SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 10, 2000
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THE BLACK & DECKER CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 1-1553 52-0248090
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(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
701 East Joppa Road, Towson, Maryland 21286
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 410-716-3900
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
As more fully described in Note 17 of Notes to Consolidated Financial Statements
included in Item 8 of the Corporation's Annual Report on Form 10-K for the year
ended December 31, 1999 ("Note 17"), the Corporation assesses the performance of
its reportable business segments based upon a number of factors, including
segment profit. For segment reporting purposes, segment assets and elements of
segment profit are translated using budgeted rates of exchange. Budgeted rates
of exchange are established annually and, once established, all prior period
segment data is updated to reflect the translation of segment assets and
elements of segment profit at the current year's budgeted rates of exchange.
Amounts included in the first table of Note 17 under the captions "Reportable
Business Segments", "All Others", and "Corporate, Adjustments, & Eliminations"
are reflected at the Corporation's budgeted rates of exchange for 1999. The
amounts included in that table under the caption "Currency Translation
Adjustments" represent the difference between consolidated amounts determined
using the budgeted rates of exchange for 1999 and those determined based upon
the rates of exchange applicable under accounting principles generally accepted
in the United States.
The Corporation has established budgeted rates of exchange for 2000 and,
accordingly, segment data for prior periods has been updated to reflect the
translation of segment assets and elements of segment profit at the budgeted
rates of exchange for 2000.
For informational purposes, the Corporation has included as Exhibit 99 to this
Current Report on Form 8-K selected unaudited supplemental information about its
business segments for 1999, 1998 and 1997 updated to reflect the translation of
elements of segment profit and certain other segment data at the budgeted rates
of exchange for 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 99 Selected unaudited supplemental information about the
Corporation's business segments for each of the three years in
the period ended December 31, 1999, and for each of the
quarters in the years ended December 31, 1999 and 1998.
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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 hereunto duly authorized.
THE BLACK & DECKER CORPORATION
By /s/ STEPHEN F. REEVES
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Stephen F. Reeves
Vice President - Finance
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<CAPTION>
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ABOUT BUSINESS SEGMENTS (Unaudited)
(Millions of Dollars)
Reportable Business Segments
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Power Hardware Fastening Currency Corporate,
Tools & & Home & Assembly All Translation Adjustments,
Year Ended December 31, 1999 Accessories Improvement Systems Total Others Adjustments & Eliminations Consolidated
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales to unaffiliated customers $3,135.4 $ 857.7 $ 496.2 $4,489.3 $ - $ 31.2 $ - $4,520.5
Segment profit (loss) (for
Consolidated, operating income) 369.8 120.7 82.7 573.2 - 2.9 (39.8) 536.3
Depreciation and amortization 85.4 30.6 15.3 131.3 - 1.0 27.7 160.0
Capital expenditures 106.0 37.3 26.6 169.9 - .9 .3 171.1
Year Ended December 31, 1998
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Sales to unaffiliated customers $2,840.1 $ 829.8 $ 461.7 $4,131.6 $ 327.6 $ 100.7 $ - $4,559.9
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs, write-off of
goodwill, and gain on sale
of businesses) 283.7 122.1 75.3 481.1 16.2 7.4 (20.7) 484.0
Depreciation and amortization 84.3 26.7 13.3 124.3 - 3.3 27.6 155.2
Capital expenditures 76.6 35.9 16.3 128.8 13.2 2.0 2.0 146.0
Year Ended December 31, 1997
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Sales to unaffiliated customers $2,865.1 $ 782.5 $ 453.3 $4,100.9 $ 707.0 $ 132.6 $ - $4,940.5
Segment profit (loss) (for
Consolidated, operating income) 282.5 118.1 69.5 470.1 60.4 8.0 (49.2) 489.3
Depreciation and amortization 84.7 24.3 11.9 120.9 24.3 3.0 66.0 214.2
Capital expenditures 110.7 46.8 15.6 173.1 25.2 2.8 2.0 203.1
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The reconciliation of segment profit to the Corporation's earnings (loss)
before income taxes for each of the three years in the period ended December 31,
1999, in millions of dollars, is as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
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1999 1998 1997
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<S> <C> <C> <C>
Segment profit for total reportable business segments $573.2 $481.1 $470.1
Segment profit for all other businesses - 16.2 60.4
Items excluded from segment profit:
Adjustment of budgeted foreign exchange rates to
actual rates 2.9 7.4 8.0
Depreciation of Corporate property and amortization
of goodwill (27.7) (27.6) (66.0)
Adjustment to businesses' postretirement benefit
expenses booked in consolidation 24.8 24.4 23.8
Adjustment to eliminate net interest and non-operating
expenses from results of certain operations in Brazil,
Mexico, Venezuela, and Turkey 1.2 4.9 3.6
Other adjustments booked in consolidation directly
related to reportable business segments (12.4) (20.4) (17.6)
Amounts allocated to businesses in arriving at segment
profit in excess of (less than) Corporate center operating
expenses, eliminations, and other amounts identified above (25.7) (2.0) 7.0
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Operating income before restructuring and exit costs, write-
off of goodwill, and gain on sale of businesses 536.3 484.0 489.3
Restructuring and exit costs - 164.7 -
Write-off of goodwill - 900.0 -
Gain on sale of businesses - 114.5 -
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Operating income (loss) 536.3 (466.2) 489.3
Interest expense, net of interest income 95.8 114.4 124.6
Other (income) expense (.8) 7.7 15.2
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Earnings (loss) before income taxes $441.3 $(588.3) $349.5
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<TABLE>
<CAPTION>
Reportable Business Segments
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Power Hardware Fastening Currency Corporate,
Tools & & Home & Assembly All Translation Adjustments,
Quarter Ended April 4, 1999 Accessories Improvement Systems Total Others Adjustments & Eliminations Consolidated
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales to unaffiliated customers $625.6 $ 208.8 $126.0 $ 960.4 $ - $18.1 $ - $ 978.5
Segment profit (loss) (for
Consolidated, operating income) 38.4 25.0 20.9 84.3 - 1.6 (7.5) 78.4
Depreciation and amortization 20.7 8.7 3.9 33.3 - .4 7.2 40.9
Capital expenditures 19.3 7.0 3.1 29.4 - .5 .1 30.0
Quarter Ended July 4, 1999
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Sales to unaffiliated customers $742.2 $ 209.1 $127.3 $1,078.6 $ - $ 5.6 $ - $ 1,084.2
Segment profit (loss) (for
Consolidated, operating income) 84.8 28.0 21.8 134.6 - .3 (7.8) 127.1
Depreciation and amortization 20.5 8.4 3.8 32.7 - .2 6.8 39.7
Capital expenditures 22.9 9.4 5.5 37.8 - - .1 37.9
Quarter Ended October 3, 1999
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Sales to unaffiliated customers $769.3 $ 220.1 $119.4 $1,108.8 $ - $ 1.8 $ - $ 1,110.6
Segment profit (loss) (for
Consolidated, operating income) 95.3 33.1 19.5 147.9 - - (10.2) 137.7
Depreciation and amortization 18.3 8.0 3.9 30.2 - - 6.9 37.1
Capital expenditures 27.3 8.7 7.4 43.4 - .1 - 43.5
Quarter Ended December 31, 1999
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Sales to unaffiliated customers $998.3 $ 219.7 $123.5 $1,341.5 $ - $ 5.7 $ - $ 1,347.2
Segment profit (loss) (for
Consolidated, operating income) 151.3 34.6 20.5 206.4 - 1.0 (14.3) 193.1
Depreciation and amortization 25.9 5.5 3.7 35.1 - .4 6.8 42.3
Capital expenditures 36.5 12.2 10.6 59.3 - .3 .1 59.7
Quarter Ended March 29, 1998
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Sales to unaffiliated customers $557.1 $ 184.9 $118.3 $ 860.3 $127.7 $20.3 $ - $ 1,008.3
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs and write-off of
goodwill) 29.9 24.3 19.0 73.2 3.7 .6 (7.4) 70.1
Depreciation and amortization 21.8 5.9 3.2 30.9 - .8 7.1 38.8
Capital expenditures 17.0 9.2 1.9 28.1 3.5 .4 .2 32.2
Quarter Ended June 28, 1998
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Sales to unaffiliated customers $685.8 $ 209.3 $117.1 $1,012.2 $134.0 $23.5 $ - $ 1,169.7
Segment profit (loss) (for
Consolidated, operating
income before gain on sale
of businesses) 64.3 31.1 20.5 115.9 8.1 1.6 (13.3) 112.3
Depreciation and amortization 20.6 6.5 3.6 30.7 - .9 6.2 37.8
Capital expenditures 12.5 4.1 4.2 20.8 6.4 .3 .1 27.6
Quarter Ended September 27, 1998
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Sales to unaffiliated customers $704.3 $ 211.0 $107.8 $1,023.1 $ 65.9 $18.7 $ - $ 1,107.7
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs and gain on sale
of businesses) 71.8 31.2 17.4 120.4 4.4 1.2 2.6 128.6
Depreciation and amortization 19.9 7.0 3.3 30.2 - .6 7.1 37.9
Capital expenditures 15.0 9.5 4.8 29.3 3.1 .1 .1 32.6
Quarter Ended December 31, 1998
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Sales to unaffiliated customers $892.9 $ 224.6 $118.5 $1,236.0 $ - $38.2 $ - $ 1,274.2
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs and gain on sale
of businesses) 117.7 35.5 18.4 171.6 - 4.0 (2.6) 173.0
Depreciation and amortization 22.0 7.3 3.2 32.5 - 1.0 7.2 40.7
Capital expenditures 32.1 13.1 5.4 50.6 .2 1.2 1.6 53.6
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The reconciliation of segment profit to the Corporation's earnings (loss)
before income taxes for each of the quarters in the years ended December 31,
1999 and 1998, in millions of dollars, is as follows:
<TABLE>
<CAPTION>
Quarter Ended
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April 4, July 4, October 3, December 31,
1999 1999 1999 1999
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<S> <C> <C> <C> <C>
Segment profit for total reportable business segments $ 84.3 $134.6 $147.9 $206.4
Segment profit for all other businesses - - - -
Items excluded from segment profit:
Adjustment of budgeted foreign exchange rates to
actual rates 1.6 .3 - 1.0
Depreciation of Corporate property and amortization
of goodwill (7.2) (6.8) (6.9) (6.8)
Adjustment to businesses' postretirement benefit
expenses booked in consolidation 8.2 8.4 5.2 3.0
Adjustment to eliminate net interest and non-operating
expenses from results of certain operations in Brazil,
Mexico, Venezuela, and Turkey .5 .6 .1 -
Other adjustments booked in consolidation directly
related to reportable business segments (3.7) .1 (6.4) (2.4)
Amounts allocated to businesses in arriving at segment
profit in excess of (less than) Corporate center operating
expenses, eliminations, and other amounts identified above (5.3) (10.1) (2.2) (8.1)
- --------------------------------------------------------------------------------------------------------------------
Operating income 78.4 127.1 137.7 193.1
Interest expense, net of interest income 22.2 22.5 26.2 24.9
Other (income) expense (1.5) .7 .8 (.8)
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Earnings before income taxes $ 57.7 $103.9 $110.7 $169.0
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<TABLE>
<CAPTION>
Quarter Ended
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March 29, June 28, September 27, December 31,
1998 1998 1998 1998
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<S> <C> <C> <C> <C>
Segment profit for total reportable business segments $ 73.2 $115.9 $120.4 $171.6
Segment profit for all other businesses 3.7 8.1 4.4 -
Items excluded from segment profit:
Adjustment of budgeted foreign exchange rates to
actual rates .6 1.6 1.2 4.0
Depreciation of Corporate property and amortization
of goodwill (7.1) (6.2) (7.1) (7.2)
Adjustment to businesses' postretirement benefit
expenses booked in consolidation 8.3 8.2 8.2 (.3)
Adjustment to eliminate net interest and non-operating
expenses from results of certain operations in Brazil,
Mexico, Venezuela, and Turkey 1.4 1.0 1.4 1.1
Other adjustments booked in consolidation directly
related to reportable business segments (1.4) (17.6) .3 (1.7)
Amounts allocated to businesses in arriving at segment
profit in excess of (less than) Corporate center operating
expenses, eliminations, and other amounts identified above (8.6) 1.3 (.2) 5.5
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Operating income before restructuring and exit costs, write-
off of goodwill, and gain on sale of businesses 70.1 112.3 128.6 173.0
Restructuring and exit costs 140.0 - 14.2 10.5
Write-off of goodwill 900.0 - - -
Gain on sale of businesses - 36.5 26.9 51.1
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Operating income (loss) (969.9) 148.8 141.3 213.6
Interest expense, net of interest income 28.4 29.8 29.1 27.1
Other (income) expense (.3) 2.7 3.8 1.5
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Earnings (loss) before income taxes $(998.0) $116.3 $108.4 $185.0
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Basis of Presentation:
The Corporation operates in three reportable business segments: Power Tools
and Accessories, Hardware and Home Improvement, and Fastening and Assembly
Systems. The Power Tools and Accessories segment has worldwide responsibility
for the manufacture and sale of consumer and professional power tools and
accessories, electric cleaning and lighting products, and electric lawn and
garden tools, as well as for product service. In addition, the Power Tools and
Accessories segment has responsibility for the sale of security hardware to
customers in Mexico, Central America, the Caribbean, and South America; for the
sale of plumbing products to customers outside the United States and Canada; and
for sales of the retained portion of the household products business. The
Hardware and Home Improvement segment has worldwide responsibility for the
manufacture and sale of security hardware (except for the sale of security
hardware in Mexico, Central America, the Caribbean, and South America). It also
has responsibility for the manufacture of plumbing products and for the sale of
plumbing products to customers in the United States and Canada. The Fastening
and Assembly Systems segment has worldwide responsibility for the manufacture
and sale of fastening and assembly systems.
The Corporation also operated several businesses that do not constitute
reportable business segments. These businesses included the manufacture and sale
of glass container-forming and inspection equipment, as well as recreational and
household products. In 1998, the Corporation completed the sale or
recapitalization of its glass container-forming and inspection equipment
business, Emhart Glass; its recreational products business, True Temper Sports;
and its household products business (excluding certain assets associated with
the Corporation's cleaning and lighting products) in North America, Central
America, the Caribbean, South America (excluding Brazil), and Australia. Because
True Temper Sports, Emhart Glass, and the divested household products businesses
are not treated as discontinued operations under generally accepted accounting
principles, they remain a part of the Corporation's reported results from
continuing operations, and the results of operations and financial positions of
these businesses have been included in the consolidated financial statements
through the dates of consummation of the respective transactions. Amounts
relating to these businesses are included in the preceding segment tables under
the caption "All Others." The results of the household products business
included under the caption "All Others" are based upon certain assumptions and
allocations. The household products businesses sold during 1998 were jointly
operated with the cleaning and lighting products businesses retained by the
Corporation. Further, the Corporation's divested household products businesses
in Central America, the Caribbean, South America (excluding Brazil), and
Australia were operated jointly with the Corporation's power tools and
accessories businesses. Accordingly, the results of the household products
businesses included in the segment tables under the caption "All Others" were
determined using certain assumptions and allocations that the Corporation
believes are reasonable under the circumstances.
The Corporation assesses the performance of its reportable business
segments based upon a number of factors, including segment profit. In general,
segments follow the same accounting policies as those described in Note 1 of the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1999,
except with respect to foreign currency translation and except as further
indicated below. The financial statements of a segment's operating units located
outside the United States, except those units operating in highly inflationary
economies, are generally measured using the local currency as the functional
currency. For these units located outside the United States, segment assets and
elements of segment profit are translated using budgeted rates of exchange.
Budgeted rates of exchange are established annually and, once established, all
prior period segment data is updated to reflect the translation of segment
assets and elements of segment profit at the current year's budgeted rates of
exchange. The amounts included in the preceding segment tables under the
captions "Reportable Business Segments," "All Others," and "Corporate,
Adjustments, & Eliminations" are reflected at the
<PAGE>
Corporation's budgeted rates of exchange for 2000. The amounts included in the
preceding segment tables under the caption "Currency Translation Adjustments"
represent the difference between consolidated amounts determined using the
budgeted rates of exchange for 2000 and those determined based upon the rates of
exchange applicable under accounting principles generally accepted in the United
States.
Segment profit excludes interest income and expense, non-operating income
and expense, goodwill amortization, adjustments to eliminate intercompany profit
in inventory, and income tax expense. In addition, segment profit excludes
restructuring and exit costs and, for 1998, the write-off of goodwill and gain
on sale of businesses. For certain operations located in Brazil, Mexico,
Venezuela, and Turkey, segment profit is reduced by net interest expense and
non-operating expenses. In determining segment profit, expenses relating to
pension and other postretirement benefits are based solely upon estimated
service costs. Corporate expenses are allocated to each segment based upon
budgeted amounts. No corporate expenses have been allocated to divested
businesses. While sales and transfers between segments are accounted for at cost
plus a reasonable profit, the effects of intersegment sales are excluded from
the computation of segment profit. Intercompany profit in inventory is excluded
from segment assets and is recognized as a reduction of cost of sales by the
selling segment when the related inventory is sold to an unaffiliated customer.
Because the Corporation compensates the management of its various businesses on,
among other factors, segment profit, the Corporation may elect to record certain
segment-related expense items of an unusual or nonrecurring nature in
consolidation rather than reflect such items in segment profit. In addition,
certain segment-related items of income or expense may be recorded in
consolidation in one period and transferred to the Corporation's various
segments in a later period.
