Black & Decker 2012 Annual Report Download - page 98

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Unallocated shares are released from the trust based on current period debt principal and interest payments as a percentage of
total future debt principal and interest payments. Dividends on both allocated and unallocated shares may be used for debt
service and to credit participant accounts for dividends earned on allocated shares. Dividends paid on the shares acquired with
the 1991 internal loan were used solely to pay internal loan debt service in all periods. Dividends on ESOP shares, which are
charged to shareowners’ equity as declared, were $12.4 million in 2012, $12.2 million in 2011 and $9.7 million in 2010, net of
the tax benefit which is recorded within equity. Dividends on ESOP shares were utilized entirely for debt service in all years.
Interest costs incurred by the ESOP on the 1991 internal loan, which have no earnings impact, were $6.7 million, $7.2 million
and $7.6 million for 2012, 2011 and 2010, respectively. Both allocated and unallocated ESOP shares are treated as outstanding
for purposes of computing earnings per share. As of December 29, 2012, the cumulative number of ESOP shares allocated to
participant accounts was 12,182,342, of which participants held 3,210,779 shares, and the number of unallocated shares was
3,382,714. At December 29, 2012, there were 25,528 released shares in the ESOP trust holding account pending allocation. The
Company made cash contributions totaling $36.6 million in 2012, $16.2 million in 2011 and $1.3 million in 2010.
PENSION AND OTHER BENEFIT PLANS — The Company sponsors pension plans covering most domestic hourly and
certain executive employees, and approximately 14,100 foreign employees. Benefits are generally based on salary and years of
service, except for U.S. collective bargaining employees whose benefits are based on a stated amount for each year of service.
The Company contributes to a number of multi-employer plans for certain collective bargaining U.S. employees. The risks of
participating in these multiemployer plans are different from single-employer plans in the following aspects:
a. Assets contributed to the multiemployer plan by one employer may be used to provide benefit to employees of other
participating employers.
b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be inherited by
the remaining participating employers.
c. If the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to
pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
In addition, the Company also contributes to a number of multiemployer plans outside of the U.S. The foreign plans are
insured, therefore, the Company’s obligation is limited to the payment of insurance premiums.
The Company has assessed and determined that none of the multiemployer plans to which it contributes are individually
significant to the Company’s financial statements. The Company does not expect to incur a withdrawal liability or expect to
significantly increase its contributions over the remainder of the contract period.
In addition to the multiemployer plans, various other defined contribution plans are sponsored worldwide, including a tax-
deferred 401(k) savings plan covering substantially all Black & Decker U.S. employees in 2010.
The expense for such defined contribution plans, aside from the earlier discussed ESOP plans, follows:
(Millions of Dollars) 2012 2011 2010
Multi-employer plan expense……………………………………………. $ 3.3 $ 3.0 $ 0.6
Other defined contribution plan expense………………………………… $ 16.2 $ 9.9 $ 16.4
The increase in other defined contribution plan expense in 2012 relative to 2011 primarily pertains to a full year expense for
Niscayah which was acquired in September 2011. The decrease in other defined contribution plan expense in 2011 relative to
2010 primarily pertains to the merger of the Black & Decker U.S. defined contribution plan into the ESOP.
The components of net periodic pension expense are as follows: