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Snap-on Inc. and Newcourt Credit Group Expanding Relationship

2 December 1998

Snap-on Incorporated and Newcourt Credit Group Expanding Relationship with Enhanced Partnership

    KENOSHA, Wis. and TORONTO--Dec. 2, 1998--Snap-on Incorporated and Newcourt Credit Group (TSE, ME, NYSE:NCT) announced they have signed a definitive agreement to form a new entity, Snap-on Credit LLC ("Snap-on Credit"), which will be the preferred provider of financial services to Snap-on's global dealer and customer network. The closing will occur following completion of various operating documents and is expected on or about Jan. 3, 1999. The entity will be 50 percent owned by each company.
    Under the agreement, Snap-on Credit will combine the operations and commitments of Snap-on's existing captive finance program with Newcourt's expertise of providing tailored, flexible financing solutions to industry leaders. The new entity will employ and primarily be staffed by personnel from Snap-on, with certain functions staffed by personnel from Newcourt. The operations will be established initially in the United States early in 1999, and expanded globally thereafter.
    The new partnership is a significant expansion of the existing relationship between the two companies. Since the relationship began in 1996, Newcourt has provided leasing services to a segment of Snap-on's finance customers. Under the new arrangement, Newcourt will make funding available to Snap-on Credit to finance all of Snap-on's current and new customers.
    "Providing financing to our customers is an important link in Snap-on's value chain. This partnership is good for our customers, our dealers and our shareholders," said Robert A. Cornog, chairman, president and chief executive officer of Snap-on Incorporated "Over time, it will enable Snap-on to offer more financial products to more types of customers in more geographies than is possible under our current structure. The venture also will reduce Snap-on Incorporated's invested capital, thereby improving our economic profit."
    "The new alliance reflects the success of our existing relationship with Snap-on," said Steven Hudson, Newcourt's chief executive officer. "Combining our individual strengths, we have created an innovative solution to meet the industry-specific financing needs of Snap-on's global dealer and customer network."
    "Our partnership with Snap-on is a significant step in Newcourt's strategy of creating growing and profitable alliances with industry leaders," said Bradley Nullmeyer, president, Newcourt Financial. "As one of Newcourt's largest vendor finance relationships, this partnership offers exciting potential and demonstrates our ability to grow organically with our customers."
    "Newcourt has proven to be an outstanding partner for Snap-on. Our previous successful experience with Newcourt made it our first choice for this venture," added Cornog. "With its entrepreneurial, customer-focused approach, Newcourt has demonstrated its commitment to work in concert with Snap-on to tailor financing solutions specific to the unique needs of our dealer and customer base."
    Through a series of transactions expected to commence in Dec. 1998, Newcourt is expected to purchase, with certain recourse provisions, Snap-on's previously securitized installment receivables as well as those currently on Snap-on's balance sheet. For Snap-on, the sales will result in cash premiums; the recognition of the accounting gains will be determined by the timing of the transactions and the expiration of the recourse provisions.
    The formation of Snap-on Credit will result in a reduction in the asset intensity of Snap-on Incorporated's balance sheet from its present level. Snap-on anticipates the transaction will be neutral with respect to its earnings in 1999.
    Newcourt Credit Group is one of the world's leading sources of commercial and corporate asset-based financing with owned and managed assets of Cdn$34.4 billion (US$22.4 billion) and global capability in 26 countries.
    Snap-on Incorporated is a $1.7 billion leading global developer, manufacturer and distributor of tool and equipment solutions for professional technicians, motor service shop owners, specialty repair centers, original equipment manufacturers, and industrial tool users worldwide. Product lines include hand and power tools, diagnostics and shop equipment, tool storage units, diagnostics software, and other solutions for the transportation service industry.

    Statements in this news release that are not historical facts, including statements (i) that include the words "believes,""expects,""anticipates," or "estimates" or words of similar importance with reference to the corporation or management; (ii) specifically identified as forward-looking, or (iii) describing the corporation's or management's future plans, objectives or goals, are forward-looking statements. The corporation or its representatives may also make similar forward-looking statements from time to time orally or in writing. The corporation cautions the reader that these statements 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. Those important factors include the corporation's ability to manufacture, distribute, and/or record the sale of products during the implementation of a new computer system involving the replacement of hardware and software components and the enterprise-wide linking of all functions; the timing or speed with which the corporation can implement the Project Simplify initiatives and the rollout of Snap-on Credit LLC without unanticipated complications: the corporation's ability to withstand external negative factors including changes in trade, monetary and fiscal policies, laws and regulations, or other activities of governments or their agencies; significant changes in the current competitive environment; inflation; currency fluctuations or the material worsening of the economic and political situation in Asia; and the achievement of productivity improvements and cost reductions. These factors may not constitute all factors that could cause actual results to differ materially from those discussed in any forward-looking statement. The corporation operates in a continually changing business environment and new factors emerge from time to time. The corporation cannot predict such factors nor can it assess the impact, if any, of such factors on the corporation or its results. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. The corporation disclaims any responsibility to update any forward-looking statement provided in this news release.