De la couverture des risques de dommages subis ou causés à des tiers, aux garanties pour couvrir pertes d’exploitation et les risques informatiques, contrats d’assurance, même facultatifs, peuvent s’avérer indispensables.
ll assez de temps en temps d’un incendie ainsi qu’à de la livraison d’un produit défaillant pour mettre en péril la vie d’une entreprise… Si, du encaissé point de vue juridique, seules plusieurs couvertures sont obligatoires – la confirmation des véhicules, la responsabilité civile et toupet spécifiques de type garantie décennale pour différents secteurs d’activité -, les PME et TPE ont tout intérêt à souscrire des garanties complémentaires. Au-delà du strict minimum – la garantie des biens, celle des pertes d’exploitation ou la responsabilité civile professionnel -, quelques-uns contrats peuvent se révéler utiles au regard de l’activité de l’entreprise (informatique, chimie, transports, activités cycliques…) mais encore son expansion à l’international. Difficile toutefois de s’y retrouver dans une offre surabondante. Parcours fléché des sept contrats obligé à l’entreprise.
1. L’assurance des biens
Première grande catégorie d’assurances pour les entreprises: la couverture des risques potentiels extérieurs. Inondation, incendie, vol menacent les locaux, le matériel et pourquoi pas les stocks. Contre ces dommages, une assurance spécifique être souscrite, non obligatoire mais néanmoins incontournable. “Attention, dans l’hypothèse ou la societé est locataire de ses locaux – bureaux, usine, entrepôt- elle obligatoire souscrire une sûreté pour couvrir les dommages liés aux biens immobiliers et sa responsabilité d’occupation. Cette obligation figure dans la loi n°89-462 du 6 juillet 1989”, avertit Damien Palandjian responsable département à la Direction des Services aux Entreprises, chez le courtier en aisance Verspieren.
En de sinistre, le chef d’aventure fera une déclaration à sa compagnie d’assurances dans un délai légal rappelé parmi le contrat (de deux à cinq jours, selon les risques), vraiment immédiatement pour les nouveauté intéressants (incendie, catastrophe naturelle, tempête, cambriolage…). Le montant de l’indemnisation dépend alors de la valeur des biens garantis, c’est pourquoi il ne faut pas oublier de prévenir son assureur lorsque le périmètre des biens à assurer évolue en cours d’année (achat de nouvelles machines, reprise d’un autre site…), ni de vérifier quels sont les réellement couverts. Les sociétés qui ont une activité périodique se traduisant en une variation importante des tenue d’articles ont intérêt à mentionner cet spécificité à assureur pour évoluer en tant que mieux couvertes en de dommages. La valeur des magasin est alors établie sur la base de montant le plus important et régularisée en fin d’année.
Dans tous les de figure, l’indemnisation existera versée d’ordinaire après présentation des factures analogue aux réparations nécessaires et pourquoi pas à l’achat de nouveau matériels. En cas de lourd sinistre, l’assureur peut toutefois verser des acomptes à son client.
L'analyse financière et commerciale ci-dessous fournit des informations que la Société considère qu'il est important d'évaluer et de comprendre son situation financière, résultats d'exploitation et flux de trésorerie. Cette situation financière et l'analyse commerciale doit être lue conjointement avec le document financier consolidé Déclarations et remarques connexes. Toutes les références aux "commentaires" dans ce paragraphe 7 sont des références Notes aux états financiers consolidés inclus au paragraphe 8 du présent rapport annuel Remarquez. Discussion plus approfondie et quelques autres chapitres de ce rapport annuel sur Le formulaire 10-K contient des déclarations qui reflètent l'approche de l'entreprise à l'égard de son avenir performances qui sont des "déclarations prospectives" dans le "Private 1995 Loi de réforme du contentieux des valeurs mobilières. Ces déclarations prospectives sont sur la base des attentes, estimations, prévisions et projections actuelles de l'industrie et les marchés dans lesquels la société opère ainsi que la direction croyances et hypothèses. Toutes les déclarations ici (y compris sans déclarations de restrictionsStanley Black & Decker, Inc. ou son la direction «croit», «attend», «fournit», «prévoit» et autres expressions) qui ne sont pas des déclarations de faits historiques doivent être déclarations prospectives. Ces déclarations ne garantissent pas l'avenir performances et inclut certains risques, incertitudes et hypothèses présents difficile à prévoir. Cela peut être dû à plusieurs facteurs importants les résultats réels sont fondamentalement différents de ceux indiqués par une telle perspective future déclarations. Ces facteurs comprennent, sans limitation, le ou incorporé comme référence ci-dessous dans la section «Conseils de prudence de 1995 Loi de réforme du contentieux des valeurs mobilières privées. «L'entreprise ne fait pas ça a l'intention de mettre à jour publiquement tout énoncé prospectif concernant nouvelles informations, événements à venir ou autre. Objectifs stratégiques La Société poursuit sa stratégie de croissance et d’acquisition qui inclut l'industrie, la géographie et la diversification de la clientèle pour promouvoir la durabilité croissance des revenus, des bénéfices et des flux de trésorerie, et utiliser ces stratégies cadre pour réaliser sa vision d'offrir la meilleure position financière en quartz performance, de devenir un des premiers innovateurs mondiaux et d’augmenter son engagement envers la responsabilité sociale: • Poursuite du taux de croissance organique en utilisant le modèle d'exploitation SBD promouvoir l'innovation et l'excellence commerciale tout en se diversifiant les entreprises avec une croissance plus élevée, des marges plus élevées;
• Soyez prudent et travaillez sur des marchés où la marque a du sens, de la valeur
La proposition est à la fois durable par l'innovation et mondiale
la maîtrise des coûts est possible; et
• Rechercher une croissance réalisable sur plusieurs fronts en fonction de son
une plate-forme d'outils mondiale pour étendre la plate-forme de l'industrie pour l'ingénierie
Fixation et consolidation de l'électronique commerciale
dans le secteur de la sécurité et à la recherche d'êtres chers selon une logique industrielle solide.
La mise en œuvre de la stratégie ci-dessus a entraîné environ10,1 milliards de dollars à propos acquisitions depuis 2002 (horsBlack & Decker fusion et en attente acquisitionConsolidated Aerospace Manufacturing, LLC , comme expliqué ci-dessous), un 20% Investissement dansMTD Holdings Inc. ("MTD"), plusieurs ventes, - une efficacité accrue de la chaîne d'approvisionnement et des opérations de production, et - augmentation des investissements dans la croissance organique tirée par la génération de flux de trésorerie et augmentation de la capacité d'endettement. De plus, la société continue de se concentrer sur: diversification et croissance organique améliorent la performance financière sa présence dans le monde s'est accrue. L'entreprise reste également concentrée utiliser son modèle d'exploitation SBD pour réussir en 2020 et plus tard. La dernière évolution du modèle d'exploitation SBD, anciennement Stanley Fulfillment System ("SFS") 2.0, basé sur les forces passées de l'entreprise tout en offrant une couverture changements dans l'environnement externe pour faire respecter le droit des sociétés compétences, intègre les progrès technologiques dans tous les domaines, soutient les opérations l'excellence, favorise l'efficacité et la résilience des processus d'affaires culture, apportant une innovation extraordinaire et garantissant que le client est là classe mondiale. Comme auparavant, le nouveau modèle d'exploitation sera la base La capacité de l'entreprise à générer une croissance supérieure à celle du marché en augmentant les marges, maintenir un niveau efficace de ventes, frais généraux et administratifs ("PBA") et utilise le trimestre le plus efficacement. Les objectifs financiers à long terme de la société demeurent: 25 -------------------------------------------------- ------------------------------
• croissance organique des revenus de 4 à 6%;
• 10-12% de la croissance totale des revenus;
• 10-12% de la croissance totale du BPA (7-9% en organique) hors acquisitions
les taxes;
• Flux de trésorerie disponible égal ou supérieur au résultat net;
• Maintenir le fonds de roulement pendant 10 ans ou plus; et
•
En ce qui concerne l'allocation du capital, la Société s'est engagée au fil du temps à: retour d'environ 50% des flux de trésorerie disponibles aux actionnaires augmentation des dividendes et rachats d'actions opportunistes. le cash-flow libre restant (environ 50%) sera utilisé acquisitions.
Rachats d'actions
À
environ
stock commun environ
Acquisitions et investissements Sur2019 8 mars acquis par l'entrepriseSolutions internationales d'équipement Accessories Business, Paladin & Pengo (Accessoires IES), Fabricant outils de fixation haute qualité et hautes performances applications hors route. L'acquisition diversifie davantage l'entreprise la présence sur les marchés industriels élargit son portefeuille de pièces jointes solutions et fournit une plate-forme significative pour une croissance continue. Sur2019 2 janvier , La Société a acquis 20% des actions de MTD, un un fabricant mondial privé d'équipements électriques d'extérieur. MTD produit et distribue des tracteurs de pelouse à essence, zéro tour, tondeuses à gazon, souffleuses à neige, tondeuses, tronçonneuses, véhicules d'occasion et autres énergies extérieures équipement. Aux termes de l'accord, la Société peut: pour acheter les 80% restants de MTD2021 1 juillet et se termine2029 2 janvier . En cas de choix, les entreprises ont convenu au multiplicateur de valorisation basé sur MTD 2018. avant intérêts, impôts, Amortissement et amortissement («EBITDA») avec accord de partage équitable pour la croissance future de l'EBITDA. Investir dans MTD augmente la présence de l’entreprise à l'intérieur20 milliards de dollars dans le domaine des équipements énergétiques d'extérieur et permet à ces deux sociétés travailler ensemble pour les opportunités de revenus et de dépenses, améliorer les performances efficacité et présenter des produits nouveaux et innovants aux professionnels et les acheteurs d'équipements extérieurs résidentiels utilisant chaque entreprise de solides portefeuilles de marques. Sur2018 2 avril , la société a acquis Nelson Fastener Systems (Nelson), qui n'incluait pas l'entreprise de soudage de goujons de voitures Nelson. Cette acquisition qui a a été intégré dans le secteur des fixations d'ingénierie, complète Les produits proposés par l'entreprise renforcent sa présence dans l'industrie marché, élargit son portefeuille de solutions de fixation techniques et assurer des synergies de coûts. Sur2017 9 mars , la société a acquis l'activité outils de Newell Brands (Newell Tools), qui présentait une coupe à la main industrielle très attrayante marques d'accessoires pour outils et outils électriques IRWIN® et LENOX®. L'acquisition s'est améliorée élargi la position de l'entreprise dans l'industrie mondiale de l'outillage et du stockage les produits et solutions proposés par l'entreprise aux clients et utilisateurs finaux, en particulier dans les accessoires d'outils électriques. Sur2017 8 mars , la société a acquis la marque Craftsman® de Sears Holdings Corporation ("Sears Holdings L'acquisition a fourni à l'entreprise droits de développer, produire et vendre des produits de marque autre que Sears Craftsman® Retenir les canaux. L'acquisition a considérablement augmenté Des produits de marque Craftsman® pour des chaînes précédemment mal desservies, amélioration de l'innovation et création d'emplois dans le secteur manufacturierUSA pour soutenir la croissance.
Achat en attente
Sur2020 3 janvier , La Société a conclu un contrat de venteConsolidated Aerospace Manufacturing, LLC (Le "poing"). CAM est une industrie leader fabricant de fixations et composants spéciaux pour l'espace et la défense marchés. La société prévoit que l’acquisition diversifiera davantage ses activités présence sur les marchés industriels et élargissement de notre gamme de spécialités fixations sur un marché de l'espace et de la défense en très forte croissance. L'acquisition fournira des marques bien connues, un modèle commercial éprouvé relations avec la clientèle, équipe de direction expérimentée et trésorerie convaincante qualités qui créeront une voie attrayante vers des produits biologiques rentables croissance réussie et rendement pour les actionnaires. Cette opération s'applique des conditions normales de fermeture, y compris l'approbation des prescripteurs, sont prévues et attendues fermer tard2020 Fevrier . 26e -------------------------------------------------- ------------------------------
Voir la note E, Acquisitions et investissements, pour plus d'informations.
Vente
Sur
dans le segment Sécurité. La vente permet à l'entreprise
investir dans d'autres domaines de la société qui sont compatibles avec sa croissance à long terme
stratégie.
Sur2017 22 février , l'entreprise a vendu l'essentiel de sa sécurité mécanique pour les entreprises qui incluent Best Access, phi Précision et GMT. La vente a permis à l'entreprise de faire un usage plus large du capital de manière accréditée et orientée vers la croissance.
Pour en savoir plus sur l'entreprise, voir la note T, «Désinvestissements»
séparations.
Certains éléments affectant le revenu
Au cours du rapport de gestion, la société a discuté des perspectives et les résultats sont inclus et excluent les coûts d'acquisition et autres. Résultats et mesures, y compris le bénéfice brut et le bénéfice sectoriel basés sur autres que ces montants sont considérés comme pertinents pour l’analyse de l’aide et Compréhension des résultats de l'entreprise sans impact significatif les choses. Ces montants sont les suivants:
L'année 2019
L'entreprise a signalé
composé des parties suivantes:
•40 millions de dollars réduire la marge brute des bâtiments et frais d'élevage;
•
initiatives de transformation des entreprises et de résilience des marges;
•
•
•
fermetures liées à un programme de réduction des coûts; et
•
L'effet net de ces taxes nettes était d'environ78 millions de dollars . À De plus, le bénéfice après impôt a été inclus dans le bénéfice net de MTD environ24 millions de dollars principalement lié à l'augmentation des stocks débogage. Pour les montants ci-dessus, les charges nettes après impôt se sont élevées à309 millions de dollars , ou2,05 $ pour la partie diluée. L'année 2018
L'entreprise a signalé
composé des parties suivantes:
•
frais supplémentaires pour l'acquisition de Nelson et fret supplémentaire
frais pour non-exécution par un fournisseur de services tiers;
•
impôts et ajustements de la juste valeur de la trésorerie;
•
règlement avec
•
•117 millions de dollars charges de restructuration, principalement liées aux coûts programme de réduction. La société a également enregistré une charge fiscale nette181 millions de dollars , qui a été conclu les impôts liés à la loi sur la réduction des impôts et l'emploi (la «loi»), qui sont partiellement compensés les avantages fiscaux desdits impôts avant impôts. Les montants ci-dessus représentaient un montant net après impôt631 millions de dollars , ou4,16 $ pour la partie diluée.
2017 année
L'entreprise a signalé
composé des parties suivantes:
27
-------------------------------------------------- ------------------------------
•
des frais supplémentaires pour l'acquisition de Newell Tools;
•
les taxes;
•
les dépenses; et
•
licenciement d'un employé.
L'entreprise a également signalé: 264 millions de dollars bénéfice avant impôt sur la vente de l'entreprise
2017, principalement lié à la vente de la plupart des titres mécaniques
les entreprises. Avantages fiscaux nets des acquisitions et bénéfices
les ventes des entreprises ont été 7 millions de dollars . De plus, la société a enregistré: 24 $
millions droit fiscal net.
Taxes liées à l'acquisition, bénéfices de vente d'entreprise et taxe nette
bénéfice net après impôt résultant de cette loi 91 millions de dollars , ou 0,59 $
pour la partie diluée.
Promouvoir davantage une croissance rentable en utilisant pleinement les principales franchises
Chaque franchise d'entreprise a des caractéristiques communes: elles sont de classe mondiale les marques et les caractéristiques de croissance attrayantes sont interchangeables et justifiables, ils peuvent se différencier par l'innovation et sont alimentés par SBD Le modèle d'exploitation. • L’entreprise d’outillage et de stockage est une entreprise d’outils que vous possédez et qui
marques, innovation éprouvée, portée mondiale et large éventail de pouvoirs
outils, outils à main, accessoires et de nombreux produits de stockage et numériques
sur les marchés développés et émergents.
• L'activité d'assertion d'ingénierie est très rentable, PIB + croissance
une entreprise proposant des solutions innovantes à haute valeur ajoutée
attributs de revenus récurrents et échelle mondiale.
• L'activité sécurité, dont les revenus récurrents sont attractifs, présente:
a le potentiel d'augmenter la marge de manière significative au fil du temps et a
a historiquement fourni un flux régulier de revenus au cours des cycles économiques,
la passerelle vers le monde numérique et la possibilité de récolter les fruits rapidement changements numériques. La sécurité a commencé une transformation
appliquera la technologie pour réduire le coût du service et créer un nouveau
offres pour vos petites et moyennes entreprises et grands comptes clés
les clients.
La diversification du portefeuille d'activités par des acquisitions stratégiques demeure Fait important, la direction reconnaît que les principales franchises sont décrites ci-dessus des fonds importants qui continuent de générer des flux de trésorerie et une croissance solides perspectives. La direction s'engage également à développer cette activité développement de produits innovants, support de marque, investissement continu dans les pays émergents marchés et une forte concentration sur la compétitivité des prix mondiaux. Nous continuons d'investir dans Stanley Black &Marques Decker La société dispose d'un assortiment solide de marques associées à une haute qualité produits comprenant STANLEY®, BLACK + DECKER®, DEWALT®, FLEXVOLT®, IRWIN®, LENOX®, CRAFTSMAN®, PORTER-CABLE®, BOSTITCH®, PROTO®, MAC TOOLS®, FACOM®, AeroScout®, Powers®, LISTA®, SIDCHROME®, Vidmar®, SONITROL® et GQ®. Au sein de l'entreprise les actifs les plus précieux sont les marques STANLEY®, BLACK + DECKER® et DEWALT® reconnue comme trois des meilleures marques mondiales, et la marque CRAFTSMAN® est reconnue comme la meilleure marque américaine. 2019 Les marques STANLEY®, DEWALT® et CRAFTSMAN® avaient de grandes marques majoraLigue de baseball (MLB) stades présentés dans de nombreux matchs de la MLB. La société a également maintenu ses opérations à long termeNASCAR et le parrainage de la course NHRA, qui a dévoilé la marque lors de près de 60 événements en 2019. avec STANLEY®, DEWALT®, CRAFTSMAN®, IRWIN® et MAC TOOLS®. L'entreprise fait également de la publicité à l'intérieurPremier League anglaise , qui est la première ligue de football un monde plein de marques STANLEY®, BLACK + DECKER® et DEWALT® dans le monde entier public. 2014 La société est devenue sponsor d'un des plus grands au monde les clubs de football populaires, le FC Barcelone ("FCB"), y compris les droits d'image des joueurs, actifs d'accueil et enseignes de stade. 2018 La société a été annoncée comme le premier supporter du T-shirt de l'équipe féminine FCB engagement envers la diversité et l'inclusion mondiales. De plus, la société poursuit ses opérations soutenir l'équipe Envision Virgin Racing Formula E pour soutenir l'entreprise dévouement à la durabilité et à l'avenir de la mobilité électrique. Les initiatives de marketing ci-dessus soulignent la forte concentration de l'entreprise sur la marque bâtiments et soutien commercial, générant plus de 300 milliards de dollars impressions mondiales de la marque chaque année grâce à la publicité numérique et traditionnelle et forte notoriété de la marque. La Société continuera de faire connaître sa marque et les publicités dépensent judicieusement pour capturer le paysage numérique émergent nous continuons à développer des programmes de marketing éprouvés pour fournir des marques de renommée mondiale qui sont fermement engagés dans le développement de la société à mesure qu'ils se transforment technologies pour créer le bon rapport 1: 1, pour le consommateur, pour l'employé et des relations avec les actionnaires qui soutiennent la vision à long terme de l’entreprise. 28e -------------------------------------------------- ------------------------------ SBD Business Model: Winning 2020 Au cours des 15 dernières années, la société a utilisé avec succès ses un modèle d'affaires en constante évolution pour focaliser l'organisation Le quartile le plus élevé qui se traduit par une efficacité de richesse supérieure à la richesse naturelle la croissance et l'expansion des marges d'exploitation. Dans sa première évolution, Stanley Le système de conformité (SFS) s'est concentré sur la rationalisation des opérations, ce qui a raccourcir les délais de livraison, réaliser des synergies grâce à l'intégration des acquisitions et réduire l'inflation des prix des matériaux et de l'énergie. 2015 L'entreprise a commencé: un système d'exploitation SFS mis à jour et revitalisé appelé SFS 2.0 pour conduire à partir de une mentalité de croissance plus programmatique pour une véritable culture de croissance organique s'engager profondément dans l'innovation de rupture et l'excellence commerciale affaires et en même temps il devient beaucoup plus entreprise numérique activée. Maintenant, en 2020, reconnaissant l'évolution le monde dans lequel l'entreprise opère, y compris l'évolution technologique, l'instabilité géopolitique et l'évolution de la nature du travail, SBD lance un nouveau modèle commercial: Winning 2020 Au centre du modèle se trouve le concept de relations interpersonnelles les gens et la technologie. Les quatre catégories restantes sont: Performance Résistance; Innovation extraordinaire; Opérations de haute qualité et client exceptionnel Expérience. Chacun de ces éléments existe en synergie avec les autres d'un point de vue systématique. Personnes et technologie Ce pilier souligne la conviction de l'entreprise dans la bonne combinaison les gens de la littératie numérique utilisant des technologies telles que l'intelligence artificielle, l'apprentissage par ordinateur, l'analyse avancée, l'IoT et d'autres moyens utiles peuvent être une énorme source de valeur et de durabilité pour l'entreprise. Aussi révèle la nature changeante du travail, des talents et des compétences nécessaires aux individus et aux institutions pour prospérer à l’avenir. Avec technologies qui pénètrent sur le lieu de travail à un rythme toujours croissant, la société considère que le les lauréats investiront massivement dans la formation continue, formation en cours d'emploi et apprentissage tout au long de la vie en mettant l'accent sur les les technologies se croisent. En d'autres termes, la technologie peut rendre les gens plus puissants et productif uniquement lorsque les gens savent comment appliquer cette technologie avantage maximum. L'entreprise a développé des plans et des programmes ainsi qu'un nouveau modèle de leadership pour s'assurer que les gens ont les bonnes compétences, les bons outils et l'état d'esprit pour prospérer à cette époque. Possibilités offertes aux employés pour l'adoption, l'apprentissage et ré-enseigner de nouvelles compétences et saisir les opportunités offertes par cette nouvelle le monde sera essentiel au succès de l'entreprise. Efficacité La société valorise l'efficacité opérationnelle comme l'agilité, la flexibilité et adaptabilité pour maintenir des performances élevées, que cela fonctionne ou non les conditions environnementales qui nécessitent une planification d'urgence et prédire la variabilité externe comme la nouvelle normale. La technologie appliquée à la clé les processus d'affaires, les produits et les modèles d'affaires seront une opportunité clé création de valeur et résilience grâce à une performance commerciale durable, transformation continue dans toute l'entreprise. Innovation exceptionnelle L'entreprise a une base historiquement solide pour l'innovation grâce à plus de déploiement plus de 1 000 produits par an, y compris des percées telles que DEWALT Flexvolt, Atom et Xtreme. L'entreprise a étendu ses opérations ces dernières années des équipes internes axées sur l'innovation et des partenariats externes, mais c'est désormais le cas la croissance rapide de l'écosystème de l'innovation, le nombre croissant d'innovations coopération externe avec des start-ups et des entrepreneurs, des institutions académiques, laboratoires de recherche, etc. Cette culture de l'innovation au service de l'attention impact social, en plus des produits et des clients traditionnels de la société L'attention permet à l'entreprise de lancer des produits plus rapidement et de réimaginer comment fonctionner dans le monde en évolution rapide d'aujourd'hui. Excellence dans les opérations Une attention particulière à l'excellence opérationnelle et à l'efficacité des actifs est un must un monde dynamique où la barre de la compétitivité monte toujours plus haut. À qui aider à maintenir l'avantage de l'entreprise est beaucoup plus agile, adaptable et une chaîne d'approvisionnement axée sur la technologie est nécessaire. L'industrie 4.0 est nécessaire pour cela transformation. Pendant plusieurs années, la société est passée à «Où Où Nous vendons "et" achetons où nous le fabriquons "avec plus de produits produits sur les marchés locaux. Aujourd'hui, environ 50% des produits vendus sontNord Amérique sont faitesAmérique du nord et le but est de continuer à le faire plus haut. Cela améliorera la réponse du client, raccourcira le délai de livraison et raccourcira le délai de livraison et atténuer les risques géopolitiques et de change, tout en atténuant les risques sous-jacents améliorations de l'empreinte carbone. Une expérience client exceptionnelle Les clients exigent de plus en plus une expertise de classe mondiale de leurs marques et les attentes à satisfaire au niveau du client augmentent de jour en jour. C'est tout il ne suffit plus d'avoir de grands produits sur des étagères ou dans un catalogue. L'entreprise sait qu'elle doit évoluer pour maintenir la croissance de ses parts de marché s'adapter pour offrir le type d'expérience auquel vos clients s'attendent maintenant. Bien que L'excellence commerciale a toujours été une partie importante de SFS 2.0 et sera La société continuera de faire partie du nouveau modèle d'entreprise la zone le porte au niveau suivant. Toutes les activités de l'entreprise 29 -------------------------------------------------- ------------------------------ valorise et segmente ses différents clients obtenir systématiquement un aperçu de ce qui peut être fait élever cette expérience client à un niveau extraordinaire. Comme avant il est à noter que l'interaction entre les gens et la technologie déterminera le succès zone. En utilisant le modèle d’entreprise SBD, l’entreprise crée une culture où il vise à devenir connu comme l'une des plus grandes entreprises innovantes du monde embrassant l'environnement actuel d'innovation rapide et l'environnement numérique transformation. L'entreprise continue de développer un fort accent sur l'innovation un écosystème pour une innovation plus rapide tout en restant conscient et ouvert à de nouveaux technologie et progrès grâce à des initiatives internes et externes partenariats. L'écosystème d'innovation utilisé conjointement avec SBD Operating Le modèle devrait permettre à l'entreprise d'appliquer l'innovation au cœur de son action processus de fabrication et de fonction de back-office pour réduire les coûts d'exploitation et les inefficacités, pour développer des innovations de produits de fond et de rupture chacune de leurs entreprises et adhère à des modèles commerciaux perturbateurs vers de nouveaux marchés ou modifier les modèles commerciaux existants avant la concurrence ou les nouveaux les acteurs du marché en profitent. L'entreprise continue de progresser vers cette vision, comme en témoigne la création d'Innovation Everywhere, un un programme qui encourage et permet à tous les employés de réaliser la création de valeur et une percée dans les économies de coûts grâce à des solutions collaboratives et innovantes des équipes d'innovation dans chaque entreprise,Stanley Ventures un groupe qui investit fonds propres pour les start-ups et les entreprises émergentes, Techstars un partenariat qui sélectionne des startups du monde entier pour introduire une technologie révolutionnaire sur le marché, la manufacture 4.0 qui est L'épicentre du développement technologique et du partenariat de l'industrie 4.0 et STANLEY X, unSilicon Valley équipe basée à construire leur kit des initiatives perturbatrices et l'exploration de nouveaux modèles commerciaux. La société a pris un engagement significatif envers le modèle commercial de SBD et la direction estime que son succès sera caractérisé par une richesse continue efficacité, croissance organique de 4 à 6% et performances étendues taux de marge au cours des 3 à 5 prochaines années, l'entreprise tirant parti de la croissance et réduit les frais structurels PBA. La société estime que le modèle commercial de SBD servira de valeur significative dans les années à venir, garantissant à la Société une chance de gagner 2020 Développer et exploiter les bonnes personnes et la bonne technologie pour livrer efficacité, innovation extrême, excellence opérationnelle et expérience client extraordinaire. Nouveau modèle commercial aligné sur L'écosystème d'innovation de l'entreprise lui permettra de changer le plus rapidement possible un environnement externe qui soutient directement les réalisations de l'entreprise les objectifs financiers à long terme, y compris la vision, le rendent encore plus habilitant une approche d'allocation du capital conviviale qui a servi l'entreprise bien passé et continuera de le faire à l’avenir. Perspectives pour 2020 Le but de cette discussion en perspective est de fournir un aperçu général de la société perspectives de génération de revenus et de flux de trésorerie à court terme. La société attend 2020 bénéfice par action réduit à environ8,05 $ à8,35 $ (8,80 $ à9,00 $ hors frais d'acquisition et autres frais) et la conversion des flux de trésorerie disponibles, défini comme un flux de trésorerie disponible divisé par le résultat net, environ 90-100%, reflétant les avantages de restructuration liés à la 2019 coût, impact programme de réduction. 2020 La perspective d'un résultat dilué par action ajusté suppose environ0,95 $ acceptation des coûts-avantages programme de réduction; environ0,40 $ à0,50 $ augmentation associée à organique la croissance; environ0,60 $ à0,70 $ - la dilution due à l'augmentation des taux, et les vents frontaux des devises; et environ0,25 $ en raison de la charge prévue taux, frais de financement et autres éléments inférieurs à la marge opérationnelle.
Différence entre 2020 réduit Prévision du bénéfice par action et
le résultat dilué par action hors taxes est
consistant en des frais d'acquisition et autres. Ces frais estimés
principalement liés aux coûts de restructuration, de transaction et d'intégration
Transformation des activités de sécurité et initiatives clés de résilience aux frontières.
30 -------------------------------------------------- ------------------------------ RÉSULTATS DE PERFORMANCE Voici un résumé des résultats d'exploitation consolidés de la société, suivi d'un aperçu de la performance du secteur d'activité. Terminologie: Le terme «biologique» est utilisé pour décrire des résultats autres que l'impact des fluctuations des devises et des acquisitions au cours de leur période initiale 12 mois de propriété et de transfert. Cela garantit une bonne comparabilité pour les performances de la période précédente.Ventes nettes : Les ventes nettes ont été14 442 milliards de dollars En 2019 par rapport à13 982 milliards de dollars à 2018, une augmentation de 3% portée par une croissance organique de 3%, Augmentation du volume 2% et augmentation des prix 1%. Acquisitions, principalement IES Primes, ventes en hausse de 2% et effet de change baisse des ventes de 2%. Les ventes nettes d'outils et de stockage ont augmenté de 3% par rapport à 2018 en partie en raison de l'augmentation des volumes et des prix de 4% et 1% il est compensé par une baisse de 2% des devises. Les ventes nettes de l'industrie ont augmenté 11% par rapport à 2018, principalement en raison de la croissance des acquisitions, en partie ils sont compensés par une baisse de 3% du volume et une baisse de 2% des devises. Les ventes nettes de sécurité ont diminué de 2% par rapport à 2018, les deux prix ayant augmenté de 1% et le nombre de petits achats commerciaux de cybersécurité était supérieur à il est compensé par une baisse de 3% des devises et une baisse de 1% des ventes deSargent & Greenleaf entreprise. Les ventes nettes ont été13 982 milliards de dollars En 2018 par rapport à12 967 milliards de dollars 2017 cela représente une augmentation de 8% et une forte croissance organique de 5%. Acquisitions, tout d'abordOutils Newell et Nelson, les ventes ont augmenté de 3%. Outils et filet de rangement les ventes ont augmenté de 9% par rapport à 2017 en raison d'une forte croissance organique de 7% basé sur une croissance solide dans toutes les régions et une croissance des acquisitions de 2%. Réseau industriel les ventes ont augmenté de 11% par rapport à 2017, principalement en raison d'une croissance des acquisitions de 9% et une devise favorable de 2%. Saugumo grynieji pardavimai, palyginti su 2017 m., Padidėjo 2% dėl padidėjusių 1% kainų ir 3% mažų komercinių elektroninių varžtų vertybinių popierių įsigijimų ir 1 proc. užsienio valiuta, kuriuos iš dalies kompensavo kritimai 1% parduodant didžiąją dalį mechaninio saugumo verslo ir 2% iš mažesnių tomų. Bendrasis pelnas: Bendrovės bendrasis pelnas sudarė4,806 milijardo dolerių , arba 33,3% grynieji pardavimai, 2019 m., palyginti su4,851 milijardo dolerių , arba 34,7% grynojo pardavimo, 2018 m. Su įsigijimu ir kiti mokesčiai, kurie sumažino bendrąjį pelną, buvo39,7 USD milijonas 2019 ir65,7 milijono dolerių be šių mokesčių, bendrasis pelnas sudarė 33,5% grynojo pardavimo 2019 m., palyginti su 35,2% 2018 m., atsižvelgiant į apimtį, našumą ir kainą daugiau nei atsvėrė tarifai, prekių infliacija ir užsienio valiutos. Bendrovės bendrasis pelnas 2010 m4,851 milijardo dolerių , arba 34,7% grynojo pardavimo, 2006 m 2018 m., Palyginti su4,778 mlrd , arba 36,9% grynojo pardavimo, 2017 m. Su įsigijimu ir kiti mokesčiai, kurie sumažino bendrąjį pelną, buvo65,7 USD milijonas 2018 ir46,8 milijono dolerių neįskaitant šių mokesčių, bendrasis pelnas sudarė 35,2% grynojo pardavimo 2018 m., palyginti su 37,2% 2017 m. produktyvumą ir kainą daugiau nei atsvėrė išoriniai vėjai, įskaitant prekių infliacija, užsienio valiuta ir tarifai. PBA išlaidos: Pardavimo, bendrosios ir administracinės išlaidos, įskaitant atidėjimas abejotinoms sąskaitoms ("PBA") buvo$3.041 billion , or 21.1% of net sales, in 2019 compared to$3.172 billion , or 22.7% of net sales, in 2018. Within SG&A, acquisition-related and other charges totaled$139.5 million à 2019 and$157.8 million in 2018. Excluding these charges, SG&A was 20.1% of net sales in 2019 compared to 21.6% in 2018, primarily reflecting disciplined cost management and actions taken in response to external headwinds. SG&A expenses were$3.172 billion , or 22.7% of net sales, in 2018 compared to$2.999 billion , or 23.1% of net sales, in 2017. Acquisition-related and other charges totaled$157.8 million in 2018 and$37.7 million in 2017. Excluding these charges, SG&A was 21.6% of net sales in 2018 compared to 22.8% in 2017, due primarily to prudent cost management and volume leverage. Distribution center costs (i.e. warehousing and fulfillment facility and associated labor costs) are classified within SG&A. This classification may differ from other companies who may report such expenses within cost of sales. Due to diversity in practice, to the extent the classification of these distribution costs differs from other companies, the Company's gross margins may not be comparable. Such distribution costs classified in SG&A amounted to$326.7 million in 2019,$316.0 million in 2018 and$279.8 million in 2017. Corporate Overhead: The corporate overhead element of SG&A, which is not allocated to the business segments, amounted to$229.5 million , or 1.6% of net sales, in 2019,$202.8 million , or 1.5% of net sales, in 2018 and$217.4 million , or 1.7% of net sales, in 2017. Excluding acquisition-related charges of$23.4 million in 2019,$12.7 million in 2018, and$0.7 million in 2017, the corporate overhead element of SG&A was 1.4% of net sales in 2019 and 2018, compared to 1.7% in 2017, reflecting continued cost management. 31 -------------------------------------------------------------------------------- Other, net: Other, net totaled$249.1 million in 2019 compared to$287.0 million in 2018 and$269.2 million in 2017. Excluding acquisition-related and other charges, Other, net totaled$218.9 million ,$178.9 million et$211.0 million in 2019, 2018, and 2017, respectively. The year-over-year increase in 2019 was driven by higher intangible amortization and a favorable resolution of a prior claim in 2018. The year-over-year decrease in 2018 was driven by an environmental remediation charge of$17 million in 2017 relating to a legacyBlack & Decker site and a favorable resolution of a prior claim in 2018, which more than offset higher intangible amortization expense in 2018. (Gain) Loss on Sales of Businesses: During 2019, the Company reported a$17.0 million gain relating to the sale of theSargent and Greenleaf business. During 2018, the Company reported a$0.8 million loss relating to a previously divested business. During 2017, the Company reported a$264.1 million gain primarily relating to the sale of the majority of the Company's mechanical security businesses. Pension Settlement: Pension settlement of$12.2 million in 2017 reflects losses previously reported in Accumulated other comprehensive loss related to a non-USA pension plan for which the Company settled its obligation by purchasing an annuity and making lump sum payments to participants.
Loss on Debt Extinguishment: During the fourth quarter of 2019, the Company
extinguished
pre-tax loss related to the write-off of deferred financing fees.
Interest, net: Net interest expense in 2019 was$230.4 million compared to$209.2 million in 2018 and$182.5 million in 2017. The increase in 2019 compared to 2018 was primarily driven by interest on the senior unsecured notes issued inNovember 2018 and lower interest income on deposits due to a decline in rates. The increase in net interest expense in 2018 versus 2017 was primarily due to higher interest rates and higher average balances relating to the Company'sUSA commercial paper borrowings partially offset by higher interest income. Income Taxes: The Company's effective tax rate was 14.2% in 2019, 40.7% in 2018, and 19.7% in 2017. Excluding the impact of divestitures and acquisition-related and other charges previously discussed, the effective tax rate in 2019 is 16.0%. This effective tax rate differs from theUSA statutory tax rate primarily due to a portion of the Company's earnings being realized in lower-taxed foreign jurisdictions, and the favorable effective settlements of income tax audits. The 2018 effective tax rate included net charges associated with the Act, which primarily related to the re-measurement of existing deferred tax balances, adjustments to the one-time transition tax, and the provision of deferred taxes on unremitted foreign earnings and profits for which the Company no longer asserted indefinite reinvestment. Excluding the impacts of the net charge related to the Act as well as the acquisition-related and other charges previously discussed, the effective tax rate in 2018 was 16.0%. This effective tax rate differed from theUSA statutory tax rate primarily due to a portion of the Company's earnings being realized in lower-taxed foreign jurisdictions and the favorable effective settlements of income tax audits. The 2017 effective tax rate included a one-time net charge relating to the provisional amounts recorded associated with the Act, which was enacted inDecember 2017 . The net charge primarily related to the re-measurement of existing deferred tax balances and the one-time transition tax. Excluding the impact of the divestitures, acquisition-related charges, and the net charge related to the Act, the effective tax rate was 20.0% in 2017. This effective tax rate differed from theUSA statutory rate primarily due to a portion of the Company's earnings being realized in lower-taxed foreign jurisdictions, the favorable settlement of certain income tax audits, and the acceleration of certain tax credits resulting in a tax benefit. Business Segment Results The Company's reportable segments are aggregations of businesses that have similar products, services and end markets, among other factors. The Company utilizes segment profit which is defined as net sales minus cost of sales and SG&A inclusive of the provision for doubtful accounts (aside from corporate overhead expense), and segment profit as a percentage of net sales to assess the profitability of each segment. Segment profit excludes the corporate overhead expense element of SG&A, other, net (inclusive of intangible asset amortization expense), gain or loss on sales of businesses, pension settlement, restructuring charges, loss on debt extinguishment, interest income, interest expense, income taxes and share of net loss of equity method investment. Corporate overhead is comprised of world headquarters facility expense, cost for the executive management team and expenses pertaining to certain centralized functions that benefit the entire Company but are not directly attributable to the businesses, such as legal and corporate finance functions. Refer to Note F,Goodwill et Intangible Assets, and Note O, Restructuring Charges, for the amount of intangible asset amortization expense and net restructuring charges, respectively, attributable to each segment. 32 -------------------------------------------------------------------------------- The Company classifies its business into three reportable segments, which also represent its operating segments: Tools & Storage, Industrial and Security. Tools & Storage: The Tools & Storage segment is comprised of the Power Tools & Equipment ("PTE") and Hand Tools, Accessories & Storage ("HTAS") businesses. The PTE business includes both professional and consumer products. Professional products include professional grade corded and cordless electric power tools and equipment including drills, impact wrenches and drivers, grinders, saws, routers and sanders, as well as pneumatic tools and fasteners including nail guns, nails, staplers and staples, concrete and masonry anchors. Consumer products include corded and cordless electric power tools sold primarily under the BLACK+DECKER® brand, lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, edgers and related accessories, and home products such as hand-held vacuums, paint tools and cleaning appliances. The HTAS business sells hand tools, power tool accessories and storage products. Hand tools include measuring, leveling and layout tools, planes, hammers, demolition tools, clamps, vises, knives, saws, chisels and industrial and automotive tools. Power tool accessories include drill bits, screwdriver bits, router bits, abrasives, saw blades and threading products. Storage products include tool boxes, sawhorses, medical cabinets and engineered storage solution products. (Millions of Dollars) 2019 2018 2017 Net sales$ 10,062 $ 9,814 $ 9,045 Segment profit$ 1,533 $ 1,393 $ 1,439 % of Net sales 15.2 % 14.2 % 15.9 % Tools & Storage net sales increased$248.1 million , or 3%, in 2019 compared to 2018 due to a 4% increase in volume and 1% increase in price, partially offset by unfavorable currency of 2%. The 5% organic growth was led byAmérique du nord etL'Europe , more than offsetting a decline in emerging markets.Amérique du nord organic growth was driven by the roll-out of the Craftsman brand and new product innovation, such as DEWALT Flexvolt, Atomic and Xtreme, partially offset by declines inCanada and industrial-focused businesses.L'Europe growth was supported by new products and successful commercial actions. The organic decline in emerging markets was driven by weak market conditions inTurkey ,La Chine et certain countries inLatin America , which more than offset the benefits from price, new product launches and e-commerce expansion. Segment profit amounted to$1.533 billion , or 15.2% of net sales, in 2019 compared to$1.393 billion , or 14.2% of net sales, in 2018. Excluding acquisition-related and other charges of$44.3 million et$142.6 million à 2019 and 2018, respectively, segment profit amounted to 15.7% of net sales in 2019 compared to 15.6% in 2018, as the benefits from volume leverage, actions taken in response to external headwinds and price were partially offset by tariffs, commodity inflation, and foreign exchange. Tools & Storage net sales increased$769.0 million , or 9%, in 2018 compared to 2017. Organic sales increased 7%, with a 6% increase in volume and 1% increase in price, reflecting strong growth in each of the regions, and acquisitions, primarilyNewell Tools , increased net sales by 2%.Amérique du nord growth was driven by new product innovation, the roll-out of the Craftsman brand and price realization.L'Europe growth was supported by new products and successful commercial actions. The growth in emerging markets was driven by mid-price-point product releases, e-commerce strategies and pricing actions. Segment profit amounted to$1.393 billion , or 14.2% of net sales, in 2018 compared to$1.439 billion , or 15.9% of net sales, in 2017. Excluding acquisition-related and other charges of$142.6 million et$81.8 million à 2018 and 2017, respectively, segment profit amounted to 15.6% of net sales in 2018 compared to 16.8% in 2017, as the benefits from volume leverage, pricing and cost control were more than offset by the impacts from currency, commodity inflation and tariffs. Industrial: The Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses. The Engineered Fastening business primarily sells engineered fastening products and systems designed for specific applications. The product lines include blind rivets and tools, blind inserts and tools, drawn arc weld studs and systems, engineered plastic and mechanical fasteners, self-piercing riveting systems, precision nut running systems, micro fasteners, and high-strength structural fasteners. The Infrastructure business consists of the Oil & Gas and Attachment Tools product lines. Oil & Gas sells and rents custom pipe handling, joint welding and coating equipment used in the construction of large and small diameter pipelines, and provides pipeline inspection services. Attachment Tools sells hydraulic tools, attachments and accessories. 33 -------------------------------------------------------------------------------- (Millions of Dollars) 2019 2018 2017 Net sales$ 2,435 $ 2,188 $ 1,974 Segment profit$ 334 $ 320 $ 346 % of Net sales 13.7 % 14.6 % 17.5 % Industrial net sales increased$246.9 million , or 11%, in 2019 compared to 2018, due to acquisition growth of 16%, partially offset by declines of 3% in volume and 2% from foreign currency. Engineered Fastening organic revenues decreased 3% as fastener penetration gains were more than offset by inventory reductions and lower production levels within industrial and automotive customers. Infrastructure organic revenues were down 2%, as growth within Oil & Gas was offset by declines in hydraulic tools from a difficult scrap steel market. Segment profit totaled$334.1 million , or 13.7% of net sales, in 2019 compared à$319.8 million , or 14.6% of net sales, in 2018. Excluding acquisition-related and other charges of$25.8 million et$26.0 million in 2019 and 2018, respectively, segment profit amounted to 14.8% of net sales in 2019 compared to 15.8% in 2018, as productivity gains and cost control were more than offset by lower volume and externally driven cost inflation. Industrial net sales increased$213.5 million , or 11%, in 2018 compared to 2017, due to acquisition growth of 9% and favorable foreign currency of 2%. Engineered Fastening organic revenues increased 1% due primarily to industrial and automotive fastener penetration gains which were partially offset by the expected impact from lower automotive system shipments. Infrastructure organic revenues were down 1% due to anticipated lower pipeline project activity in Oil & Gas, partially offset by volume growth in hydraulic tools. Segment profit totaled$319.8 million , or 14.6% of net sales, in 2018 compared à$345.9 million , or 17.5% of net sales, in 2017. Excluding acquisition-related and other charges of$26.0 million in 2018, segment profit amounted to 15.8% of net sales in 2018 compared to 17.5% in 2017, as productivity gains and cost control were more than offset by commodity inflation and the modestly dilutive impact from the Nelson acquisition.
Security:
The Security segment is comprised of the Convergent Security Solutions ("CSS")
and the Mechanical Access Solutions ("MAS") businesses. The CSS business
designs, supplies and installs commercial electronic security systems and
provides electronic security services, including alarm monitoring, video
surveillance, fire alarm monitoring, systems integration and system maintenance.
Purchasers of these systems typically contract for ongoing security systems
monitoring and maintenance at the time of initial equipment installation.
business also sells healthcare solutions, which include asset tracking, infant
protection, pediatric protection, patient protection, wander management, fall
management, and emergency call products. The MAS business primarily sells
automatic doors.
(Millions of Dollars) 2019 2018 2017
Net sales $ 1,945 $ 1,981 $ 1,947
Segment profit $ 127 $ 169 $ 212
% of Net sales 6.5 % 8.5 % 10.9 %
Security net sales decreased $35.2 million , or 2%, in 2019 compared to 2018, as
1% increases in both price and small bolt-on commercial electronic security
acquisitions were more than offset by a 3% decrease due to foreign currency and
a 1% decrease from the sale of the Sargent & Greenleaf business. Organic sales
à cause de Amérique du nord increased 3% driven by increased installations within
commercial electronic security and higher volumes in healthcare and automatic
doors. L'Europe declined 1% organically as growth in En France was offset by
continued market weakness in the Nordics and the JK .
Segment profit amounted to $126.6 million , or 6.5% of net sales, in 2019
compared to $169.3 million , or 8.5% of net sales, in 2018. Excluding
acquisition-related and other charges of $85.7 million et $42.2 million in 2019
and 2018, respectively, segment profit amounted to 10.9% of net sales in 2019
compared to 10.7% in 2018, as the benefits of organic growth and a focus on cost
containment were partially offset by investments to support the business
transformation in commercial electronic security and the dilutive impact from
the Sargent & Greenleaf divestiture.
Security net sales increased $33.3 million , or 2%, in 2018 compared to 2017,
primarily due to increases of 1% in price, 3% in small bolt-on commercial
electronic security acquisitions and 1% in foreign currency, partially offset by
declines of 1% from the sale of the majority of the mechanical security
businesses and 2% from lower volumes. Organic sales for Amérique du nord
34
--------------------------------------------------------------------------------
decreased 1% as higher volumes within automatic doors were offset by lower
installations in commercial electronic security.
as strength within the Nordics was offset by weakness in the
Segment profit amounted to$169.3 million , or 8.5% of net sales, in 2018 compared to$211.7 million , or 10.9% of net sales, in 2017. Excluding acquisition-related and other charges of$42.2 million et$2.0 million in 2018 and 2017, respectively, segment profit amounted to 10.7% of net sales in 2018 compared to 11.0% in 2017. The year-over-year change in segment profit rate reflects investments to support business transformation in commercial electronic security and the impact from the sale of the majority of the mechanical security business, partially offset by a continued focus on cost containment.
RESTRUCTURING ACTIVITIES
A summary of the restructuring reserve activity from
December 29, December 28,
(Millions of Dollars) 2018 Net Additions Usage Currency 2019
Severance and related costs $ 105.7 $ 131.9 $ (97.4 ) $ 0.1 $ 140.3
Facility closures and asset
impairments 3.1 22.2 (17.9 ) 0.1 7.5
Total $ 108.8 $ 154.1 $ (115.3 ) $ 0.2 $ 147.8
During 2019, the Company recognized net restructuring charges of $154.1 million ,
primarily related to severance costs associated with a cost reduction program
announced in the third quarter of 2019. Current and expected actions of the
program include headcount reductions across the Company as well as footprint
rationalization opportunities. The Company expects the 2019 actions to result in
annual net cost savings of approximately $185 million by the end of 2020.
The majority of the
is expected to be utilized within the next twelve months.
During 2018, the Company recognized net restructuring charges of$160.3 million , which primarily related to a cost reduction program executed in the fourth quarter of 2018. This amount reflected$151.0 million of net severance charges associated with the reduction of 4,184 employees and$9.3 million of facility closure and other restructuring costs. The 2018 actions resulted in annual net cost savings of approximately$230 million , primarily in the Tools & Storage and Security segments. During 2017, the Company recognized net restructuring charges of$51.5 million . This amount reflected$40.6 million of net severance charges associated with the reduction of 1,584 employees and$10.9 million of facility closure and other restructuring costs. The 2017 actions resulted in annual net cost savings of approximately$45 million in 2018, primarily in the Tools & Storage and Security segments. Segments: The$154 million of net restructuring charges in 2019 includes:$63 million pertaining to the Tools & Storage segment;$27 million pertaining to the Industrial segment;$18 million pertaining to the Security segment; et$46 million pertaining to Corporate. The anticipated annual net cost savings of approximately$185 million related to the 2019 restructuring actions include:$89 million in the Tools & Storage segment;$34 million in the Industrial segment;$28 million in the Security segment; et$34 million in Corporate. FINANCIAL CONDITION Liquidity, Sources and Uses of Capital: The Company's primary sources of liquidity are cash flows generated from operations and available lines of credit under various credit facilities. Operating Activities: Cash flows provided by operations were$1.506 billion à 2019 compared to$1.261 billion in 2018. The year-over-year increase was mainly attributable to improved working capital (accounts receivable, inventory, accounts payable and deferred revenue) as a result of an intense focus on working capital management and lower inventory investment associated with recent Tools & Storage brand roll-outs. In 2018, cash flows from operations were$1.261 billion compared to$669 million in 2017. The year-over-year increase related primarily to the retrospective adoption of new cash flow accounting standards in the first quarter of 2018, which decreased 2017 operating cash flows by approximately$750 million . Excluding the impact of these new standards, cash flows provided by operations in 2018 decreased year-over-year primarily due to higher income tax payments and higher payments associated with acquisition-related and other charges. 35 -------------------------------------------------------------------------------- Free Cash Flow: Free cash flow, as defined in the table below, was$1.081 billion in 2019 compared to$769 million in 2018 and$226 million in 2017. Excluding the retrospective impacts of the previously discussed new cash flow standards adopted in the first quarter of 2018, free cash flow totaled$976 million in 2017. The improvement in free cash flow in 2019 was driven by higher operating cash flows as discussed above and lower capital expenditures due to higher investments in the Company's supply chain and SFS 2.0 initiatives in both 2018 and 2017. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and provide dividends to shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. (Millions of Dollars) 2019 2018 2017
Net cash provided by operating activities
Less: capital and software expenditures (425 ) (492 ) (443 )
Free cash flow
$ 1,081 $ 769 $ 226 Investing Activities: Cash flows used in investing activities totaled$1.209 billion in 2019, driven by business acquisitions of$685 million , primarily related to IES Attachments, capital and software expenditures of$425 million and purchases of investments of$261 million , which mainly related to the 20 percent investment in MTD. Cash flows used in investing activities in 2018 totaled$989 million , primarily due to business acquisitions of525 millions de dollars , mainly related to the Nelson acquisition, and capital and software expenditures of$492 million . The increase in capital and software expenditures in 2018 was primarily due to technology-related and capacity investments to support the Company's strong organic growth and its SFS 2.0 initiatives. Cash flows used in investing activities in 2017 totaled$1.567 billion qui primarily consisted of business acquisitions of$2.584 billion , mainly related to the Newell Tools and Craftsman acquisitions, and capital and software expenditures of$443 million , partially offset by proceeds of$757 million from sales of businesses and$705 million from the deferred purchase price receivable related to an accounts receivable sales program, which was terminated inFebruary 2018 . Financing Activities: Cash flows used in financing activities totaled$293 million in 2019 driven by payments on long-term debt of$1.150 billion and cash dividend payments of$402 million , partially offset by$735 million in net proceeds from the issuance of equity units and net proceeds from debt issuances of$496 million . Cash flows used in financing activities totaled$562 million in 2018 primarily related to the repurchase of common shares for$527 million and cash dividend payments of$385 million , partially offset by$433 million of net proceeds from short-term borrowings under the Company's commercial paper program. Cash flows provided by financing activities in 2017 totaled$295 million , primarily due to$726 million in net proceeds from the issuance of equity units, partially offset by$363 million of cash payments for dividends and$77 million of net repayments of short-term borrowings under the Company's commercial paper program. Fluctuations in foreign currency rates negatively impacted cash by$1 million et$54 million in 2019 and 2018, respectively, due to the strengthening of theUSA Dollar against the Company's other currencies, while positively impacting cash by$81 million in 2017 due to the weakening of theUSA Dollar against other currencies. Refer to Note H, Long-Term Debt and Financing Arrangements, and Note J, Capital Stock, for further discussion regarding the Company's debt and equity arrangements. Credit Ratings and Liquidity: The Company maintains strong investment grade credit ratings from the majorUSA rating agencies on its senior unsecured debt (S&P A, Fitch A-, Moody's Baa1), as well as its commercial paper program (S&P A-1, Fitch F1, Moody's P-2). The Company's Fitch short-term credit rating was upgraded to F1 during the third quarter of 2019 from the previous rating of F2. Failure to maintain strong investment grade rating levels could adversely affect the Company's cost of funds, liquidity and access to capital markets, but would not have an adverse effect on the Company's ability to access its existing committed credit facilities. 36 --------------------------------------------------------------------------------
Cash and cash equivalents totaled
comprised of
As of
comprised of
As a result of the Act, the Company's tax liability related to the one-time transition tax associated with unremitted foreign earnings and profits totaled$344 million atDecember 28, 2019 . The Act permits aUSA company to elect to pay the net tax liability interest-free over a period of up to eight years. A voir the Contractual Obligations table below for the estimated amounts due by period. The Company has considered the implications of paying the required one-time transition tax, and believes it will not have a material impact on its liquidity. Refer to Note Q, Income Taxes, for further discussion of the impacts of the Act. The Company has a$3.0 billion commercial paper program which includes Euro denominated borrowings in addition toUSA Dollars. As ofDecember 28, 2019 , Company had approximately$336 million of borrowings outstanding representing Euro denominated commercial paper, which was designated as a net investment hedge. As ofDecember 29, 2018 , the Company had approximately$373 million of borrowings outstanding, of which approximately$229 million in Euro denominated commercial paper was designated as a net investment hedge. Refer to Note I, Financial Instruments, for further discussion. The Company has a five-year$2.0 billion committed credit facility (the "5-Year Credit Agreement"). Borrowings under the 5-Year Credit Agreement may be made inUSA Dollars, Euros or Pounds Sterling. A sub-limit amount of$653.3 million is designated for swing line advances which may be drawn in Euros pursuant to the terms of the 5-Year Credit Agreement. Borrowings bear interest at a floating rate plus an applicable margin dependent upon the denomination of the borrowing and specific terms of the 5-Year Credit Agreement. The Company must repay all advances under the 5-Year Credit Agreement by the earlier ofSeptember 12, 2023 or upon termination. The 5-Year Credit Agreement is designated to be part of the liquidity back-stop for the Company's$3.0 billion USA Dollar and Euro commercial paper program. As ofDecember 28, 2019 etDecember 29, 2018 , Company had not drawn on its five-year committed credit facility. ÀSeptember 2019 , the Company terminated its 364-Day$1.0 billion committed credit facility and concurrently executed a new 364-Day$1.0 billion committed credit facility (the "September 364-Day Credit Agreement"). Borrowings under the September 364-Day Credit Agreement may be made inUSA Dollars or Euros and bear interest at a floating rate plus an applicable margin dependent upon the denomination of the borrowing and pursuant to the terms of the September 364-Day Credit Agreement. The Company must repay all advances under the September 364-Day Credit Agreement by the earlier ofSeptember 9, 2020 or upon termination. The Company may, however, convert all advances outstanding upon termination into a term loan that shall be repaid in full no later than the first anniversary of the termination date provided that the Company, among other things, pays a fee to the administrative agent for the account of each lender. The September 364-Day Credit Agreement serves as part of the liquidity back-stop for the Company's$3.0 billion USA Dollar and Euro commercial paper program previously discussed. As ofDecember 28, 2019 etDecember 29, 2018 , Company had not drawn on its 364-Day committed credit facilities.
In addition, the Company has other short-term lines of credit that are primarily
uncommitted, with numerous banks, aggregating
approximately
arrangements are reviewed annually for renewal.
AtDecember 28, 2019 , the aggregate amount of committed and uncommitted lines of credit, long-term and short-term, was$3.5 billion . AtDecember 28, 2019 ,$337 million was recorded as short-term borrowings relating to commercial paper and amounts outstanding against uncommitted lines. De plus,$89 million de short-term credit lines was utilized primarily pertaining to outstanding letters of credit for which there are no required or reported debt balances. weighted-average interest rate onUSA dollar denominated short-term borrowings for 2019 and 2018 was 2.3%. The weighted-average interest rate on Euro denominated short-term borrowings for 2019 and 2018 was negative 0.3%. À2020 Fevrier , the Company issued$750 million of senior unsecured term notes maturingMarch 15, 2030 ("2030 Term Notes") and$750 million of fixed-to-fixed reset rate junior subordinated debentures maturingMarch 15, 2060 ("2060 Junior Subordinated Debentures"). The 2030 Term Notes will accrue interest at a fixed rate of 2.3% per annum, with interest payable semi-annually in arrears, and rank equally in right of payment with all of the Company's existing and future unsecured and unsubordinated debt. The 2060 Junior Subordinated Debentures will bear interest at a fixed rate of 4.0% per annum, payable semi-annually in arrears, up to but excludingMarch 15, 2025 . From and includingMarch 15, 2025 , the interest rate will be reset for each subsequent five-year reset period equal to the Five-Year Treasury Rate plus 2.657%. The Five-Year Treasury Rate is based on the average yields on actively tradedUSA treasury securities adjusted to constant maturity, for five-year maturities. On each five-year reset date, the 2060 Junior Subordinated Debentures can be called at par value. The 2060 Junior Subordinated Debentures are unsecured and rank subordinate and junior in right of payment to all of the Company's existing and future senior debt. The Company received total net proceeds from these offerings of approximately$1.487 billion qui 37 -------------------------------------------------------------------------------- reflected approximately$13 million of underwriting expenses and other fees associated with the transactions. The net proceeds from the offering will be used for general corporate purposes, including acquisition funding and repayment of short-term borrowings.
À
Subordinated Debentures for approximately
of the principal amount plus accrued and unpaid interest.
ÀMarch 2019 , the Company issued$500 million of senior unsecured notes, maturing onMarch 1, 2026 ("2026 Term Notes"). The 2026 Term Notes accrue interest at a fixed rate of 3.40% per annum with interest payable semi-annually in arrears. The 2026 Term Notes rank equally in right of payment with all of the Company's existing and future unsecured and unsubordinated debt. The Company received net cash proceeds of$496 million which reflects the notional amount offset by a discount, underwriting expenses, and other fees associated with the transaction. The Company used the net proceeds from the offering for general corporate purposes, including repayment of other borrowings.
À
Subordinated Debentures for approximately
of the principal amount plus accrued and unpaid interest.
ÀNovember 2019 , the Company issued 7,500,000 Equity Units with a total notional value of$750 million ("2019 Equity Units"). Each unit has a stated amount of$100 and initially consisted of a three-year forward stock purchase contract ("2022 Purchase Contracts") for the purchase of a variable number of shares of common stock, onNovember 15, 2022 , for a price of$100 , and a 10% beneficial ownership interest in one share of 0% Series D Cumulative Perpetual Convertible Preferred Stock, without par, with a liquidation preference of$1,000 per share ("Series D Preferred Stock"). The Company received approximately$735 million in cash proceeds from the 2019 Equity Units, net of underwriting costs and commissions, before offering expenses, and issued 750,000 shares of Series D Preferred Stock, recording$750 million in preferred stock. The proceeds were used, together with cash on hand, to redeem the 2052 Junior Subordinated Debentures inDecember 2019 , as previously discussed. The Company also used$19 million of the proceeds to enter into capped call transactions utilized to hedge potential economic dilution. On and afterNovember 15, 2022 , the Series D Preferred Stock may be converted into common stock at the option of the holder. At the election of the Company, upon conversion, the Company may deliver cash, common stock, or a combination thereof. On or afterDecember 22, 2022 , the Company may elect to redeem for cash, all or any portion of the outstanding shares of the Series D Preferred Stock at a redemption price equal to 100% of the liquidation preference, plus any accumulated and unpaid dividends. If the Company calls the Series D Preferred Stock for redemption, holders may convert their shares immediately preceding the redemption date. Upon settlement of the 2022 Purchase Contracts, the Company will receive additional cash proceeds of$750 million . The Company will pay the holders of the 2022 Purchase Contracts quarterly contract adjustment payments, which will commenceFebruary 15, 2020 . As ofDecember 28, 2019 , the present value of the contract adjustment payments was approximately$114 million . ÀMarch 2018 , the Company purchased from a financial institution "at-the-money" capped call options with an approximate term of three years, on 3.2 million shares of its common stock (subject to customary anti-dilution adjustments) for an aggregate premium of$57 million . As ofDecember 28, 2019 , the capped call has an adjusted lower strike price of$156.59 and an adjusted upper strike price of$203.57 . The purpose of the capped call options was to hedge the risk of stock price appreciation between the lower and upper strike prices of the capped call options for a future share repurchase. ÀMay 2017 , the Company issued 7,500,000 Equity Units with a total notional value of$750 million ("2017 Equity Units"). Each unit has a stated amount of$100 and initially consisted of a three-year forward stock purchase contract ("2020 Purchase Contracts") for the purchase of a variable number of shares of common stock, onMay 15, 2020 , for a price of$100 , and a 10% beneficial ownership interest in one share of 0% Series C Cumulative Perpetual Convertible Preferred Stock, without par, with a liquidation preference of$1,000 per share ("Series C Preferred Stock"). The Company received approximately$726 million à cash proceeds from the 2017 Equity Units, net of underwriting costs and commissions, before offering expenses, and issued 750,000 shares of Series C Preferred Stock, recording$750 million in preferred stock. The proceeds were used for general corporate purposes, including repayment of short-term borrowings. The Company also used$25 million of the proceeds to enter into capped call transactions utilized to hedge potential economic dilution. On and afterMay 15, 2020 , the Series C Preferred Stock may be converted into common stock at the option of the holder. At the election of the Company, upon conversion, the Company may deliver cash, common stock, or a combination thereof. On or afterJune 22, 2020 , the Company may elect to redeem for cash, all or any portion of the outstanding shares of the Series C Preferred Stock at a redemption price equal to 100% of the liquidation preference, plus any accumulated and unpaid dividends. If the Company calls the Series C Preferred Stock for redemption, holders may convert their shares immediately preceding the redemption date. Upon settlement of the 2020 Purchase Contracts, the Company will receive additional cash proceeds of$750 million . The Company pays the holders of the 2020 Purchase Contracts quarterly contract adjustment payments, which commenced inAugust 2017 . As ofDecember 28, 2019 , the present value of the contract adjustment payments was approximately$20 million . 38 -------------------------------------------------------------------------------- ÀMarch 2015 , the Company entered into a forward share purchase contract with a financial institution counterparty for 3,645,510 shares of common stock. contract obligates the Company to pay$350 million , plus an additional amount related to the forward component of the contract. À2020 Fevrier , the Company amended the settlement date toApril 2022 , or earlier at the Company's option. Refer to Note H, Long-Term Debt and Financing Arrangements, and Note J, Capital Stock, for further discussion regarding the Company's debt and equity arrangements. Contractual Obligations: The following table summarizes the Company's significant contractual obligations and commitments that impact its liquidity: Payments Due by Period (Millions of Dollars) Total 2020 2021-2022 2023-2024 Thereafter Long-term debt (a)$ 4,704 $ -$ 1,154 $ -$ 3,550 Interest payments on long-term debt (b) 2,224 177 340 282 1,425 Short-term borrowings 336 336 - - - Lease obligations 607 144 193 113 157 Inventory purchase commitments (c) 523 523 - - - Deferred compensation 30 4 1 1 24 Marketing commitments 34 25 9 - - Derivatives (d) 41 - 41 - - Forward stock purchase contract (e) 350 - 350 - - Pension funding obligations (f) 38 38 - - - Contract adjustment fees (g) 138 59 79 - - Purchase price (h) 250 250 - - - U.S. income tax (i) 344 9 70 153 112 Total contractual cash obligations$ 9,619 $ 1,565 $ 2,237 $ 549 $ 5,268 (a) Future payments on long-term debt encompass all payments related to aggregate debt maturities, excluding certain fair value adjustments
included in long-term debt. As previously discussed, the Company issued the
2030 Term Notes and 2060 Junior Subordinated Debentures in
Accordingly, the future payments related to these issuances have been
reflected in the table above. Refer to Note H, Long-Term Debt and Financing
Arrangements.
(b) Future interest payments on long-term debt reflect the applicable interest
rate in effect at
future interest payments associated with the previously discussed 2030 Term
Notes and 2060 Junior Subordinated Debentures issued in
(c) Inventory purchase commitments primarily consist of open purchase orders to
purchase raw materials, components, and sourced products. (d) Future cash flows on derivative instruments reflect the fair value and
accrued interest as of
instruments will differ, perhaps significantly, based on applicable market
interest and foreign currency rates at their maturity.
(e) In
with a financial institution counterparty which obligates the Company to pay$350 million , plus an additional amount related to the forward component of the contract. À2020 Fevrier , the Company amended the
settlement date to
J, Capital Stock, for further discussion. (f) This amount principally represents contributions either required by regulations or laws or, with respect to unfunded plans, necessary to fund current benefits. The Company has not presented estimated pension and post-retirement funding beyond 2020 as funding can vary significantly from year to year based upon changes in the fair value of the plan assets, actuarial assumptions, and curtailment/settlement actions.
(g) These amounts represent future contract adjustment payments to holders of
the Company's 2020 and 2022 Purchase Contracts. See Note J, Capital Stock,
for further discussion.
(h) The Company acquired the Craftsman® brand from Sears Holdings in March
2017. As part of the purchase price, the Company is obligated to pay
million in
further discussion.
(i) Income tax liability for the one-time deemed repatriation tax on unremitted
foreign earnings and profits. See Note Q, Income Taxes, for further discussion. 39
-------------------------------------------------------------------------------- To the extent the Company can reliably determine when payments will occur, the related amounts will be included in the table above. However, due to the high degree of uncertainty regarding the timing of potential future cash flows associated with the contingent consideration liability related to the Craftsman acquisition and the unrecognized tax liabilities of$196 million et$454 million , respectively, atDecember 28, 2019 , the Company is unable to make a reliable estimate of when (if at all) these amounts may be paid. Refer to Note E, Acquisitions and Investments, Note M, Fair Value Measurements, and Note Q, Income Taxes, for further discussion. Payments of the above contractual obligations (with the exception of payments related to debt principal, the forward stock purchase contract, contract adjustment fees, theMarch 2020 purchase price, and tax obligations) will typically generate a cash tax benefit such that the net cash outflow will be lower than the gross amounts summarized above.
Other Significant Commercial Commitments:
Amount of Commitment Expirations Per Period
(Millions of Dollars) Total 2020 2021-2022 2023-2024
Thereafter
Short-term borrowings, long-term debt and lines of credit are explained in
detail within Note H, Long-Term Debt and Financing Arrangements.
MARKET RISK
Market risk is the potential economic loss that may result from adverse changes
in the fair value of financial instruments, currencies, commodities and other
items traded in global markets. The Company is exposed to market risk from
changes in foreign currency exchange rates, interest rates, stock prices, bond
prices and commodity prices, amongst others.
Exposure to foreign currency risk results because the Company, through its
global businesses, enters into transactions and makes investments denominated in
multiple currencies. The Company's predominant currency exposures are related to
the Euro, Canadian Dollar, British Pound, Australian Dollar, Brazilian Real,
Argentine Peso, Chinese Renminbi ("RMB") and the Taiwan Dollar. Certain
cross-currency trade flows arising from both trade and affiliate sales and
purchases are consolidated and netted prior to obtaining risk protection through
the use of various derivative financial instruments which may include: purchased
basket options, purchased options, collars, cross-currency swaps and currency
forwards. The Company is thus able to capitalize on its global positioning by
taking advantage of naturally offsetting exposures and portfolio efficiencies to
reduce the cost of purchasing derivative protection. At times, the Company also
enters into foreign exchange derivative contracts to reduce the earnings and
cash flow impacts of non-functional currency denominated receivables and
payables, primarily for affiliate transactions. Gains and losses from these
hedging instruments offset the gains or losses on the underlying net exposures.
Management determines the nature and extent of currency hedging activities, and
in certain cases, may elect to allow certain currency exposures to remain
un -hedged. The Company may also enter into cross-currency swaps and forward
contracts to hedge the net investments in certain subsidiaries and better match
the cash flows of operations to debt service requirements. Management estimates
the foreign currency impact from its derivative financial instruments
outstanding at the end of 2019 would have been an incremental pre-tax loss of
approximately $37 million based on a hypothetical 10% adverse movement in all
net derivative currency positions. The Company follows risk management policies
in executing derivative financial instrument transactions, and does not use such
instruments for speculative purposes. The Company generally does not hedge the
translation of its non-USA dollar earnings in foreign subsidiaries, but may
choose to do so in certain instances in future periods.
As mentioned above, the Company routinely has cross-border trade and affiliate
flows that cause an impact on earnings from foreign exchange rate movements.
Company is also exposed to currency fluctuation volatility from the translation
of foreign earnings into USA dollars and the economic impact of foreign
currency volatility on monetary assets held in foreign currencies. It is more
difficult to quantify the transactional effects from currency fluctuations than
the translational effects. Aside from the use of derivative instruments, which
may be used to mitigate some of the exposure, transactional effects can
potentially be influenced by actions the Company may take. For example, if an
exposure occurs from a European entity sourcing product from a USA supplier it
may be possible to change to a European supplier. Management estimates the
combined translational and transactional impact, on pre-tax earnings, of a 10%
overall movement in exchange rates is approximately $158 million , ou
approximately $0.88 per diluted share. In 2019, translational and transactional
foreign currency fluctuations negatively impacted pre-tax earnings by
approximately $120 million , or approximately $0.67 per diluted share.
The Company's exposure to interest rate risk results from its outstanding debt
and derivative obligations, short-term investments, and derivative financial
instruments employed in the management of its debt portfolio. The debt portfolio
40
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including both trade and affiliate debt, is managed to achieve capital structure
targets and reduce the overall cost of borrowing by using a combination of fixed
and floating rate debt as well as interest rate swaps, and cross-currency swaps.
The Company's primary exposure to interest rate risk comes from its commercial
paper program in which the pricing is partially based on short-term USA
interest rates. At December 28, 2019 , the impact of a hypothetical 10% increase
in the interest rates associated with the Company's commercial paper borrowings
would have an immaterial effect on the Company's financial position and results
of operations.
The Company has exposure to commodity prices in many businesses, particularly
brass, nickel, resin, aluminum, copper, zinc, steel, and energy used in the
production of finished goods. Generally, commodity price exposures are not
hedged with derivative financial instruments, but instead are actively managed
through customer product and service pricing actions, procurement-driven cost
reduction initiatives and other productivity improvement projects.
Fluctuations in the fair value of the Company's common stock affect domestic
retirement plan expense as discussed below in the Employee Stock Ownership Plan
("ESOP") section of MD&A. Additionally, the Company has $108 million of
liabilities as of December 28, 2019 pertaining to unfunded defined contribution
plans for certain USA employees for which there is mark-to-market exposure.
The assets held by the Company's defined benefit plans are exposed to
fluctuations in the market value of securities, primarily global stocks and
fixed-income securities. The funding obligations for these plans would increase
in the event of adverse changes in the plan asset values, although such funding
would occur over a period of many years. In 2019, 2018, and 2017, investment
returns on pension plan assets resulted in a $323 million increase, a $72
million decrease, and a $217 million increase, respectively. The Company expects
funding obligations on its defined benefit plans to be approximately $38 million
in 2020. The Company employs diversified asset allocations to help mitigate this
risk. Management has worked to minimize this exposure by freezing and
terminating defined benefit plans where appropriate.
The Company has access to financial resources and borrowing capabilities around
the world. There are no instruments within the debt structure that would
accelerate payment requirements due to a change in credit rating.
The Company's existing credit facilities and sources of liquidity, including
operating cash flows, are considered more than adequate to conduct business as
normal. Accordingly, based on present conditions and past history, management
believes it is unlikely that operations will be materially affected by any
potential deterioration of the general credit markets that may occur.
Company believes that its strong financial position, operating cash flows,
committed long-term credit facilities and borrowing capacity, and ability to
access equity markets, provide the financial flexibility necessary to continue
its record of annual dividend payments, to invest in the routine needs of its
businesses, to make strategic acquisitions and to fund other initiatives
encompassed by its growth strategy and maintain its strong investment grade
credit ratings.
OTHER MATTERS
Employee Stock Ownership Plan ("ESOP") - As detailed in Note L, Employee Benefit
Plans, the Company has an ESOP under which the ongoing USA Core and 401(k)
defined contribution plans are funded. Overall ESOP expense is affected by the
market value of the Company's stock on the monthly dates when shares are
released, among other factors. The Company's net ESOP activity resulted in
income of $0.5 million in 2019 and expense of $0.4 million in 2018 and $1.3
million in 2017. ESOP expense could increase in the future if the market value
of the Company's common stock declines. In addition, ESOP expense will increase
once all remaining unallocated shares are released, which will occur in the
first quarter of 2020.
CRITICAL ACCOUNTING ESTIMATES - Preparation of the Company's Consolidated
Financial Statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Significant accounting policies used in the preparation of the Consolidated
Financial Statements are described in Note A, Significant Accounting Policies.
Management believes the most complex and sensitive judgments, because of their
significance to the Consolidated Financial Statements, result primarily from the
need to make estimates about the effects of matters with inherent uncertainty.
The most significant areas involving management estimates are described below.
Actual results in these areas could differ from management's estimates.
ALLOWANCE FOR DOUBTFUL ACCOUNTS - The Company's estimate for its allowance for
doubtful accounts related to trade receivables is based on two methods.
amounts calculated from each of these methods are combined to determine the
total amount reserved. First, a specific reserve is established for individual
accounts where information indicates the customers may have an inability to meet
financial obligations. In these cases, management uses its judgment, based on
the surrounding facts and circumstances, to record a specific reserve for those
customers against amounts due to reduce the receivable to the amount expected to
be collected. These specific reserves are reevaluated and adjusted as additional
information is received.
41
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Second, a reserve is determined for all customers based on a range of
percentages applied to receivable aging categories. These percentages are based
on historical collection and write-off experience.
If circumstances change, for example, due to the occurrence of
higher-than-expected defaults or a significant adverse change in a major
customer's ability to meet its financial obligation to the Company, estimates of
the recoverability of receivable amounts due could be reduced.
INVENTORIES - Inventories in the USA are primarily valued at the lower of
Last-In First-Out ("LIFO") cost or market, while non-USA inventories are
primarily valued at the lower of First-In, First-Out ("FIFO") cost and net
realizable value. The calculation of LIFO reserves, and therefore the net
inventory valuation, is affected by inflation and deflation in inventory
components. The Company continually reviews the carrying value of discontinued
product lines and stock-keeping-units ("SKUs") to determine that these items are
properly valued. The Company also continually evaluates the composition of its
inventory and identifies obsolete and/or slow-moving inventories. Inventory
items identified as obsolete and/or slow-moving are evaluated to determine if
write-downs are required. The Company assesses the ability to dispose of these
inventories at a price greater than cost. If it is determined that cost is less
than market or net realizable value, as applicable, cost is used for inventory
valuation. If market value or net realizable value, as applicable, is less than
cost, the Company writes down the related inventory to that value.
GOODWILL AND INTANGIBLE ASSETS - The Company acquires businesses in purchase
transactions that result in the recognition of goodwill and intangible assets.
The determination of the value of intangible assets requires management to make
estimates and assumptions. In accordance with Accounting Standards Codification
("ASC") 350-20, Goodwill , acquired goodwill and indefinite-lived intangible
assets are not amortized but are subject to impairment testing at least annually
or when an event occurs or circumstances change that indicate it is more likely
than not an impairment exists. Definite-lived intangible assets are amortized
and are tested for impairment when an event occurs or circumstances change that
indicate it is more likely than not that an impairment exists. Goodwill
represents costs in excess of fair values assigned to the underlying net assets
of acquired businesses. At December 28, 2019 , the Company reported $9.238
billion of goodwill, $2.186 billion of indefinite-lived trade names and $1.436
billion of net definite-lived intangibles.
Management tests goodwill for impairment at the reporting unit level. Un
reporting unit is an operating segment as defined in ASC 280, Segment Reporting,
or one level below an operating segment (component level) as determined by the
availability of discrete financial information that is regularly reviewed by
operating segment management or an aggregate of component levels of an operating
segment having similar economic characteristics. If the carrying value of a
reporting unit (including the value of goodwill) is greater than its estimated
fair value, an impairment may exist. An impairment charge would be recorded to
the extent that the recorded value of goodwill exceeded the implied fair value.
As required by the Company's policy, goodwill was tested for impairment in the
third quarter of 2019. In accordance with Accounting Standards Update ("ASU")
2011-08, Intangibles - Goodwill and Other (Topic 350): Testing Goodwill for
Impairment, companies are permitted to first assess qualitative factors to
determine whether it is more likely than not that the fair value of a reporting
unit is less than its carrying amount as a basis for determining whether it is
necessary to perform the two-step quantitative goodwill impairment test. Under
the two-step quantitative goodwill impairment test, the fair value of the
reporting unit is compared to its respective carrying amount including goodwill.
If the fair value exceeds the carrying amount, then no impairment exists. If the
carrying amount exceeds the fair value, further analysis is performed to assess
impairment. Such tests are completed separately with respect to the goodwill of
each of the Company's reporting units. Accordingly, for its annual impairment
testing performed in the third quarter of 2019, the Company applied the
qualitative assessment for three of its reporting units, while performing the
quantitative test for two of its reporting units. For the reporting units in
which a quantitative test was performed, it was noted that the fair value for
each of these reporting units exceeded its carrying amount by in excess of 45%.
Based on the results of the Company's annual impairment testing, it was
determined that the fair value of each of its reporting units is substantially
in excess of its carrying amount.
In performing the qualitative assessments, the Company identified and considered
the significance of relevant key factors, events, and circumstances that could
affect the fair value of each reporting unit. These factors include external
factors such as macroeconomic, industry, and market conditions, as well as
entity-specific factors, such as actual and planned financial performance.
Company also assessed changes in each reporting unit's fair value and carrying
value since the most recent date a fair value measurement was performed. Comment
result of the qualitative assessments performed, the Company concluded that it
is more likely than not that the fair value of each of these reporting units
exceeded its respective carrying value and therefore, no additional quantitative
impairment testing was performed.
With respect to the quantitative tests, the Company assessed the fair values of
the two reporting units based on a discounted cash flow valuation model. The key
assumptions applied to the cash flow projections were discount rates, which
ranged from 7.5% to 9.5%, near-term revenue growth rates over the next five
years, which represented cumulative annual growth rates
42
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ranging from approximately 2% to 7%, and perpetual growth rates of 3%. These
assumptions contemplated business, market and overall economic conditions. Based
on the results of this testing, the Company determined that the fair value for
each of these reporting units exceeded its carrying amount by in excess of 45%.
Furthermore, management performed sensitivity analyses on the estimated fair
values from the discounted cash flow valuation models utilizing more
conservative assumptions that reflect reasonably likely future changes in the
discount rate and perpetual growth rate. The discount rate was increased by
100 basis points with no impairment indicated. The perpetual growth rate was
decreased by 150 basis points with no impairment indicated.
The Company also tested its indefinite-lived trade names for impairment during
the third quarter of 2019 utilizing a discounted cash flow model. The key
assumptions used included discount rates, royalty rates, and perpetual growth
rates applied to the projected sales. Based on these quantitative impairment
tests, the Company determined that the fair values of the indefinite-lived trade
names exceeded their respective carrying amounts.
In the event that future operating results of any of the Company's reporting
units or indefinite-lived trade names do not meet current expectations,
management, based upon conditions at the time, would consider taking
restructuring or other strategic actions, as necessary, to maximize revenue
growth and profitability. A thorough analysis of all the facts and circumstances
existing at that time would need to be performed to determine if recording an
impairment loss would be appropriate.
DEFINED BENEFIT OBLIGATIONS - The valuation of pension and other postretirement
benefits costs and obligations is dependent on various assumptions. These
assumptions, which are updated annually, include discount rates, expected return
on plan assets, future salary increase rates, and health care cost trend rates.
The Company considers current market conditions, including interest rates, to
establish these assumptions. Discount rates are developed considering the yields
available on high-quality fixed income investments with maturities corresponding
to the duration of the related benefit obligations. Les entreprises
weighted-average discount rates used to determine benefit obligations at
December 28, 2019 à cause de États-Unis and international pension plans were
3.20% and 1.80%, respectively. The Company's weighted-average discount rates
used to determine benefit obligations at December 29, 2018 à cause de États-Unis
and international pension plans were 4.20% and 2.62%, respectively. As discussed
further in Note L, Employee Benefit Plans, the Company develops the expected
return on plan assets considering various factors, which include its targeted
asset allocation percentages, historic returns, and expected future returns.
Company's expected rate of return assumptions for États-Unis et
international pension plans were 6.25% and 4.73%, respectively, at December 28,
L'année 2019 . The Company will use a 4.70% weighted-average expected rate of return
assumption to determine the 2020 net periodic benefit cost. A 25 basis point
reduction in the expected rate of return assumption would increase 2020 net
periodic benefit cost by approximately $5 million on a pre-tax basis.
The Company believes that the assumptions used are appropriate; however,
differences in actual experience or changes in the assumptions may materially
affect the Company's financial position or results of operations. To the extent
that actual (newly measured) results differ from the actuarial assumptions, the
difference is recognized in accumulated other comprehensive loss, and, if in
excess of a specified corridor, amortized over future periods. The expected
return on plan assets is determined using the expected rate of return and the
fair value of plan assets. Accordingly, market fluctuations in the fair value of
plan assets can affect the net periodic benefit cost in the following year.
projected benefit obligation for defined benefit plans exceeded the fair value
of plan assets by $631 million at December 28, 2019 . A 25 basis point reduction
in the discount rate would have increased the projected benefit obligation by
approximately $93 million at December 28, 2019 . The primary Black & Decker USA
pension and post employment benefit plans were curtailed in late 2010, as well
as the only material Black & Decker international plan, and in their place the
Company implemented defined contribution benefit plans. The vast majority of the
projected benefit obligation pertains to plans that have been frozen; the
remaining defined benefit plans that are not frozen are predominantly small
domestic union plans and those that are statutorily mandated in certain
international jurisdictions. The Company recognized approximately $15 million of
defined benefit plan expense in 2019, which may fluctuate in future years
depending upon various factors including future discount rates and actual
returns on plan assets.
ENVIRONMENTAL - The Company incurs costs related to environmental issues as a
result of various laws and regulations governing current operations as well as
the remediation of previously contaminated sites. The Company's policy is to
accrue environmental investigatory and remediation costs for identified sites
when it is probable that a liability has been incurred and the amount of loss
can be reasonably estimated. The amount of liability recorded is based on an
evaluation of currently available facts with respect to each individual site and
includes such factors as existing technology, presently enacted laws and
regulations, and prior experience in remediation of contaminated sites.
liabilities recorded do not take into account any claims for recoveries from
insurance or third parties. As assessments and remediation progress at
individual sites, the amounts recorded are reviewed periodically and adjusted to
reflect additional technical and legal information that becomes available.
43
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As of December 28, 2019 , the Company had reserves of $213.8 million à cause de
remediation activities associated with Company-owned properties as well as for
Superfund sites, for losses that are probable and estimable. The range of
environmental remediation costs that is reasonably possible is $149.1 million à
$286.1 million which is subject to change in the near term. The Company may be
liable for environmental remediation of sites it no longer owns. Liabilities
have been recorded on those sites in accordance with this policy.
INCOME TAXES - The Company accounts for income taxes under the asset and
liability method in accordance with ASC 740, Income Taxes, which requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements.
Deferred tax assets and liabilities are determined based on the differences
between the financial statements and tax basis of assets and liabilities using
the enacted tax rates in effect for the year in which the differences are
expected to reverse. Any changes in tax rates on deferred tax assets and
liabilities are recognized in income in the period that includes the enactment
date.
The Company records net deferred tax assets to the extent that it is more likely
than not that these assets will be realized. In making this determination,
management considers all available positive and negative evidence, including
future reversals of existing temporary differences, estimates of future taxable
income, tax-planning strategies, and the realizability of net operating loss
carryforwards. In the event that it is determined that an asset is not more
likely that not to be realized, a valuation allowance is recorded against the
asset. Valuation allowances related to deferred tax assets can be impacted by
changes to tax laws, changes to statutory tax rates and future taxable income
levels. In the event the Company were to determine that it would not be able to
realize all or a portion of its deferred tax assets in the future, the
unrealizable amount would be charged to earnings in the period in which that
determination is made. Conversely, if the Company were to determine that it
would be able to realize deferred tax assets in the future in excess of the net
carrying amounts, it would decrease the recorded valuation allowance through a
favorable adjustment to earnings in the period that the determination was made.
The Act subjects a USA shareholder to current tax on global intangible
low-taxed income ("GILTI") earned by certain foreign subsidiaries. The Financial
Accounting Standards Board ("FASB") Staff Q&A, Topic 740 No. 5, Accounting for
Global Intangible Low-Taxed Income, states that an entity can make an accounting
policy election to either recognize deferred taxes for temporary differences
expected to reverse as GILTI in future years or provide for the tax expense
related to GILTI in the year the tax is incurred. The Company has elected to
recognize the tax on GILTI as a period expense in the period the tax is
incurred.
The Company records uncertain tax positions in accordance with ASC 740, which
requires a two-step process. First, management determines whether it is more
likely than not that a tax position will be sustained based on the technical
merits of the position and second, for those tax positions that meet the more
likely than not threshold, management recognizes the largest amount of the tax
benefit that is greater than 50 percent likely to be realized upon ultimate
settlement with the related taxing authority. The Company maintains an
accounting policy of recording interest and penalties on uncertain tax positions
as a component of Income taxes in the Consolidated Statements of Operations.
The Company is subject to income tax in a number of locations, including many
state and foreign jurisdictions. Significant judgment is required when
calculating the worldwide provision for income taxes. Many factors are
considered when evaluating and estimating the Company's tax positions and tax
benefits, which may require periodic adjustments, and which may not accurately
anticipate actual outcomes. It is reasonably possible that the amount of the
unrecognized benefit with respect to certain of the Company's unrecognized tax
positions will significantly increase or decrease within the next twelve months.
These changes may be the result of settlements of ongoing audits or final
decisions in transfer pricing matters. The Company periodically assesses its
liabilities and contingencies for all tax years still subject to audit based on
the most current available information, which involves inherent uncertainty.
Additional information regarding income taxes is available in Note Q, Income
Taxes.
RISK INSURANCE - To manage its insurance costs efficiently, the Company self
insures for certain USA business exposures and generally has low deductible
plans internationally. For domestic workers' compensation, automobile and
product liability (liability for alleged injuries associated with the Company's
products), the Company generally purchases insurance coverage only for severe
losses that are unlikely, and these lines of insurance involve the most
significant accounting estimates. While different self insured retentions, in
the form of deductibles and self insurance through its captive insurance
company, exist for each of these lines of insurance, the maximum self insured
retention is set at no more than $5 million per occurrence. The process of
establishing risk insurance reserves includes consideration of actuarial
valuations that reflect the Company's specific loss history, actual claims
reported, and industry trends among statistical and other factors to estimate
the range of reserves required. Risk insurance reserves are comprised of
specific reserves for individual claims and additional amounts expected for
development of these claims, as well as for incurred but not yet reported claims
discounted to present value. The cash outflows related to risk insurance claims
are expected to occur over a period of approximately 15 years. The Company
believes the
44
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liabilities recorded for these USA risk insurance reserves, totaling $87
million et $86 million as of December 28, 2019 et December 29, 2018 ,
respectively, are adequate. Due to judgments inherent in the reserve estimation
process, it is possible the ultimate costs will differ from this estimate.
WARRANTY - The Company provides product and service warranties which vary across
its businesses. The types of warranties offered generally range from one year to
limited lifetime, and certain branded products carry a lifetime warranty. There
are also certain products with no warranty. Further, the Company sometimes
incurs discretionary costs to service its products in connection with product
performance issues. Historical warranty and service claim experience forms the
basis for warranty obligations recognized. Adjustments are recorded to the
warranty liability as new information becomes available. The Company believes
the $100 million reserve for expected product warranty claims as of December 28,
L'année 2019 is adequate, but due to judgments inherent in the reserve estimation
process, including forecasting future product reliability levels and costs of
repair as well as the estimated age of certain products submitted for claims,
the ultimate claim costs may differ from the recorded warranty liability.
Company also establishes a reserve for product recalls on a product-specific
basis during the period in which the circumstances giving rise to the recall
become known and estimable for both company-initiated actions and those required
by regulatory bodies.
OFF-BALANCE SHEET ARRANGEMENT
The Company has no off-balance sheet arrangements as of December 28, 2019 .
45
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CAUTIONARY STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This document contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact are "forward-looking statements" for purposes of
federal and state securities laws, including any projections or guidance of
earnings, revenue or other financial items; any statements of the plans,
strategies and objectives of management for future operations; any statements
concerning proposed new products, services or developments; any statements
regarding future economic conditions or performance; any statements of belief;
and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include, among others, the words "may," "will,"
"estimate," "intend," "continue," "believe," "expect," "anticipate" or any other
similar words.
Although the Company believes that the expectations reflected in any of its
forward-looking statements are reasonable, actual results could differ
materially from those projected or assumed in any of its forward-looking
statements. The Company's future financial condition and results of operations,
as well as any forward-looking statements, are subject to change and to inherent
risks and uncertainties, such as those disclosed or incorporated by reference in
the Company's filings with the Commission de sécurité et de changement .
Important factors that could cause the Company's actual results, performance and
achievements, or industry results to differ materially from estimates or
projections contained in its forward-looking statements include, among others,
the following: (i) successfully developing, marketing and achieving sales from
new products and services and the continued acceptance of current products and
services; (ii) macroeconomic factors, including global and regional business
conditions (such as Brexit), commodity prices, inflation, and currency exchange
rates; (iii) laws, regulations and governmental policies affecting the Company's
activities in the countries where it does business, including those related to
tariffs, taxation, and trade controls, including section 301 tariffs and section
232 steel and aluminum tariffs; (iv) the economic environment of emerging
markets, particularly Latin America , Russia , La Chine et Turkey ; (v) realizing the
anticipated benefits of mergers, acquisitions, joint ventures, strategic
alliances or divestitures, including the closing of the CAM acquisition, its
successful integration into the Company and the return to production of the
Boeing 737 MAX; (vi) pricing pressure and other changes within competitive
markets; (vii) availability and price of raw materials, component parts,
freight, energy, labor and sourced finished goods; (viii) the impact the
tightened credit markets may have on the Company or its customers or suppliers;
(ix) the extent to which the Company has to write off accounts receivable or
assets or experiences supply chain disruptions in connection with bankruptcy
filings by customers or suppliers; (x) the Company's ability to identify and
effectively execute productivity improvements and cost reductions; (xi)
potential business and distribution disruptions, including those related to
physical security threats, information technology or cyber-attacks, epidemics,
sanctions or natural disasters; (xii) the continued consolidation of customers,
particularly in consumer channels; (xiii) managing franchisee relationships;
(xiv) the impact of poor weather conditions; (xv) maintaining or improving
production rates in the Company's manufacturing facilities, responding to
significant changes in product demand and fulfilling demand for new and existing
products; (xvi) changes in the competitive landscape in the Company's markets;
(xvii) the Company's non-USA operations, including sales to non-USA customers;
(xviii) the impact from demand changes within world-wide markets associated with
homebuilding and remodeling; (xix) potential adverse developments in new or
pending litigation and/or government investigations; (xx) changes in the
Company's ability to obtain debt on commercially reasonable terms and at
competitive rates; (xxi) substantial pension and other postretirement benefit
obligations; (xxii) potential environmental liabilities; (xxiii) work stoppages
or other labor disruptions; and (xxiv) changes in accounting estimates.
Additional factors that could cause actual results to differ materially from
forward-looking statements are set forth in this Annual Report on Form 10-K,
including under the heading "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and in the
Consolidated Financial Statements and the related Notes.
Forward-looking statements in this Annual Report on Form 10-K speak only as of
the date hereof, and forward-looking statements in documents attached that are
incorporated by reference speak only as of the date of those documents.
Company does not undertake any obligation to update or release any revisions to
any forward-looking statement or to report any events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events, except as
required by law.
46e
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7 and in Note I, Financial Instruments, of the Notes to Consolidated
Financial Statements in Item 8.
© Edgar Online, source
STANLEY BLACK & DECKER: PROTECTION DE LA GESTION ET CONDITIONS FINANCIÈRES ET ANALYSE DE LA PERFORMANCE (formulaire 10-K)
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