EX-99.1 3 exhibit2.htm EX-99.1 EX-99.1

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STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)

                                 
    FOURTH QUARTER
            One-Time Charges   Normalized 2010   Normalized 2009
    GAAP 2010   1   2   3
 
                                
NET SALES
   $ 2,412.9           $ 2,412.9   $ 969.4
 
                                
COSTS AND EXPENSES 
                                
    Cost of sales
   1,543.3   (10.2 )   1,533.1   575.2
      Gross margin
   869.6   10.2   879.8   394.2
          % to Net sales
   36.0 %           36.5 %   40.7 %
 
                                
    Selling, general and administrative
   619.6   (9.7 )   609.9   264.5
          % to Net sales
   25.7 %           25.3 %   27.3 %
 
                        
       Operating margin
   250.0   19.9   269.9   129.7
          % to Net sales
   10.4 %           11.2 %   13.4 %
 
                                
    Other-net
   17.3   15.4   32.7   29.2
    Restructuring charges and asset impairments
   34.6   (34.2 )   0.4   15.1
 
                                
      Income from operations
   198.1   38.7   236.8   85.4
 
                                
    Interest-net
   31.2   —   31.2   14.0
 
                                
 
                                
 
                                
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
   166.9   38.7   205.6   71.4
    Income taxes (benefit)
   29.6   (2.0 )   27.6   (1.9 )
 
                                
NET EARNINGS FROM CONTINUING OPERATIONS
   137.3   40.7   178.0   73.3
 
                                
    Less: net loss attributable to non-controlling interests
   (0.5 )   —   (0.5 )   (0.2 )
 
                                
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREOWNERS
   137.8   40.7   178.5   73.5
 
                                
    Income tax benefit on discontinued operations
   —   —   —   0.8
 
                                
NET EARNINGS FROM DISCONTINUED OPERATIONS
   —   —   —   0.8
 
                                
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
   $ 137.8   $ 40.7   $ 178.5   $ 74.3
 
                                
 
                                
BASIC EARNINGS PER SHARE OF COMMON STOCK
                                
    Continuing operations
   $ 0.83   $ 0.24   $ 1.07   $ 0.91
    Discontinued operations
   —   —   —   0.01
 
                                
      Total basic earnings per share of common stock
   $ 0.83   $ 0.24   $ 1.07   $ 0.92
 
                                
 
                            
DILUTED EARNINGS PER SHARE OF COMMON STOCK
                        
    Continuing operations
   $ 0.81   $ 0.24   $ 1.05   $ 0.90
    Discontinued operations
   —   —   —   0.01
 
                                
      Total diluted earnings per share of common stock
   $ 0.81   $ 0.24   $ 1.05   $ 0.91
 
                                
 
                            
DIVIDENDS PER SHARE
   $ 0.34           $ 0.34   $ 0.33
 
                                
 
                            
AVERAGE SHARES OUTSTANDING (in thousands)
                                
    Basic
   166,141   166,141   166,141   80,626
 
                                
 
                            
    Diluted
   169,833   169,833   169,833   81,663
 
                                
 
                                

1 One-time charges relate primarily to the Black & Decker merger, including inventory step-up, facility closure-related charges, severance, and integration costs, partially offset by $20 million of pension curtailment gains.

2 The normalized 2010 consolidated statement of operations, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s margin and earnings results aside from the material impact of the one-time charges associated with the Black & Decker merger.

3 The normalized 2009 consolidated statement of operations is considered relevant to aid analysis of the company’s margin and earnings results aside from the impact of the one-time charges primarily associated with the Black & Decker merger. Refer to “2009 Normalized Consolidated Statements of Operations, as Reconciled to GAAP” on page 18.

1

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STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)

                                 
    YEAR TO DATE
            One-Time Charges   Normalized 2010   Normalized 2009
    GAAP 2010   1   2   3
 
                                
NET SALES
   $ 8,409.6           $ 8,409.6   $ 3,737.1
 
                                
COSTS AND EXPENSES 
                                
    Cost of sales
   5,460.8   (195.4 )   5,265.4   2,228.8
      Gross margin
   2,948.8   195.4   3,144.2   1,508.3
           % to Net sales
   35.1 %           37.4 %   40.4 %
 
                                
    Selling, general and administrative
   2,168.9   (82.4 )   2,086.5   1,023.9
           % to Net sales
   25.8 %           24.8 %   27.4 %
 
                        
      Operating margin
   779.9   277.8   1,057.7   484.4
           % to Net sales
   9.3 %           12.6 %   13.0 %
 
                                
    Other-net
   199.6   (36.3 )   163.3   80.5
    Restructuring charges and asset impairments
   242.6   (224.3 )   18.3   40.7
 
                                
      Income from operations
   337.7   538.4   876.1   363.2
 
                                
    Interest-net
   100.6   —   100.6   60.6
 
                                
 
                                
 
                                
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
   237.1   538.4   775.5   302.6
    Income taxes
   38.9   117.3   156.2   56.2
 
                                
NET EARNINGS FROM CONTINUING OPERATIONS
   198.2   421.1   619.3   246.4
 
                                
    Less: net earnings attributable to non-controlling interests
   —   —   —   2.0
 
                                
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREOWNERS
   198.2   421.1   619.3   244.4
 
                                
    Loss from discontinued operations before income taxes
   —   —   —   (5.8 )
    Income tax benefit on discontinued operations
   —   —   —   (3.3 )
 
                                
NET LOSS FROM DISCONTINUED OPERATIONS
   —   —   —   (2.5 )
 
                                
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
   $ 198.2   $ 421.1   $ 619.3   $ 241.9
 
                                
 
                                
BASIC (LOSS) EARNINGS PER SHARE OF COMMON STOCK
                                
    Continuing operations
   $ 1.34   $ 2.86   $ 4.20   $ 3.06
    Discontinued operations
   —   —   —   (0.03 )
 
                                
      Total basic earnings per share of common stock
   $ 1.34   $ 2.86   $ 4.20   $ 3.03
 
                                
 
                            
DILUTED (LOSS) EARNINGS PER SHARE OF COMMON STOCK
                        
    Continuing operations
   $ 1.32   $ 2.80   $ 4.12   $ 3.04
    Discontinued operations
   —   —   —   (0.03 )
 
                                
      Total diluted earnings per share of common stock
   $ 1.32   $ 2.80   $ 4.12   $ 3.01
 
                                
 
                            
DIVIDENDS PER SHARE
   $ 1.34           $ 1.34   $ 1.30
 
                                
 
                            
AVERAGE SHARES OUTSTANDING (in thousands)
                                
    Basic
   147,224   147,224   147,224   79,788
 
                                
 
                            
    Diluted
   150,167   150,167   150,167   80,396
 
                                
 
                                

1 One-time charges relate primarily to the Black & Decker merger, including inventory step-up, facility closure-related charges, certain executive compensation and severance costs, transaction, and integration costs, partially offset by $20 million of pension curtailment gains.

2 The normalized 2010 consolidated statement of operations, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s margin and earnings results aside from the material impact of the one-time charges associated with the Black & Decker merger.

3 The normalized 2009 consolidated statement of operations is considered relevant to aid analysis of the company’s margin and earnings results aside from the impact of the one-time charges primarily associated with the Black & Decker merger. Refer to “2009 Normalized Consolidated Statements of Operations, as Reconciled to GAAP” on page 19.

2

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STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of Dollars)

                 
    (Unaudited)    
    January 1, 2011   January 2, 2010
ASSETS
 
 
           Cash and cash equivalents
  $ 1,745.4     $ 400.7  
           Accounts and notes receivable, net
    1,417.1       532.0  
           Inventories, net
    1,272.0       366.2  
           Other current assets
    266.0       113.0  
 
                
                  Total current assets
    4,700.5       1,411.9  
 
                
           Property, plant and equipment, net
    1,166.5       575.9  
           Goodwill and other intangibles, net
    8,814.1       2,594.8  
           Other assets
    359.4       186.5  
 
                
                  Total assets
  $ 15,040.5     $ 4,769.1  
 
                
 
 
 
 
 
 
LIABILITIES AND SHAREOWNERS’ EQUITY
               
           Short-term borrowings
  $ 417.7     $ 298.4  
           Accounts payable
    998.6       410.1  
           Accrued expenses
    1,211.5       483.5  
 
                
                  Total current liabilities
    2,627.8       1,192.0  
 
                
           Long-term debt
    3,018.1       1,084.7  
           Other long-term liabilities
    2,324.9       480.9  
           Stanley Black & Decker, Inc. shareowners’ equity
    7,017.0       1,986.1  
           Non-controlling interests’ equity
    52.7       25.4  
 
                
                  Total liabilities and equity
  $ 15,040.5     $ 4,769.1  
 
                

3

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STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)

                                         
    FOURTH QUARTER
            One-Time                    
            Charge and Payments                   Normalized 2009
    GAAP 2010   1           Normalized 2010 2   4
OPERATING ACTIVITIES
                                    
 
                                    
    Net earnings
   $ 137.8   $ 40.7       $ 178.5   $ 74.3
    Depreciation and amortization
   109.9   (13.9 )       96.0   51.3
    Changes in working capital
   318.3   —       318.3   209.2
    Other
   (214.1 )   154.9       (59.2 )   (43.4 )
 
                                        
    Net cash provided by operating activities
   351.9   181.7       533.6   291.4
 
                                    
INVESTING AND FINANCING ACTIVITIES
                                    
 
                                    
    Capital and software expenditures
   (82.4 )   —       (82.4 )   (28.2 )
    Business acquisitions and asset disposals
   (60.6 )   —       (60.6 )   (1.7 )
    Proceeds from long-term borrowings
   613.5   —           613.5   —
    Payments on long-term debt
   (313.3 )   —           (313.3 )   (1.3 )
    Net repayments on short-term borrowings
   (303.8 )   —           (303.8 )   (62.2 )
    Cash dividends on common stock
   (56.4 )   —       (56.4 )   (26.7 )
    Other
   (39.4 )   —       (39.4 )   22.0
 
                                        
    Net cash used in investing and financing activities
   (242.4 )   —       (242.4 )   (98.1 )
 
                                    
Increase in Cash and Cash Equivalents
   109.5   181.7       291.2   193.3
 
                                    
Cash and Cash Equivalents, Beginning of Period
   1,635.9   —           1,635.9   207.4
 
                                        
 
                                    
Cash and Cash Equivalents, End of Period
   $ 1,745.4   $ 181.7           $ 1,927.1   $ 400.7
 
                                        
 
                                        
 
                                        
Free Cash Flow Computation 3
                                        
 
                                        
Operating Cash Inflow
   $ 351.9                   $ 533.6   $ 291.4
Less: capital and software expenditures
   (82.4 )                   (82.4 )   (28.2 )
 
                                        
Free Cash Inflow (before dividends)
   $ 269.5                   $ 451.2   $ 263.2
 
                                        

1 One-time charges and payments relate primarily to the Black & Decker merger, including special, discretionary cash contributions to two defined benefit pension plans which were curtailed and replaced with defined contribution plans, inventory step-up (non-cash), facility closure-related charges, severance costs, and integration costs.

2¸ 3Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. Normalized cash flow and free cash flow, as reconciled above, are considered meaningful pro forma metrics to aid the understanding of the company’s cash flow performance aside from the material impact of Black & Decker merger-related payments and charges.

4 Fourth-quarter 2009 net earnings and the “other” component of operating activities were adjusted by $17.6 million to reflect the one-time charges associated with the Black & Decker merger.

The change in working capital is comprised of accounts receivable, inventory and accounts payable.

4

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STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)

                                         
    YEAR TO DATE
            One-Time                    
            Charge and Payments                   Normalized 2009
    GAAP 2010   1           Normalized 2010 2   4
OPERATING ACTIVITIES
                                    
 
                                    
    Net earnings
   $ 198.2   $ 421.1       $ 619.3   $ 241.9
    Depreciation and amortization
   348.7   (13.9 )       334.8   200.1
    Changes in working capital
   135.1   —       135.1   226.0
    Other
   57.3   (25.6 )       31.7   (128.6 )
 
                                        
    Net cash provided by operating activities
   739.3   381.6       1,120.9   539.4
 
                                    
INVESTING AND FINANCING ACTIVITIES
                                    
 
                                    
    Capital and software expenditures
   (185.5 )   —       (185.5 )   (93.4 )
    Business acquisitions and asset disposals
   (539.3 )   —       (539.3 )   (21.8 )
    Proceeds from long-term borrowings
   1,009.8   —           1,009.8   —
    Payments on long-term debt
   (515.8 )   —           (515.8 )   (64.5 )
    Net repayments on short-term borrowings
   (263.6 )   —           (263.6 )   (119.9 )
    Cash acquired from Black & Decker
   949.4   —           949.4   —
    Cash dividends on common stock
   (201.6 )   —       (201.6 )   (103.6 )
    Other
   352.00   —       352.0   52.9
 
                                        
    Net cash provided by (used in) investing and financing activities
   605.4   —           605.4   (350.3 )
 
                                    
Increase in Cash and Cash Equivalents
   1,344.7   381.6       1,726.3   189.1
 
                                    
Cash and Cash Equivalents, Beginning of Period
   400.7   —           400.7   211.6
 
                                        
 
                                    
Cash and Cash Equivalents, End of Period
   $ 1,745.4   $ 381.6           $ 2,127.0   $ 400.7
 
                                        
 
                                        
 
                                        
Free Cash Flow Computation 3
                                        
 
                                        
Operating Cash Inflow
   $ 739.3                   $ 1,120.9   $ 539.4
Less: capital and software expenditures
   (185.5 )                   (185.5 )   (93.4 )
 
                                        
Free Cash Inflow (before dividends)
   $ 553.8                   $ 935.4   $ 446.0
 
                                        

1 One-time charges and payments relate primarily to the Black & Decker merger, including special, discretionary cash contributions to two defined benefit pension plans which were curtailed and replaced with defined contribution plans, inventory step-up (non-cash), facility closure-related charges, certain executive compensation and severance costs, transaction and integration costs.

2¸ 3Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. Normalized cash flow and free cash flow, as reconciled above, are considered meaningful pro forma metrics to aid the understanding of the company’s cash flow performance aside from the material impact of Black & Decker merger-related payments and charges.

4 Full year 2009 net earnings and the “other” component of operating activities were adjusted by $17.6 million to reflect the one-time charges associated with the Black & Decker merger.

The change in working capital is comprised of accounts receivable, inventory and accounts payable.

5

-Page 16-

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)

                                     
    FOURTH QUARTER
                                Normalized 2009
    GAAP 2010   One-Time Charges 1       Normalized 2010 2   3
NET SALES
 
 
 
 
 
       Construction & DIY
  $ 1,273.1                 $ 1,273.1     $ 340.3  
       Security
    564.5                   564.5       393.2  
       Industrial
    575.3                   575.3       235.9  
 
                                    
         Total
  $ 2,412.9                 $ 2,412.9     $ 969.4  
 
                                    
 
                     
 
 
                     
 
SEGMENT PROFIT
                     
 
       Construction & DIY
  $ 141.9     $ 1.8         $ 143.7     $ 40.4  
       Security
    87.0       6.6           93.6       78.3  
       Industrial
    82.3       2.8           85.1       26.7  
 
                                    
         Segment Profit
    311.2       11.2           322.4       145.4  
       Corporate Overhead
    (61.2 )     8.7           (52.5 )     (15.7 )
 
                                    
         Total
  $ 250.0     $ 19.9         $ 269.9     $ 129.7  
 
                                    
 
 
 
 
 
 
 
 
 
 
 
 
Segment Profit as a Percentage of Net Sales
 
 
 
 
 
       Construction & DIY
    11.1 %                 11.3 %     11.9 %
       Security
    15.4 %                 16.6 %     19.9 %
       Industrial
    14.3 %                 14.8 %     11.3 %
 
                                    
         Segment Profit
    12.9 %                 13.4 %     15.0 %
       Corporate Overhead
    -2.5 %                 -2.2 %     -1.6 %
 
                                    
         Total
    10.4 %                 11.2 %     13.4 %
 
                                    

1 One-time charges relate primarily to the Black & Decker merger, including inventory step-up, facility closure-related charges, severance, and integration costs.

2 The normalized 2010 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s segment profit results aside from the material impact of the one-time charges associated with the Black & Decker merger.

3 The normalized 2009 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s segment profit results aside from the material impact of the one-time charges associated with the Black & Decker merger. Refer to “2009 Normalized Business Segment Information, as Reconciled to GAAP” on page 20.

6

-Page 17-

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)

                                     
    YEAR TO DATE
                                Normalized 2009
    GAAP 2010   One-Time Charges 1       Normalized 2010 2   3
NET SALES
 
 
 
 
 
       Construction & DIY
  $ 4,446.1                 $ 4,446.1     $ 1,295.3  
       Security
    2,112.9                   2,112.9       1,560.2  
       Industrial
    1,850.6                   1,850.6       881.6  
 
                                    
         Total
  $ 8,409.6                 $ 8,409.6     $ 3,737.1  
 
                                    
 
                     
 
 
                     
 
SEGMENT PROFIT
                     
 
       Construction & DIY
  $ 475.5     $ 127.9         $ 603.4     $ 154.1  
       Security
    306.0       43.4           349.4       307.0  
       Industrial
    242.9       25.6           268.5       89.3  
 
                                    
         Segment Profit
    1,024.4       196.9           1,221.3       550.4  
       Corporate Overhead
    (244.5 )     80.9           (163.6 )     (66.0 )
 
                                    
         Total
  $ 779.9     $ 277.8         $ 1,057.7     $ 484.4  
 
                                    
 
 
 
 
 
 
 
 
 
 
 
 
Segment Profit as a Percentage of Net Sales
 
 
 
 
 
       Construction & DIY
    10.7 %                 13.6 %     11.9 %
       Security
    14.5 %                 16.5 %     19.7 %
       Industrial
    13.1 %                 14.5 %     10.1 %
 
                                    
         Segment Profit
    12.2 %                 14.5 %     14.7 %
       Corporate Overhead
    -2.9 %                 -1.9 %     -1.8 %
 
                                    
         Total
    9.3 %                 12.6 %     13.0 %
 
                                    

1 One-time charges relate primarily to the Black & Decker merger, including inventory step-up, facility closure-related charges, certain executive compensation and severance, and integration costs.

2 The normalized 2010 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s segment profit results aside from the material impact of the one-time charges associated with the Black & Decker merger.

3 The normalized 2009 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s segment profit results aside from the material impact of the one-time charges associated with the Black & Decker merger. Refer to “2009 Normalized Business Segment Information, as Reconciled to GAAP” on page 21.

-Page 18-

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
2009 NORMALIZED CONSOLIDATED STATEMENTS OF OPERATIONS, AS RECONCILED TO GAAP
(Unaudited, Millions of Dollars Except Per Share Amounts)

                         
    FOURTH QUARTER 2009
            One-Time Charges   Normalized 2009
    GAAP 2009   1   2
 
                        
NET SALES
   $ 969.4           $ 969.4
 
                        
COSTS AND EXPENSES 
                        
    Cost of sales
   575.2           575.2
      Gross margin
   394.2   —   394.2
          % to Net sales
   40.7 %           40.7 %
 
                        
    Selling, general and administrative
   269.0   (4.5 )   264.5
          % to Net sales
   27.7 %           27.3 %
 
                
       Operating margin
   125.2   4.5   129.7
          % to Net sales
   12.9 %           13.4 %
 
                        
    Other-net
   44.0   (14.8 )   29.2
    Restructuring charges and asset impairments
   15.1           15.1
 
                        
      Income from operations
   66.1   19.3   85.4
 
                        
    Interest-net
   14.0   —   14.0
 
                        
 
                        
 
                        
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
   52.1   19.3   71.4
    Income taxes (benefit)
   (3.6 )   1.7   (1.9 )
 
                        
NET EARNINGS FROM CONTINUING OPERATIONS
   55.7   17.6   73.3
 
                        
    Less: net loss attributable to non-controlling interests
   (0.2 )   —   (0.2 )
 
                        
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREOWNERS
   55.9   17.6   73.5
 
                        
    Income tax benefit on discontinued operations
   0.8   —   0.8
 
                        
NET EARNINGS FROM DISCONTINUED OPERATIONS
   0.8   —   0.8
 
                        
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
   $ 56.7   $ 17.6   $ 74.3
 
                        
 
                        
BASIC EARNINGS PER SHARE OF COMMON STOCK
                        
    Continuing operations
   $ 0.69   $ 0.22   $ 0.91
    Discontinued operations
   0.01   —   0.01
 
                        
      Total basic earnings per share of common stock
   $ 0.70   $ 0.22   $ 0.92
 
                        
 
                        
DILUTED EARNINGS PER SHARE OF COMMON STOCK
                
    Continuing operations
   $ 0.68   $ 0.22   $ 0.90
    Discontinued operations
   0.01   —   0.01
 
                        
      Total diluted earnings per share of common stock
   $ 0.69   $ 0.22   $ 0.91
 
                        
 
                        
DIVIDENDS PER SHARE
   $ 0.33           $ 0.33
 
                        
 
                        
AVERAGE SHARES OUTSTANDING (in thousands)
                        
    Basic
   80,626   80,626   80,626
 
                        
    Diluted
   81,663   81,663   81,663
 
                        
 
                        

1 One-time charges are related to the Black & Decker merger transaction and integration planning costs.

2 The normalized 2009 consolidated statement of operations, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s margin and earnings results aside from the impact of the one-time charges associated with the Black & Decker merger.

-Page 19-

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
2009 NORMALIZED CONSOLIDATED STATEMENTS OF OPERATIONS, AS RECONCILED TO GAAP
(Unaudited, Millions of Dollars Except Per Share Amounts)

                         
    YEAR TO DATE 2009
            One-Time Charges   Normalized 2009
    GAAP 2009   1   2
 
                        
NET SALES
   $ 3,737.1           $ 3,737.1
 
                        
COSTS AND EXPENSES 
                        
    Cost of sales
   2,228.8           2,228.8
      Gross margin
   1,508.3   —   1,508.3
          % to Net sales
   40.4 %           40.4 %
 
                        
    Selling, general and administrative
   1,028.4   (4.5 )   1,023.9
          % to Net sales
   27.5 %           27.4 %
 
                
       Operating margin
   479.9   4.5   484.4
          % to Net sales
   12.8 %           13.0 %
 
                        
    Other-net
   95.3   (14.8 )   80.5
    Restructuring charges and asset impairments
   40.7           40.7
 
                        
      Income from operations
   343.9   19.3   363.2
 
                        
    Interest-net
   60.6   —   60.6
 
                        
 
                        
 
                        
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
   283.3   19.3   302.6
    Income taxes
   54.5   1.7   56.2
 
                        
NET EARNINGS FROM CONTINUING OPERATIONS
   228.8   17.6   246.4
 
                        
    Less: net earnings attributable to non-controlling interests
   2.0   —   2.0
 
                        
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREOWNERS
   226.8   17.6   244.4
 
                        
    Loss from discontinued operations before income taxes
   (5.8 )   —   (5.8 )
    Income tax benefit on discontinued operations
   (3.3 )   —   (3.3 )
 
                        
NET LOSS FROM DISCONTINUED OPERATIONS
   (2.5 )   —   (2.5 )
 
                        
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
   $ 224.3   $ 17.6   $ 241.9
 
                        
 
                        
BASIC (LOSS) EARNINGS PER SHARE OF COMMON STOCK
                        
    Continuing operations
   $ 2.84   $ 0.22   $ 3.06
    Discontinued operations
   (0.03 )   —   (0.03 )
 
                        
      Total basic earnings per share of common stock
   $ 2.81   $ 0.22   $ 3.03
 
                        
 
                        
DILUTED (LOSS) EARNINGS PER SHARE OF COMMON STOCK
                
    Continuing operations
   $ 2.82   $ 0.22   $ 3.04
    Discontinued operations
   (0.03 )   —   (0.03 )
 
                        
      Total diluted earnings per share of common stock
   $ 2.79   $ 0.22   $ 3.01
 
                        
 
                        
DIVIDENDS PER SHARE
   $ 1.30           $ 1.30
 
                        
 
                        
AVERAGE SHARES OUTSTANDING (in thousands)
                        
    Basic
   79,788   79,788   79,788
 
                        
    Diluted
   80,396   80,396   80,396
 
                        
 
                        

1 One-time charges are related to the Black & Decker merger transaction and integration planning costs.

2 The normalized 2009 consolidated statement of operations, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s margin and earnings results aside from the impact of the one-time charges associated with the Black & Decker merger.

-Page 20-

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
2009 NORMALIZED BUSINESS SEGMENT INFORMATION, AS RECONCILED TO GAAP
(Unaudited, Millions of Dollars)

                                 
    FOURTH QUARTER 2009
                            Normalized 2009
    GAAP 2009   One-Time Charges 1           2
NET SALES
                                
       Construction & DIY
   $ 340.3               $ 340.3
       Security
   393.2               393.2
       Industrial
   235.9               235.9
 
                                
         Total
   $ 969.4               $ 969.4
 
                                
 
                            
 
                            
SEGMENT PROFIT
                            
       Construction & DIY
   $ 40.4               $ 40.4
       Security
   78.3               78.3
       Industrial
   26.7               26.7
 
                                
         Segment Profit
   145.4   —       145.4
       Corporate Overhead
   (20.2 )   4.5       (15.7 )
 
                                
         Total
   $ 125.2   $ 4.5       $ 129.7
 
                                
 
                                
 
                                
Segment Profit as a Percentage of Net Sales
                                
       Construction & DIY
   11.9 %               11.9 %
       Security
   19.9 %               19.9 %
       Industrial
   11.3 %               11.3 %
 
                                
         Segment Profit
   15.0 %               15.0 %
       Corporate Overhead
   -2.1 %               -1.6 %
 
                                
         Total
   12.9 %               13.4 %
 
                                

1 One-time charges are related to the Black & Decker merger transaction and integration planning costs.

2 The normalized 2009 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s segment profit results aside from the impact of the one-time charges associated with the Black & Decker merger.

7

-Page 21-

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
2009 NORMALIZED BUSINESS SEGMENT INFORMATION, AS RECONCILED TO GAAP
(Unaudited, Millions of Dollars)

                                 
    YEAR TO DATE 2009
                            Normalized 2009
    GAAP 2009   One-Time Charges 1           2
NET SALES
                                
       Construction & DIY
   $ 1,295.3               $ 1,295.3
       Security
   1,560.2               1,560.2
       Industrial
   881.6               881.6
 
                                
         Total
   $ 3,737.1               $ 3,737.1
 
                                
 
                            
 
                            
SEGMENT PROFIT
                            
       Construction & DIY
   $ 154.1               $ 154.1
       Security
   307.0               307.0
       Industrial
   89.3               89.3
 
                                
         Segment Profit
   550.4   —       550.4
       Corporate Overhead
   (70.5 )   4.5       (66.0 )
 
                                
         Total
   $ 479.9   4.5       $ 484.4
 
                                
 
                                
 
                                
Segment Profit as a Percentage of Net Sales
                                
       Construction & DIY
   11.9 %               11.9 %
       Security
   19.7 %               19.7 %
       Industrial
   10.1 %               10.1 %
 
                                
         Segment Profit
   14.7 %               14.7 %
       Corporate Overhead
   -1.9 %               -1.8 %
 
                                
         Total
   12.8 %               13.0 %
 
                                

1 One-time charges are related to the Black & Decker merger transaction and integration planning costs.

2 The normalized 2009 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s segment profit results aside from the impact of the one-time charges associated with the Black & Decker merger.

8