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Item 5. Market for Registrant’s Common Equity

2022-02-22 compared with 2021-02-18 · 19 added, 65 removed, 30 unchanged (74% of the section changed)

2 unchanged sentences

(“NYSE”) under the abbreviated ticker symbol “SWK”, and is a component of the Standard & Poor’s (“S&P”) 500 Composite Stock Price Index.

The Company’s high and low quarterly stock prices on the NYSE for the years ended January 2, 2021 and December 28, 2019 follow:

The Company’s high and low quarterly stock prices on the NYSE for the years ended January 1, 2022 and January 2, 2021 follow:

High Low Dividend Per

13 unchanged sentences

Yet Be Purchased Under The Program

September 27 - October 31 3,494 $ 175.67 — 11,450,000

November 1 - November 28 11 $ 164.57 — 11,450,000

November 29 - January 2 79,591 $ 176.76 — 11,450,000

October 3 - November 6 3,980 $ 180.09 — 20,000,000

November 7 - December 4 58,996 177.99 — 20,000,000

December 5 - January 1 15,877 187.71 — 20,000,000

Total 78,853 $ 180.05 — 20,000,000

(a) The shares of common stock in this column were deemed surrendered to the Company by participants in various benefit plans of the Company to satisfy the participants’ taxes related to vesting or delivery of time-vesting restricted share units under those plans.

(b) On July 20, 2017, the Board of Directors approved a new repurchase program for up to 15.0 million shares of the Company’s common stock and terminated its previously approved repurchase program.

As of January 2, 2021, the authorized shares available for repurchase under the new repurchase program totaled approximately 11.5 million shares.

The currently authorized shares available for repurchase do not include approximately 3.6 million shares reserved and authorized for purchase under the Company’s previously approved repurchase program relating to a forward share purchase contract entered into in March 2015.

(b) On April 23, 2021, the Board of Directors approved a new repurchase program of up to 20.0 million shares of the Company's common stock (the "April 2021 Program") and terminated the previously approved repurchase program.

As of January 1, 2022, the authorized shares available for repurchase under April 2021 Program totaled 20.0 million shares.

On February 16, 2022, the Board of Directors terminated the April 2021 Program and approved a new repurchase program of up to the greater of (i) 20.0 million shares of the Company’s common stock;

and (ii) the number of shares of the Company’s common stock in the aggregate that can be purchased for an amount up to $2.5 billion.

As of February 16, 2022, the authorized shares available for purchase under the new program totaled the greater of (i) 20.0 million shares;

and (ii) the number of shares in the aggregate that can be purchased for an amount up to $2.5 billion.

The new repurchase program does not have an expiration date.

The Company may repurchase shares under the repurchase program through open market purchases, privately negotiated transactions or share repurchase programs, including one or more accelerated share repurchase programs (under which an initial payment for the entire repurchase amount may be made at the inception of the program).

Such repurchases may be funded from cash on hand, short-term borrowings or other sources of cash at the Company’s discretion, and the Company is under no obligation to repurchase any shares pursuant to the repurchase program.

In the second quarter of 2021, the Company net-share settled capped call options and received 344,004 shares.

This transaction was completed under the approved repurchase program in place prior to the April 2021 Program.

The currently authorized shares available for repurchase under the new repurchase program do not include approximately 3.6 million shares reserved and authorized for purchase under the Company’s approved repurchase program in place prior to the April 2021 Program relating to a forward share purchase contract entered into

in March 2015.

Refer to Note J, Capital Stock, of the Notes to Consolidated Financial Statements in Item 8 for further discussion.

7 unchanged sentences

S&P 500 Industrials $ 100.00 $ 122.71 $ 118.04 $ 157.93 $ 194.02 $ 248.15

The comparison assumes $100 invested at the closing price on January 2, 2016 in the Company’s common stock, S&P 500 Index, and S&P 500 Industrials Index.

The comparison assumes $100 invested at the closing price on December 31, 2016 in the Company’s common stock, S&P 500 Index, and S&P 500 Industrials Index.

Total return assumes reinvestment of dividends.

SELECTED FINANCIAL DATA

Acquisitions and divestitures completed by the Company during the five-year period presented below affect comparability of results.

Refer to Note E, Acquisitions and Investments , and Note T, Divestitures , of the Notes to Consolidated Financial Statements in Item 8 and prior year 10-K filings for further information.

Net sales $ 14,535 $ 14,442 $ 13,982 $ 12,967 $ 11,594

Net Earnings Attributable to Common Shareowners $ 1,210 $ 956 $ 605 $ 1,227 $ 968

Earnings per share of common stock:

Basic $ 7.85 $ 6.44 $ 4.06 $ 8.20 $ 6.63

Diluted $ 7.77 $ 6.35 $ 3.99 $ 8.05 $ 6.53

Percent of net sales:

Cost of sales 65.8 % 66.7 % 65.3 % 63.1 % 63.2 %

Selling, general and administrative(e) 21.3 % 21.1 % 22.7 % 23.1 % 22.7 %

Other, net 1.8 % 1.7 % 2.1 % 2.1 % 1.6 %

Restructuring charges 0.6 % 1.1 % 1.1 % 0.4 % 0.4 %

Interest, net 1.4 % 1.6 % 1.5 % 1.4 % 1.5 %

Earnings before income taxes and equity interest 8.7 % 7.8 % 7.3 % 11.8 % 10.6 %

Net Earnings Attributable to Common Shareowners 8.3 % 6.6 % 4.3 % 9.5 % 8.3 %

Balance sheet data:

Total assets(f) $ 23,566 $ 20,597 $ 19,408 $ 19,098 $ 15,655

Long-term debt, including current maturities $ 4,245 $ 3,180 $ 3,822 $ 3,806 $ 3,806

Stanley Black & Decker, Inc.’s shareowners’ equity $ 11,060 $ 9,136 $ 7,836 $ 8,302 $ 6,374

Total debt to total capital 27.7 % 27.8 % 34.9 % 31.5 % 37.4 %

Income tax rate 3.3 % 14.2 % 40.7 % 19.7 % 21.3 %

Common stock data:

Dividends per share $ 2.78 $ 2.70 $ 2.58 $ 2.42 $ 2.26

Equity per basic share at year-end $ 70.40 $ 60.97 $ 53.07 $ 55.20 $ 42.80

Market price per share — high $ 190.94 $ 167.76 $ 175.91 $ 170.03 $ 125.78

Market price per share — low $ 72.03 $ 115.69 $ 108.45 $ 115.75 $ 90.14

Weighted-average shares outstanding (in 000’s):

Basic 154,176 148,365 148,919 149,629 146,041

Diluted 155,861 150,558 151,643 152,449 148,207

Other information:

Average number of employees(g) 62,606 61,755 60,785 57,076 53,231

Shareowners of record at end of year 9,064 9,360 9,727 10,014 10,313

(a) The Company's 2020 results include $400 million of pre-tax charges related to a cost reduction program, loss on extinguishment of debt, inventory step-up charges, deal costs, Security business transformation and margin resiliency initiatives, and a net loss related to the sales of businesses, partially offset by a release of a contingent consideration liability relating to the CAM acquisition.

As a result, as a percentage of Net sales, Cost of sales was 49 basis points higher, Selling, general, & administrative was 121 basis points higher, Other, net was 6 basis points higher, Restructuring charges was 57 basis points higher, and Earnings before income taxes and equity interest was 275 basis points lower.

The Company also recorded a tax benefit of $211 million, which is comprised of a $119 million one-time tax benefit associated with a supply chain reorganization and a $92 million tax benefit of the above pre-tax charges.

In addition, the Company's share of MTD's net earnings included an after-tax charge of approximately $10 million.

Overall, the amounts described above resulted in a decrease to the Company's 2020 Net earnings attributable to common shareowners of $199 million (or $1.27 per diluted share).

(b) The Company's 2019 results include $363 million of pre-tax charges related to restructuring, deal and integration costs, loss on extinguishment of debt, Security business transformation and margin resiliency initiatives, and a gain on a sale of a business.

As a result, as a percentage of Net sales, Cost of sales was 27 basis points higher, Selling, general, & administrative was 97 basis points higher, Other, net was 21 basis points higher, Restructuring charges was 106 basis points higher, and Earnings before income taxes and equity interest was 251 basis points lower.

In addition, the

Company's share of MTD's net earnings included an after-tax charge of approximately $24 million.

Overall, the amounts described above resulted in a decrease to the Company's 2019 Net earnings attributable to common shareowners of $309 million (or $2.05 per diluted share).

(c) The Company's 2018 results include $450 million of pre-tax charges related to acquisitions, an environmental remediation settlement, a non-cash fair value adjustment, a cost reduction program, an incremental freight charge related to a service provider's bankruptcy, and a loss related to a previously divested business.

As a result, as a percentage of Net sales, Cost of sales was 47 basis points higher, Selling, general, & administrative was 113 basis points higher, Other, net was 77 basis points higher, Restructuring charges was 84 basis points higher, and Earnings before income taxes was 322 basis points lower.

The Company also recorded a net tax charge of $181 million, which is comprised of charges related to the Tax Cuts and Jobs Act ("the Act"), partially offset by the tax benefit of the above pre-tax charges.

Overall, the amounts described above resulted in a decrease to the Company's 2018 Net earnings attributable to common shareowners of $631 million (or $4.16 per diluted share).

(d) The Company's 2017 results include $156 million of pre-tax acquisition-related charges and a $264 million pre-tax gain on sales of businesses, primarily related to the divestiture of the mechanical security businesses.

As a result, as a percentage of Net sales, Cost of sales was 36 basis points higher, Selling, general, & administrative was 29 basis points higher, Other, net was 45 basis points higher, Restructuring charges was 11 basis points higher, and Earnings before income taxes was 83 basis points higher.

The net tax benefit of the acquisition-related charges and gain on sales of businesses was $7 million.

Income taxes for 2017 also includes a one-time net tax charge of $24 million related to the Act.

Overall, the acquisition-related charges, gain on sales of businesses, and one-time net tax charge related to the Act resulted in a net increase to the Company's 2017 Net earnings attributable to common shareowners of $91 million (or $0.59 per diluted share).

(e) SG&A is inclusive of the Provision for credit losses.

(f) In the first quarter of 2019, the Company adopted ASU 2016-02, Leases (Topic 842) ("new lease standard") utilizing the transition method, which allowed the new lease standard to be applied as of the adoption date with no adjustment for periods prior to fiscal year 2019.

As a result, total assets as of January 2, 2021 and as of December 28, 2019 reflect a lease right-of-use asset of approximately $523 million and $535 million, respectively.

(g) The average number of employees includes temporary contractors.

REMOVED AND RESERVED

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity