EXHIBIT 99.0
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ABOUT BUSINESS SEGMENTS (Unaudited)
(Millions of Dollars)
Reportable Business Segments
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Power Hardware Fastening Currency Corporate,
Tools & & Home & Assembly Translation Adjustments,
Year Ended December 31, 2003 Accessories Improvement Systems Total Adjustments & Eliminations Consolidated
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Sales to unaffiliated customers $3,198.4 $718.1 $530.1 $4,446.6 $ 36.1 $ - $4,482.7
Segment profit (loss)
(for Consolidated, operating
income before restructuring
and exit costs) 361.2 93.2 77.6 532.0 2.6 (74.3) 460.3
Depreciation and amortization 82.0 24.4 15.4 121.8 .9 10.7 133.4
Capital expenditures 69.8 17.1 13.8 100.7 1.0 .8 102.5
Year Ended December 31, 2002
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Sales to unaffiliated customers $3,242.5 $660.7 $528.6 $4,431.8 $(140.0) $ - $4,291.8
Segment profit (loss)
(for Consolidated, operating
income before restructuring
and exit costs) 361.5 47.4 77.9 486.8 (11.7) (60.5) 414.6
Depreciation and amortization 81.5 25.5 14.6 121.6 (2.5) 3.3 122.4
Capital expenditures 72.3 9.0 14.3 95.6 (2.1) .8 94.3
Year Ended December 31, 2001
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Sales to unaffiliated customers $3,145.7 $659.8 $504.7 $4,310.2 $(170.3) $ - $4,139.9
Segment profit (loss)
(for Consolidated, operating
income before restructuring
and exit costs) 255.6 48.0 74.3 377.9 (6.1) (33.8) 338.0
Depreciation and amortization 88.6 28.7 14.9 132.2 (3.5) 23.6 152.3
Capital expenditures 87.2 29.7 16.2 133.1 (2.5) .8 131.4
The reconciliation of segment profit to the Corporation's earnings from
continuing operations before income taxes for each of the three years in the
period ended December 31, 2003, in millions of dollars, is as follows:
Year Ended December 31,
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2003 2002 2001
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Segment profit for total reportable business segments $532.0 $486.8 $377.9
Items excluded from segment profit:
Adjustment of budgeted foreign exchange rates to
actual rates 2.6 (11.7) (6.1)
Depreciation of Corporate property and amortization
of certain goodwill (1.1) (1.3) (23.6)
Adjustment to businesses' postretirement benefit
expenses booked in consolidation 15.4 38.3 42.6
Other adjustments booked in consolidation directly
related to reportable business segments (15.0) (8.4) (.6)
Amounts allocated to businesses in arriving at segment
profit in excess of (less than) Corporate center operating
expenses, eliminations, and other amounts identified above (73.6) (89.1) (52.2)
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Operating income before restructuring and exit costs 460.3 414.6 338.0
Restructuring and exit costs 31.6 46.6 99.7
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Operating income 428.7 368.0 238.3
Interest expense, net of interest income 35.2 57.8 84.3
Other expense 2.6 4.8 8.2
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Earnings from continuing operations before income taxes $390.9 $305.4 $145.8
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Reportable Business Segments
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Power Hardware Fastening Currency Corporate,
Tools & & Home Assembly Translation Adjustments,
Quarter Ended March 30, 2003 Accessories Improvement Systems Total Adjustments & Eliminations Consolidated
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Sales to unaffiliated customers $666.4 $146.2 $133.2 $ 945.8 $ (6.6) $ - $ 939.2
Segment profit (loss) (for
Consolidated, operating income
before restructuring and exit costs) 59.5 13.0 19.3 91.8 (.2) (19.3) 72.3
Depreciation and amortization 20.1 6.8 3.8 30.7 - 4.4 35.1
Capital expenditures 15.2 7.3 3.5 26.0 (.2) .2 26.0
Quarter Ended June 29, 2003
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Sales to unaffiliated customers $786.2 $166.0 $132.0 $1,084.2 $ 5.9 $ - $1,090.1
Segment profit (loss) (for
Consolidated, operating income
before restructuring and exit costs) 87.3 16.9 19.3 123.5 1.0 (14.2) 110.3
Depreciation and amortization 20.2 6.7 4.0 30.9 .1 3.8 34.8
Capital expenditures 15.7 5.1 3.1 23.9 .1 .3 24.3
Quarter Ended September 28, 2003
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Sales to unaffiliated customers $808.5 $174.3 $126.3 $1,109.1 $ 6.7 $ - $1,115.8
Segment profit (loss) (for
Consolidated, operating income
before restructuring and exit costs) 98.1 25.1 17.2 140.4 (.4) (11.3) 128.7
Depreciation and amortization 21.2 4.7 3.9 29.8 .2 .8 30.8
Capital expenditures 23.0 .8 3.1 26.9 .4 .2 27.5
Quarter Ended December 31, 2003
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Sales to unaffiliated customers $937.3 $231.6 $138.6 $1,307.5 $ 30.1 $ - $1,337.6
Segment profit (loss) (for
Consolidated, operating income
before restructuring and exit costs) 116.3 38.2 21.8 176.3 2.2 (29.5) 149.0
Depreciation and amortization 20.5 6.2 3.7 30.4 .6 1.7 32.7
Capital expenditures 15.9 3.9 4.1 23.9 .7 .1 24.7
Quarter Ended March 31, 2002
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Sales to unaffiliated customers $672.1 $173.7 $129.9 $ 975.7 $(48.6) $ - $ 927.1
Segment profit (loss) (for
Consolidated, operating income) 40.3 13.2 17.4 70.9 (2.9) (7.9) 60.1
Depreciation and amortization 22.1 7.9 3.7 33.7 (1.1) .3 32.9
Capital expenditures 15.5 2.9 3.7 22.1 (.7) .2 21.6
Quarter Ended June 30, 2002
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Sales to unaffiliated customers $837.2 $169.9 $136.6 $1,143.7 $(43.1) $ - $1,100.6
Segment profit (loss) (for
Consolidated, operating income
before restructuring and exit costs) 96.8 6.0 20.0 122.8 (3.4) (12.8) 106.6
Depreciation and amortization 18.8 6.9 3.7 29.4 (.8) .7 29.3
Capital expenditures 20.7 2.4 3.8 26.9 (.5) .1 26.5
Quarter Ended September 29, 2002
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Sales to unaffiliated customers $798.3 $154.5 $129.6 $1,082.4 $(22.8) $ - $1,059.6
Segment profit (loss) (for
Consolidated, operating income
before restructuring and exit costs) 108.1 9.4 19.9 137.4 (2.1) (14.9) 120.4
Depreciation and amortization 20.3 5.9 3.7 29.9 (.3) .1 29.7
Capital expenditures 17.2 2.0 1.7 20.9 (.4) .4 20.9
Quarter Ended December 31, 2002
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Sales to unaffiliated customers $934.9 $162.6 $132.5 $1,230.0 $(25.5) $ - $1,204.5
Segment profit (loss) (for
Consolidated, operating income
before restructuring and exit costs) 116.3 18.8 20.6 155.7 (3.3) (24.9) 127.5
Depreciation and amortization 20.3 4.8 3.5 28.6 (.3) 2.2 30.5
Capital expenditures 18.9 1.7 5.1 25.7 (.5) .1 25.3
The reconciliation of segment profit to the Corporation's earnings from
continuing operations before income taxes for each of the quarters in the years
ended December 31, 2003 and 2002, in millions of dollars, is as follows:
Quarter Ended
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March 30, June 29, September 28, December 31,
2003 2003 2003 2003
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Segment profit for total reportable business segments $ 91.8 $123.5 $140.4 $176.3
Items excluded from segment profit:
Adjustment of budgeted foreign exchange rates to
actual rates (.2) 1.0 (.4) 2.2
Depreciation of Corporate property (.3) (.2) (.3) (.3)
Adjustment to businesses' postretirement benefit
expenses booked in consolidation 3.8 3.9 3.8 3.9
Other adjustments booked in consolidation directly
related to reportable business segments (8.8) (1.2) 1.0 (6.0)
Amounts allocated to businesses in arriving at segment
profit in excess of (less than) Corporate center operating
expenses, eliminations, and other amounts identified above (14.0) (16.7) (15.8) (27.1)
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Operating income before restructuring and exit costs 72.3 110.3 128.7 149.0
Restructuring and exit costs .2 .4 21.0 10.0
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Operating income 72.1 109.9 107.7 139.0
Interest expense, net of interest income 12.1 7.7 7.6 7.8
Other expense 1.7 .6 .3 -
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Earnings from continuing operations before income taxes $ 58.3 $101.6 $ 99.8 $131.2
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Quarter Ended
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March 31, June 30, September 29, December 31,
2002 2002 2002 2002
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Segment profit for total reportable business segments $ 70.9 $122.8 $137.4 $155.7
Items excluded from segment profit:
Adjustment of budgeted foreign exchange rates to
actual rates (2.9) (3.4) (2.1) (3.3)
Depreciation of Corporate property (.3) (.7) (.1) (.2)
Adjustment to businesses' postretirement benefit
expenses booked in consolidation 10.4 8.9 9.5 9.5
Other adjustments booked in consolidation directly
related to reportable business segments (4.7) 3.2 (2.1) (4.8)
Amounts allocated to businesses in arriving at segment
profit in excess of (less than) Corporate center operating
expenses, eliminations, and other amounts identified above (13.3) (24.2) (22.2) (29.4)
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Operating income before restructuring and exit costs 60.1 106.6 120.4 127.5
Restructuring and exit costs - (1.2) 35.5 12.3
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Operating income 60.1 107.8 84.9 115.2
Interest expense, net of interest income 15.8 14.8 14.2 13.0
Other expense (income) 1.2 2.1 1.8 (.3)
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Earnings from continuing operations before income taxes $ 43.1 $ 90.9 $ 68.9 $102.5
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Basis of Presentation:
The Corporation operates in three reportable business segments: Power Tools
and Accessories, Hardware and Home Improvement, and Fastening and Assembly
Systems. The Power Tools and Accessories segment has worldwide responsibility
for the manufacture and sale of consumer and professional power tools and
accessories, electric cleaning and lighting products, and electric lawn and
garden tools, as well as for product service. In addition, the Power Tools and
Accessories segment has responsibility for the sale of security hardware to
customers in Mexico, Central America, the Caribbean, and South America; for the
sale of plumbing products to customers outside the United States and Canada; and
for sales of household products. The Hardware and Home Improvement segment has
worldwide responsibility for the manufacture and sale of security hardware
(except for the sale of security hardware in Mexico, Central America, the
Caribbean, and South America). On September 30, 2003, the Corporation acquired
Baldwin Hardware Corporation and Weiser Lock Corporation. These acquired
businesses are included in the Hardware and Home Improvement segment. The
Hardware and Home Improvement segment also has responsibility for the
manufacture of plumbing products and for the sale of plumbing products to
customers in the United States and Canada. The Fastening and Assembly Systems
segment has worldwide responsibility for the manufacture and sale of fastening
and assembly systems.
In January 2004, the Corporation sold two components of its European
security hardware business. The divested businesses and the remaining portion
that is expected to be sold in 2004 are treated as discontinued operations in
the Corporation's consolidated financial statements. Sales, segment profit,
depreciation and amortization, and capital expenditures set forth in the
preceding tables exclude the results of the discontinued operations.
The Corporation assesses the performance of its reportable business
segments based upon a number of factors, including segment profit. In general,
segments follow the same accounting policies as those described in Note 1 of
Notes to Consolidated Financial Statements included in Item 8 of the
Corporation's Annual Report on Form 10-K for the year ended December 31, 2003,
except with respect to foreign currency translation and except as further
indicated below. The financial statements of a segment's operating units located
outside of the United States, except those units operating in highly
inflationary economies, are generally measured using the local currency as the
functional currency. For these units located outside of the United States,
segment assets and elements of segment profit are translated using budgeted
rates of exchange. Budgeted rates of exchange are established annually and, once
established, all prior period segment data is restated to reflect the current
year's budgeted rates of exchange. The amounts included in the preceding tables
under the captions "Reportable Business Segments" and "Corporate, Adjustments, &
Eliminations" are reflected at the Corporation's budgeted rates of exchange for
2004. The amounts included in the preceding tables under the caption "Currency
Translation Adjustments" represent the difference between consolidated amounts
determined using those budgeted rates of exchange and those determined based
upon the rates of exchange applicable under accounting principles generally
accepted in the United States.
Segment profit excludes interest income and expense, non-operating income
and expense, adjustments to eliminate intercompany profit in inventory, income
tax expense, and, for 2001, goodwill amortization (except for the amortization
of goodwill associated with certain acquisitions made by the Power Tools and
Accessories and Fastening and Assembly Systems segments). In addition, segment
profit excludes restructuring and exit costs. In determining segment profit,
expenses relating to pension and other postretirement benefits are based solely
upon estimated service costs. Corporate expenses, as well as certain centrally
managed expenses, are allocated to each reportable segment based upon budgeted
amounts. While sales and transfers between segments are accounted for at cost
plus a reasonable profit, the effects of intersegment sales are excluded from
the computation of segment profit. Intercompany profit in inventory is excluded
from segment assets and is recognized as a reduction of cost of goods sold by
the selling segment when the related inventory is sold to an unaffiliated
customer. Because the Corporation compensates the management of its various
businesses on, among other factors, segment profit, the Corporation may elect to
record certain segment-related expense items of an unusual or non-recurring
nature in consolidation rather than reflect such items in segment profit. In
addition, certain segment-related items of income or expense may be recorded in
consolidation in one period and transferred to the various segments in a later
period.