<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended Commission File Number
July 2, 1995 1-1553
THE BLACK & DECKER CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 52-0248090
(State of Incorporation) (I.R.S. Employer Identification Number)
701 East Joppa Road Towson, Maryland 21286
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 716-3900
Not Applicable
Former Address
Number of shares of common stock outstanding on July 2, 1995:
85,693,571.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months and
(2) has been subject to such filing requirements for the past 90
days.
YES X NO
The exhibit index as required by item 601(a) of Regulation S-K is
included in this report.
<PAGE>
<PAGE> - 2 -
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
INDEX - FORM 10-Q
July 2, 1995
Page
PART I - FINANCIAL INFORMATION
Consolidated Statement of Earnings
(Unaudited) - For the Three Months
and Six Months Ended
July 2, 1995, and July 3, 1994 . . . . . . . . . . 3
Consolidated Balance Sheet
- July 2, 1995 (Unaudited), and December 31, 1994 . . 4
Consolidated Statement of Cash Flows
(Unaudited) - For the Six Months Ended
July 2, 1995, and July 3, 1994 . . . . . . . . . . 5
Notes to Consolidated Financial Statements
(Unaudited) . . . . . . . . . . . . . . . . . . . . . 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . 9
PART II - OTHER INFORMATION . . . . . . . . . . . . . 18
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 21
<PAGE>
<PAGE> - 3 -
<TABLE>
CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
(Dollars in Millions, Except Per Share Amounts)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------- ----------------------
JULY 2, JULY 3, JULY 2, JULY 3,
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES
Product sales $1,135.4 $1,015.8 $2,156.8 $1,910.1
Information technology
and services 193.6 205.4 372.0 395.6
-------- -------- -------- --------
TOTAL REVENUES 1,329.0 1,221.2 2,528.8 2,305.7
Cost of revenues
Products 716.2 644.2 1,358.7 1,215.4
Information technology
and services 149.2 155.7 284.6 299.1
Marketing and administrative
expenses 362.4 337.0 695.6 639.1
-------- -------- -------- --------
Total operating costs and expenses 1,227.8 1,136.9 2,338.9 2,153.6
-------- -------- -------- --------
OPERATING INCOME 101.2 84.3 189.9 152.1
Interest expense (net of
interest income) 47.4 47.8 94.2 91.7
Other expense 4.1 2.3 2.0 4.4
-------- -------- -------- --------
EARNINGS BEFORE INCOME TAXES 49.7 34.2 93.7 56.0
Income taxes 14.9 11.2 33.2 18.4
-------- -------- -------- --------
NET EARNINGS $ 34.8 $ 23.0 $ 60.5 $ 37.6
======== ======== ======== ========
NET EARNINGS APPLICABLE TO
COMMON SHARES $ 31.9 $ 20.1 $ 54.7 $ 31.7
======== ======== ======== ========
NET EARNINGS PER COMMON SHARE $ .37 $ .24 $ .64 $ .38
======== ======== ======== ========
DIVIDENDS PER COMMON SHARE $ .10 $ .10 $ .20 $ .20
======== ======== ======== ========
Average Common Shares Outstanding
(in Millions) 85.5 84.1 85.2 84.0
======== ======== ======== ========
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<PAGE> - 4 -
<TABLE>
CONSOLIDATED BALANCE SHEET
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
(Millions of Dollars)
<CAPTION>
JULY 2, DECEMBER 31,
1995 1994
---------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 126.6 $ 65.9
Trade accounts receivable 869.5 910.9
Inventories 872.4 723.0
Other current assets 164.7 133.4
-------- --------
TOTAL CURRENT ASSETS 2,033.2 1,833.2
-------- --------
PROPERTY, PLANT AND EQUIPMENT 857.0 858.1
GOODWILL 2,311.6 2,293.0
OTHER ASSETS 456.5 449.4
-------- --------
$5,658.3 $5,433.7
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings $ 572.8 $ 549.0
Current maturities of long-term debt 137.6 121.1
Trade accounts payable 403.6 405.2
Other accrued liabilities 742.2 804.5
-------- --------
TOTAL CURRENT LIABILITIES 1,856.2 1,879.8
-------- --------
LONG-TERM DEBT 1,812.1 1,723.2
DEFERRED INCOME TAXES 49.8 45.4
POSTRETIREMENT BENEFITS 313.0 328.2
OTHER LONG-TERM LIABILITIES 340.7 287.7
STOCKHOLDERS' EQUITY
Convertible preferred stock, no par value:
Outstanding:
July 2, 1995 and December 31, 1994
- 150,000 shares 150.0 150.0
Common stock, par value $.50 per share:
Outstanding:
July 2, 1995 - 85,693,571 shares
December 31, 1994 - 84,688,803 shares 42.8 42.3
Capital in excess of par value 1,069.2 1,049.1
Retained earnings 62.1 24.6
Equity adjustment from translation (37.6) (96.6)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 1,286.5 1,169.4
-------- --------
$5,658.3 $5,433.7
======== ========
</TABLE>
See Notes to Consolidated Financial Statements<PAGE>
<PAGE> - 5 -
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
(Millions of Dollars)
<CAPTION>
SIX MONTHS ENDED
---------------------------
JULY 2, JULY 3,
1995 1994
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 60.5 $ 37.6
Adjustments to reconcile net earnings
to cash flow from operating activities:
Non-cash charges and credits:
Depreciation and amortization 111.6 102.9
Other 2.8 (2.4)
Changes in selected working capital items:
Trade accounts receivable 125.6 96.4
Inventories (128.9) (93.5)
Trade accounts payable (8.3) 6.2
Other assets and liabilities (118.0) (72.5)
-------- --------
CASH FLOW FROM OPERATING ACTIVITIES BEFORE
SALE OF RECEIVABLES 45.3 74.7
Sale of receivables (64.5) (52.0)
-------- --------
CASH FLOW FROM OPERATING ACTIVITIES (19.2) 22.7
-------- --------
INVESTING ACTIVITIES
Proceeds from disposal of assets and businesses 67.8 6.3
Capital expenditures (83.0) (75.0)
Cash inflow from hedging activities 295.6 741.9
Cash outflow from hedging activities (284.1) (749.0)
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES (3.7) (75.8)
-------- --------
CASH FLOW BEFORE FINANCING ACTIVITIES (22.9) (53.1)
FINANCING ACTIVITIES
Net increase in short-term borrowings 20.0 223.2
Proceeds from long-term debt
(including revolving credit facility) 186.1 1,046.6
Payments on long-term debt
(including revolving credit facility) (117.1) (1,203.0)
Issuance of equity interest in a subsidiary - 4.3
Issuance of common stock 12.6 6.8
Cash dividends (22.9) (22.6)
-------- ---------
CASH FLOW FROM FINANCING ACTIVITIES 78.7 55.3
Effect of exchange rate changes on cash 4.9 4.1
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS 60.7 6.3
Cash and cash equivalents at beginning of period 65.9 82.0
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 126.6 $ 88.3
======== ========
</TABLE>
See Notes to Consolidated Financial Statements<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q
and do not include all the information and notes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, the unaudited
consolidated financial statements include all adjustments
consisting only of normal recurring accruals considered necessary
for a fair presentation of the financial position and the results
of operations. Certain prior year amounts in the consolidated
financial statements have been reclassified to conform to the
presentation used for 1995.
Operating results for the three-month and six-month periods
ended July 2, 1995, are not necessarily indicative of the results
that may be expected for a full fiscal year. For further
information, refer to the consolidated financial statements and
notes included in the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1994, as amended.
SALE OF RECEIVABLES
At July 2, 1995, under its sale of receivables program, the
Corporation had sold $179.5 million of receivables compared to
$244.0 million at December 31, 1994. The discount on sale of
receivables is included in "Other expense."
SALE OF SUBSIDIARY
On March 31, 1995, the Corporation sold PRC Realty Systems, Inc.
("RSI"), a component of its Information Technology and Services
segment, for approximately $60 million. The gain on the sale of
RSI is included in "Other expense." The pre-tax gain was offset
by tax expense associated with the sale.
RSI represented approximately 1% of the Corporation's
consolidated revenues for the six months ended July 2, 1995, and
July 3, 1994, and for the quarter ended July 3, 1994.
INVENTORIES
The components of inventory at the end of each period, in
millions of dollars, consisted of the following:
<TABLE>
<CAPTION>
July 2, December 31,
1995 1994
<S> --------- ------------
<C> <C>
FIFO Cost
Raw materials and work-in-process $ 255.1 $ 220.4
Finished products 662.5 543.8
-------- --------
917.6 764.2
Excess of FIFO cost over LIFO
inventory value (45.2) (41.2)
-------- --------
$ 872.4 $ 723.0
======== ========
</TABLE>
Inventories are stated at the lower of cost or market. The cost
of United States inventories is based primarily on the last-in,
first-out (LIFO) method; foreign inventories are valued on the
first-in, first-out (FIFO) method.
GOODWILL
Goodwill at the end of each period, in millions of dollars, was
as follows:
<TABLE>
<CAPTION>
July 2, December 31,
1995 1994
-------- -----------
<S> <C> <C>
Goodwill $2,789.5 $2,735.5
Less accumulated amortization 477.9 442.5
-------- --------
$2,311.6 $2,293.0
======== ========
</TABLE>
LONG-TERM DEBT
Indebtedness of subsidiaries of the Corporation in the aggregate
principal amounts of $859.0 million and $773.8 million were
included in the Consolidated Balance Sheet at July 2, 1995, and
December 31, 1994, respectively, under the captions short-term
borrowings, current maturities of long-term debt, and long-term
debt.
INTEREST EXPENSE (Net of Interest Income)
Interest expense (net of interest income) for each period, in
millions of dollars, consisted of the following:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------- -----------------------
July 2, July 3, July 2, July 3,
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Interest expense $ 49.4 $ 49.7 $ 98.3 $ 95.7
Interest (income) (2.0) (1.9) (4.1) (4.0)
-------- -------- -------- --------
$ 47.4 $ 47.8 $ 94.2 $ 91.7
======== ======== ======== ========
</TABLE>
NET EARNINGS PER COMMON SHARE
Net earnings per common share for each period presented are
computed by dividing net earnings applicable to common shares,
which are after preferred dividends, by the weighted average
number of common shares outstanding for each period. Preferred
dividends were $2.9 million and $5.8 million for the three-month
and six-month periods ended July 2, 1995, respectively, and $2.9
million and $5.9 million for the three-month and six-month
periods ended July 3, 1994, respectively.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Net earnings for the three months ended July 2, 1995, increased
51% to $34.8 million or $.37 per common share compared to $23.0
million or $.24 per common share for the comparable quarter last
year. Net earnings for the six months ended July 2, 1995,
increased 61% to $60.5 million or $.64 per common share compared
to $37.6 million or $.38 per common share for the corresponding
period in 1994. The improvement in net earnings is primarily
attributable to higher sales volumes, including the favorable
effects of foreign currency translation, coupled with the results
of manufacturing productivity and cost reduction initiatives.
RESULTS OF OPERATIONS
Revenues
The following chart sets forth an analysis of changes in revenues
for the three-month and six-month periods ended July 2, 1995, and
July 3, 1994.
<TABLE>
_______________________________________________________________________________________________
<CAPTION>
Analysis of Changes in Revenues (in Millions of Dollars)
--------------------------------------------------------
Consolidated Three Months Ended Six Months Ended
------------ ------------------------ -----------------------
July 2, July 3, July 2, July 3,
1995 1994 1995 1994
-------- -------- -------- --------
<S> <S> <S> <S> <S>
Total revenues $1,329.0 $1,221.2 $2,528.8 $2,305.7
Unit volume - Existing (1) 6 % 9 % 6 % 5 %
- Disposed (2) (1)% (2)% (1)% (3)%
Price 1 % 1 % 1 % 1 %
Currency 3 % (2)% 4 % (1)%
-------- -------- -------- --------
Change in total revenues 9 % 6 % 10 % 2 %
_______________________________________________________________________________________________
(1) Existing - Reflects the change in unit volume for
businesses where period-to-period comparability
exists.
(2) Disposed - Reflects the change in total revenues
for businesses that were included in prior year
results but subsequently have been sold.
</TABLE>
The Corporation operates in three business segments: Consumer
and Home Improvement Products (Consumer), including consumer and
professional power tools and accessories, household products,
security hardware, outdoor products (composed of electric lawn
and garden and recreational products), plumbing products, and
product service; Commercial and Industrial Products (Commercial),
including fastening systems and glass container-making equipment;
and Information Technology and Services (PRC), including
government and commercial systems development, consulting, and
other related contract services.
The following chart sets forth an analysis of the change in
revenues for the three months and six months ended July 2, 1995,
compared to the three months and six months ended July 3, 1994,
by geographic area for each business segment.
<PAGE>
<TABLE>
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
THREE AND SIX MONTHS ENDED JULY 2, 1995
ANALYSIS OF CHANGES IN REVENUES
(in Millions of Dollars)
<CAPTION>
United
States Europe Other Total
------ ------ ----- -----
3 MOS 6 MOS 3 MOS 6 MOS 3 MOS 6 MOS 3 MOS 6 MOS
----- ------- ----- ----- ----- ----- ----- --------
Consumer
- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Revenues $518.9 $962.5 $307.2 $598.9 $134.1 $255.5 $960.2 $1,816.9
------ ------ ------ ------ ------ ------ ------ --------
Unit Volume - Existing 7 % 7 % 4 % 4 % 11 % 11 % 6 % 7 %
- Disposed - % - % - % - % - % - % - % - %
Price - % 1 % - % - % 6 % 4 % 1 % 1 %
Currency - % - % 14 % 13 % (6)% (4)% 4 % 3 %
-- -- -- -- -- -- -- --
7 % 8 % 18 % 17 % 11 % 11 % 11 % 11 %
-- -- -- -- -- -- -- --
____________________________________________________________________________________________________________________________
Commercial
- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Revenues $65.1 $132.9 $80.4 $145.4 $29.7 $61.6 $175.2 $339.9
----- ------ ----- ------ ----- ----- ------ ------
Unit Volume - Existing (3)% 2 % 15 % 24 % 15 % 19 % 7 % 13 %
- Disposed - % - % - % - % - % - % - % - %
Price 1 % 1 % 2 % 2 % (1)% - % 1 % 1 %
Currency - % - % 18 % 17 % 20 % 16 % 10 % 9 %
-- -- -- -- -- -- -- --
(2)% 3 % 35 % 43 % 34 % 35 % 18 % 23 %
-- -- -- -- -- -- -- --
____________________________________________________________________________________________________________________________
PRC
- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Revenues $193.6 $372.0 $ - $ - $ - $ - $193.6 $372.0
------ ------ ----- ----- ----- ----- ------ ------
Unit Volume - Existing 3 % (1)% - % - % - % - % 3 % (1)%
Disposed (9)% (5)% - % - % - % - % (9)% (5)%
-- -- -- -- -- -- -- --
(6)% (6)% - % - % - % - % (6)% (6)%
-- -- -- -- -- -- -- --
____________________________________________________________________________________________________________________________
Consolidated
- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Revenues $777.6 $1,467.4 $387.6 $744.3 $163.8 $317.1 $1,329.0 $2,528.8
------ -------- ------ ------ ------ ------ -------- --------
Unit Volume - Existing 5 % 4 % 6 % 8 % 11 % 12 % 6 % 6 %
- Disposed (2)% (1)% - % - % - % - % (1)% (1)%
Price - % 1 % - % - % 5 % 3 % 1 % 1 %
Currency - % - % 15 % 13 % (2)% - % 3 % 4 %
-- -- -- -- -- -- -- --
Change in Total Revenues 3 % 4 % 21 % 21 % 14 % 15 % 9 % 10 %
-- -- -- -- -- -- -- --
____________________________________________________________________________________________________________________________
</TABLE>
Existing unit volume grew by 6% for the three-month and six-month
periods ended July 2, 1995, over prior year levels. The effects
of a weaker United States dollar compared to most major foreign
currencies accounted for 3% and 4% of the increase in revenues
for the three- and six-month periods ended July 2, 1995,
respectively, over the comparable periods in 1994. Pricing
actions modestly improved revenue comparisons for the quarter and
first half of 1995 compared to the corresponding periods in the
prior year. The sale of the Corporation's RSI business in March
1995 resulted in a decrease in unit volume of 1% for the three-
and six-month periods ended July 2, 1995, as compared to 1994.
Existing unit volume in the Consumer segment increased by 6%
and 7% for the three-month and six-month periods ended July 2,
1995, respectively, as compared to the same periods last year.
Revenues in the Corporation's Consumer businesses in the United
States grew by 7% and 8% for the three-month and six-month
periods ended July 2, 1995, respectively, over 1994 levels. In
the domestic power tools and accessories businesses, the
continued success of the DeWalt professional power tools line
during 1995 more than offset a decline in the sale of consumer
power tools. The decline in consumer power tools sales in 1995
over 1994 levels is partially attributable to the Corporation's
announced plans to launch a global repositioning of its consumer
power tools during the latter half of 1995, including the
introduction of a significant number of new tools. The
Corporation's household products business achieved sharply higher
sales during the three and six months ended July 2, 1995, over
the corresponding periods in a weak 1994 due to strong sales of
the SnakeLight flexible flashlight which was introduced in late
1994. Strong 1995 SnakeLight sales were more than sufficient to
offset revenue declines over 1994 levels in certain product lines
as the household products business moved to improve profitability
or exit certain of its lower margin product lines during the
three and six months ended July 2, 1995. The Corporation's
domestic security hardware business experienced moderate sales
growth for the three-month and six-month periods ended July 2,
1995 over prior year levels. Poor weather-related building
conditions in the western United States and the resultant soft
demand in professional distribution channels during the second
quarter of 1995 caused a substantial decrease in revenues over
1994 levels for the Corporation's plumbing products business and
an overall sales decrease for the six months ended July 2, 1995
over the corresponding period in 1994.
Excluding the substantial positive effect of changes in foreign
exchange rates, the Corporation's Consumer businesses in Europe
experienced a revenue increase of 4% during the quarter and six
months ended July 2, 1995, over the comparable periods in 1994.
European sales for the quarter and six months ended July 2, 1995,
were impacted by the Corporation's repositioning of its entire
range of consumer power tools. This repositioning was launched
in Europe during the second quarter of 1995 and will occur later
in 1995 in the United States. An extremely dry winter and late
spring caused a decrease in sales of outdoor products during the
second quarter and first half of 1995 compared to the
corresponding periods in 1994. Despite weak levels of
construction starts in many portions of Europe during 1995, sales
of the Corporation's Elu professional power tools for the three
and six months ended July 2, 1995, were significantly ahead of
1994 levels. While the European Consumer businesses were up 4%
overall exclusive of positive foreign currency effects, results
in individual countries in Europe varied, with some countries up
substantially over the corresponding periods in 1994 and other
countries experiencing declines period over period.
The Corporation's Consumer businesses in other geographic
regions experienced an 11% increase in existing unit volume for
the three-month and six-month periods ended July 2, 1995, over
the corresponding 1994 periods. While economic turmoil caused by
the monetary crisis negatively affected sales in Mexico for all
of 1995 and a softening of sales occurred during the second
quarter of 1995 in certain other businesses, strong revenue
growth over 1994 levels was experienced in certain of the
Corporation's Consumer businesses, particularly in Brazil, during
the three and six months ended July 2, 1995.
Excluding the significant positive effect of changes in foreign
currencies, revenues in the Commercial segment for the three
months and six months ended July 2, 1995, were 8% and 14% higher
than the corresponding periods in 1994. These revenue increases
were the result of good performances by both the fastening
systems business and the glass-container making equipment
business.
Excluding the effects of the RSI business sold in March 1995,
PRC's total revenues increased by 3% for the quarter ended July
2, 1995, compared to the same period last year and decreased by
1% for the six months ended July 2, 1995, compared to the same
period in 1994. The increase in revenues for the second quarter
of 1995 was attributable to strong sales under PRC's Super-
Minicomputer Procurement (SMP) contract, which was up by more
than 50% over the corresponding quarter in 1994, partially offset
by results of PRC's Environmental Management Group where the slow
start-up of a major new contract resulted in a revenue decrease
compared to the prior year. The slight decrease in revenues for
the six-month period ended July 2, 1995, compared to the
comparable period in 1994 was reflective of the lower level of
sales under the SMP contract for the first quarter of 1995
compared to the first quarter of 1994. For the six months ended
July 2, 1995, sales under the SMP contract exceeded the 1994
level.
Earnings
Operating income for the second quarter of 1995 increased 20% to
$101.2 million compared to $84.3 million in the second quarter of
1994. Operating income for the first half of 1995 increased 25%
to $189.9 million compared to $152.1 million in the first half of
1994. Operating income as a percentage of revenues for the
three-month and six-month periods ended July 2, 1995, was 7.6%
and 7.5%, respectively, compared to 6.9% and 6.6% for the
corresponding periods in 1994. The higher operating income
levels for the three-month and six-month periods ended July 2,
1995, resulted from improvements in a number of the Corporation's
businesses, including the power tools business, the fastening
systems business, the glass container-making equipment business
and, in particular, the household products business, which were
partially offset by operating income declines in the plumbing
products business as a result of lower sales in 1995. Excluding
the effects of the sold RSI business, operating income as a
percentage of sales at PRC was up slightly during the three and
six months ended July 2, 1995, compared to the corresponding
periods in 1994.
Gross margin on product sales as a percentage of revenues for
the three-month and six-month periods ended July 2, 1995, was
36.9% and 37.0%, respectively, compared to 36.6% and 36.4% for
the comparable periods of 1994. These improvements resulted
primarily from increased manufacturing productivity, the
implementation of cost reduction initiatives, and the leveraging
of fixed and semi-fixed costs over a higher sales base, partially
offset by commodity price pressures.
Excluding the effects of the RSI business sold in March 1995,
PRC's gross margin as a percentage of revenues for the three-
month and six-month periods was 22.9% and 23.3%, respectively,
compared to 23.5% and 23.7% for the comparable periods last year.
The margin erosion experienced by PRC during the quarter and six
months ended July 2, 1995, was primarily the result of higher
sales during those periods than in 1994 under the SMP contract,
which has a dilutive effect on margin during its early stages.
Marketing and administrative expenses as a percentage of total
revenues for the three-month and six-month periods ended July 2,
1995, were 27.3% and 27.5%, respectively, compared to 27.6% and
27.7% for the comparable periods of last year.
Net interest expense (interest expense less interest income)
for the three-month and six-month periods ended July 2, 1995, of
$47.4 million and $94.2 million, respectively, approximated the
levels of the comparable periods in 1994 as higher interest rates
in 1995 were offset by lower average borrowing levels during
1995.
The Corporation maintains a portfolio of interest rate hedge
instruments for the purpose of managing interest rate exposure.
During the six-month period ended July 2, 1995, the Corporation
decreased its portfolio by the net reduction of $250.0 million
notional principal amount of interest rate hedges. This net
reduction consisted of the following (in millions of dollars of
notional principal amounts):
<TABLE>
<CAPTION>
Less:
Maturities
Plus: and Early
Outstanding at New Termina- Outstanding at
December 31, 1994 Hedges tions July 2, 1995
<S> <C> <C> <C> <C>
Interest rate swaps:
Fixed to variable rates $850.0 $100.0 $(250.0) $700.0
Variable to fixed rates 750.0 150.0 $(400.0) 500.0
Rate basis swaps 200.0 50.0 250.0
U.S. rates to
foreign rates 175.0 175.0
Interest rate caps purchased 100.0 100.0 200.0
</TABLE>
Deferred gains and losses on the early termination of interest
rate swaps as of July 2, 1995, were not significant. The net
reduction of the Corporation's interest rate hedge portfolio
during the six-month period ended July 2, 1995, coupled with the
issuance of fixed rate debt during the first quarter of 1995, had
the effect of reducing the Corporation's variable rate debt to
total debt ratio from 34% at December 31, 1994, to 30% at July 2,
1995.
Other expense for the three-month and six-month periods ended
July 2, 1995 and July 3, 1994, primarily includes the discount on
the sale of receivables, and, for the six months ended July 2,
1995, is partially offset by the gain on the sale of RSI.
The Corporation's effective tax rate for the three-month and
six-month periods ended July 2, 1995, was 30% and 35%,
respectively, compared to 33% for the three-month and six-month
periods ended July 3, 1994. The higher rate for the six months
ended July 2, 1995, as compared to the three months then ended
was a result of the sale of RSI during the first quarter of 1995.
Tax expense recognized as a result of the sale of RSI offset the
pre-tax gain recognized on the sale during the first quarter of
1995. Excluding the effects of the RSI sale, the lower rate for
1995 as compared to 1994 was the result of a change in the mix of
the Corporation's operating income from subsidiaries in higher
rate tax jurisdictions to those in lower rate tax jurisdictions
or to those that benefit from the utilization of net operating
loss carryforwards.
FINANCIAL CONDITION
Cash flow from operating activities for the six months ended July
2, 1995, used cash of $19.2 million compared to cash generation
of $22.7 million for the first six months of 1994. The increased
net income level during the six-month period ended July 2, 1995,
over the corresponding period in 1994, was more than offset by
higher working capital requirements due to increased inventory
levels to support the Corporation's global repositioning of its
consumer power tools and to the timing of various accruals and
expense payments.
Investing activities for the six months ended July 2, 1995,
used cash of $3.7 million compared to $75.8 million last year.
The improvement in cash flow from investing activities is
attributable to the receipt of approximately $60 million in
proceeds from the sale of the Corporation's RSI business in March
1995.
Financing activities generated cash of $78.7 million for the
six months ended July 2, 1995, compared to cash generated of
$55.3 million in the first six months of 1994. During the first
six months of 1995, the Corporation issued $85.0 million of
Medium Term Notes under its shelf registration statement and
increased its short-term borrowings by $20.0 million. At July 2,
1995, average debt maturity was 4.5 years compared to 4.9 years
at December 31, 1994.
In addition to measuring its cash flow generation and usage
based upon the operating, investing, and financing
classifications included in the Consolidated Statement of Cash
Flows, the Corporation also measures its free cash flow. Free
cash flow, a measure commonly employed by bond rating agencies
and banks, is defined by the Corporation as cash available for
debt reduction (including short-term borrowings), prior to the
effects of cash received from divested businesses, equity
offerings, and sales of receivables. Free cash flow, a more
inclusive measure of the Corporation's cash flow generation than
cash flow from operating activities included in the Consolidated
Statement of Cash Flows, considers items such as cash used for
capital expenditures and dividends, as well as net cash inflows
or outflows from hedging activities. During the six months ended
July 2, 1995, the Corporation experienced negative free cash flow
of $77.1 million compared to negative free cash flow of $16.9
million for the corresponding period in 1994. This $60.2 million
decrease in free cash flow during the first six months of 1995
over 1994 was primarily the result of increased working capital
levels as a result of higher inventories required in connection
with the Corporation's global repositioning of its consumer power
tools and the timing of certain accruals and expense payments as
well as the timing of capital expenditures. (The Corporation's
calculation of free cash flows includes capital expenditures
financed by directly related debt, such as its newly completed
distribution facility in South Carolina, while such expenditures
are excluded from capital expenditures in the Consolidated
Statement of Cash Flows since they represent non-cash items.)
The Credit Facility includes certain covenants that require the
Corporation to meet specified minimum cash flow coverage and
maximum leverage (debt to equity) ratios. The Corporation's
leverage ratio during the term of the Credit Facility may not
exceed 2.2 at the end of any fiscal quarter. The cash flow
coverage ratio, calculated as of the end of each fiscal quarter,
must exceed 2.5 for any 12-month period. As of July 2, 1995, the
Corporation was in compliance with all covenants and provisions
of the Credit Facility, with a leverage ratio of 1.61 and cash
flow coverage ratio of 3.39.<PAGE>
THE BLACK & DECKER CORPORATION
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
The Corporation is involved in various lawsuits in the ordinary
course of business. These lawsuits primarily involve claims for
damages arising out of the use of the Corporation's products and
allegations of patent and trademark infringement. The
Corporation is also involved in litigation and administrative
proceedings involving employment matters and commercial disputes.
Some of these lawsuits include claims for punitive as well as
compensatory damages. The Corporation, using current product
sales data and historical trends, actuarially calculates the
estimate of its current exposure for product liability claims for
amounts in excess of established deductibles and accrues for the
estimated liability as described above up to the limits of the
deductibles. All other claims and lawsuits are handled on a
case-by-case basis.
The Corporation also is involved in lawsuits and administrative
proceedings with respect to claims involving the discharge of
hazardous substances into the environment. Certain of these
claims assert damages and liability for remedial investigations
and cleanup costs with respect to sites at which the Corporation
has been identified as a potentially responsible party under
federal and state environmental laws and regulations (off-site).
Other matters involve sites that the Corporation currently owns
and operates or has previously sold (on-site). For off-site
claims, the Corporation makes an assessment of the cost involved
based on environmental studies, prior experience at similar
sites, and the experience of other named parties. The
Corporation also considers the ability of other parties to share
costs, the percentage of the Corporation's exposure relative to
all other parties, and the effects of inflation on these
estimated costs. For on-site matters associated with properties
currently owned, an assessment is made as to whether an
investigation and remediation would be required under applicable
federal and state law. For on-site matters associated with
properties previously sold, the Corporation considers the terms
of sale as well as applicable federal and state laws to determine
if the Corporation has any remaining liability. If the
Corporation is determined to have potential liability for
properties currently owned or previously sold, an estimate is
made of the total cost of investigation and remediation and other
potential costs associated with the site.
Reference is made to the discussion in Item 1 of Part I of the
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994, in respect of certain groundwater
contamination at the Corporation's facility in Hampstead,
Maryland. The Corporation has entered into a consent order with
the Maryland Department of the Environment under the terms of
which the Corporation will continue groundwater treatment,
conduct soil remediation activities and engage in certain
additional investigations. The Maryland Department of the
Environment is overseeing the remediation activities at this site
under a pilot program with the United States Environmental
Protection Agency.
Reference is made to the discussion in Item 1 of Part I of the
Corporation's Annual Report of Form 10-K for the year ended
December 31, 1994, in respect of the suit filed by the owners of
a farm that is adjacent to the Corporation's Hampstead, Maryland
facility. In response to the Corporation's filing of a motion to
dismiss all of the claims brought by plaintiffs in this case, the
Court issued an order dismissing all of the claims except one
claim under the Federal Resource Conservation and Recovery Act.
Reference is made to the discussion in Item 1 of Part I of the
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994, in respect of claims brought by the Attorney
General of the State of California against the Corporation's
Price Pfister subsidiary to the effect that lead which leaches
from faucets constitutes a prohibited discharge of lead into
water or onto or into land where lead will pass or is at least
likely to pass into a source of drinking water. During the
quarter ended July 2, 1995, the Court of Appeal of the State of
California affirmed the decision of the trial court in rejecting
the Attorney General's claim and in concluding that lead which
leaches from faucets is not a prohibited discharge of lead into
a "source of drinking water" under California's Proposition 65.
Subsequent to this decision, the Natural Resources Defense
Council and the Environmental Law Foundation as well as a number
of other environmental interest groups filed motions with the
Court requesting leave to intervene in this matter for purposes
of appealing the decision of the Court of Appeal to the
California Supreme Court. The Court granted these motions and it
is anticipated that an appeal to the decision will be taken.
Reference is made to the discussion in Item 1 of Part I of the
Corporation's Annual Report of Form 10-K for the year ended
December 31, 1994, in respect of claims submitted by the
Corporation's Emhart Corporation subsidiary against several of
its insurance carriers regarding costs incurred with respect to
the clean-up of hazardous wastes. Emhart now has finalized the
settlement of all of these claims with its various insurance
carriers.
Reference is made to the discussion in Item 1 of Part I of the
Corporation's Annual Report of Form 10-K for the year ended
December 31, 1994, in respect of claims made by the successor to
Orkem S.A. concerning the Corporation's obligations to indemnify
the successor for certain environmental liabilities associated
with the Corporation's former Bostik chemical adhesives business.
Although the Corporation and the successor have not resolved the
disputes with respect to all of the claims, to date the
Corporation has paid claims totalling approximately $1.2 million.
The Corporation's estimate of the costs associated with legal,
product liability, and environmental exposures is accrued if, in
management's judgment, the likelihood of a loss is probable.
These accrued liabilities are not discounted. Insurance
recoveries for environmental and certain general liability claims
are not recognized until realized.
As of July 2, 1995, the Corporation has no known probable but
inestimable exposures for awards and assessments in connection
with environmental matters and other litigation and
administrative proceedings that could have a material effect on
the Corporation.
Management is of the opinion that the amounts accrued for
awards or assessments in connection with the environmental
matters and other litigation and administrative proceedings to
which the Corporation is a party are adequate and, accordingly,
ultimate resolution of these matters will not have a material
adverse effect on the Corporation.
Item 6 Exhibits and Reports on Form 8-K
Exhibit No. Description
10 The Black & Decker Supplemental Executive Retirement
Plan, as amended.
11 Computation of Earnings Per Share.
12 Computation of Ratios.
27 Financial Data Schedule.
99 Computation of Leverage and Cash Flow Coverage Ratios.
The Corporation did not file any reports on Form 8-K during the
three-month period ended July 2, 1995.
All other items were not applicable.
<PAGE>
THE BLACK & DECKER CORPORATION
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
THE BLACK & DECKER CORPORATION
By THOMAS M. SCHOEWE
Thomas M. Schoewe
Vice President and
Chief Financial Officer
Principal Accounting Officer
By STEPHEN F. REEVES
Stephen F. Reeves
Corporate Controller
Date: August 4, 1995
EXHIBIT 10
THE BLACK & DECKER
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
INTRODUCTION
The Black & Decker Supplemental Executive Retirement Plan
provides certain supplemental retirement benefits for selected
executive employees of The Black & Decker Corporation and its
subsidiaries and affiliates. This document amends The Black &
Decker Supplemental Executive Retirement Plan, originally
effective on January 1, 1984 and as amended and restated
effective January 1, 1993, by restating the Plan in its entirety.
The Plan is intended to provide supplemental retirement benefits
primarily for a select group of management or highly paid
executive employees. The employees eligible for the Plan are
only those executive employees selected by the Organization
Committee of the Corporation.
SECTION 1 - Definitions
Each of the following terms, when used in this Plan, has the
meaning indicated below, unless a different meaning is plainly
implied by the context:
"Actual Retirement Date" means the date that a Participant's
employment by Black & Decker terminates on or after the
Participant's Early Retirement Date or Normal Retirement Date, as
the case may be, whether due to retirement, death, resignation or
dismissal or, in the case of a Protected Participant, the
Protected Participant's 55th birthday, if later than the date of
termination of his or her employment with Black & Decker. If,
however, a Participant's active employment with Black & Decker
ceases prior to the Participant's Normal Retirement Date due to
Disability, the Participant's Actual Retirement Date shall mean
the Participant's Normal Retirement Date, unless the Participant
elects, with the Committee's approval, to receive benefits under
this Plan at a date preceding the Participant's Normal Retirement
Date (but not earlier than the Participant's Early Retirement
Date), in which case the date benefit payments under this Plan
begin will be the Participant's Actual Retirement Date.
"Actuarial Adjustment" means a reduction to the
Participant's benefits under this Plan that is the Actuarial
Equivalent of any portion of the Participant's Social Security
Benefits and Other Retirement Benefits that the Participant could
have received as retirement or disability income at the same time
the Participant was receiving benefits under this Plan (and
which, therefore, would have reduced the Participant's benefits
under this Plan) if, solely because of the Participant's election
of an alternative form of payment under the plan, program,
arrangement or agreement providing those Social Security Benefits
or Other Retirement Benefits, no reduction would otherwise be
made to the Participant's benefits under this Plan with respect
to the portion of those Social Security Benefits or Other
Retirement Benefits that was subject to that election by the
Participant. However, no Actuarial Adjustment is to be made by
reason of the Participant's election to provide benefits after
the Participant's death for the Participant's spouse under the
plan, program, arrangement or agreement providing Social Security
Benefits or Other Retirement Benefits. Whether an Actuarial
Adjustment is appropriate and the amount of that Adjustment to
the Participant's benefit is to be determined by the Committee,
in its sole discretion, but based on the Actuarial Assumptions in
effect when that Actuarial Adjustment first applies.
"Actuarial Assumptions" means generally, the actuarial
assumptions used in calculating benefits under the Black & Decker
Pension Plan, or such other interest and mortality rates and
other pertinent actuarial assumptions and methods as may be
adopted by the Committee from time to time, in its sole
discretion, for use in determining benefits under this Plan.
"Actuarial Equivalent" means a benefit having the same
actuarial value, based on the Actuarial Assumptions applicable at
the time actuarial equivalency is to be determined.
"Black & Decker" means the Corporation, Black & Decker (U.S)
Inc., Black & Decker Inc. and all of their subsidiaries and
affiliates, both collectively and individually.
"Board" means the Corporation's Board of Directors.
"Change in Control of the Corporation" shall mean a change
in control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), whether or not the Corporation is in fact
required to comply therewith, provided that, without limitation,
such a change in control shall be deemed to have occurred if (A)
any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the
Corporation or any of its subsidiaries or a corporation owned,
directly or indirectly, by the stockholders of the Corporation in
substantially the same proportions as their ownership of stock of
the Corporation, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding
securities; (B) during any period of two consecutive years (not
including any period prior to the Effective Date), individuals
who at the beginning of such period constitute the Board and any
new director (other than a director designated by a person who
has entered into an agreement with the Corporation to effect a
transaction described in clauses (A) or (D) of this definition)
whose election by the Board or nomination for election by the
Corporation's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; (C) the Corporation
enters into an agreement, the consummation of which would result
in the occurrence of a change in control of the Corporation; or
(D) the stockholders of the Corporation approve a merger, share
exchange or consolidation of the Corporation with any other
corporation, other than a merger, share exchange or consolidation
which would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 60% of the
combined voting power of the voting securities of the Corporation
or such surviving entity outstanding immediately after such
merger, share exchange or consolidation, or the stockholders of
the Corporation approve a plan of complete liquidation of the
Corporation or an agreement for the sale or disposition by the
Corporation of all or substantially all the Corporation's assets.
"Committee" means The Black & Decker Corporation Pension
Management Committee.
"Committee Secretary" means the Secretary of the Committee.
"Corporation" means The Black & Decker Corporation, a
Maryland corporation.
"Credited Service" means all periods during which an
Employee qualifies as an employee of Black & Decker, including
all periods during which the Employee is absent on leave
authorized by Black & Decker, and including all periods for which
the Employee receives Benefit Service Credit under the Black &
Decker Pension Plan. Subject to the foregoing, unless otherwise
determined by the Committee in its sole discretion, Credited
Service under this Plan shall not include any period of
employment with any company during any period when that company
was not a subsidiary or affiliate of the Corporation. Credited
Service also includes all periods of Disability beginning while
the Employee is employed by Black & Decker and continuing as long
as the Disability continues. Credited Service is to be measured
on the basis of one month's credit for each full calendar month
in any Credited Service period; no partial credit is to be given
for partial calendar months of Credited Service. Twelve months
of Credited Service is equivalent to one year of Credited
Service, whether or not those months were consecutive. No loss
of Credited Service will occur by reason of an interruption in an
Employee's period of Credited Service, regardless of the length
of that interruption.
"Disability" means an illness or injury which would cause
the Employee to be disabled under the terms of The Black & Decker
Long Term Disability Plan or that totally prevents the Employee
from satisfactorily performing the Employee's usual duties with
Black & Decker, as determined by the Committee based on
professional medical advice. The Committee may require the
Employee to submit from time to time to medical examinations by
physicians selected or approved by the Committee to establish the
Disability or its continuation, provided that those examinations
may not be required more frequently than once each year. The
Employee's refusal to submit to any examination reasonably
requested by the Committee under this Section is grounds for the
Committee to find that the Employee's Disability no longer
exists.
"Early Retirement Date" means the first day of the calendar
month coincident with or next following the date upon which the
Participant has both attained age 55 and completed 5 years of
Credited Service; provided, however, that, in the case of a
Protected Participant, the Early Retirement Date shall be the
first day of the calendar month coincident with or next following
the Protected Participant's 55th birthday.
"Effective Date" means August 1, 1995, the effective date of
this amended and restated Plan. The Prior Plan was originally
effective as of January 1, 1984 and amended and restated
effective as of January 1, 1993.
"Employee" means any person rendering personal services to
Black & Decker as an employee.
"Final Average Pay" means the average monthly amount of the
Participant's Pay for the 3 consecutive years in which the
Participant's Pay was the highest out of the 5-year period ending
on the date the Participant's employment with Black & Decker
terminates; provided, however, that, in the case of a Protected
Participant, the Protected Participant's "Final Average Pay"
shall be based on the 3 consecutive years in which the Protected
Participant's Pay was the highest out of the 5-year period ending
on the date that the Change in Control of the Corporation
occurred, if this produces a higher Final Average Pay.
"Normal Retirement Date" means the first day of the calendar
month coincident with or next following the date upon which the
Participant has both attained age 60 and completed 5 years of
Credited Service; provided, however, that, in the case of a
Protected Participant, the Normal Retirement Date shall be the
first day of the calendar month coincident with or next following
the Participant's 60th birthday.
"Other Retirement Benefits" means any retirement or any
disability income benefits, and any severance pay, salary
continuance, notice pay, termination indemnity, unemployment
compensation, or the like, that the Participant is entitled to
receive under any plan, program, arrangement or agreement
provided, maintained or funded, in part or in whole, by any of
the Participant's employers (whether or not affiliated with Black
& Decker) except: (a) any Social Security Benefit; (b) any
portion of that retirement or disability income which is
attributable to the Participant's contributions, including
contributions made by the Participant's employer pursuant to a
salary reduction agreement with the Participant (such as under
the Black & Decker Executive Deferred Compensation Plan); (c) any
death benefits under a life insurance contract with a life
insurance company; and (d) any defined contribution pension,
profit sharing or stock bonus plan, unless that plan is intended
to provide the primary source of retirement income (in addition
to Social Security Benefits) funded by Black & Decker for the
employees at any location covered by that plan. In determining
the Death Benefit payable to the Participant's spouse under
Section 6(b), the term "Other Retirement Benefits" means any
benefit payable to the spouse under any plan, program,
arrangement or agreement that provided or would have provided to
the Participant severance, retirement or disability benefits that
constituted "Other Retirement Benefits" as described in the
preceding sentence, but excluding the following payments to the
spouse: (a) any Social Security Benefit; (b) any benefit
attributable to the Participant's contributions (including
contributions made by the Participant's employer pursuant to a
salary reduction agreement with the Participant); (c) any death
benefits (including accelerated death benefits) under a life
insurance contract with a life insurance company; and (d) any
defined contribution pension, profit sharing or stock bonus plan,
unless that plan is intended to provide the primary source of
retirement income (in addition to Social Security Benefits)
funded by Black & Decker for the employees at any location
covered by that plan. Without limiting the generality of the
foregoing, the term "Other Retirement Benefits" includes benefits
payable to a Participant under any plan, program, arrangement or
agreement provided or maintained at any time by any employer of
the Participant (whether or not affiliated with Black & Decker)
which provides benefits in excess of any of the limitations
imposed by the Internal Revenue Code of 1986, as amended, on
benefits payable from a tax-advantaged or tax-qualified pension
plan on compensation covered under a tax-advantaged or tax-
qualified pension plan (such as The Black & Decker Supplemental
Pension Plan).
"Participant" means any Employee who qualifies for
participation in this Plan, as more particularly described in
Section 2.
"Pay" means the actual compensation paid during the relevant
period by Black & Decker to the Participant for services as an
Employee, including basic salary, bonuses, annual incentive
awards, any amounts contributed to any employee benefit plan
pursuant to a salary or other compensation reduction agreement
with the Participant, and including, for the year of deferral,
amounts deferred by the Participant under any non-qualified
deferred compensation plan (such as The Black & Decker Executive
Deferred Compensation Plan); and salary continuation payments
during sick leave (other than long-term disability benefits).
The term "Pay" does not include any incentive awards or other
amounts paid pursuant to any long-range performance compensation
plan (such as the Black & Decker Long Term Incentive Plan),
amounts paid pursuant to the Black & Decker Performance Equity
Plan or under any "golden parachute" arrangement or any non-cash
remuneration, imputed income (including income imputed under any
group life insurance program), perquisites and other cash or non-
cash fringe benefits, such as (but not limited to) reimbursements
or allowances for expenses (such as automobile, moving or
relocation, country club, tax preparation, overseas housing,
educational and similar expense allowances); contributions to or
benefits under any employee pension or welfare benefit plan or
payments received by a Participant under any non-qualified
deferred compensation plan (such as the Black & Decker Executive
Deferred Compensation Plan); special recognition awards; stock
bonuses, income attributable to discount stock purchases, stock
options or stock appreciation rights; income attributable to the
vesting of restricted property; benefits received under any
severance plan or program; and allowances for or the provision of
counseling or other personal services (such as financial and tax
counseling). For any period during which the Participant is
entitled to Credited Service by reason of a Disability, the
Participant's Pay is deemed to continue during that Disability
period at a monthly rate equal to 1/12th of the Participant's
basic salary (before any salary reduction for contributions to
any employee benefit plan pursuant to a salary reduction
agreement with the Participant) at the Participant's annual
salary rate in effect at the date that the Disability began plus
all items other than basic salary and such salary reduction
contributions) included in the Participant's actual Pay during
the 12-month period ending on the date that the Disability began.
"Plan" means this document entitled "The Black & Decker
Supplemental Executive Retirement Plan", effective as of August
1, 1995, as it may be amended from time to time. This document
completely amends and restates the Black & Decker Supplemental
Executive Retirement Plan as effective January 1, 1993 and which
is referred to in this Plan as the "Prior Plan." To the extent
any person is receiving benefits hereunder prior to the Effective
Date, such benefits and the payment thereof shall be determined
under the terms of the Prior Plan.
"Protected Participant" means a Participant who is an
Employee when a Change in Control of the Corporation occurs.
"Social Security Benefit" means the retirement or disability
income payments under any plan, program or arrangement which is
sponsored, mandated or administered by any government and which
provides or would provide retirement or disability income to the
Participant and to which any of the Participant's employers
(whether or not affiliated with Black & Decker) has made
contributions on the Participant's behalf. In determining the
Death Benefit payable to the Participant's spouse under Section
6, the term "Social Security Benefit" means any payment to the
spouse under a governmental program described in the preceding
sentence and attributable to the Participant's employment.
SECTION 2 - Eligibility
Any executive employee may be selected for participation in
this Plan by the Organization Committee of the Corporation and
will automatically become a Participant on the date designated by
that committee in its written notice to the Employee of selection
for participation under this Plan. Any Employee who was a
Participant in the Prior Plan immediately prior to the Effective
Date shall continue as a Participant hereunder without further
action by the Organization Committee of the Corporation.
SECTION 3 - Normal Retirement Benefit
Subject to Section 5, any Participant whose employment with
Black & Decker terminates at or after the Participant's Normal
Retirement Date is entitled to receive under this Plan a monthly
benefit, beginning at the Participant's Actual Retirement Date
and continuing for the Participant's life. The amount of each
monthly benefit payment under this Section 3 is to be equal to
50% of his or her Final Average Pay less the sum of: (i) all
Social Security Benefits and all Other Retirement Benefits
payable to the Participant during that month and (ii) the
Actuarial Adjustments for that month. In the event that any
offsets to the Participant's benefit under this Plan exceed the
monthly benefit payment under this Plan, such excess shall be
carried over and applied against subsequent monthly benefit
payments under this Plan until such excess is exhausted. The
offsets to the Participant's benefits under this Plan (as
described in the preceding sentence) are not to be increased to
reflect any increase in the Participant's Social Security
Benefits or Other Retirement Benefits attributable to increases
in the cost-of-living after his or her Actual Retirement Date and
no benefit is payable to the Participant in any month when those
offsets exceed 50% of the Participant's Final Average Pay.
SECTION 4 - Early Retirement Benefit
Subject to Section 5, any Participant whose employment with
Black & Decker terminates at or after the Participant's Early
Retirement Date or, in the case of a Protected Participant, whose
employment with Black & Decker terminates at any time before his
or her Normal Retirement Date (whether or not after his or her
Early Retirement Date) is entitled to receive under this Plan a
monthly benefit beginning on the first day of the calendar month
after the Participant's Actual Retirement Date and continuing for
the Participant's life. The amount of each monthly benefit
payment under this Section 4 is to be equal to: (a) 50% of the
Participant's Final Average Pay, reduced by 1/3 of 1% for each
full calendar month by which the Participant's Actual Retirement
Date precedes the Participant's Normal Retirement Date, less (b)
the sum of: (i) the Participant's Social Security Benefit and
all Other Retirement Benefits payable to the Participant during
that month and (ii) the Actuarial Adjustment for that month. In
the event that any offsets to the Participant's benefit under
this Plan exceed the monthly benefit payment under this Plan,
such excess shall be carried over and applied against subsequent
monthly benefit payments under this Plan until such excess is
exhausted. The offsets to the Participant's benefits under this
Plan (as described in the preceding sentence) are not to be
increased to reflect any increase in the Participant's Social
Security Benefits or Other Retirement Benefits attributable to
increases in the cost-of-living after the Participant's Actual
Retirement Date and no benefit is payable to the Participant in
any month when those offsets exceed 50% of the Participant's
Final Average Pay, reduced by 1/3 of 1% for each full calendar
month by which the Participant's Actual Retirement Date precedes
the Participant's Normal Retirement Date.
SECTION 5 - Benefit Reduction for Less than 10 Years' Service
Notwithstanding anything to the contrary in this Plan, if a
Participant (other than a Protected Participant) has less than 10
years of Credited Service at the Participant's Actual Retirement
Date, the monthly benefit described in Section 3 or 4, as
appropriate, is to be multiplied by a fraction, the numerator of
which equals the Participant's years of Credited Service
(including fractional years) and the denominator of which equals
10 years. For this purpose, months of Credited Service equal
1/12th of a year's credit for each full calendar month of
Credited Service. This Section 5 shall not apply in the case of
a Protected Participant.
SECTION 6 - Death Benefits
No benefits under this Plan are payable after the
Participant's death except as otherwise provided in this Section
6.
(a) Pre-Retirement Death Benefit. No benefits under this
Plan are payable after the Participant's death if the Participant
dies before the Participant's Actual Retirement Date.
(b) Post-Retirement Death Benefit. If the Participant dies
after the Participant's Actual Retirement Date, the Participant's
surviving spouse, if any, is entitled to receive a monthly
benefit beginning on the first day of the calendar month
coincident with or following the Participant's death and
continuing for the spouse's life in the monthly amount equal to
one-half of the monthly benefit that the Participant was
receiving or would have been entitled to receive at the
Participant's death under Section 3 or 4 of this Plan (determined
before the stated offsets of the Participant's Social Security
Benefits, Other Retirement Benefits and Actuarial Adjustments are
applied but subject to Section 5) less the Social Security
Benefits and Other Retirement Benefits payable to the
Participant's spouse during that month.
SECTION 7 - Vesting
(a) Except in the case of a Protected Participant, upon
termination of a Participant's employment with Black & Decker at
any time for any reason before the Participant's Early Retirement
Date, or if the Participant dies before the Participant's Actual
Retirement Date, the Participant's (and the surviving spouse's)
right to benefits under this Plan will be completely forfeited.
In the case of a Protected Participant, the Protected
Participant's and his or her spouse's right to benefits under
this Plan will be completely forfeited if the Protected
Participant dies before his or her Actual Retirement Date.
Except in the case of a Protected Participant, if this Plan is
terminated by the Corporation on or after a Participant's Early
Retirement Date but before the Participant's Actual Retirement
Date, the Participant will be entitled to receive a monthly
benefit under this Plan commencing at the Participant's Actual
Retirement Date and continuing for the Participant's life in the
amount the Participant would have received under this Plan based
on the Participant's Credited Service and Final Average Pay
determined at the Plan's termination date, and the Participant's
surviving spouse shall be entitled to receive the corresponding
post-retirement death benefit pursuant to Section 6(b). If this
Plan is terminated or amended after a Change in Control of the
Corporation, each Protected Participant who has not consented in
writing to that termination or amendment shall be entitled to
receive a monthly benefit, commencing at his or her Actual
Retirement Date, that is not less than the monthly benefit the
Protected Participant would have received if the Plan termination
or amendment had not occurred and the Protected Participant's
surviving spouse shall be entitled to receive the corresponding
post-retirement death benefit pursuant to Section 6(b).
(b) Notwithstanding anything to the contrary, all of the
Participant's (and surviving spouse's) rights and benefits under
this Plan will be forfeited:
(i) if the Participant's employment with Black &
Decker is terminated by reason of fraud, misappropriation or
intentional material damage to the property or business of
Black & Decker; commission of a felony; or the continuance
of willful and repeated failure by the Participant to
perform his or her duties after written notice to the
Participant specifying such failure; or
(ii) if before the Participant's Actual Retirement Date
and for a period of 24 months following the Participant's
termination of employment, the Participant, without the
Corporation's written consent, enters into competition with
Black & Decker or the Participant discloses confidential
information.
(c) For purposes of this Section 7, the Participant will be
deemed to be in competition with Black & Decker if the
Participant, directly or indirectly, solicits as a customer any
company which is or was a customer of Black & Decker during the
Participant's employment, or which is or was a potential customer
of Black & Decker with which Black & Decker has made or will make
business contacts during the Participant's employment; provided,
however, that solicitation of a company as a customer of any
business which is not in direct or indirect competition with any
of the types of business conducted by Black & Decker within any
of the same territories as Black & Decker shall not be prohibited
hereby. In addition, a Participant will be deemed to be in
competition with Black & Decker if the Participant directly or
indirectly becomes an owner, officer, director, operator, sole
proprietor, partner, joint venturer, contractor or consultant, or
participates in or is connected with the ownership, operation,
management or control of any company in direct or indirect
competition with any of the types of businesses conducted by
Black & Decker within any of the same territories as Black &
Decker; provided, however, that the ownership for investment of
less than 5% of the outstanding stock of any of the classes of
stock issued by a publicly-held company shall not be prohibited
hereby. The Participant shall be deemed to have disclosed
"confidential information" if the Participant fails to preserve
as confidential and uses, communicates, or discloses to any
person, to the actual or potential detriment of Black & Decker,
orally, in writing or by publication, any information, regardless
of when, where or how acquired relating to or concerning the
affairs of Black & Decker; provided, however, that the foregoing
obligations shall not apply to information which is or becomes
public through no fault of the Participant.
(d) The Committee shall have the absolute right to
determine in its sole discretion (i) whether or not a
Participant's employment was terminated as a result of a wrongful
act, and (ii) whether or not a Participant has entered into
competition with Black & Decker or has disclosed confidential
information so as to cause a forfeiture of the Participant's
benefits hereunder.
SECTION 8 - Additional Provisions Concerning Benefits
(a) The offsets described in Sections 3, 4 and 6 for Social
Security Benefits, Other Retirement Benefits and Actuarial
Adjustments are to be applied separately to each monthly payment
under this Plan when that payment becomes due, ignoring increases
in those Social Security Benefits and Other Retirement Benefits
attributable to increases in the cost-of-living after the
Participant's Actual Retirement Date. The Committee will decide,
in its sole discretion, the manner in which these offsets are to
be applied. The payments under this Plan are conditioned on the
agreement of the Participant and the Participant's spouse (i) to
inform the Committee of all retirement, severance, disability and
death benefit payments received or receivable by them that may
reduce the Corporation's obligations to pay benefits under this
Plan and (ii) to provide all information about those payments
that the Committee may reasonably request from time to time in
order to administer this Plan.
(b) The benefit payments under this Plan will be calculated
in U.S. dollars using the appropriate currency exchange rate
selected by the Committee in its sole discretion at the
Participant's Actual Retirement Date. The benefits under this
Plan will be paid to the Participant and the Participant's spouse
in any currency designated by the Participant at the
Participant's Actual Retirement Date (or, if the Participant dies
before benefits commence, the currency designated by the spouse),
based on the appropriate currency exchange rate (selected by the
Committee in its sole discretion) in effect at the Participant's
Actual Retirement Date. Once benefit payments under this Plan
have begun, the currency selected by the Participant (or the
Participant's spouse) and the applicable exchange rate may not be
changed except to the extent that the Committee, in its sole
discretion, may approve a change in order to prevent extreme
financial hardship to the Participant or the Participant's
spouse.
SECTION 9 - Corporation's Obligations are Unfunded and Unsecured
Except as otherwise required by applicable law, the
Corporation's obligations under this Plan are not required to be
funded or secured in any manner; no assets need be placed in
trust or in escrow or otherwise physically or legally segregated
for the benefit of any Participant; and the eventual payment of
the benefits described in this Plan to a Participant or the
Participant's spouse is not required to be secured to the
Participant or them by the issuance of any negotiable instrument
or other evidence of the Corporation's indebtedness. Neither a
Participant nor the Participant's spouse is entitled to any
property interest, legal or equitable, in any specific asset of
the Corporation, and, to the extent that any person acquires any
right to receive payments under the provisions of this Plan, that
right is intended to be no greater than or to have any preference
or priority over, the rights of any other unsecured general
creditor of the Corporation. However, the Corporation reserves
the right, in its sole discretion, to accumulate assets to offset
its eventual liabilities under this Plan and physically or
legally to segregate assets for the benefit of any Participant or
Participant's spouse (whether by escrow, by trust, by the
purchase of an annuity contract or by any other method of funding
selected by the Corporation) without liability for any adverse
tax consequences resulting to that Participant or Participant's
spouse from the Corporation's action. Any such segregation of
assets may be made with respect to the Corporation's obligations
under this Plan for benefits attributable to an individual
Participant, a selected group of Participants or all
Participants, as the Corporation may determine from time to time,
in its absolute discretion. Benefits under this Plan shall be
payable by the Corporation from the Corporation's general assets
and no other company shall have any responsibility or liability
under this Plan. The Corporation's liabilities under this Plan
shall, however, be discharged to the extent of any payment
received by the Participant (or the Participant's surviving
spouse) from any other company made for that purpose and on the
Corporation's behalf or for its benefit.
SECTION 10 - Alienation or Encumbrance
No payments, benefits or rights under this Plan shall be
subject in any manner to anticipation, sale, transfer,
assignment, mortgage, pledge, encumbrance, charge or alienation
by a Participant, the Participant's spouse or any other person
who could or might possibly receive benefit payments that were
due to the Participant or the Participant's spouse, but were not
paid. If the Corporation determines that any person entitled to
payments under this Plan has become insolvent, bankrupt, or has
attempted to anticipate, sell, transfer, assign, mortgage,
pledge, encumber, charge or otherwise in any manner alienate any
amount payable to that person under this Plan or that there is
any danger of any levy, attachment, or other court process or
encumbrance on the part of any creditor of that person, against
any benefit or other amounts payable to that person, the
Corporation may, in its sole discretion and to the extent
permitted by law, at any time, withhold any or all such payments
or benefits and apply the same for the benefit of that person, in
such manner and in such proportion as the Corporation may deem
proper.
SECTION 11 - Other Benefits
The provisions of this Plan relate only to the specific
benefits described in this Plan and are not intended to affect
any other benefits to which a Participant may be entitled as a
retiree and former employee of Black & Decker. Nothing contained
in this Plan shall in any manner modify, impair or affect the
existing rights or interests of a Participant under any other
benefit plan provided by Black & Decker, and the rights and
interests of a Participant to any benefits or as a participant or
beneficiary in or under any or all such plans shall continue in
full force and effect unimpaired, subject nonetheless to the
eligibility requirements and other terms of each such plan. This
Section shall not be interpreted as modifying in any way the
effect that the Participant's termination of employment and
retirement at the Participant's Actual Retirement Date has upon
the Participant's rights under such other plans. The benefits
provided under this Plan are not to be applied as an offset
against any other retirement or deferred compensation benefits or
payments that are otherwise to be provided by Black & Decker to
the Participant or the Participant's beneficiaries; and those
benefits or payments are to be calculated first, ignoring this
Plan's existence. In no event shall any benefits payable under
this Plan be treated as salary or other compensation to a
Participant for the purpose of computing benefits to which the
Participant may be entitled under any other benefit plan of
Black & Decker.
SECTION 12 - No Guarantee of Employment
The Plan shall not be construed as conferring any legal
rights upon any Participant for continuation of employment, nor
shall it interfere with the rights of Black & Decker to discharge
a Participant and to treat the Participant without regard to the
effect which such treatment might have upon the Participant under
the Plan.
SECTION 13 - Cooperation of Parties
Each Participant (and surviving spouse) shall perform any
and all reasonable acts and execute any and all reasonable
documents and papers that are necessary or desirable for carrying
out this Plan or any of its provisions.
SECTION 14 - Claims Procedure
Any claim by a Participant, a Participant's spouse or
beneficiary that benefits under the Plan have not been paid in
accordance with the terms and conditions of the Plan shall be
made in writing and delivered to the Committee at the
Corporation's principal office in the State of Maryland. The
Committee shall notify the claimant if any additional information
is needed to process the claim. All claims shall be approved or
denied by the Committee within 90 days of receipt of the claim by
the Committee. If the claim is denied, the Committee shall
furnish the claimant with a written notice containing:
(a) an explanation of the reason for the denial;
(b) a specific reference to the applicable provisions of
the Plan; and
(c) a description of any additional material or information
necessary for the claimant to pursue the claim.
Within 90 days of receipt of the notice described above, the
claimant shall, if further review is desired, file a written
request for consideration with the Committee. A request for
reconsideration must include an explanation of the grounds for
the request and the facts supporting the claim. So long as the
claimant's request for review is pending, including such 90 day
period, the claimant or the claimant's duly authorized
representative may review pertinent documents and may submit
issues and comments in writing to the Committee.
A final and binding decision shall be made by the Committee
within 60 days of the filing of the request for reconsideration;
provided, however, that the Committee, in its discretion, may
extend this period up to an additional 60 days.
The decision by the Committee shall be conveyed to the
claimant in writing and shall include specific reasons for the
decision, with specific references to the applicable provisions
of the Plan on which the decision is based.
SECTION 15 - Incapacity
If a Participant or the Participant's spouse has become
legally incompetent, then the legal guardian, or other legal
representative of such Participant's or spouse's estate shall be
entitled to act for and represent such incompetent Participant or
spouse in all matters and to the same extent as the Participant
or spouse could have done but for such incompetency, including
but not limited to the receipt of Plan benefits.
SECTION 16 - Administration
(a) The Plan shall be administered by the Committee, which
shall be responsible for all matters affecting the administration
of the Plan and shall have the following duties and
responsibilities in connection with the administration of the
Plan:
(i) To prepare and enforce such rules, regulations and
procedures as shall be proper for the efficient
administration of the Plan, such rules, regulations and
procedures to apply uniformly to all Participants;
(ii) To determine all questions arising in the
administration, interpretation and application of the Plan,
including questions of the status and rights of Participants
and any other persons hereunder;
(iii) To decide any dispute arising hereunder;
(iv) To correct defects, supply omissions, and
reconcile inconsistencies to the extent necessary to
effectuate the Plan;
(v) To compute the amount of benefits which shall be
payable to any Participant or spouse in accordance with the
provisions of the Plan and to determine the person or
persons to whom such benefits shall be paid;
(vi) To select the currency conversion or exchange
rates to be applied in determining a Participant's or
spouse's benefits under this Plan, where foreign currencies
are involved;
(vii) To authorize all payments that shall be made
pursuant to the provisions of this Plan;
(viii) To make recommendations to the Corporation's
Board of Directors with respect to proposed amendments to
the Plan;
(ix) To file all reports with government agencies,
employees, and other parties as may be required by law,
whether such reports are initially the obligation of the
Corporation or the Plan;
(x) To have all such other powers as may be necessary
to discharge its duties hereunder.
(b) The Committee shall have the authority to interpret the
Plan in its sole and absolute discretion. The Committee's
interpretation of the Plan and actions in respect of the Plan
shall be binding and conclusive on all persons for all purposes.
(c) Neither the Committee nor any person acting on its
behalf shall be liable to any person for any action taken or
omitted in connection with the interpretation and administration
of the Plan unless attributable to gross negligence or willful
misconduct. In addition to such other rights of indemnification
they may have as directors, officers or employees of the
Corporation, each member of the Committee shall be indemnified by
the Corporation against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection
with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which such member may be a
party by reason of any action taken or omitted under or in
connection with the Plan, and against all amounts paid in
settlement thereof, provided such settlement is approved by
independent legal counsel selected by the Corporation, or paid by
such member in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such
member is liable for gross negligence or willful misconduct in
such member's duties; provided that within 60 days after the
institution of such action, suit or proceeding the member shall
in writing offer the Corporation the opportunity, at its own
expense, to handle and defend the same.
(d) If a Participant is also a member of the Committee, the
Participant may not vote or act upon matters relating
specifically to such member's participation in the Plan.
SECTION 17 - Amendments and Termination
The Board of Directors of the Corporation reserves the right
at any time and from time to time to the extent permissible under
law, to amend or terminate this Plan, prospectively or
retroactively, in whole or in part; provided, however, that no
such amendment or termination shall, without the Participant's
written agreement, reduce or impair (a) the benefits or rights of
any Participant (or spouse) whose Actual Retirement Date occurred
before the date the amendment is adopted or the Plan is
terminated, (b) the vested benefits and rights of any Participant
who is then employed by Black & Decker or (c) the right of any
Protected Participant and/or his or her surviving spouse to
receive benefits under this Plan determined as if that Plan
termination or amendment had not occurred. Any amendment or
termination shall be adopted by resolution of the Corporation's
Board of Directors.
SECTION 18 - Severability
If any provision of this Plan shall be held void or
unenforceable, the remaining provisions of the Plan shall remain
in full force and effect; provided, however, that in interpreting
this Plan, such void or unenforceable provision shall be replaced
with an effective and legally permissible provision, the effect
of which shall be identical to, or as close as reasonably
possible to, the effect of the original provision.
SECTION 19 - Construction
Any use of the singular shall include the plural, and vice
versa, as may be appropriate. Titles, captions or paragraph
headings contained in this Plan are for purposes of convenience
and reference only, and shall not operate to define or modify the
text to which they relate.
SECTION 20 - Choice of Law
This Plan, and the respective rights and duties of the
Corporation and all persons thereunder, shall in all respect be
governed by and construed under the laws of the State of
Maryland, except to the extent, if any, that those laws may have
been pre-empted by federal law. This Plan is intended to be a
"pension plan" within the meaning of Section 3(2)(A) of the
Employee Retirement Income Security Act of 1974, as amended
(ERISA), which is exempt from Parts 2, 3 and 4 of ERISA by virtue
of Sections 201(2), 301(a)(3) and 401(a)(1) thereof,
respectively, and is not designed to meet the requirements of
Section 401(a) of the Internal Revenue Code of 1986, as amended.
SECTION 21 - Parties to be Bound
The provisions of this Plan shall be binding upon, and shall
inure to the benefit of the Corporation, its successors and
assigns, and each Participant and the Participant's spouse.
Originally Adopted January 30, 1984
Amendment and Restatement adopted February 18, 1993.
Amendment and Restatement adopted July 20, 1995.
<PAGE>
<TABLE>
Exhibit 11
THE BLACK & DECKER CORPORATION
-----------------------------
COMPUTATION OF EARNINGS PER SHARE
---------------------------------
(Millions of Dollars Except Per Share Data)
<CAPTION>
For Six Months Ended
--------------------
July 2, 1995 July 3, 1994
----------------- -----------------
Per Per
Amount Share Amount Share
------ ----- ------ -----
<S> <C> <C> <C> <C>
Primary:
- -------
Average shares outstanding 85.2 84.0
Dilutive stock options and
purchase plans--based on the
Treasury stock method using
the average market price (Note 1) (Note 1)
-------- --------
Adjusted shares outstanding 85.2 84.0
====== ======
Net earnings $60.5 $37.6
Less preferred stock dividend 5.8 (Note 3) 5.9
------ ------
Net earnings attributable to
common stock $54.7 $.64 $31.7 $.38
====== ==== ====== ======
Fully Diluted: (Note 2)
- -------------
Average shares outstanding 85.2 84.0
Dilutive stock options and
purchase plans--based on the
Treasury stock method using
the higher of average market
price or ending market price (Note 1) (Note 1)
-------- --------
Adjusted shares outstanding 85.2 84.0
Average shares assumed to be
converted through convertible
preferred stock 6.4 6.4
------ ------
Fully diluted average
shares outstanding 91.6 90.4
====== ======
Net earnings $60.5 $.66 $37.6 $.42
===== ==== ===== ====
<FN>
Notes: 1. Dilutive effect of common stock equivalents is less than 3% for the six-
month periods ended July 2, 1995, and July 3, 1994, and has not been shown.
2. The calculation of fully diluted earnings per share is anti-dilutive and,
therefore, is not presented in the financial statements.
3. Difference from prior year is due to rounding.
/TABLE
<PAGE>
<PAGE>
<TABLE>
Exhibit 11
THE BLACK & DECKER CORPORATION
-----------------------------
COMPUTATION OF EARNINGS PER SHARE
---------------------------------
(Millions of dollars, except per share data)
<CAPTION>
For Three Months Ended
----------------------
July 2, 1995 July 3, 1994
----------------- -----------------
Per Per
Amount Share Amount Share
------ ----- ------ -----
<S> <C> <C> <C> <C>
Primary:
- -------
Average shares outstanding 85.5 84.1
Dilutive stock options and
purchase plans--based on the
Treasury stock method using
the average market price (Note 1) (Note 1)
-------- --------
Adjusted shares outstanding 85.5 84.1
===== =====
Net earnings $34.8 $23.0
Less preferred stock dividend 2.9 2.9
----- -----
Net earnings attributable to
common stock $31.9 $.37 $20.1 $.24
===== ==== ===== ====
Fully Diluted: (Note 2)
- -------------
Average shares outstanding 85.5 84.1
Dilutive stock options and
purchase plans--based on the
Treasury stock method using
the higher of average market
price or ending market price (Note 1) (Note 1)
--------- ---------
Adjusted shares outstanding 85.5 84.1
Average shares assumed to be
converted through convertible
preferred stock 6.3 (Note 3) 6.4
------ ------
Fully diluted average
shares outstanding 91.8 90.5
====== ======
Net earnings $34.8 $.38 $23.0 $.25
====== ==== ====== ====
<FN>
Notes: 1. Dilutive effect of common stock equivalents is less than 3% for the three-
month periods ended July 2, 1995, and July 3, 1994, and has not been shown.
2. The calculation of fully diluted earnings per share is anti-dilutive and,
therefore, is not presented in the financial statements.
3. Difference from prior year is due to rounding.
</TABLE>
<PAGE>
<TABLE>
EXHIBIT 12
THE BLACK & DECKER CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Millions of Dollars, Except Ratios)
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
July 2, 1995 July 2, 1995
------------ ------------
<S> <C> <C>
EARNINGS:
Earnings before income taxes $49.7 $ 93.7
Interest expense 49.4 98.3
Portion of rent expense representative
of an interest factor 7.6 15.2
------ ------
Adjusted earnings before taxes and
fixed charges $106.7 $207.2
====== ======
FIXED CHARGES:
Interest expense $ 49.4 $ 98.3
Portion of rent expense representative
of an interest factor 7.6 15.2
------ ------
Total fixed charges $ 57.0 $113.5
====== ======
RATIO OF EARNINGS TO FIXED CHARGES 1.87 1.83
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains financial information extracted from the
Corporation's unaudited interim financial statements as of and
for the six months ended July 2, 1995, and the accompanying
footnotes and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000012355
<NAME> THE BLACK & DECKER CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUL-02-1995
<CASH> 126,600
<SECURITIES> 0
<RECEIVABLES> 869,500<F1>
<ALLOWANCES> 0
<INVENTORY> 872,400
<CURRENT-ASSETS> 2,033,200
<PP&E> 857,000<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,658,300
<CURRENT-LIABILITIES> 1,856,200
<BONDS> 1,812,100
<COMMON> 42,800
0
150,000
<OTHER-SE> 1,093,700
<TOTAL-LIABILITY-AND-EQUITY> 5,658,300
<SALES> 2,156,800
<TOTAL-REVENUES> 2,528,800
<CGS> 1,358,700
<TOTAL-COSTS> 2,338,900
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 98,300
<INCOME-PRETAX> 93,700
<INCOME-TAX> 33,200
<INCOME-CONTINUING> 60,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60,500
<EPS-PRIMARY> .64
<EPS-DILUTED> 0<F3>
<FN>
<F1>Represents net trade receivables.
<F2>Represents net property, plant and equipment.
<F3>Fully diluted earnings per share are anti-dilutive and are not
presented.
</FN>
</TABLE>
<PAGE>
<TABLE>
Exhibit 99
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
Computation of Ratios
(Millions of Dollars)
<CAPTION>
July 2, 1995
------------
<S> <C>
A. Cash Flow Coverage Ratio
------------------------
1. EBITDA (Earnings before income taxes for such period as set forth on BDC's
consolidated statements of earnings for such period, minus [or plus] other
income [or expense] for such period to the extent included in earnings before
income taxes, plus Consolidated Net Interest Expense, plus all charges
in such period for depreciation and amortization as set forth in BDC's
consolidated statements of cash flows for such period, minus net income
of BFS to the extent such net income is derived from any business activity
unrelated to BDC or any subsidiary of BDC) for the period from July 4, 1994
to July 2, 1995, the Reporting Date. $ 652.6
--------
2. Consolidated Net Interest Expense (Total interest expense [including the
interest component of capital leases and Discount accrued during such
period] of BDC and its Subsidiaries for such period, plus all dividends
declared in such period on Mandatorily Redeemable Stock, minus total interest
income of BDC and its Subsidiaries) for the same period. $ 192.7
--------
3. Quotient obtained by dividing Line 1 by Line 2 3.39
--------
The calculation of the Cash Flow Coverage Ratio excludes all effects of FAS 106,
FAS 109, and FAS 112 and unusual or non-recurring credits or charges.
B. Leverage Ratio
--------------
1. The sum, without duplication, of all Reported Debt less cash and cash
equivalents of BDC and its Consolidated Subsidiaries at such time, plus
all outstanding Mandatorily Redeemable Stock of BDC and its Subsidiaries
at such time, determined on a consolidated basis, plus all outstanding
obligations of other Persons for money borrowed (except employee obligations
not exceeding $10,000 in aggregate at such time outstanding) Guaranteed by,
or secured by a Lien on any assets of, BDC and its Subsidiaries at such
time, determined on a consolidated basis, plus the book value on the books
of the purchasers thereof of accounts receivable sold by BDC and its
Subsidiaries (other than to BDC or any of its Subsidiaries). $2,633.9
--------
2. Consolidated Net Worth at such time, minus cumulative consolidated net
income of BFS to the extent such net income is derived from any business
activity unrelated to BDC or any Subsidiary of BDC minus (or plus) the
amount by which the equity adjustment for foreign currency translations
used in determining Consolidated Net Worth at such time exceeds (is less
than) the amount thereof used in determining Consolidated Net Worth as
at September 27, 1992. $1,640.3
--------
3. Quotient obtained by dividing Line 1 by Line 2 1.61
--------
The calculation of the Leverage Ratio excludes all effects of FAS 106,
FAS 109 and FAS 112 and unusual or non-recurring credits or charges after
September 27, 1992.
Note: The information described herein is as of the last day of the
fiscal quarter ended July 2, 1995 (the Reporting Date).
Capitalized terms used herein shall have the meanings set forth
in the Credit Facility, dated as of November 18, 1992.
</TABLE>
