Black & Decker 2014 Annual Report Download - page 78

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responsibility, based on its assessment of the servicing fee, market values for similar transactions and its cost of servicing the
receivables sold.
At January 3, 2015 and December 28, 2013, $100.3 million and $84.8 million, respectively, of net receivables were
derecognized. Gross receivables sold amounted to $1,421.2 million ($1,260.1 million, net) for the year ended January 3, 2015
and $1,328.4 million ($1,151.4 million, net) for the year ended December 28, 2013. These sales resulted in a pre-tax loss of
$3.6 million and $2.6 million for the years ended January 3, 2015 and December 28, 2013, respectively. These pre-tax losses
include servicing fees of $0.6 million for both the years ended January 3, 2015 and December 28, 2013. Proceeds from
transfers of receivables to the Purchaser totaled $1,262.1 million and $1,142.0 million for the years ended January 3, 2015 and
December 28, 2013, respectively. Collections of previously sold receivables, including deferred purchase price receivables, and
all fees, which are settled one month in arrears, resulted in payments to the Purchaser of $1,246.8 million and $1,136.5 million
for the years ended January 3, 2015 and December 28, 2013, respectively.
The Company’s risk of loss following the sale of the receivables is limited to the deferred purchase price receivable, which was
$21.7 million at January 3, 2015 and $37.3 million at December 28, 2013. The deferred purchase price receivable will be repaid
in cash as receivables are collected, generally within 30 days, and as such the carrying value of the receivable recorded
approximates fair value. Delinquencies and credit losses on receivables sold were $0.3 million for the year ended January 3,
2015 and $1.0 million for the year ended December 28, 2013. Cash inflows related to the deferred purchase price receivable
totaled $400.6 million for the year ended January 3, 2015 and $370.0 million for the year ended December 28, 2013. All cash
flows under the program are reported as a component of changes in accounts receivable within operating activities in the
Consolidated Statements of Cash Flows since all the cash from the Purchaser is either: 1) received upon the initial sale of the
receivable; or 2) from the ultimate collection of the underlying receivables and the underlying receivables are not subject to
significant risks, other than credit risk, given their short-term nature.
C. INVENTORIES
(Millions of Dollars) 2014 2013
Finished products......................................................................................................... $ 1,105.0 $ 1,075.5
Work in process............................................................................................................ 141.4 122.9
Raw materials............................................................................................................... 316.3 274.9
Total ............................................................................................................................. $ 1,562.7 $ 1,473.3
Net inventories in the amount of $600.4 million at January 3, 2015 and $440.2 million at December 28, 2013 were valued at the
lower of LIFO cost or market. If the LIFO method had not been used, inventories would have been $34.9 million higher than
reported at January 3, 2015 and $40.9 million higher than reported at December 28, 2013.
D. PROPERTY, PLANT AND EQUIPMENT
(Millions of Dollars) 2014 2013
Land........................................................................................................................... $ 136.3 $ 141.4
Land improvements ................................................................................................... 34.9 34.2
Buildings.................................................................................................................... 542.8 537.1
Leasehold improvements........................................................................................... 89.8 86.3
Machinery and equipment ......................................................................................... 1,895.9 1,835.8
Computer software .................................................................................................... 381.0 376.8
Property, plant & equipment, gross........................................................................... $ 3,080.7 $ 3,011.6
Less: accumulated depreciation and amortization..................................................... (1,626.6)(1,533.0)
Property, plant & equipment, net............................................................................... $ 1,454.1 $ 1,478.6
Depreciation and amortization expense associated with property, plant and equipment was as follows:
(Millions of Dollars) 2014 2013 2012
Depreciation .......................................................................................... $ 229.5 $ 208.7 $ 210.6
Amortization.......................................................................................... 33.9 29.3 27.3
Depreciation and amortization expense................................................. $ 263.4 $ 238.0 $ 237.9