Black & Decker 2011 Annual Report Download - page 72

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60
2009 ACQUISITIONS — During 2009, the Company completed six minor acquisitions, primarily relating to the Company’s
electronic security solutions business, for a combined purchase price of $24.3 million. Amounts allocated to the assets acquired and
liabilities assumed were based on their estimated fair values at the acquisition dates. The purchase price allocations of these
acquisitions are complete.
ACTUAL AND PRO-FORMA IMPACT OF THE MERGER AND ACQUISITIONS
The Company’s Consolidated Statement of Operations for 2011 includes $364.6 million in net sales and $40.6 million in net losses
(inclusive of deal costs and other acquisition related costs) for Niscayah and other 2011 acquisitions.
The following table presents supplemental pro-forma information as if the Merger, acquisition of Niscayah and other acquisitions had
occurred on January 3, 2010. This pro-forma information includes merger and acquisition-related charges for the period. 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 on January 3, 2010. In addition, the pro-forma consolidated results do not reflect the
expected realization of any cost savings associated with the Merger and acquisitions.
Year
-
to
-
Date
(Millions of Dollars, except per share amounts)
2011
2010
Net
sales ................................................................................................
......
$ 11,012.6 10,511.8
Net earnings
................................................................
................................
682.9 205.5
Diluted earnings per share ................................................................
...........
4.08 1.20
2011 Pro-Forma Results
The 2011 pro-forma results were calculated by combining the results of Stanley Black & Decker, Niscayah’s stand-alone pre-
acquisition results and other smaller acquisitions’ pre-acquisition periods. The following adjustments were made to account for certain
costs which would have been incurred during this pre-acquisition period.
• Elimination of the historical pre-acquisition intangible asset amortization expense and the addition of intangible asset
amortization expense related to intangibles valued as part of acquisitions that would have been incurred from January 2,
2011 to the acquisition dates.
• Because the 2011 acquisitions were assumed to occur on January 3, 2010, there were no deal costs, inventory step up
amortization, or deferred revenue fair value amortization factored into the 2011 pro-forma year, as such expenses would
have occurred in the first year following the acquisition.
• Because the 2011 acquisitions were funded with existing cash resources and debt acquired was repaid, no additional
interest expense was factored into the 2011 pro-forma year.
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 and Niscayah’s stand-alone results from January 3, 2010 through January 1,
2011. The pre-acquisition results of the other 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 period 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 pertaining to Merger-related compensation for key executives which would have been incurred from
January 3, 2010 to March 12, 2010.
• Reduced revenue for fair value adjustments made to deferred revenue for Niscayah.
• 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 date.
• The modifications above were adjusted for the applicable tax impact.