Black & Decker 2010 Annual Report Download - page 89

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The purchase accounting for the 2010 acquisitions is preliminary, principally with respect to finalization of
intangible asset valuations, contingencies, deferred taxes, the valuation of property, plant and equipment and
certain other items.
ACTUAL AND PRO FORMA IMPACT OF THE MERGER AND ACQUISITIONS
The following table presents information for the Black & Decker Merger and other 2010 acquisitions that is
included in the Company’s consolidated statement of operations from the merger and acquisition dates through
January 1, 2011 (in millions):
Year Ended
2010
Net sales ................................................................... $4,507.3
Loss attributable to the Merger and acquisitions ...................................... $(38.2)(A)
(A) The net loss attributable to the Merger and acquisitions includes amortization of inventory step-up,
restructuring charges and other merger and acquisition-related items.
The following table presents supplemental pro forma information as if the Merger and acquisitions had
occurred on January 3, 2010 for the year ended January 1, 2011. The comparative 2009 columns were
prepared as if the Merger and acquisitions had occurred at the beginning of fiscal 2009. As such, both years
presented include merger and acquisition related charges. The pro forma consolidated results are not
necessarily indicative of what the Company’s consolidated net earnings would have been had the Company
completed the Merger and acquisitions at the beginning of each fiscal year. In addition the pro forma
consolidated results do not purport to project the future results of the combined Company nor do they reflect
the expected realization of any cost savings associated with the Merger and acquisitions.
(Millions of Dollars, except per share amounts) 2010 2009
Year-to-Date
Net sales ........................................................... $9,552.6 $8,958.5
Net earnings (loss).................................................... $ 216.1 $ (56.2)
Diluted earnings (loss) per share ......................................... $ 1.44 $ (0.36)
2010 Pro Forma Results
The 2010 pro forma results were calculated by combining the results of Stanley Black & Decker with Black &
Decker’s stand-alone results from January 3, 2010 through March 12, 2010. The pre-acquisition results of the
acquisitions were also combined for their respective pre-acquisition periods. The following adjustments were
made to account for certain costs which would have been incurred during this pre-Merger and pre-acquisition
period.
• Elimination of the historical pre-Merger and pre-acquisition intangible asset amortization expense
and the addition of intangible asset amortization expense related to intangibles valued as part of the
Merger and acquisitions that would have been incurred from January 3, 2010 to the merger and/or
acquisition dates.
• Additional expense for the inventory step-up which would have been amortized as the corresponding
inventory was sold.
• Additional expense relating to Merger-related compensation for key executives which would have
been incurred from January 3, 2010 to March 12, 2010.
• Reduced interest expense for the Black & Decker debt fair value adjustment which would have been
amortized from January 3, 2010 to March 12, 2010.
• Additional depreciation related to property, plant and equipment fair value adjustments that would
have been expensed prior to the Merger and acquisitions commencement dates.
• The modifications above were adjusted for the applicable tax impact.
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