SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For  quarterly period ended July 3, 1999

Commission File Number 1-7724

SNAP-ON INCORPORATED
(Exact name of registrant as specified in its charter)

Delaware                                   39-0622040
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

10801 Corporate Drive, Pleasant Prairie, Wisconsin           53158-1603
(Address of principal executive offices)                 (zip code)

Registrant's telephone number, including area code:   (414) 656-5200 

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 the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:

Class                            Outstanding at July 31, 1999
--------------------------                ----------------------------
Common stock, $1 par value                     58,469,617 shares

SNAP-ON INCORPORATED

INDEX

Page

Part I. Financial Information

Consolidated  Statements of Earnings -
Thirteen and  Twenty-six  Weeks Ended 
July 3, 1999 and July 4, 1998                                  3

Consolidated Balance Sheets - 
July 3, 1999 and January 2, 1999                             4-5

Consolidated Statements of Cash Flows -
Twenty-six Weeks Ended
July 3, 1999 and July 4, 1998                                  6

Notes to Consolidated Unaudited Financial Statements        7-13

Management's  Discussion  and  Analysis  of
Financial  Condition  and Results of Operations            14-19

Part II. Other Information                                              20

PART I. FINANCIAL INFORMATION

SNAP-ON INCORPORATED
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands except per share data)
(Unaudited)

Thirteen Weeks Ended                   Twenty-six Weeks Ended
July 3,           July 4,              July 3,          July 4,
1999             1998                 1999             1998     
----------       ----------           -----------       -----------

Net sales                                                  $  473,153       $  442,176           $   925,738       $   868,605

Cost of goods sold                                           (247,888)        (237,486)             (481,572)         (452,370)

Operating expenses                                           (174,482)        (178,148)             (356,711)         (348,980)

Restructuring and other non-recurring charges                  (7,037)               -                (8,970)                -

Net finance income                                             13,141           15,893                34,133            32,872

Interest expense                                               (5,417)          (5,449)              (10,098)           (9,482)

Other income (expense) - net                                  (12,406)          (1,578)              (13,239)           (2,228)
----------       ----------           -----------       -----------

Earnings before income taxes                             39,064           35,408                89,281            88,417

Income tax provision                                           14,065           12,747                32,041            31,830
----------       ----------           -----------       -----------

Net earnings                                               $   24,999       $   22,661           $    57,240       $    56,587
==========       ==========           ===========       ==========

Earnings per weighted average
common share - basic                                      $      .43       $      .38           $       .98       $       .95
==========       ==========           ===========       ===========

Earnings per weighted average
common share - diluted                                    $      .42       $      .38           $       .97       $       .94
==========       ==========           ===========       ===========

Weighted average common shares
outstanding - basic                                          58,384           59,186                58,477            59,540

Effect of dilutive options                                        420              819                   420               819
----------       ----------           -----------       -----------

Weighted average common shares
outstanding - diluted                                        58,804           60,005                58,897            60,359
==========       ==========           ===========       ===========

Dividends declared per common share                        $      .45       $      .43           $       .67       $       .64
==========       ==========           ===========       ===========

The accompanying notes are an integral part of these statements.

3

SNAP-ON INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except share data)

(Unaudited)
July 3,        January 2,
1999            1999     
------------    -----------
ASSETS
Current Assets
Cash and cash equivalents                   $     15,664    $    15,041

Accounts receivable, less allowances             500,548        554,703

Inventories
Finished stock                                379,732        359,358
Work in process                                44,881         38,357
Raw materials                                  65,443         74,192
Excess of current cost over LIFO cost         (97,296)       (96,471)
------------    -----------
Total inventory                               392,760        375,436

Prepaid expenses and other assets               131,068        134,652
------------    -----------
Total current assets                        1,040,040      1,079,832

Property and equipment
Land                                              19,414         19,572
Buildings and improvements                       177,133        175,385
Machinery and equipment                          387,251        388,862
------------    -----------
583,798        583,819
Accumulated depreciation                        (313,817)      (311,789)
------------    -----------
Total property and equipment                  269,981        272,030

Deferred income tax benefits                         51,533         60,139
Intangible and other assets                         308,624        262,919
------------    -----------

Total assets                          $  1,670,178    $ 1,674,920
============    ===========

The accompanying notes are an integral part of these statements.

4

SNAP-ON INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except share data)

(Unaudited)
July 3,             January 2,
1999                  1999    
-------------          ------------ 

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable                                                          $      80,166          $     89,442
Notes payable and current maturities of long-term debt                           61,812                93,117
Dividends payable                                                                13,436                     -
Accrued compensation                                                             40,975                42,105
Dealer deposits                                                                  39,204                42,421
Deferred subscription revenue                                                    41,768                34,793
Accrued restructuring reserve                                                    21,307                26,165
Other accrued liabilities                                                       158,003               130,010
-------------          ------------
Total current liabilities                                                    456,671               458,053

Long-term debt                                                                     252,856               246,644
Deferred income taxes                                                                9,959                 9,587
Retiree health care benefits                                                        90,047                89,124
Pension and other long-term liabilities                                             97,680               109,245
-------------          ------------
Total liabilities                                                            907,213               912,653

SHAREHOLDERS' EQUITY
Preferred stock - authorized 15,000,000 shares
of $1 par value; none outstanding                                                     -                     -
Common stock - authorized 250,000,000 shares
of $1 par value; issued -
July 3, 1999 - 66,707,243 shares
January 2, 1999 - 66,685,169 shares                                              66,707                66,685
Additional paid-in capital                                                         124,720               117,384
Retained earnings                                                                  901,252               883,207
Accumulated other comprehensive income (loss)                                      (39,458)              (30,231)
Grantor stock trust at fair market value - 6,728,486
and 6,924,019 shares                                                           (241,805)             (241,042)
Treasury stock at cost - 1,509,140 and 1,016,224 shares                            (48,451)              (33,736)
-------------          ------------

Total shareholders' equity                                                   762,965               762,267
-------------          ------------

Total liabilities and shareholders' equity                             $   1,670,178          $  1,674,920
=============          ============

The accompanying notes are an integral part of these statements.

5

SNAP-ON INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

Twenty-six Weeks Ended 
July 3,               July 4,
1999                  1998 
-------------          -----------

OPERATING ACTIVITIES
Net earnings                                                                  $      57,240          $     56,587
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation                                                                      19,183                16,783
Amortization                                                                       5,650                 4,199
Deferred income taxes                                                              9,920                   (44)
(Gain) on sale of assets                                                            (995)               (1,462)
Loss on currency hedge for purchase
price commitment, net of tax                                                     8,700                     -
Charges due to restructuring and other
non-recurring charges, net of tax                                                5,640                     -
Changes in operating assets and liabilities:
Decrease in receivables                                                           52,874                31,792
(Increase) in inventories                                                        (18,584)              (60,471)
Decrease in prepaid and other assets                                               9,043                31,301
(Decrease) in accounts payable                                                    (9,251)               (8,479)
Increase (decrease) in accruals and other liabilities                              9,827               (59,517)
-------------          ------------

Net cash provided by operating activities                                           149,246                10,689

INVESTING ACTIVITIES
Capital expenditures                                                                (19,991)              (20,272)
Acquisitions of businesses                                                          (70,257)              (53,407)
Disposal of property and equipment                                                    3,650                 2,083
-------------          ------------

Net cash used in investing activities                                               (86,598)              (71,596)

FINANCING ACTIVITIES
Payment of long-term debt                                                              (335)                 (780)
Increase in long-term debt                                                            6,356                46,269
Increase (decrease) in short-term borrowings-net                                    (33,461)               81,597
Purchase of treasury stock                                                          (14,714)              (61,458)
Proceeds from stock plans                                                             6,594                 6,717
Cash dividends paid                                                                 (25,760)              (25,049)
-------------          ------------

Net cash provided by (used in) financing activities                                   (61,320)               47,296

Effect of exchange rate changes on cash                                                  (705)                 (106)
-------------          ------------

Increase (decrease) in cash and cash equivalents                                          623               (13,717)

Cash and cash equivalents at beginning of period                                       15,041                25,679
-------------          ------------

Cash and cash equivalents at end of period                                      $      15,664          $     11,962
=============          ============

The accompanying notes are an integral part of these statements.

6

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

1.   This report should be read in conjunction with the  consolidated  financial
statements  and related  notes  included in Snap-on  Incorporated's  Annual
Report for the year ended January 2, 1999.

In the  opinion  of  management,  all  adjustments  (consisting  of  normal
recurring  adjustments and adjustments  related to restructuring  and other
non-recurring charges) necessary to a fair statement of financial condition
and results of operations for the thirteen and twenty-six  weeks ended July
3, 1999 have been  made.  Management  also  believes  that the  results  of
operations for the thirteen and twenty-six weeks ended July 3, 1999 are not
necessarily  indicative  of the results to be  expected  for the full year.
Certain   prior-year   amounts  have  been  reclassified  to  conform  with
current-year presentation.

2.   Snap-on Incorporated (the "Corporation") normally declares and pays in cash
four regular,  quarterly dividends.  However, the third quarter dividend in
each  year is  declared  in  June,  giving  rise to two  regular  quarterly
dividends  appearing  in the  second  quarter  and  correspondingly,  three
regular  quarterly  dividends  appearing  in the  first  twenty-six  weeks'
statements.

3.   Income tax paid for the twenty-six  week period ended July 3, 1999 and July
4,  1998  was  $8.7  million  and  $34.0  million.  Interest  paid  for the
twenty-six  week  period  ended  July 3,  1999 and July 4,  1998 was  $13.4
million and $9.4 million.

4.   In 1998, the Corporation  announced a simplification  initiative  ("Project
Simplify")   which  is  a  broad  program  of  internal   rationalizations,
consolidations and  reorganizations.  The goal is to make the Corporation's
business  operations  simpler and more effective.  Project  Simplify,  upon
completion in the first quarter of 2000,  will result in the closing of six
manufacturing  facilities,  seven  warehouses and 47 small offices in North
America and Europe; the elimination of 1,100 positions;  the discontinuance
of 12,000 stock keeping units ("SKUs") of inventory;  and the consolidation
of certain business units.  Total charges for Project Simplify are composed
of  restructuring   charges,   other  non-recurring   charges  and  related
transitional costs.

For the  second  quarter  and first six  months  of 1999,  the  Corporation
recorded pre-tax charges of $7.0 million and $9.0 million, respectively, of
other  non-recurring  charges.  Total reported  charges  related to Project
Simplify as of July 3, 1999 are $158.8  million.  This  amount  consists of
$75.6  million  of  restructuring   charges  and  $83.2  million  of  other
non-recurring charges.

7

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (continued)

The composition of the Corporation's $75.6 million restructuring charges is
as follows:

Original                         Write-down                        Restructuring
Restructuring        Additions         of Assets             Cash         Reserves as
(Amounts in thousands)             Reserves      to Reserves     to Fair Value         Payments        July 3, 1999
--------      -----------     -------------        ---------        ------------

Expenditures for severance
and other exit costs            $ 21,105         $  1,969        $        -        $ (10,854)          $  12,220
Loss on the write-down
of intangibles and
goodwill                          36,240              298           (36,538)               -                   -
Charges for warranty
provisions                         9,660                -                 -             (573)              9,087
Loss on the write-down
of assets                          5,978              357            (6,335)               -                   -
--------         --------        ----------        ---------           ---------
Total restructuring
reserves                         $ 72,983         $  2,624        $  (42,873)       $ (11,427)          $  21,307
========         ========        ==========        =========           =========

The  Corporation  has recorded  restructuring  charges of $15.5 million for
severance  and of $7.6  million  for  non-cancelable  lease  agreements  on
facilities  to be closed  and other  exit  costs  associated  with  Project
Simplify.  Severance  costs  provided  for  worldwide  salaried  and hourly
employees relate to facility closures,  staffing  redundancies  elimination
and  operational  streamlining.  As of July 3, 1999,  889  employees  of an
estimated 1,100 have separated from the Corporation and severance  payments
of $7.2 million have been made. The elimination of the remaining  positions
is expected by the first  quarter of 2000.  The  Corporation  has  adjusted
property,  plant and  equipment  and other assets to net  realizable  value
through a $6.3 million restructuring charge.

As part of the restructuring efforts, the Corporation has also written down
impaired  goodwill  and other  intangible  assets of  certain  discontinued
business units by $36.5 million. The majority of this write-down relates to
Computer  Aided  Services,   Inc.  and  Edge  Diagnostic  Systems.  No  net
realizable  value was  assessed  for  these  intangible  assets  due to the
closure of these operations and the  discontinuance of their product lines.
As part of the elimination of these business units and their product lines,
the  Corporation  has  recorded a charge in the  amount of $9.7  million to
provide  additional  warranty  support,  at no  cost to the  customer,  for
products  already sold.  The warranty  reserve has been included in Cost of
Goods  Sold -  Discontinued  Products  while  all  remaining  restructuring
charges have been included in Restructuring and Other Non-recurring Charges
on the accompanying Consolidated Statements of Earnings.

Other non-recurring  Charges: As part of Project Simplify,  the Corporation
has recorded  other  non-recurring  charges in the amount of $83.2 million.
These charges include the elimination of $50.9 million of discontinued SKUs
of inventory, costs to resolve certain legal matters in the amount of $18.7
million  and  other  transitional  costs in the  amount  of $13.6  million.
Transitional  costs,  which are  comprised  of  employee  incentives  ($1.9
million),  relocation costs ($4.6 million) and professional  services ($7.1
million),  do not  qualify  for  restructuring  accrual  treatment  and are
therefore  expensed  when  incurred.  The reduction of SKUs is an effort to
reduce  the  transaction   costs  and  working  capital  intensity  of  the
Corporation's product offering, and refocus on high

8

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (continued)

volume growth products. The charge for certain legal matters includes legal
costs to conclude  these issues.  The  non-recurring  charge related to the
reduction  of SKUs  has  been  included  as part  of Cost of  Goods  Sold -
Discontinued Products,  while the remaining non-recurring charges have been
included  in  Restructuring   and  Other   Non-recurring   Charges  on  the
accompanying Consolidated Statements of Earnings.

5.   During the second  quarter of 1999, the  Corporation  announced that it had
entered into a definitive  agreement with Sandvik AB to acquire the Sandvik
Saws and Tools division for approximately $400 million.  The acquisition of
Sandvik Saws and Tools is expected to close in September 1999. Sandvik Saws
and Tools, based in Sandviken, Sweden, is a leading global manufacturer and
supplier of professional hand tool products.

6.   Earnings per share  calculations  were computed by dividing net earnings 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 shares of common stock is calculated using the treasury
stock method.

7.   In June 1998,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement  No. 133,  "Accounting  for  Derivative  Instruments  and Hedging
Activities,"  which  establishes  accounting  and  reporting  standards for
derivative  instruments  and  for  hedging  activities.  The  Statement  of
Financial  Accounting  Standards  (SFAS) No. 133 was  effective  for fiscal
years beginning after June 15, 1999. In June 1999, the FASB issued SFAS No.
137,     "Accounting    for    Derivative     Instruments    and    Hedging
Activities--Deferral of the Effective Date of FASB Statement No. 133". SFAS
No. 137 defers  the  effective  date of SFAS No. 133 for one year to fiscal
years   beginning  after  June  15,  2000.  The  Corporation  is  currently
evaluating the impact of this pronouncement.

8.   Total comprehensive income, consisting of net earnings and foreign currency
translation adjustments, for the thirteen and twenty-six week periods ended
July 3, 1999 and July 4, 1998, was as follows:

Thirteen Weeks Ended             Twenty-six Weeks Ended
July 3,           July 4,          July 3,              July 4
(Amounts in thousands)                   1999             1998              1999                1998
----             ----              ----                ----

Net earnings                      $  24,999         $  22,661        $  57,240           $  56,587
Foreign currency translation         (2,521)             (414)          (9,227)               (854)
---------         ---------        ---------           ---------
Total comprehensive income        $  22,478         $  22,247        $  48,013           $  55,733
=========         =========        =========           =========

9.   The Corporation uses derivative instruments to manage well-defined interest
rate  and  foreign  currency  exposures.   The  Corporation  does  not  use
derivative instruments for trading purposes. 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 obligation.

9

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (continued)

Interest Rate Derivative Instruments:
------------------------------------
The  Corporation  enters  into  interest  rate  swap  agreements  to manage
interest  costs and risks  associated  with changing  interest  rates.  The
differentials  paid or received on interest rate agreements are accrued and
recognized as adjustments to interest  expense.  Gains and losses  realized
upon settlement of these  agreements are deferred and amortized to interest
expense over a period  relevant to the agreement if the  underlying  hedged
instrument  remains  outstanding,  or immediately if the underlying  hedged
instrument is settled.

Foreign Currency Derivative Instruments:
---------------------------------------
The   Corporation   has  operations  in  a  number  of  countries  and  has
intercompany  transactions  among  them and,  as a result,  is  exposed  to
changes in foreign currency exchange rates. The Corporation manages most of
these  exposures on a  consolidated  basis,  which allows  netting  certain
exposures to take advantage of any natural  offsets.  To the extent the net
exposures are hedged,  forward  contracts are used.  Gains and/or losses on
these foreign currency hedges are included in income in the period in which
the exchange rates change.  In the second quarter of 1999, the  Corporation
entered into a forward  currency  hedge to buy 3.2 billion of Swedish Krona
on the US$400 million equivalent  purchase price commitment for the Sandvik
acquisition.  The  hedge was  marked  to  market  at the end of the  second
quarter  resulting in a $13.6 million pre-tax  unrealized  loss. Other than
the forward currency hedge related to the Sandvik acquisition, gains and/or
losses  from  foreign  currency  hedges  have  not  been  material  to  the
consolidated financial statements.

10.  Tejas Testing  Technology One, L.C. and Tejas Testing  Technology Two, L.C.
(the "Tejas Companies"), former subsidiaries of the Corporation, previously
entered  into  contracts  with the  Texas  Natural  Resources  Conservation
Commission  ("TNRCC"),  an  agency  of  the  State  of  Texas,  to  perform
automotive emissions testing services.  The Corporation  guaranteed payment
(the  "Guaranty") of the Tejas  Companies'  obligations  under a seven-year
lease  agreement  in the  amount of  approximately  $98.8  million  plus an
interest  factor,   pursuant  to  which  the  Tejas  Companies  leased  the
facilities necessary to perform the contracts. The Guaranty was assigned to
the  lessor's  lenders.   The  Tejas  Companies  agreed  to  indemnify  the
Corporation for any payments it must make under the Guaranty.

The State of Texas subsequently  terminated the emissions program described
in the contracts.  The Tejas  companies  filed for bankruptcy and commenced
litigation  in state and  federal  court  against  the  TNRCC  and  related
entities. The Corporation has recorded as assets the net amounts paid under
the  Guaranty  that are  expected  to be  received  from the State of Texas
pursuant to a settlement  agreement approved by the U.S.  Bankruptcy Court.
Under  this  settlement  agreement,   the  obligation  under  the  Guaranty
previously  recorded  as a  contingent  liability  in the  amount  of $38.5
million was satisfied,  leaving an expected receivable of $55.2 million. In
1998, the  Corporation  received  $18.2  million,  leaving a net receivable
balance of $37.0  million as of July 3, 1999.  This  amount is  included in
Intangible  and  Other  Assets  on the  accompanying  Consolidated  Balance
Sheets.  The Texas Legislature has appropriated  funds to settle the amount
outstanding   during  its  session  which   concluded  May  31,  1999.  The
Corporation believes recovery of the net receivable is probable.

10

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (continued)

In April 1996, the  Corporation  filed a complaint  against SPX Corporation
("SPX") alleging  infringement of the  Corporation's  patents and asserting
claims  relating to SPX's hiring of the former  president of Sun  Electric.
SPX filed a  counterclaim,  alleging  infringement  of certain SPX patents.
Upon the  Corporation's  request  for  reexamination,  the U.S.  Patent and
Trademark Office initially rejected SPX's patents as invalid,  but recently
reconfirmed  them.  Document and deposition  discovery is  proceeding.  The
original trial date for non-patent  claims, set for April 5, 1999, has been
postponed.  No trial dates have been  established  for either the patent or
non-patent  claims.  The Corporation  believes it has numerous  meritorious
defenses  to SPX's  claims,  including  defenses of patent  invalidity  and
non-infringement,  and intends to  vigorously  prosecute  the claims it has
raised.  Neither  the  complaint  nor the  counterclaim  contains  specific
allegations of damages; however, the parties' claims could involve multiple
millions of dollars.  It is not possible at this time to assess the outcome
of any of the claims.

The  Corporation  is involved  in various  legal  matters,  which are being
defended and handled in the ordinary course of business. Although it is not
possible to predict the outcome of these matters,  management believes that
the results will not have a material impact on the Corporation's  financial
statements.

11.  In 1998,  the  Corporation  created  a  Grantor  Stock  Trust  ("GST").  In
conjunction with the formation of the GST, the Corporation sold 7.1 million
shares of treasury  stock to the GST.  The sale of these  shares had no net
impact  on  shareholders'  equity  or  on  the  Corporation's  Consolidated
Statements of Earnings.  The GST is a funding mechanism for certain benefit
programs and  compensation  arrangements,  including  the  incentive  stock
program and  employee  and  franchised  dealer stock  purchase  plans.  The
Northern Trust  Company,  as trustee of the GST, will vote the common stock
held by the GST based on the directions of non-director  employees  holding
vested options and certain employee and dealer  participants in those stock
purchase plans,  as set forth in the GST Agreement.  The GST is recorded as
Grantor Stock Trust at Fair Market Value on the  accompanying  Consolidated
Balance Sheets. Shares owned by the GST are accounted for as a reduction to
shareholders' equity until used in connection with employee benefits.  Each
period, the shares owned by the GST are valued at the closing market price,
with  corresponding  changes in the GST  balance  reflected  in  additional
paid-in capital.

12.  In January 1999, the  Corporation  recorded a gain in accordance  with SFAS
No. 125. of $40 million  (reported in 1998 annual  report as a  preliminary
estimate of $44  million  before  post-closing  adjustments)  pre-tax  that
resulted  from the sale of  $141.1  million  of U.S.  installment  accounts
receivables  to Newcourt  Financial  USA Inc.  ("Newcourt").  A significant
portion of the  receivables  sold to Newcourt were  previously  securitized
with a third party. The Corporation reacquired these previously securitized
receivables  through an arms length  transaction  and they were recorded at
cost. These receivables,  along with previously unsecuritized  receivables,
were sold to Newcourt resulting in a pre-tax gain of $40 million.  The gain
is being recognized over a two-year period.

13.  In  1998,  the  Corporation  adopted  Statement  of  Financial   Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information,"  which changes the way the  Corporation  reports  information
about its operating  segments.  The  information for 1998 has been restated
from  the  prior  years'  presentation  in  order  to  conform  to the 1999
presentation.

11

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (continued)

The Corporation's  segments are based on the organization structure that is
used by management for making  operating and  investment  decisions and for
assessing  performance.  Based on this management approach, the Corporation
has five reportable segments:  North America Transportation,  North America
Other,  Europe,  International  and Financial  Services.  The North America
Transportation  segment consists of the Corporation's  business  operations
serving  primarily the  franchised  dealer channel in the United States and
Canada.  The North  America  Other  segment  consists of the  Corporation's
business  operations  serving the direct sales and distributor  channels in
the United States and Canada, as well as the Corporation's exports from the
United States. The Europe segment consists of the Corporation's  operations
in  Europe  and  Africa.   The   International   segment  consists  of  the
Corporation's  operations  in the  Asia/Pacific  region and Latin  America.
These four segments  derive  revenues  primarily from the sale of tools and
equipment.  The Financial Services segment derives royalty income, based on
new loan  originations,  and management fees from Snap-on Credit LLC, a 50%
owned joint venture with Newcourt Financial USA Inc. ("Newcourt"). Earnings
from this  segment  also  includes  a portion  of the  amortization  of the
approximately $40 million pre-tax gain that resulted from the Corporation's
sale of installment accounts  receivables to Newcourt.  The overall gain is
being  recognized over a two year period.  The Financial  Services  segment
also provides limited financing to technicians, shop owners and dealers.

The Corporation  evaluates the performance of its operating  segments based
on earnings before taxes, interest expense,  other  income/expense-net  and
restructuring and other non-recurring charges. The Corporation accounts for
intersegment  sales and transfers based on established sales prices between
the  segments,  which  represent  cost  plus an  intercompany  markup.  The
Corporation  allocates  shared  service  expenses  to those  segments  that
utilize the services  based on their  percentage  of revenues from external
sources.  The  Corporation  has charged  license fees to its North  America
segments  based  on their  percentages  of  certain  North  America  sales.
Expenses related to restructuring and other  non-recurring  charges are not
allocated to the reportable segments.

Financial data by segment for the thirteen and twenty-six weeks ended:

Thirteen Weeks Ended               Twenty-six Weeks Ended
July 3,           July 4,           July 3,            July 4,
(Amounts in thousands)                                   1999             1998              1999                1998
----             ----              ----                ----

Revenues from external customers:
North America Transportation                      $   228,533      $    218,380      $   445,385        $    422,555
North America Other                                   121,963           110,725          232,873             225,416
Europe                                                101,164            94,246          208,450             182,901
International                                          21,493            18,824           39,030              37,732
-----------      ------------      -----------        ------------
Total from reportable segments                    $   473,153      $    442,175      $   925,738        $    868,604
===========      ============      ===========        ============

12

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (continued)

Thirteen Weeks Ended                 Twenty-six Weeks Ended
July 3,           July 4,           July 3,            July 4,
(Amounts in thousands)                                   1999              1998             1999                1998
----              ----             ----                ----

Intersegment revenues:
North America Transportation                   $           -      $          -       $        -        $         11
North America Other                                   70,209            57,367          132,110             114,392
Europe                                                 2,798             1,632            5,215               3,362
International                                              3                 1                3                  47
-------------      ------------       ----------        ------------
Total from reportable segments                        73,010            59,000          137,328             117,812
Elimination of intersegment revenue                  (73,010)          (59,000)        (137,328)           (117,812)
-------------      ------------       ----------        ------------
Total consolidated intersegment revenue        $           -      $          -       $        -        $          -
=============      ============       ==========        ============

Earnings:
North America Transportation                   $      24,657      $      9,528       $   47,414        $     29,058
North America Other                                   24,233            18,238           38,926              41,316
Europe                                                 2,103               392            3,098                 (98)
International                                           (210)           (1,616)          (1,983)             (3,021)
Financial Services                                    13,141            15,893           34,133              32,872
-------------      ------------       ----------        ------------
Total from reportable segments                        63,924            42,435          121,588             100,127
Restructuring and other
non-recurring charges                               (7,037)                -           (8,970)                  -
Interest expense                                      (5,417)           (5,449)         (10,098)             (9,482)
Other income (expense) - net                         (12,406)           (1,578)         (13,239)             (2,228)
-------------      ------------       ----------        ------------
Total consolidated earnings before taxes       $      39,064      $     35,408       $   89,281        $     88,417
=============      ============       ==========        ============

Financial data by segment as of:                     July 3,        January 2,
(Amounts in thousands)                                  1999              1999
----              ----
Total assets:
North America Transportation                   $     512,918      $    516,372
North America Other                                  618,803           591,831
Europe                                               405,431           407,663
International                                         60,405            56,293
Financial Services                                   139,810           231,092
-------------      ------------
Total from reportable segments                 $   1,737,367      $  1,803,251
=============      ============

13

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Overview:  The Corporation  posted record sales for the second quarter and first
six months of 1999, and increased net earnings and earnings per share. Net sales
increased  7.0% to $473.2  million for the second  quarter and increased 6.6% to
$925.7  million for the first six months of 1999 as  compared to the  comparable
1998 periods of $442.2 million and $868.6 million.  The increase in net sales in
the second  quarter  was driven by  increases  across all  segments  and was the
seventh consecutive second quarter with record sales.  Reported net earnings for
the second  quarter  and first six months of 1999 were $25.0  million  and $57.2
million as compared to $22.7 million and $56.6 million in the  comparable  prior
year periods.  Reported  diluted  earnings per share for the second  quarter and
first six months of 1999 were $0.42 per share and $0.97 per share as compared to
$0.38 per share and $0.94 per share in the comparable prior year periods.

Net earnings  for the second  quarter,  excluding  other  non-recurring  charges
related to Project Simplify of $4.5 million after-tax and the negative impact of
the forward  currency  hedge on the US$400  million  equivalent  purchase  price
commitment for the Sandvik acquisition of $8.7 million after-tax ("non-recurring
items"), improved to $38.2 million from $22.7 million, an increase of 68.6% from
the same  year-ago  period.  Net  earnings  for the  first  six  months of 1999,
excluding other non-recurring charges of $5.7 million after-tax and the negative
impact of a currency hedge of $8.7 million  after-tax,  increased 26.5% to $71.6
million,  versus $56.6 million in the same period a year ago.  Diluted  earnings
per share for the 1999 second quarter were $0.65, excluding non-recurring items.
For the first six  months  of 1999,  diluted  earnings  per  share  were  $1.22,
excluding non-recurring items.

Operating expenses as a percentage of net sales decreased to 36.9% in the second
quarter  of 1999 from  40.3% in prior  year  period.  For the six month  period,
operating  expenses as a percentage of net sales decreased to 38.5% in 1999 from
40.2% in the  prior  year  period.  The  declines  in  operating  expenses  as a
percentage of net sales reflects the  streamlining  benefits of Project Simplify
actions,  the absence of computer system  difficulties  experienced last year, a
generally  lower level of costs present in the  organization,  and the growth in
net sales.

The  Corporation's  simplification  initiative,  Project  Simplify,  is a  broad
program  of  internal   rationalizations,   consolidations  and  reorganizations
intended  to  make  the  Corporation's  business  operations  simpler  and  more
effective.  The actions associated with Project Simplify, upon completion in the
first quarter of 2000, are expected to lead to the closing of six  manufacturing
facilities,  seven  warehouses and 47 small offices in North America and Europe;
the elimination of more than 1,100  positions;  the elimination of nearly 12,000
SKUs; and the  consolidation  of certain  business  units.  As of the end of the
second quarter of 1999, 889 positions were eliminated, 44 facilities were closed
and the SKU  reduction  activities  were on  schedule  with  over 75% of  target
achieved to date. The closing of the remaining 16 facilities and the elimination
of the  remaining 211 positions is expected to be completed by the first quarter
of 2000. The Corporation expects to realize annual cost savings of approximately
$60 million from the initiative.  On an annual  run-rate basis,  the Corporation
expects to achieve half of these savings in 1999,  with the full amount achieved
in 2000.  As of July 3, 1999,  annualized  savings in excess of $30 million were
achieved.

14

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

In the second  quarter and first six months of 1999,  $7.0 million ($4.5 million
or $0.08 per share  after-tax) and $9.0 million ($5.7 million or $0.10 per share
after-tax) of other non-recurring  charges were taken in connection with Project
Simplify,  primarily  for  reassignment  of personnel  and costs for  facilities
consolidation.  Of the expected total charge of approximately  $185.0 million to
be recorded  through  the first  quarter of 2000,  a total of $158.8  million in
pre-tax charges have been recorded through the second quarter of 1999 (including
$133.1 million in the third quarter of 1998, $16.8 million in the fourth quarter
of 1998,  $1.9  million in the first  quarter of 1999,  and $7.0  million in the
second  quarter of 1999).  Approximately  one-half of the total  charges will be
non-cash with the remaining  costs requiring cash outflows which will be and are
being provided from operations.

Finance income for the second  quarter of 1999 was $13.1 million,  a decrease of
17.3% from second quarter 1998 of $15.9 million, reflecting the expected decline
resulting  from the reduced  level of extended  credit  receivables.  This lower
level is the  result of the sale of  extended  credit  receivables  in the first
quarter to Snap-on  Credit LLC.  Finance income for the first six months of 1999
was $34.1  million,  an increase of 3.8% from  six-month  1998 finance income of
$32.9 million. The increase in finance income for the six month period is due to
gains on the initial sale of non-recourse  receivables to Snap-on Credit LLC and
strong  originations in the first quarter  partially offset by the reduced level
of extended credit receivables in the second quarter.

Segment  Results:   North  America  Transportation  sales  consist  of  business
operations  serving the dealer  channel in the U.S.  and Canada.  For the second
quarter of 1999,  sales were  $228.5  million,  an  increase of 4.6% over second
quarter 1998 sales of $218.4  million.  For the first six months of 1999,  sales
were $445.4  million,  an increase of 5.4% over  six-month  1998 sales of $422.6
million. Renewed focus on Snap-on's traditional product lines - hand tools, tool
storage and power tools - resulted in a significantly  better product mix during
the quarter and six month  period.  The resulting  improvement  in gross margin,
impact of Project Simplify and the absence of computer system difficulties drove
improved earnings in this segment.

North  America  Other sales  consist of business  operations  serving the direct
sales and distributor  channels in the U.S. and Canada,  as well as exports from
the U.S. For the second quarter of 1999, sales were $122.0 million,  an increase
of 10.1% over second  quarter  1998 sales of $110.7  million,  reflecting  solid
growth to industrial customers and equipment sales to the Corporation's  growing
base of national and OEM accounts.  For the first six months of 1999, sales were
$232.9 million, an increase of 3.3% over six-month 1998 sales of $225.4 million,
reflecting  growth to industrial  customers  and equipment  sales to the growing
base of national and OEM accounts partially offset by the reduction in emissions
and a discontinued product line.

Europe sales consist of business operations in Europe and Africa. For the second
quarter of 1999,  sales were  $101.2  million,  an  increase of 7.3% over second
quarter  1998 sales of $94.2  million.  For the first six months of 1999,  sales
were $208.5  million,  an increase of 14.0% over  six-month 1998 sales of $182.9
million.  The  increases  in both  periods  year over year is mainly  from sales
increases as a result of  acquisitions.  Excluding  acquisitions,  sales overall
were  roughly  flat in local  currencies  in the  second  quarter,  as  weakness
continued  in exports to Eastern  Europe and  Russia.  Currency  exchange  rates
negatively  affected segment sales by approximately  four percentage  points for
the

15

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

second  quarter  and one  percentage  point for the first six  months of 1999 as
compared to prior year periods.

International sales consist of business operations in the Asia/Pacific and Latin
America  markets,  with the majority  derived from Japan and Australia.  For the
second  quarter of 1999,  sales were $21.5  million,  an  increase of 14.2% over
second  quarter 1998 sales of $18.8  million.  For the first six months of 1999,
sales were $39.0 million, an increase of 3.4% over six-month 1998 sales of $37.7
million. Although reported results increased year over year, operations continue
to be affected by the weakened economies in the Asia/Pacific region.

FINANCIAL CONDITION

Liquidity:  Cash and cash  equivalents  increased to $15.7 million at the end of
the second  quarter  from  $15.0  million  at the end of 1998.  Working  capital
increased to $583.4  million at second  quarter end, from $621.8  million at the
end of 1998.

In September  1994,  the  Corporation  filed a  registration  statement with the
Securities  and Exchange  Commission  that allows the  Corporation to issue from
time to time up to $300 million of unsecured indebtedness.  In October 1995, the
Corporation  issued  $100  million  of  its  notes  to  the  public.  The  shelf
registration  gives  the  Corporation   financing  flexibility  to  operate  the
business.

The  Corporation  believes it has  sufficient  sources of  liquidity  to support
working capital requirements,  finance capital  expenditures,  pay dividends and
provide for costs of Project  Simplify.  The corporation  intends to finance the
acquisition of Sandvik through existing credit facilities.

Accounts  receivable  less  allowances:   Accounts  receivable  less  allowances
decreased 9.8% to $500.5 million at the end of the second quarter, compared with
$554.7  million at the end of 1998,  mainly  reflecting  the sale of  additional
non-securitized receivables to Snap-on Credit LLC.

Inventories:  Inventories  increased  4.6% to $392.8  million in the 1999 second
quarter,  compared  with  $375.4  million at the end of 1998,  primarily  due to
seasonal inventory buildups.

Liabilities:  Total  short-term and long-term debt was $314.7 million at the end
of the second  quarter,  compared  with $339.8  million at the end of 1998.  The
decrease is due to payments made from funds  received  from the extended  credit
receivable  portfolio  sale  which  were  partially  offset  by  cash  paid  for
acquisitions, the repurchase of common stock and working capital needs.

Average shares outstanding: Average shares outstanding for diluted EPS and basic
EPS in 1999's  second  quarter were 58.8 million and 58.4 million  shares versus
60.0  million and 59.2 million in last year's  second  quarter.  Average  shares
outstanding  for  diluted EPS and basic EPS in the first six months of 1999 were
58.9  million and 58.5  million  shares  versus 60.4 million and 59.5 million in
last year's second quarter.

Share  repurchase:  In 1996, the  Corporation's  board of directors  approved an
ongoing  authorization  to  repurchase  stock in an  amount  equivalent  to that
necessary  to  prevent  dilution  created by shares  issued  for stock  options,
employee and dealer stock purchase plans, and other corporate purposes.  On June
27,

16

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

1997, the Corporation's  board of directors  authorized the repurchase of $100.0
million of the  Corporation's  common stock over a two-year period.  On June 26,
1998,  the  Corporation's  board of directors  authorized  an  additional  share
repurchase program aggregating $100.0 million of the Corporation's common stock.
In the first quarter of 1999, the Corporation's board of directors authorized an
additional   share  repurchase   program  of  $50.0  million.   The  Corporation
repurchased  $14.7 million or 492,800  shares in the first quarter of 1999.  The
Corporation did not repurchase any additional  shares of its common stock in the
second  quarter  of  1999.  The  Corporation's  outstanding  authorizations  are
approximately $140 million.

Foreign  currency:  The Corporation  operates in a number of countries and, as a
result,  is exposed to changes in foreign currency exchange rates. Most of these
exposures  are  managed on a  consolidated  basis to take  advantage  of natural
offsets  through  netting.  To the extent  that the net  exposures  are  hedged,
forward   contracts  are  used.  Refer  to  Note  9  for  a  discussion  of  the
Corporation's accounting policies for the use of derivative instruments.

Year  2000  Update:  The  Corporation  is  engaged  in a  comprehensive  project
involving its  information  systems,  third-party  systems,  and  products.  The
objective  of this  project  is to  identify,  develop,  implement  and test any
modifications  that are required so that these systems and products will achieve
a Year 2000 date  conversion  with no disruption to the  Corporation's  business
operations.  A committee has been established and given the  responsibility  for
achieving this objective.

For the Corporation's  information systems, the committee has completed the risk
assessment phase of this project,  and is finalizing the remediation and testing
phases of the required  modifications.  In North America,  the implementation of
the  BaaN  enterprise-wide  system,  which  is Year  2000  compliant,  has  been
completed.  The  Corporation  has  substantially  completed the  replacement  or
upgrades of the mission critical systems worldwide.  These projects are expected
to be  completed  by the end of the third  quarter of 1999,  and no  significant
issues have been identified.

For  third-party  systems,  the  Corporation  has  communicated  with suppliers,
dealers,  financial  institutions  and others  with which the  Corporation  does
business,  and has received responses from more than 95% of those contacted that
they either are, or plan on a timely basis to be Year 2000 compliant.

The  Corporation  tested its current  product line for Year 2000  compliance and
found no date-related issues in these products.  The Corporation also tested its
previously  manufactured  products likely to still be in use and has established
mechanisms  to address any date  related  issues found and to  communicate  with
customers regarding the handling of these issues,  whether or not covered by the
product warranty.

The Corporation  completed its risk assessment and is finalizing the remediation
and testing of  embedded  systems at its  facilities  and  manufacturing  plants
worldwide.  This is more than 95%  complete.  No  significant  issues  have been
identified and these final phases are expected to be completed  during the third
quarter of 1999.

The  Corporation  is  completing  a  comprehensive  analysis  of the  costs  and
operational  problems that may occur if the Corporation or third parties fail to
achieve Year 2000 compliance on a timely basis.

17

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

The  Corporation  is  continuing to develop  contingency  plans for its critical
business  systems  and  processes  to  deal  with  the  most  reasonably  likely
worst-case scenario. The Corporation could potentially experience disruptions to
some mission  critical  operations as a result of Year 2000 problems  outside of
the  Corporation's  control.  These disruptions could be caused by problems with
systems utilized by significant  suppliers,  government  entities,  customers or
others, as well as risks related to infrastructure (e.g., electricity supply and
water and sewer service).  The contingency  plans cannot  guarantee that mission
critical  systems  or  business  functions  will not be  affected  by Year  2000
problems,  especially those related to third parties. The Corporation expects to
have the analysis  completed  and  contingency  plans in place by the end of the
third quarter of 1999.

Based on information  currently known to it, the Corporation expects to be fully
Year  2000  compliant  by the end of the  fourth  quarter  of 1999.  None of the
Corporation's other information technology projects has been delayed as a result
of these issues.  The  Corporation  believes that total costs for the compliance
activities will  approximate  between $4 million and $6 million through December
1999.  Through the end of the second quarter of 1999, the  Corporation has spent
$3.4 million on these Year 2000 issues, with funding provided by cash flows from
operations.  The estimated  costs do not include any potential  costs related to
customer or other claims, or potential amounts related to executing  contingency
plans,  such as costs  incurred  as a result of an  infrastructure  or  supplier
failure.  All cost estimates are based on the current assessment of the projects
and are subject to change as the projects progress. Based on currently available
information,  the  Corporation  does not  believe  that the  Year  2000  matters
discussed  above related to internal  systems or products sold to customers will
have a material adverse effect on the Corporation's  financial  condition or its
results. In addition,  there can be no assurance that the failure to ensure Year
2000  capability  by a  supplier,  customer  or another  party  would not have a
material adverse effect on the Corporation's financial condition or its results.

Euro  Conversion:  On January 1, 1999,  certain member countries of the European
Union  established  fixed  conversion  rates between their  existing  currencies
("legacy  currencies")  and one common  currency - the euro.  The euro trades on
currency  exchanges  and may be  used in  business  transactions.  Beginning  in
January 2002, the new euro-denominated  bills and coins will be used, and legacy
currencies  will be withdrawn  from  circulation.  The  Corporation's  operating
subsidiaries affected by the euro conversion are developing plans to address the
systems and business  issues  affected by the euro  currency  conversion.  These
issues include,  among others, (i) the need to adapt computer and other business
systems and equipment to accommodate euro-denominated transactions, and (ii) the
competitive impact of cross-border price transparency,  which may affect pricing
strategies.  The Corporation  does not expect this conversion to have a material
impact on its financial condition or results of operations.

Sandvik  Acquisition:  During  the  second  quarter  of  1999,  the  Corporation
announced that the respective boards of directors of the Corporation and Sandvik
AB have entered into a definitive  agreement that the  Corporation  will acquire
the  Sandvik  Saws and Tools  division  for  approximately  $400  million.  This
acquisition  will be financed  through debt,  and  accounted for under  purchase
accounting  rules. The Corporation  recorded an after-tax charge of $8.7 million
($0.15 per diluted share  after-tax) on the foreign currency hedge of the US$400
million  equivalent  purchase price commitment.  The acquisition of Sandvik Saws
and Tools is expected to close in September 1999. The  Corporation  expects this

18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

transaction to have a minimal  effect on 1999  earnings,  and to be accretive to
earnings per share beginning in 2000.

Sandvik  Saws and  Tools,  based  in  Sandviken,  Sweden,  is a  leading  global
manufacturer and supplier of professional hand tool products.  This division has
approximately  2,700 employees  worldwide,  with 12  manufacturing  plants and 4
distribution  centers.  They sell to both the  retail  and  industrial  channels
supported by a worldwide  sales  force.  They have sales of  approximately  $325
million (60% Europe, 26% U.S. and Latin America, and 14% in Asia/Pacific and the
rest of the world).

Safe  Harbor:  Statements  in  this  document  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 timing and progress with
which the Corporation can implement the Project Simplify initiatives; the timing
and progress  related to the acquisition of Sandvik Saws and Tools,  which could
include failure to receive applicable  approvals;  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
Year 2000  issue;  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 or
other parts of the world;  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
document.

Item 3: Qualitative and Qualitative Disclosures About Market Risk
-----------------------------------------------------------------

Pursuant to Item 305 of Regulation  S-K, there were no material  changes for the
quarter ended July 3, 1999.

19

PART II. OTHER INFORMATION

Item 4: Submission of Matters to a Vote of Security Holders

The  Corporation  held its Annual Meeting of Shareholders on April 23, 1999. The
following  is a summary  of the  matters  voted on in that  meeting.  There were
65,591,328 outstanding shares eligible to vote.

a)   The  shareholders  elected  four  members  of the  Corporation's  Board  of
Directors,  whose  terms were up for  reelection,  to serve  until the 2002
Annual  Meeting.   The  persons  elected  to  the  Corporation's  Board  of
Directors,  the number of votes  cast for and the number of votes  withheld
with respect to each of these persons were as follows:

Director               For             Withheld            Term
--------               ---             --------            ----
Branko M. Beronja        54,855,125         1,493,532           2002
Richard F. Teerlink      55,017,340         1,331,317           2002
Donald W. Brinckman      55,000,369         1,348,288           2002
George W. Mead          54,991,006         1,357,651           2002
Leonard A. Hadley                                              2001
Robert A. Cornog                                               2001
Edward H. Rensi                                                2001
Bruce S. Chelberg                                              2000
Arthur L. Kelly                                                2000
Roxanne J. Decyk                                               2000
Jack D. Michaels                                               2000

Item 6: Exhibits and Reports on Form 8-K
----------------------------------------

Item 6(a):  Exhibits 
--------------------

Exhibit 27        Financial Data Schedule

20

SIGNATURES

Pursuant to the  requirements  of the Securities  Exchange Act of 1934,  Snap-on
Incorporated  has duly  caused  this  report to be  signed on its  behalf by the
undersigned duly authorized persons.

SNAP-ON INCORPORATED

Date:  August 17, 1999        /s/ R. A. Cornog                              
----------------       -----------------------------------------------
R. A. CORNOG
(Chairman, President and Chief Executive Officer)

Date:  August 17, 1999        /s/ N. T. Smith                              
----------------       -----------------------------------------------
N. T. SMITH
(Principal Accounting Officer and Controller)

EXHIBIT INDEX

Exhibit No.         Description

27               Financial Data Schedule

<ARTICLE>                     5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SNAP-ON INCORPORATED AS OF AND FOR 
THE TWENTY-SIX WEEKS ENDED JULY 3, 1999 AND IS QUALIFIED IN ITS 
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER>                                   1,000

<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                              JAN-01-2000
<PERIOD-START>                                 JAN-03-1999
<PERIOD-END>                                   JUL-03-1999
<CASH>                                         15,664
<SECURITIES>                                   0
<RECEIVABLES>                                  522,718
<ALLOWANCES>                                   22,170
<INVENTORY>                                    392,760
<CURRENT-ASSETS>                               1,040,040
<PP                                         583,798
<DEPRECIATION>                                 313,817
<TOTAL-ASSETS>                                 1,670,178
<CURRENT-LIABILITIES>                          456,671
<BONDS>                                        252,856
<PREFERRED-MANDATORY>                          0
<PREFERRED>                                    0
<COMMON>                                       66,707
<OTHER-SE>                                     696,258
<TOTAL-LIABILITY-AND-EQUITY>                   1,670,178
<SALES>                                        925,738
<TOTAL-REVENUES>                               925,738
<CGS>                                          481,572
<TOTAL-COSTS>                                  481,572
<OTHER-EXPENSES>                               356,711
<LOSS-PROVISION>                               0
<INTEREST-EXPENSE>                             10,098
<INCOME-PRETAX>                                89,281
<INCOME-TAX>                                   32,041
<INCOME-CONTINUING>                            57,240
<DISCONTINUED>                                 0
<EXTRAORDINARY>                                0
<CHANGES>                                      0
<NET-INCOME>                                   57,240
<EPS-BASIC>                                  0.98
<EPS-DILUTED>                                  0.97