Black & Decker 2014 Annual Report Download - page 33

Download and view the complete annual report

Please find page 33 of the 2014 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 148

  • 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

19
(a) The Company's 2014 results include $54 million of pre-tax charges related to merger and acquisition-related charges.
As a result of these charges, net earnings attributable to common shareowners were reduced by $49 million (or $0.30
per diluted share). As a percentage of Net sales, Cost of sales was 2 basis points higher, Selling, general &
administrative was 28 basis points higher, Other-net was 2 basis points higher, Earnings before income taxes was
48 basis points lower, and Net earnings attributable to common shareowners was 43 basis points lower. The Income tax
rate — continuing operations ratio was 53 basis points higher.
(b) The Company's 2013 results include $390 million of pre-tax charges related to merger and acquisition-related charges,
as well as the charges associated with the extinguishment of debt during the fourth quarter of 2013. As a result of these
charges, net earnings attributable to common shareowners were reduced by $270 million (or $1.70 per diluted share).
As a percentage of Net sales, Cost of sales was 27 basis points higher, Selling, general & administrative was 125 basis
points higher, Other-net was 47 basis points higher, Earnings before income taxes was 358 basis points lower, and Net
earnings attributable to common shareowners was 248 basis points lower. The Income tax rate — continuing operations
ratio was 761 basis points lower.
(c) The Company's 2012 results include $442 million of pre-tax charges related to merger and acquisition-related charges,
the charges associated with the $200 million in cost actions implemented in 2012, as well as the charges associated with
the extinguishment of debt during the third quarter of 2012. As a result of these charges, net earnings attributable to
common shareowners were reduced by $329 million (or $1.97 per diluted share). As a percentage of Net Sales, Cost of
sales was 30 basis points higher, Selling, general & administrative was 138 basis points higher, Other-net was 53 basis
points higher, Earnings before income taxes was 441 basis points lower, and Net earnings attributable to common
shareowners was 328 basis points lower. The Income tax rate — continuing operations ratio was 514 basis points lower.
During 2012, the Company recognized an income tax benefit attributable to the settlement of certain tax contingencies
of $49 million, or $0.29 per diluted share.
(d) The Company’s 2011 results include $227 million of pre-tax merger and acquisition-related charges incurred in
connection with the Black & Decker merger and other acquisition activities, such as Niscayah. These charges include
facility closure-related charges, employee related matters, including severance costs, transaction and integration costs.
As a result of these charges, net earnings attributable to common shareowners were reduced by $180 million (or $1.06
per diluted share). As a percentage of Net sales, Cost of sales was 23 basis points higher, Selling, general &
administrative was 105 basis points higher, Other-net was 52 basis points higher, Earnings before income taxes was
243 basis points lower, and Net earnings attributable to common shareowners was 193 basis points lower. The Income
tax rate — continuing operations ratio was 321 basis points lower. During 2011, the Company recognized an income
tax benefit attributable to the settlement of certain tax contingencies of $73 million, or $0.43 per diluted share.
(e) The Company’s Consolidated Financial Statements include Black & Decker’s results of operations and cash flows from
March 13, 2010. The Company’s 2010 results include $478 million of pre-tax merger and acquisition-related charges
incurred in connection with the Merger. Such charges include amortization of inventory step-up, facility closure-related
charges, certain executive compensation and severance costs, transaction and integration costs, partially offset by
pension curtailment gains. As a result of these charges, Net earnings attributable to common shareowners were reduced
by $380 million (or $2.53 per diluted share). As a percentage of Net sales, Cost of sales was 196 basis points higher,
Selling, general & administrative was 110 basis points higher, Other-net was 49 basis points higher, Earnings before
income taxes was 643 basis points lower, and Net earnings attributable to common shareowners was 511 basis points
lower. The Income tax rate — continuing operations ratio was 700 basis points lower. In the second quarter of 2010,
the Company recognized an income tax benefit attributable to the settlement of certain tax contingencies of $36 million,
or $0.21 per diluted share.
(f) Amounts in 2014 reflect a $96 million loss, or $0.60 per diluted share, associated with the Security segment’s Spain and
Italy operations (“Security Spain and Italy”) that were classified as held for sale in the fourth quarter of 2014 and two
small businesses that were divested in 2014. Amounts in 2013 reflect a $30 million loss, or $0.19 per diluted share,
associated with Security Spain and Italy, HHI, and two small businesses that were divested in 2014. Amounts in 2012
reflect earnings of $426 million, or $2.55 per diluted share, related to Security Spain and Italy as well as HHI, partially
offset by losses associated with two small businesses previously discussed. The net (loss) earnings from discontinued
operations in 2013 and 2012 include net gains related to the HHI sale of $4.7 million and $358.9 million, respectively.
Refer to Note T, Discontinued Operations, of the Notes to Consolidated Financial Statements in Item 8 for further
information. Amounts in 2011 reflect earnings of $63 million (or $0.37 per diluted share) related to Security Spain and
Italy, HHI, two small businesses divested in 2014, and three small businesses divested during 2011. Amounts in 2010
reflect earnings of $47 million (or $0.31 per diluted share) primarily related to HHI, two small businesses divested in
2014, and three small businesses divested during 2011.
(g) SG&A is inclusive of the Provision for Doubtful Accounts.