includes	(i)	3,914,882	shares	reserved	for	issuance	under	the	2011	Incentive	Stock	and	Awards	Plan;	(ii)	143,695	shares	reserved	for	issuance	under	the	Directors'	Fee	Plan;	and	(iii)	1,015,066	shares	reserved	for issuance	under	the	employee	stock	purchase	plan.	No	further	awards	may	be	granted	under	the	2001	Incentive	Stock	and	Awards	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.

The	additional	information	required	by	Item	12	is	contained	in	Snap-on's	2013	Proxy	Statement	in	the	sections	entitled	"Executive	Compensation,"	"Security	Ownership of	Certain	Beneficial	Owners	and	Management"	and	"Other	Information"	and	is	incorporated	herein	by	reference.

# Item	13:	Certain	Relationships	and	Related	Transactions,	and	Director	Independence

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	2013	Proxy	Statement.

# Item	14:	Principal	Accounting	Fees	and	Services

Incorporated	by	reference	to	the	section	entitled	"Deloitte	&	Touche	LLP	Fee	Disclosure"	in	Snap-on's	2013	Proxy	Statement.

# PART	IV

# Item	15:	Exhibits,	Financial	Statement	Schedules

# Item	15(a):	Documents	Filed	as	Part	of	This	Report:

# 1.	List	of	Financial	Statements

The	following	consolidated	financial	statements	of	Snap-on	and	the	Report	of	Independent	Registered	Public	Accounting	Firm	thereon,	are	filed	as	part	of	this	report:

•	 Consolidated	Statements	of	Earnings	for	the	2012,	2011	and	2010	fiscal	years.

•	 Consolidated	Statements	of	Comprehensive	Income	for	the	2012,	2011	and	2010	fiscal	years.

•	 Consolidated	Balance	Sheets	as	of	2012	and	2011	year	end.

•	 Notes	to	Consolidated	Financial	Statements.

# 2.	Financial	Statement	Schedules

All	schedules	are	omitted	because	they	are	not	applicable,	or	the	required	information	is	included	in	the	consolidated	financial	statements	or	notes	thereto.

# 3.	List	of	Exhibits

The	exhibits	filed	with	or	incorporated	by	reference	in	this	report	are	as	specified	in	the	exhibit	index	included	herein.

To	the	Board	of	Directors	and	Shareholders	of

We	have	audited	the	accompanying	consolidated	balance	sheets	of	Snap-on	Incorporated	and	subsidiaries	(the	"Company")	as	of	December	29,	2012,	and	December	31, 2011,	and	the	related	consolidated	statements	of	earnings,	comprehensive	income,	equity,	and	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	29, 2012.	These	financial	statements	are	the	responsibility	of	the	Company's	management.	Our	responsibility	is	to	express	an	opinion	on	these	financial	statements	based	on our	audits.

We	conducted	our	audits	in	accordance	with	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and perform	the	audit	to	obtain	reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement.	An	audit	includes	examining,	on	a	test	basis, evidence	supporting	the	amounts	and	disclosures	in	the	financial	statements.	An	audit	also	includes	assessing	the	accounting	principles	used	and	significant	estimates made	by	management,	as	well	as	evaluating	the	overall	financial	statement	presentation.	We	believe	that	our	audits	provide	a	reasonable	basis	for	our	opinion.

In	our	opinion,	such	consolidated	financial	statements	present	fairly,	in	all	material	respects,	the	financial	position	of	Snap-on	Incorporated	and	subsidiaries	as	of December	29,	2012,	and	December	31,	2011,	and	the	results	of	their	operations	and	their	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	29,	2012, 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),	the	Company's	internal	control	over financial	reporting	as	of	December	29,	2012,	based	on	the	criteria	established	in	Internal	Control	–	Integrated	Framework	issued	by	the	Committee	of	Sponsoring Organizations	of	the	Treadway	Commission	and	our	report	dated	February	14,	2013,	expressed	an	unqualified	opinion	on	the	Company's	internal	control	over	financial reporting.

DELOITTE	&	TOUCHE	LLP Milwaukee,	Wisconsin

# Consolidated	Statements	of	Earnings

| (Amounts	in	millions,	except	per	share	data) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Net\tsales | \t\t\t\t$2,937.9 | \t\t\t\t$2,854.2 | \t\t\t\t$2,619.2 |
| Cost\tof\tgoods\tsold | \t\t(1,547.9) | \t\t(1,516.3) | \t\t(1,408.1) |
| Gross\tprofit | 1,390.0 | 1,337.9 | 1,211.1 |
| Operating\texpenses | (980.3) | (953.7) | (894.1) |
| Operating\tearnings\tbefore\tfinancial\tservices | 409.7 | 384.2 | 317.0 |
| Financial\tservices\trevenue | 161.3 | 124.3 | 62.3 |
| Financial\tservices\texpenses | (54.6) | (51.4) | (47.9) |
| Operating\tearnings\tfrom\tfinancial\tservices\tbefore\tarbitration\tsettlement | 106.7 | 72.9 | 14.4 |
| Arbitration\tsettlement | – | 18.0 | – |
| Operating\tearnings\tfrom\tfinancial\tservices | 106.7 | 90.9 | 14.4 |
| Operating\tearnings | 516.4 | 475.1 | 331.4 |
| Interest\texpense | (55.8) | (61.2) | (54.8) |
| Other\tincome\t(expense)\t–\tnet | (0.4) | (1.0) | 0.8 |
| Earnings\tbefore\tincome\ttaxes\tand\tequity\tearnings | 460.2 | 412.9 | 277.4 |
| Income\ttax\texpense | (148.2) | (133.7) | (87.6) |
| Earnings\tbefore\tequity\tearnings | 312.0 | 279.2 | 189.8 |
| Equity\tearnings,\tnet\tof\ttax | 2.6 | 4.6 | 3.2 |
| Net\tearnings | 314.6 | 283.8 | 193.0 |
| Net\tearnings\tattributable\tto\tnoncontrolling\tinterests | (8.5) | (7.5) | (6.5) |
| Net\tearnings\tattributable\tto\tSnap-on\tIncorporated | \t\t\t\t$306.1 | \t\t\t\t$276.3 | \t\t\t\t$186.5 |
| Net\tearnings\tper\tshare\tattributable\tto\tSnap-on\tIncorporated: |  |  |  |
| Basic | \t\t\t\t$5.26 | \t\t\t\t$4.75 | \t\t\t\t$3.22 |
| Diluted | 5.20 | 4.71 | 3.19 |
| Weighted-average\tshares\toutstanding: |  |  |  |
| Basic | 58.2 | 58.2 | 58.0 |
| Effect\tof\tdilutive\toptions | 0.7 | 0.5 | 0.4 |
| Diluted | 58.9 | 58.7 | 58.4 |
| See\tNotes\tto\tConsolidated\tFinancial\tStatements. |  |  |  |
| 2012\tANNUAL\tREPORT |  |  | 63 |

See	Notes	to	Consolidated	Financial	Statements.

# Consolidated	Statements	of	Comprehensive	Income

| (Amounts	in	millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Comprehensive\tincome\t(loss): |  |  |  |
| Net\tearnings | \t\t\t\t$314.6 | \t\t\t\t$283.8 | \t\t\t\t$193.0 |
| Other\tcomprehensive\tincome\t(loss): |  |  |  |
| Foreign\tcurrency\ttranslation* | 35.0 | \t\t(11.5) | (24.7) |
| Unrealized\tcash\tflow\thedges,\tnet\tof\ttax: |  |  |  |
| Change\tin\tcash\tflow\thedge | – | – | 2.2 |
| Less\tamortization\tof\tcash\tflow\thedges\tto\tnet\tearnings | (0.4) | (0.4) | (0.1) |
|  | (0.4) | (0.4) | 2.1 |
| Defined\tbenefit\tpension\tand\tpostretirement\tplans: |  |  |  |
| million,\trespectively | (12.0) | (78.8) | (27.3) |
|  | 5.1 | – | – |
|  | – | – | 0.6 |
| Less\tamortization\tof\tprior\tservice\tcosts\tand\tunrecognized\tloss\tincluded\tin\tnet\tperiodic\tbenefit |  |  |  |
|  | 22.7 | 20.9 | 12.9 |
|  | 15.8 | (57.9) | (13.8) |
| Total\tcomprehensive\tincome | 365.0 | 214.0 | 156.6 |
| Comprehensive\tincome\tattributable\tto\tnon-redeemable\tnoncontrolling\tinterest | (8.5) | (7.5) | (6.8) |
| Comprehensive\tloss\tattributable\tto\tredeemable\tnoncontrolling\tinterest | – | – | 0.3 |
| Comprehensive\tincome\tattributable\tto\tSnap-on\tIncorporated | \t\t\t\t$\t\t356.5 | \t\t\t\t$\t\t206.5 | \t\t\t\t$\t\t150.1 |

* There	was	no	sale	or	liquidation	in	a	foreign	entity;	therefore,	there	is	no	reclassification	adjustment	for	any	period	presented.

# Consolidated	Balance	Sheets

| (Amounts	in	millions,	except	share	data) | 2012 | 2011 |
| :--- | :--- | :--- |
| ASSETS |  |  |
| Current\tassets: |  |  |
| Cash\tand\tcash\tequivalents | \t\t\t\t$214.5 | \t\t\t\t$185.6 |
| Trade\tand\tother\taccounts\treceivable\t–\tnet | 497.9 | 463.5 |
| Finance\treceivables\t–\tnet | 323.1 | 277.2 |
| Contract\treceivables\t–\tnet | 62.7 | 49.7 |
| Inventories\t–\tnet | 404.2 | 386.4 |
| Deferred\tincome\ttax\tassets | 81.8 | 92.6 |
| Prepaid\texpenses\tand\tother\tassets | 84.8 | 75.7 |
| Total\tcurrent\tassets | 1,669.0 | 1,530.7 |
| Property\tand\tequipment\t–\tnet | 375.2 | 352.9 |
| Deferred\tincome\ttax\tassets | 110.4 | 125.2 |
| Long-term\tfinance\treceivables\t–\tnet | 494.6 | 431.8 |
| Long-term\tcontract\treceivables\t–\tnet | 194.4 | 165.1 |
| Goodwill | 807.4 | 795.8 |
| Other\tintangibles\t–\tnet | 187.2 | 188.3 |
| Other\tassets | 64.1 | 83.1 |
| Total\tassets | \t\t\t\t$3,902.3 | \t\t\t\t$3,672.9 |
| LIABILITIES\tAND\tEQUITY |  |  |
| Current\tliabilities: |  |  |
| Notes\tpayable | \t\t\t\t$5.2 | \t\t\t\t$16.2 |
| Accounts\tpayable | 142.5 | 124.6 |
| Accrued\tbenefits | 50.6 | 48.8 |
| Accrued\tcompensation | 88.3 | 91.0 |
| Franchisee\tdeposits | 54.7 | 47.3 |
| Other\taccrued\tliabilities | 247.9 | 255.9 |
| Total\tcurrent\tliabilities | 589.2 | 583.8 |
| Long-term\tdebt | 970.4 | 967.9 |
| Deferred\tincome\ttax\tliabilities | 127.1 | 108.1 |
| Retiree\thealth\tcare\tbenefits | 48.4 | 52.8 |
| Pension\tliabilities | 260.7 | 317.7 |
| Other\tlong-term\tliabilities | 87.5 | 95.3 |
| Total\tliabilities | 2,083.3 | 2,125.6 |
| Commitments\tand\tcontingencies\t(Note\t15) |  |  |
| Equity |  |  |
| Shareholders'\tequity\tattributable\tto\tSnap-on\tIncorporated: |  |  |
| Preferred\tstock\t(authorized\t15,000,000\tshares\tof\t$1\tpar\tvalue;\tnone\toutstanding) | – | – |
| Common\tstock\t(authorized\t250,000,000\tshares\tof\t$1\tpar\tvalue;\tissued\t67,356,950\tand\t67,335,341\tshares) | 67.4 | 67.3 |
| Additional\tpaid-in\tcapital | 204.6 | 181.4 |
| Retained\tearnings | 2,067.0 | 1,843.7 |
| Accumulated\tother\tcomprehensive\tloss | (124.2) | (174.6) |
| Treasury\tstock\tat\tcost\t(9,102,154\tand\t9,110,389\tshares) | (412.7) | (386.9) |
| Total\tshareholders'\tequity\tattributable\tto\tSnap-on\tIncorporated | 1,802.1 | 1,530.9 |
| Noncontrolling\tinterests | 16.9 | 16.4 |
| Total\tequity | 1,819.0 | 1,547.3 |
| Total\tliabilities\tand\tequity | \t\t\t\t$\t\t3,902.3 | \t\t\t\t$\t\t3,672.9 |
| See\tNotes\tto\tConsolidated\tFinancial\tStatements. |  |  |
| 2012\tANNUAL\tREPORT |  | 65 |

# Consolidated	Statements	of	Equity

# Shareholders'	Equity	Attributable	to	Snap-on	Incorporated

|  |  |  |  | Accumulated |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Additional |  | Other |  |  |  |
|  | Common | Paid-in | Retained | Comprehensive | Treasury | Noncontrolling |  |
| (Amounts\tin\tmillions,\texcept\tshare\tdata) | Stock | Capital | Earnings | Income\t(Loss) | Stock | Interests | Total\tEquity |
| Balance\tat\tJanuary\t2,\t2010 | \t\t\t\t$\t\t67.3 | \t\t\t\t$\t\t154.4 | \t\t\t\t$\t\t1,528.9 | \t\t\t\t$(68.4) | \t\t\t\t$\t\t(392.2) | \t\t\t\t$\t\t15.6 | \t\t\t\t$\t\t1,305.6 |
| the\tredeemable\tnoncontrolling\tinterest) | – | – | 186.5 | – | – | 6.8 | 193.3 |
| Foreign\tcurrency\ttranslation | – | – | – | (24.7) | – | – | (24.7) |
| Change\tin\tcash\tflow\thedges | – | – | – | 2.1 | – | – | 2.1 |
|  | – | – | – | (13.8) | – | – | (13.8) |
| Cash\tdividends\t–\t$1.22\tper\tshare | – | – | (71.3) | – | – | – | (71.3) |
| Dividend\treinvestment\tplan\tand\tother | – | 1.4 | – | – | – | (6.5) | (5.1) |
| Stock\tcompensation\tplans | – | 17.2 | – | – | 13.6 | – | 30.8 |
| Share\trepurchases\t–\t152,000\tshares | – | – | – | – | (8.7) | – | (8.7) |
| Tax\tbenefit\tfrom\tcertain\tstock\toptions | – | 1.9 | – | – | – | – | 1.9 |
| Purchase\tof\tredeemable\tnoncontrolling\tinterest | – | (5.7) | – | – | – | – | (5.7) |
| Balance\tat\tJanuary\t1,\t2011 | 67.3 | 169.2 | 1,644.1 | \t\t(104.8) | (387.3) | 15.9 | 1,404.4 |
| Net\tearnings\tfor\t2011 | – | – | 276.3 | – | – | 7.5 | 283.8 |
| Foreign\tcurrency\ttranslation | – | – | – | (11.5) | – | – | (11.5) |
| Change\tin\tcash\tflow\thedges | – | – | – | (0.4) | – | – | (0.4) |
| million | – | – | – | (57.9) | – | – | (57.9) |
| Cash\tdividends\t–\t$1.30\tper\tshare | – | – | (76.7) | – | – | – | (76.7) |
| Dividend\treinvestment\tplan\tand\tother | – | 2.1 | – | – | – | (7.0) | (4.9) |
| Stock\tcompensation\tplans | – | 7.3 | – | – | 37.8 | – | 45.1 |
| Share\trepurchases\t–\t628,000\tshares | – | – | – | – | (37.4) | – | (37.4) |
| Tax\tbenefit\tfrom\tcertain\tstock\toptions | – | 2.8 | – | – | – | – | 2.8 |
| Balance\tat\tDecember\t31,\t2011 | 67.3 | 181.4 | 1,843.7 | (174.6) | (386.9) | 16.4 | 1,547.3 |
| Net\tearnings\tfor\t2012 | – | – | 306.1 | – | – | 8.5 | 314.6 |
| Foreign\tcurrency\ttranslation | – | – | – | 35.0 | – | – | 35.0 |
| Change\tin\tcash\tflow\thedges | – | – | – | (0.4) | – | – | (0.4) |
| million | – | – | – | 15.8 | – | – | 15.8 |
| Cash\tdividends\t–\t$1.40\tper\tshare | – | – | (81.5) | – | – | – | (81.5) |
| Dividend\treinvestment\tplan\tand\tother | 0.1 | 1.3 | (1.3) | – | – | (8.0) | (7.9) |
| Stock\tcompensation\tplans | – | 13.7 | – | – | 52.3 | – | 66.0 |
| Share\trepurchases\t–\t1,180,000\tshares | – | – | – | – | (78.1) | – | (78.1) |
| Tax\tbenefit\tfrom\tcertain\tstock\toptions | – | 8.2 | – | – | – | – | 8.2 |
| Balance\tat\tDecember\t29,\t2012 | \t\t\t\t$\t\t67.4 | \t\t\t\t$204.6 | \t\t\t\t$2,067.0 | \t\t\t\t$(124.2) | \t\t\t\t$(412.7) | \t\t\t\t$16.9 | \t\t\t\t$1,819.0 |

# Consolidated	Statements	of	Cash	Flow

| (Amounts	in	millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Operating\tactivities: |  |  |  |
| Net\tearnings | \t\t\t\t$314.6 | \t\t\t\t$283.8 | \t\t\t\t$193.0 |
| Adjustments\tto\treconcile\tnet\tearnings\tto\tnet\tcash\tprovided\t(used)\tby\toperating\tactivities: |  |  |  |
| Depreciation | 50.2 | 49.3 | 48.7 |
| Amortization\tof\tother\tintangibles | 26.5 | 25.3 | 24.0 |
| Provision\tfor\tlosses\ton\tfinance\treceivables | 18.7 | 13.3 | 13.9 |
| Provision\tfor\tlosses\ton\tnon-finance\treceivables | 12.6 | 12.9 | 20.5 |
| Stock-based\tcompensation\texpense | 32.1 | 20.3 | 14.9 |
| Excess\ttax\tbenefits\tfrom\tstock-based\tcompensation | (8.2) | (2.8) | (1.5) |
| Deferred\tincome\ttax\t(benefit)\tprovision | 29.3 | 5.1 | (18.0) |
| Gain\ton\tsale\tof\tassets | (0.9) | (0.1) | (0.2) |
| Changes\tin\toperating\tassets\tand\tliabilities,\tnet\tof\teffects\tof\tacquisition: |  |  |  |
| Increase\tin\ttrade\tand\tother\taccounts\treceivable | (43.4) | (36.8) | (56.5) |
| Increase\tin\tcontract\treceivables | \t\t(41.1) | (51.5) | (60.1) |
| Increase\tin\tinventories | (13.4) | (60.9) | (55.2) |
| Increase\tin\tprepaid\tand\tother\tassets | (24.8) | (35.7) | (26.1) |
| Increase\t(decrease)\tin\taccounts\tpayable | 16.6 | (21.5) | 26.2 |
| Increase\t(decrease)\tin\taccruals\tand\tother\tliabilities | (39.5) | (72.2) | 16.8 |
| Net\tcash\tprovided\tby\toperating\tactivities | 329.3 | 128.5 | 140.4 |
| Investing\tactivities: |  |  |  |
| Additions\tto\tfinance\treceivables | (569.6) | (519.1) | (497.6) |
| Collections\tof\tfinance\treceivables | 445.5 | 356.9 | 245.2 |
| Capital\texpenditures | (79.4) | (61.2) | (51.1) |
| Disposal\tof\tproperty\tand\tequipment | 2.6 | 3.7 | 7.9 |
| Proceeds\tfrom\tsale\tof\tequity\tinvestment | 27.0 | – | – |
| Acquisition\tof\tbusiness | – | – | (7.7) |
| Other | 0.8 | 0.1 | 0.3 |
| Net\tcash\tused\tby\tinvesting\tactivities | (173.1) | (219.6) | (303.0) |
| Financing\tactivities: |  |  |  |
| Repayment\tof\tlong-term\tdebt | – | (200.0) | (150.0) |
| Proceeds\tfrom\tissuance\tof\tlong-term\tdebt | – | – | 247.7 |
| Proceeds\tfrom\tshort-term\tborrowings | 16.0 | 19.7 | 21.8 |
| Repayments\tof\tshort-term\tborrowings | (30.3) | (17.9) | (21.8) |
| Net\tincrease\t(decrease)\tin\tother\tshort-term\tborrowings | 3.1 | (1.2) | (0.2) |
| Cash\tdividends\tpaid | (81.5) | (76.7) | (71.3) |
| Purchase\tof\ttreasury\tstock | (78.1) | (37.4) | (8.7) |
| Proceeds\tfrom\tstock\tpurchase\tand\toption\tplans | 46.8 | 25.7 | 23.7 |
| Excess\ttax\tbenefits\tfrom\tstock-based\tcompensation | 8.2 | 2.8 | 1.5 |
| Other | (11.2) | (8.7) | (7.9) |
| Net\tcash\t(used)\tprovided\tby\tfinancing\tactivities | (127.0) | (293.7) | 34.8 |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | (0.3) | (1.8) | 0.6 |
| Increase\t(decrease)\tin\tcash\tand\tcash\tequivalents | 28.9 | (386.6) | (127.2) |
| Cash\tand\tcash\tequivalents\tat\tbeginning\tof\tyear | 185.6 | 572.2 | 699.4 |
| Cash\tand\tcash\tequivalents\tat\tend\tof\tyear | \t\t\t\t$214.5 | \t\t\t\t$185.6 | \t\t\t\t$572.2 |
| Supplemental\tcash\tflow\tdisclosures: |  |  |  |
| Cash\tpaid\tfor\tinterest | \t\t\t\t$(55.6) | \t\t\t\t$(59.3) | \t\t\t\t$(55.4) |
| Net\tcash\tpaid\tfor\tincome\ttaxes | (93.6) | \t\t(128.8) | \t\t(118.3) |
| See\tNotes\tto\tConsolidated\tFinancial\tStatements. |  |  |  |
| 2012\tANNUAL\tREPORT |  |  | 67 |

# Note	1:	Summary	of	Accounting	Policies

Principles	 of	 consolidation	 and	 presentation:	The	 Consolidated	 Financial	 Statements include the	 accounts	 of	 Snap-on	 Incorporated	 and its	 wholly-owned	 and majority-owned	subsidiaries	(collectively,	"Snap-on"	or	"the	company").

Snap-on	accounts	for	investments	in	unconsolidated	affiliates	where	Snap-on	has	a	greater	than	20%	but	less	than	50%	ownership	interest	under	the	equity	method	of accounting.	Investments	in	unconsolidated	affiliates	of	$13.5	million	as	of	2012	year	end	and	$40.7	million	as	of	2011	year	end	are	included	in	"Other	assets"	on	the accompanying	Consolidated	Balance	Sheets.	In	2012,	Snap-on	sold	its	equity	investment	in	a	non-strategic,	unconsolidated	affiliate	for	$32.0	million,	including	$27.0 million	of	cash	and	a	five	year,	$5.0	million	note;	there	was	no	gain	or	loss	on	the	sale.	Equity	investment	dividends	received	in	2012,	2011	and	2010	were	zero,	$5.0 million	and	$2.0	million,	respectively.	In	the	normal	course	of	business,	the	company	may	purchase	products	or	services	from	unconsolidated	affiliates;	purchases	from unconsolidated	affiliates	were	$15.2	million,	$20.1	million	and	$19.2	million	in	2012,	2011	and	2010,	respectively.	The	Consolidated	Financial	Statements	do	not include	the	accounts	of	the	company's	independent	franchisees.	Snap-on's	Consolidated	Financial	Statements	are	prepared	in	conformity	with	generally	accepted accounting	principles	in	the	United	States	of	America	("U.S.	GAAP").	All	significant	intercompany	accounts	and	transactions	have	been	eliminated.

Snap-on	Credit	LLC	("SOC")	is	the	company's	financial	services	operation	in	the	United	States.	Snap-on	terminated	its	SOC	financial	services	joint	venture	agreement with	CIT	Group	Inc.	("CIT")	in	2009	and	subsequently	acquired	CIT's	50%-ownership	interest	in	SOC.	As	a	result,	SOC	became	a	wholly-owned	subsidiary	of	Snap-on and	Snap-on	began	providing	financing	for	the	majority	of	new	loans	originated	by	SOC.

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

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

Franchise	fee	revenue,	including	nominal,	non-refundable	initial	fees,	is	recognized	upon	the	granting	of	a	franchise,	which	is	when	the	company	has	performed substantially	all	initial	services	required	by	the	franchise	agreement.	Franchise	fee	revenue	also	includes	ongoing	monthly	fees	(primarily	for	sales	and	business	training and	marketing	and	product	promotion	programs)	that	are	recognized	as	the	fees	are	earned.	Franchise	fee	revenue	totaled	$9.9	million,	$8.8	million	and	$9.0	million	in fiscal	2012,	2011	and	2010,	respectively.

Research	and	engineering:	Snap-on	incurred	research	and	engineering	costs	of	$44.8	million,	$41.2	million	and	$38.1	million	in	2012,	2011	and	2010,	respectively. Research	and	engineering	costs	are	included	in	"Operating	expenses"	on	the	accompanying	Consolidated	Statements	of	Earnings.

Internally	developed	software:	Costs	incurred	in	the	development	of	software	that	will	ultimately	be	sold	are	capitalized	from	the	time	technological	feasibility	has been	attained	and	capitalization	ceases	when	the	related	product	is	ready	for	general	release.	During	2012,	2011	and	2010,	Snap-on	capitalized	$23.0	million,	$19.5 million	and	$13.0	million,	respectively,	of	such	costs.	Amortization	of	capitalized	software	development	costs,	which	is	included	in	"Cost	of	goods	sold"	on	the accompanying	Consolidated	Statements	of	Earnings,	was	$14.3	million	in	2012,	$12.6	million	in	2011	and	$10.9	million	in	2010.	Unamortized	capitalized	software development	costs	of	$41.1	million	as	of	2012	year	end	and	$33.1	million	as	of	2011	year	end	are	 included	 in	"Other	 intangibles	–	net"	on	 the	accompanying Consolidated	Balance	Sheets.

Internal-use software:	Costs that	 are incurred in	 creating software solutions	 and	 enhancements to those solutions	 are	 capitalized	 only	 during the	 application development	stage	of	the	project.

Shipping	and	handling:	Amounts	billed	to	customers	for	shipping	and	handling	are	included	as	a	component	of	sales.	Costs	incurred	by	Snap-on	for	shipping	and handling	are	included	as	a	component	of	cost	of	goods	sold	when	the	costs	relate	to	manufacturing	activities.	In	2012,	2011	and	2010,	Snap-on	incurred	shipping	and handling	charges	of	$37.1	million,	$39.3	million	and	$32.3	million,	respectively,	that	were	recorded	in	"Cost	of	goods	sold"	on	the	accompanying	Consolidated Statements	of	Earnings.	Shipping	and	handling	costs	incurred	in	conjunction	with	selling	or	distribution	activities	are	included	as	a	component	of	operating	expenses.	In 2012,	2011	and	2010,	Snap-on	incurred	shipping	and	handling	charges	of	$65.4	million,	$64.0	million	and	$60.8	million,	respectively;	these	charges	were	recorded	in "Operating	expenses"	on	the	accompanying	Consolidated	Statements	of	Earnings.

# Notes	to	Consolidated	Financial	Statements	(continued)

Advertising	and	promotion:	Production	costs	of	future	media	advertising	are	deferred	until	the	advertising	occurs.	All	other	advertising	and	promotion	costs	are expensed	when	incurred.	For	2012,	2011	and	2010,	advertising	and	promotion	expenses	totaled	$50.1	million,	$46.3	million	and	$41.1	million,	respectively.	Advertising and	promotion	costs	are	included	in	"Operating	expenses"	on	the	accompanying	Consolidated	Statements	of	Earnings.

Warranties:	Snap-on	provides	product	warranties	for	specific	product	lines	and	accrues	for	estimated	future	warranty	costs	in	the	period	in	which	the	sale	is	recorded. See	Note	15	for	further	information	on	warranties.

Foreign	currency:	The	financial	statements	of	Snap-on's	foreign	subsidiaries	are	translated	into	U.S.	dollars.	Assets	and	liabilities	of	foreign	subsidiaries	are	translated at	current	rates	of	exchange,	and	income	and	expense	items	are	translated	at	the	average	exchange	rate	for	the	period.	The	resulting	translation	adjustments	are	recorded directly	into	"Accumulated	other	comprehensive	loss"	on	the	accompanying	Consolidated	Balance	Sheets.	Foreign	exchange	transactions,	net	of	foreign	currency hedges,	resulted	in	pretax	losses	of	$0.7	million,	$2.6	million	and	$0.7	million	in	2012,	2011	and	2010,	respectively.	Foreign	exchange	transaction	gains	and	losses	are reported	in	"Other	income	(expense)	–	net"	on	the	accompanying	Consolidated	Statements	of	Earnings.

Income	taxes:	Current	tax	assets	and	liabilities	are	based	upon	an	estimate	of	taxes	refundable	or	payable	for	each	of	the	jurisdictions	in	which	the	company	is	subject	to tax.	In	the	ordinary	course	of	business,	there	is	inherent	uncertainty	in	quantifying	income	tax	positions.	Snap-on	assesses	income	tax	positions	and	records	tax	benefits for	all	years	subject	to	examination	based	upon	management's	evaluation	of	the	facts,	circumstances	and	information	available	at	the	reporting	dates.	For	those	tax positions	where	it	is	more-likely-than-not	that	a	tax	benefit	will	be	sustained,	Snap-on	records	the	largest	amount	of	tax	benefit	with	a	greater	than	50%	likelihood	of being	realized	upon	ultimate	settlement	with	a	taxing	authority	that	has	full	knowledge	of	all	relevant	information.	For	those	income	tax	positions	where	it	is	not	more- likely-than-not	that	a	tax	benefit	will	be	sustained,	no	tax	benefit	is	recognized	in	the	financial	statements.	When	applicable,	associated	interest	and	penalties	are recognized	as	a	component	of	income	tax	expense.	Accrued	interest	and	penalties	are	included	within	the	related	tax	asset	or	liability	on	the	accompanying	Consolidated Balance	Sheets.

Deferred	income	taxes	are	provided	for	temporary	differences	arising	from	differences	in	bases	of	assets	and	liabilities	for	tax	and	financial	reporting	purposes.	Deferred income	taxes	are	recorded	on	temporary	differences	using	enacted	tax	rates	in	effect	for	the	year	in	which	the	temporary	differences	are	expected	to	reverse.	The	effect	of a	change	in	tax	rates	on	deferred	tax	assets	and	liabilities	is	recognized	in	income	in	the	period	that	includes	the	enactment	date.	Deferred	tax	assets	are	reduced	by	a valuation	allowance	when,	in	the	opinion	of	management,	it	is	more-likely-than-not	that	some	portion	or	all	of	the	deferred	tax	assets	will	not	be	realized.	See	Note	8	for further	information	on	income	taxes.

Per	share	data:	Basic	earnings	per	share	calculations	were	computed	by	dividing	net	earnings	attributable	to	Snap-on	Incorporated	by	the	corresponding	weighted- average	number	of	common	shares	outstanding	for	the	period.	The	dilutive	effect	of	the	potential	exercise	of	outstanding	options	to	purchase	common	shares	is calculated	 using	 the	 treasury	 stock	 method.	 Snap-on	 had	 dilutive	 shares	 totaling	 669,503	 shares,	 533,056	 shares	 and	 390,833	 shares,	 in	 2012,	 2011	 and	 2010, respectively.	 Options	 to	 purchase	 296,643	 shares,	 2,218,407	 shares	 and	 667,208	 shares	 of	 Snap-on	 common	 stock	 for	 the	 years	 ended	 2012,	 2011	 and	 2010, respectively,	were	not	included	in	the	computation	of	diluted	earnings	per	share	as	the	exercise	prices	of	the	options	were	greater	than	the	average	market	price	of	the common	stock	for	the	respective	year	and,	as	a	result,	the	effect	on	earnings	per	share	would	be	anti-dilutive.	Performance	units	and	performance-based	restricted	stock units	("RSUs")	do	not	affect	the	diluted	earnings	per	share	calculation	until	it	is	determined	that	the	applicable	performance	metrics	have	been	met.	See	Note	13	for further	information	on	performance	awards	and	RSUs.

Stock-based	compensation:	Snap-on	recognizes	the	cost	of	employee	services	in	exchange	for	awards	of	equity	instruments	based	on	the	grant	date	fair	value	of	those awards.	That	cost,	based	on	the	estimated	number	of	awards	that	are	expected	to	vest,	is	recognized	on	a	straight-line	basis	over	the	period	during	which	the	employee	is required	to	provide	the	service	in	exchange	for	the	award.	No	compensation	cost	is	recognized	for	awards	for	which	employees	do	not	render	the	requisite	service.	The grant	date	fair	value	of	employee	stock	options	and	similar	instruments	is	estimated	using	the	Black-Scholes	valuation	model.

The	Black-Scholes	valuation	model	requires	the	input	of	subjective	assumptions,	including	the	expected	life	of	the	stock-based	award	and	stock	price	volatility.	The assumptions	used	are	management's	best	estimates,	but	the	estimates	involve	inherent	uncertainties	and	the	application	of	management	judgment.	As	a	result,	if	other assumptions	had	been	used,	the	recorded	stock-based	compensation	expense	could	have	been	materially	different	from	that	depicted	in	the	financial	statements.	See Note	13	for	further	information	on	stock-based	compensation.

Derivatives:	Snap-on	utilizes	derivative	financial	instruments,	including	foreign	currency	forward	contracts,	interest	rate	swap	agreements	and	treasury	lock	agreements, to	manage	its	exposure	to	foreign	currency	exchange	rate	and	interest	rate	risks.	Snap-on	accounts	for	its	derivative	instruments	at	fair	value.	Snap-on	does	not	hold	or issue	financial	instruments	for	speculative	or	trading	purposes.	See	Note	10	for	further	information	on	derivatives.

Cash	equivalents:	Snap-on	considers	all	highly	liquid	investments	with	an	original	maturity	of	three	months	or	less	to	be	cash	equivalents.	As	of	2012	and	2011	year end,	cash	equivalents	primarily	consisted	of	AAA-rated	money	market	funds	of	$84.8	million	and	$25.8	million,	respectively.	Cash	equivalents	are	stated	at	cost,	which approximates	market	value,	and	are	considered	to	be	Level	1	in	the	fair	value	hierarchy.

Receivables	and	allowances	for	doubtful	accounts:	All	trade,	finance	and	contract	receivables	are	reported	on	the	Consolidated	Balance	Sheets	at	their	outstanding principal	balance	adjusted	for	any	charge-offs	and	net	of	allowances	for	doubtful	accounts.	Finance	and	contract	receivables	also	include	accrued	interest	and	loan acquisition	costs,	net	of	loan	acquisition	fees.

Snap-on	maintains	allowances	for	doubtful	accounts	to	absorb	probable	losses	inherent	in	its	portfolio	of	receivables.	The	allowances	for	doubtful	accounts	represent management's	estimate	of	the	losses	inherent	in	the	company's	receivables	portfolio	based	on	ongoing	assessments	and	evaluations	of	collectability	and	historical	loss experience.	In	estimating	losses	inherent	in	each	of	its	receivable	portfolios	(trade,	finance	and	contract	receivables),	Snap-on	uses	historical	loss	experience	rates	by portfolio	and	applies	them	to	a	related	aging	analysis.	Determination	of	the	proper	level	of	allowances	by	portfolio	requires	management	to	exercise	significant	judgment about	the	timing,	frequency	and	severity	of	credit	losses	that	could	materially	affect	the	provision	for	credit	losses	and,	therefore,	net	income.	The	allowances	for doubtful	accounts	takes	into	consideration	numerous	quantitative	and	qualitative	factors,	by	loan	type,	including	historical	loss	experience,	portfolio	duration,	collection experience,	delinquency	trends,	economic	conditions	and	credit	risk	quality	as	follows:

Management	performs	detailed	reviews	of	its	receivables	on	a	monthly	and/or	quarterly	basis	to	assess	the	adequacy	of	the	allowances	based	on	historical	and	current trends	and	other	factors	affecting	credit	losses	and	to	determine	if	any	impairment	has	occurred.	A	receivable	is	impaired	when	it	is	probable	that	all	amounts	related	to the	receivable	will	not	be	collected	according	to	the	contractual	terms	of	the	agreement.	In	circumstances	where	the	company	is	aware	of	a	specific	customer's	inability to	meet	its	financial	obligations,	a	specific	reserve	is	recorded	against	amounts	due	to	reduce	the	net	recognized	receivable	to	the	amount	reasonably	expected	to	be collected.	Additions	to	the	allowances	for	doubtful	accounts	are	maintained	through	adjustments	to	the	provision	for	credit	losses,	which	are	charged	to	current	period

earnings;	amounts	determined	to	be	uncollectable	are	charged	directly	against	the	allowances,	while	amounts	recovered	on	previously	charged-off	accounts	increase	the allowances.	Net	charge-offs	include	the	principal	amount	of	losses	charged	off	as	well	as	charged-off	interest	and	fees.	Recovered	interest	and	fees	previously	charged- off	are	recorded	through	the	allowances	for	doubtful	accounts	and	increase	the	allowances.	Finance	receivables	are	assessed	for	charge-off	when	an	account	becomes 120	days	past	due	and	are	charged-off	typically	within	60	days	of	asset	repossession.	Contract	receivables	related	to	equipment	leases	are	generally	charged-off	when	an account	becomes	150	days	past	due,	while	contract	receivables	related	to	franchise	finance	and	van	leases	are	generally	charged	off	up	to	180	days	past	the	asset	return. For	finance	and	contract	receivables,	customer	bankruptcies	are	generally	charged-off	upon	notification	that	the	associated	debt	is	not	being	reaffirmed	or,	in	any	event, no	later	than	180	days	past	due.

Snap-on	does	not	believe	that	its	trade	accounts,	finance	or	contract	receivables	represent	significant	concentrations	of	credit	risk	because	of	the	diversified	portfolio	of individual	customers	and	geographical	areas.	See	Note	3	for	further	information	on	receivables	and	allowances	for	doubtful	accounts.

Other	accrued	liabilities:	Supplemental	balance	sheet	information	for	"Other	accrued	liabilities"	as	of	2012	and	2011	year	end	is	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Income\ttaxes | \t\t\t\t$19.6 | \t\t\t\t$11.7 |
| Accrued\trestructuring | 7.2 | 8.4 |
| Accrued\twarranty | 18.9 | 18.6 |
| Deferred\tsubscription\trevenue | 24.8 | 24.9 |
| Accrued\tproperty,\tpayroll\tand\tother\ttax | 32.9 | 30.4 |
| Accrued\tselling\tand\tpromotion\texpense | 26.6 | 29.1 |
| Other | 117.9 | 132.8 |
| Total\tother\taccrued\tliabilities | \t\t\t\t$\t\t247.9 | \t\t\t\t$\t\t255.9 |

Inventories:	Snap-on	values	its	inventory	at	the	lower	of	cost	or	market	and	adjusts	for	the	value	of	inventory	that	is	estimated	to	be	excess,	obsolete	or	otherwise unmarketable.	Snap-on	records	allowances	for	excess	and	obsolete	inventory	based	on	historical	and	estimated	future	demand	and	market	conditions.	Allowances	for raw	materials	are	largely	based	on	an	analysis	of	raw	material	age	and	actual	physical	inspection	of	raw	material	for	fitness	for	use.	As	part	of	evaluating	the	adequacy	of allowances	for	work-in-progress	and	finished	goods,	management	reviews	individual	product	stock-keeping	units	(SKUs)	by	product	category	and	product	life	cycle. Cost	adjustments	for	each	product	category/product	life-cycle	state	are	generally	established	and	maintained	based	on	a	combination	of	historical	experience,	forecasted sales	and	promotions,	technological	obsolescence,	inventory	age	and	other	actual	known	conditions	and	circumstances.	Should	actual	product	marketability	and	raw material	fitness	for	use	be	affected	by	conditions	that	are	different	from	management	estimates,	further	adjustments	to	inventory	allowances	may	be	required.

Snap-on	adopted	the	"last-in,	first-out"	("LIFO")	inventory	valuation	method	in	1973	for	its	U.S.	locations.	Snap-on's	U.S.	inventories	accounted	for	on	a	LIFO	basis consist	of	purchased	product	and	inventory	manufactured	at	the	company's	heritage	U.S.	manufacturing	facilities	(primarily	hand	tools	and	tool	storage).	As	Snap-on began	acquiring	businesses	in	the	1990's,	the	company	retained	the	"first-in,	first-out"	("FIFO")	inventory	valuation	methodology	used	by	the	predecessor	businesses prior	to	their	acquisition	by	Snap-on;	the	company	does	not	adopt	the	LIFO	inventory	valuation	methodology	for	new	acquisitions.	See	Note	4	for	further	information	on inventories.

Property	and	equipment:	Property	and	equipment	is	stated	at	cost	less	accumulated	depreciation	and	amortization.	Depreciation	and	amortization	are	provided	on	a straight-line	basis	over	estimated	useful	lives.	Major	repairs	that	extend	the	useful	life	of	an	asset	are	capitalized,	while	routine	maintenance	and	repairs	are	expensed	as incurred.	Capitalized	software	included	in	property	and	equipment	reflects	costs	related	to	internally	developed	or	purchased	software	for	internal	use	and	is	amortized on	a	straight-line	basis	over	their	estimated	useful	lives.	Long-lived	assets	are	evaluated	for	impairment	when	events	or	circumstances	indicate	that	the	carrying	amount of	the	long-lived	asset	may	not	be	recoverable.	See	Note	5	for	further	information	on	property	and	equipment.

Goodwill	and	other	intangible	assets:	Goodwill	and	indefinite-lived	assets	are	tested	for	impairment	annually	or	more	frequently	if	events	or	changes	in	circumstances indicate	that	the	assets	might	be	impaired.	Annual	impairment	tests	are	performed	by	the	company	in	the	second	quarter	of	each	year.	Snap-on	evaluates	the	existence	of goodwill	and	indefinite-lived	intangible	asset	impairment	on	the	basis	of	whether	the	assets	are	fully	recoverable	from	projected,	discounted	cash	flows	of	the	related business	unit	or	asset.	Intangible	assets	with	finite	lives	are	amortized	over	their	estimated	useful	lives	using	straight-line	and	accelerated	methods	depending	on	the nature	of	the	particular	asset.	See	Note	6	for	further	information	on	goodwill	and	other	intangible	assets.

Accumulated	other	comprehensive	loss:	The	components	of	"Accumulated	other	comprehensive	loss"	("Accumulated	OCI")	on	the	accompanying	Consolidated Balance	Sheets	as	of	2012	and	2011	year	end	are	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Foreign\tcurrency\ttranslation\tadjustment | \t\t\t\t$129.7 | \t\t\t\t$94.7 |
| Unamortized\tloss\ton\tpension\tand\tpostretirement\tbenefit |  |  |
|  | \t\t(255.6) | (271.4) |
| Other | 1.7 | 2.1 |
| Accumulated\tOCI | \t\t\t\t$(124.2) | \t\t\t\t$\t\t(174.6) |

# Indefinite-lived	Intangible	Assets

The	Financial	Accounting	Standards	Board	("FASB")	issued	updated	authoritative	guidance	in	July	2012	to	amend	previous	guidance	on	the	annual	and	interim	testing of	indefinite-lived	intangible	assets	for	impairment;	the	guidance	becomes	effective	for	Snap-on	at	the	beginning	of	its	2013	fiscal	year.	The	guidance	provides	entities with	the	option	of	first	assessing	qualitative	factors	to	determine	whether	it	is	more-likely-than-not	that	the	fair	value	of	an	indefinite-lived	intangible	asset	is	less	than	its carrying	amount.	If	it	is	determined,	on	the	basis	of	qualitative	factors,	that	the	fair	value	of	the	indefinite-lived	intangible	asset	is	more-likely-than-not	less	than	the carrying	amount,	a	quantitative	impairment	test	would	still	be	required.	Annual	impairment	tests	are	performed	by	the	company	in	the	second	quarter	of	each	year.	The adoption	of	this	updated	authoritative	guidance	is	not	expected	to	have	a	significant	impact	on	the	company's	Consolidated	Financial	Statements.

# Goodwill

The	FASB	issued	updated	authoritative	guidance	in	September	2011	to	amend	previous	guidance	on	the	annual	and	interim	testing	of	goodwill	for	impairment;	the guidance	became	effective	for	Snap-on	at	the	beginning	of	its	2012	fiscal	year.	The	guidance	provides	entities	with	the	option	of	first	assessing	qualitative	factors	to determine	whether	it	is	more-	likely-than-not	that	the	fair	value	of	a	reporting	unit	is	less	than	its	carrying	amount.	If	it	is	determined,	on	the	basis	of	qualitative	factors, that	the	fair	value	of	the	reporting	unit	is	more-likely-than-not	less	than	the	carrying	amount,	the	two-step	impairment	test	would	still	be	required.	The	company	did	not elect	to	perform	a	qualitative	assessment	in	2012.	As	a	result,	the	adoption	of	this	updated	authoritative	guidance	had	no	impact	on	the	company's	Consolidated Financial	Statements.

# Fair	Value	Measurements

The	FASB	issued	updated	authoritative	guidance	in	May	2011	to	amend	fair	value	measurements	and	related	disclosures;	the	guidance	became	effective	for	Snap-on	at the	beginning	of	its	2012	fiscal	year.	This	guidance	relates	to	a	major	convergence	project	of	the	FASB	and	the	International	Accounting	Standards	Board	to	improve International	Financial	Reporting	Standards	("IFRS")	and	U.S.	GAAP.	This	guidance	resulted	in	a	consistent	definition	of	fair	value	and	common	requirements	for measurement	of	and	disclosure	about	fair	value	between	IFRS	and	U.S.	GAAP.	The	guidance	also	changed	some	fair	value	measurement	principles	and	enhanced disclosure	requirements	related	to	activities	in	Level	3	of	the	fair	value	hierarchy.	The	adoption	of	this	updated	authoritative	guidance	had	no	impact	on	the	company's Consolidated	Financial	Statements.

# Disclosures	Relating	to	Comprehensive	Income

The	FASB	issued	updated	authoritative	guidance	in	June	2011	to	amend	the	presentation	of	comprehensive	income	in	financial	statements.	The	FASB	also	issued	an accounting	standards	update	in	December	2011	that	indefinitely	deferred	certain	financial	statement	presentation	provisions	contained	in	its	original	June	2011	guidance. The	guidance,	which	became	effective	for	Snap-on	on	a	retrospective	basis	at	the	beginning	of	its	2012	fiscal	year,	gives	companies	the	option	to	present	other comprehensive	income	in	either	a	single	continuous	statement	or	in	two	separate	but	consecutive	statements.	Under	both	alternatives,	companies	are	required	to	annually present	each	component	of	comprehensive	income.	The	adoption	of	this	updated	authoritative	guidance	impacted	the	presentation	of	the	company's	Consolidated Statements	of	Comprehensive	Income,	but	it	did	not	change	the	items	that	must	be	reported	in	other	comprehensive	income	or	when	an	item	of	other	comprehensive income	must	be	reclassified	to	net	income.

# Note	2:	Acquisitions

Snap-on	acquired	a	60%	interest	in	Snap-on	Asia	Manufacturing	(Zhejiang)	Co.	Ltd.	("Xiaoshan")	(formerly	known	as	Wanda	Snap-on	(Zhejiang)	Co.	Ltd.),	the company's	tool	manufacturing	operation	in	Xiaoshan,	China,	in	2008.	Snap-on	acquired	the	remaining	40%	redeemable	noncontrolling	interest	in	Xiaoshan	in	April 2010	for	a	purchase	price	of	$7.7	million	and	$0.1	million	of	transaction	costs.

# Note	3:	Receivables

# Trade	and	Other	Accounts	Receivable

Snap-on's	trade	and	other	accounts	receivable	primarily	arise	from	the	sale	of	tools,	diagnostics	and	equipment	to	a	broad	range	of	industrial	and	commercial	customers and	to	Snap-on's	independent	franchise	van	channel	on	a	non-extended-term	basis	with	payment	terms	generally	ranging	from	30	to	120	days.

The	components	of	Snap-on's	trade	and	other	accounts	receivable	as	of	2012	and	2011	year	end	are	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Trade\tand\tother\taccounts\treceivable | \t\t\t\t$516.9 | \t\t\t\t$485.5 |
| Allowances\tfor\tdoubtful\taccounts | (19.0) | (22.0) |
| Total\ttrade\tand\tother\taccounts\treceivable\t–\tnet | \t\t\t\t$\t\t497.9 | \t\t\t\t$\t\t463.5 |

# Finance	and	Contract	Receivables

SOC	originates	extended-term	finance	and	contract	receivables	on	sales	of	Snap-on	product	sold	through	the	U.S.	franchisee	and	customer	network	and	to	Snap-on's industrial	and	other	customers;	Snap-on's	foreign	finance	subsidiaries	provide	similar	financing	internationally.	Interest	income	on	finance	and	contract	receivables	is included	in	"Financial	services	revenue"	on	the	accompanying	Consolidated	Statements	of	Earnings.

Snap-on's	finance	receivables	are	comprised	of	extended-term	installment	loans	to	both	technicians	and	independent	shop	owners	(i.e.,	franchisees'	customers)	to	enable them	to	purchase	tools,	diagnostics	and	equipment	on	an	extended-term	payment	plan,	generally	with	average	payment	terms	of	32	months.	Contract	receivables,	with payment	terms	of	up	to	10	years,	are	comprised	of	extended-term	installment	loans	to	a	broad	base	of	industrial	and	other	customers	worldwide,	including	shop	owners, both	independents	and	national	chains,	for	their	purchase	of	tools,	diagnostics	and	equipment.	Contract	receivables	also	include	extended-term	installment	loans	to franchisees	to	meet	a	number	of	financing	needs	including	van	and	truck	leases,	working	capital	loans,	and	loans	to	enable	new	franchisees	to	fund	the	purchase	of	the franchise.	Finance	and	contract	receivables	are	generally	secured	by	the	underlying	tools,	diagnostics	or	equipment	financed	and,	for	installment	loans	to	franchisees, other	franchisee	assets.

Snap-on	did	not	purchase	or	sell	any	finance	or	contract	receivables	during	2012,	2011	or	2010.

The	components	of	Snap-on's	current	finance	and	contract	receivables	as	of	2012	and	2011	year	end	are	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| million,\trespectively | \t\t\t\t$\t\t331.7 | \t\t\t\t$\t\t285.3 |
| million,\trespectively | 63.7 | 51.2 |
| Total | 395.4 | 336.5 |
| Allowances\tfor\tdoubtful\taccounts: |  |  |
| Finance\treceivables | (8.6) | (8.1) |
| Contract\treceivables | (1.0) | (1.5) |
| Total | (9.6) | (9.6) |
| Total\tcurrent\tfinance\tand\tcontract\treceivables\t–\tnet | \t\t\t\t$385.8 | \t\t\t\t$326.9 |
| Finance\treceivables\t–\tnet | \t\t\t\t$323.1 | \t\t\t\t$277.2 |
| Contract\treceivables\t–\tnet | 62.7 | 49.7 |
| Total\tcurrent\tfinance\tand\tcontract\treceivables\t–\tnet | \t\t\t\t$385.8 | \t\t\t\t$326.9 |

The	components	of	Snap-on's	finance	and	contract	receivables	with	payment	terms	beyond	one	year	as	of	2012	and	2011	year	end	are	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| million,\trespectively | \t\t\t\t$512.5 | \t\t\t\t$447.9 |
| million,\trespectively | 196.6 | 167.7 |
| Total | 709.1 | 615.6 |
| Allowances\tfor\tdoubtful\taccounts: |  |  |
| Finance\treceivables | (17.9) | (16.1) |
| Contract\treceivables | (2.2) | (2.6) |
| Total | (20.1) | \t\t(18.7) |
| Total\tlong-term\tfinance\tand\tcontract\treceivables\t–\tnet | \t\t\t\t$689.0 | \t\t\t\t$596.9 |
| Finance\treceivables\t–\tnet | \t\t\t\t$494.6 | \t\t\t\t$431.8 |
| Contract\treceivables\t–\tnet | 194.4 | 165.1 |
| Total\tlong-term\tfinance\tand\tcontract\treceivables\t–\tnet | \t\t\t\t$\t\t689.0 | \t\t\t\t$596.9 |

Long-term	finance	and	contract	receivables	installments,	net	of	unearned	finance	charges,	as	of	2012	and	2011	year	end	are	scheduled	as	follows:

|  | Finance | Contract | Finance | Contract |
| :--- | :--- | :--- | :--- | :--- |
| (Amounts\tin\tmillions) | Receivables | Receivables | Receivables | Receivables |
| Due\tin\tMonths: |  |  |  |  |
| 13\t–\t24 | \t\t\t\t$\t\t\t\t261.1 | \t\t\t\t$54.6 | \t\t\t\t$\t\t223.8 | \t\t\t\t$44.9 |
| 25\t–\t36 | 160.1 | 45.4 | 141.9 | 37.0 |
| 37\t–\t48 | 65.1 | 32.4 | 59.2 | 28.6 |
| 49\t–\t60 | 25.5 | 21.4 | 22.4 | 18.6 |
| Thereafter | 0.7 | 42.8 | 0.6 | 38.6 |
| Total | \t\t\t\t$512.5 | \t\t\t\t$\t\t\t\t196.6 | \t\t\t\t$447.9 | \t\t\t\t$\t\t167.7 |
|  | 2012\tANNUAL\tREPORT |  |  | 75 |

Delinquency	is	the	primary	indicator	of	credit	quality	for	finance	and	contract	receivables.	Receivable	balances	are	considered	delinquent	when	contractual	payments	on the	loans	become	30	days	past	due.

Finance	receivables	are	generally	placed	on	nonaccrual	status	(nonaccrual	of	interest	and	other	fees)	(i)	when	a	customer	is	placed	on	repossession	status;	(ii)	upon receipt	of	notification	of	bankruptcy;	(iii)	upon	notification	of	the	death	of	a	customer;	or	(iv)	in	other	instances	in	which	management	concludes	collectability	is	not reasonably	assured.	Finance	receivables	that	are	considered	nonperforming	include	receivables	that	are	on	nonaccrual	status	and	receivables	that	are	generally	more	than 90	days	past	due.

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

The	accrual	of	interest	and	other	fees	is	resumed	when	the	finance	or	contract	receivable	becomes	contractually	current	and	collection	of	all	remaining	contractual amounts	due	is	reasonably	assured.	Finance	and	contract	receivables	are	evaluated	for	impairment	on	a	collective	basis;	however,	in	circumstances	where	the	company	is aware	of	a	specific	customer's	inability	to	meet	its	financial	obligations,	a	specific	reserve	is	recorded	against	amounts	due	to	reduce	the	net	recognized	receivable	to	the amount	reasonably	expected	to	be	collected.	A	receivable	is	impaired	when	it	is	probable	that	all	amounts	related	to	the	receivable	will	not	be	collected	according	to	the contractual	terms	of	the	loan	agreement.	Impaired	receivables	are	covered	by	the	company's	finance	and	contract	allowances	for	doubtful	accounts	reserves	and	are charged-off	against	the	reserves	when	appropriate.	As	of	2012	and	2011	year	end,	there	were	$13.4	million	and	$11.5	million,	respectively,	of	impaired	finance receivables,	and	there	were	$0.9	million	and	$0.7	million,	respectively,	of	impaired	contract	receivables.

The	aging	of	finance	and	contract	receivables	as	of	2012	and	2011	year	end	is	as	follows:

|  |  |  |  |  |  |  | Greater |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | Greater |  |  |  | Than\t90 |
|  |  |  | Than\t90 |  |  |  | Days\tPast |
|  | 30-59\tDays | 60-90\tDays | Days\tPast | Total\tPast | Total\tNot |  | Due\tand |
| (Amounts\tin\tmillions) | Past\tDue | Past\tDue | Due | Due | Past\tDue | Total | Accruing |
| 2012\tyear\tend: |  |  |  |  |  |  |  |
| Finance\treceivables | \t\t\t\t$\t\t9.2 | \t\t\t\t\t\t$\t\t5.5 | \t\t\t\t$\t\t8.4 | \t\t\t\t$23.1 | \t\t\t\t$821.1 | \t\t\t\t$\t\t844.2 | \t\t\t\t$6.2 |
| Contract\treceivables | 1.3 | 0.6 | 1.0 | 2.9 | 257.4 | 260.3 | 0.3 |
| 2011\tyear\tend: |  |  |  |  |  |  |  |
| Finance\treceivables | \t\t\t\t$8.0 | \t\t\t\t\t\t$3.0 | \t\t\t\t$6.6 | \t\t\t\t$\t\t17.6 | \t\t\t\t$\t\t715.6 | \t\t\t\t$733.2 | \t\t\t\t$\t\t4.8 |
| Contract\treceivables | 0.9 | 0.4 | 0.6 | 1.9 | 217.0 | 218.9 | 0.2 |

The	amount	of	performing	and	nonperforming	finance	and	contract	receivables	based	on	payment	activity	as	of	2012	and	2011	year	end	is	as	follows:

|  | Finance | Contract | Finance | Contract |
| :--- | :--- | :--- | :--- | :--- |
| (Amounts\tin\tmillions) | Receivables | Receivables | Receivables | Receivables |
| Performing | \t\t\t\t$830.8 | \t\t\t\t$259.4 | \t\t\t\t$\t\t\t\t721.7 | \t\t\t\t$\t\t\t\t218.2 |
| Nonperforming | 13.4 | 0.9 | 11.5 | 0.7 |
| Total | \t\t\t\t$\t\t\t\t844.2 | \t\t\t\t$\t\t\t\t260.3 | \t\t\t\t$733.2 | \t\t\t\t$218.9 |

The	amount	of	finance	and	contract	receivables	on	nonaccrual	status	as	of	2012	and	2011	year	end	is	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Finance\treceivables | \t\t\t\t$\t\t\t\t7.2 | \t\t\t\t$\t\t\t\t6.8 |
| Contract\treceivables | 0.9 | 0.7 |

The	following	is	a	rollforward	of	the	allowances	for	credit	losses	for	finance	and	contract	receivables	for	2012	and	2011:

|  | Finance | Contract | Finance | Contract |
| :--- | :--- | :--- | :--- | :--- |
| (Amounts\tin\tmillions) | Receivables | Receivables | Receivables | Receivables |
| Allowances\tfor\tdoubtful\taccounts: |  |  |  |  |
| Beginning\tof\tyear | \t\t\t\t$24.2 | \t\t\t\t$4.1 | \t\t\t\t$21.5 | \t\t\t\t$4.0 |
| Provision\tfor\tbad\tdebt\texpense | 18.7 | 0.5 | 13.3 | 0.8 |
| Charge-offs | \t\t(20.6) | \t\t(1.7) | \t\t(14.3) | \t\t(1.5) |
| Recoveries | 4.2 | 0.3 | 3.8 | 0.8 |
| Currency\ttranslation | – | – | (0.1) | – |
| End\tof\tyear | \t\t\t\t$26.5 | \t\t\t\t$3.2 | \t\t\t\t$24.2 | \t\t\t\t$4.1 |

The	following	 is	a	rollforward	of the	combined	allowances	for	doubtful	accounts	related to trade	and	other	accounts	receivable,	as	well	as	finance	and	contract receivables	for	2012,	2011	and	2010:

|  | Balance	at |  |  | Balance	at |
| :--- | :--- | :--- | :--- | :--- |
|  | Beginning |  |  | End\tof |
| (Amounts\tin\tmillions) | of\tYear | Expenses | Deductions\t^(1) | Year |
| Allowances\tfor\tdoubtful\taccounts: |  |  |  |  |
| 2012 | \t\t\t\t$\t\t50.3 | \t\t\t\t$\t\t31.3 | \t\t\t\t$\t\t(32.9) | \t\t\t\t$\t\t48.7 |
| 2011 | 52.5 | 26.2 | (28.4) | 50.3 |
| 2010 | 40.6 | 34.4 | (22.5) | 52.5 |

Represents	write-offs	of	bad	debts,	net	of	recoveries,	and	the	net	impact	of	currency	translation.

The	increase	in	the	allowances	for	doubtful	accounts	over	beginning-of-year	2010	levels	primarily	reflects	the	building	of	allowances	as	a	result	of	the	growth	of	the	on- book	finance	portfolio	at	SOC	following	the	July	2009	termination	of	the	company's	financial	services	joint	venture	with	CIT.

Prior	to	the	termination	of	the	financial	services	joint	venture	with	CIT,	SOC	sold	substantially	all	new	finance	and	contract	loan	originations	to	CIT	on	a	limited recourse	basis	and	SOC	retained	the	right	to	service	such	loans	for	a	contractual	servicing	fee.	As	of	2012	year	end,	the	remaining	portfolio	of	receivables	owned	by	CIT that	is	being	serviced	by	SOC	was	$53.8	million.	Contractual	servicing	fees	were	$1.4	million	in	2012,	$2.3	million	in	2011	and	$4.9	million	in	2010.

# Note	4:	Inventories

Inventories	by	major	classification	as	of	2012	and	2011	year	end	are	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Finished\tgoods | \t\t\t\t$353.6 | \t\t\t\t$343.8 |
| Work\tin\tprogress | 38.6 | 32.2 |
| Raw\tmaterials | 83.8 | 80.5 |
| Total\tFIFO\tvalue | 476.0 | 456.5 |
| Excess\tof\tcurrent\tcost\tover\tLIFO\tcost | \t\t(71.8) | \t\t(70.1) |
| Total\tinventories\t–\tnet | \t\t\t\t$404.2 | \t\t\t\t$386.4 |

Inventories	accounted	for	using	the	FIFO	method	as	of	2012	and	2011	year	end	approximated	60%	and	62%,	respectively,	of	total	inventories.	The	company	accounts	for its	non-U.S.	inventory	on	the	FIFO	method.	As	of	2012	year	end,	approximately	26%	of	the	company's	U.S.	inventory	was	accounted	for	using	the	FIFO	method	and 74%	was	accounted	for	using	the	LIFO	method.	There	were	no	LIFO	inventory	liquidations	in	2012,	2011	or	2010.

# Note	5:	Property	and	Equipment

Snap-on's	property	and	equipment	values	(which	are	carried	at	cost)	as	of	2012	and	2011	year	end	are	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Land | \t\t\t\t$\t\t\t\t\t\t19.4 | \t\t\t\t$\t\t\t\t\t\t19.8 |
| Buildings\tand\timprovements | 286.2 | 274.9 |
| Machinery,\tequipment\tand\tcomputer\tsoftware | 684.6 | 632.3 |
| Property\tand\tequipment\t–\tgross | 990.2 | 927.0 |
| Accumulated\tdepreciation\tand\tamortization | \t\t(615.0) | \t\t(574.1) |
| Property\tand\tequipment\t–\tnet | \t\t\t\t$375.2 | \t\t\t\t$352.9 |

The	estimated	service	lives	of	property	and	equipment	are	principally	as	follows:

The	cost	and	accumulated	depreciation	of	property	and	equipment	under	capital	leases	as	of	2012	and	2011	year	end	are	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Buildings\tand\timprovements | \t\t\t\t$\t\t\t\t\t\t27.4 | \t\t\t\t$\t\t\t\t\t\t30.0 |
| Machinery,\tequipment\tand\tcomputer\tsoftware | 1.6 | 1.6 |
| Accumulated\tdepreciation | (11.3) | (10.6) |
| Net\tbook\tvalue | \t\t\t\t$17.7 | \t\t\t\t$21.0 |

During	the	fourth	quarter	of	2012,	Snap-on	committed	to	a	plan	to	sell	its	former	Newmarket,	Canada,	tool	storage	manufacturing	facility;	this	facility	was	closed	as	a result	of	the	2011	consolidation	of	the	company's	North	American	tool	storage	operations.	The	Newmarket	facility,	which	is	part	of	the	Snap-on	Tools	Group	segment, has	been	designated	as	held	for	sale	and	is	expected	to	sell	in	2013.	The	facility's	$7.2	million	net	book	value,	which	consists	of	land	and	building,	has	been	reclassified to	"Prepaid	expenses	and	other	assets"	as	of	December	29,	2012,	on	the	accompanying	Consolidated	Balance	Sheets.	The	company	does	not	expect	to	incur	a	loss	on	the sale	of	this	facility.

# Note	6:	Intangible	and	Other	Assets

The	changes	in	the	carrying	amount	of	goodwill	by	segment	for	2012	and	2011	are	as	follows:

|  | Commercial |  | Systems		& |  |
| :--- | :--- | :--- | :--- | :--- |
|  | &\tIndustrial | Snap-on | Information |  |
| (Amounts\tin\tmillions) | Group | Tools\tGroup | Group | Total |
| Balance\tas\tof\t2010\tyear\tend | \t\t\t\t$\t\t\t\t299.3 | \t\t\t\t$\t\t\t\t\t\t12.5 | \t\t\t\t$\t\t\t\t486.6 | \t\t\t\t$\t\t\t\t798.4 |
| Currency\ttranslation | (2.3) | – | (0.3) | (2.6) |
| Balance\tas\tof\t2011\tyear\tend | 297.0 | 12.5 | 486.3 | 795.8 |
| Currency\ttranslation | 9.9 | – | 1.7 | 11.6 |
| Balance\tas\tof\t2012\tyear\tend | \t\t\t\t$306.9 | \t\t\t\t$12.5 | \t\t\t\t$488.0 | \t\t\t\t$807.4 |

Additional	disclosures	related	to	other	intangible	assets	as	of	2012	and	2011	year	end	are	as	follows:

|  | Gross | Accumulated | Gross | Accumulated |
| :--- | :--- | :--- | :--- | :--- |
| (Amounts\tin\tmillions) | Carrying\tValue | Amortization | Carrying\tValue | Amortization |
| Amortized\tother\tintangible\tassets: |  |  |  |  |
| Customer\trelationships | \t\t\t\t$135.3 | \t\t\t\t$(54.1) | \t\t\t\t$134.4 | \t\t\t\t$(45.3) |
| Developed\ttechnology | 19.4 | (18.8) | 19.1 | (16.8) |
| Internally\tdeveloped\tsoftware | 107.2 | (66.1) | 85.1 | (52.0) |
| Patents | 28.1 | (19.4) | 27.2 | (17.8) |
| Trademarks | 2.6 | (1.4) | 2.4 | (1.2) |
| Other | 7.1 | (1.2) | 7.0 | (0.9) |
| Total | 299.7 | (161.0) | 275.2 | (134.0) |
| Non-amortized\ttrademarks | 48.5 | – | 47.1 | – |
| Total\tother\tintangible\tassets | \t\t\t\t$\t\t348.2 | \t\t\t\t$\t\t(161.0) | \t\t\t\t$\t\t322.3 | \t\t\t\t$\t\t(134.0) |

Significant	and	unanticipated	changes	in	circumstances,	such	as	declines	in	profitability	and	cash	flow	due	to	significant	and	long-term	deterioration	in	macroeconomic, industry	and	market	conditions,	the	loss	of	key	customers,	changes	in	technology	or	markets,	significant	changes	in	key	personnel	or	litigation,	a	significant	and sustained	decrease	in	share	price	and/or	other	events,	including	effects	from	the	sale	or	disposal	of	a	reporting	unit,	could	require	a	provision	for	impairment	of	goodwill and/or	other	intangible	assets	in	a	future	period.	As	of	2012	year	end,	the	company	has	no	accumulated	impairment	losses.

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

Snap-on	is	amortizing	its	customer	relationships	on	an	accelerated	basis	over	a	16	year	weighted-average	life;	the	remaining	intangibles	are	amortized	on	a	straight-line basis.	The	weighted-average	amortization	period	for	all	amortizable	intangibles	on	a	combined	basis	is	13	years.

The	company's	customer	relationships	generally	have	contractual	terms	of	three	to	five	years	and	are	typically	renewed	without	significant	cost	to	the	company.	The weighted-average	16	year	life	for	customer	relationships	is	based	on	the	company's	historical	renewal	experience.	Intangible	asset	renewal	costs	are	expensed	as incurred.

# Note	7:	Exit	and	Disposal	Activities

Snap-on	recorded	costs	associated	with	exit	and	disposal	activities	of	$16.5	million	and	$12.2	million	during	2012	and	2011,	respectively.	The	2012	and	2011	costs associated	with	exit	and	disposal	activities	by	operating	segment	are	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Exit\tand\tdisposal\tcosts: |  |  |
| Cost\tof\tgoods\tsold: |  |  |
| Commercial\t&\tIndustrial\tGroup | \t\t\t\t$3.6 | \t\t\t\t$2.9 |
| Snap-on\tTools\tGroup | 7.1 | 3.7 |
| Repair\tSystems\t&\tInformation\tGroup | 0.2 | 1.0 |
| Total\tcost\tof\tgoods\tsold | 10.9 | 7.6 |
| Operating\texpenses: |  |  |
| Commercial\t&\tIndustrial\tGroup | 5.3 | 2.7 |
| Snap-on\tTools\tGroup | 0.1 | 0.6 |
| Repair\tSystems\t&\tInformation\tGroup | 0.2 | 1.1 |
| Corporate | – | 0.2 |
| Total\toperating\texpenses | 5.6 | 4.6 |
| Total\texit\tand\tdisposal\tcosts: |  |  |
| Commercial\t&\tIndustrial\tGroup | 8.9 | 5.6 |
| Snap-on\tTools\tGroup | 7.2 | 4.3 |
| Repair\tSystems\t&\tInformation\tGroup | 0.4 | 2.1 |
| Corporate | – | 0.2 |
| Total\texit\tand\tdisposal\tcosts | \t\t\t\t$\t\t16.5 | \t\t\t\t$\t\t12.2 |

Costs	associated	with	exit	and	disposal	activities	in	2012	primarily	related	to	the	settlement	of	a	pension	plan	as	a	result	of	the	2011	closure	of	the	company's	former Newmarket,	Canada,	facility	as	well	as	headcount	reductions,	largely	to	improve	the	company's	cost	structure	in	Europe.	Of	the	$16.5	million	of	exit	and	disposal	costs incurred	in	2012,	$8.8	million	qualified	for	accrual	treatment.	Of	the	$12.2	million	of	exit	and	disposal	costs	incurred	in	2011,	$8.2	million	qualified	for	accrual treatment.

Snap-on's	exit	and	disposal	accrual	activity	related	to	2012	and	2011	actions	is	as	follows:

|  | Balance |  |  | Balance | Provision |  | Balance	at |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | at\t2010 | Provision | Usage\tin | at\t2011 | (reversal) | Usage | 2012 |
| (Amounts\tin\tmillions) | Year\tEnd | in\t2011 | 2011 | Year\tEnd | in\t2012 | in\t2012 | Year\tEnd |
| Severance\tcosts: |  |  |  |  |  |  |  |
| Commercial\t&\tIndustrial\tGroup | \t\t\t\t$2.8 | \t\t\t\t$4.3 | \t\t\t\t$(3.5) | \t\t\t\t$3.6 | \t\t\t\t$8.7 | \t\t\t\t$(6.1) | \t\t\t\t$6.2 |
| Snap-on\tTools\tGroup | 3.5 | 1.8 | (4.7) | 0.6 | \t\t(0.1) | (0.4) | 0.1 |
| Repair\tSystems\t& |  |  |  |  |  |  |  |
| Information\tGroup | 3.3 | 2.1 | (1.6) | 3.8 | 0.2 | (3.3) | 0.7 |
| Corporate | 0.2 | – | (0.2) | – | – | – | – |
| Facility-related\tcosts: |  |  |  |  |  |  |  |
| Commercial\t&\tIndustrial\tGroup | 0.5 | – | (0.1) | 0.4 | – | (0.2) | 0.2 |
| Snap-on\tTools\tGroup | 0.2 | – | (0.2) | – | – | – | – |
| Total | \t\t\t\t$\t\t10.5 | \t\t\t\t$\t\t8.2 | \t\t\t\t$\t\t(10.3) | \t\t\t\t$\t\t8.4 | \t\t\t\t$8.8 | \t\t\t\t$\t\t(10.0) | \t\t\t\t$\t\t7.2 |

Snap-on	reduced	headcount	by	approximately	150	employees	in	2012	as	part	of	its	restructuring	actions.	The	exit	and	disposal	accrual	of	$7.2	million	as	of	2012	year end	is	expected	to	be	fully	utilized	in	2013.

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

# Note	8:	Income	Taxes

The	source	of	earnings	before	income	taxes	and	equity	earnings	consisted	of	the	following:

Temporary	differences	that	give	rise	to	the	net	deferred	income	tax	asset	as	of	2012,	2011	and	2010	year	end	are	as	follows:

| (Amounts	in	millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Current\tdeferred\tincome\ttax\tassets\t(liabilities): |  |  |  |
| Inventories | \t\t\t\t$\t\t\t\t25.0 | \t\t\t\t$\t\t\t\t24.2 | \t\t\t\t$\t\t\t\t21.2 |
| Accruals\tnot\tcurrently\tdeductible | 60.4 | 73.4 | 67.5 |
| Valuation\tallowance | (3.7) | (5.6) | (3.2) |
| Total\tcurrent\t(included\tin\tdeferred\tincome\ttax\tassets\tand\tother\taccrued\tliabilities) | 81.7 | 92.0 | 85.5 |
| Long-term\tdeferred\tincome\ttax\tassets\t(liabilities): |  |  |  |
| Employee\tbenefits | 108.1 | 133.9 | 109.2 |
| Net\toperating\tlosses | 59.2 | 52.2 | 46.9 |
| Depreciation\tand\tamortization | (161.4) | (150.4) | (126.0) |
| SOC\tsecuritizations | 0.4 | (1.4) | (6.8) |
| Valuation\tallowance | (40.2) | (34.8) | (36.9) |
| Equity-based\tcompensation | 17.1 | 14.8 | 9.2 |
| Other | – | 2.8 | 1.5 |
| Total\tlong\tterm | (16.8) | 17.1 | (2.9) |
| Net\tdeferred\tincome\ttax\tasset | \t\t\t\t$64.9 | \t\t\t\t$109.1 | \t\t\t\t$82.6 |

As	of	2012	year	end,	Snap-on	had	tax	net	operating	loss	carryforwards	totaling	$313.2	million	as	follows:

| (Amounts	in	millions) | State | States | Foreign | Total |
| :--- | :--- | :--- | :--- | :--- |
| Year\tof\texpiration: |  |  |  |  |
| 2013\t–\t2017 | \t\t\t\t$\t\t\t\t\t– | \t\t\t\t$– | \t\t\t\t$29.6 | \t\t\t\t$29.6 |
| 2018\t–\t2022 | 0.1 | – | 0.2 | 0.3 |
| 2023\t–\t2027 | 3.6 | – | 45.1 | 48.7 |
| 2028\t–\t2032 | 128.9 | – | – | 128.9 |
| Indefinite | – | – | 105.7 | 105.7 |
| Total\tnet\toperating\tloss\tcarryforwards | \t\t\t\t$\t\t\t\t132.6 | \t\t\t\t$\t\t\t\t\t\t– | \t\t\t\t$\t\t180.6 | \t\t\t\t$\t\t313.2 |

A	valuation	allowance	totaling	$43.9	million,	$40.4	million	and	$40.1	million	as	of	2012,	2011	and	2010	year	end,	respectively,	has	been	established	for	deferred income	tax	assets	primarily	related	to	certain	subsidiary	loss	carryforwards	that	may	not	be	realized.	Realization	of	the	net	deferred	income	tax	assets	is	dependent	on generating	sufficient	taxable	income	prior	to	their	expiration.	Although	realization	is	not	assured,	management	believes	it	is	more-	likely-than-not	that	the	net	deferred income	tax	assets	will	be	realized.	The	amount	of	the	net	deferred	income	tax	assets	considered	realizable,	however,	could	change	in	the	near	term	if	estimates	of	future taxable	income	during	the	carryforward	period	fluctuate.

The	following	is	a	reconciliation	of	the	beginning	and	ending	amounts	of	unrecognized	tax	benefits	for	2012,	2011	and	2010:

| (Amounts	in	millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Unrecognized\ttax\tbenefits\tat\tbeginning\tof\tyear | \t$11.0 | \t$11.1 | \t$17.5 |
| Gross\tincreases\t–\ttax\tpositions\tin\tprior\tperiods | 0.7 | 0.5 | 0.6 |
| Gross\tdecreases\t–\ttax\tpositions\tin\tprior\tperiods | (4.9) | (0.4) | (0.4) |
| Gross\tincreases\t–\ttax\tpositions\tin\tthe\tcurrent\tperiod | 1.2 | 2.8 | 3.1 |
| Settlements\twith\ttaxing\tauthorities | – | (1.2) | (9.5) |
| Increase\trelated\tto\tacquired\tbusiness | – | – | 0.4 |
| Lapsing\tof\tstatutes\tof\tlimitations | \t\t(1.2) | \t\t(1.8) | \t\t(0.6) |
| Unrecognized\ttax\tbenefits\tat\tend\tof\tyear | \t$6.8 | \t$11.0 | \t$11.1 |

Of	the	$6.8	million,	$11.0	million	and	$11.1	million	of	unrecognized	tax	benefits	as	of	2012,	2011	and	2010	year	end,	respectively,	approximately	$4.1	million,	$9.1 million	and	$11.1	million,	respectively,	would	impact	the	effective	income	tax	rate	if	recognized.

Interest	and	penalties	related	to	unrecognized	tax	benefits	are	recorded	in	income	tax	expense.	During	2012	and	2011,	the	company	reversed	a	net	$0.5	million	and	$1.4 million,	respectively,	of	interest	and	penalties	to	income	associated	with	unrecognized	tax	benefits.	As	of	2012,	2011	and	2010	year	end,	the	company	has	provided	for $1.6	million,	$1.6	million	and	$2.8	million,	respectively,	of	accrued	interest	and	penalties	related	to	unrecognized	tax	benefits.	The	unrecognized	tax	benefits	and	related accrued	interest	and	penalties	are	included	in	"Other	long-term	liabilities"	on	the	accompanying	Consolidated	Balance	Sheets.

Snap-on	and	its	subsidiaries	file	income	tax	returns	in	the	United	States	and	in	various	state,	local	and	foreign	jurisdictions.	It	is	reasonably	possible	that	certain unrecognized	tax	benefits	may	either	be	settled	with	taxing	authorities	or	the	statutes	of	limitations	for	such	items	may	lapse	within	the	next	12	months,	causing	Snap- on's	gross	unrecognized	tax	benefits	to	decrease	by	a	range	of	zero	to	$2.4	million.	Over	the	next	12	months,	Snap-on	anticipates	taking	uncertain	tax	positions	on various	tax	returns	for	which	the	related	tax	benefit	does	not	meet	the	recognition	threshold.	Accordingly,	Snap-on's	gross	unrecognized	tax	benefits	may	increase	by	a range	of	zero	to	$1.6	million	over	the	next	12	months	for	uncertain	tax	positions	expected	to	be	taken	in	future	tax	filings.

With	few	exceptions,	Snap-on	is	no	longer	subject	to	U.S.	federal	and	state/local	income	tax	examinations	by	tax	authorities	for	years	prior	to	2008,	and	Snap-on	is	no longer	subject	to	non-U.S.	income	tax	examinations	by	tax	authorities	for	years	prior	to	2006.

The	undistributed	earnings	of	all	non-U.S.	subsidiaries	totaled	$492.2	million,	$416.4	million	and	$386.5	million	as	of	2012,	2011	and	2010	year	end,	respectively. Snap-on	has	not	provided	any	deferred	taxes	on	these	undistributed	earnings	as	it	considers	the	undistributed	earnings	to	be	permanently	invested.	Determination	of	the amount	of	unrecognized	deferred	income	tax	liability	related	to	these	earnings	is	not	practicable.

# Note	9:	Short-term	and	Long-term	Debt

Short-term	and	long-term	debt	as	of	2012	and	2011	year	end	consisted	of	the	following:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| 5.85%\tunsecured\tnotes\tdue\tMarch\t2014 | \t\t\t\t$100.0 | \t\t\t\t$100.0 |
| 5.50%\tunsecured\tnotes\tdue\t2017 | 150.0 | 150.0 |
| 4.25%\tunsecured\tnotes\tdue\t2018 | 250.0 | 250.0 |
| 6.70%\tunsecured\tnotes\tdue\t2019 | 200.0 | 200.0 |
| 6.125%\tunsecured\tnotes\tdue\t2021 | 250.0 | 250.0 |
| Other\tdebt* | 25.6 | 34.1 |
|  | 975.6 | 984.1 |
| Less:\tnotes\tpayable | (5.2) | (16.2) |
| Total\tlong-term\tdebt | \t\t\t\t$\t\t970.4 | \t\t\t\t$\t\t967.9 |

* Includes	fair	value	adjustments	related	to	interest	rate	swaps.

Snap-on	also	has	a	364-day	loan	and	servicing	agreement	that	allows	Snap-on	to	borrow	up	to	$200	million	(subject	to	borrowing	base	requirements)	through	the pledging	of	finance	receivables	under	an	asset-backed	commercial	paper	conduit	facility;	the	loan	and	servicing	agreement	expires	on	September	27,	2013	(unless	earlier terminated	or	subsequently	extended	pursuant	to	the	terms	of	the	agreement).	As	of	2012	year	end,	no	amounts	were	outstanding	under	the	loan	and	servicing	agreement.

# Note	10:	Financial	Instruments

Derivatives:	All	derivative	instruments	are	reported	in	the	Consolidated	Financial	Statements	at	fair	value.	Changes	in	the	fair	value	of	derivatives	are	recorded	each period	 in	 earnings	 or	 on	 the	 accompanying	 Consolidated	 Balance	 Sheets,	 depending	 on	 whether	 the	 derivative	 is	 designated	 and	 effective	 as	 part	 of	 a	 hedged transaction.	Gains	or	losses	on	derivative	instruments	recorded	in	Accumulated	OCI	must	be	reclassified	to	earnings	in	the	period	in	which	earnings	are	affected	by	the underlying	hedged	item	and	the	ineffective	portion	of	all	hedges	must	be	recognized	in	earnings	in	the	period	that	such	portion	is	determined	to	be	ineffective.

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

The	company	is	exposed	to	global	market	risks,	including	the	effect	of	changes	in	foreign	currency	exchange	rates	and	interest	rates,	and	therefore	uses	derivatives	to manage	financial	exposures	that	occur	in	the	normal	course	of	business.	The	primary	risks	managed	by	using	derivative	instruments	are	foreign	currency	risk	and	interest rate	risk.

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

As	of	2012	year	end,	Snap-on	had	$199.0	million	of	net	foreign	currency	forward	buy	contracts	outstanding	comprised	of	buy	contracts	including	$90.0	million	in	euros, $74.9	million	in	Swedish	kronor,	$34.7	million	in	Australian	dollars,	$33.0	million	in	British	pounds,	$12.0	million	in	Singapore	dollars,	$7.0	million	in	Hong	Kong dollars,	$5.1	million	in	South	Korean	won,	$2.5	million	in	Chilean	pesos,	and	$3.5	million	in	other	currencies,	and	sell	contracts	including	$41.6	million	in	Canadian dollars,	$11.1	million	in	Japanese	yen,	$3.5	million	in	Argentine	pesos,	$2.6	million	in	Turkish	lira,	and	$4.9	million	in	other	currencies.	As	of	2011	year	end,	Snap-on had	$183.8	million	of	net	foreign	currency	forward	buy	contracts	outstanding	comprised	of	buy	contracts	including	$85.2	million	in	euros,	$59.8	million	in	Swedish kronor,	$35.3	million	in	British	pounds,	$32.4	million	in	Australian	dollars,	$18.8	million	in	Singapore	dollars,	$6.1	million	in	Hong	Kong	dollars,	$5.7	million	in Norwegian	kroner,	$4.1	million	in	South	Korean	won,	$4.1	million	in	Danish	kroner,	and	$2.3	million	in	Chilean	pesos,	and	sell	contracts	including	$51.1	million	in Canadian	dollars,	$12.3	million	in	Japanese	yen,	$3.6	million	in	Turkish	lira,	and	$3.0	million	in	other	currencies.

Interest	rate	risk	management:	Snap-on	aims	to	control	funding	costs	by	managing	the	exposure	created	by	the	differing	maturities	and	interest	rate	structures	of Snap-on's	borrowings	through	the	use	of	interest	rate	swap	agreements.	Treasury	lock	agreements	are	used	from	time	to	time	to	manage	potential	changes	in	interest rates	in	anticipation	of	the	issuance	or	sale	of	certain	financial	instruments.

Interest	rate	swap	agreements:	Snap-on	enters	into	interest	rate	swap	agreements	("interest	rate	swaps")	to	manage	risks	associated	with	changing	interest	rates	related to	the	company's	fixed	rate	borrowings.	Interest	rate	swaps	are	accounted	for	as	fair	value	hedges.	The	differentials	paid	or	received	on	interest	rate	swaps	are	recognized as	adjustments	to	"Interest	expense"	on	the	accompanying	Consolidated	Statements	of	Earnings.	The	effective	portion	of	the	change	in	fair	value	of	the	derivative	is recorded	in	"Long-term	debt"	on	the	accompanying	Consolidated	Balance	Sheets,	while	any	ineffective	portion	is	recorded	as	an	adjustment	to	"Interest	expense"	on	the accompanying	Consolidated	Statements	of	Earnings.	The	notional	amount	of	interest	rate	swaps	outstanding	and	designated	as	fair	value	hedges	was	$100.0	million	as	of both	2012	and	2011	year	end.

Treasury	lock	agreements:	Snap-on	enters	into	treasury	lock	agreements	("treasury	locks")	from	time	to	time	to	manage	the	potential	change	in	interest	rates	in anticipation	of	issuing	fixed	rate	debt.	Treasury	locks	are	accounted	for	as	cash	flow	hedges.	The	effective	differentials	paid	or	received	on	treasury	locks	related	to	the anticipated	issuance	of	fixed	rate	debt	are	recognized	as	adjustments	to	"Interest	expense"	on	the	accompanying	Consolidated	Statements	of	Earnings.	There	were	no treasury	locks	outstanding	as	of	2012	or	2011	year	end,	and	no	treasury	locks	were	settled	in	2012	or	2011.	In	2010,	Snap-on	settled	treasury	locks	of	$125	million associated	with	the	company's	issuance	of	$250	million	of	fixed	rate,	long-term	notes	in	December	2010.

Fair	value	measurements:	Snap-on	has	derivative	assets	and	liabilities	that	are	measured	at	Level	2	fair	value	(primarily	based	on	observable	market	information)	on	a recurring	basis.	The	fair	value	of	derivative	instruments	included	within	the	Consolidated	Balance	Sheets	as	of	2012	and	2011	year	end	are	as	follows:

|  |  | Asset | Liability | Asset | Liability |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Balance\tSheet | Derivatives | Derivatives | Derivatives | Derivatives |
| (Amounts\tin\tmillions) | Presentation | Fair\tValue | Fair\tValue | Fair\tValue | Fair\tValue |
| Derivatives\tdesignated\tas\thedging |  |  |  |  |  |
| instruments: |  |  |  |  |  |
| Interest\trate\tswaps | \t\t\t\tOther\tassets | \t\t\t\t$21.4 | \t\t\t\t$\t\t\t– | \t\t\t\t$19.0 | \t\t\t\t$– |
| Derivatives\tnot\tdesignated\tas\thedging |  |  |  |  |  |
| instruments: |  |  |  |  |  |
| Foreign\tcurrency\tforwards | \t\t\t\tPrepaid\texpenses\tand\tother\tassets | 8.9 | – | 4.3 | – |
| Foreign\tcurrency\tforwards | \t\t\t\tOther\taccrued\tliabilities | – | 1.8 | – | 11.0 |
| Total |  | 8.9 | 1.8 | 4.3 | 11.0 |
| Total\tderivative\tinstruments |  | \t\t\t\t$\t\t30.3 | \t\t\t\t$\t\t1.8 | \t\t\t\t$\t\t23.3 | \t\t\t\t$\t\t11.0 |

As	of	2012	and	2011	year	end,	the	fair	value	adjustment	to	long-term	debt	related	to	the	interest	rate	swaps	was	$21.4	million	and	$19.0	million,	respectively.

Fair	value	is	defined	as	the	price	that	would	be	received	to	sell	an	asset	or	paid	to	transfer	a	liability	in	an	orderly	transaction	between	participants	at	the	measurement date.	Level	2	fair	value	measurements	for	derivative	assets	and	liabilities	are	measured	using	quoted	prices	in	active	markets	for	similar	assets	and	liabilities.	Interest	rate swaps	are	valued	based	on	the	six-month	LIBOR	swap	rate	for	similar	instruments.	Foreign	currency	forwards	are	valued	based	on	exchange	rates	quoted	by	domestic and	foreign	banks	for	similar	instruments.	The	company	did	not	have	any	assets	or	liabilities	measured	at	Level	1	or	Level	3,	or	implement	any	changes	in	its	valuation techniques	as	of	and	for	the	2012	and	2011	years	ended.

The	effect	of	derivative	instruments	designated	as	fair	value	hedges	as	included	in	the	Consolidated	Statements	of	Earnings	is	as	follows:

The	effects	of	derivative	instruments	designated	as	cash	flow	hedges	as	included	in	Accumulated	OCI	on	the	Consolidated	Balance	Sheets	and	the	Consolidated Statements	of	Earnings	are	as	follows:

|  |  |  |  |  | Effective	Portion	of	Gain | Effective	Portion	of	Gain |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Effective\tPortion\tof\t\tGain | Effective\tPortion\tof\t\tGain |  |  |  | Reclassified\tfrom |  |
|  |  | Recognized\tin |  | Statement\tof | Accumulated\tOCI\tinto | Accumulated\tOCI\tinto |  |
|  |  | Accumulated\tOCI |  | Earnings |  | Income |  |
| (Amounts\tin\tmillions) | 2012 | 2011 | 2010 | Presentation | 2012 | 2011 | 2010 |
| Derivatives\tdesignated\tas\tcash\tflow\thedges: |  |  |  |  |  |  |  |
| Treasury\tlocks | \t\t\t\t$\t\t– | \t\t\t\t$\t\t– | \t\t\t\t$\t\t2.1 | \t\t\t\tInterest\texpense | \t\t\t\t$\t\t0.4 | \t\t\t\t$\t\t0.4 | \t\t\t\t$\t\t– |
| Firm\tcommitments | – | – | 0.1 | \t\t\t\tNet\tsales | – | – | 0.1 |

The	effect	of	derivative	instruments	not	designated	as	hedging	instruments	as	included	in	the	Consolidated	Statements	of	Earnings	is	as	follows:

Snap-on's	foreign	currency	forwards	are	typically	not	designated	as	hedges	for	financial	reporting	purposes.	The	fair	value	changes	of	derivatives	not	designated	as hedging	instruments	are	reported	in	earnings	as	foreign	exchange	gain	or	loss	in	"Other	income	(expense)	–	net"	on	the	accompanying	Consolidated	Statements	of Earnings.	The	$11.0	million	derivative	gain	recognized	in	2012	was	more	than	offset	by	transaction	losses	on	net	exposures	of	$11.7	million,	resulting	in	a	net	foreign exchange	loss	of	$0.7	million.	The	$7.8	million	derivative	gain	recognized	in	2011	was	more	than	offset	by	transaction	losses	on	net	exposures	of	$10.4	million, resulting	in	a	net	foreign	exchange	loss	of	$2.6	million.	The	$4.6	million	derivative	gain	recognized	in	2010	was	more	than	offset	by	transaction	losses	on	net	exposures of	$5.3	million,	resulting	in	a	net	foreign	exchange	loss	of	$0.7	million.	The	resulting	net	foreign	exchange	losses	are	included	in	"Other	income	(expense)	–	net"	on	the accompanying	Consolidated	Statements	of	Earnings.	See	Note	16	for	additional	information	on	"Other	income	(expense)	–	net."

As	of	2012	year	end,	the	maximum	maturity	date	of	any	fair	value	hedge	was	nine	years.	During	the	next	12	months,	Snap-on	expects	to	reclassify	into	earnings	net gains	from	Accumulated	OCI	of	approximately	$0.3	million	after	tax	at	the	time	the	underlying	hedge	transactions	are	realized.

See	the	accompanying	Consolidated	Statements	of	Comprehensive	Income	for	additional	information	on	changes	in	comprehensive	income.

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

Fair	value	of	financial	instruments:	The	fair	values	of	financial	instruments	that	do	not	approximate	the	carrying	values	in	the	financial	statements	as	of	2012	and	2011 year	end	are	as	follows:

|  | Carrying | Fair | Carrying | Fair |
| :--- | :--- | :--- | :--- | :--- |
| (Amounts\tin\tmillions) | Value | Value | Value | Value |
| Finance\treceivables\t–\tnet | \t\t\t\t$\t\t817.7 | \t\t\t\t$948.9 | \t\t\t\t$\t\t709.0 | \t\t\t\t$815.0 |
| Contract\treceivables\t–\tnet | 257.1 | 300.6 | 214.8 | 246.7 |
| Long-term\tdebt\tand\tnotes\tpayable | 975.6 | \t\t1,126.7 | 984.1 | \t\t1,101.5 |

The	following	methods	and	assumptions	were	used	in	estimating	the	fair	value	of	financial	instruments:

•Finance	and	contract	receivables	include	both	short-term	and	long-term	receivables.	The	fair	value	of	finance	and	contract	receivables	was	estimated,	using Level	2	fair	value	measurements,	based	on	a	discounted	cash	flow	analysis	that	was	performed	over	the	average	life	of	the	receivables	using	a	current market	discount	rate	of	a	similar	term	adjusted	for	credit	quality.

•Fair	value	of	long-term	debt	was	estimated,	using	Level	2	fair	value	measurements,	based	on	quoted	market	values	of	Snap-on's	publicly	traded	senior debt.	 The	 carrying	 value	 of	 long-term	 debt	 includes	 adjustments	 related	 to	 fair	 value	 hedges.	 The	 fair	 value	 of	 notes	 payable	 approximates	 such instruments'	carrying	value	due	to	their	short-term	nature.

•The	fair	value	of	all	other	financial	instruments	including	cash	equivalents,	trade	and	other	accounts	receivable,	accounts	payable	and	other	financial instruments	approximates	such	instruments'	carrying	value	due	to	their	short-term	nature.

# Note	11:	Pension	Plans

Snap-on	has	several	non-contributory	defined	benefit	pension	plans	covering	most	U.S.	employees	and	certain	employees	in	foreign	countries.	Snap-on	also	has	foreign contributory	defined	benefit	pension	plans	covering	certain	foreign	employees.	Retirement	benefits	are	generally	provided	based	on	employees'	years	of	service	and average	earnings	or	stated	amounts	for	years	of	service.	Normal	retirement	age	is	65,	with	provisions	for	earlier	retirement.	In	2012,	the	company	settled	a	Canadian pension	plan	following	the	2011	closure	of	its	former	Newmarket,	Canada,	facility.

The	status	of	Snap-on's	pension	plans	as	of	2012	and	2011	year	end	are	as	follows:

Amounts	included	in	Accumulated	OCI	on	the	accompanying	Consolidated	Balance	Sheets	as	of	2012	and	2011	year	end	are	as	follows:

The	accumulated	benefit	obligation	for	Snap-on's	pension	plans	as	of	2012	and	2011	year	end	was	$1,170.6	million	and	$1,123.1	million,	respectively.

The	projected	benefit	obligation,	accumulated	benefit	obligation	and	fair	value	of	plan	assets	for	Snap-on's	pension	plans	in	which	the	accumulated	benefit	obligation exceeds	the	fair	value	of	plan	assets	as	of	2012	and	2011	year	end	are	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Projected\tbenefit\tobligation | \t\t\t\t$\t\t1,229.3 | \t\t\t\t$\t\t1,116.4 |
| Accumulated\tbenefit\tobligation | 1,170.6 | 1,074.1 |
| Fair\tvalue\tof\tplan\tassets | 964.0 | 796.0 |

| (Amounts	in	millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Net\tperiodic\tbenefit\tcost: |  |  |  |
| Service\tcost | \t\t\t\t$21.1 | \t\t\t\t$19.1 | \t\t\t\t$16.5 |
| Interest\tcost | 52.0 | 53.9 | 54.2 |
| Expected\treturn\ton\tplan\tassets | \t\t(66.6) | \t\t(58.7) | \t\t(57.9) |
| Amortization\tof\tprior\tservice\tcost | 1.2 | 1.1 | 1.2 |
| Amortization\tof\tunrecognized\tloss | 41.4 | 31.1 | 19.4 |
| Settlement\tloss\trecognized | 6.8 | – | – |
| Curtailment\tloss\trecognized | – | – | 0.9 |
| Net\tperiodic\tbenefit\tcost | \t\t\t\t$55.9 | \t\t\t\t$46.5 | \t\t\t\t$34.3 |
| Changes\tin\tbenefit\tobligations\trecognized\tin\tOCI,\tnet\tof\ttax: |  |  |  |
| Prior\tservice\tcost | \t\t\t\t$(7.0) | \t\t\t\t$(0.2) | \t\t\t\t$(1.4) |
| Net\tloss | (7.6) | 61.1 | 13.5 |
| Total\trecognized\tin\tOCI | \t\t\t\t$(14.6) | \t\t\t\t$60.9 | \t\t\t\t$12.1 |
| Amounts\tin\tAccumulated\tOCI\tthat\tare\texpected\tto\tbe\tamortized\tas\tnet\texpense\tduring\t2013\tare\tas\tfollows: |  |  |  |
| (Amounts\tin\tmillions) | Amount |  |  |
| Amortization\tof\tprior\tservice\tcredit | \t\t\t\t$\t\t\t\t(0.7) |  |  |
| Amortization\tof\tunrecognized\tloss | 39.0 |  |  |
| Total\tto\tbe\trecognized\tin\tnet\tperiodic\tbenefit\tcost | \t\t\t\t$38.3 |  |  |
| 2012\tANNUAL\tREPORT |  |  | 89 |

Amounts	in	Accumulated	OCI	that	are	expected	to	be	amortized	as	net	expense	during	2013	are	as	follows:

The	worldwide	weighted-average	assumptions	used	to	determine	Snap-on's	full-year	pension	costs	are	as	follows:

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Discount\trate | \t\t\t\t4.5% | \t\t\t\t5.3% | \t\t\t\t5.9% |
| Expected\tlong-term\trate\tof\treturn\ton\tplan\tassets | \t\t\t\t7.7% | \t\t\t\t7.8% | \t\t\t\t7.8% |
| Rate\tof\tcompensation\tincrease | \t\t\t\t3.6% | \t\t\t\t3.6% | \t\t\t\t3.6% |

The	worldwide	weighted-average	assumptions	used	to	determine	Snap-on's	projected	benefit	obligation	as	of	2012	and	2011	year	end	are	as	follows:

|  | 2012 | 2011 |
| :--- | :--- | :--- |
| Discount\trate | \t\t\t\t4.3% | \t\t\t\t4.5% |
| Rate\tof\tcompensation\tincrease | \t\t\t\t3.6% | \t\t\t\t3.6% |

The	objective	of	Snap-on's	discount	rate	assumption	is	to	reflect	the	rate	at	which	the	pension	benefits	could	be	effectively	settled.	In	making	this	determination,	the company	takes	into	account	the	timing	and	amount	of	benefits	that	would	be	available	under	the	plans.	The	discount	rate	assumption	used	to	determine	the	December	29, 2012	projected	benefit	obligation	was	based	on	a	cash	flow	matching	methodology	developed	by	the	company's	outside	actuaries	and	which	incorporates	a	review	of current	economic	conditions.	The	methodology	for	selecting	the	4.3%	weighted-average	discount	rate	as	of	2012	year	end	for	the	company's	domestic	pension	plans	was to	match	the	plans'	yearly	projected	benefit	cash	flows	to	those	of	hypothetical	bond	portfolios	using	high-quality,	AA	rated	or	better,	corporate	bonds	from	either Moody's	Investors	Service	or	Standard	&	Poor's	credit	rating	agencies	available	at	the	measurement	date.	This	technique	calculates	bond	portfolios	that	produce adequate	cash	flows	to	pay	the	plans'	projected	yearly	benefits	and	then	selects	the	portfolio	with	the	highest	yield	and	uses	that	yield	as	the	recommended	discount	rate. Previously	the	company's	discount	rate	assumption,	which	was	also	based	on	a	cash	flow	methodology	developed	by	the	company's	outside	actuaries	and	which incorporated	a	review	of	current	economic	conditions,	used	a	theoretical	bond	portfolio	yield	curve	that	provided	the	equivalent	yields	on	zero-coupon	bonds	with	an	AA rating	or	better	for	each	maturity.	Had	the	company	continued	using	this	methodology,	the	weighted-average	discount	rate	for	Snap-on's	domestic	pension	plans	as	of 2012	year	end	would	have	been	3.7%	and	its	projected	benefit	obligation	would	have	increased	by	$73.3	million.

The	weighted-average	discount	rate	for	Snap-on's	domestic	pension	plans	of	4.3%	represents	the	single	rate	that	produces	the	same	present	value	of	cash	flows	as	the estimated	benefit	plan	payments.	Lowering	Snap-on's	domestic	discount	rate	assumption	by	50	basis	points	(100	basis	points	equals	1.0	percent)	would	have	increased Snap-on's	2012	domestic	pension	expense	and	projected	benefit	obligation	by	approximately	$6.3	million	and	$60.5	million,	respectively.	As	of	2012	year	end,	Snap- on's	domestic	projected	benefit	obligation	comprised	approximately	82%	of	Snap-on's	worldwide	projected	benefit	obligation.	The	weighted-average	discount	rate	for Snap-on's	foreign	pension	plans	of	4.1%	represents	the	single	rate	that	produces	the	same	present	value	of	cash	flows	as	the	estimated	benefit	plan	payments.	Lowering Snap-on's	foreign	discount	rate	assumption	by	50	basis	points	would	have	increased	Snap-on's	2012	foreign	pension	expense	and	projected	benefit	obligation	by approximately	$1.6	million	and	$21.6	million,	respectively.

Actuarial	gains	and	losses	in	excess	of	10	percent	of	the	greater	of	the	projected	benefit	obligation	or	market-related	value	of	assets	are	amortized	on	a	straight-line	basis over	the	average	remaining	service	period	of	active	participants.	Prior	service	costs	resulting	from	plan	amendments	are	amortized	in	equal	annual	amounts	over	the average	remaining	service	period	of	affected	active	participants	or	over	the	remaining	life	expectancy	of	affected	retired	participants.

Snap-on	uses	the	last	day	of	its	fiscal	year	end	as	the	measurement	date	for	its	plans.	Snap-on	funds	its	pension	plans	as	required	by	governmental	regulation	and	may consider	discretionary	contributions	as	conditions	warrant.	Snap-on	intends	to	make	contributions	of	$10.2	million	to	its	foreign	pension	plans	and	$1.6	million	to	its domestic	pension	plans	in	2013,	as	required	by	law.	Depending	on	market	and	other	conditions,	Snap-on	may	elect	to	make	discretionary	cash	contributions	to	its domestic	pension	plans	in	2013.

The	following	benefit	payments,	which	reflect	expected	future	service,	are	expected	to	be	paid	as	follows:

Snap-on's	domestic	pension	plans	have	a	long-term	investment	horizon	and	a	total	return	strategy	that	emphasizes	a	capital	growth	objective.	The	long-term	investment performance	objective	for	Snap-on's	domestic	plans'	assets	is	to	achieve	net	of	expense	returns	that	meet	or	exceed	the	7.8%	domestic	long-term,	rate-of-return-on- assets	assumption	used	for	reporting	purposes.	Snap-on	uses	a	three-year,	market-related	value	asset	method	of	amortizing	the	difference	between	actual	and	expected returns	on	its	domestic	plans'	assets.

The	basis	for	determining	the	overall	expected	long-term,	rate-of-return-on-assets	assumption	is	a	nominal	returns	forecasting	method.	For	each	asset	class,	future	returns are	estimated	by	identifying	the	premium	of	riskier	asset	classes	over	lower	risk	alternatives.	The	methodology	constructs	expected	returns	using	a	"building	block" approach	to	the	individual	components	of	total	return.	These	forecasts	are	stated	in	both	nominal	and	real	(after	inflation)	terms.	This	process	first	considers	the	long- term	historical	return	premium	based	on	the	longest	set	of	data	available	for	each	asset	class.	These	premiums	are	then	adjusted	based	on	current	relative	valuation	levels and	macro-economic	conditions.

For	risk	and	correlation	assumptions,	the	actual	experience	for	each	asset	class	is	reviewed	for	the	longest	time	period	available.	Expected	relationships	for	a	10	to	20 year	time	horizon	are	determined	based	upon	historical	results,	with	adjustments	made	for	material	changes.

Investments	are	diversified	to	attempt	to	minimize	the	risk	of	large	losses.	Since	asset	allocation	is	a	key	determinant	of	expected	investment	returns,	assets	are periodically	rebalanced	to	the	targeted	allocation	to	correct	significant	deviations	from	the	asset	allocation	policy	that	are	caused	by	market	fluctuations	and	cash	flow. Asset/liability	studies	are	conducted	periodically	to	determine	if	any	revisions	to	the	strategic	asset	allocation	policy	are	necessary.

Snap-on's	domestic	pension	plans'	target	allocation	and	actual	weighted-average	asset	allocation	by	asset	category	and	fair	value	of	plan	assets	as	of	2012	and	2011	year end	are	as	follows:

|  | Target | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Asset\tcategory: |  |  |  |
| Equity\tsecurities | 48% | 48% | 46% |
| Debt\tsecurities\tand\tcash | 34% | 37% | 38% |
| Real\testate\tand\tother\treal\tassets | 8% | 6% | 6% |
| Hedge\tfunds | 10% | 9% | 10% |
| Total | \t\t\t\t\t100% | 100% | 100% |
| Fair\tvalue\tof\tplan\tassets\t(Amounts\tin\tmillions) |  | \t\t\t\t$\t\t830.6 | \t\t\t\t$\t\t720.8 |

The	fair	value	measurement	hierarchy	prioritizes	the	inputs	used	to	measure	fair	value.	The	hierarchy	gives	the	highest	priority	("Level	1")	to	unadjusted	quoted	prices	in active	markets	for	identical	assets	and	liabilities	and	the	lowest	priority	("Level	3")	to	unobservable	inputs.	Fair	value	measurements	primarily	based	on	observable market	information	are	given	a	"Level	2"	priority.

Shares	of	certain	equity	and	debt	securities	and	real	estate	and	other	real	assets	valued	at	quoted	market	prices	for	which	an	official	close	or	last	trade	pricing	on	an active	exchange	is	available	are	categorized	as	Level	1	in	the	fair	value	hierarchy.	Shares	of	commingled	equity	and	debt	fund	securities,	commingled	multi-strategy funds	and	insurance	contracts	are	valued	at	the	net	asset	value	("NAV")	as	reported	by	the	fund	managers	based	on	the	value	of	the	underlying	assets	less	liabilities,	with this	NAV	divided	by	the	number	of	units	outstanding.	The	unit	price	is	quoted	on	a	private	market	and	based	on	the	value	of	the	underlying	investment,	which	is primarily	based	on	observable	inputs;	such	investments	are	categorized	as	Level	2	in	the	fair	value	hierarchy.	Private	equity	partnership	funds,	hedge	funds,	and	certain real	estate	and	other	real	assets	are	stated	at	estimated	fair	value	as	reported	by	the	fund	manager	based	on	the	fair	market	value	of	the	underlying	investments	and	are classified	as	Level	3	in	the	fair	value	hierarchy.	Management	regularly	reviews	fund	performance	for	Level	3	plan	assets	and	performs	qualitative	analysis	to	corroborate the	reasonableness	of	the	reported	fair	market	values.

The	following	is	a	summary,	by	asset	category,	of	the	fair	value	and	the	level	within	the	fair	value	hierarchy	of	Snap-on's	domestic	pension	plans'	assets	as	of	2012	year end:

|  | Quoted | Significant |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Prices\tfor | Other | Significant |  |
|  | Identical | Observable | Unobservable |  |
|  | Assets | Inputs | Inputs |  |
| (Amounts\tin\tmillions) | (Level\t1) | (Level\t2) | (Level\t3) | Total |
| Asset\tcategory: |  |  |  |  |
| Cash\tand\tcash\tequivalents | \t\t\t\t$25.5 | \t\t\t\t$– | \t\t\t\t$– | $25.5 |
| Equity\tsecurities: |  |  |  |  |
| Domestic | 108.5 | – | – | 108.5 |
| Commingled\tfunds\t–\tdomestic | – | 172.2 | – | 172.2 |
| Commingled\tfunds\t–\tforeign | – | 64.8 | – | 64.8 |
| Private\tequity\tpartnerships | – | – | 49.6 | 49.6 |
| Debt\tsecurities: |  |  |  |  |
| Government | 91.9 | – | – | 91.9 |
| Corporate\tbonds | 192.5 | – | – | 192.5 |
| Real\testate\tand\tother\treal\tassets | 11.6 | – | 39.0 | 50.6 |
| Hedge\tfunds | – | – | 75.0 | 75.0 |
| Total | \t\t\t\t$\t\t430.0 | \t\t\t\t$\t\t237.0 | \t\t\t\t$ \t\t163.6 | \t\t\t\t$\t\t830.6 |

The	following	is	a	summary	of	the	fiscal	2012	changes	in	fair	value	of	the	domestic	plans'	assets	with	Level	3	inputs:

|  | Hedge | Equity |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Fund | Partnership | Real\tEstate |  |
| (Amounts\tin\tmillions) | Interests | Interests | Interests | Total |
| Balance\tas\tof\t2011\tyear\tend | \t\t\t\t$\t\t68.6 | \t\t\t\t$ 49.9 | \t\t\t\t$\t\t33.9 | \t\t\t\t$\t\t152.4 |
| Realized\tgains\ton\tassets\tsold | 1.0 | 4.0 | 0.2 | 5.2 |
| Unrealized\tgains\t(losses)\tattributable\tto |  |  |  |  |
| \t\t\t\tassets\theld | 5.0 | (5.1) | 3.4 | 3.3 |
| Net\tpurchases\tand\tsettlements | 0.4 | 0.8 | 1.5 | 2.7 |
| Balance\tas\tof\t2012\tyear\tend | \t\t\t\t$75.0 | \t\t\t\t$ 49.6 | \t\t\t\t$39.0 | \t\t\t\t$163.6 |

|  | Quoted | Significant |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Prices\tfor | Other | Significant |  |
|  | Identical | Observable | Unobservable |  |
|  | Assets | Inputs | Inputs |  |
| (Amounts\tin\tmillions) | (Level\t1) | (Level\t2) | (Level\t3) | Total |
| Asset\tcategory: |  |  |  |  |
| Cash\tand\tcash\tequivalents | \t\t\t\t$9.2 | \t\t\t\t$– | \t\t\t\t$– | \t\t\t\t$9.2 |
| Equity\tsecurities: |  |  |  |  |
| Domestic | 150.7 | – | – | 150.7 |
| Foreign | 17.7 | – | – | 17.7 |
| Commingled\tfunds\t-\tforeign | – | 112.3 | – | 112.3 |
| Private\tequity\tpartnerships | – | – | 49.9 | 49.9 |
| Debt\tsecurities: |  |  |  |  |
| Government | 81.0 | – | – | 81.0 |
| Corporate\tbonds | 160.4 | – | – | 160.4 |
| Commingled\tfunds | 6.4 | 21.5 | – | 27.9 |
| Real\testate\tand\tother\treal\tassets | 9.2 | – | 33.9 | 43.1 |
| Hedge\tfunds | – | – | 68.6 | 68.6 |
| Total | \t\t\t\t$\t\t434.6 | \t\t\t\t$\t\t133.8 | \t\t\t\t$ \t\t152.4 | \t\t\t\t$\t\t720.8 |

|  |  | Equity | Real |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Hedge\tFund | Partnership | Estate |  |
| (Amounts\tin\tmillions) | Interests | Interests | Interests | Total |
| Balance\tas\tof\t2010\tyear\tend | \t\t\t\t$73.5 | \t\t\t\t$\t\t\t\t41.4 | \t\t\t\t$\t\t\t\t29.7 | \t\t\t\t$144.6 |
| Realized\tgains\ton\tassets\tsold | 0.5 | 3.3 | 0.2 | 4.0 |
| Unrealized\tgains\t(losses)\tattributable\tto |  |  |  |  |
| \t\t\t\tassets\theld | (1.8) | 1.0 | 3.4 | 2.6 |
| Net\tpurchases\tand\tsettlements | (3.6) | 4.2 | 0.6 | 1.2 |
| Balance\tas\tof\t2011\tyear\tend | \t\t\t\t$\t\t\t\t68.6 | \t\t\t\t$49.9 | \t\t\t\t$33.9 | \t\t\t\t$\t\t\t\t152.4 |

Snap-on's	primary	investment	objective	for	its	foreign	pension	plans'	assets	is	to	meet	the	projected	obligations	to	the	beneficiaries	over	a	long	period	of	time,	and	to	do so	in	a	manner	that	is	consistent	with	the	company's	risk	tolerance.	The	foreign	asset	allocation	policies	consider	the	company's	financial	strength	and	long-term	asset class	risk/return	expectations,	since	the	obligations	are	long	term	in	nature.	The	company	believes	the	foreign	pension	plans'	assets,	which	are	managed	locally	by professional	investment	firms,	are	well	diversified.

The	expected	long-term	rate	of	return	on	foreign	plans'	assets	reflects	management's	expectations	of	long-term	average	rates	of	return	on	funds	invested	to	provide benefits	included	in	the	projected	benefit	obligation.	The	expected	return	is	based	on	the	outlook	for	inflation,	fixed	income	returns	and	equity	returns,	while	also considering	historical	returns,	asset	allocation	and	investment	strategy.	Differences	between	actual	and	expected	returns	on	foreign	pension	plans'	assets	are	recorded	as an	actuarial	gain	or	loss	and	are	amortized	over	the	average	remaining	service	period	of	active	plan	participants.

Snap-on's	foreign	pension	plans'	target	allocation	and	actual	weighted-average	asset	allocation	by	asset	category	and	fair	value	of	plan	assets	as	of	2012	and	2011	year end	are	as	follows:

|  | Target | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Asset\tcategory: |  |  |  |
| Equity\tsecurities* | \t\t\t\t33% | 35% | 31% |
| Debt\tsecurities\tand\tcash* | \t\t\t\t46% | 47% | 53% |
| Insurance\tcontracts\tand\thedge\tfunds | \t\t\t\t21% | 18% | 16% |
| Total | \t\t\t\t100% | 100% | 100% |
| Fair\tvalue\tof\tplan\tassets\t(Amounts\tin\tmillions) |  | $\t\t133.4 | $\t\t125.3 |

*	Includes	commingled	funds	–	multi-strategy

The	following	is	a	summary,	by	asset	category,	of	the	fair	value	and	the	level	within	the	fair	value	hierarchy	of	Snap-on's	foreign	pension	plans'	assets	as	of	2012	year end:

|  | Quoted | Significant |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Prices\tfor | Other | Significant |  |
|  | Identical | Observable | Unobservable |  |
|  | Assets | Inputs | Inputs |  |
| (Amounts\tin\tmillions) | (Level\t1) | (Level\t2) | (Level\t3) | Total |
| Asset\tcategory: |  |  |  |  |
| Cash\tand\tcash\tequivalents | \t\t\t\t$3.9 | \t\t\t\t$– | \t\t\t\t$– | \t\t\t\t$3.9 |
| Equity\tsecurities | \t\t11.6 | – | – | 11.6 |
| Commingled\tfunds\t–\tmulti-strategy | – | \t\t94.1 | – | \t\t94.1 |
| Insurance\tcontracts | – | 3.8 | – | 3.8 |
| Hedge\tfunds | – | – | \t\t20.0 | 20.0 |
| Total | \t\t\t\t$15.5 | \t\t\t\t$97.9 | \t\t\t\t$20.0 | \t\t\t\t$\t\t133.4 |

The	following	is	a	summary	of	the	fiscal	2012	changes	in	fair	value	of	the	foreign	plans'	assets	with	Level	3	inputs:

|  | Hedge	Fund |
| :--- | :--- |
| (Amounts\tin\tmillions) | Interests |
| Balance\tas\tof\t2011\tyear\tend | \t\t\t\t$16.5 |
| Unrealized\tgains\tattributable\tto\tassets\theld | 2.0 |
| Net\tpurchases\tand\tsettlements | 1.5 |
| Balance\tas\tof\t2012\tyear\tend | \t\t\t\t$\t\t20.0 |

|  | Quoted | Significant |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Prices\tfor | Other | Significant |  |
|  | Identical | Observable | Unobservable |  |
|  | Assets | Inputs | Inputs |  |
| (Amounts\tin\tmillions) | (Level\t1) | (Level\t2) | (Level\t3) | Total |
| Asset\tcategory: |  |  |  |  |
| Cash\tand\tcash\tequivalents | \t\t\t\t$11.2 | \t\t\t\t$– | \t\t\t\t$– | \t\t\t\t$11.2 |
| Equity\tsecurities | 10.1 | – | – | 10.1 |
| Commingled\tfunds\t–\tmulti-strategy | – | 83.4 | – | 83.4 |
| Insurance\tcontracts | – | 4.1 | – | 4.1 |
| Hedge\tfunds | – | – | 16.5 | 16.5 |
| Total | \t\t\t\t$\t\t21.3 | \t\t\t\t$\t\t87.5 | \t\t\t\t$\t\t16.5 | \t\t\t\t$\t\t125.3 |

Snap-on	has	several	401(k)	plans	covering	certain	U.S.	employees.	Snap-on's	employer	match	to	the	401(k)	plans	is	made	with	cash	contributions.	For	2012,	2011	and 2010,	Snap-on	recognized	$5.7	million,	$5.2	million	and	$4.3	million,	respectively,	of	expense	related	to	its	401(k)	plans.

# Note	12:	Postretirement	Plans

Snap-on	provides	certain	health	care	benefits	for	certain	retired	U.S.	employees.	The	majority	of	Snap-on's	U.S.	employees	become	eligible	for	those	benefits	if	they reach	early	retirement	age	while	working	for	Snap-on;	however,	the	age	and	service	requirements	for	eligibility	under	 the	plans	have	been	 increased	for	certain employees	hired	on	and	after	specified	dates	since	1992.	Generally,	most	plans	pay	stated	percentages	of	covered	expenses	after	a	deductible	is	met.	There	are	several plan	designs,	with	more	recent	retirees	being	covered	under	a	comprehensive	major	medical	plan.	In	determining	benefits,	the	plans	take	into	consideration	payments	by Medicare	and	other	insurance	coverage.

For	employees	retiring	under	the	comprehensive	major	medical	plans,	retiree	contributions	are	required,	and	these	plans	contain	provisions	allowing	for	benefit	and coverage	 changes.	The	 plans	 require	 retirees	 to	 contribute	 either	 the	 full	 cost	 of	 the	 coverage	 or	 amounts	 estimated	 to	 exceed	 a	 capped	 per-retiree	 annual	 cost commitment	by	Snap-on.	Most	employees	hired	since	1994	are	required	to	pay	the	full	cost.

In	2007,	Snap-on	contributed	$14.5	million	to	a	Voluntary	Employees	Beneficiary	Association	("VEBA")	trust	for	the	funding	of	existing	postretirement	health	care benefits	for	certain	non-salaried	retirees	in	the	United	States;	all	other	retiree	health	care	plans	are	unfunded.

The	status	of	Snap-on's	U.S.	postretirement	health	care	plans	is	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Change\tin\taccumulated\tpostretirement\tbenefit\tobligation: |  |  |
| Benefit\tobligation\tat\tbeginning\tof\tyear | \t\t\t\t$72.8 | \t\t\t\t$81.3 |
| Service\tcost | 0.2 | 0.2 |
| Interest\tcost | 2.6 | 3.3 |
| Plan\tparticipants'\tcontributions | 1.4 | 1.9 |
| Benefits\tpaid | (6.8) | \t\t(7.9) |
| Actuarial\tgain | (1.2) | (6.0) |
| Benefit\tobligation\tat\tend\tof\tyear | \t\t\t\t$\t\t69.0 | \t\t\t\t$72.8 |
| Change\tin\tplan\tassets: |  |  |
| Fair\tvalue\tof\tplan\tassets\tat\tbeginning\tof\tyear | \t\t\t\t$13.5 | \t\t\t\t$13.9 |
| Plan\tparticipants'\tcontributions | 1.4 | 1.9 |
| Employer\tcontributions | 5.3 | 5.8 |
| Actual\treturn\t(loss)\ton\tVEBA\tplan\tassets | 1.7 | (0.2) |
| Benefits\tpaid | (6.8) | (7.9) |
| Fair\tvalue\tof\tplan\tassets\tat\tend\tof\tyear | \t\t\t\t$15.1 | \t\t\t\t$13.5 |
| Unfunded\tstatus\tat\tend\tof\tyear | \t\t\t\t$\t\t(53.9) | \t\t\t\t$\t\t(59.3) |
| 2012\tANNUAL\tREPORT |  | 95 |

Amounts	recognized	in	the	Consolidated	Balance	Sheets	as	of	2012	and	2011	year	end	are	as	follows:

| (Amounts	in	millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Accrued\tbenefits | \t\t\t\t$\t\t\t\t(5.5) | \t\t\t\t$\t\t\t\t\t(6.5) |
| Retiree\thealth\tcare\tbenefits | (48.4) | (52.8) |
| Net\tliability | \t\t\t\t$(53.9) | \t\t\t\t$(59.3) |

| (Amounts	in	millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Net\tperiodic\tbenefit\tcost: |  |  |  |
| Service\tcost | \t\t\t\t$0.2 | \t\t\t\t$0.2 | \t\t\t\t$0.2 |
| Interest\tcost | 2.6 | 3.3 | 3.9 |
| Expected\treturn\ton\tplan\tassets | (1.0) | (1.0) | \t\t\t(0.9) |
| Amortization\tof\tprior\tservice\tcredit | – | – | \t\t\t(0.4) |
| Net\tperiodic\tbenefit\tcost | \t\t\t\t$1.8 | \t\t\t\t$2.5 | \t\t\t\t$2.8 |
| Changes\tin\tbenefit\tobligations\trecognized\tin\tOCI,\tnet\tof\ttax: |  |  |  |
| Prior\tservice\tcost | \t\t\t\t$– | \t\t\t\t$– | \t\t\t\t$0.2 |
| Net\t(gain)\tloss | (1.2) | (3.0) | 1.5 |
| Total\trecognized\tin\tOCI | \t\t\t\t$(1.2) | \t\t\t\t$(3.0) | \t\t\t\t$1.7 |

Snap-on	does	not	expect	to	recognize	any	prior	service	costs	or	prior	net	gains	included	in	Accumulated	OCI	on	the	accompanying	2012	Consolidated	Balance	Sheet in	net	periodic	benefit	cost	in	2013.

The	weighted-average	discount	rates	used	to	determine	Snap-on's	postretirement	health	care	expense	are	as	follows:

|  |  | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
|  | \t\t\t\t\t\t2012 |  |  |
| Discount\trate | \t\t\t3.8% | \t\t\t4.3% | \t\t\t5.0% |
| The\tweighted-average\tdiscount\trates\tused\tto\tdetermine\tSnap-on's\taccumulated\tbenefit\tobligation\tare\tas\tfollows: |  |  |  |
|  | \t\t\t\t\t\t2012 | \t\t\t\t\t\t2011 |  |
| Discount\trate | 3.2% | 3.8% |  |

The	methodology	for	selecting	the	weighted-average	3.2%	discount	rate	as	of	2012	year	end	for	the	company's	domestic	postretirement	plans	was	to	match	the	plans' yearly	projected	benefit	cash	flows	to	those	of	hypothetical	bond	portfolios	using	high-quality,	AA	rated	or	better,	corporate	bonds	from	either	Moody's	Investors Service	or	Standard	&	Poor's	credit	rating	agencies	available	at	the	measurement	date.	Previously	the	company's	discount	rate	assumption	used	a	theoretical	bond portfolio	yield	curve	that	provided	the	equivalent	yields	on	zero-coupon	bonds	with	an	AA	rating	or	better	for	each	maturity.	Had	the	company	continued	using	this methodology,	 the	 weighted-average	 discount	 rate	 for	 Snap-on's	 domestic	 postretirement	 plans	 as	 of	 2012	 year	 end	 would	 have	 been	 2.7%	 and	 its	 accumulated postretirement	benefit	obligation	would	have	increased	by	$2.3	million.

The	actuarial	calculation	assumes	a	health	care	cost	trend	rate	of	7.4%	in	2013,	decreasing	gradually	to	4.5%	in	2028	and	thereafter.	As	of	2012	year	end,	a	one- percentage-point	increase	in	the	health	care	cost	trend	rate	for	future	years	would	increase	the	accumulated	postretirement	benefit	obligation	by	approximately	$1.3 million	and	the	aggregate	of	the	service	cost	and	interest	cost	components	by	$0.1	million.	Conversely,	a	one-percentage-point	decrease	in	the	health	care	cost	trend	rate for	future	years	would	decrease	the	accumulated	postretirement	benefit	obligation	by	$1.1	million	and	the	aggregate	of	the	service	cost	and	interest	rate	components	by $0.1	million.

The	objective	of	the	VEBA	trust	is	to	achieve	net	of	expense	returns	that	meet	or	exceed	the	7.8%	long-term,	rate-of-return-on-assets	assumption	used	for	reporting purposes.	Investments	are	diversified	to	attempt	to	minimize	the	risk	of	large	losses.	Since	asset	allocation	is	a	key	determinant	of	expected	investment	returns,	assets	are periodically	rebalanced	to	the	targeted	allocation	to	correct	significant	deviations	from	the	asset	allocation	policy	that	are	caused	by	market	fluctuations	and	cash	flow.

Snap-on's	VEBA	plan	target	allocation	and	actual	weighted-average	asset	allocation	as	of	2012	and	2011	year	end,	by	asset	category	and	fair	value	of	plan	assets,	are	as follows:

|  | Target | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Asset\tcategory: |  |  |  |
| Equity\tsecurities | 56% | 56% | 55% |
| Private\tequity\tpartnerships | 22% | 21% | 22% |
| Debt\tsecurities\tand\tcash | 14% | 15% | 16% |
| Real\testate\tand\tother\treal\tassets | 8% | 8% | 7% |
| Total | \t\t\t\t\t100% | \t\t100% | \t\t100% |
| Fair\tvalue\tof\tplan\tassets\t(Amounts\tin\tmillions) |  | \t\t\t\t$15.1 | \t\t\t\t$13.5 |

Shares	of	equity	and	debt	securities	and	real	estate	and	other	real	assets	valued	at	quoted	market	prices	for	which	an	official	close	or	last	trade	pricing	on	an	active exchange	is	available	are	categorized	as	Level	1	in	the	fair	value	hierarchy.	Private	equity	partnership	funds	are	stated	at	estimated	fair	value	as	reported	by	the	fund manager	based	on	the	fair	market	value	of	the	underlying	investments	and	are	classified	as	Level	3	in	the	fair	value	hierarchy.	Management	regularly	reviews	fund performance	for	Level	3	plan	assets	and	performs	qualitative	analysis	to	corroborate	the	reasonableness	of	the	reported	fair	market	values.

The	following	is	a	summary,	by	asset	category,	of	the	fair	value	and	the	level	within	the	fair	value	hierarchy	of	the	VEBA	assets	as	of	2012	year	end:

|  | Prices	for | Significant |  |
| :--- | :--- | :--- | :--- |
|  | Identical | Unobservable |  |
|  | Assets | Inputs |  |
| (Amounts\tin\tmillions) | (Level\t1) | (Level\t3) | Total |
| Asset\tcategory: |  |  |  |
| Cash\tand\tcash\tequivalents | \t\t\t\t$0.1 | \t\t\t\t$– | \t\t\t\t$0.1 |
| Equity\tsecurities | 8.5 | – | 8.5 |
| Private\tequity\tpartnerships | – | 3.2 | 3.2 |
| Debt\tsecurities | 2.1 | – | 2.1 |
| Real\testate\tand\tother\treal\tassets | 1.2 | – | 1.2 |
| Total | \t\t\t\t$\t\t11.9 | \t\t\t\t$\t\t3.2 | \t\t\t\t$\t\t15.1 |

The	following	is	a	summary	of	the	fiscal	2012	changes	in	fair	value	of	the	VEBA	plan	assets	with	Level	3	inputs:

|  | Private	Equity |
| :--- | :--- |
|  | Partnership |
| (Amounts\tin\tmillions) | Interests |
| Balance\tas\tof\t2011\tyear\tend | \t\t\t\t$\t\t3.0 |
| Unrealized\tgains\tattributable\tto\tassets\theld | 0.2 |
| Balance\tas\tof\t2012\tyear\tend | \t\t\t\t$\t\t3.2 |

|  | Prices	for | Significant |  |
| :--- | :--- | :--- | :--- |
|  | Identical | Unobservable |  |
|  | Assets | Inputs |  |
| (Amounts\tin\tmillions) | (Level\t1) | (Level\t3) | Total |
| Asset\tcategory: |  |  |  |
| Cash\tand\tcash\tequivalents | \t\t\t\t$0.1 | \t\t\t\t$– | \t\t\t\t$0.1 |
| Equity\tsecurities | 7.4 | – | 7.4 |
| Private\tequity\tpartnerships | – | 3.0 | 3.0 |
| Debt\tsecurities | 2.1 | – | 2.1 |
| Real\testate\tand\tother\treal\tassets | 0.9 | – | 0.9 |
| Total | \t\t\t\t$\t\t10.5 | \t\t\t\t$\t\t3.0 | \t\t\t\t$\t\t13.5 |

|  | Private	Equity |
| :--- | :--- |
|  | Partnership |
| (Amounts\tin\tmillions) | Interests |
| Balance\tas\tof\t2010\tyear\tend | \t\t\t\t$2.8 |
| Unrealized\tgains\tattributable\tto\tassets\theld | 0.2 |
| Balance\tas\tof\t2011\tyear\tend | \t\t\t\t$\t\t\t\t3.0 |

# Note	13:	Stock-based	Compensation	and	Other	Stock	Plans

The	2011	Incentive	Stock	and	Awards	Plan	(the	"2011	Plan")	provides	for	the	grant	of	stock	options,	performance	awards,	stock	appreciation	rights	("SARs")	and restricted	stock	awards	(which	may	be	designated	as	"restricted	stock	units"	or	"RSUs").	No	further	grants	are	being	made	under	its	predecessor,	the	2001	Incentive Stock	and	Awards	Plan	(the	"2001	Plan"),	although	outstanding	awards	under	the	2001	Plan	will	continue	until	exercised,	vested,	forfeited	or	expired.	As	of	2012	year end,	the	2011	Plan	had	3,914,882	shares	available	for	future	grants.	The	company	uses	treasury	stock	to	deliver	shares	under	both	the	2001	and	2011	Plans.

# Stock	Options

Stock	options	are	granted	with	an	exercise	price	equal	to	the	market	value	of	a	share	of	Snap-on's	common	stock	on	the	date	of	grant	and	have	a	contractual	term	of	ten years.	Stock	option	grants	vest	ratably	on	the	first,	second	and	third	anniversaries	of	the	date	of	grant.

The	fair	value	of	each	stock	option	award	is	estimated	on	the	date	of	grant	using	the	Black-Scholes	valuation	model.	The	company	uses	historical	data	regarding	stock option	exercise	behaviors	for	different	participating	groups	to	estimate	the	period	of	time	that	options	granted	are	expected	to	be	outstanding.	Expected	volatility	is	based on	the	historical	volatility	of	the	company's	stock	for	the	length	of	time	corresponding	to	the	expected	term	of	the	option.	The	expected	dividend	yield	is	based	on	the company's	historical	dividend	payments.	The	risk-free	interest	rate	is	based	on	the	U.S.	treasury	yield	curve	on	the	grant	date	for	the	expected	term	of	the	option.	The following	weighted-average	assumptions	were	used	in	calculating	the	fair	value	of	stock	options	granted	during	2012,	2011	and	2010,	using	the	Black-Scholes	valuation model:

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Expected\tterm\tof\toption\t(in\tyears) | 5.36 | 5.89 | 5.85 |
| Expected\tvolatility\tfactor | \t\t\t\t36.93% | \t\t\t\t34.22% | \t\t\t\t33.98% |
| Expected\tdividend\tyield | 2.72% | 2.72% | 2.76% |
| Risk-free\tinterest\trate | 0.82% | 2.31% | 2.39% |

A	summary	of	stock	option	activity	during	2012	is	presented	below:

|  |  |  | Remaining | Aggregate |
| :--- | :--- | :--- | :--- | :--- |
|  |  | Exercise | Contractual | Intrinsic |
|  | Shares | Price\tper | Term* | Value |
|  | (in\tthousands) | Share* | (in\tyears) | (in\tmillions) |
| Outstanding\tat\tbeginning\tof\tyear | 2,533 | \t\t\t\t$\t\t45.07 |  |  |
| Granted | 621 | 60.01 |  |  |
| Exercised | (962) | 42.23 |  |  |
| Forfeited\tor\texpired | (31) | 55.57 |  |  |
| Outstanding\tat\tend\tof\tyear | \t\t\t\t\t2,161 | 50.48 | \t\t\t\t7.1 | \t\t\t\t$\t\t58.0 |
| Exercisable\tat\tend\tof\tyear | 1,009 | 43.16 | \t\t\t\t5.5 | 34.5 |

# * Weighted-average

As	of	2012	year	end	there	was	$10.2	million	of	unrecognized	compensation	cost	related	to	non-vested	stock	option	compensation	arrangements	that	is	expected	to	be recognized	as	a	charge	to	earnings	over	a	weighted-average	period	of	1.8	years.

# Performance	Awards

Performance	awards,	which	are	granted	as	performance	share	units	and	performance-based	RSUs,	are	earned	and	expensed	using	the	fair	value	of	the	award	over	a contractual	term	of	three	years	based	on	the	company's	performance.	Vesting	of	the	performance	awards	is	dependent	upon	performance	relative	to	pre-defined	goals	for revenue	growth	and	return	on	net	assets	for	the	applicable	performance	period.	For	performance	achieved	above	a	certain	level,	the	recipient	may	earn	additional	shares of	stock,	not	to	exceed	100%	of	the	number	of	performance	awards	initially	granted.

The	performance	share	units	have	a	three	year	performance	period	based	on	the	results	of	the	consolidated	financial	metrics	of	the	company.	The	performance-based RSUs	have	a	one	year	performance	period	based	on	the	results	of	the	consolidated	financial	metrics	of	the	company	followed	by	a	two	year	cliff	vesting	schedule.

The	fair	value	of	performance	awards	is	calculated	using	the	market	value	of	a	share	of	Snap-on's	common	stock	on	the	date	of	grant.	The	weighted-average	grant	date fair	value	of	performance	awards	granted	during	2012,	2011	and	2010	was	$60.00,	$55.97	and	$41.01,	respectively.	Vested	performance	share	units	approximated 213,000	shares	as	of	2012	year	end	and	54,208	shares	as	of	2011	year	end;	there	were	no	vested	performance	share	units	as	of	2010	year	end.	Performance	share	units	of 53,990	shares	were	paid	out	in	2012;	no	performance	share	units	were	paid	out	in	2011	or	2010.	Earned	performance	share	units	are	generally	paid	out	following	the conclusion	of	the	applicable	performance	period	upon	approval	by	the	Organization	and	Executive	Compensation	Committee	of	the	company's	Board	of	Directors	(the "Board").

Based	on	the	company's	2012	performance,	95,047	RSUs	granted	in	2012	were	earned;	assuming	continued	employment,	these	RSUs	will	vest	at	the	end	of	fiscal	2014. Based	on	the	company's	2011	performance,	159,970	RSUs	granted	in	2011	were	earned;	assuming	continued	employment,	these	RSUs	will	vest	at	the	end	of	fiscal 2013.	Based	on	the	company's	2010	performance,	169,921	RSUs	granted	in	2010	were	earned;	these	RSUs	vested	as	of	fiscal	2012	year	end	and	were	paid	out	shortly thereafter.	As	a	result	of	employee	retirements,	2,706	of	the	RSUs	earned	in	2010	vested	pursuant	to	the	terms	of	the	related	award	agreements	and	were	paid	out	in	the first	quarter	of	2011.

The	changes	to	the	company's	non-vested	performance	awards	in	2012	are	as	follows:

|  |  | Fair	Value |
| :--- | :--- | :--- |
|  | Shares | Price\tper |
|  | (in\tthousands) | Share* |
| Non-vested\tperformance\tawards\tat\tbeginning\tof\tyear | 707 | \t\t\t\t$\t\t48.87 |
| Granted | 203 | 60.00 |
| Vested | (379) | 41.01 |
| Cancellations\tand\tother | (22) | 44.93 |
| Non-vested\tperformance\tawards\tat\tend\tof\tyear | \t\t\t\t509 | 59.36 |

As	of	2012	year	end	there	was	approximately	$14.1	million	of	unrecognized	compensation	cost	related	to	non-vested	performance	awards	that	is	expected	to	be recognized	as	a	charge	to	earnings	over	a	weighted-average	period	of	1.6	years.

# Stock	Appreciation	Rights	("SARs")

The	company	also	issues	SARs	to	certain	key	non-U.S.	employees.	SARs	are	granted	with	an	exercise	price	equal	to	the	market	value	of	a	share	of	Snap-on's	common stock	on	the	date	of	grant	and	have	a	contractual	term	of	ten	years	and	vest	ratably	on	the	first,	second	and	third	anniversaries	of	the	date	of	grant.	SARs	provide	for	the cash	payment	of	the	excess	of	the	fair	market	value	of	Snap-on's	common	stock	price	on	the	date	of	exercise	over	the	grant	price.	SARs	have	no	effect	on	dilutive	shares or	shares	outstanding	as	any	appreciation	of	Snap-on's	common	stock	value	over	the	grant	price	is	paid	in	cash	and	not	in	common	stock.

The	fair	value	of	SARs	is	revalued	(mark-to-market)	each	reporting	period	using	the	Black-Scholes	valuation	model	based	on	Snap-on's	period-end	stock	price.	The company	uses	historical	data	regarding	SARs	exercise	behaviors	for	different	participating	groups	to	estimate	the	expected	term	of	the	SARs	granted	based	on	the	period of	time	that	similar	instruments	granted	are	expected	to	be	outstanding.	Expected	volatility	is	based	on	the	historical	volatility	of	the	company's	stock	for	the	length	of time	corresponding	to	the	expected	term	of	the	SARs.	The	expected	dividend	yield	is	based	on	the	company's	historical	dividend	payments.	The	risk-free	interest	rate	is based	on	the	U.S.	treasury	yield	curve	in	effect	as	of	the	reporting	date	for	the	length	of	time	corresponding	to	the	expected	term	of	the	SARs.	The	following	weighted- average	assumptions	were	used	in	calculating	the	fair	value	of	SARs	granted	during	2012,	2011	and	2010	using	the	Black-Scholes	valuation	model:

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Expected\tterm\tof\tSARs\t(in\tyears) | 4.49 | 4.67 | 5.54 |
| Expected\tvolatility\tfactor | \t\t\t\t\t\t36.44% | \t\t\t\t\t\t38.45% | \t\t\t\t\t\t34.59% |
| Expected\tdividend\tyield | 2.69% | 2.72% | 2.76% |
| Risk-free\tinterest\trate | 0.72% | 0.83% | 2.39% |

Changes	to	the	company's	non-vested	SARS	in	2012	are	as	follows:

|  | SARs | Price	per |
| :--- | :--- | :--- |
|  | (in\tthousands) | Share* |
| Non-vested\tSARs\tat\tbeginning\tof\tyear | 232 | \t\t\t\t$\t\t13.56 |
| Granted | 130 | \t\t24.70 |
| Vested | \t\t\t\t\t(109) | 32.33 |
| Cancellations | (15) | – |
| Non-vested\tSARs\tat\tend\tof\tyear | 238 | 24.26 |

As	of	2012	year	end	there	was	$5.8	million	of	unrecognized	compensation	cost	related	to	non-vested	SARs	that	is	expected	to	be	recognized	as	a	charge	to	earnings	over a	weighted-average	period	of	1.5	years.

# Restricted	Stock	Awards	–	Non-employee	Directors

The	company	granted	17,811	and	17,964	non-performance-based	RSUs	to	non-employee	members	of	its	Board	in	2012	and	2011,	respectively.	The	company	uses	the fair	value	at	the	date	of	grant	to	value	RSUs	granted	to	members	of	the	Board.	All	restrictions	will	lapse	upon	the	recipient's	termination	of	service	as	a	director	or	in	the event	of	a	change	in	control.

# Directors'	Fee	Plan

Under	the	Directors'	1993	Fee	Plan,	as	amended,	non-employee	directors	may	elect	up	to	100%	of	their	fees	and	retainer	in	shares	of	Snap-on's	common	stock. Directors	may	elect	to	defer	receipt	of	all	or	part	of	these	shares.	For	2012,	2011	and	2010,	issuances	under	the	Directors'	Fee	Plan	totaled	1,747	shares,	2,211	shares and	3,600	shares,	respectively.	Additionally,	receipt	of	9,278	shares,	2,608	shares	and	4,780	shares	was	deferred	in	2012,	2011	and	2010,	respectively.	As	of	2012	year end,	shares	reserved	for	issuance	to	directors	under	this	plan	totaled	143,695	shares.

# Employee	Stock	Purchase	Plan

Employees	of	Snap-on	are	eligible	to	participate	in	an	employee	stock	purchase	plan.	The	employee	purchase	price	of	the	common	stock	is	the	lesser	of	the	mean	of	the high	and	low	price	of	the	stock	on	the	beginning	date	(May	15)	or	ending	date	(the	following	May	14)	of	each	plan	year.	For	2012,	2011	and	2010,	issuances	under	this plan	totaled	33,596	shares,	89,699	shares	and	112,944	shares,	respectively.	As	of	2012	year	end,	shares	reserved	for	issuance	to	employees	under	this	plan	totaled 1,015,066	shares	and	Snap-on	held	employee	contributions	of	approximately	$2.3	million	for	the	purchase	of	common	stock	by	employees.	Employees	are	able	to withdraw	from	the	plan	and	receive	all	contributions	made	during	the	plan	year.	Compensation	expense	for	plan	participants	was	$0.5	million	in	2012,	$1.0	million	in 2011	and	$1.8	million	in	2010.

# Franchisee	Stock	Purchase	Plan

Franchisees	are	eligible	to	participate	in	a	franchisee	stock	purchase	plan.	The	franchisee	purchase	price	of	the	common	stock	is	the	lesser	of	the	mean	of	the	high	and low	price	of	the	stock	on	the	beginning	date	(May	15)	or	ending	date	(the	following	May	14)	of	each	plan	year.	For	2012,	2011	and	2010,	issuances	under	this	plan totaled	48,819	shares,	78,154	shares	and	109,052	shares,	respectively.	As	of	2012	year	end,	shares	reserved	for	issuance	to	franchisees	under	this	plan	totaled	410,245 shares	and	Snap-on	held	franchisee	contributions	of	approximately	$2.2	million	for	the	purchase	of	common	stock	by	franchisees.	Franchisees	are	able	to	withdraw	from the	plan	and	receive	all	contributions	made	during	the	plan	year.	Expense	for	plan	participants	was	$0.7	million	in	both	2012	and	2011,	and	$1.6	million	in	2010.

# Note	14:	Capital	Stock

Snap-on	has	undertaken	repurchases	of	Snap-on	common	stock	from	time	to	time	to	offset	dilution	created	by	shares	issued	for	employee	and	franchisee	stock	purchase plans,	stock	awards	and	other	corporate	purposes.	Snap-on	repurchased	1,180,000	shares	in	2012,	628,000	shares	in	2011	and	152,000	shares	in	2010.	As	of	2012	year end,	Snap-on	has	remaining	availability	to	repurchase	up	to	an	additional	$180.9	million	in	common	stock	pursuant	to	Board	authorizations.	The	purchase	of	Snap-on common	stock	is	at	the	company's	discretion,	subject	to	prevailing	financial	and	market	conditions.

# Note	15:	Commitments	and	Contingencies

Snap-on	leases	facilities,	office	equipment	and	vehicles	under	non-cancelable	operating	and	capital	leases	that	extend	for	varying	amounts	of	time.	Snap-on's	future minimum	lease	commitments	under	these	leases,	net	of	sub-lease	rental	income,	are	as	follows:

|  | Operating | Capital |
| :--- | :--- | :--- |
| (Amounts\tin\tmillions) | Leases | Leases |
| Year: |  |  |
| 2013 | \t\t\t\t$23.0 | \t\t\t\t$7.7 |
| 2014 | 17.3 | 7.1 |
| 2015 | 13.0 | 6.8 |
| 2016 | 8.4 | 4.8 |
| 2017 | 6.4 | 3.3 |
| 2018\tand\tthereafter | 14.9 | 14.4 |
| Total\tminimum\tlease\tpayments | \t\t\t\t$\t\t83.0 | \t\t\t\t$\t\t44.1 |
| Less:\tamount\trepresenting\tinterest |  | (4.5) |
| Total\tpresent\tvalue\tof\tminimum\tcapital\tlease\tpayments |  | \t\t\t\t$39.6 |

Amounts	included	in	the	accompanying	Consolidated	Balance	Sheets	for	the	present	value	of	minimum	capital	lease	payments	as	of	2012	year	end	are	as	follows:

Rent	expense,	net	of	sub-lease	rental	income,	for	worldwide	facilities,	office	equipment	and	vehicles	was	$29.7	million,	$31.7	million	and	$33.2	million	in	2012,	2011 and	2010,	respectively.

Snap-on	provides	product	warranties	for	specific	product	lines	and	accrues	for	estimated	future	warranty	cost	in	the	period	in	which	the	sale	is	recorded.	Snap-on calculates	its	accrual	requirements	based	on	historic	warranty	loss	experience	that	is	periodically	adjusted	for	recent	actual	experience,	including	the	timing	of	claims during	the	warranty	period	and	actual	costs	incurred.	Snap-on's	product	warranty	accrual	activity	for	2012,	2011	and	2010	is	as	follows:

| (Amounts	in	millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Warranty\treserve: |  |  |  |
| Beginning\tof\tyear | \t\t\t\t$18.6 | \t\t\t\t$16.9 | \t\t\t\t$14.3 |
| Additions | 10.4 | 15.3 | 16.0 |
| Usage | (10.1) | (13.6) | (13.4) |
| End\tof\tyear | \t\t\t\t$18.9 | \t\t\t\t$18.6 | \t\t\t\t$16.9 |

Approximately 2,700 employees,	 or 24% of	 Snap-on's	 worldwide	 workforce,	 are	 represented	 by	 unions	 and/or	 covered	 under	 collective	 bargaining agreements.	Approximately	900	employees	are	covered	under	agreements	expiring	in	2013.	In	recent	years,	Snap-on	has	not	experienced	any	significant	work	slow- downs,	stoppages	or	other	labor	disruptions.

Snap-on	has	credit	risk	exposure	for	certain	SOC-originated	contracts	with	recourse	provisions	related	to	franchisee	van	loans	sold	by	SOC;	as	of	2012	and	2011	year end,	$13.3	million	and	$13.9	million,	respectively,	of	franchisee	loans	contain	a	recourse	provision	to	Snap-on	if	the	loans	become	more	than	90	days	past	due.	The	asset value	of	the	collateral	underlying	these	recourse	loans	would	serve	to	mitigate	Snap-on's	loss	in	the	event	of	default.	The	estimated	fair	value	of	the	guarantees	for	all loan	originations	with	recourse	as	of	December	29,	2012,	was	not	material.

In	May	2011,	Snap-on	and	CIT	reached	an	amicable	settlement	of	their	respective	claims	relating	to	payments	during	the	course	of	their	SOC	financial	services	joint venture	and,	in	the	second	quarter	of	2011,	Snap-on	recorded	an	$18.0	million	pretax	arbitration	settlement	gain.	The	$18.0	million	arbitration	settlement	gain	is included	in	"Operating	earnings	from	financial	services"	on	the	accompanying	Consolidated	Statement	of	Earnings	for	2011.

# Note	16:	Other	Income	(Expense)	–	Net

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

| (Amounts	in	millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Interest\tincome | \t\t\t\t$0.6 | \t\t\t\t$1.4 | \t\t\t\t$1.3 |
| Net\tforeign\texchange\tloss | (0.7) | (2.6) | \t\t(0.7) |
| Other | (0.3) | 0.2 | 0.2 |
| Total\tother\tincome\t(expense)\t–\tnet | \t\t\t\t$\t\t(0.4) | \t\t\t\t$\t\t(1.0) | \t\t\t\t$0.8 |

# Note	17:	Segments

Neither	Snap-on	nor	any	of	its	segments	depend	on	any	single	customer,	small	group	of	customers	or	government	for	more	than	10%	of	its	revenues.

# Financial	Data	by	Segment:

# Financial	Data	by	Segment	(continued):

* Revenues	are	attributed	to	countries	based	on	the	origin	of	the	sale.

** Long-lived	assets	consist	of	Property	and	equipment	–	net,	Goodwill,	and	Other	intangibles	–	net.

Products	and	Services:	 Snap-on	 derives	 net	 sales	 from	 a	 broad	 line	 of	 products	 and	 complementary	 services	 that	 are	 grouped	 into	 three	 categories:	 (i)	 tools; (ii)	diagnostics	and	repair	information;	and	(iii)	equipment.	The	tools	category	includes	Snap-on's	hand	tools,	power	tools,	tool	storage	units,	saws,	and	cutting	and pruning	tools	product	offerings.	The	diagnostics	and	repair	information	category	includes	handheld	and	PC-based	diagnostic	products,	service	and	repair	information products,	and	diagnostic	software	solutions,	including	electronic	parts	catalogs,	business	management	and	other	solutions	to	help	owners	and	managers	of	independent repair	shops	and	OEM	dealership	service	and	repair	shops	manage	and	track	performance.	The	equipment	category	includes	solutions	for	the	diagnosis	and	service	of automotive	and	industrial	equipment.	Through	its	finance	services	businesses,	Snap-on	also	derives	revenue	from	various	financing	programs	designed	to	facilitate	the sales	of	its	products.	Further	product	line	information	is	not	presented	as	it	is	not	practicable	to	do	so.	The	following	table	shows	the	consolidated	net	sales	and	revenues of	these	product	groups	in	the	last	three	years:

| (Amounts	in	millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Net\tsales: |  |  |  |
| Tools | \t\t\t\t$1,729.4 | \t\t\t\t$1,667.3 | \t\t\t\t$1,545.1 |
| Diagnostics\tand\trepair\tinformation | 619.8 | 613.7 | 563.3 |
| Equipment | 588.7 | 573.2 | 510.8 |
| Total\tnet\tsales | \t\t\t\t$2,937.9 | \t\t\t\t$2,854.2 | \t\t\t\t$2,619.2 |
| Financial\tservices\trevenue | 161.3 | 124.3 | 62.3 |
| Total\trevenues | \t\t\t\t$\t\t3,099.2 | \t\t\t\t$\t\t2,978.5 | \t\t\t\t$\t\t2,681.5 |

# Note	18:	Quarterly	Data	(unaudited)

|  | First | Second | Third | Fourth |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (Amounts\tin\tmillions,\texcept\tper\tshare\tdata) | Quarter | Quarter | Quarter | Quarter | Total |
| 2012 |  |  |  |  |  |
| Net\tsales | \t\t\t\t$\t\t735.2 | \t\t\t\t$\t\t737.9 | \t\t\t\t$\t\t711.6 | \t\t\t\t$753.2 | \t\t\t\t$\t\t2,937.9 |
| Gross\tprofit | 347.7 | 349.9 | 340.4 | 352.0 | 1,390.0 |
| Financial\tservices\trevenue | 38.0 | 39.9 | 40.5 | 42.9 | 161.3 |
| Financial\tservices\texpenses | (14.1) | (14.3) | (12.6) | (13.6) | (54.6) |
| Net\tearnings | 73.0 | 78.5 | 76.4 | 86.7 | 314.6 |
| Net\tearnings\tattributable\tto\tSnap-on\tIncorporated | 71.0 | 76.4 | 74.1 | 84.6 | 306.1 |
| Earnings\tper\tshare\t–\tbasic | 1.22 | 1.31 | 1.27 | 1.45 | 5.26 |
| Earnings\tper\tshare\t–\tdiluted | 1.21 | 1.30 | 1.26 | 1.43 | 5.20 |
| Cash\tdividends\tpaid\tper\tshare | 0.34 | 0.34 | 0.34 | 0.38 | 1.40 |

| 2011 | First<br>Quarter | Second<br>Quarter | Third<br>Quarter | Fourth<br>Quarter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tsales | \t\t\t\t$\t\t693.7 | \t\t\t\t$\t\t726.7 | \t\t\t\t$\t\t697.2 | \t\t\t\t$\t\t736.6 | \t\t\t\t$\t\t2,854.2 |
| Gross\tprofit | 330.6 | 342.2 | 329.3 | 335.8 | 1,337.9 |
| Financial\tservices\trevenue | 25.8 | 30.3 | 32.7 | 35.5 | 124.3 |
| Financial\tservices\texpenses | (13.3) | (12.8) | (11.9) | (13.4) | (51.4) |
| Net\tearnings | 58.0 | 79.9 | 69.8 | 76.1 | 283.8 |
| Net\tearnings\tattributable\tto\tSnap-on\tIncorporated | 56.2 | 78.0 | 67.8 | 74.3 | 276.3 |
| Earnings\tper\tshare\t–\tbasic | 0.97 | 1.34 | 1.16 | 1.28 | 4.75 |
| Earnings\tper\tshare\t–\tdiluted | 0.96 | 1.33 | 1.16 | 1.27 | 4.71 |
| Cash\tdividends\tpaid\tper\tshare | 0.32 | 0.32 | 0.32 | 0.34 | 1.30 |
|  | 2012\tANNUAL\tREPORT | 2012\tANNUAL\tREPORT |  |  | 107 |

# SIGNATURES

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	Snap-on	has	duly	caused	this	report	to	be	signed	on	its	behalf	by	the undersigned,	thereunto	duly	authorized.

	and	Chief	Executive	Officer

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	Snap-on	and	in	the capacities	and	on	the	date	indicated.

	Vice	President	and	Controller

(3) (a) Restated	Certificate	of	Incorporation	of	Snap-on	Incorporated,	as	amended	through	April	25,	1997	(incorporated	by	reference	to	Exhibit	3(a)	to	Snap- on's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	January	3,	1998	(Commission	File	No.	1-7724))

(b) Amended	and	Restated	Bylaws	of	Snap-on	Incorporated,	adopted	on	February	19,	2008	(incorporated	by	reference	to	Exhibit	3.1	to	Snap-on's	Current Report	on	Form	8-K	dated	February	19,	2008	(Commission	File	No.	1-7724))

(4) (a) Indenture,	dated	as	of	January	8,	2007,	between	Snap-on	Incorporated	and	U.S.	Bank	National	Association	as	trustee	(incorporated	by	reference	to Exhibit	(4)(b)	to	Form	S-3	Registration	Statement	(Registration	No.	333-139863))

(g) Amended	and	Restated	Loan	and	Servicing	Agreement,	dated	as	of	September	28,	2012,	among	SOC	SPV1,	LLC,	as	borrower,	Snap-on	Credit	LLC,	as servicer,	the	conduit	lenders,	committed	lenders	and	administrative	agents	from	time	to	time	party	thereto,	and	JPMorgan	Chase	Bank,	N.A.,	as	program agent.	(incorporated	by	reference	to	Exhibit	4.1	to	Snap-on's	Current	Report	on	Form	8-K	dated	September	28,	2012	(Commission		File	No.	1-7724))

(h)	(1) Receivables	Sale	Agreement,	dated	as	of	October	1,	2010,	by	and	among	Snap-on	Credit	LLC	and	each	affiliate	of	Snap-on	Credit	LLC	from	time	to time	party	thereto,	as	sellers,	and	SOC	SPV1,	LLC,	as	purchaser	(incorporated	by	reference	to	Exhibit	4.1	to	Snap-on's	Current	Report	on	Form	8-K dated	October	1,	2010	(Commission	File	No.	1-7724))

(h)	(2) First	Omnibus	Amendment,	dated	as	of	April	18,	2011,	among	SOC	SPV1,	LLC,	Snap-on	Credit	LLC	and	JPMorgan	Chase	Bank,	N.A.	(incorporated by	reference	to	Exhibit	4.1	to	Snap-on's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period	ended	October	1,	2011	(Commission		File	No.	1-7724))

(h)	(3) Second	Omnibus	Amendment,	dated	as	of	September	30,	2011,	among	SOC	SPV	1,	LLC,	Snap-on	Credit	LLC	and	JPMorgan	Chase	Bank,	N.A.	(which includes	a	copy	of	the	Receivables	Sale	Agreement,	as	amended,	as	Exhibit	B	thereto)	(incorporated	by	reference	to	Exhibit	4.1	to	Snap-on's	Current Report	on	Form	8-K	dated	September	30,	2011	(Commission		File	No.	1-7724))

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	December	29,	2012.	Copies	of	debt	instruments	for	which	the	related	debt	is	less	than	10%	of	consolidated	total	assets	will	be	furnished	to the	Commission	upon	request.

# (10) Material	Contracts

(a) Amended	and	Restated	Snap-on	Incorporated	1986	Incentive	Stock	Program	(incorporated	by	reference	to	Exhibit	(10)(a)	to	Snap-on's	Annual	Report	on Form	10-K	for	the	fiscal	year	ended	December	31,	2005	(Commission	File	No.	1-7724))**

(b) 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)

(c) Snap-on	Incorporated	2011	Incentive	Stock	and	Awards	Plan	(incorporated	by	reference	to	Appendix	A	to	Snap-on's	Definitive	Proxy	Statement	for	its 2011	Annual	Meeting	of	Shareholders,	filed	with	the	Securities	and	Exchange	Commission	on	March	9,	2011	(Commission	File	No.	1-7724))**

(d) Form	of	Restated	Executive	Agreement	between	Snap-on	Incorporated	and	each	of	Nicholas	T.	Pinchuk,	Iain	Boyd,	Constance	R.	Johnsen,	Thomas	L. Kassouf,	Jeanne	M.	Moreno,	Aldo	J.	Pagliari,	Irwin	M.	Shur	and	Thomas	J.	Ward	(incorporated	by	reference	to	Exhibit	10.1	to	Snap-on's	Current	Report on	Form	8-K	dated	January	31,	2008	(Commission	File	No.	1-7724))**

(e)	(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))**

(e)	(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))**

(f) 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))**

(g) 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))**

(h) 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))**

(i) Form	of	Share	and	Performance	Award	Agreement	under	the	2001	Incentive	Stock	and	Awards	Plan	(incorporated	by	reference	to	Exhibit	10.2	to	Snap- on's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period	ended	March	31,	2007	(Commission	File	No.	1-7724))**

(j) Form	of	Deferred	Share	and	Performance	Award	Agreement	under	the	2001	Incentive	Stock	and	Awards	Plan	(incorporated	by	reference	to	Exhibit	10(d) to	Snap-on's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period	ended	March	29,	2003	(Commission	File	No.	1-7724))**

(k) 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))**

(l) Form	of	Restricted	Stock	Unit	Agreement	under	the	2001	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	April	4,	2009	(Commission	File	No.	1-7724))**

(m) 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))**

(n) Form	of	Retention	Bonus	Agreement	(incorporated	by	reference	to	Exhibit	10(m)	to	Snap-on's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended January	2,	2010	(Commission	File	No.	1-7724))**

(o) 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))**

(p) 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))**

(q) 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))**

(r) 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))**

(s) Letter	agreement	between	Snap-on	Incorporated	and	Nicholas	T.	Pinchuk	dated	December	18,	2007	(incorporated	by	reference	to	Exhibit	10.1	to	Snap-on's Current	Report	on	Form	8-K	dated	December	18,	2007	(Commission	File	No.	1-7724))**

(t) Amended	and	Restated	Five	Year	Credit	Agreement,	dated	as	of	August	10,	2007,	among	Snap-on	Incorporated	and	the	banks,	financial	institutions	and other	institutional	lenders	listed	on	the	signature	pages	thereof,	J.P.	Morgan	Securities,	Inc.	and	Citigroup	Global	Markets	Inc.,	as	joint	lead	arrangers	and joint	book	runners,	and	JPMorgan	Chase	Bank,	N.A.,	as	administrative	agent	(incorporated	by	reference	to	Exhibit	10.1	to	Snap-on's	Current	Report	on Form	8-K/A	dated	August	10,	2007	(Commission	File	No.	1-7724))	(superseded)

(u) Amended	and	Restated	Five	Year	Credit	Agreement,	dated	as	of	December	8,	2011,	among	Snap-on	Incorporated	and	the	banks,	financial	institutions	and other	institutional	lenders	listed	on	the	signature	pages	thereof,	J.P.	Morgan	Securities,	Inc.	and	Citigroup	Global	Markets	Inc.,	as	joint	lead	arrangers	and joint	book	runners,	and	JPMorgan	Chase	Bank,	N.A.,	as	administrative	agent	(incorporated	by	reference	to	Exhibit	10.1	to	Snap-on's	Current	Report	on Form	8-K	dated	December	8,	2011	(Commission	File	No.	1-7724))

# (12) Computation	of	Ratio	of	Earnings	to	Fixed	Charges

(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))

# (21) Subsidiaries	of	the	Corporation

(23) Consent	of	Independent	Registered	Public	Accounting	Firm

(31.1) Certification	of	the	Chief	Executive	Officer	pursuant	to	Section	302	of	the	Sarbanes-Oxley	Act	of	2002

(31.2) Certification	of	the	Principal	Financial	Officer	pursuant	to	Section	302	of	the	Sarbanes-Oxley	Act	of	2002

(32.1) Certification	of	Chief	Executive	Officer	Pursuant	to	18	U.S.C.	Section	1350,	as	Adopted	Pursuant	to	Section	906	of	the	Sarbanes-Oxley	Act	of	2002

(32.2) Certification	of	Principal	Financial	Officer	Pursuant	to	18	U.S.C.	Section	1350,	as	Adopted	Pursuant	to	Section	906	of	the	Sarbanes-Oxley	Act	of	2002

(101.INS) XBRL	Instance	Document***

(101.SCH) XBRL	Taxonomy	Extension	Schema	Document***

(101.CAL) XBRL	Taxonomy	Extension	Calculation	Linkbase	Document***

(101.DEF) XBRL	Taxonomy	Extension	Definition	Linkbase	Document***

(101.LAB) XBRL	Taxonomy	Extension	Label	Linkbase	Document***

(101.PRE) XBRL	Taxonomy	Extension	Presentation	Linkbase	Document***

* Filed	electronically	or	incorporated	by	reference	as	an	exhibit	to	this	Annual	Report	on	Form	10-K.	Copies	of	any	materials	the	company	files	with	the	SEC	can	also	be	obtained	free	of	charge	through	the	SEC's web	site	at	www.sec.gov.	The	SEC's	Public	Reference	Room	can	be	contacted	at	100	F	Street,	N.E.,	Washington,	D.C.	20549,	or	by	calling	the	SEC's	Public	Reference	Room	at	1-800-732-0330.

** Represents	a	management	compensatory	plan	or	agreement. *** Attached	as	Exhibit	101	to	this	report	are	the	following	documents	formatted	in	XBRL	(Extensible	Business	Reporting	Language):	(i)	Consolidated	Statements	of	Earnings	for	the	twelve	months	ended	December	29, 2012,	December	31,	2011,	and	January	1,	2011;	(ii)	Consolidated	Statements	of	Comprehensive	Income	for	the	twelve	months	ended	December	29,	2012,	December	31,	2011,	and	January	1,	2011;	(iii)	Consolidated Balance	 Sheets	 as	 of	 December	 29,	 2012,	 and	 December	 31,	 2011;	 (iv)	 Consolidated	 Statements	 of	 Equity	 for	 the	 twelve	 months	 ended	 December	 29,	 2012,	 December	 31,	 2011,	 and	 January	 1,	 2011; (v)	Consolidated	Statements	of	Cash	Flow	for	the	twelve	months	ended	December	29,	2012,	December	31,	2011,	and	January	1,	2011;	and	(vi)	Notes	to	Consolidated	Financial	Statements.



Question: in 2012 what was the percent change in the number of shares that was not vested
Answer: -28%