(4)

FORMATION OF JOINT VENTURE:

On July 4, 2010, the Company entered into a joint venture with Cooper Industries, plc ("Cooper"), combining certain of the Company's hand tools business with Cooper's Tools business to form a new entity called Apex Tool Group, LLC ("Apex"). The 2009 sales, on a combined basis, of the two tools businesses contributed to Apex were approximately $1.2 billion. Each of Cooper and the Company owns a 50% interest in Apex and has an equal number of representatives on Apex's Board of Directors. Neither joint venture partner controls the significant operating and financing activities of Apex. Upon the closing of the transaction, Apex simultaneously obtained a credit facility and term debt financing and used $45 million of the term debt financing to purchase from the Company certain assets of the Company's tools business. In addition, as indicated in the table below, the Company recorded receivables from Apex totaling approximately $45 million related to consideration due to the Company in connection with the formation of the joint venture. The Company has collected the majority of this receivable as of December 31, 2011 and expects to collect the remaining outstanding balance during 2012.

In accordance with accounting standards applicable to non-controlling interests in subsidiaries, the Company recognized a $232 million after-tax gain ($0.34 per diluted share) during the third quarter of 2010 associated with the transaction. The gain is computed as the difference between the book value of the contributed business that was deconsolidated and the fair value of the consideration received in exchange, consisting of $45 million in cash, a receivable of $45 million from Apex and the 50% interest in Apex as indicated in the table below ($ in millions):


Fair value of consideration received:
Fair value of 50% equity interest received	$	480.0
Cash received		45.2
Receivable from joint venture		44.8

Total fair value of consideration received		570.0

Less: book value of net assets contributed		(279.0	)

Pre-tax gain on contribution to joint venture		291.0

Income taxes		(58.8	)

After-tax gain on contribution to joint venture	$	232.2

As of the closing of the transaction, the Company deconsolidated its contributed businesses and accounts for its investment in the joint venture based on the equity method of accounting. As a result of the Company's continuing involvement with the joint venture, the contributed businesses are not presented as a discontinued operation. The Company recorded its equity in the earnings of Apex in an amount equal to $67 million and $23 million for the years ended December 31, 2011 and 2010, respectively, reflecting its 50% ownership position.

Sales and operating profit generated by the contributed business prior to the closing of the transaction and included in the Company's consolidated results of operations during the two years ended December 31 were as indicated in the table below ($ in millions):


	2010		2009
Sales	$	315.6	$	607.9
Operating profit		41.5		63.9