Black & Decker 2013 Annual Report Download - page 29

Download and view the complete annual report

Please find page 29 of the 2013 Black & Decker annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152


7KH&RQVXPHU3URGXFW6DIHW\&RPPLVVLRQRURWKHUDSSOLFDEOHUHJXODWRU\ERGLHVPD\UHTXLUHWKHUHFDOOUHSDLURUUHSODFHPHQW
RIWKH&RPSDQ\¶VSURGXFWVLIWKRVHSURGXFWVDUHIRXQGQRWWREHLQFRPSOLDQFHZLWKDSSOLFDEOHVWDQGDUGVRUUHJXODWLRQV$UHFDOO
FRXOGLQFUHDVHFRVWVDQGDGYHUVHO\LPSDFWWKH&RPSDQ\¶VUHSXWDWLRQ
7KH&RPSDQ\LVH[SRVHGWRFUHGLWULVNRQLWVDFFRXQWVUHFHLYDEOH
7KH&RPSDQ\¶VRXWVWDQGLQJWUDGHUHFHLYDEOHVDUHQRWJHQHUDOO\FRYHUHGE\FROODWHUDORUFUHGLWLQVXUDQFH:KLOHWKH&RPSDQ\
KDVSURFHGXUHVWRPRQLWRUDQGOLPLWH[SRVXUHWRFUHGLWULVNRQLWVWUDGHDQGQRQWUDGHUHFHLYDEOHVWKHUHFDQEHQRDVVXUDQFH
VXFKSURFHGXUHVZLOOHIIHFWLYHO\OLPLWLWVFUHGLWULVNDQGDYRLGORVVHVZKLFKFRXOGKDYHDQDGYHUVHDIIHFWRQWKH&RPSDQ\¶V
ILQDQFLDOFRQGLWLRQDQGRSHUDWLQJUHVXOWV
,IWKH&RPSDQ\ZHUHUHTXLUHGWRZULWHGRZQDOORUSDUWRILWVJRRGZLOOLQGHILQLWHOLYHGWUDGHQDPHVRURWKHUGHILQLWHOLYHG
LQWDQJLEOHDVVHWVLWVQHWLQFRPHDQGQHWZRUWKFRXOGEHPDWHULDOO\DGYHUVHO\DIIHFWHG
$VDUHVXOWRIWKH%ODFNDQG'HFNHUPHUJHUDQGRWKHUDFTXLVLWLRQVWKH&RPSDQ\KDVELOOLRQRIJRRGZLOOELOOLRQRI
LQGHILQLWHOLYHGWUDGHQDPHVDQGELOOLRQRIGHILQLWHOLYHGLQWDQJLEOHDVVHWVDW'HFHPEHU7KH&RPSDQ\LVUHTXLUHG
WRSHULRGLFDOO\DWOHDVWDQQXDOO\GHWHUPLQHLILWVJRRGZLOORULQGHILQLWHOLYHGWUDGHQDPHVKDYHEHFRPHLPSDLUHGLQZKLFKFDVH
LWZRXOGZULWHGRZQWKHLPSDLUHGSRUWLRQRIWKHLQWDQJLEOHDVVHW7KHGHILQLWHOLYHGLQWDQJLEOHDVVHWVLQFOXGLQJFXVWRPHU
UHODWLRQVKLSVDUHDPRUWL]HGRYHUWKHLUHVWLPDWHGXVHIXOOLYHVVXFKDVVHWVDUHDOVRHYDOXDWHGIRULPSDLUPHQWZKHQDSSURSULDWH
,PSDLUPHQWRILQWDQJLEOHDVVHWVPD\EHWULJJHUHGE\GHYHORSPHQWVRXWVLGHRIWKH&RPSDQ\¶VFRQWUROVXFKDVZRUVHQLQJ
HFRQRPLFFRQGLWLRQVWHFKQRORJLFDOFKDQJHLQWHQVLILHGFRPSHWLWLRQRURWKHUIDFWRUVUHVXOWLQJLQGHOHWHULRXVFRQVHTXHQFHV
,IWKHLQYHVWPHQWVLQHPSOR\HHEHQHILWSODQVGRQRWSHUIRUPDVH[SHFWHGWKH&RPSDQ\PD\KDYHWRFRQWULEXWHDGGLWLRQDO
DPRXQWVWRWKHVHSODQVZKLFKZRXOGRWKHUZLVHEHDYDLODEOHWRFRYHURSHUDWLQJH[SHQVHVRURWKHUEXVLQHVVSXUSRVHV
7KH&RPSDQ\VSRQVRUVSHQVLRQDQGRWKHUSRVWUHWLUHPHQWGHILQHGEHQHILWSODQV7KH&RPSDQ\¶VGHILQHGEHQHILWSODQDVVHWVDUH
FXUUHQWO\LQYHVWHGLQHTXLW\VHFXULWLHVJRYHUQPHQWDQGFRUSRUDWHERQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHVPRQH\PDUNHW
LQVWUXPHQWVDQGLQVXUDQFHFRQWUDFWV7KH&RPSDQ\¶VIXQGLQJSROLF\LVJHQHUDOO\WRFRQWULEXWHDPRXQWVGHWHUPLQHGDQQXDOO\RQ
DQDFWXDULDOEDVLVWRSURYLGHIRUFXUUHQWDQGIXWXUHEHQHILWVLQDFFRUGDQFHZLWKDSSOLFDEOHODZZKLFKUHTXLUHDPRQJRWKHU
WKLQJVWKDWWKH&RPSDQ\PDNHFDVKFRQWULEXWLRQVWRXQGHUIXQGHGSHQVLRQSODQV'XULQJWKH&RPSDQ\PDGHFDVK
FRQWULEXWLRQVWRLWVGHILQHGEHQHILWSODQVRIPLOOLRQDQGLWH[SHFWVWRFRQWULEXWHPLOOLRQWRLWVGHILQHGEHQHILWSODQVLQ

7KHUHFDQEHQRDVVXUDQFHWKDWWKHYDOXHRIWKHGHILQHGEHQHILWSODQDVVHWVRUWKHLQYHVWPHQWUHWXUQVRQWKRVHSODQDVVHWVZLOO
EHVXIILFLHQWLQWKHIXWXUH,WLVWKHUHIRUHSRVVLEOHWKDWWKH&RPSDQ\PD\EHUHTXLUHGWRPDNHKLJKHUFDVKFRQWULEXWLRQVWRWKH
SODQVLQIXWXUH\HDUVZKLFKZRXOGUHGXFHWKHFDVKDYDLODEOHIRURWKHUEXVLQHVVSXUSRVHVDQGWKDWWKH&RPSDQ\ZLOOKDYHWR
UHFRJQL]HDVLJQLILFDQWSHQVLRQOLDELOLW\DGMXVWPHQWZKLFKZRXOGGHFUHDVHWKHQHWDVVHWVRIWKH&RPSDQ\DQGUHVXOWLQKLJKHU
H[SHQVHLQIXWXUH\HDUV7KHIDLUYDOXHRIWKHVHDVVHWVDW'HFHPEHUZDVELOOLRQ
/HJDORUWHFKQRORJLFDOKXUGOHVDVVRFLDWHGZLWKWKHH[SDQVLRQRIXVHRI5),'DQG57/6WHFKQRORJLHVLQ&RPSDQ\SURGXFWV
FRXOGDGYHUVHO\DIIHFWWKH&RPSDQ\VJURZWKLQLWLDWLYHVDQGORQJWHUPUHVXOWV
7KH&RPSDQ\VJURZWKLQLWLDWLYHVFDOOIRUH[SDQVLRQVRIXVHRI5),'DQG57/6WHFKQRORJLHVERWKJHRJUDSKLFDOO\DQGWKURXJK
LQFRUSRUDWLRQRIWKHVHWHFKQRORJLHVLQWRQHZSURGXFWV,QFRQQHFWLRQZLWKWKHVHDFWLYLWLHVWKH&RPSDQ\PD\HQFRXQWHUERWK
WHFKQRORJLFDOGLIILFXOWLHVDQGOHJDOLPSHGLPHQWVLQFOXGLQJEXWQRWOLPLWHGWRGHVLJQUHTXLUHPHQWVRZQHUVKLSFODLPVDQG
OLFHQVLQJRUSHUPLWWLQJUHTXLUHPHQWVWKDWFRXOGGHOD\RUSUHYHQWWKHXVHRIWKHVHWHFKQRORJLHVLQFHUWDLQSURGXFWVDQGRULQ
FHUWDLQJHRJUDSKLHV$Q\VXFKLPSHGLPHQWVFRXOGDGYHUVHO\LPSDFWWKH&RPSDQ\VSODQVIRUJURZWKDQGIXWXUHUHVXOWV
5LVNVDVVRFLDWHGZLWKKRVWLOLWLHVLQYROYLQJ1RUWK.RUHD
7KH&RPSDQ\KDVDQXPEHURINH\VXSSOLHUVLQ6RXWK.RUHD(VFDODWLRQRIKRVWLOLWLHVZLWK1RUWK.RUHDDQGRUPLOLWDU\DFWLRQ
LQWKHUHJLRQFRXOGFDXVHGLVUXSWLRQVLQWKH&RPSDQ\VVXSSO\FKDLQZKLFKFRXOGLQWXUQFDXVHSURGXFWVKRUWDJHVGHOD\VLQ
GHOLYHU\DQGRULQFUHDVHVLQWKH&RPSDQ\VFRVWLQFXUUHGWRSURGXFHDQGGHOLYHUSURGXFWVWRLWVFXVWRPHUV
,7(0%815(62/9('67$))&200(176
1RQH
,7(03523(57,(6
$VRI'HFHPEHUWKH&RPSDQ\DQGLWVVXEVLGLDULHVRZQHGRUOHDVHGVLJQLILFDQWIDFLOLWLHVXVHGIRUPDQXIDFWXULQJ
GLVWULEXWLRQDQGVDOHVRIILFHVLQVWDWHVDQGIRUHLJQFRXQWULHV7KH&RPSDQ\OHDVHVLWVFRUSRUDWHKHDGTXDUWHUVLQ1HZ