EX-99.1 2 form8k041609b.htm EXHIBIT 99.1 FILED APRIL 16, 2009 form8k041609b.htm
EXHIBIT 99.1
 
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ABOUT BUSINESS SEGMENTS (Unaudited)
(Millions of Dollars)
 
 
Reportable Business Segments
           
Year Ended December 31, 2008
Power
Tools &
 Accessories
 
Hardware
& Home
 Improvement
 
Fastening 
& Assembly
 Systems
 
Total
 
Currency Translation Adjustments
 
Corporate,
Adjustments,
& Eliminations
 
Consolidated
Sales to unaffiliated customers
$ 4,286.6   $ 891.6   $ 703.2   $ 5,881.4   $ 204.7   $   $ 6,086.1
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs)
  317.4     75.8     106.0     499.2     29.4     (51.8 )   476.8
Depreciation and amortization
  89.9     20.6     21.6     132.1     3.4     1.1     136.6
Capital expenditures
  56.6     16.5     18.6     91.7     2.3     4.8     98.8
                                         
Year Ended December 31, 2007
                                       
Sales to unaffiliated customers
$ 4,754.8   $ 1,001.7   $ 720.7   $ 6,477.2   $ 86.0   $   $ 6,563.2
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs)
  482.2     113.6     113.9     709.7     (2.3 )   (106.2 )   601.2
Depreciation and amortization
  96.7     22.8     20.5     140.0     .5     2.9     143.4
Capital expenditures
  65.0     20.8     22.2     108.0     .5     7.9     116.4
                                         
Year Ended December 31, 2006
                                       
Sales to unaffiliated customers
$ 4,821.1   $ 1,010.0   $ 694.5   $ 6,525.6   $ (78.3 ) $   $ 6,447.3
Segment profit (loss) (for 
Consolidated, operating
income)
  586.5     137.1     102.9     826.5     (23.5 )   (62.6 )   740.4
Depreciation and amortization
  113.7     22.9     19.4     156.0     (3.3 )   2.2     154.9
Capital expenditures
  74.0     14.1     17.2     105.3     (2.1 )   1.4     104.6
 


 
The reconciliation of segment profit to consolidated earnings before income taxes for each of the
three years in the period ended December 31, 2008, in millions of dollars, is as follows:
 
    Year Ended December 31, 
   
2008
   
2007
   
2006
 
Segment profit for total reportable business segments
  $ 499.2     $ 709.7     $ 826.5  
Items excluded from segment profit:
                       
Adjustment of budgeted foreign exchange rates to
actual rates
    29.4       (2.3 )     (23.5 )
Depreciation of Corporate property
    (1.1 )     (1.4 )     (.9 )
Adjustment to businesses’ postretirement benefit
expenses booked in consolidation
    (3.6 )     (19.9 )     (25.2 )
Other adjustments booked in consolidation directly
related to reportable business segments
    (4.9 )     8.3       (.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
    (42.2 )     (93.2 )     (36.3 )
Operating income before restructuring and exit costs
    476.8       601.2       740.4  
Restructuring and exit costs
    54.7       19.0        
Operating income
    422.1       582.2       740.4  
Interest expense, net of interest income
    62.4       82.3       73.8  
Other (income) expense
    (5.0 )     2.3       2.2  
Earnings before income taxes
  $ 364.7     $ 497.6     $ 664.4  

 

 
 
Reportable Business Segments
           
Quarter Ended March 30, 2008
Power
Tools &
 Accessories
 
Hardware
& Home
 Improvement
 
Fastening 
& Assembly
 Systems
 
Total
 
Currency Translation Adjustments
 
Corporate,
Adjustments,
& Eliminations
 
Consolidated
Sales to unaffiliated customers
$ 1,038.2   $ 211.1   $ 187.2   $ 1,436.5   $ 59.3   $   $ 1,495.8
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs)
  86.1     15.6     29.5     131.2     8.0     (16.3 )   122.9
Depreciation and amortization
  22.4     4.8     5.4     32.6     1.0     .1     33.7
Capital expenditures
  15.0     5.3     3.8     24.1     .8     .1     25.0
                                         
Quarter Ended June 29, 2008
                                       
Sales to unaffiliated customers
$ 1,127.2   $ 240.3   $ 183.8   $ 1,551.3   $ 90.4   $   $ 1,641.7
Segment profit (loss) (for
Consolidated, operating
income)
  89.4     22.2     29.8     141.4     11.8     (15.5 )   137.7
Depreciation and amortization
  24.7     6.0     5.6     36.3     1.3     .6     38.2
Capital expenditures
  16.5     4.7     5.4     26.6     .9     1.3     28.8
                                         
Quarter Ended September 28, 2008
                                   
Sales to unaffiliated customers
$ 1,094.4   $ 231.2   $ 173.8   $ 1,499.4   $ 71.4   $   $ 1,570.8
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs)
  83.0     26.1     27.6     136.7     7.8     (9.0 )   135.5
Depreciation and amortization
  21.5     4.8     5.2     31.5     1.2     .1     32.8
Capital expenditures
  13.4     3.8     3.9     21.1     .7     2.0     23.8
                                         
Quarter Ended December 31, 2008
                                   
Sales to unaffiliated customers  $ 1,026.8    $ 209.0    $ 158.4    $ 1,394.2    $ (16.4 )  $
   $ 1,377.8
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs)
  58.9     11.9     19.1     89.9     1.8     (11.0 )   80.7
Depreciation and amortization   21.3     5.0     5.4     31.7     (.1 )   .3     31.9
Capital expenditures   11.7     2.7     5.5     19.9     (.1 )   1.4     21.2
                                         
Quarter Ended April 1, 2007                                        
Sales to unaffiliated customers  $ 1,157.2    $ 247.0    $ 179.1    $ 1,583.3    $ (6.1 )  $    $ 1,577.2
Segment profit (loss) (for
Consolidated, operating
income)
  145.5     27.8     29.0     202.3     (4.0 )   (28.7 )   169.6
Depreciation and amortization   24.6     7.2     5.1     36.9     (.3 )   .6     37.2
Capital expenditures   13.0     4.8     2.4     20.2     (.2 )   .1     20.1
                                         
Quarter Ended July 1, 2007                                        
Sales to unaffilitated customers  $ 1,250.7    $ 253.6    $ 183.1    $ 1,687.4    $ 12.5    $    $ 1,699.9
Segment profit (loss) (for
Consolidated, operating
income)
  156.9     30.5     29.5     216.9     (1.1 )   (29.2 )   186.6
Depreciation and amortization   25.0     6.0     5.4     36.4         .7     37.1
Capital expenditures   14.8     5.9     4.9     25.6     (.1 )   1.0     26.5
                                         
Quarter Ended September 30, 2007                                    
Sales to unaffiliated customers  $ 1,167.3    $ 266.7    $ 177.3    $ 1,611.3    $ 22.3    $    $ 1,633.6
Segment profit (loss) (for
Consolidated, operating
income)
  120.8     32.7     28.2     181.7     (.1 )   (17.1 )   164.5
Depreciation and amortization   24.6     4.6     5.2     34.4     .1     .5     35.0
Capital expenditures   19.6     4.4     5.1     29.1         (.3 )   28.8
                                         
Quarter Ended December 31, 2007                                    
Sales to unaffiliated customers  $ 1,179.6    $ 234.4    $ 181.2    $ 1,595.2    $ 57.3    $    $ 1,652.5
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs)
  59.0     22.6     27.2     108.8     2.9     (31.2 )   80.5
Depreciation and amortization   22.5     5.0     4.8     32.3     .7     1.1     34.1
Capital expenditures   17.6     5.7     9.8     33.1     .8     7.1     41.0
 
 

 
The reconciliation of segment profit to the consolidated earnings before income taxes for each of the
quarters in the years ended December 31, 2008 and 2007, in millions of dollars, is as follows:
 
   
Quarter Ended
 
   
March 30,
2008
   
June 29,
2008
   
September 28,
2008
   
December 31,
2008
 
Segment profit for total reportable business segments
  $ 131.2     $ 141.4     $ 136.7     $ 89.9  
Items excluded from segment profit:
                               
Adjustment of budgeted foreign exchange rates to
actual rates
    8.0       11.8       7.8       1.8  
Depreciation of Corporate property
    (.1 )     (.6 )     (.1 )     (.3 )
Adjustment to businesses' postretirement benefit
expenses booked in consolidation
    (.9 )     (1.0 )     (.9 )     (.8 )
Other adjustments booked in consolidation directly
related to reportable business segments
    (2.2 )     (1.1 )     (.5 )     (1.1 )
Amounts allocated to businesses in arriving at segment
profit in excess of (less than) Corporate center 
operating expenses, eliminations, and other amounts
identified above
    (13.1 )     (12.8 )     (7.5 )     (8.8 )
Operating income before restructuring and exit costs
    122.9       137.7       135.5       80.7  
Restructuring and exit costs
    18.3             15.6       20.8  
Operating income
    104.6       137.7       119.9       59.9  
Interest expense, net of interest income
    16.5       14.8       13.4       17.7  
Other expense (income)
          .4       (3.0 )     (2.4 )
Earnings before income taxes
  $ 88.1     $ 122.5     $ 109.5     $ 44.6  
 
   
Quarter Ended
 
   
April 1,
2007
   
July 1,
2007
   
September 30,
2007
   
December 31,
2007
 
Segment profit for total reportable business segments
  $ 202.3     $ 216.9     $ 181.7     $ 108.8  
Items excluded from segment profit:
                               
Adjustment of budgeted foreign exchange rates to
actual rates
    (4.0 )     (1.1 )     (.1 )     2.9  
Depreciation of Corporate property
    (.2 )     (.3 )     (.2 )     (.7 )
Adjustment to businesses' postretirement benefit
expenses booked in consolidation
    (4.8 )     (5.0 )     (5.0 )     (5.1 )
Other adjustments booked in consolidation directly
related to reportable business segments
    1.3       (4.9 )     4.6       7.3  
Amounts allocated to businesses in arriving at segment
profit in excess of (less than) Corporate center
operating expenses, eliminations, and other amounts
identified above
    (25.0 )     (19.0 )     (16.5 )     (32.7 )
Operating income before restructuring and exit costs
    169.6       186.6       164.5       80.5  
Restructuring and exit costs
                      19.0  
Operating income
    169.6       186.6       164.5       61.5  
Interest expense, net of interest income
    21.5       20.0       19.9       20.9  
Other expense
    1.1       .2       .9       .1  
Earnings before income taxes
  $ 147.0     $ 166.4     $ 143.7     $ 40.5  
 
 

 
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 products, and electric cleaning, automotive, lighting, and household 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; and for the sale of plumbing products to customers outside the United States and Canada. 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.

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 before restructuring and exit costs). 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, 2008, 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 2009. 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 addition, segment profit excludes restructuring and exit costs.  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.