Black & Decker 2015 Annual Report Download - page 106

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P. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS
As previously discussed, in the first quarter of 2015 the Company combined the CDIY business with certain complementary
elements of the IAR and Healthcare businesses (formerly part of the Industrial and Security segments, respectively) to form one
Tools & Storage business. As a result, the Company recast segment financial information for all years to align with this change
in organizational structure. There was no impact to the consolidated financial statements of the Company as a result of this
change.
The Company classifies its business into three reportable segments, which also represent its operating segments: Tools &
Storage, Security and Industrial.
The Tools & Storage segment is comprised of the Power Tools and Hand Tools & Storage businesses. The Power Tools
business includes professional products, consumer products and power tool accessories. Professional products include
professional grade corded and cordless electric power tools and equipment including drills, impact wrenches and drivers,
grinders, saws, routers and sanders as well as pneumatic tools and fasteners including nail guns, nails, staplers, and staples,
concrete and masonry anchors. Consumer products include corded and cordless electric power tools sold primarily under the
BLACK + DECKER brand, lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, edgers, and
related accessories, and home products such as hand held vacuums, paint tools, and cleaning appliances. Power tool accessories
include drill bits, router bits, abrasives and saw blades. The Hand Tools & Storage business sells measuring, leveling and
layout tools, planes, hammers, demolition tools, knives, saws, chisels, and industrial and automotive tools. Storage products
include tool boxes, sawhorses, medical cabinets, and engineered storage solution products.
The Security segment is comprised of the Convergent Security Solutions ("CSS") and Mechanical Access Solutions ("MAS")
businesses. The CSS business designs, supplies and installs electronic security systems and provides electronic security
services, including alarm monitoring, video surveillance, fire alarm monitoring, systems integration and system maintenance.
Purchasers of these systems typically contract for ongoing security systems monitoring and maintenance at the time of initial
equipment installation. The business also includes healthcare solutions, which markets asset tracking, infant protection,
pediatric protection, patient protection, wander management, fall management, and emergency call products. The MAS
business sells automatic doors, commercial hardware, locking mechanisms, electronic keyless entry systems, keying systems,
tubular and mortise door locksets.
The Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses. The Engineered Fastening
business primarily sells engineered fastening products and systems designed for specific applications. The product lines include
stud welding systems, blind rivets and tools, blind inserts and tools, drawn arc weld studs, engineered plastic and mechanical
fasteners, self-piercing riveting systems, precision nut running systems, micro fasteners, and high-strength structural fasteners.
The Infrastructure business consists of the Oil & Gas and Hydraulics businesses. The Oil & Gas business sells and rents custom
pipe handling, joint welding and coating equipment used in the construction of large and small diameter pipelines, and provides
pipeline inspection services. The Hydraulics business sells hydraulic tools and accessories.
The Company utilizes segment profit, which is defined as net sales minus cost of sales and SG&A inclusive of the provision for
doubtful accounts (aside from corporate overhead expense), and segment profit as a percentage of net sales to assess the
profitability of each segment. Segment profit excludes the corporate overhead expense element of SG&A, interest income,
interest expense, other-net (inclusive of intangible asset amortization expense), restructuring, and income taxes. Refer to
Note O, Restructuring Charges and Asset Impairments, for the amount of net restructuring charges by segment, and to Note F,
Goodwill and Intangible Assets, for intangible amortization expense by segment. Corporate overhead is comprised of world
headquarters facility expense, cost for the executive management team and cost for certain centralized functions that benefit the
entire Company but are not directly attributable to the businesses, such as legal and corporate finance functions. Transactions
between segments are not material. Segment assets primarily include accounts receivable, inventory, other current assets,
property, plant and equipment, intangible assets and other miscellaneous assets.
Geographic net sales and long-lived assets are attributed to the geographic regions based on the geographic location of each
Company subsidiary.