EX-99 2 form8k04162007b.htm EXHIBIT 99 FILED APRIL 16, 2007

EXHIBIT 99

THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ABOUT BUSINESS SEGMENTS (Unaudited)
(Millions of Dollars)

Reportable Business Segments
Year Ended December 31, 2006      Power
    Tools &
Accessories
   Hardware
     & Home
Improvement
  Fastening
 & Assembly
    Systems
Total     Currency
 Translation
 Adjustments
    Corporate,
  Adjustments,
& Eliminations
Consolidated

Sales to unaffiliated customers     $ 4,789 .9 $ 1,009 .2 $ 669 .3 $ 6,468 .4 $ (21 .1) $   $ 6,447 .3
Segment profit (loss) (for  
     Consolidated, operating income)    576 .1  136 .9  96 .1  809 .1  (1 .9)  (66 .8)  740 .4
Depreciation and amortization    111 .4  22 .9  18 .9  153 .2  ( .5)  2 .2  154 .9
Capital expenditures    72 .8  14 .0  16 .7  103 .5  ( .3)  1 .4  104 .6
   
Year Ended December 31, 2005  

Sales to unaffiliated customers   $ 4,875 .4 $ 1,025 .6 $ 665 .6 $ 6,566 .6 $ (42 .9) $   $ 6,523 .7
Segment profit (loss) (for  
     Consolidated, operating income)    641 .4  145 .4  95 .3  882 .1  (4 .6)  (82 .6)  794 .9
Depreciation and amortization    104 .0  25 .6  18 .8  148 .4  (1 .3)  3 .5  150 .6
Capital expenditures    82 .0  12 .9  15 .7  110 .6  (1 .3)  1 .8  111 .1
   
Year Ended December 31, 2004  

Sales to unaffiliated customers   $ 3,890 .8 $ 975 .7 $ 622 .9 $ 5,489 .4 $ (91 .0) $   $ 5,398 .4
Segment profit (loss) (for  
     Consolidated, operating income)    494 .3  147 .8  84 .8 726 .9 (11 .4) (102 .3) 613 .2
Depreciation and amortization    91 .5  27 .2  17 .5  136 .2  (2 .7)  9 .0  142 .5
Capital expenditures    80 .3  25 .9  14 .1  120 .3  (3 .5)  1 .0  117 .8

        The reconciliation of segment profit to the Corporation’s earnings from continuing operations before income taxes for each of the three years in the period ended December 31, 2006, in millions of dollars, is as follows:

             Year Ended December 31,

2006  2005  2004 

Segment profit for total reportable business segments     $ 809 .1 $ 882 .1 $ 726 .9
Items excluded from segment profit:  
     Adjustment of budgeted foreign exchange rates to  
         actual rates    (1 .9)  (4 .6)  (11 .4)
     Depreciation of Corporate property    ( .9)  (1 .0)  (1 .2)
     Adjustment to businesses' postretirement benefit  
         expenses booked in consolidation    (25 .2)  (13 .8)   .8
     Other adjustments booked in consolidation directly  
         related to reportable business segments    ( .2)  3 .3  (10 .0)
Amounts allocated to businesses in arriving at segment  
     profit in excess of (less than) Corporate center operating  
     expenses, eliminations, and other amounts identified above    (40 .5)  (71 .1)  (91 .9)

     Operating income    740 .4  794 .9  613 .2
Interest expense, net of interest income    73 .8  45 .4  22 .1
Other expense (income)    2 .2  (51 .6)  2 .8

     Earnings from continuing operations before income taxes   $ 664 .4 $ 801 .1 $ 588 .3


Reportable Business Segments
Quarter Ended April 2, 2006      Power
    Tools &
Accessories
   Hardware
     & Home
Improvement
  Fastening
 & Assembly
    Systems
Total     Currency
 Translation
 Adjustments
    Corporate,
  Adjustments,
& Eliminations
Consolidated

Sales to unaffiliated customers     $ 1,125 .6 $ 251 .9 $ 171 .0 $ 1,548 .5 $ (19 .6) $   $ 1,528 .9
Segment profit (loss) (for  
     Consolidated, operating income)    138 .3  33 .6  24 .3  196 .2  (2 .1)  (25 .9)  168 .2
Depreciation and amortization    26 .6  5 .8  4 .7  37 .1  ( .4)   .7  37 .4
Capital expenditures    19 .9  1 .6  2 .7  24 .2  ( .3)      23 .9
   
Quarter Ended July 2, 2006  

Sales to unaffiliated customers   $ 1,266 .8 $ 261 .8 $ 174 .2 $ 1,702 .8 $ (5 .9) $   $ 1,696 .9
Segment profit (loss) (for  
     Consolidated, operating income)    177 .8  41 .4  26 .1  245 .3  ( .5)  (18 .5)  226 .3
Depreciation and amortization    26 .4  6 .4  4 .9  37 .7  ( .3)   .4  37 .8
Capital expenditures    18 .7  3 .5  3 .2  25 .4  ( .1)   .1  25 .4
   
Quarter Ended October 1, 2006  

Sales to unaffiliated customers   $ 1,197 .9 $ 252 .5 $ 159 .7 $ 1,610 .1 $ .1 $   $ 1,610 .2
Segment profit (loss) (for  
     Consolidated, operating income)    145 .4  35 .6  22 .6  203 .6   .2  (11 .3)  192 .5
Depreciation and amortization    30 .1  6 .1  4 .7  40 .9       .6  41 .5
Capital expenditures    19 .3  4 .4  3 .1  26 .8       .1  26 .9
   
Quarter Ended December 31, 2006  

Sales to unaffiliated customers   $ 1,199 .6 $ 243 .0 $ 164 .4 $ 1,607 .0 $ 4 .3 $   $ 1,611 .3
Segment profit (loss) (for  
     Consolidated, operating income)    114 .6  26 .3  23 .1  164 .0   .5  (11 .1)  153 .4
Depreciation and amortization    28 .3  4 .6  4 .6  37 .5   .2   .5  38 .2
Capital expenditures    14 .9  4 .5  7 .7  27 .1   .1  1 .2  28 .4
   
   
Quarter Ended April 3, 2005  

Sales to unaffiliated customers   $ 1,102 .8 $ 243 .6 $ 167 .4 $ 1,513 .8 $ 5 .5 $   $ 1,519 .3
Segment profit (loss) (for  
     Consolidated, operating income)    132 .8  29 .7  24 .2  186 .7  1 .6  (30 .0)  158 .3
Depreciation and amortization    25 .8  6 .3  4 .7  36 .8   .1  1 .8  38 .7
Capital expenditures    18 .7  5 .4  2 .5  26 .6  ( .2)   .2  26 .6
   
Quarter Ended July 3, 2005  

Sales to unaffiliated customers   $ 1,255 .5 $ 278 .9 $ 168 .9 $ 1,703 .3 $ (4 .5) $   $ 1,698 .8
Segment profit (loss) (for  
     Consolidated, operating income)    178 .4  39 .6  22 .5  240 .5  ( .6)  (22 .6)  217 .3
Depreciation and amortization    26 .9  6 .0  4 .6  37 .5       .2  37 .7
Capital expenditures    21 .8  3 .2  3 .3  28 .3  ( .2)   .1  28 .2
   
Quarter Ended October 2, 2005  

Sales to unaffiliated customers   $ 1,180 .5 $ 254 .6 $ 161 .0 $ 1,596 .1 $ (20 .5) $   $ 1,575 .6
Segment profit (loss) (for  
     Consolidated, operating income)    156 .5  42 .7  20 .8  220 .0  (2 .8)  (17 .5)  199 .7
Depreciation and amortization    26 .7  5 .6  4 .7  37 .0  ( .6)   .3  36 .7
Capital expenditures    19 .0  3 .6  3 .6  26 .2  ( .3)   .4  26 .3
   
Quarter Ended December 31, 2005  

Sales to unaffiliated customers   $ 1,336 .6 $ 248 .5 $ 168 .3 $ 1,753 .4 $ (23 .4) $   $ 1,730 .0
Segment profit (loss) (for  
     Consolidated, operating income)    173 .7  33 .4  27 .8  234 .9  (2 .8)  (12 .5)  219 .6
Depreciation and amortization    24 .6  7 .7  4 .8  37 .1  ( .8)  1 .2  37 .5
Capital expenditures    22 .5   .7  6 .3  29 .5  ( .6)  1 .1  30 .0

        The reconciliation of segment profit to the Corporation’s earnings from continuing operations before income taxes for each of the quarters in the years ended December 31, 2006 and 2005, in millions of dollars, is as follows:

     Quarter Ended

April 2,
2006
July 2,
    2006
October 1,
2006
 December 31,
        2006

Segment profit for total reportable business segments     $ 196 .2 $ 245 .3 $ 203 .6 $ 164 .0
Items excluded from segment profit:  
     Adjustment of budgeted foreign exchange rates to  
         actual rates    (2 .1)  ( .5)   .2   .5
     Depreciation of Corporate property    ( .2)  ( .3)  ( .2)  ( .2)
     Adjustment to businesses' postretirement benefit  
         expenses booked in consolidation    (6 .2)  (6 .3)  (6 .4)  (6 .3)
     Other adjustments booked in consolidation directly  
         related to reportable business segments    (2 .3)  (2 .0)  5 .6  (1 .5)
Amounts allocated to businesses in arriving at segment  
     profit in excess of (less than) Corporate center operating  
     expenses, eliminations, and other amounts identified above    (17 .2)  (9 .9)  (10 .3)  (3 .1)

     Operating income    168 .2  226 .3  192 .5  153 .4
Interest expense, net of interest income    13 .7  17 .5  20 .7  21 .9
Other expense         .9   .9   .4

     Earnings from continuing operations before income taxes   $ 154 .5 $ 207 .9 $ 170 .9 $ 131 .1



     Quarter Ended

April 3,
2005
July 3,
    2005
October 2,
2005
 December 31,
        2005

Segment profit for total reportable business segments     $ 186 .7 $ 240 .5 $ 220 .0 $ 234 .9
Items excluded from segment profit:  
     Adjustment of budgeted foreign exchange rates to  
         actual rates    1 .6  ( .6)  (2 .8)  (2 .8)
     Depreciation of Corporate property    ( .2)  ( .2)  ( .3)  ( .3)
     Adjustment to businesses' postretirement benefit  
         expenses booked in consolidation    (3 .9)  (3 .8)  (3 .4)  (2 .7)
     Other adjustments booked in consolidation directly  
         related to reportable business segments    ( .8)  ( .8)  6 .1  (1 .2)
Amounts allocated to businesses in arriving at segment  
     profit in excess of (less than) Corporate center operating  
     expenses, eliminations, and other amounts identified above    (25 .1)  (17 .8)  (19 .9)  (8 .3)

     Operating income    158 .3  217 .3  199 .7  219 .6
Interest expense, net of interest income    9 .2  9 .8  12 .6  13 .8
Other (income) expense    (53 .5)  1 .3  ( .7)  1 .3

     Earnings from continuing operations before income taxes   $ 202 .6 $ 206 .2 $ 187 .8 $ 204 .5


BASIS OF PRESENTATION:

The Corporation operates in three reportable business segments: Power Tools and Accessories, Hardware and Home Improvement, and Fastening and Assembly Systems. The Power Tools and Accessories segment has worldwide responsibility for the manufacture and sale of consumer and industrial power tools and accessories, lawn and garden tools, and electric cleaning, automotive, and lighting products, as well as for product service. In addition, the Power Tools and Accessories segment has responsibility for the sale of security hardware to customers in Mexico, Central America, the Caribbean, and South America; for the sale of plumbing products to customers outside the United States and Canada; and for sales of household products. On March 1, 2006, the Corporation acquired Vector Products, Inc. On October 2, 2004, the Corporation acquired the Porter-Cable and Delta Tools Group from Pentair, Inc. These acquired businesses are included in the Power Tools and Accessories segment. The Hardware and Home Improvement segment has worldwide responsibility for the manufacture and sale of security hardware (except for the sale of security hardware in Mexico, Central America, the Caribbean, and South America). The Hardware and Home Improvement segment also has responsibility for the manufacture of plumbing products and for the sale of plumbing products to customers in the United States and Canada. The Fastening and Assembly Systems segment has worldwide responsibility for the manufacture and sale of fastening and assembly systems. Sales, segment profit, depreciation and amortization, and capital expenditures set forth in the preceding tables exclude the results of the discontinued operations.

The profitability measure employed by the Corporation and its chief operating decision maker for making decisions about allocating resources to segments and assessing segment performance is segment profit (for the Corporation on a consolidated basis, operating income). In general, segments follow the same accounting policies as those described in Note 1 of Notes to Consolidated Financial Statements included in Item 8 of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2006, except with respect to foreign currency translation and except as further indicated below. The financial statements of a segment’s operating units located outside of the United States, except those units operating in highly inflationary economies, are generally measured using the local currency as the functional currency. For these units located outside of the United States, segment assets and elements of segment profit are translated using budgeted rates of exchange. Budgeted rates of exchange are established annually and, once established, all prior period segment data is restated to reflect the current year’s budgeted rates of exchange. The amounts included in the preceding table under the captions “Reportable Business Segments” and “Corporate, Adjustments, & Eliminations” are reflected at the Corporation’s budgeted rates of exchange for 2007. The amounts included in the preceding table under the caption “Currency Translation Adjustments” represent the difference between consolidated amounts determined using those budgeted rates of exchange and those determined based upon the rates of exchange applicable under accounting principles generally accepted in the United States.

Segment profit excludes interest income and expense, non-operating income and expense, adjustments to eliminate intercompany profit in inventory, and income tax expense. In determining segment profit, expenses relating to pension and other postretirement benefits are based solely upon estimated service costs. Corporate expenses, as well as certain centrally managed expenses, including expenses related to share-based compensation, are allocated to each reportable segment based upon budgeted amounts. While sales and transfers between segments are accounted for at cost plus a reasonable profit, the effects of intersegment sales are excluded from the computation of segment profit. Intercompany profit in inventory is excluded from segment assets and is recognized as a reduction of cost of goods sold by the selling segment


when the related inventory is sold to an unaffiliated customer. Because the Corporation compensates the management of its various businesses on, among other factors, segment profit, the Corporation may elect to record certain segment-related expense items of an unusual or non-recurring nature in consolidation rather than reflect such items in segment profit. In addition, certain segment-related items of income or expense may be recorded in consolidation in one period and transferred to the various segments in a later period.