During 2010, we made significant progress in the four strategic areas that we’ve identified as decisive to our future: enhancing our franchise network, expanding in the vehicle repair garage, extending to critical industries and building in emerging markets — all so that we can reach more professionals. 

We believe continued solid execution in these four strategic areas will place Snap-on in a strong position as we move forward, creating long-term value for our shareholders. 

## TO OUR SNAP-ON SHAREHOLDERS 

Our performance in 2010 was evidence of solid progress on our strategic priorities, of continuing benefits from our Snap-on Value Creation Processes and of stabilization in the overall business environment. We were encouraged by the continuing higher sales and earnings as the year progressed, demonstrating a trend of increasing strategic strength. Our customers began to show restored confidence as their purchases of longer payback items such as diagnostics, undercar equipment and tool storage recovered from the economic downturn. We were also fortified by the ongoing benefits from our commitment to Snap-on Value Creation, driving product innovation, customer connection, quality assurance, safety and rapid continuous improvement (RCI). 

For the year, net sales of $2.62 billion were up 10.9% compared to 2009. Operating income margin of 12.4% improved 200 basis points from 10.4% and diluted earnings per share of $3.19 improved 37.5% from $2.32 in 2009. These results reflect not only the positive effects of higher sales volumes from the improved economic environment and further penetration in key markets, but also the benefits of RCI and other initiatives implemented in 2010 and previously. Through ongoing advances with RCI and our other Snap-on Value Creation Processes, we believe that we have meaningful opportunity for further overall improvement and higher efficiency, which will enable us to shift resources to key initiatives and investments aimed at future growth. 

