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THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
SECOND QUARTER | YEAR TO DATE | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
NET SALES | $ | 1,017.9 | $ | 814.7 | $ | 1,986.6 | $ | 1,611.0 | ||||||||
COSTS AND EXPENSES | ||||||||||||||||
Cost of sales | 641.2 | 514.0 | 1,278.0 | 1,023.3 | ||||||||||||
Selling, general and administrative | 244.6 | 188.4 | 483.4 | 372.8 | ||||||||||||
Interest-net | 17.4 | 8.2 | 33.0 | 15.8 | ||||||||||||
Other-net | 10.9 | 12.0 | 30.2 | 21.5 | ||||||||||||
Restructuring charges | 1.8 | 1.6 | 9.1 | 1.6 | ||||||||||||
915.9 | 724.2 | 1,833.7 | 1,435.0 | |||||||||||||
EARNINGS FROM CONTINUING OPERATIONS | ||||||||||||||||
BEFORE INCOME TAXES | 102.0 | 90.5 | 152.9 | 176.0 | ||||||||||||
Income taxes | 27.0 | 25.2 | 39.4 | 44.9 | ||||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 75.0 | 65.3 | 113.5 | 131.1 | ||||||||||||
Earnings (loss) from discontinued operations (including loss | ||||||||||||||||
on disposal of $1.5 million in 2006) before income taxes | (0.5 | ) | 1.3 | (1.5 | ) | 2.2 | ||||||||||
Income taxes (tax benefit) on discontinued operations | (0.2 | ) | 0.7 | (0.4 | ) | 0.8 | ||||||||||
NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS | (0.3 | ) | 0.6 | (1.1 | ) | 1.4 | ||||||||||
NET EARNINGS | $ | 74.7 | $ | 65.9 | $ | 112.4 | $ | 132.5 | ||||||||
BASIC EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
Continuing operations | $ | 0.92 | $ | 0.79 | $ | 1.38 | $ | 1.58 | ||||||||
Discontinued operations | — | 0.01 | (0.01 | ) | 0.02 | |||||||||||
Total basic earnings per share of common stock | $ | 0.92 | $ | 0.79 | $ | 1.37 | $ | 1.60 | ||||||||
DILUTED EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
Continuing operations | $ | 0.90 | $ | 0.77 | $ | 1.35 | $ | 1.54 | ||||||||
Discontinued operations | — | 0.01 | (0.01 | ) | 0.02 | |||||||||||
Total diluted earnings per share of common stock | $ | 0.90 | $ | 0.78 | $ | 1.34 | $ | 1.56 | ||||||||
DIVIDENDS PER SHARE | $ | 0.29 | $ | 0.28 | $ | 0.58 | $ | 0.56 | ||||||||
AVERAGE SHARES OUTSTANDING (in thousands) | ||||||||||||||||
Basic | 81,132 | 83,020 | 82,114 | 82,919 | ||||||||||||
Diluted | 82,978 | 84,983 | 83,991 | 85,076 | ||||||||||||
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THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
July 1, 2006 | December 31, 2005 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 207.1 | $ | 657.8 | ||||
Accounts and notes receivable | 751.2 | 609.6 | ||||||
Inventories | 571.6 | 460.7 | ||||||
Other current assets | 80.5 | 84.2 | ||||||
Assets held for sale | 2.9 | 13.3 | ||||||
Total current assets | 1,613.3 | 1,825.6 | ||||||
Property, plant and equipment | 493.5 | 467.1 | ||||||
Goodwill and other intangibles | 1,517.1 | 1,060.4 | ||||||
Other assets | 221.4 | 192.0 | ||||||
Total assets | $ | 3,845.3 | $ | 3,545.1 | ||||
LIABILITIES AND SHAREOWNERS’ EQUITY | ||||||||
Short-term borrowings | $ | 345.1 | $ | 170.2 | ||||
Accounts payable | 420.1 | 327.7 | ||||||
Accrued expenses | 433.9 | 374.3 | ||||||
Liabilities held for sale | — | 3.1 | ||||||
Total current liabilities | 1,199.1 | 875.3 | ||||||
Long-term debt | 821.0 | 895.3 | ||||||
Other long-term liabilities | 418.2 | 329.6 | ||||||
Shareowners’ equity | 1,407.0 | 1,444.9 | ||||||
Total liabilities and equity | $ | 3,845.3 | $ | 3,545.1 | ||||
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THE STANLEY WORKS AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
SECOND QUARTER | YEAR TO DATE | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||||||
Net earnings | $ | 74.7 | $ | 65.9 | $ | 112.4 | $ | 132.5 | ||||||||||||
Depreciation and amortization | 31.0 | 23.9 | 61.3 | 47.3 | ||||||||||||||||
Changes in working capital | (8.1 | ) | (4.2 | ) | 1.5 | (25.4 | ) | |||||||||||||
Other | 19.7 | (8.5 | ) | 27.3 | (16.7 | ) | ||||||||||||||
Net cash provided by operating activities | 117.3 | 77.1 | 202.5 | 137.7 | ||||||||||||||||
INVESTING AND FINANCING ACTIVITIES | ||||||||||||||||||||
Capital and software expenditures | (24.1 | ) | (16.5 | ) | (38.6 | ) | (27.0 | ) | ||||||||||||
Proceeds (taxes paid) from sale of business | — | (8.1 | ) | 0.9 | (18.7 | ) | ||||||||||||||
Business acquisitions and asset disposals | (25.2 | ) | (46.4 | ) | (515.8 | ) | (106.1 | ) | ||||||||||||
Cash dividends on common stock | (23.5 | ) | (23.2 | ) | (47.3 | ) | (46.4 | ) | ||||||||||||
Other | (42.3 | ) | 32.2 | (52.4 | ) | 136.1 | ||||||||||||||
�� Net cash used in investing and financing activities | (115.1 | ) | (62.0 | ) | (653.2 | ) | (62.1 | ) | ||||||||||||
Increase(decrease) in Cash and Cash Equivalents | 2.2 | 15.1 | (450.7 | ) | 75.6 | |||||||||||||||
Cash and Cash Equivalents, Beginning of Period | 204.9 | 310.5 | 657.8 | 250.0 | ||||||||||||||||
Cash and Cash Equivalents, End of Period | $ | 207.1 | $ | 325.6 | $ | 207.1 | $ | 325.6 | ||||||||||||
Free Cash Flow Computation | ||||||||||||||||||||
Operating Cash Flow | $ | 117.3 | $ | 77.1 | $ | 202.5 | $ | 137.7 | ||||||||||||
Less: capital and software expenditures | (24.1 | ) | (16.5 | ) | (38.6 | ) | (27.0 | ) | ||||||||||||
Free Cash Flow (before dividends) | $ | 93.2 | $ | 60.6 | $ | 163.9 | $ | 110.7 | ||||||||||||
Free cash flow is defined as cash flow from operations less capital expenditures; the company believes this is an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners.
The change in working capital is comprised of accounts receivable, inventory and accounts payable.
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THE STANLEY WORKS AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
SECOND QUARTER | YEAR TO DATE | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
NET SALES | ||||||||||||||||||||
Consumer Products | $ | 331.7 | $ | 261.3 | $ | 641.5 | $ | 518.5 | ||||||||||||
Industrial Tools | 462.6 | 348.1 | 913.6 | 697.4 | ||||||||||||||||
Security Solutions | 223.6 | 205.3 | 431.5 | 395.1 | ||||||||||||||||
Total | $ | 1,017.9 | $ | 814.7 | $ | 1,986.6 | $ | 1,611.0 | ||||||||||||
OPERATING PROFIT | ||||||||||||||||||||
Consumer Products | $ | 50.7 | $ | 42.0 | $ | 88.0 | $ | 83.0 | ||||||||||||
Industrial Tools | 45.3 | 38.0 | 74.0 | 74.8 | ||||||||||||||||
Security Solutions | 36.1 | 32.3 | 63.2 | 57.1 | ||||||||||||||||
Total | $ | 132.1 | $ | 112.3 | $ | 225.2 | $ | 214.9 | ||||||||||||
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