Black & Decker 2014 Annual Report Download - page 108

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94
P. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS
The Company classifies its business into three reportable segments, which also represent its operating segments:
Construction & Do It Yourself (“CDIY”), Industrial and Security.
The CDIY segment is comprised of the Professional Power Tool business, the Consumer Products Group, the Hand Tools &
Storage business, and the Fastening & Accessories business. The Professional Power Tool business sells professional grade
corded and cordless electric power tools and equipment including drills, impact wrenches and drivers, grinders, saws, routers
and sanders. The Consumer Products Group sells corded and cordless electric power tools sold primarily under the Black &
Decker brand, lawn and garden products and home products. The Hand Tools & Storage business sells measuring, leveling and
layout tools, planes, hammers, demolition tools, knives, saws, chisels, tool boxes, sawhorses, and storage units. The Fastening
and Accessories business sells cordless power tools, pneumatic tools and fasteners including nail guns, nails, staplers and
staples, concrete and masonry anchors, as well as power tool accessories which include drill bits, router bits, abrasives and saw
blades.
The Industrial segment is comprised of the Industrial and Automotive Repair ("IAR"), Engineered Fastening and Infrastructure
businesses. The IAR business sells professional hand tools, power tools, and engineered storage solution products. The
Engineered Fastening business primarily sells engineered fastening products and systems designed for specific applications.
The product lines include stud welding systems, blind rivets and tools, blind inserts and tools, drawn arc weld studs, engineered
plastic and mechanical fasteners, self-piercing riveting systems and precision nut running systems, micro fasteners, and high-
strength structural fasteners. The Infrastructure business consists of the Oil & Gas and Hydraulics businesses. The Oil & Gas
business 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. The Hydraulics business sells hydraulic tools and accessories.
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 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. The business also includes healthcare solutions, which markets medical cabinets, asset
tracking, infant protection, pediatric protection, patient protection, wander management, fall management, and emergency call
products. The MAS business sells automatic doors, commercial hardware, locking mechanisms, electronic keyless entry
systems, keying systems, tubular and mortise door locksets.
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, interest income,
interest expense, other-net (inclusive of intangible asset amortization expense), restructuring, and income taxes. Refer to
Note O, Restructuring Charges, for the amount of net restructuring charges by segment, and to Note F, Goodwill and Intangible
Assets, for intangible amortization expense by segment. Corporate overhead is comprised of world headquarters facility
expense, cost for the executive management team and cost for certain centralized functions that benefit the entire Company but
are not directly attributable to the businesses, such as legal and corporate finance functions. Transactions between segments are
not material. Segment assets primarily include accounts receivable, inventory, other current assets, property, plant and
equipment, intangible assets and other miscellaneous assets.
Geographic net sales and long-lived assets are attributed to the geographic regions based on the geographic location of each
Company subsidiary.