Stanley Black & Decker (SWK) 8-K Stanley Black & Decker Reports 1Q 2012 Results

Exhibit 99.2

Page 8

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, Millions of Dollars Except Per Share Amounts)

	FIRST QUARTER
	2012			2011
NET SALES	$	2,652.9		$	2,361.5
COSTS AND EXPENSES
Cost of sales		1,666.9			1,484.1
Gross margin		986.0			877.4
% to Net Sales		37.2	%		37.2	%
Selling, general and administrative		679.0			601.7
% to Net sales		25.6	%		25.5	%
Operating margin		307.0			275.7
% to Net sales		11.6	%		11.7	%
Other - net		80.7			52.5
Restructuring charges		37.4			13.3
Income from operations		188.9			209.9
Interest - net		31.2			29.6
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		157.7			180.3
Income taxes on continuing operations		36.6			23.2
NET EARNINGS FROM CONTINUING OPERATIONS		121.1			157.1
Less: net loss attributable to non-controlling interests		(0.7	)		(0.3	)
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREOWNERS		121.8			157.4
Net earnings from discontinued operations before income taxes		—			1.2
Income tax benefit on discontinued operations		—			(0.1	)
NET EARNINGS FROM DISCONTINUED OPERATIONS		—			1.3
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS	$	121.8		$	158.7
BASIC EARNINGS PER SHARE OF COMMON STOCK
Continuing operations		0.74			0.94
Discontinued operations		—			0.01
Total basic earnings per share of common stock		0.74			0.95
DILUTED EARNINGS PER SHARE OF COMMON STOCK
Continuing operations		0.72			0.92
Discontinued operations		—			0.01
Total diluted earnings per share of common stock		0.72			0.92
DIVIDENDS PER SHARE	$	0.41		$	0.41
AVERAGE SHARES OUTSTANDING (in thousands)
Basic		164,530			167,259
Diluted		168,948			171,945

Page 9

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Millions of Dollars)

	(Unaudited)
	March 31,		December 31,
	2012		2011
ASSETS
Cash and cash equivalents	$	883.6	$	906.9
Accounts and notes receivable, net		1,725.8		1,553.2
Inventories, net		1,589.7		1,438.6
Other current assets		404.2		424.0
Total current assets		4,603.3		4,322.7
Property, plant and equipment, net		1,268.2		1,250.9
Goodwill and other intangibles, net		10,178.0		10,037.1
Other assets		300.8		338.3
Total assets	$	16,350.3	$	15,949.0
LIABILITIES AND SHAREOWNERS’ EQUITY
Short-term borrowings	$	733.7	$	526.6
Accounts payable		1,417.5		1,312.6
Accrued expenses		1,285.9		1,429.3
Total current liabilities		3,437.1		3,268.5
Long-term debt		2,905.7		2,925.8
Other long-term liabilities		2,745.9		2,687.9
Stanley Black & Decker, Inc. shareowners’ equity		7,203.1		7,003.6
Non-controlling interests’ equity		58.5		63.2
Total liabilities and equity	$	16,350.3	$	15,949.0

Page 10

STANLEY BLACK & DECKER INC. AND SUBSIDIARIES

SUMMARY OF CASH FLOW ACTIVITY

(Unaudited, Millions of Dollars)

	FIRST QUARTER
	2012			2011
OPERATING ACTIVITIES
Net earnings from continuing operations	$	121.1		$	157.1
Depreciation and amortization		115.8			103.9
Changes in working capital1		(152.2	)		(40.4	)
Other		(117.0	)		(100.3	)
Net cash (used in) provided by operating activities		(32.3	)		120.3
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures		(61.5	)		(70.1	)
Business acquisitions and asset disposals		(112.8	)		(68.3	)
Proceeds from sale of businesses		—			23.8
Proceeds from issuance of common stock		64.6			55.4
Net short-term borrowings repayments		196.8			141.4
Cash dividends on common stock		(69.9	)		(68.6	)
Other		(8.2	)		4.1
Net cash provided by investing and financing activities		9.0			17.7
(Decrease) Increase in Cash and Cash Equivalents		(23.3	)		138.0
Cash and Cash Equivalents, Beginning of Period		906.9			1,742.8
Cash and Cash Equivalents, End of Period	$	883.6		$	1,880.8

¹  The change in working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.

Page 11

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

BUSINESS SEGMENT INFORMATION

(Unaudited, Millions of Dollars)

	FIRST QUARTER
	2012			2011
NET SALES
Construction & DIY	$	1,228.2		$	1,210.8
Security		762.7			549.8
Industrial		662.0			600.9
Total	$	2,652.9		$	2,361.5
SEGMENT PROFIT
Construction & DIY	$	157.7		$	156.5
Security		91.6			73.4
Industrial		124.1			105.1
Segment Profit		373.4			335.0
Corporate Overhead		(66.4	)		(59.3	)
Total	$	307.0		$	275.7
Segment Profit as a Percentage of Net Sales
Construction & DIY		12.8	%		12.9	%
Security		12.0	%		13.4	%
Industrial		18.7	%		17.5	%
Segment Profit		14.1	%		14.2	%
Corporate Overhead		(2.5	%)		(2.5	%)
Total		11.6	%		11.7	%

Page 12

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING

NON-GAAP FINANCIAL MEASURES

(Unaudited, Millions of Dollars Except Per Share Amounts)

	FIRST QUARTER 2012
	Reported			Merger & Acquisition- Related Charges1			Normalized2
Gross margin	$	986.0		$	5.4		$	991.4
% to Net Sales		37.2	%					37.4	%
Selling, general and administrative		679.0			(27.8	)		651.2
% to Net Sales		25.6	%					24.5	%
Operating margin		307.0			33.2			340.2
% to Net Sales		11.6	%					12.8	%
Earnings from continuing operations before income taxes		157.7			82.7			240.4
Income taxes on continuing operations		36.6			21.2			57.8
Net earnings from continuing operations		121.8			61.5			183.3
Diluted earnings per share of common stock	$	0.72		$	0.37		$	1.09

¹  Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges and integration costs.

	FIRST QUARTER 2011
	Reported			Merger & Acquisition- Related Charges3			Normalized2
Gross margin	$	877.4		$	6.3		$	883.7
% to Net Sales		37.2	%					37.4	%
Selling, general and administrative		601.7			(15.6	)		586.1
% to Net Sales		25.5	%					24.8	%
Operating margin		275.7			21.9			297.6
% to Net Sales		11.7	%					12.6	%
Earnings from continuing operations before income taxes		180.3			37.2			217.5
Income taxes on continuing operations		23.2			9.3			32.5
Net earnings from continuing operations		157.4			27.9			185.3
Diluted earnings per share of common stock	$	0.92		$	0.16		$	1.08

²  The normalized 2012 and 2011 information, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges.

³  Merger and acquisition-related charges relate primarily to the Black & Decker merger, including facility closure-related charges and integration costs.

Page 13

STANLEY BLACK & DECKER INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP CASH FLOW FINANCIAL MEASURES TO CORRESPONDING

NON-GAAP FINANCIAL MEASURES

(Unaudited, Millions of Dollars)

	FIRST QUARTER 2012
	Reported			Merger & Acquisition- Related Charges and Payments1		Normalized2
Free Cash Flow Computation3
Net cash (used in) provided by operating activities	$	(32.3	)		61.5	$	29.2
Less: capital and software expenditures		(61.5	)		23.6		(37.9	)
Free Cash (Outflow) Inflow (before dividends)	$	(93.8	)			$	(8.7	)

¹  Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges and integration costs.

	FIRST QUARTER 2011
	Reported			Merger & Acquisition- Related Charges and Payments4		Normalized2
Free Cash Flow Computation3
Net cash provided by operating activities		120.3			13.8	$	134.1
Less: capital and software expenditures		(70.1	)		—		(70.1	)
Free Cash Inflow (before dividends)	$	50.2				$	64.0

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

⁴  Merger and acquisition-related charges relate primarily to the Black & Decker merger, including facility closure-related charges and integration costs.

Page 14

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING

NON-GAAP FINANCIAL MEASURES

(Unaudited, Millions of Dollars)

	FIRST QUARTER 2012
	Reported			Merger & Acquisition- Related Charges1		Normalized2
SEGMENT PROFIT
Construction & DIY	$	157.7		$	3.3	$	161.0
Security		91.6			10.4		102.0
Industrial		124.1			2.0		126.1
Segment Profit		373.4			15.7		389.1
Corporate Overhead		(66.4	)		17.5		(48.9	)
Total	$	307.0		$	33.2	$	340.2
Segment Profit as a Percentage of Net Sales
Construction & DIY		12.8	%				13.1	%
Security		12.0	%				13.4	%
Industrial		18.7	%				19.0	%
Segment Profit		14.1	%				14.7	%
Corporate Overhead		(2.5	%)				(1.8	%)
Total		11.6	%				12.8	%

¹  Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges and integration costs.

	FIRST QUARTER 2011
	Reported			Merger & Acquisition- Related Charges3		Normalized2
SEGMENT PROFIT
Construction & DIY	$	156.5		$	2.4	$	158.9
Security		73.4			4.5		77.9
Industrial		105.1			—		105.1
Segment Profit		335.0			6.9		341.9
Corporate Overhead		(59.3	)		15.0		(44.3	)
Total	$	275.7		$	21.9	$	297.6
Segment Profit as a Percentage of Net Sales
Construction & DIY		12.9	%				13.1	%
Security		13.4	%				14.2	%
Industrial		17.5	%				17.5	%
Segment Profit		14.2	%				14.5	%
Corporate Overhead		(2.5	%)				(1.9	%)
Total		11.7	%				12.6	%

²  The normalized 2011 and 2010 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the company’s segment profit results aside from the material impact of the merger and acquisition-related charges.

³  Merger and acquisition-related charges relate primarily to the Black & Decker merger, including facility closure-related charges and integration costs.