-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Q3F2BY6Ucl9lX+S2BeMsUiTp5F7NEh01QNFHly0KPV8V7BltMiHTlGYF8/hDi3qE x2z0BICcLXl633HSEXMM+g== 0000012355-95-000020.txt : 19950807 0000012355-95-000020.hdr.sgml : 19950807 ACCESSION NUMBER: 0000012355-95-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19950702 FILED AS OF DATE: 19950804 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLACK & DECKER CORP CENTRAL INDEX KEY: 0000012355 STANDARD INDUSTRIAL CLASSIFICATION: METALWORKING MACHINERY & EQUIPMENT [3540] IRS NUMBER: 520248090 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01553 FILM NUMBER: 95559050 BUSINESS ADDRESS: STREET 1: 701 E JOPPA RD CITY: TOWSON STATE: MD ZIP: 21286 BUSINESS PHONE: 4107163310 FORMER COMPANY: FORMER CONFORMED NAME: BLACK & DECKER MANUFACTURING CO DATE OF NAME CHANGE: 19850206 10-Q 1 FORM 10-Q FOR QTR ENDED JULY 2, 1995 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended Commission File Number July 2, 1995 1-1553 THE BLACK & DECKER CORPORATION (Exact name of registrant as specified in its charter) Maryland 52-0248090 (State of Incorporation) (I.R.S. Employer Identification Number) 701 East Joppa Road Towson, Maryland 21286 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (410) 716-3900 Not Applicable Former Address Number of shares of common stock outstanding on July 2, 1995: 85,693,571. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. YES X NO The exhibit index as required by item 601(a) of Regulation S-K is included in this report. - 2 - THE BLACK & DECKER CORPORATION AND SUBSIDIARIES INDEX - FORM 10-Q July 2, 1995 Page PART I - FINANCIAL INFORMATION Consolidated Statement of Earnings (Unaudited) - For the Three Months and Six Months Ended July 2, 1995, and July 3, 1994 . . . . . . . . . . 3 Consolidated Balance Sheet - July 2, 1995 (Unaudited), and December 31, 1994 . . 4 Consolidated Statement of Cash Flows (Unaudited) - For the Six Months Ended July 2, 1995, and July 3, 1994 . . . . . . . . . . 5 Notes to Consolidated Financial Statements (Unaudited) . . . . . . . . . . . . . . . . . . . . . 6 Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . 9 PART II - OTHER INFORMATION . . . . . . . . . . . . . 18 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 21 - 3 - CONSOLIDATED STATEMENT OF EARNINGS (Unaudited) THE BLACK & DECKER CORPORATION AND SUBSIDIARIES (Dollars in Millions, Except Per Share Amounts)
THREE MONTHS ENDED SIX MONTHS ENDED ---------------------- ---------------------- JULY 2, JULY 3, JULY 2, JULY 3, 1995 1994 1995 1994 -------- -------- -------- -------- REVENUES Product sales $1,135.4 $1,015.8 $2,156.8 $1,910.1 Information technology and services 193.6 205.4 372.0 395.6 -------- -------- -------- -------- TOTAL REVENUES 1,329.0 1,221.2 2,528.8 2,305.7 Cost of revenues Products 716.2 644.2 1,358.7 1,215.4 Information technology and services 149.2 155.7 284.6 299.1 Marketing and administrative expenses 362.4 337.0 695.6 639.1 -------- -------- -------- -------- Total operating costs and expenses 1,227.8 1,136.9 2,338.9 2,153.6 -------- -------- -------- -------- OPERATING INCOME 101.2 84.3 189.9 152.1 Interest expense (net of interest income) 47.4 47.8 94.2 91.7 Other expense 4.1 2.3 2.0 4.4 -------- -------- -------- -------- EARNINGS BEFORE INCOME TAXES 49.7 34.2 93.7 56.0 Income taxes 14.9 11.2 33.2 18.4 -------- -------- -------- -------- NET EARNINGS $ 34.8 $ 23.0 $ 60.5 $ 37.6 ======== ======== ======== ======== NET EARNINGS APPLICABLE TO COMMON SHARES $ 31.9 $ 20.1 $ 54.7 $ 31.7 ======== ======== ======== ======== NET EARNINGS PER COMMON SHARE $ .37 $ .24 $ .64 $ .38 ======== ======== ======== ======== DIVIDENDS PER COMMON SHARE $ .10 $ .10 $ .20 $ .20 ======== ======== ======== ======== Average Common Shares Outstanding (in Millions) 85.5 84.1 85.2 84.0 ======== ======== ======== ======== See Notes to Consolidated Financial Statements
- 4 - CONSOLIDATED BALANCE SHEET THE BLACK & DECKER CORPORATION AND SUBSIDIARIES (Millions of Dollars)
JULY 2, DECEMBER 31, 1995 1994 ---------- ------------ (Unaudited) ASSETS Cash and cash equivalents $ 126.6 $ 65.9 Trade accounts receivable 869.5 910.9 Inventories 872.4 723.0 Other current assets 164.7 133.4 -------- -------- TOTAL CURRENT ASSETS 2,033.2 1,833.2 -------- -------- PROPERTY, PLANT AND EQUIPMENT 857.0 858.1 GOODWILL 2,311.6 2,293.0 OTHER ASSETS 456.5 449.4 -------- -------- $5,658.3 $5,433.7 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Short-term borrowings $ 572.8 $ 549.0 Current maturities of long-term debt 137.6 121.1 Trade accounts payable 403.6 405.2 Other accrued liabilities 742.2 804.5 -------- -------- TOTAL CURRENT LIABILITIES 1,856.2 1,879.8 -------- -------- LONG-TERM DEBT 1,812.1 1,723.2 DEFERRED INCOME TAXES 49.8 45.4 POSTRETIREMENT BENEFITS 313.0 328.2 OTHER LONG-TERM LIABILITIES 340.7 287.7 STOCKHOLDERS' EQUITY Convertible preferred stock, no par value: Outstanding: July 2, 1995 and December 31, 1994 - 150,000 shares 150.0 150.0 Common stock, par value $.50 per share: Outstanding: July 2, 1995 - 85,693,571 shares December 31, 1994 - 84,688,803 shares 42.8 42.3 Capital in excess of par value 1,069.2 1,049.1 Retained earnings 62.1 24.6 Equity adjustment from translation (37.6) (96.6) -------- -------- TOTAL STOCKHOLDERS' EQUITY 1,286.5 1,169.4 -------- -------- $5,658.3 $5,433.7 ======== ========
See Notes to Consolidated Financial Statements - 5 - CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) THE BLACK & DECKER CORPORATION AND SUBSIDIARIES (Millions of Dollars)
SIX MONTHS ENDED --------------------------- JULY 2, JULY 3, 1995 1994 -------- --------- OPERATING ACTIVITIES Net earnings $ 60.5 $ 37.6 Adjustments to reconcile net earnings to cash flow from operating activities: Non-cash charges and credits: Depreciation and amortization 111.6 102.9 Other 2.8 (2.4) Changes in selected working capital items: Trade accounts receivable 125.6 96.4 Inventories (128.9) (93.5) Trade accounts payable (8.3) 6.2 Other assets and liabilities (118.0) (72.5) -------- -------- CASH FLOW FROM OPERATING ACTIVITIES BEFORE SALE OF RECEIVABLES 45.3 74.7 Sale of receivables (64.5) (52.0) -------- -------- CASH FLOW FROM OPERATING ACTIVITIES (19.2) 22.7 -------- -------- INVESTING ACTIVITIES Proceeds from disposal of assets and businesses 67.8 6.3 Capital expenditures (83.0) (75.0) Cash inflow from hedging activities 295.6 741.9 Cash outflow from hedging activities (284.1) (749.0) -------- -------- CASH FLOW FROM INVESTING ACTIVITIES (3.7) (75.8) -------- -------- CASH FLOW BEFORE FINANCING ACTIVITIES (22.9) (53.1) FINANCING ACTIVITIES Net increase in short-term borrowings 20.0 223.2 Proceeds from long-term debt (including revolving credit facility) 186.1 1,046.6 Payments on long-term debt (including revolving credit facility) (117.1) (1,203.0) Issuance of equity interest in a subsidiary - 4.3 Issuance of common stock 12.6 6.8 Cash dividends (22.9) (22.6) -------- --------- CASH FLOW FROM FINANCING ACTIVITIES 78.7 55.3 Effect of exchange rate changes on cash 4.9 4.1 -------- -------- INCREASE IN CASH AND CASH EQUIVALENTS 60.7 6.3 Cash and cash equivalents at beginning of period 65.9 82.0 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 126.6 $ 88.3 ======== ========
See Notes to Consolidated Financial Statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) THE BLACK & DECKER CORPORATION AND SUBSIDIARIES BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited consolidated financial statements include all adjustments consisting only of normal recurring accruals considered necessary for a fair presentation of the financial position and the results of operations. Certain prior year amounts in the consolidated financial statements have been reclassified to conform to the presentation used for 1995. Operating results for the three-month and six-month periods ended July 2, 1995, are not necessarily indicative of the results that may be expected for a full fiscal year. For further information, refer to the consolidated financial statements and notes included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 1994, as amended. SALE OF RECEIVABLES At July 2, 1995, under its sale of receivables program, the Corporation had sold $179.5 million of receivables compared to $244.0 million at December 31, 1994. The discount on sale of receivables is included in "Other expense." SALE OF SUBSIDIARY On March 31, 1995, the Corporation sold PRC Realty Systems, Inc. ("RSI"), a component of its Information Technology and Services segment, for approximately $60 million. The gain on the sale of RSI is included in "Other expense." The pre-tax gain was offset by tax expense associated with the sale. RSI represented approximately 1% of the Corporation's consolidated revenues for the six months ended July 2, 1995, and July 3, 1994, and for the quarter ended July 3, 1994. INVENTORIES The components of inventory at the end of each period, in millions of dollars, consisted of the following:
July 2, December 31, 1995 1994 --------- ------------ FIFO Cost Raw materials and work-in-process $ 255.1 $ 220.4 Finished products 662.5 543.8 -------- -------- 917.6 764.2 Excess of FIFO cost over LIFO inventory value (45.2) (41.2) -------- -------- $ 872.4 $ 723.0 ======== ========
Inventories are stated at the lower of cost or market. The cost of United States inventories is based primarily on the last-in, first-out (LIFO) method; foreign inventories are valued on the first-in, first-out (FIFO) method. GOODWILL Goodwill at the end of each period, in millions of dollars, was as follows:
July 2, December 31, 1995 1994 -------- ----------- Goodwill $2,789.5 $2,735.5 Less accumulated amortization 477.9 442.5 -------- -------- $2,311.6 $2,293.0 ======== ========
LONG-TERM DEBT Indebtedness of subsidiaries of the Corporation in the aggregate principal amounts of $859.0 million and $773.8 million were included in the Consolidated Balance Sheet at July 2, 1995, and December 31, 1994, respectively, under the captions short-term borrowings, current maturities of long-term debt, and long-term debt. INTEREST EXPENSE (Net of Interest Income) Interest expense (net of interest income) for each period, in millions of dollars, consisted of the following:
Three Months Ended Six Months Ended ---------------------- ----------------------- July 2, July 3, July 2, July 3, 1995 1994 1995 1994 -------- -------- -------- -------- Interest expense $ 49.4 $ 49.7 $ 98.3 $ 95.7 Interest (income) (2.0) (1.9) (4.1) (4.0) -------- -------- -------- -------- $ 47.4 $ 47.8 $ 94.2 $ 91.7 ======== ======== ======== ========
NET EARNINGS PER COMMON SHARE Net earnings per common share for each period presented are computed by dividing net earnings applicable to common shares, which are after preferred dividends, by the weighted average number of common shares outstanding for each period. Preferred dividends were $2.9 million and $5.8 million for the three-month and six-month periods ended July 2, 1995, respectively, and $2.9 million and $5.9 million for the three-month and six-month periods ended July 3, 1994, respectively. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Net earnings for the three months ended July 2, 1995, increased 51% to $34.8 million or $.37 per common share compared to $23.0 million or $.24 per common share for the comparable quarter last year. Net earnings for the six months ended July 2, 1995, increased 61% to $60.5 million or $.64 per common share compared to $37.6 million or $.38 per common share for the corresponding period in 1994. The improvement in net earnings is primarily attributable to higher sales volumes, including the favorable effects of foreign currency translation, coupled with the results of manufacturing productivity and cost reduction initiatives. RESULTS OF OPERATIONS Revenues The following chart sets forth an analysis of changes in revenues for the three-month and six-month periods ended July 2, 1995, and July 3, 1994. _______________________________________________________________________________________________
Analysis of Changes in Revenues (in Millions of Dollars) -------------------------------------------------------- Consolidated Three Months Ended Six Months Ended ------------ ------------------------ ----------------------- July 2, July 3, July 2, July 3, 1995 1994 1995 1994 -------- -------- -------- -------- Total revenues $1,329.0 $1,221.2 $2,528.8 $2,305.7 Unit volume - Existing (1) 6 % 9 % 6 % 5 % - Disposed (2) (1)% (2)% (1)% (3)% Price 1 % 1 % 1 % 1 % Currency 3 % (2)% 4 % (1)% -------- -------- -------- -------- Change in total revenues 9 % 6 % 10 % 2 % _______________________________________________________________________________________________ (1) Existing - Reflects the change in unit volume for businesses where period-to-period comparability exists. (2) Disposed - Reflects the change in total revenues for businesses that were included in prior year results but subsequently have been sold.
The Corporation operates in three business segments: Consumer and Home Improvement Products (Consumer), including consumer and professional power tools and accessories, household products, security hardware, outdoor products (composed of electric lawn and garden and recreational products), plumbing products, and product service; Commercial and Industrial Products (Commercial), including fastening systems and glass container-making equipment; and Information Technology and Services (PRC), including government and commercial systems development, consulting, and other related contract services. The following chart sets forth an analysis of the change in revenues for the three months and six months ended July 2, 1995, compared to the three months and six months ended July 3, 1994, by geographic area for each business segment. THE BLACK & DECKER CORPORATION AND SUBSIDIARIES THREE AND SIX MONTHS ENDED JULY 2, 1995 ANALYSIS OF CHANGES IN REVENUES (in Millions of Dollars)
United States Europe Other Total ------ ------ ----- ----- 3 MOS 6 MOS 3 MOS 6 MOS 3 MOS 6 MOS 3 MOS 6 MOS ----- ------- ----- ----- ----- ----- ----- -------- Consumer - -------- Total Revenues $518.9 $962.5 $307.2 $598.9 $134.1 $255.5 $960.2 $1,816.9 ------ ------ ------ ------ ------ ------ ------ -------- Unit Volume - Existing 7 % 7 % 4 % 4 % 11 % 11 % 6 % 7 % - Disposed - % - % - % - % - % - % - % - % Price - % 1 % - % - % 6 % 4 % 1 % 1 % Currency - % - % 14 % 13 % (6)% (4)% 4 % 3 % -- -- -- -- -- -- -- -- 7 % 8 % 18 % 17 % 11 % 11 % 11 % 11 % -- -- -- -- -- -- -- -- ____________________________________________________________________________________________________________________________ Commercial - ---------- Total Revenues $65.1 $132.9 $80.4 $145.4 $29.7 $61.6 $175.2 $339.9 ----- ------ ----- ------ ----- ----- ------ ------ Unit Volume - Existing (3)% 2 % 15 % 24 % 15 % 19 % 7 % 13 % - Disposed - % - % - % - % - % - % - % - % Price 1 % 1 % 2 % 2 % (1)% - % 1 % 1 % Currency - % - % 18 % 17 % 20 % 16 % 10 % 9 % -- -- -- -- -- -- -- -- (2)% 3 % 35 % 43 % 34 % 35 % 18 % 23 % -- -- -- -- -- -- -- -- ____________________________________________________________________________________________________________________________ PRC - --- Total Revenues $193.6 $372.0 $ - $ - $ - $ - $193.6 $372.0 ------ ------ ----- ----- ----- ----- ------ ------ Unit Volume - Existing 3 % (1)% - % - % - % - % 3 % (1)% Disposed (9)% (5)% - % - % - % - % (9)% (5)% -- -- -- -- -- -- -- -- (6)% (6)% - % - % - % - % (6)% (6)% -- -- -- -- -- -- -- -- ____________________________________________________________________________________________________________________________ Consolidated - ------------ Total Revenues $777.6 $1,467.4 $387.6 $744.3 $163.8 $317.1 $1,329.0 $2,528.8 ------ -------- ------ ------ ------ ------ -------- -------- Unit Volume - Existing 5 % 4 % 6 % 8 % 11 % 12 % 6 % 6 % - Disposed (2)% (1)% - % - % - % - % (1)% (1)% Price - % 1 % - % - % 5 % 3 % 1 % 1 % Currency - % - % 15 % 13 % (2)% - % 3 % 4 % -- -- -- -- -- -- -- -- Change in Total Revenues 3 % 4 % 21 % 21 % 14 % 15 % 9 % 10 % -- -- -- -- -- -- -- -- ____________________________________________________________________________________________________________________________
Existing unit volume grew by 6% for the three-month and six-month periods ended July 2, 1995, over prior year levels. The effects of a weaker United States dollar compared to most major foreign currencies accounted for 3% and 4% of the increase in revenues for the three- and six-month periods ended July 2, 1995, respectively, over the comparable periods in 1994. Pricing actions modestly improved revenue comparisons for the quarter and first half of 1995 compared to the corresponding periods in the prior year. The sale of the Corporation's RSI business in March 1995 resulted in a decrease in unit volume of 1% for the three- and six-month periods ended July 2, 1995, as compared to 1994. Existing unit volume in the Consumer segment increased by 6% and 7% for the three-month and six-month periods ended July 2, 1995, respectively, as compared to the same periods last year. Revenues in the Corporation's Consumer businesses in the United States grew by 7% and 8% for the three-month and six-month periods ended July 2, 1995, respectively, over 1994 levels. In the domestic power tools and accessories businesses, the continued success of the DeWalt professional power tools line during 1995 more than offset a decline in the sale of consumer power tools. The decline in consumer power tools sales in 1995 over 1994 levels is partially attributable to the Corporation's announced plans to launch a global repositioning of its consumer power tools during the latter half of 1995, including the introduction of a significant number of new tools. The Corporation's household products business achieved sharply higher sales during the three and six months ended July 2, 1995, over the corresponding periods in a weak 1994 due to strong sales of the SnakeLight flexible flashlight which was introduced in late 1994. Strong 1995 SnakeLight sales were more than sufficient to offset revenue declines over 1994 levels in certain product lines as the household products business moved to improve profitability or exit certain of its lower margin product lines during the three and six months ended July 2, 1995. The Corporation's domestic security hardware business experienced moderate sales growth for the three-month and six-month periods ended July 2, 1995 over prior year levels. Poor weather-related building conditions in the western United States and the resultant soft demand in professional distribution channels during the second quarter of 1995 caused a substantial decrease in revenues over 1994 levels for the Corporation's plumbing products business and an overall sales decrease for the six months ended July 2, 1995 over the corresponding period in 1994. Excluding the substantial positive effect of changes in foreign exchange rates, the Corporation's Consumer businesses in Europe experienced a revenue increase of 4% during the quarter and six months ended July 2, 1995, over the comparable periods in 1994. European sales for the quarter and six months ended July 2, 1995, were impacted by the Corporation's repositioning of its entire range of consumer power tools. This repositioning was launched in Europe during the second quarter of 1995 and will occur later in 1995 in the United States. An extremely dry winter and late spring caused a decrease in sales of outdoor products during the second quarter and first half of 1995 compared to the corresponding periods in 1994. Despite weak levels of construction starts in many portions of Europe during 1995, sales of the Corporation's Elu professional power tools for the three and six months ended July 2, 1995, were significantly ahead of 1994 levels. While the European Consumer businesses were up 4% overall exclusive of positive foreign currency effects, results in individual countries in Europe varied, with some countries up substantially over the corresponding periods in 1994 and other countries experiencing declines period over period. The Corporation's Consumer businesses in other geographic regions experienced an 11% increase in existing unit volume for the three-month and six-month periods ended July 2, 1995, over the corresponding 1994 periods. While economic turmoil caused by the monetary crisis negatively affected sales in Mexico for all of 1995 and a softening of sales occurred during the second quarter of 1995 in certain other businesses, strong revenue growth over 1994 levels was experienced in certain of the Corporation's Consumer businesses, particularly in Brazil, during the three and six months ended July 2, 1995. Excluding the significant positive effect of changes in foreign currencies, revenues in the Commercial segment for the three months and six months ended July 2, 1995, were 8% and 14% higher than the corresponding periods in 1994. These revenue increases were the result of good performances by both the fastening systems business and the glass-container making equipment business. Excluding the effects of the RSI business sold in March 1995, PRC's total revenues increased by 3% for the quarter ended July 2, 1995, compared to the same period last year and decreased by 1% for the six months ended July 2, 1995, compared to the same period in 1994. The increase in revenues for the second quarter of 1995 was attributable to strong sales under PRC's Super- Minicomputer Procurement (SMP) contract, which was up by more than 50% over the corresponding quarter in 1994, partially offset by results of PRC's Environmental Management Group where the slow start-up of a major new contract resulted in a revenue decrease compared to the prior year. The slight decrease in revenues for the six-month period ended July 2, 1995, compared to the comparable period in 1994 was reflective of the lower level of sales under the SMP contract for the first quarter of 1995 compared to the first quarter of 1994. For the six months ended July 2, 1995, sales under the SMP contract exceeded the 1994 level. Earnings Operating income for the second quarter of 1995 increased 20% to $101.2 million compared to $84.3 million in the second quarter of 1994. Operating income for the first half of 1995 increased 25% to $189.9 million compared to $152.1 million in the first half of 1994. Operating income as a percentage of revenues for the three-month and six-month periods ended July 2, 1995, was 7.6% and 7.5%, respectively, compared to 6.9% and 6.6% for the corresponding periods in 1994. The higher operating income levels for the three-month and six-month periods ended July 2, 1995, resulted from improvements in a number of the Corporation's businesses, including the power tools business, the fastening systems business, the glass container-making equipment business and, in particular, the household products business, which were partially offset by operating income declines in the plumbing products business as a result of lower sales in 1995. Excluding the effects of the sold RSI business, operating income as a percentage of sales at PRC was up slightly during the three and six months ended July 2, 1995, compared to the corresponding periods in 1994. Gross margin on product sales as a percentage of revenues for the three-month and six-month periods ended July 2, 1995, was 36.9% and 37.0%, respectively, compared to 36.6% and 36.4% for the comparable periods of 1994. These improvements resulted primarily from increased manufacturing productivity, the implementation of cost reduction initiatives, and the leveraging of fixed and semi-fixed costs over a higher sales base, partially offset by commodity price pressures. Excluding the effects of the RSI business sold in March 1995, PRC's gross margin as a percentage of revenues for the three- month and six-month periods was 22.9% and 23.3%, respectively, compared to 23.5% and 23.7% for the comparable periods last year. The margin erosion experienced by PRC during the quarter and six months ended July 2, 1995, was primarily the result of higher sales during those periods than in 1994 under the SMP contract, which has a dilutive effect on margin during its early stages. Marketing and administrative expenses as a percentage of total revenues for the three-month and six-month periods ended July 2, 1995, were 27.3% and 27.5%, respectively, compared to 27.6% and 27.7% for the comparable periods of last year. Net interest expense (interest expense less interest income) for the three-month and six-month periods ended July 2, 1995, of $47.4 million and $94.2 million, respectively, approximated the levels of the comparable periods in 1994 as higher interest rates in 1995 were offset by lower average borrowing levels during 1995. The Corporation maintains a portfolio of interest rate hedge instruments for the purpose of managing interest rate exposure. During the six-month period ended July 2, 1995, the Corporation decreased its portfolio by the net reduction of $250.0 million notional principal amount of interest rate hedges. This net reduction consisted of the following (in millions of dollars of notional principal amounts):
Less: Maturities Plus: and Early Outstanding at New Termina- Outstanding at December 31, 1994 Hedges tions July 2, 1995 Interest rate swaps: Fixed to variable rates $850.0 $100.0 $(250.0) $700.0 Variable to fixed rates 750.0 150.0 $(400.0) 500.0 Rate basis swaps 200.0 50.0 250.0 U.S. rates to foreign rates 175.0 175.0 Interest rate caps purchased 100.0 100.0 200.0
Deferred gains and losses on the early termination of interest rate swaps as of July 2, 1995, were not significant. The net reduction of the Corporation's interest rate hedge portfolio during the six-month period ended July 2, 1995, coupled with the issuance of fixed rate debt during the first quarter of 1995, had the effect of reducing the Corporation's variable rate debt to total debt ratio from 34% at December 31, 1994, to 30% at July 2, 1995. Other expense for the three-month and six-month periods ended July 2, 1995 and July 3, 1994, primarily includes the discount on the sale of receivables, and, for the six months ended July 2, 1995, is partially offset by the gain on the sale of RSI. The Corporation's effective tax rate for the three-month and six-month periods ended July 2, 1995, was 30% and 35%, respectively, compared to 33% for the three-month and six-month periods ended July 3, 1994. The higher rate for the six months ended July 2, 1995, as compared to the three months then ended was a result of the sale of RSI during the first quarter of 1995. Tax expense recognized as a result of the sale of RSI offset the pre-tax gain recognized on the sale during the first quarter of 1995. Excluding the effects of the RSI sale, the lower rate for 1995 as compared to 1994 was the result of a change in the mix of the Corporation's operating income from subsidiaries in higher rate tax jurisdictions to those in lower rate tax jurisdictions or to those that benefit from the utilization of net operating loss carryforwards. FINANCIAL CONDITION Cash flow from operating activities for the six months ended July 2, 1995, used cash of $19.2 million compared to cash generation of $22.7 million for the first six months of 1994. The increased net income level during the six-month period ended July 2, 1995, over the corresponding period in 1994, was more than offset by higher working capital requirements due to increased inventory levels to support the Corporation's global repositioning of its consumer power tools and to the timing of various accruals and expense payments. Investing activities for the six months ended July 2, 1995, used cash of $3.7 million compared to $75.8 million last year. The improvement in cash flow from investing activities is attributable to the receipt of approximately $60 million in proceeds from the sale of the Corporation's RSI business in March 1995. Financing activities generated cash of $78.7 million for the six months ended July 2, 1995, compared to cash generated of $55.3 million in the first six months of 1994. During the first six months of 1995, the Corporation issued $85.0 million of Medium Term Notes under its shelf registration statement and increased its short-term borrowings by $20.0 million. At July 2, 1995, average debt maturity was 4.5 years compared to 4.9 years at December 31, 1994. In addition to measuring its cash flow generation and usage based upon the operating, investing, and financing classifications included in the Consolidated Statement of Cash Flows, the Corporation also measures its free cash flow. Free cash flow, a measure commonly employed by bond rating agencies and banks, is defined by the Corporation as cash available for debt reduction (including short-term borrowings), prior to the effects of cash received from divested businesses, equity offerings, and sales of receivables. Free cash flow, a more inclusive measure of the Corporation's cash flow generation than cash flow from operating activities included in the Consolidated Statement of Cash Flows, considers items such as cash used for capital expenditures and dividends, as well as net cash inflows or outflows from hedging activities. During the six months ended July 2, 1995, the Corporation experienced negative free cash flow of $77.1 million compared to negative free cash flow of $16.9 million for the corresponding period in 1994. This $60.2 million decrease in free cash flow during the first six months of 1995 over 1994 was primarily the result of increased working capital levels as a result of higher inventories required in connection with the Corporation's global repositioning of its consumer power tools and the timing of certain accruals and expense payments as well as the timing of capital expenditures. (The Corporation's calculation of free cash flows includes capital expenditures financed by directly related debt, such as its newly completed distribution facility in South Carolina, while such expenditures are excluded from capital expenditures in the Consolidated Statement of Cash Flows since they represent non-cash items.) The Credit Facility includes certain covenants that require the Corporation to meet specified minimum cash flow coverage and maximum leverage (debt to equity) ratios. The Corporation's leverage ratio during the term of the Credit Facility may not exceed 2.2 at the end of any fiscal quarter. The cash flow coverage ratio, calculated as of the end of each fiscal quarter, must exceed 2.5 for any 12-month period. As of July 2, 1995, the Corporation was in compliance with all covenants and provisions of the Credit Facility, with a leverage ratio of 1.61 and cash flow coverage ratio of 3.39. THE BLACK & DECKER CORPORATION PART II - OTHER INFORMATION Item 1 Legal Proceedings The Corporation is involved in various lawsuits in the ordinary course of business. These lawsuits primarily involve claims for damages arising out of the use of the Corporation's products and allegations of patent and trademark infringement. The Corporation is also involved in litigation and administrative proceedings involving employment matters and commercial disputes. Some of these lawsuits include claims for punitive as well as compensatory damages. The Corporation, using current product sales data and historical trends, actuarially calculates the estimate of its current exposure for product liability claims for amounts in excess of established deductibles and accrues for the estimated liability as described above up to the limits of the deductibles. All other claims and lawsuits are handled on a case-by-case basis. The Corporation also is involved in lawsuits and administrative proceedings with respect to claims involving the discharge of hazardous substances into the environment. Certain of these claims assert damages and liability for remedial investigations and cleanup costs with respect to sites at which the Corporation has been identified as a potentially responsible party under federal and state environmental laws and regulations (off-site). Other matters involve sites that the Corporation currently owns and operates or has previously sold (on-site). For off-site claims, the Corporation makes an assessment of the cost involved based on environmental studies, prior experience at similar sites, and the experience of other named parties. The Corporation also considers the ability of other parties to share costs, the percentage of the Corporation's exposure relative to all other parties, and the effects of inflation on these estimated costs. For on-site matters associated with properties currently owned, an assessment is made as to whether an investigation and remediation would be required under applicable federal and state law. For on-site matters associated with properties previously sold, the Corporation considers the terms of sale as well as applicable federal and state laws to determine if the Corporation has any remaining liability. If the Corporation is determined to have potential liability for properties currently owned or previously sold, an estimate is made of the total cost of investigation and remediation and other potential costs associated with the site. Reference is made to the discussion in Item 1 of Part I of the Corporation's Annual Report on Form 10-K for the year ended December 31, 1994, in respect of certain groundwater contamination at the Corporation's facility in Hampstead, Maryland. The Corporation has entered into a consent order with the Maryland Department of the Environment under the terms of which the Corporation will continue groundwater treatment, conduct soil remediation activities and engage in certain additional investigations. The Maryland Department of the Environment is overseeing the remediation activities at this site under a pilot program with the United States Environmental Protection Agency. Reference is made to the discussion in Item 1 of Part I of the Corporation's Annual Report of Form 10-K for the year ended December 31, 1994, in respect of the suit filed by the owners of a farm that is adjacent to the Corporation's Hampstead, Maryland facility. In response to the Corporation's filing of a motion to dismiss all of the claims brought by plaintiffs in this case, the Court issued an order dismissing all of the claims except one claim under the Federal Resource Conservation and Recovery Act. Reference is made to the discussion in Item 1 of Part I of the Corporation's Annual Report on Form 10-K for the year ended December 31, 1994, in respect of claims brought by the Attorney General of the State of California against the Corporation's Price Pfister subsidiary to the effect that lead which leaches from faucets constitutes a prohibited discharge of lead into water or onto or into land where lead will pass or is at least likely to pass into a source of drinking water. During the quarter ended July 2, 1995, the Court of Appeal of the State of California affirmed the decision of the trial court in rejecting the Attorney General's claim and in concluding that lead which leaches from faucets is not a prohibited discharge of lead into a "source of drinking water" under California's Proposition 65. Subsequent to this decision, the Natural Resources Defense Council and the Environmental Law Foundation as well as a number of other environmental interest groups filed motions with the Court requesting leave to intervene in this matter for purposes of appealing the decision of the Court of Appeal to the California Supreme Court. The Court granted these motions and it is anticipated that an appeal to the decision will be taken. Reference is made to the discussion in Item 1 of Part I of the Corporation's Annual Report of Form 10-K for the year ended December 31, 1994, in respect of claims submitted by the Corporation's Emhart Corporation subsidiary against several of its insurance carriers regarding costs incurred with respect to the clean-up of hazardous wastes. Emhart now has finalized the settlement of all of these claims with its various insurance carriers. Reference is made to the discussion in Item 1 of Part I of the Corporation's Annual Report of Form 10-K for the year ended December 31, 1994, in respect of claims made by the successor to Orkem S.A. concerning the Corporation's obligations to indemnify the successor for certain environmental liabilities associated with the Corporation's former Bostik chemical adhesives business. Although the Corporation and the successor have not resolved the disputes with respect to all of the claims, to date the Corporation has paid claims totalling approximately $1.2 million. The Corporation's estimate of the costs associated with legal, product liability, and environmental exposures is accrued if, in management's judgment, the likelihood of a loss is probable. These accrued liabilities are not discounted. Insurance recoveries for environmental and certain general liability claims are not recognized until realized. As of July 2, 1995, the Corporation has no known probable but inestimable exposures for awards and assessments in connection with environmental matters and other litigation and administrative proceedings that could have a material effect on the Corporation. Management is of the opinion that the amounts accrued for awards or assessments in connection with the environmental matters and other litigation and administrative proceedings to which the Corporation is a party are adequate and, accordingly, ultimate resolution of these matters will not have a material adverse effect on the Corporation. Item 6 Exhibits and Reports on Form 8-K Exhibit No. Description 10 The Black & Decker Supplemental Executive Retirement Plan, as amended. 11 Computation of Earnings Per Share. 12 Computation of Ratios. 27 Financial Data Schedule. 99 Computation of Leverage and Cash Flow Coverage Ratios. The Corporation did not file any reports on Form 8-K during the three-month period ended July 2, 1995. All other items were not applicable. THE BLACK & DECKER CORPORATION S I G N A T U R E S Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE BLACK & DECKER CORPORATION By THOMAS M. SCHOEWE Thomas M. Schoewe Vice President and Chief Financial Officer Principal Accounting Officer By STEPHEN F. REEVES Stephen F. Reeves Corporate Controller Date: August 4, 1995 EX-10 2 EXHIBIT 10 FOR FORM 10Q EXHIBIT 10 THE BLACK & DECKER SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN INTRODUCTION The Black & Decker Supplemental Executive Retirement Plan provides certain supplemental retirement benefits for selected executive employees of The Black & Decker Corporation and its subsidiaries and affiliates. This document amends The Black & Decker Supplemental Executive Retirement Plan, originally effective on January 1, 1984 and as amended and restated effective January 1, 1993, by restating the Plan in its entirety. The Plan is intended to provide supplemental retirement benefits primarily for a select group of management or highly paid executive employees. The employees eligible for the Plan are only those executive employees selected by the Organization Committee of the Corporation. SECTION 1 - Definitions Each of the following terms, when used in this Plan, has the meaning indicated below, unless a different meaning is plainly implied by the context: "Actual Retirement Date" means the date that a Participant's employment by Black & Decker terminates on or after the Participant's Early Retirement Date or Normal Retirement Date, as the case may be, whether due to retirement, death, resignation or dismissal or, in the case of a Protected Participant, the Protected Participant's 55th birthday, if later than the date of termination of his or her employment with Black & Decker. If, however, a Participant's active employment with Black & Decker ceases prior to the Participant's Normal Retirement Date due to Disability, the Participant's Actual Retirement Date shall mean the Participant's Normal Retirement Date, unless the Participant elects, with the Committee's approval, to receive benefits under this Plan at a date preceding the Participant's Normal Retirement Date (but not earlier than the Participant's Early Retirement Date), in which case the date benefit payments under this Plan begin will be the Participant's Actual Retirement Date. "Actuarial Adjustment" means a reduction to the Participant's benefits under this Plan that is the Actuarial Equivalent of any portion of the Participant's Social Security Benefits and Other Retirement Benefits that the Participant could have received as retirement or disability income at the same time the Participant was receiving benefits under this Plan (and which, therefore, would have reduced the Participant's benefits under this Plan) if, solely because of the Participant's election of an alternative form of payment under the plan, program, arrangement or agreement providing those Social Security Benefits or Other Retirement Benefits, no reduction would otherwise be made to the Participant's benefits under this Plan with respect to the portion of those Social Security Benefits or Other Retirement Benefits that was subject to that election by the Participant. However, no Actuarial Adjustment is to be made by reason of the Participant's election to provide benefits after the Participant's death for the Participant's spouse under the plan, program, arrangement or agreement providing Social Security Benefits or Other Retirement Benefits. Whether an Actuarial Adjustment is appropriate and the amount of that Adjustment to the Participant's benefit is to be determined by the Committee, in its sole discretion, but based on the Actuarial Assumptions in effect when that Actuarial Adjustment first applies. "Actuarial Assumptions" means generally, the actuarial assumptions used in calculating benefits under the Black & Decker Pension Plan, or such other interest and mortality rates and other pertinent actuarial assumptions and methods as may be adopted by the Committee from time to time, in its sole discretion, for use in determining benefits under this Plan. "Actuarial Equivalent" means a benefit having the same actuarial value, based on the Actuarial Assumptions applicable at the time actuarial equivalency is to be determined. "Black & Decker" means the Corporation, Black & Decker (U.S) Inc., Black & Decker Inc. and all of their subsidiaries and affiliates, both collectively and individually. "Board" means the Corporation's Board of Directors. "Change in Control of the Corporation" shall mean a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not the Corporation is in fact required to comply therewith, provided that, without limitation, such a change in control shall be deemed to have occurred if (A) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or any of its subsidiaries or a corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 20% or more of the combined voting power of the Corporation's then outstanding securities; (B) during any period of two consecutive years (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the Corporation to effect a transaction described in clauses (A) or (D) of this definition) whose election by the Board or nomination for election by the Corporation's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; (C) the Corporation enters into an agreement, the consummation of which would result in the occurrence of a change in control of the Corporation; or (D) the stockholders of the Corporation approve a merger, share exchange or consolidation of the Corporation with any other corporation, other than a merger, share exchange or consolidation which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 60% of the combined voting power of the voting securities of the Corporation or such surviving entity outstanding immediately after such merger, share exchange or consolidation, or the stockholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of all or substantially all the Corporation's assets. "Committee" means The Black & Decker Corporation Pension Management Committee. "Committee Secretary" means the Secretary of the Committee. "Corporation" means The Black & Decker Corporation, a Maryland corporation. "Credited Service" means all periods during which an Employee qualifies as an employee of Black & Decker, including all periods during which the Employee is absent on leave authorized by Black & Decker, and including all periods for which the Employee receives Benefit Service Credit under the Black & Decker Pension Plan. Subject to the foregoing, unless otherwise determined by the Committee in its sole discretion, Credited Service under this Plan shall not include any period of employment with any company during any period when that company was not a subsidiary or affiliate of the Corporation. Credited Service also includes all periods of Disability beginning while the Employee is employed by Black & Decker and continuing as long as the Disability continues. Credited Service is to be measured on the basis of one month's credit for each full calendar month in any Credited Service period; no partial credit is to be given for partial calendar months of Credited Service. Twelve months of Credited Service is equivalent to one year of Credited Service, whether or not those months were consecutive. No loss of Credited Service will occur by reason of an interruption in an Employee's period of Credited Service, regardless of the length of that interruption. "Disability" means an illness or injury which would cause the Employee to be disabled under the terms of The Black & Decker Long Term Disability Plan or that totally prevents the Employee from satisfactorily performing the Employee's usual duties with Black & Decker, as determined by the Committee based on professional medical advice. The Committee may require the Employee to submit from time to time to medical examinations by physicians selected or approved by the Committee to establish the Disability or its continuation, provided that those examinations may not be required more frequently than once each year. The Employee's refusal to submit to any examination reasonably requested by the Committee under this Section is grounds for the Committee to find that the Employee's Disability no longer exists. "Early Retirement Date" means the first day of the calendar month coincident with or next following the date upon which the Participant has both attained age 55 and completed 5 years of Credited Service; provided, however, that, in the case of a Protected Participant, the Early Retirement Date shall be the first day of the calendar month coincident with or next following the Protected Participant's 55th birthday. "Effective Date" means August 1, 1995, the effective date of this amended and restated Plan. The Prior Plan was originally effective as of January 1, 1984 and amended and restated effective as of January 1, 1993. "Employee" means any person rendering personal services to Black & Decker as an employee. "Final Average Pay" means the average monthly amount of the Participant's Pay for the 3 consecutive years in which the Participant's Pay was the highest out of the 5-year period ending on the date the Participant's employment with Black & Decker terminates; provided, however, that, in the case of a Protected Participant, the Protected Participant's "Final Average Pay" shall be based on the 3 consecutive years in which the Protected Participant's Pay was the highest out of the 5-year period ending on the date that the Change in Control of the Corporation occurred, if this produces a higher Final Average Pay. "Normal Retirement Date" means the first day of the calendar month coincident with or next following the date upon which the Participant has both attained age 60 and completed 5 years of Credited Service; provided, however, that, in the case of a Protected Participant, the Normal Retirement Date shall be the first day of the calendar month coincident with or next following the Participant's 60th birthday. "Other Retirement Benefits" means any retirement or any disability income benefits, and any severance pay, salary continuance, notice pay, termination indemnity, unemployment compensation, or the like, that the Participant is entitled to receive under any plan, program, arrangement or agreement provided, maintained or funded, in part or in whole, by any of the Participant's employers (whether or not affiliated with Black & Decker) except: (a) any Social Security Benefit; (b) any portion of that retirement or disability income which is attributable to the Participant's contributions, including contributions made by the Participant's employer pursuant to a salary reduction agreement with the Participant (such as under the Black & Decker Executive Deferred Compensation Plan); (c) any death benefits under a life insurance contract with a life insurance company; and (d) any defined contribution pension, profit sharing or stock bonus plan, unless that plan is intended to provide the primary source of retirement income (in addition to Social Security Benefits) funded by Black & Decker for the employees at any location covered by that plan. In determining the Death Benefit payable to the Participant's spouse under Section 6(b), the term "Other Retirement Benefits" means any benefit payable to the spouse under any plan, program, arrangement or agreement that provided or would have provided to the Participant severance, retirement or disability benefits that constituted "Other Retirement Benefits" as described in the preceding sentence, but excluding the following payments to the spouse: (a) any Social Security Benefit; (b) any benefit attributable to the Participant's contributions (including contributions made by the Participant's employer pursuant to a salary reduction agreement with the Participant); (c) any death benefits (including accelerated death benefits) under a life insurance contract with a life insurance company; and (d) any defined contribution pension, profit sharing or stock bonus plan, unless that plan is intended to provide the primary source of retirement income (in addition to Social Security Benefits) funded by Black & Decker for the employees at any location covered by that plan. Without limiting the generality of the foregoing, the term "Other Retirement Benefits" includes benefits payable to a Participant under any plan, program, arrangement or agreement provided or maintained at any time by any employer of the Participant (whether or not affiliated with Black & Decker) which provides benefits in excess of any of the limitations imposed by the Internal Revenue Code of 1986, as amended, on benefits payable from a tax-advantaged or tax-qualified pension plan on compensation covered under a tax-advantaged or tax- qualified pension plan (such as The Black & Decker Supplemental Pension Plan). "Participant" means any Employee who qualifies for participation in this Plan, as more particularly described in Section 2. "Pay" means the actual compensation paid during the relevant period by Black & Decker to the Participant for services as an Employee, including basic salary, bonuses, annual incentive awards, any amounts contributed to any employee benefit plan pursuant to a salary or other compensation reduction agreement with the Participant, and including, for the year of deferral, amounts deferred by the Participant under any non-qualified deferred compensation plan (such as The Black & Decker Executive Deferred Compensation Plan); and salary continuation payments during sick leave (other than long-term disability benefits). The term "Pay" does not include any incentive awards or other amounts paid pursuant to any long-range performance compensation plan (such as the Black & Decker Long Term Incentive Plan), amounts paid pursuant to the Black & Decker Performance Equity Plan or under any "golden parachute" arrangement or any non-cash remuneration, imputed income (including income imputed under any group life insurance program), perquisites and other cash or non- cash fringe benefits, such as (but not limited to) reimbursements or allowances for expenses (such as automobile, moving or relocation, country club, tax preparation, overseas housing, educational and similar expense allowances); contributions to or benefits under any employee pension or welfare benefit plan or payments received by a Participant under any non-qualified deferred compensation plan (such as the Black & Decker Executive Deferred Compensation Plan); special recognition awards; stock bonuses, income attributable to discount stock purchases, stock options or stock appreciation rights; income attributable to the vesting of restricted property; benefits received under any severance plan or program; and allowances for or the provision of counseling or other personal services (such as financial and tax counseling). For any period during which the Participant is entitled to Credited Service by reason of a Disability, the Participant's Pay is deemed to continue during that Disability period at a monthly rate equal to 1/12th of the Participant's basic salary (before any salary reduction for contributions to any employee benefit plan pursuant to a salary reduction agreement with the Participant) at the Participant's annual salary rate in effect at the date that the Disability began plus all items other than basic salary and such salary reduction contributions) included in the Participant's actual Pay during the 12-month period ending on the date that the Disability began. "Plan" means this document entitled "The Black & Decker Supplemental Executive Retirement Plan", effective as of August 1, 1995, as it may be amended from time to time. This document completely amends and restates the Black & Decker Supplemental Executive Retirement Plan as effective January 1, 1993 and which is referred to in this Plan as the "Prior Plan." To the extent any person is receiving benefits hereunder prior to the Effective Date, such benefits and the payment thereof shall be determined under the terms of the Prior Plan. "Protected Participant" means a Participant who is an Employee when a Change in Control of the Corporation occurs. "Social Security Benefit" means the retirement or disability income payments under any plan, program or arrangement which is sponsored, mandated or administered by any government and which provides or would provide retirement or disability income to the Participant and to which any of the Participant's employers (whether or not affiliated with Black & Decker) has made contributions on the Participant's behalf. In determining the Death Benefit payable to the Participant's spouse under Section 6, the term "Social Security Benefit" means any payment to the spouse under a governmental program described in the preceding sentence and attributable to the Participant's employment. SECTION 2 - Eligibility Any executive employee may be selected for participation in this Plan by the Organization Committee of the Corporation and will automatically become a Participant on the date designated by that committee in its written notice to the Employee of selection for participation under this Plan. Any Employee who was a Participant in the Prior Plan immediately prior to the Effective Date shall continue as a Participant hereunder without further action by the Organization Committee of the Corporation. SECTION 3 - Normal Retirement Benefit Subject to Section 5, any Participant whose employment with Black & Decker terminates at or after the Participant's Normal Retirement Date is entitled to receive under this Plan a monthly benefit, beginning at the Participant's Actual Retirement Date and continuing for the Participant's life. The amount of each monthly benefit payment under this Section 3 is to be equal to 50% of his or her Final Average Pay less the sum of: (i) all Social Security Benefits and all Other Retirement Benefits payable to the Participant during that month and (ii) the Actuarial Adjustments for that month. In the event that any offsets to the Participant's benefit under this Plan exceed the monthly benefit payment under this Plan, such excess shall be carried over and applied against subsequent monthly benefit payments under this Plan until such excess is exhausted. The offsets to the Participant's benefits under this Plan (as described in the preceding sentence) are not to be increased to reflect any increase in the Participant's Social Security Benefits or Other Retirement Benefits attributable to increases in the cost-of-living after his or her Actual Retirement Date and no benefit is payable to the Participant in any month when those offsets exceed 50% of the Participant's Final Average Pay. SECTION 4 - Early Retirement Benefit Subject to Section 5, any Participant whose employment with Black & Decker terminates at or after the Participant's Early Retirement Date or, in the case of a Protected Participant, whose employment with Black & Decker terminates at any time before his or her Normal Retirement Date (whether or not after his or her Early Retirement Date) is entitled to receive under this Plan a monthly benefit beginning on the first day of the calendar month after the Participant's Actual Retirement Date and continuing for the Participant's life. The amount of each monthly benefit payment under this Section 4 is to be equal to: (a) 50% of the Participant's Final Average Pay, reduced by 1/3 of 1% for each full calendar month by which the Participant's Actual Retirement Date precedes the Participant's Normal Retirement Date, less (b) the sum of: (i) the Participant's Social Security Benefit and all Other Retirement Benefits payable to the Participant during that month and (ii) the Actuarial Adjustment for that month. In the event that any offsets to the Participant's benefit under this Plan exceed the monthly benefit payment under this Plan, such excess shall be carried over and applied against subsequent monthly benefit payments under this Plan until such excess is exhausted. The offsets to the Participant's benefits under this Plan (as described in the preceding sentence) are not to be increased to reflect any increase in the Participant's Social Security Benefits or Other Retirement Benefits attributable to increases in the cost-of-living after the Participant's Actual Retirement Date and no benefit is payable to the Participant in any month when those offsets exceed 50% of the Participant's Final Average Pay, reduced by 1/3 of 1% for each full calendar month by which the Participant's Actual Retirement Date precedes the Participant's Normal Retirement Date. SECTION 5 - Benefit Reduction for Less than 10 Years' Service Notwithstanding anything to the contrary in this Plan, if a Participant (other than a Protected Participant) has less than 10 years of Credited Service at the Participant's Actual Retirement Date, the monthly benefit described in Section 3 or 4, as appropriate, is to be multiplied by a fraction, the numerator of which equals the Participant's years of Credited Service (including fractional years) and the denominator of which equals 10 years. For this purpose, months of Credited Service equal 1/12th of a year's credit for each full calendar month of Credited Service. This Section 5 shall not apply in the case of a Protected Participant. SECTION 6 - Death Benefits No benefits under this Plan are payable after the Participant's death except as otherwise provided in this Section 6. (a) Pre-Retirement Death Benefit. No benefits under this Plan are payable after the Participant's death if the Participant dies before the Participant's Actual Retirement Date. (b) Post-Retirement Death Benefit. If the Participant dies after the Participant's Actual Retirement Date, the Participant's surviving spouse, if any, is entitled to receive a monthly benefit beginning on the first day of the calendar month coincident with or following the Participant's death and continuing for the spouse's life in the monthly amount equal to one-half of the monthly benefit that the Participant was receiving or would have been entitled to receive at the Participant's death under Section 3 or 4 of this Plan (determined before the stated offsets of the Participant's Social Security Benefits, Other Retirement Benefits and Actuarial Adjustments are applied but subject to Section 5) less the Social Security Benefits and Other Retirement Benefits payable to the Participant's spouse during that month. SECTION 7 - Vesting (a) Except in the case of a Protected Participant, upon termination of a Participant's employment with Black & Decker at any time for any reason before the Participant's Early Retirement Date, or if the Participant dies before the Participant's Actual Retirement Date, the Participant's (and the surviving spouse's) right to benefits under this Plan will be completely forfeited. In the case of a Protected Participant, the Protected Participant's and his or her spouse's right to benefits under this Plan will be completely forfeited if the Protected Participant dies before his or her Actual Retirement Date. Except in the case of a Protected Participant, if this Plan is terminated by the Corporation on or after a Participant's Early Retirement Date but before the Participant's Actual Retirement Date, the Participant will be entitled to receive a monthly benefit under this Plan commencing at the Participant's Actual Retirement Date and continuing for the Participant's life in the amount the Participant would have received under this Plan based on the Participant's Credited Service and Final Average Pay determined at the Plan's termination date, and the Participant's surviving spouse shall be entitled to receive the corresponding post-retirement death benefit pursuant to Section 6(b). If this Plan is terminated or amended after a Change in Control of the Corporation, each Protected Participant who has not consented in writing to that termination or amendment shall be entitled to receive a monthly benefit, commencing at his or her Actual Retirement Date, that is not less than the monthly benefit the Protected Participant would have received if the Plan termination or amendment had not occurred and the Protected Participant's surviving spouse shall be entitled to receive the corresponding post-retirement death benefit pursuant to Section 6(b). (b) Notwithstanding anything to the contrary, all of the Participant's (and surviving spouse's) rights and benefits under this Plan will be forfeited: (i) if the Participant's employment with Black & Decker is terminated by reason of fraud, misappropriation or intentional material damage to the property or business of Black & Decker; commission of a felony; or the continuance of willful and repeated failure by the Participant to perform his or her duties after written notice to the Participant specifying such failure; or (ii) if before the Participant's Actual Retirement Date and for a period of 24 months following the Participant's termination of employment, the Participant, without the Corporation's written consent, enters into competition with Black & Decker or the Participant discloses confidential information. (c) For purposes of this Section 7, the Participant will be deemed to be in competition with Black & Decker if the Participant, directly or indirectly, solicits as a customer any company which is or was a customer of Black & Decker during the Participant's employment, or which is or was a potential customer of Black & Decker with which Black & Decker has made or will make business contacts during the Participant's employment; provided, however, that solicitation of a company as a customer of any business which is not in direct or indirect competition with any of the types of business conducted by Black & Decker within any of the same territories as Black & Decker shall not be prohibited hereby. In addition, a Participant will be deemed to be in competition with Black & Decker if the Participant directly or indirectly becomes an owner, officer, director, operator, sole proprietor, partner, joint venturer, contractor or consultant, or participates in or is connected with the ownership, operation, management or control of any company in direct or indirect competition with any of the types of businesses conducted by Black & Decker within any of the same territories as Black & Decker; provided, however, that the ownership for investment of less than 5% of the outstanding stock of any of the classes of stock issued by a publicly-held company shall not be prohibited hereby. The Participant shall be deemed to have disclosed "confidential information" if the Participant fails to preserve as confidential and uses, communicates, or discloses to any person, to the actual or potential detriment of Black & Decker, orally, in writing or by publication, any information, regardless of when, where or how acquired relating to or concerning the affairs of Black & Decker; provided, however, that the foregoing obligations shall not apply to information which is or becomes public through no fault of the Participant. (d) The Committee shall have the absolute right to determine in its sole discretion (i) whether or not a Participant's employment was terminated as a result of a wrongful act, and (ii) whether or not a Participant has entered into competition with Black & Decker or has disclosed confidential information so as to cause a forfeiture of the Participant's benefits hereunder. SECTION 8 - Additional Provisions Concerning Benefits (a) The offsets described in Sections 3, 4 and 6 for Social Security Benefits, Other Retirement Benefits and Actuarial Adjustments are to be applied separately to each monthly payment under this Plan when that payment becomes due, ignoring increases in those Social Security Benefits and Other Retirement Benefits attributable to increases in the cost-of-living after the Participant's Actual Retirement Date. The Committee will decide, in its sole discretion, the manner in which these offsets are to be applied. The payments under this Plan are conditioned on the agreement of the Participant and the Participant's spouse (i) to inform the Committee of all retirement, severance, disability and death benefit payments received or receivable by them that may reduce the Corporation's obligations to pay benefits under this Plan and (ii) to provide all information about those payments that the Committee may reasonably request from time to time in order to administer this Plan. (b) The benefit payments under this Plan will be calculated in U.S. dollars using the appropriate currency exchange rate selected by the Committee in its sole discretion at the Participant's Actual Retirement Date. The benefits under this Plan will be paid to the Participant and the Participant's spouse in any currency designated by the Participant at the Participant's Actual Retirement Date (or, if the Participant dies before benefits commence, the currency designated by the spouse), based on the appropriate currency exchange rate (selected by the Committee in its sole discretion) in effect at the Participant's Actual Retirement Date. Once benefit payments under this Plan have begun, the currency selected by the Participant (or the Participant's spouse) and the applicable exchange rate may not be changed except to the extent that the Committee, in its sole discretion, may approve a change in order to prevent extreme financial hardship to the Participant or the Participant's spouse. SECTION 9 - Corporation's Obligations are Unfunded and Unsecured Except as otherwise required by applicable law, the Corporation's obligations under this Plan are not required to be funded or secured in any manner; no assets need be placed in trust or in escrow or otherwise physically or legally segregated for the benefit of any Participant; and the eventual payment of the benefits described in this Plan to a Participant or the Participant's spouse is not required to be secured to the Participant or them by the issuance of any negotiable instrument or other evidence of the Corporation's indebtedness. Neither a Participant nor the Participant's spouse is entitled to any property interest, legal or equitable, in any specific asset of the Corporation, and, to the extent that any person acquires any right to receive payments under the provisions of this Plan, that right is intended to be no greater than or to have any preference or priority over, the rights of any other unsecured general creditor of the Corporation. However, the Corporation reserves the right, in its sole discretion, to accumulate assets to offset its eventual liabilities under this Plan and physically or legally to segregate assets for the benefit of any Participant or Participant's spouse (whether by escrow, by trust, by the purchase of an annuity contract or by any other method of funding selected by the Corporation) without liability for any adverse tax consequences resulting to that Participant or Participant's spouse from the Corporation's action. Any such segregation of assets may be made with respect to the Corporation's obligations under this Plan for benefits attributable to an individual Participant, a selected group of Participants or all Participants, as the Corporation may determine from time to time, in its absolute discretion. Benefits under this Plan shall be payable by the Corporation from the Corporation's general assets and no other company shall have any responsibility or liability under this Plan. The Corporation's liabilities under this Plan shall, however, be discharged to the extent of any payment received by the Participant (or the Participant's surviving spouse) from any other company made for that purpose and on the Corporation's behalf or for its benefit. SECTION 10 - Alienation or Encumbrance No payments, benefits or rights under this Plan shall be subject in any manner to anticipation, sale, transfer, assignment, mortgage, pledge, encumbrance, charge or alienation by a Participant, the Participant's spouse or any other person who could or might possibly receive benefit payments that were due to the Participant or the Participant's spouse, but were not paid. If the Corporation determines that any person entitled to payments under this Plan has become insolvent, bankrupt, or has attempted to anticipate, sell, transfer, assign, mortgage, pledge, encumber, charge or otherwise in any manner alienate any amount payable to that person under this Plan or that there is any danger of any levy, attachment, or other court process or encumbrance on the part of any creditor of that person, against any benefit or other amounts payable to that person, the Corporation may, in its sole discretion and to the extent permitted by law, at any time, withhold any or all such payments or benefits and apply the same for the benefit of that person, in such manner and in such proportion as the Corporation may deem proper. SECTION 11 - Other Benefits The provisions of this Plan relate only to the specific benefits described in this Plan and are not intended to affect any other benefits to which a Participant may be entitled as a retiree and former employee of Black & Decker. Nothing contained in this Plan shall in any manner modify, impair or affect the existing rights or interests of a Participant under any other benefit plan provided by Black & Decker, and the rights and interests of a Participant to any benefits or as a participant or beneficiary in or under any or all such plans shall continue in full force and effect unimpaired, subject nonetheless to the eligibility requirements and other terms of each such plan. This Section shall not be interpreted as modifying in any way the effect that the Participant's termination of employment and retirement at the Participant's Actual Retirement Date has upon the Participant's rights under such other plans. The benefits provided under this Plan are not to be applied as an offset against any other retirement or deferred compensation benefits or payments that are otherwise to be provided by Black & Decker to the Participant or the Participant's beneficiaries; and those benefits or payments are to be calculated first, ignoring this Plan's existence. In no event shall any benefits payable under this Plan be treated as salary or other compensation to a Participant for the purpose of computing benefits to which the Participant may be entitled under any other benefit plan of Black & Decker. SECTION 12 - No Guarantee of Employment The Plan shall not be construed as conferring any legal rights upon any Participant for continuation of employment, nor shall it interfere with the rights of Black & Decker to discharge a Participant and to treat the Participant without regard to the effect which such treatment might have upon the Participant under the Plan. SECTION 13 - Cooperation of Parties Each Participant (and surviving spouse) shall perform any and all reasonable acts and execute any and all reasonable documents and papers that are necessary or desirable for carrying out this Plan or any of its provisions. SECTION 14 - Claims Procedure Any claim by a Participant, a Participant's spouse or beneficiary that benefits under the Plan have not been paid in accordance with the terms and conditions of the Plan shall be made in writing and delivered to the Committee at the Corporation's principal office in the State of Maryland. The Committee shall notify the claimant if any additional information is needed to process the claim. All claims shall be approved or denied by the Committee within 90 days of receipt of the claim by the Committee. If the claim is denied, the Committee shall furnish the claimant with a written notice containing: (a) an explanation of the reason for the denial; (b) a specific reference to the applicable provisions of the Plan; and (c) a description of any additional material or information necessary for the claimant to pursue the claim. Within 90 days of receipt of the notice described above, the claimant shall, if further review is desired, file a written request for consideration with the Committee. A request for reconsideration must include an explanation of the grounds for the request and the facts supporting the claim. So long as the claimant's request for review is pending, including such 90 day period, the claimant or the claimant's duly authorized representative may review pertinent documents and may submit issues and comments in writing to the Committee. A final and binding decision shall be made by the Committee within 60 days of the filing of the request for reconsideration; provided, however, that the Committee, in its discretion, may extend this period up to an additional 60 days. The decision by the Committee shall be conveyed to the claimant in writing and shall include specific reasons for the decision, with specific references to the applicable provisions of the Plan on which the decision is based. SECTION 15 - Incapacity If a Participant or the Participant's spouse has become legally incompetent, then the legal guardian, or other legal representative of such Participant's or spouse's estate shall be entitled to act for and represent such incompetent Participant or spouse in all matters and to the same extent as the Participant or spouse could have done but for such incompetency, including but not limited to the receipt of Plan benefits. SECTION 16 - Administration (a) The Plan shall be administered by the Committee, which shall be responsible for all matters affecting the administration of the Plan and shall have the following duties and responsibilities in connection with the administration of the Plan: (i) To prepare and enforce such rules, regulations and procedures as shall be proper for the efficient administration of the Plan, such rules, regulations and procedures to apply uniformly to all Participants; (ii) To determine all questions arising in the administration, interpretation and application of the Plan, including questions of the status and rights of Participants and any other persons hereunder; (iii) To decide any dispute arising hereunder; (iv) To correct defects, supply omissions, and reconcile inconsistencies to the extent necessary to effectuate the Plan; (v) To compute the amount of benefits which shall be payable to any Participant or spouse in accordance with the provisions of the Plan and to determine the person or persons to whom such benefits shall be paid; (vi) To select the currency conversion or exchange rates to be applied in determining a Participant's or spouse's benefits under this Plan, where foreign currencies are involved; (vii) To authorize all payments that shall be made pursuant to the provisions of this Plan; (viii) To make recommendations to the Corporation's Board of Directors with respect to proposed amendments to the Plan; (ix) To file all reports with government agencies, employees, and other parties as may be required by law, whether such reports are initially the obligation of the Corporation or the Plan; (x) To have all such other powers as may be necessary to discharge its duties hereunder. (b) The Committee shall have the authority to interpret the Plan in its sole and absolute discretion. The Committee's interpretation of the Plan and actions in respect of the Plan shall be binding and conclusive on all persons for all purposes. (c) Neither the Committee nor any person acting on its behalf shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of the Plan unless attributable to gross negligence or willful misconduct. In addition to such other rights of indemnification they may have as directors, officers or employees of the Corporation, each member of the Committee shall be indemnified by the Corporation against the reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which such member may be a party by reason of any action taken or omitted under or in connection with the Plan, and against all amounts paid in settlement thereof, provided such settlement is approved by independent legal counsel selected by the Corporation, or paid by such member in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such member is liable for gross negligence or willful misconduct in such member's duties; provided that within 60 days after the institution of such action, suit or proceeding the member shall in writing offer the Corporation the opportunity, at its own expense, to handle and defend the same. (d) If a Participant is also a member of the Committee, the Participant may not vote or act upon matters relating specifically to such member's participation in the Plan. SECTION 17 - Amendments and Termination The Board of Directors of the Corporation reserves the right at any time and from time to time to the extent permissible under law, to amend or terminate this Plan, prospectively or retroactively, in whole or in part; provided, however, that no such amendment or termination shall, without the Participant's written agreement, reduce or impair (a) the benefits or rights of any Participant (or spouse) whose Actual Retirement Date occurred before the date the amendment is adopted or the Plan is terminated, (b) the vested benefits and rights of any Participant who is then employed by Black & Decker or (c) the right of any Protected Participant and/or his or her surviving spouse to receive benefits under this Plan determined as if that Plan termination or amendment had not occurred. Any amendment or termination shall be adopted by resolution of the Corporation's Board of Directors. SECTION 18 - Severability If any provision of this Plan shall be held void or unenforceable, the remaining provisions of the Plan shall remain in full force and effect; provided, however, that in interpreting this Plan, such void or unenforceable provision shall be replaced with an effective and legally permissible provision, the effect of which shall be identical to, or as close as reasonably possible to, the effect of the original provision. SECTION 19 - Construction Any use of the singular shall include the plural, and vice versa, as may be appropriate. Titles, captions or paragraph headings contained in this Plan are for purposes of convenience and reference only, and shall not operate to define or modify the text to which they relate. SECTION 20 - Choice of Law This Plan, and the respective rights and duties of the Corporation and all persons thereunder, shall in all respect be governed by and construed under the laws of the State of Maryland, except to the extent, if any, that those laws may have been pre-empted by federal law. This Plan is intended to be a "pension plan" within the meaning of Section 3(2)(A) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), which is exempt from Parts 2, 3 and 4 of ERISA by virtue of Sections 201(2), 301(a)(3) and 401(a)(1) thereof, respectively, and is not designed to meet the requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended. SECTION 21 - Parties to be Bound The provisions of this Plan shall be binding upon, and shall inure to the benefit of the Corporation, its successors and assigns, and each Participant and the Participant's spouse. Originally Adopted January 30, 1984 Amendment and Restatement adopted February 18, 1993. Amendment and Restatement adopted July 20, 1995. EX-11 3 EXHIBIT 11 FOR FORM 10Q Exhibit 11 THE BLACK & DECKER CORPORATION ----------------------------- COMPUTATION OF EARNINGS PER SHARE --------------------------------- (Millions of Dollars Except Per Share Data)
For Six Months Ended -------------------- July 2, 1995 July 3, 1994 ----------------- ----------------- Per Per Amount Share Amount Share ------ ----- ------ ----- Primary: - ------- Average shares outstanding 85.2 84.0 Dilutive stock options and purchase plans--based on the Treasury stock method using the average market price (Note 1) (Note 1) -------- -------- Adjusted shares outstanding 85.2 84.0 ====== ====== Net earnings $60.5 $37.6 Less preferred stock dividend 5.8 (Note 3) 5.9 ------ ------ Net earnings attributable to common stock $54.7 $.64 $31.7 $.38 ====== ==== ====== ====== Fully Diluted: (Note 2) - ------------- Average shares outstanding 85.2 84.0 Dilutive stock options and purchase plans--based on the Treasury stock method using the higher of average market price or ending market price (Note 1) (Note 1) -------- -------- Adjusted shares outstanding 85.2 84.0 Average shares assumed to be converted through convertible preferred stock 6.4 6.4 ------ ------ Fully diluted average shares outstanding 91.6 90.4 ====== ====== Net earnings $60.5 $.66 $37.6 $.42 ===== ==== ===== ==== Notes: 1. Dilutive effect of common stock equivalents is less than 3% for the six- month periods ended July 2, 1995, and July 3, 1994, and has not been shown. 2. The calculation of fully diluted earnings per share is anti-dilutive and, therefore, is not presented in the financial statements. 3. Difference from prior year is due to rounding. /TABLE Exhibit 11 THE BLACK & DECKER CORPORATION ----------------------------- COMPUTATION OF EARNINGS PER SHARE --------------------------------- (Millions of dollars, except per share data)
For Three Months Ended ---------------------- July 2, 1995 July 3, 1994 ----------------- ----------------- Per Per Amount Share Amount Share ------ ----- ------ ----- Primary: - ------- Average shares outstanding 85.5 84.1 Dilutive stock options and purchase plans--based on the Treasury stock method using the average market price (Note 1) (Note 1) -------- -------- Adjusted shares outstanding 85.5 84.1 ===== ===== Net earnings $34.8 $23.0 Less preferred stock dividend 2.9 2.9 ----- ----- Net earnings attributable to common stock $31.9 $.37 $20.1 $.24 ===== ==== ===== ==== Fully Diluted: (Note 2) - ------------- Average shares outstanding 85.5 84.1 Dilutive stock options and purchase plans--based on the Treasury stock method using the higher of average market price or ending market price (Note 1) (Note 1) --------- --------- Adjusted shares outstanding 85.5 84.1 Average shares assumed to be converted through convertible preferred stock 6.3 (Note 3) 6.4 ------ ------ Fully diluted average shares outstanding 91.8 90.5 ====== ====== Net earnings $34.8 $.38 $23.0 $.25 ====== ==== ====== ==== Notes: 1. Dilutive effect of common stock equivalents is less than 3% for the three- month periods ended July 2, 1995, and July 3, 1994, and has not been shown. 2. The calculation of fully diluted earnings per share is anti-dilutive and, therefore, is not presented in the financial statements. 3. Difference from prior year is due to rounding.
EX-12 4 EXHIBIT 12 FOR FORM 10Q EXHIBIT 12 THE BLACK & DECKER CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Millions of Dollars, Except Ratios)
Three Months Ended Six Months Ended ------------------ ---------------- July 2, 1995 July 2, 1995 ------------ ------------ EARNINGS: Earnings before income taxes $49.7 $ 93.7 Interest expense 49.4 98.3 Portion of rent expense representative of an interest factor 7.6 15.2 ------ ------ Adjusted earnings before taxes and fixed charges $106.7 $207.2 ====== ====== FIXED CHARGES: Interest expense $ 49.4 $ 98.3 Portion of rent expense representative of an interest factor 7.6 15.2 ------ ------ Total fixed charges $ 57.0 $113.5 ====== ====== RATIO OF EARNINGS TO FIXED CHARGES 1.87 1.83
EX-27 5 EXHIBIT 27 FOR FORM 10Q
5 This schedule contains financial information extracted from the Corporation's unaudited interim financial statements as of and for the six months ended July 2, 1995, and the accompanying footnotes and is qualified in its entirety by reference to such financial statements. 0000012355 THE BLACK & DECKER CORPORATION 1,000 6-MOS DEC-31-1995 JUL-02-1995 126,600 0 869,500 0 872,400 2,033,200 857,000 0 5,658,300 1,856,200 1,812,100 42,800 0 150,000 1,093,700 5,658,300 2,156,800 2,528,800 1,358,700 2,338,900 0 0 98,300 93,700 33,200 60,500 0 0 0 60,500 .64 0 Represents net trade receivables. Represents net property, plant and equipment. Fully diluted earnings per share are anti-dilutive and are not presented.
EX-99 6 EXHIBIT 99 FOR FORM 10Q Exhibit 99 THE BLACK & DECKER CORPORATION AND SUBSIDIARIES Computation of Ratios (Millions of Dollars)
July 2, 1995 ------------ A. Cash Flow Coverage Ratio ------------------------ 1. EBITDA (Earnings before income taxes for such period as set forth on BDC's consolidated statements of earnings for such period, minus [or plus] other income [or expense] for such period to the extent included in earnings before income taxes, plus Consolidated Net Interest Expense, plus all charges in such period for depreciation and amortization as set forth in BDC's consolidated statements of cash flows for such period, minus net income of BFS to the extent such net income is derived from any business activity unrelated to BDC or any subsidiary of BDC) for the period from July 4, 1994 to July 2, 1995, the Reporting Date. $ 652.6 -------- 2. Consolidated Net Interest Expense (Total interest expense [including the interest component of capital leases and Discount accrued during such period] of BDC and its Subsidiaries for such period, plus all dividends declared in such period on Mandatorily Redeemable Stock, minus total interest income of BDC and its Subsidiaries) for the same period. $ 192.7 -------- 3. Quotient obtained by dividing Line 1 by Line 2 3.39 -------- The calculation of the Cash Flow Coverage Ratio excludes all effects of FAS 106, FAS 109, and FAS 112 and unusual or non-recurring credits or charges. B. Leverage Ratio -------------- 1. The sum, without duplication, of all Reported Debt less cash and cash equivalents of BDC and its Consolidated Subsidiaries at such time, plus all outstanding Mandatorily Redeemable Stock of BDC and its Subsidiaries at such time, determined on a consolidated basis, plus all outstanding obligations of other Persons for money borrowed (except employee obligations not exceeding $10,000 in aggregate at such time outstanding) Guaranteed by, or secured by a Lien on any assets of, BDC and its Subsidiaries at such time, determined on a consolidated basis, plus the book value on the books of the purchasers thereof of accounts receivable sold by BDC and its Subsidiaries (other than to BDC or any of its Subsidiaries). $2,633.9 -------- 2. Consolidated Net Worth at such time, minus cumulative consolidated net income of BFS to the extent such net income is derived from any business activity unrelated to BDC or any Subsidiary of BDC minus (or plus) the amount by which the equity adjustment for foreign currency translations used in determining Consolidated Net Worth at such time exceeds (is less than) the amount thereof used in determining Consolidated Net Worth as at September 27, 1992. $1,640.3 -------- 3. Quotient obtained by dividing Line 1 by Line 2 1.61 -------- The calculation of the Leverage Ratio excludes all effects of FAS 106, FAS 109 and FAS 112 and unusual or non-recurring credits or charges after September 27, 1992. Note: The information described herein is as of the last day of the fiscal quarter ended July 2, 1995 (the Reporting Date). Capitalized terms used herein shall have the meanings set forth in the Credit Facility, dated as of November 18, 1992.
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