BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

12 Months Ended

Jan. 02, 2016

Segment Reporting [Abstract]

BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

 BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

As previously discussed, in the first quarter of 2015 the Company combined the CDIY business with certain complementary elements of the IAR and Healthcare businesses (formerly part of the Industrial and Security segments, respectively) to form one Tools & Storage business. As a result, the Company recast segment financial information for all years to align with this change in organizational structure. There was no impact to the consolidated financial statements of the Company as a result of this change.

The Company classifies its business into three reportable segments, which also represent its operating segments: Tools & Storage, Security and Industrial.

The Tools & Storage segment is comprised of the Power Tools and Hand Tools & Storage businesses. The Power Tools business includes professional products, consumer products and power tool accessories. Professional products include professional grade corded and cordless electric power tools and equipment including drills, impact wrenches and drivers, grinders, saws, routers and sanders as well as pneumatic tools and fasteners including nail guns, nails, staplers, and staples, concrete and masonry anchors. Consumer products include corded and cordless electric power tools sold primarily under the BLACK + DECKER brand, lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, edgers, and related accessories, and home products such as hand held vacuums, paint tools, and cleaning appliances. Power tool accessories include drill bits, router bits, abrasives and saw blades. The Hand Tools & Storage business sells measuring, leveling and layout tools, planes, hammers, demolition tools, knives, saws, chisels, and industrial and automotive tools. Storage products include tool boxes, sawhorses, medical cabinets, and engineered storage solution products.

The Security segment is comprised of the Convergent Security Solutions ("CSS") and Mechanical Access Solutions ("MAS") businesses. The CSS business designs, supplies and installs electronic security systems and provides electronic security services, including alarm monitoring, video surveillance, fire alarm monitoring, systems integration and system maintenance. Purchasers of these systems typically contract for ongoing security systems monitoring and maintenance at the time of initial equipment installation. The business also includes healthcare solutions, which markets asset tracking, infant protection, pediatric protection, patient protection, wander management, fall management, and emergency call products. The MAS business sells automatic doors, commercial hardware, locking mechanisms, electronic keyless entry systems, keying systems, tubular and mortise door locksets.

The Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses. The Engineered Fastening business primarily sells engineered fastening products and systems designed for specific applications. The product lines include stud welding systems, blind rivets and tools, blind inserts and tools, drawn arc weld studs, engineered plastic and mechanical fasteners, self-piercing riveting systems, precision nut running systems, micro fasteners, and high-strength structural fasteners. The Infrastructure business consists of the Oil & Gas and Hydraulics businesses. The Oil & Gas business sells and rents custom pipe handling, joint welding and coating equipment used in the construction of large and small diameter pipelines, and provides pipeline inspection services. The Hydraulics business sells hydraulic tools and accessories.

The Company utilizes segment profit, which is defined as net sales minus cost of sales and SG&A inclusive of the provision for doubtful accounts (aside from corporate overhead expense), and segment profit as a percentage of net sales to assess the profitability of each segment. Segment profit excludes the corporate overhead expense element of SG&A, interest income, interest expense, other-net (inclusive of intangible asset amortization expense), restructuring, and income taxes. Refer to Note O, Restructuring Charges and Asset Impairments, for the amount of net restructuring charges by segment, and to Note F, Goodwill and Intangible Assets, for intangible amortization expense by segment. Corporate overhead is comprised of world headquarters facility expense, cost for the executive management team and cost for certain centralized functions that benefit the entire Company but are not directly attributable to the businesses, such as legal and corporate finance functions. Transactions between segments are not material. Segment assets primarily include accounts receivable, inventory, other current assets, property, plant and equipment, intangible assets and other miscellaneous assets.

Geographic net sales and long-lived assets are attributed to the geographic regions based on the geographic location of each Company subsidiary.

BUSINESS SEGMENTS

(Millions of Dollars)	2015			2014			2013
Net Sales
Tools & Storage	$	7,140.7		$	7,033.0		$	6,705.0
Security	2,092.9			2,261.2			2,295.9
Industrial	1,938.2			2,044.4			1,888.6
Consolidated	$	11,171.8		$	11,338.6		$	10,889.5
Segment Profit
Tools & Storage	$	1,170.1		$	1,074.4		$	951.7
Security	239.6			259.2			235.2
Industrial	339.9			350.6			280.2
Segment Profit	1,749.6			1,684.2			1,467.1
Corporate overhead	(164.0		)	(177.4		)	(254.0		)
Other-net	(222.0		)	(239.7		)	(283.9		)
Restructuring charges and asset impairments	(47.6		)	(18.8		)	(173.7		)
Gain (loss) on debt extinguishment	—			0.1			(20.6		)
Interest income	15.2			13.6			12.8
Interest expense	(180.4		)	(177.2		)	(160.1		)
Earnings from continuing operations before income taxes	$	1,150.8		$	1,084.8		$	587.6
Capital and Software Expenditures
Tools & Storage	$	191.7		$	183.0		$	196.1
Security	35.9			27.9			79.8
Industrial	83.8			74.3			61.2
Discontinued operations	—			5.8			3.2
Consolidated	$	311.4		$	291.0		$	340.3
Depreciation and Amortization
Tools & Storage	$	196.5		$	193.9		$	191.7
Security	105.2			127.8			132.1
Industrial	112.3			122.5			110.5
Discontinued operations	$	—		$	5.6		$	7.0
Consolidated	$	414.0		$	449.8		$	441.3
Segment Assets
Tools & Storage	$	8,492.9		$	8,568.2		$	9,004.9
Security	3,741.6			3,972.0			4,355.5
Industrial	3,438.7			3,501.8			3,668.3
	15,673.2			16,042.0			17,028.7
Discontinued operations	—			29.5			136.9
Corporate assets	(500.9		)	(222.4		)	(630.5		)
Consolidated	$	15,172.3		$	15,849.1		$	16,535.1

Corporate assets primarily consist of cash, deferred taxes, and property, plant and equipment. Based on the nature of the Company's cash pooling arrangements, at times corporate-related cash accounts will be in a net liability position.

Sales to the Home Depot were 13%, 11%, and 11% of the Tools & Storage segment net sales in 2015, 2014 and 2013, respectively. Sales to Lowes were 14%, 13% and 13% of the Tools & Storage segment net sales in 2015, 2014 and 2013, respectively.

In 2013, the Company recorded $165 million of facility closure-related and other charges associated with the merger and other acquisitions across all segments, impacting segment profit by $18 million in Tools & Storage, $20 million in Industrial, and $38 million in Security for the year ended December 28, 2013, with the remainder residing in corporate overhead.

GEOGRAPHIC AREAS

(Millions of Dollars)	2015		2014		2013
Net Sales
United States	$	5,882.0	$	5,492.4	$	5,208.0
Canada	516.3		591.3		600.3
Other Americas	706.5		788.4		818.2
France	595.7		695.6		704.6
Other Europe	2,371.5		2,585.3		2,417.9
Asia	1,099.8		1,185.6		1,140.5
Consolidated	$	11,171.8	$	11,338.6	$	10,889.5
Property, Plant & Equipment
United States	$	676.0	$	639.7	$	620.7
Canada	19.1		20.9		25.0
Other Americas	82.6		82.2		84.4
France	64.8		74.7		85.3
Other Europe	328.4		333.2		368.8
Asia	279.3		303.4		294.4
Consolidated	$	1,450.2	$	1,454.1	$	1,478.6