Black & Decker 2015 Annual Report Download - page 53

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CAUTIONARY STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
Certain statements contained in this Annual Report on Form 10-K that are not historical, including but not limited to those regarding the
Company’s ability to: (i) achieve full year 2016 diluted EPS of approximately $6.00 - $6.20 on a GAAP basis (inclusive of restructuring
charges relatively consistent with 2015 levels); (ii) achieve free cash flow conversion of approximately 100% for 2016 ; (iii) reduce its basic
share count by the share equivalent of approximately $300 million in 2016; (iv) achieve organic sales growth of 3% in 2016 ; (v) successfully
achieve its three-year annual financial targets (“2018 Vision"), which assumes a relatively stable currency environment and approximately
$50 million of annual restructuring costs, including: 4-6% organic revenue growth with total revenue growth enhanced by acquisitions; 50-75
basis points of annual operating margin rate improvement to approximately 16% in 2018; 10-12% earnings per share growth including
acquisitions (7-9% organic growth); CFROI expansion to 14-15%; progress towards working capital turns of 10 or more; returning
approximately 50% of free cash flow to shareholders through a strong and growing dividend as well as opportunistic share repurchases; and
deploying the remaining roughly 50% of free cash flow to acquisitions (collectively, the “Results”); are “forward-looking statements” and
subject to risk and uncertainty.
The Company’s ability to deliver the Results as described above is based on current expectations and involves inherent risks and
uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes
and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed elsewhere herein,
the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in
the forward-looking statements include, without limitation, those set forth under Item 1A Risk Factors hereto and any material changes
thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Company’s other filings with the Securities and
Exchange Commission, and those set forth below.
The Company’s ability to deliver the Results is dependent, or based, upon: (i) the Company’s ability to generate organic net sales increase of
3% driving approximately $0.45 to $0.50 of EPS accretion in 2016; (ii) the Company’s ability to successfully execute cost actions and
productivity initiatives, as well as achieve the anticipated commodity deflation all yielding approximately $0.45 to $0.50 of EPS accretion in
2016; (iii) the Company’s ability to drive an additional $0.13 of EPS accretion from lower average share count due to share repurchases
during 2016; (iv) foreign exchange headwinds being approximately $170 - $190 million, or $0.85 to $0.95 of EPS in 2016; (v) the Company’s
tax rate being relatively consistent with the 2015 rate; (vi) the Company’s ability to limit one-time restructuring charges to approximately $50
million in 2016; (vii) the Company’s ability to capitalize on operational improvements in both Security Europe and North America; (viii) the
Company’s ability to identify and realize revenue synergies associated with acquisitions; (ix) successful identification of appropriate
acquisition opportunities and completing them within time frames and at reasonable costs as well as the integration of completed acquisitions
and reorganization of existing businesses; (x) the continued acceptance of technologies used in the Company’s products and services; (xi) the
Company’s ability to manage existing Sonitrol franchisee and Mac Tools relationships; (xii) the Company’s ability to minimize costs
associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xiii) the
proceeds realized with respect to any business or product line disposals; (xiv) the extent of any asset impairments with respect to any
businesses or product lines that are sold or discontinued; (xv) the success of the Company’s efforts to manage freight costs, steel and other
commodity costs as well as capital expenditures; (xvi) the Company’s ability to sustain or increase prices in order to, among other things,
offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases and/or
currency impacts; (xvii) the Company’s ability to generate free cash flow, maintain a conservative credit profile, and a strong investment
grade rating; (xviii) the Company’s ability to identify and effectively execute productivity improvements and cost reductions, while
minimizing any associated restructuring charges; (xix) the Company’s ability to obtain favorable settlement of tax audits; (xx) the ability of
the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become
deductible; (xxi) the continued ability of the Company to access credit markets under satisfactory terms; (xxii) the Company’s ability to
negotiate satisfactory payment terms under which the Company buys and sells goods, services, materials and products; (xxiii) the Company’s
ability to successfully develop, market and achieve sales from new products and services; and (xxiv) the availability of cash to repurchase
shares when conditions are right, as well as the Company's ability to effectively use equity derivative transactions to reduce the capital
requirement associated with share repurchases.
The Company’s ability to deliver the Results is also dependent upon: (i) the success of the Company’s marketing and sales efforts, including
the ability to develop and market new and innovative products and solutions in both existing and new markets including emerging markets;
(ii) the ability of the Company to maintain or improve production rates in the Company’s manufacturing facilities, respond to significant
changes in product demand and fulfill demand for new and existing products; (iii) the Company’s ability to continue improvements in
working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing
and defending claims and litigation; (v) the success of the Company’s efforts to mitigate adverse earnings impact resulting from any cost
increases generated by, for example, increases in the cost of energy or significant Euro, Canadian Dollar, Chinese Renminbi or other currency
fluctuations; (vi) the geographic distribution of the Company’s earnings; (vii) the commitment to, and success of, the Stanley Fulfillment
System; and (viii) successful implementation with expected results of cost reduction programs.
The Company’s ability to achieve the Results will also be affected by external factors. These external factors include: challenging global
geopolitical and macroeconomic environment; the economic environment of emerging markets, particularly Latin America, Russia, China and
Turkey; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer
channels; inventory management pressures on the Company’s customers; the impact the tightened credit markets may have on the Company
or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain
disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies