What changed in this filing

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Item 9A. Controls and Procedures

2024-02-27 compared with 2023-02-23 · 588 added, 807 removed, 1643 unchanged (46% of the section changed)

9 unchanged sentences

Ernst & Young LLP, the auditor of the financial statements included in this annual report, has issued an attestation report on the registrant’s internal control over financial reporting, a copy of which appears on page 63.

Under the supervision and with the participation of management, including the Company’s President and Chief Executive Officer and its Interim Chief Financial Officer, the Company has, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined under Rule 13a-15(e) of the Exchange Act).

Based upon that evaluation, the Company’s President and Chief Executive Officer and its Interim Chief Financial Officer have concluded that, as of December 31, 2022, the Company’s disclosure controls and procedures are effective.

Remediation of Previously Reported Material Weaknesses

To address the previously reported material weaknesses in internal control over financial reporting described in Part II, Item 9A of the Company's 2021 Form 10-K, the Company enhanced and revised the design of existing controls and procedures to properly account for financial instruments with debt- and equity-like features, including the impact to the calculation of earnings per share.

During the first quarter of fiscal 2022, the Company successfully completed the testing necessary to conclude that the material weaknesses have been remediated.

Under the supervision and with the participation of management, including the Company’s President and Chief Executive Officer and its Executive Vice President and Chief Financial Officer, the Company has, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined under Rule 13a-15(e) of the Exchange Act).

Based upon that evaluation, the Company’s President and Chief Executive Officer and its Executive Vice President and Chief Financial Officer have concluded that, as of December 30, 2023, the Company’s disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

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OTHER INFORMATION

During the three months ended December 30, 2023, no director or Section 16 officer of the Company adopted , modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE OF THE REGISTRANT

The information required by this Item, except for certain information with respect to the Company’s Code of Business Ethics, the identification of the executive officers of the Company and any material changes to the procedures by which shareholders may recommend nominees to the Company’s Board of Directors, as set forth below, is incorporated herein by reference to the information set forth in the section of the Company’s definitive proxy statement (which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the close of the Company’s fiscal year) under the headings “Delinquent Section 16(a) Reports,” “Information Concerning Nominees for Election as Directors,” and “Board of Directors".

Available on the Company's website at http://www.stanleyblackanddecker.com under the “Impact” heading is the Code of Business Ethics applicable to all of its directors and officers, including the President and Chief Executive Officer, Interim Chief Financial Officer, and Chief Accounting Officer, and employees worldwide, as well as the Supplemental Code of Ethics for CEO and Senior Financial Officers, applicable to the Company’s President and Chief Executive Officer, and all senior financial officers, including the Interim Chief Financial Officer and Chief Accounting Officer.

The information required by this Item, except for the identification of the executive officers of the Company presented in Part I of this Annual Report on Form 10-K under the caption "Information About Our Executive Officers," and certain information with respect to the Company’s Code of Business Ethics and any material changes to the procedures by which shareholders may recommend nominees to the Company’s Board of Directors, as set forth below, is incorporated herein by reference to the information set forth in the section of the Company’s definitive proxy statement (which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the close of the Company’s fiscal year) under the headings “Delinquent Section 16(a) Reports,” “Corporate Governance,” “Information Concerning Nominees for Election as Directors,” and “Board of Directors".

Available on the Company's website at http://www.stanleyblackanddecker.com under the “Investors” heading is the Code of Business Ethics applicable to all of its directors and officers, including the President and Chief Executive Officer, Executive Vice President and Chief Financial Officer, and Chief Accounting Officer, and employees worldwide, as well as the Supplemental Code of Ethics for CEO and Senior Financial Officers, applicable to the Company’s President and Chief Executive Officer, and all senior financial officers, including the Executive Vice President and Chief Financial Officer and Chief Accounting Officer.

The Company intends to post on its website required information regarding any amendment to, or waiver from, the Code of Business Ethics or the Code of Ethics for CEO and Senior Financial Officers that applies to the Company's President and Chief Executive Officer and senior financial officers within four business days after any such amendment or waiver.

The following is a list of the executive officers of the Company as of February 23, 2023:

Name and Age Office Date Elected to Office as an Executive Officer

Donald Allan, Jr.

(58) President & Chief Executive Officer since July 2022.

President & Chief Financial Officer (2021);

Executive Vice President & Chief Financial Officer (2016);

Senior Vice President & Chief Financial Officer (2010);

Vice President & Chief Financial Officer (2009);

Vice President & Corporate Controller (2002);

Corporate Controller (2000);

Assistant Controller (1999).

Walburger (52) Interim Chief Financial Officer since July 2022.

Vice President of Corporate Business Development (2008);

Vice President and Associate in Investment Banking Division, Goldman Sachs (1999);

Financial Analyst, Goldman Sachs (1995).

Greulach (40) Chief Accounting Officer since October 2022.

Business Unit Controller for Stanley Industrial (2021);

Director – Corporate and Technical Accounting (2018);

Director – Statutory Reporting and Tax Compliance (2017);

Director – External Reporting (2014);

Senior Manager – External Reporting (2012).

Link (53) Senior Vice President, General Counsel and Secretary since July 2017.

Executive Vice President, General Counsel, JC Penney Company, Inc.

Vice President, Deputy General Counsel, JC Penney Company, Inc.

Vice President, Deputy General Counsel, Clear Channel Companies (2013).

Raff (56) Interim Co-President & Chief Commercial Officer, Tools & Outdoor since July 2022.

Head of Outdoor Integration (2021);

President, Stanley Security (2016);

President, Stanley Electronic Security North America (2015);

President, North America Sales, Construction & DIY (2010);

President, Stanley National Hardware (2007);

Vice President of Latin America, Construction & DIY (2005);

General Manager, Construction & DIY (2002).

Robinson (54) Senior Vice President & President, Stanley Industrial since April 2020.

President, Honeywell Industrial Safety (Honeywell International) (2018);

President, Honeywell Sensing and Internet of Things (Honeywell International) (2016);

Chief Marketing Officer and Vice President, Global Strategy & Marketing, Automation and Control Solutions (Honeywell International) (2014).

Wyatt (64) Interim Co-President & Senior Vice President, Tools & Outdoor since July 2022.

Senior Vice President & President, Stanley Outdoor (2021);

Senior Vice President & President, Stanley Outdoor and Aerospace (2020);

President, Stanley Engineered Fastening (2016);

President, Global Sales & Marketing - Global Tools & Storage (2014);

President, Construction & DIY, Europe and ANZ (2012);

President, Construction & DIY, EMEA (2010);

President-Europe, Middle East, and Africa, Power Tools and Accessories, The Black & Decker Corporation (2008);

Vice President-Consumer Products (Europe, Middle East and Africa), The Black & Decker Corporation (2006).

Lucas (63) Chief Human Resources Officer since January 2023.

Founder & Principal, True North Human Capital Consulting, LLC (2019);

Senior Vice President and Chief Human Resources Officer, Goodyear Tire & Rubber Company (2015);

Senior Vice President, Human Resources & Communications, Lockheed Martin Corporation (2009).

EXECUTIVE COMPENSATION

The information required by this Item is incorporated herein by reference to the information set forth under the sections entitled "Compensation Discussion & Analysis" and “2022 Executive Compensation Program” of the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by this Item is incorporated herein by reference to the information set forth under the sections entitled “Compensation Discussion & Analysis,” “2023 Executive Compensation,” “Director Compensation,” and “Compensation and Talent Development Committee Report” of the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by Item 403 of Regulation S-K is incorporated herein by reference to the information set forth under the sections entitled "Security Ownership of Certain Beneficial Owners," "Security Ownership of Directors and Officers," "Compensation Discussion & Analysis" and “2022 Executive Compensation Program” of the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by Item 403 of Regulation S-K is incorporated herein by reference to the information set forth under the sections entitled “Security Ownership of Certain Beneficial Owners” and “Security Ownership of Directors and Officers” of the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

EQUITY COMPENSATION PLAN INFORMATION

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issued upon exercise of

outstanding options, warrants and rights Weighted-average exercise

price of outstanding options, warrants and rights Number of securities

outstanding options and stock awards Weighted-average exercise

price of outstanding options Number of securities

remaining available for

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Total 7,883,446

(1) Consists of 5,281,713 shares underlying outstanding stock options (whether vested or unvested) with a weighted-average exercise price of $140.22 and a weighted-average term of 6.54 years;

(1) Consists of 5,490,848 shares underlying outstanding stock options (whether vested or unvested) with a weighted-average exercise price of $133.22 and a weighted-average remaining term of 6.22 years;

2,222,052 shares underlying time-vesting restricted stock units that have not yet vested and the maximum number of shares that will be issued pursuant to outstanding performance awards if all established goals are met;

and 134,614 of shares earned but for which participants elected deferral of delivery.

and 170,546 of shares earned but related to which participants elected deferral of delivery.

All stock-based compensation plans are discussed in Note J, Capital Stock , of the Notes to Consolidated Financial Statements in Item 8 .

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Because there is no strike price applicable to these stock awards they are excluded from the weighted-average exercise price which pertains solely to outstanding stock options.

(3) Consists of 1,251,699 of shares available for purchase under the employee stock purchase plan ("ESPP") at the election of employees and 8,403,765 securities available for future grants by the Board of Directors under stock-based compensation plans.

On February 16, 2022, the Board of Directors adopted the 2022 Omnibus Award Plan (the "2022 Plan") and authorized the issuance of 9,800,000 shares of the Company's common stock in connection with awards pursuant to the 2022 Plan.

No further awards will be issued under the Company's 2018 Omnibus Award Plan.

(3) Consists of 1,070,126 of shares available for purchase under the employee stock purchase plan ("ESPP") at the election of employees and 6,161,350 securities available for future grants under stock-based compensation plans.

No further awards are available for issuance under the Company's 2013 Long-Term Incentive Plan or the 2018 Omnibus Award Plan.

non-highly compensated employees are eligible to contribute from 1% to 25% of their salary to a qualified tax deferred savings plan as described in the Employee Stock Ownership Plan ("ESOP") section of Note L, Employee Benefit Plans, of the Notes to the Consolidated Financial Statements in Item 8.

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The same matching arrangement was provided for highly compensated salaried employees in the non-qualified plan, to the extent the match was not fully met in the qualified plan, except that the arrangement for these employees is outside of the ESOP, and is not funded in advance of distributions.

Effective January 1, 2019, the Company, at its discretion, will determine whether matching and core contributions will be made for the non-qualified tax deferred savings plan for a particular year.

If the Company decides to make matching contributions for a year, it will make contributions, in an amount determined at its discretion, that may constitute part or all of or more than the matching contributions that would have been made pursuant to the provisions of the Stanley Black & Decker Supplemental Retirement Account Plan that were

in effect prior to 2019.

For both qualified and non-qualified plans, the investment of the employee’s contribution and the Company’s matching contribution is controlled by the employee and may include an election to invest in Company stock.

For both qualified and non-qualified plans, the investment of

the employee’s contribution and the Company’s matching contribution is controlled by the employee and may include an election to invest in Company stock.

Shares of the Company’s common stock may be issued at the time of a distribution from the qualified plan.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by Items 404 and 407(a) of Regulation S-K is incorporated by reference to the information set forth under the sections entitled "Corporate Governance," "Director Independence" and "Related Person Transactions" of the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by Items 404 and 407(a) of Regulation S-K is incorporated by reference to the information set forth under the sections entitled “Corporate Governance” and “Related Person Transactions” of the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 9(e) of Schedule 14A is incorporated herein by reference to the information set forth under the section entitled “Fees of Independent Auditors” of the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by Item 9(e) of Schedule 14A is incorporated herein by reference to the information set forth under the section entitled “Fees of Independent Auditors” and “Corporate Governance” of the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

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Report of Independent Registered Public Accounting Firm — Internal Control Opinion (page 63).

Consolidated Statements of Operations — fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021 (page 63).

Consolidated Statements of Comprehensive Income — fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021 (page 64).

Consolidated Balance Sheets — December 31, 2022 and January 1, 2022 (page 65).

Consolidated Statements of Cash Flows — fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021 (page 66).

Consolidated Statements of Changes in Shareowners’ Equity — fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021 (page 68).

Consolidated Statements of Operations — fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022 (page 64).

Consolidated Statements of Comprehensive (Loss) Income — fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022 (page 65).

Consolidated Balance Sheets — December 30, 2023 and December 31, 2022 (page 66).

Consolidated Statements of Cash Flows — fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022 (page 67).

Consolidated Statements of Changes in Shareowners’ Equity — fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022 (page 69).

Notes to Consolidated Financial Statements (page 70).

Selected Quarterly Financial Data (Unaudited) (page 117).

Consent of Independent Registered Public Accounting Firm (Exhibit 23).

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Not applicable.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

STANLEY BLACK & DECKER, INC.

/s/ Donald Allan, Jr.

Donald Allan, Jr., President and Chief Executive Officer

February 23, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

Signature Title Date

/s/ Donald Allan, Jr.

President and Chief Executive Officer February 23, 2023

Donald Allan, Jr.

/s/ Corbin Walburger Interim Chief Financial Officer February 23, 2023

Corbin Walburger

/s/ Scot Greulach Chief Accounting Officer February 23, 2023

Scot Greulach

* Director February 23, 2023

(As Attorney-in-Fact)

Schedule II — Valuation and Qualifying Accounts

1 unchanged sentence

and Subsidiaries

Fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021

Fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022

(Millions of Dollars)

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The prior year amounts in the table above have been recast to exclude the amounts relating to businesses classified as discontinued operations.

Refer to Note T, Divestitures , of the Notes to Consolidated Financial Statements in Item 8 for further discussion.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

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Donald Allan, Jr., President and Chief Executive Officer

/s/ Corbin B.

Walburger, Interim Chief Financial Officer

/s/ Patrick Hallinan

Patrick Hallinan, Executive Vice President & Chief Financial Officer

Report of Independent Registered Public Accounting Firm

To the Shareowners and Board of Directors of Stanley Black & Decker, Inc.

To the Shareowners and the Board of Directors of Stanley Black & Decker, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Stanley Black & Decker, Inc.

(the Company) as of December 31, 2022 and January 1, 2022, the related consolidated statements of operations, comprehensive income, shareowners’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and January 1, 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

(the Company) as of December 30, 2023 and December 31, 2022, the related consolidated statements of operations, comprehensive (loss) income, shareowners’ equity and cash flows for each of the three years in the period ended December 30, 2023, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 30, 2023 and December 31, 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 30, 2023, in conformity with U.S.

generally accepted accounting principles.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

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In our opinion, Stanley Black & Decker (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 30, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and January 1, 2022, the related consolidated statements of operations, comprehensive income, shareowners’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and schedule listed in the Index at Item 15(a) and our report dated February 23, 2023 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 30, 2023 and December 31, 2022, the related consolidated statements of operations, comprehensive (loss) income, shareowners’ equity and cash flows for each of the three years in the period ended December 30, 2023, and the related notes and schedule listed in the Index at Item 15(a) and our report dated February 27, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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Consolidated Statements of Operations

Fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021

Fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022

(Millions of Dollars, Except Per Share Amounts)

9 unchanged sentences

Gain on equity method investment — — ( 68.0 )

Asset impairment charge 168.4 — —

Loss on debt extinguishment — — 46.9

Asset impairment charges 274.8 168.4 —

Interest income ( 186.9 ) ( 54.7 ) ( 9.8 )

1 unchanged sentence

$ 16,156.8 $ 16,909.5 $ 13,694.4

Earnings from continuing operations before income taxes and equity interest 37.9 1,586.9 1,183.7

(Loss) earnings from continuing operations before income taxes and equity interest ( 375.7 ) 37.9 1,586.9

Income taxes on continuing operations ( 94.0 ) ( 132.4 ) 55.1

Net earnings from continuing operations before equity interest 170.3 1,531.8 1,145.7

Net (loss) earnings from continuing operations before equity interest ( 281.7 ) 170.3 1,531.8

Share of net earnings of equity method investment — — 19.0

Net earnings from continuing operations 170.3 1,550.8 1,154.8

Net (loss) earnings from continuing operations ( 281.7 ) 170.3 1,550.8

Net earnings (losses) attributable to non-controlling interests — 0.2 ( 1.7 )

Net earnings from continuing operations attributable to Stanley Black & Decker, Inc.

Net (loss) earnings from continuing operations attributable to Stanley Black & Decker, Inc.

$ ( 281.7 ) $ 170.1 $ 1,552.5

Preferred stock dividends and beneficial conversion feature — 5.8 14.2

Net Earnings from Continuing Operations Attributable to Common Shareowners $ 164.3 $ 1,538.3 $ 1,129.8

Net (Loss) Earnings from Continuing Operations Attributable to Common Shareowners $ ( 281.7 ) $ 164.3 $ 1,538.3

Contract adjustment payments accretion — 1.2 1.3

Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted $ 165.5 $ 1,539.6 $ 1,131.5

Earnings from discontinued operations before income taxes (including 2022 pre-tax gain on Security sale of $ 1,197.4 million)

Net (Loss) Earnings from Continuing Operations Attributable to Common Shareowners - Diluted $ ( 281.7 ) $ 165.5 $ 1,539.6

(Loss) earnings from discontinued operations before income taxes (including 2023 pre-tax loss on Security sale of $ 14.3 million and 2022 pre-tax gain on Security sale of $ 1,197.4 million)

( 14.3 ) 1,210.9 124.3

Income taxes on discontinued operations (including 2022 income taxes for gain on Security sale of $ 312.5 million)

Income taxes on discontinued operations (including 2023 income taxes of $ 14.5 million for loss on Security sale and 2022 income taxes of $ 312.5 million for gain on Security sale)

14.5 318.5 ( 12.4 )

Net earnings from discontinued operations $ 892.4 $ 136.7 $ 79.9

Net Earnings Attributable to Common Shareowners - Diluted $ 1,057.9 $ 1,676.3 $ 1,211.4

Net Earnings Attributable to Stanley Black & Decker, Inc.

Net (loss) earnings from discontinued operations $ ( 28.8 ) $ 892.4 $ 136.7

Net (Loss) Earnings Attributable to Common Shareowners - Diluted $ ( 310.5 ) $ 1,057.9 $ 1,676.3

Net (Loss) Earnings Attributable to Stanley Black & Decker, Inc.

$ ( 310.5 ) $ 1,062.5 $ 1,689.2

Basic earnings per share of common stock:

Basic (loss) earnings per share of common stock:

Continuing operations $ ( 1.88 ) $ 1.11 $ 9.69

Discontinued operations $ ( 0.19 ) $ 6.02 $ 0.86

Total basic earnings per share of common stock $ 7.13 $ 10.55 $ 7.85

Diluted earnings per share of common stock:

Total basic (loss) earnings per share of common stock $ ( 2.07 ) $ 7.13 $ 10.55

Diluted (loss) earnings per share of common stock:

Continuing operations $ ( 1.88 ) $ 1.06 $ 9.33

Discontinued operations $ ( 0.19 ) $ 5.70 $ 0.83

Total diluted earnings per share of common stock $ 6.76 $ 10.16 $ 7.46

Total diluted (loss) earnings per share of common stock $ ( 2.07 ) $ 6.76 $ 10.16

See Notes to Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

Fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021

Consolidated Statements of Comprehensive (Loss) Income

Fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022

(Millions of Dollars)

2023 2022 2021

Net Earnings from Continuing Operations Attributable to Common Shareowners $ 164.3 $ 1,538.3 $ 1,129.8

Net earnings from discontinued operations 892.4 136.7 79.9

Net (Loss) Earnings from Continuing Operations Attributable to Common Shareowners $ ( 281.7 ) $ 164.3 $ 1,538.3

Net (loss) earnings from discontinued operations ( 28.8 ) 892.4 136.7

$ ( 310.5 ) $ 1,056.7 $ 1,675.0

Other comprehensive (loss) income:

Other comprehensive income (loss):

Currency translation adjustment and other 75.1 ( 364.4 ) ( 307.7 )

Gains (losses) on cash flow hedges, net of tax 5.3 53.2 ( 48.8 )

Gains (losses) on net investment hedges, net of tax 2.0 ( 1.0 ) ( 24.5 )

Pension gains (losses), net of tax 83.2 123.6 ( 37.7 )

Other comprehensive (loss) income $ ( 273.9 ) $ ( 131.9 ) $ 170.9

Comprehensive income attributable to common shareowners $ 782.8 $ 1,543.1 $ 1,380.6

Gains on cash flow hedges, net of tax 2.0 5.3 53.2

(Losses) gains on net investment hedges, net of tax ( 8.9 ) 2.0 ( 1.0 )

Pension (losses) gains, net of tax ( 17.8 ) 83.2 123.6

Other comprehensive income (loss) $ 50.4 $ ( 273.9 ) $ ( 131.9 )

Comprehensive (loss) income attributable to common shareowners $ ( 260.1 ) $ 782.8 $ 1,543.1

See Notes to Consolidated Financial Statements.

Consolidated Balance Sheets

December 31, 2022 and January 1, 2022

December 30, 2023 and December 31, 2022

(Millions of Dollars, Except Share and Per Share Amounts)

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Accrued expenses 2,464.3 2,120.7

Liabilities held for sale — 460.4

Current liabilities held for sale 44.1 —

Total Current Liabilities 5,883.2 6,569.2

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Shareowners’ Equity

Preferred stock, without par value:

Authorized 10,000,000 shares in 2022 and 2021

Issued and outstanding 750,000 shares in 2021

Common stock, par value $ 2.50 per share:

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Consolidated Statements of Cash Flows

Fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021

Fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022

(Millions of Dollars)

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Operating Activities:

Net earnings from continuing operations $ 170.3 $ 1,550.8 $ 1,154.8

Net earnings from discontinued operations 892.4 136.7 79.9

Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:

Net (loss) earnings $ ( 310.5 ) $ 1,062.7 $ 1,687.5

Adjustments to reconcile net (loss) earnings to net cash provided by (used in) operating activities:

Depreciation and amortization of property, plant and equipment 432.4 369.7 374.0

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Gain on equity method investment — — ( 68.0 )

Loss on debt extinguishment — — 46.9

Gain on sale of discontinued operations ( 1,197.4 ) — —

Asset impairment charge 168.4 — —

Loss (gain) on sale of discontinued operations 14.3 ( 1,197.4 ) —

Asset impairment charges 274.8 168.4 —

Craftsman contingent consideration remeasurement from MTD acquisition — — 101.1

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Other long-term liabilities 113.0 173.4 277.7

Net cash (used in) provided by operating activities ( 1,459.5 ) 663.1 2,022.1

Net cash provided by (used in) operating activities 1,191.3 ( 1,459.5 ) 663.1

Investing Activities:

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Other 1.6 ( 24.5 ) ( 19.5 )

Net cash provided by (used in) investing activities 3,572.6 ( 2,623.8 ) ( 1,577.1 )

Net cash (used in) provided by investing activities ( 327.7 ) 3,572.6 ( 2,623.8 )

Financing Activities:

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Redemption and conversion of preferred stock — ( 750.0 ) ( 750.0 )

Premium paid on debt extinguishment — — ( 48.7 )

Proceeds from issuances of common stock 19.0 38.7 131.4

Craftsman deferred purchase price — — ( 250.0 )

Craftsman contingent consideration ( 41.3 ) ( 29.3 ) ( 45.9 )

CAM contingent consideration — — ( 94.4 )

Craftsman contingent consideration payments ( 18.0 ) ( 41.3 ) ( 29.3 )

Termination of interest rate swaps — 22.7 ( 75.3 )

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Cash, cash equivalents and restricted cash, end of year $ 454.6 $ 404.9 $ 294.8

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances as of December 31, 2022 and January 1, 2022, as shown above:

December 31, 2022 January 1, 2022

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances as of December 30, 2023 and December 31, 2022, as shown above:

December 30, 2023 December 31, 2022

Cash and cash equivalents $ 449.4 $ 395.6

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Consolidated Statements of Changes in Shareowners’ Equity

Fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021

Fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022

(Millions of Dollars, Except Share and Per Share Amounts)

3 unchanged sentences

Comprehensive

Loss ESOP Treasury

Loss Treasury

Interests Shareowners’

Balance December 28, 2019 $ 1,230.0 $ 442.3 $ 4,767.6 $ 6,768.1 $ ( 1,884.6 ) $ ( 2.3 ) $ ( 2,184.8 ) $ 5.9 $ 9,142.2

Net earnings 1,233.8 0.9 1,234.7

Other comprehensive income 170.9 170.9

Cash dividends declared — $ 2.78 per common share

( 431.8 ) ( 431.8 )

Cash dividends declared — $ 50.00 per annum per preferred share

( 23.4 ) ( 23.4 )

Issuance of common stock ( 2,010,644 shares)

( 32.1 ) 179.1 147.0

Repurchase of common stock ( 228,541 shares)

10.0 ( 36.2 ) ( 26.2 )

Conversion of original Series C Preferred Stock ( 5,463,750 shares)

( 610.4 ) 113.2 492.6 ( 4.6 )

Issuance of remarketed Series C Preferred Stock 750.0 750.0

Stock-based compensation related 109.1 109.1

Adoption of ASU 2016-13 ( 3.8 ) ( 3.8 )

Beneficial conversion feature 0.7 ( 0.7 ) —

Balance January 2, 2021 $ 1,370.3 $ 442.3 $ 4,967.8 $ 7,542.2 $ ( 1,713.7 ) $ ( 1,549.3 ) $ 6.8 $ 11,066.4

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Balance December 31, 2022 $ — $ 442.3 $ 5,055.6 $ 9,333.3 $ ( 2,119.5 ) $ ( 2,999.6 ) $ 2.1 $ 9,714.2

Net loss ( 310.5 ) — ( 310.5 )

Other comprehensive income 50.4 50.4

Cash dividends declared — $ 3.22 per common share

( 482.6 ) ( 482.6 )

Issuance of common stock ( 817,110 shares)

( 80.4 ) 99.4 19.0

Repurchase of common stock ( 180,552 shares)

( 16.1 ) ( 16.1 )

Non-controlling interest liquidation ( 2.1 ) ( 2.1 )

Stock-based compensation related 83.8 83.8

Balance December 30, 2023 $ — $ 442.3 $ 5,059.0 $ 8,540.2 $ ( 2,069.1 ) $ ( 2,916.3 ) $ — $ 9,056.1

See Notes to Consolidated Financial Statements.

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The Company’s fiscal year ends on the Saturday nearest to December 31.

There were 52 weeks in fiscal years 2022 and 2021, and 53 weeks in the fiscal year 2020.

There were 52 weeks in fiscal years 2023, 2022 and 2021.

On December 15, 2023, the Company announced that it had entered into a definitive agreement for the sale of the Infrastructure business.

Based on management's commitment to sell this business, the assets and liabilities related to Infrastructure were classified as held for sale on the Company's Consolidated Balance Sheet as of December 30, 2023.

There were no assets or liabilities held for sale relating to Infrastructure as of December 31, 2022.

This pending divestiture does not qualify for discontinued operations and therefore, its results are included in the Company's continuing operations for all periods presented.

On August 19, 2022, the Company completed the sale of its Oil & Gas business.

This divestiture does not qualify for discontinued operations, and therefore, the results of the Oil & Gas business are included in the Company's continuing operations for all periods presented through the date of sale.

There were no assets or liabilities held for sale relating to the Oil & Gas business as of January 1, 2022.

On July 22, 2022, the Company completed the previously announced sale of its Convergent Security Solutions ("CSS") business comprised of the commercial electronic security and healthcare businesses.

On July 5, 2022, the Company completed the previously announced sale of its Mechanical Access Solutions ("MAS") business, the automatic doors business.

The assets and liabilities related to CSS and MAS are classified as held for sale on the Company's Consolidated Balance Sheets as of January 1, 2022.

The CSS and MAS divestitures represent a single plan to exit the Security segment and are considered a strategic shift that will have a major effect on the Company’s operations and financial results.

The operating results of CSS and MAS have been reported as discontinued operations in the Consolidated Financial Statements.

Amounts previously reported have been reclassified to conform to this presentation in accordance with Accounting Standards Codification ("ASC") 205, Presentation of Financial Statements ("ASC 205"), to allow for meaningful comparison of continuing operations.

In November 2020, the Company sold its commercial electronic security businesses in five countries in Europe and emerging markets within the Security segment.

In October 2020, the Company sold a product line in Oil & Gas within the Industrial segment.

The operating results of these businesses have been reported in the Consolidated Financial Statements through their respective dates of sale in 2020.

This divestiture did not qualify for discontinued operations, and therefore, the results of the Oil & Gas business were included in the Company's continuing operations for all periods presented through the date of sale.

On July 22, 2022, the Company completed the sale of its Convergent Security Solutions ("CSS") business comprised of the commercial electronic security and healthcare businesses.

On July 5, 2022, the Company completed the sale of its Mechanical Access Solutions ("MAS") business, the automatic doors business.

The CSS and MAS divestitures represented a single plan to exit the Security segment and were considered a strategic shift that had a major effect on the Company’s operations and financial results.

As a result, the operating results of CSS and MAS were reported as discontinued operations in the consolidated financial statements through their respective dates of sale.

The divestitures above are part of the Company's strategic commitment to simplify and streamline its portfolio to focus on the core Tools & Outdoor and Industrial businesses.

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These acquisitions were accounted for as business combinations using the acquisition method of accounting and the results subsequent to the dates of acquisition are included in the Company's Tools & Outdoor segment.

In February 2020, the Company acquired Consolidated Aerospace Manufacturing, LLC ("CAM").

This acquisition was accounted for as a business combination using the acquisition method of accounting and the results subsequent to the date of acquisition are included in the Company's Industrial segment.

Refer to Note E, Acquisitions and Investments , for further discussion on these transactions.

Refer to Note E, Acquisitions , for further discussion on these transactions.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements.

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The Company's payment terms are generally consistent with the industries in which its businesses operate and typically range from 30-90 days globally.

Additionally, the Company considers the credit quality of all past-due or delinquent financing receivables as nonperforming.

Additionally, the Company considers the credit

quality of all past-due or delinquent financing receivables as nonperforming.

The Company does not adjust the promised amount of consideration for the effects of a significant financing component when the period between transfer of the product and receipt of payment is less than one year.

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In performing a quantitative analysis, the Company determines the fair value of a reporting unit using management’s assumptions about future cash flows based on long-range strategic plans.

This approach incorporates many assumptions including discount rates, future growth rates and expected profitability.

This approach incorporates many

assumptions including discount rates, future growth rates and expected profitability.

In the event the carrying amount of a reporting unit exceeded its fair value, an impairment loss would be recognized.

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If the carrying amount of the asset was to exceed the fair value, it would be written down to fair value.

No significant goodwill or other intangible asset impairments were recorded during 2022, 2021 or 2020 as part of the Company's annual impairment testing.

Goodwill totaling $ 39.0 million was allocated to the Oil & Gas business based on the relative fair value of the business disposed, resulting in a reduction of goodwill which was included in the impairment loss relating to the Oil & Gas business in the second quarter of 2022.

Refer to Note T, Divestitures , for further discussion.

Refer to Note F, Goodwill And Intangible Assets, for further discussion of the goodwill impacts relating to the 2023 impairment charges for the pending divestiture of the Infrastructure business and the Irwin and Troy-Bilt trade names, as well as the 2022 impairment charge relating to the Oil & Gas business.

FINANCIAL INSTRUMENTS — Derivative financial instruments are employed to manage risks, including foreign currency, interest rate exposures and commodity prices and are not used for trading or speculative purposes.

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The majority of the Company’s revenues are recorded at a point in time from the sale of tangible products.

A portion of the Company’s revenues within the Oil & Gas business, disposed in the third quarter of 2022, were generated from equipment leased to custome rs.

Customer arrangements are identified as leases if they include transfer of a tangible asset which is provided to the customer in exchange for payments typically at fixed rates payable monthly, quarterly or annually.

Customer leases may include terms to allow for extension of leases for a short period of time, but typically do not provide for customer termination prior to the initial term.

Some customer leases include terms to allow the customer to purchase the underlying asset, which occurs occasionally, and virtually no customer leases include residual value guarantee clauses.

A portion of the Company’s revenues within the Oil & Gas business, disposed in the third quarter of 2022, were generated from equipment leased to customers.

Customer arrangements were identified as leases if they included a transfer of a tangible asset provided to the customer in exchange for payments typically at fixed rates.

Customer leases may have included terms to allow for extension of leases for a short period of time, but typically did not provide for customer termination prior to the initial term.

Some customer leases included terms to allow the customer to purchase the underlying asset, which occurred occasionally, and virtually no customer leases included residual value guarantee clauses.

For Oil & Gas leases, underlying assets were assessed for functionality at termination of the lease and, if necessary, an impairment to the leased asset value was recorded.

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These costs include expenses to acquire and manufacture products to the point that they are allocable to be sold to customers and costs to perform services pertaining to service revenues.

Cost of sales is primarily comprised of freight, direct materials, direct labor as well as overhead which

includes indirect labor and facility and equipment costs.

Cost of sales is primarily comprised of freight, direct materials, direct labor as well as overhead which includes indirect labor and facility and equipment costs.

Cost of sales also includes quality control, procurement and material receiving costs as well as internal transfer costs.

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The expense for stock options and restricted stock units awarded to retirement-eligible employees (those aged 55 and over, and with 10 or more years of service) is recognized on the grant date, or (if later) by the date they become retirement-eligible.

POSTRETIREMENT DEFINED BENEFIT PLAN — The Company uses the corridor approach to determine expense recognition for each defined benefit pension and other postretirement plan.

POSTRETIREMENT DEFINED BENEFIT PLANS — The Company uses the corridor approach to determine expense recognition for each defined benefit pension and other postretirement plan.

The corridor approach defers actuarial gains and losses resulting from variances between actual and expected results (based on economic estimates or actuarial assumptions) and amortizes them over future periods.

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In making this determination, management considers all available positive and negative evidence, including future reversals of existing temporary differences, estimates of future taxable income, tax-planning strategies, and the realizability of net operating loss carryforwards.

In the event that it is determined that an asset is not more likely that not to be realized, a valuation allowance is recorded against the asset.

In the event that it is determined that an asset is not more likely than not to be realized, a valuation allowance is recorded against the asset.

Valuation allowances related to deferred tax assets can be impacted by changes to tax laws, changes to statutory tax rates and future taxable income levels.

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First, management determines whether it is more likely than not that a tax position will be sustained based on the technical merits of the position and second, for those tax positions that meet the more likely than not threshold, management recognizes the largest amount of the tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related taxing authority.

The Company maintains

an accounting policy of recording interest and penalties on uncertain tax positions as a component of Income taxes in the Consolidated Statements of Operations.

The Company is subject to income tax in a number of locations, including many state and foreign jurisdictions.

The Company maintains an accounting policy of recording interest and penalties on uncertain tax positions as a component of Income taxes in the Consolidated Statements of Operations.

The Company is subject to income tax in a number of locations, including U.S.

federal, state and foreign jurisdictions.

Significant judgment is required when calculating the worldwide provision for income taxes.

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Diluted earnings per share include the impact of common stock equivalents using the treasury stock method or the if-converted method, as applicable, when the effect is dilutive.

NEW ACCOUNTING STANDARDS ADOPTED — In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

The new standard improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency.

The new standard requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606.

The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including adoption in an interim period.

The standard should be applied prospectively to business combinations occurring on or after the effective date of the amendments.

The Company elected to early adopt this standard in the first quarter of 2022 and it did not have a material impact on its consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings per share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Equity (Subtopic 815-40).

The new standard clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.

The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

The Company adopted this standard prospectively in the first quarter of 2022 and it did not have a material impact on its consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06 , Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40).

The new standard reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and amends the guidance for the derivatives scope exception for contracts in an entity's own equity.

The standard also amends and makes targeted improvements to the related earnings per share guidance.

The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

The Company adopted this standard in the first quarter of 2022, using the modified retrospective method, which has no impact to prior periods.

In accordance with the standard, the Company increased weighted-average shares outstanding used to calculate diluted earnings per share for the year ended December 31, 2022 by 3.6 million shares, as required by the use of the if-converted method for convertible instruments that may be settled in cash or shares.

See Note J, Capital Stock , for further discussion.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

The new standard provides optional expedients and exceptions that companies can apply during a limited time period to account for contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met.

Companies may elect to apply these optional expedients and exceptions beginning March 12, 2020 through December 31, 2022.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), to clarify the scope of Topic 848 and provide explicit guidance to help companies applying optional expedients and exceptions .

This ASU is effective immediately for all entities that have applied optional expedients and exceptions.

The Company applied certain optional expedients and exceptions as needed to comply with regulatory and tax authorities for the transition to alternative reference rates.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date Topic of 848 , effective upon issuance, to defer the sunset date of Topic 848 from December 2022 to December 2024 following the cessation of LIBOR being moved to June 2023.

The Company's adoption of these standards did not have a material impact on its consolidated financial statements.

RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED — In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50):

NEW ACCOUNTING STANDARDS ADOPTED — In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations.

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The amendments in this update should be applied retrospectively to all periods in which a balance sheet is presented, except for the rollforward requirement, which is applied prospectively.

The Company will adopt this disclosure guidance in the first quarter of 2023 related to its supplier finance programs.

The Company adopted this standard in the first quarter of 2023, with the exception of the amendment on rollforward information.

Refer to Note R, Commitments and Guarantees , for further discussion.

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815):

Fair Value Hedging—Portfolio Layer Method .

The new standard expands and clarifies the use of the portfolio layer method for fair value hedges of interest rate risk.

The new standard allows non-prepayable financial assets to also be included in a closed portfolio which is hedged using the portfolio layer method.

The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The new guidance on hedging multiple layers in a closed portfolio should be applied prospectively and the guidance on the accounting for fair value basis adjustments should be applied on a modified retrospective basis.

The Company adopted this standard in the first quarter of 2023 and it did not have a material impact on its consolidated financial statements.

RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED — In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The new standard was issued to improve transparency and decision usefulness of income tax disclosures by providing information that helps investors better understand how an entity’s operations, tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

The amendments in this update primarily relate to requiring greater disaggregated disclosure of information in the rate reconciliation, income taxes paid, income (loss) from continuing operations before income tax expense (benefit), and income tax expense (benefit) from continuing operations.

The ASU is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted.

The standard can be applied prospectively or retrospectively.

The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The new standard provides improvements to reportable segment disclosure requirements through amendments that require disclosure of significant segment expenses and other segment items on an interim and annual basis and requires all annual disclosures about a reportable segment’s profit or loss and assets to be made on an interim basis.

The standard also requires the disclosure of the chief operating decision maker’s (“CODM”) title and position and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The standard also clarifies that if the CODM uses more than one measure in assessing segment performance and deciding how to allocate resources, a company may report the additional segment profit or loss measure(s) and that companies with a single reportable segment must provide all disclosures required by this amendment.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The standard should be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820):

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The standard should be applied prospectively.

The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815):

Fair Value Hedging—Portfolio Layer Method .

The new standard expands and clarifies the use of the portfolio layer method for fair value hedges of interest rate risk.

The new standard allows non-prepayable financial assets to also be included in a closed portfolio which is hedged using the portfolio layer method.

The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including adoption in an interim period.

The Company will adopt this guidance in the first quarter of 2023 and does not expect it to have a material impact on its consolidated financial statements.

The Company is currently evaluating this guidance, but does not expect it to have a material impact on its consolidated financial statements.

ACCOUNTS AND NOTES RECEIVABLE, NET

(Millions of Dollars) December 31, 2022 January 1, 2022

(Millions of Dollars) December 30, 2023 December 31, 2022

Trade accounts receivable $ 1,057.8 $ 1,059.7

Trade notes receivable 100.1 75.3

Notes receivable 66.9 100.1

Other accounts receivable 253.9 177.8

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Adequate reserves have been established to cover anticipated credit losses.

The changes in the allowance for credit losses for the years ended December 31, 2022 and January 1, 2022 are as follows:

The changes in the allowance for credit losses for the years ended December 30, 2023 and December 31, 2022 are as follows:

(Millions of Dollars) 2023 2022

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Balance end of period $ 76.6 $ 106.6

(a) Amounts represent charge-offs less recoveries, the impacts of foreign currency translation, acquisitions, divestitures and net transfers to/from other accounts.

At December 31, 2022 and January 1, 2022, the Industrial segment operating lease receivable was $ 0.7 million and $ 21.2 million, respectively, from leasing equipment to customers.

Net sales from operating lease revenue were $ 39.8 million and $ 62.0 million for the years ended December 31, 2022 and January 1, 2022, respectively.

The decrease in operating lease receivable and revenue compared to prior year was primarily due to the sale of the Oil & Gas business.

(a) Amounts represent charge-offs less recoveries, the impacts of foreign currency translation, divestitures and net transfers to/from other accounts.

The Company has an accounts receivable sale program.

According to the terms, the Company sells certain of its trade accounts receivables at fair value to a wholly owned, consolidated, bankruptcy-remote special purpose subsidiary (“BRS").

turn, can sell such receivables to a third-party financial institution (“Purchaser”) for cash.

The BRS, in turn, can sell such receivables to a third-party financial institution (“Purchaser”) for cash.

The Purchaser’s maximum cash investment in the receivables at any time is $ 110.0 million .

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At December 30, 2023, the Company did not record a servicing asset or liability related to its retained responsibility based on its assessment of the servicing fee, market values for similar transactions and its cost of servicing the receivables sold.

At December 31, 2022 and January 1, 2022, net receivables of approximately $ 110.0 million and $ 100.0 million, respectively, were derecognized.

Proceeds from transfers of receivables to the Purchaser totaled $ 496.4 million and $ 447.7 million for the years ended December 31, 2022 and January 1, 2022, respectively, and payments to the Purchaser totaled $ 486.4 million and $ 434.5 million, respectively.

The program resulted in a pre-tax loss of $ 4.1 million and $ 2.0 million for the years ended December 31, 2022 and January 1, 2022, respectively, which included service fees of $ 0.9 million and $ 0.9 million, respectively.

At December 30, 2023 and December 31, 2022, net receivables of approximately $ 110.0 million were derecognized.

Proceeds from transfers of receivables to the Purchaser totaled $ 455.7 million and $ 496.4 million for the years ended December 30, 2023 and December 31, 2022, respectively, and payments to the Purchaser totaled $ 455.7 million and $ 486.4 million, respectively.

The program resulted in a pre-tax loss of $ 6.3 million and $ 4.1 million for the years ended December 30, 2023 and December 31, 2022, respectively, which included service fees of $ 0.9 million and $ 0.9 million, respectively.

All cash flows under the program are reported as a component of changes in accounts receivable within operating activities in the Consolidated Statements of Cash Flows since all the cash from the Purchaser is received upon the initial sale of the receivable.

As of December 31, 2022 and January 1, 2022, the Company's deferred revenue totaled $ 122.9 million and $ 117.1 million, respectively, of which $ 29.6 million and $ 35.0 million, respectively, was classified as current.

Revenue recognized for the years ended December 31, 2022 and January 1, 2022 that was previously deferred as of January 1, 2022 and January 2, 2021 totaled $ 22.9 million and $ 24.0 million, respectively.

As of December 30, 2023 and December 31, 2022, the Company's deferred revenue totaled $ 116.8 million and $ 122.9 million, respectively, of which $ 31.7 million and $ 29.6 million, respectively, was classified as current.

Revenue recognized for the years ended December 30, 2023 and December 31, 2022 that was previously deferred as of December 31, 2022 and January 1, 2022 totaled $ 27.3 million and $ 22.9 million, respectively.

INVENTORIES, NET

(Millions of Dollars) December 31, 2022 January 1, 2022

(Millions of Dollars) December 30, 2023 December 31, 2022

Finished products $ 2,912.5 $ 3,460.8

2 unchanged sentences

Total $ 4,738.6 $ 5,861.1

Net inventories in the amount of $ 3.4 billion at December 31, 2022 and $ 2.6 billion at January 1, 2022 were valued at the lower of LIFO cost or market.

If the LIFO method had not been used, inventories would have been higher than reported by $ 486.9 million at December 31, 2022 and $ 215.6 million at January 1, 2022.

Net inventories in the amount of $ 2.8 billion at December 30, 2023 and $ 3.4 billion at December 31, 2022 were valued at the lower of LIFO cost or market.

If the LIFO method had not been used, inventories would have been higher than reported by $ 256.1 million at December 30, 2023 and $ 486.9 million at December 31, 2022.

PROPERTY, PLANT AND EQUIPMENT

(Millions of Dollars) December 31, 2022 January 1, 2022

(Millions of Dollars) December 30, 2023 December 31, 2022

Land $ 135.1 $ 137.7

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Depreciation and amortization expense $ 432.4 $ 369.7 $ 374.0

The amounts above are inclusive of depreciation and amortization expense for discontinued operations amounting to

$ 0.4 million in 2022, $ 23.7 million in 2021, and $ 23.1 million in 2020.

ACQUISITIONS AND INVESTMENTS

The amounts above are inclusive of depreciation and amortization expense for discontinued operations amounting to $ 0.4 million in 2022 and $ 23.7 million in 2021.

2021 ACQUISITIONS

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The results of MTD subsequent to the date of acquisition are included in the Company's Tools & Outdoor segment.

The MTD acquisition was accounted for as a business combination using the acquisition method of accounting, which requires, among other things, certain assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date.

The acquisition accounting for MTD is complete.

The measurement period adjustments recorded in 2022, primarily related to working capital accounts and opening balance sheet contingencies, did not have a material impact to the Company's Consolidated Financial Statements.

The following table summarizes the acquisition date value of identifiable net assets acquired and liabilities assumed adjusted for measurement period adjustments:

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The Excel acquisition was accounted for as a business combination using the acquisition method of accounting.

The acquisition accounting for Excel is complete.

The measurement period adjustments recorded in 2022 did not have a material impact to the Company's Consolidated Financial Statements.

The acquisition date value of identifiable net assets acquired, which included $ 31.4 million of working capital, $ 43.6 million of deferred tax liabilities, and $ 203.5 million of intangible assets, was $ 195.5 million.

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The related goodwill was $ 158.8 million.

The acquisition accounting for these acquisitions is complete.

The measurement period adjustments recorded in 2022 did not have a material impact to the Company's Consolidated Financial Statements.

The results of these acquisitions subsequent to the dates of acquisition are included in the Company's Tools & Outdoor segment.

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Goodwill of $ 47.9 million related to these acquisitions will be deductible for tax purposes.

2020 ACQUISITION

On February 24, 2020, the Company acquired CAM for a total estimated purchase price of approximately $ 1.46 billion, net of cash acquired.

The purchase price consisted of an initial cash payment of approximately $ 1.30 billion, net of cash acquired, and future payments up to $ 200.0 million contingent on The Boeing Company ("Boeing") 737 MAX Airplanes receiving Federal Aviation Administration ("FAA") authorization to return to service and Boeing achieving certain production levels, which were valued at $ 155.3 million as of the acquisition date.

In November 2020, the FAA rescinded the 737 MAX grounding order and as a result of the subsequent return to revenue service of the 737 MAX in December 2020, the Company paid $ 100.0 million to the former owners of CAM.

The remaining contingent consideration was remeasured at January 2, 2021 and the Company concluded the achievement of certain production levels based on Boeing’s future forecast was remote and released the remaining $ 55.3 million contingent consideration liability in the fourth quarter of 2020 to the Consolidated Statements of Operations in Other, net.

The period for the remaining contingent consideration ended in June 2022 and, consistent with the Company's expectations, Boeing did not meet the required production levels at that time.

CAM is an industry-leading manufacturer of specialty fasteners and components for the aerospace and defense markets.

The acquisition further diversified the Company's presence in the industrial markets and expanded its portfolio of specialty fasteners in the aerospace and defense markets.

The results of CAM subsequent to the date of acquisition are included in the Company's Industrial segment.

The CAM acquisition was accounted for as a business combination using the acquisition method of accounting.

The following table summarizes the acquisition date value of identifiable net assets acquired and liabilities assumed adjusted for measurement period adjustments:

(Millions of Dollars)

Cash and cash equivalents $ 35.8

Accounts receivable, net 48.3

Inventories, net 124.3

Prepaid expenses and other assets 2.6

Property, plant and equipment 127.9

Trade names 25.0

Customer relationships 565.0

Accounts payable ( 25.9 )

Accrued expenses ( 26.9 )

Deferred taxes ( 16.3 )

Other liabilities ( 0.3 )

Total identifiable net assets $ 859.5

Goodwill 632.3

Contingent consideration ( 155.3 )

Total consideration paid $ 1,336.5

The weighted-average useful life assigned to the intangible assets was 20 years.

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the expected cost synergies of the combined business and assembled workforce.

Goodwill of $ 569.8 million will be deductible for tax purposes.

ACTUAL AND PRO-FORMA IMPACT FROM ACQUISITIONS

Actual Impact from Acquisitions

The Company did not complete any material acquisitions during 2022.

As such, there was no material impact from new acquisitions on the Company's Consolidated Statements of Operations for the year ended December 31, 2022.

The Company did not complete any acquisitions during 2023.

As such, there was no impact from new acquisitions on the Company's Consolidated Statements of Operations for the year ended December 30, 2023.

Pro-forma Impact from Acquisitions

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• Because the MTD acquisition was assumed to occur on December 29, 2019, the gain on investment and remeasurement of the Craftsman contingent consideration liability due to additional forecasted Craftsman sales resulting from the acquisition of MTD was not factored into the 2021 pro-forma year, as such gain and expense would have occurred in the first year following the assumed acquisition date.

During 2022, 2021 and 2020, the Company made additional immaterial investments in new and emerging start-up companies focused on innovation, breakthrough products and advanced technologies.

With the exception of two immaterial investments, these investments, which are included in Other assets in the Consolidated Balance Sheets, do not qualify for equity method accounting as the Company acquired less than 20 percent interest in each investment and does not have the ability to significantly influence the operating or financial decisions of any of the investees.

GOODWILL AND INTANGIBLE ASSETS

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Foreign currency translation and other ( 124.5 ) ( 54.0 ) ( 178.5 )

Balance January 1, 2022 $ 5,973.7 $ 2,617.0 $ 8,590.7

Acquisitions 90.5 — 90.5

Balance December 31, 2022 $ 5,939.7 $ 2,563.0 $ 8,502.7

Reclassification to assets held for sale — ( 540.5 ) ( 540.5 )

Foreign currency translation and other 36.6 ( 2.9 ) 33.7

Balance December 30, 2023 $ 5,976.3 $ 2,019.6 $ 7,995.9

Goodwill totaling $ 2,088.0 million and $ 2,143.9 million from the previously reported Security segment was reclassified to assets held for sale as of January 1, 2022 and January 2, 2021, respectively.

In July 2022, the Company completed the sale of its Security segment and $ 2,001.4 million of goodwill was included in the gain on sale in the third quarter of 2022.

In addition, $ 39.0 million of goodwill was allocated to the Oil & Gas business based on the relative fair value of the business disposed, and was included in the determination of the impairment loss relating to the Oil & Gas business in the second quarter of 2022.

As previously discussed, in December 2023, the Company entered into an agreement to sell its Infrastructure business.

As a result, $ 540.5 million of goodwill was reclassified to assets held for sale as of December 30, 2023, and was included in the determination of the impairment charge recorded in the fourth quarter of 2023 to adjust the carrying amount of Infrastructure’s long-lived assets to its estimated fair value less selling costs.

In 2022, $ 39.0 million of goodwill was allocated to the Oil & Gas business based on the relative fair value of the business disposed, and was included in the determination of the impairment charge recorded relating to the Oil & Gas business.

Refer to Note T, Divestitures , for further discussion.

As required by the Company's policy, goodwill and indefinite-lived trade names were tested for impairment in the third quarter of 2022.

As required by the Company's policy, the Company performed its annual goodwill impairment testing in the third quarter of 2023 and determined that the fair values of each of its reporting units exceeded their respective carrying amounts.

The Company assessed the fair values of its three reporting units utilizing a discounted cash flow valuation model.

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These assumptions contemplated business, market and overall economic conditions.

Based on the results of the annual impairment testing performed in the third quarter of 2022, the Company determined that the fair values of each of its reporting units exceeded their respective carrying amounts.

INTANGIBLE ASSETS — Intangible assets at December 31, 2022 and January 1, 2022 were as follows:

As previously disclosed in the Company's Form 10-Q for the third quarter of 2023, the fair value of the Engineered Fastening reporting unit exceeded its carrying amount by 16 %.

In connection with the preparation of the Consolidated Financial Statements for the year ended December 30, 2023, the Company performed an updated impairment analysis with respect to the Engineered Fastening reporting unit, which included approximately $ 2.020 billion of goodwill at year-end.

The key assumptions applied to the updated cash flow projections for the Engineered Fastening reporting unit included a 10.0 % discount rate, near-term revenue growth rates over the next six years , which represented a compound annual growth rate of approximately 5 %, and a 3 % perpetual growth rate.

Based on this analysis, it was determined that the fair value of the Engineering Fastening reporting unit exceeded its carrying amount by 22 %.

The increase in excess fair value is reflective of a slightly more favorable long-term outlook based on 2023 results and a lower carrying value driven by working capital reductions.

Management remains confident in the long-term viability and success of the Engineered Fastening reporting unit, particularly given its market position, growth prospects, such as automotive electrification and the aerospace market recovery, and geographies served.

INTANGIBLE ASSETS — Definite-lived intangible assets at December 30, 2023 and December 31, 2022 were as follows:

(Millions of Dollars) Gross

8 unchanged sentences

Total $ 2,958.4 $ ( 1,405.2 ) $ 3,284.3 $ ( 1,325.5 )

Net intangibles totaling $ 182.2 million were recognized as assets held for sale as of January 1, 2022.

Indefinite-lived trade names totaled $ 2.516 billion at December 31, 2022 and $ 2.525 billion at January 1, 2022.

The year-over-year change is primarily due to currency fluctuations.

The fair values of the Company's indefinite-lived trade names were assessed using quantitative analyses, which utilized discounted cash flow valuation models taking into consideration appropriate discount rates, royalty rates and perpetual growth rates applied to projected sales.

Based on the results of the annual impairment testing performed in the third quarter of 2022, the Company determined that the fair values of its indefinite-lived trade names exceeded their respective carrying amounts.

Net intangible assets totaling $ 214.3 million were reclassified to assets held for sale as of December 30, 2023 related to the pending divestiture of the Infrastructure business.

Indefinite-lived trade names totaled $ 2.396 billion at December 30, 2023 and $ 2.516 billion at December 31, 2022.

The year-over-year change is primarily due to a $ 124.0 million pre-tax, non-cash impairment charge , as discussed below, partially offset by currency fluctuations.

As required by the Company’s policy, the Company tested its indefinite-lived trade names for impairment during the third quarter of 2023 utilizing a discounted cash flow model.

The key assumptions used included discount rates, royalty rates, and perpetual growth rates applied to the projected sales.

With the exception of the Irwin and Troy-Bilt trade names discussed below, the Company determined that the fair values of its indefinite-lived trade names exceeded their respective carrying amounts.

During the third quarter of 2023, as a result of new leadership within the Tools & Outdoor segment, the Company reviewed its brand portfolio resulting in a decision to shift prioritization and investment to its major brands, while leveraging certain of its specialty brands in a more focused manner.

As a result of this shift in brand prioritization, the Company recognized a $ 124.0 million pre-tax, non-cash impairment charge related to the Irwin and Troy-Bilt trade names in the third quarter of 2023.

Subsequent to this impairment charge, the carrying value of the Irwin and Troy-Bilt trade names totaled $ 113.0 million.

The Company intends to continue utilizing these trade names, which accounted for less than 5 % of 2023 net sales for the Tools & Outdoor segment, indefinitely in more focused product categories and end markets.

Intangible assets amortization expense by segment was as follows:

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ACCRUED EXPENSES

(Millions of Dollars) December 31, 2022 January 1, 2022

(Millions of Dollars) December 30, 2023 December 31, 2022

Payroll and related taxes $ 318.3 $ 192.0

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LONG-TERM DEBT AND FINANCING ARRANGEMENTS

December 31, 2022 January 1, 2022

December 30, 2023 December 31, 2022

(Millions of Dollars) Interest Rate Notional Value Unamortized Discount Unamortized Gain (Loss) Terminated Swaps 1

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Notes payable due 2040 5.20 % 400.0 ( 0.2 ) ( 24.6 ) — ( 2.3 ) 372.9 371.3

Notes payable due 2048 4.85 % 500.0 ( 0.5 ) — — ( 4.5 ) 495.0 494.8

Notes payable due 2050 2.75 % 750.0 ( 1.8 ) — — ( 7.5 ) 740.7 740.3

Notes payable due 2060 (junior subordinated) 4.00 % 750.0 — — — ( 8.6 ) 741.4 741.2

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These maturities represent the principal amounts to be paid and accordingly exclude the remaining $ 10.1 million of unamortized fair value adjustments made in acquisition accounting, which increased the Black & Decker note payable due 2028 and MTD notes payable due 2026 and 2028, as well as a net loss of $ 25.6 million pertaining to unamortized termination gains and losses on interest rate swaps and unamortized discounts on the notes as described in Note I, Financial Instruments, and $ 36.8 million of unamortized deferred financing fees.

In March 2023, the Company issued $ 350.0 million of senior unsecured term notes maturing March 6, 2026 ("2026 Term Notes") and $ 400.0 million of senior unsecured term notes maturing March 6, 2028 (“2028 Term Notes”).

The 2026 Term Notes accrue interest at a fixed rate of 6.272 % per annum and the 2028 Term Notes at a fixed rate of 6.0 % per annum, with interest payable semi-annually in arrears, and both notes rank equally in right of payment with all of the Company's existing and future unsecured, unsubordinated debt.

The Company received total net proceeds from this offering of $ 745.3 million, net of $ 4.7 million of underwriting expenses and other fees associated with the transaction.

The Company used the net proceeds from the offering for general corporate purposes, including repayment of indebtedness under the commercial paper program.

In February 2022, the Company issued $ 500.0 million of senior unsecured term notes maturing February 24, 2025 ("2025 Term Notes") and $ 500.0 million of senior unsecured term notes maturing May 15, 2032 (“2032 Term Notes”).

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The Company received total net proceeds from this offering of approximately $ 992.6 million, net of approximately $ 7.4 million of underwriting expenses and other fees associated with the transaction.

The Company used the net proceeds from the offering for general corporate purposes, including repayment of indebtedness under the commercial paper facilities.

In 2021, the Company assumed $ 110.9 million and $ 3.0 million of long-term debt from the acquisitions of MTD and Excel, respectively.

In November 2020, the Company redeemed the 3.4 % senior unsecured term notes due 2021 (“2021 Term Notes”) and the 2.9 % senior unsecured term notes due 2022 (“2022 Term Notes”) for approximately $ 1.2 billion representing the outstanding principal amounts, accrued and unpaid interest, and a make-whole premium.

The Company recognized a net pre-tax loss of $ 46.9 million from the extinguishment, which was comprised of the $ 48.7 million make-whole premium payment and a $ 1.7 million loss related to the write-off of deferred financing fees, partially offset by a $ 3.5 million gain relating to the write-off of unamortized fair value swap terminations.

The Company also recognized a pre-tax loss of $ 19.6 million relating to the unamortized loss on cash flow swap terminations related to the 2022 Term Notes.

Refer to Note I, Financial Instruments, for further discussion.

The Company used the net proceeds from the offering for general corporate purposes, including repayment of indebtedness under the commercial paper program.

Commercial Paper and Credit Facilities

The Company has a $ 3.5 billion commercial paper program which includes Euro denominated borrowings in addition to U.S.

As of December 31, 2022 and January 1, 2022, the Company had commercial paper borrowings outstanding of $ 2.1 billion and $ 2.2 billion, respectively.

As of December 30, 2023, the Company had commercial paper borrowings outstanding of $ 1.1 billion of which $ 399.7 million in Euro denominated commercial paper was designated as a net investment hedge.

Refer to Note I, Financial Instruments , for further discussion.

As of December 31, 2022, the Company had commercial paper borrowings outstanding of $ 2.1 billion, which did not include any Euro denominated commercial paper.

The Company has a five-year $ 2.5 billion committed credit facility (the “ 5 -Year Credit Agreement”).

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Dollar and Euro commercial paper program.

As of December 31, 2022, and January 1, 2022, the Company had no t drawn on its five-year committed credit facility.

In September 2022, the Company terminated its 364 -D ay $ 1.0 billion comm itted credit facility (the " 364 -Day Credit Agreement"), dated September 2021.

There were no outstanding borrowings under the 364 -Day Credit Agreement upon termination and as of January 1, 2022 .

Contemporaneously, the Company entered into a $ 1.5 billion s yndicated 364 -Day Credit Agreement (the “Syndicated 364 -Day Credit Agreement”) which is a revolving credit loan.

Borrowings under the Syndicated 364 -Day Credit Agreement may be made in U.S.

As of December 30, 2023 and December 31, 2022, the Company had not drawn on its five-year committed credit facility.

In September 2023, the Company terminated its $ 1.5 billion syndicated 364 -Day Credit Agreement (the "Syndicated 364 -Day Credit Agreement") dated September 2022, as amended.

There were no outstanding borrowings under the Syndicated 364 -Day Credit Agreement upon termination and as of December 31, 2022.

Contemporaneously, the Company entered into a new $ 1.5 billion syndicated 364 -Day Credit Agreement (the "2023 Syndicated 364 -Day Credit Agreement") which is a revolving credit loan.

The borrowings under the 2023 Syndicated 364 -Day Credit Agreement may be made in U.S.

Dollars or Euros and bear interest at a floating rate plus an applicable margin dependent upon the denomination of the borrowing and pursuant to the terms of the 2023 Syndicated 364 -Day Credit Agreement.

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Dollar and Euro commercial paper program.

As of December 31, 2022, the Company had not drawn on its Syndicated 364 -Day Credit Agreement .

In September 2022, the Company terminated its second 364 -Day $ 1.0 billion committed credit facility (the "Second 364 -Day Credit A greement"), dated November 2021, and replaced it with a $ 0.5 billion revolving credit loan (the "Club 364 -Day Credit Agreement").

There were no outstanding borrowings under the Second 364 -Day Credit Agreement upon termination and as of January 1, 2022 .

Borrowings under the Club 364 -Day Credit Agreement may be made in U.S.

Dollars and Euros and bear interest at a floating rate plus an applicable margin dependent upon the denomination of the borrowing and pursuant to the terms of the Club 364 -Day Credit Agreement.

The Company must repay all advances under the Club 364 -Day Credit Agreement by the earlier of September 6, 2023 or u pon termination.

The Company may, however, convert all advances outstanding upon termination into a term loan that shall be repaid in full no later than the firs t anniversary of the termination date provided that the Company, among other things, pays a fee to the administrative agent for the account of each lender.

As of December 31, 2022, the Company had no t drawn on its Club 364 -Day Credit Agreement .

In August 2022, the Company paid $ 2.5 billion to settle the outstanding amount of its third 364 -Day committed credit facility (the "Third 364 -Day Credit Agreement"), dated January 2022, usi ng proceeds from the sales of the Security and Oil & Gas businesses and subsequently terminated the agreement.

There were no outstanding borrowings under the Third 364 -Day Credit Agreement upon terminatio n.

The Company did not incur any termination penalties in connection with the termination.

As of December 30, 2023, the Company had no t drawn on its 2023 Syndicated 364 -Day Credit Agreement .

In September 2023, the Company terminated its $ 0.5 billion revolving credit loan (the "Club 364 -Day Credit Agreement") dated September 2022, as amended.

There were no outstanding borrowings under the Club 364 -Day Credit Agreement upon termination and as of December 31, 2022.

In addition, the Company has other short-term lines of credit that are primarily uncommitted, with numerous banks, aggregating to $ 251.6 million, of which $ 154.7 million was available at December 30, 2023.

The $ 90 million of the short-term credit lines was utilized primarily pertaining to outstanding letters of credit for which there are no required or reported debt balances.

Approximately $ 96.9 million of the short-term credit lines were utilized primarily pertaining to outstanding letters of credit for which there are no required or reported debt balances.

Short-term arrangements are reviewed annually for renewal.

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The weighted-average interest rates on U.S.

dollar denominated short-term borrowings for the years ended December 31, 2022 and January 1, 2022 were 2.3 % and 0.1 %, respectively.

The weighted-average interest rate on Euro denominated short-term borrowings for the year ended January 1, 2022 was negative 0.5 %.

dollar denominated short-term borrowings for the years ended December 30, 2023 and December 31, 2022 were 5.1 % and 2.3 %, respectively.

The weighted-average interest rate on Euro denominated short-term borrowings for the year ended December 30, 2023 was 3.5 %.

For the year ended December 31, 2022, the Company had not drawn on its Euro denominated short-term borrowings.

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The Company has an interest coverage covenant that must be maintained to permit continued access to its committed credit facilities described above.

The interest coverage ratio tested for covenant compliance compares adjusted Earnings Before Interest, Taxes, Depreciation and Amortization to adjusted Interest Expense ("Adjusted EBITDA"/"Adjusted Interest Expense").

In February 2023, the Company entered into amendments to its 5 -Year Credit Agreement, Syndicated 364 -Day Credit Agreement, and Club 364 -Day Credit Agreement to:

The interest coverage ratio tested for covenant compliance compares adjusted Earnings Before Interest, Taxes, Depreciation and Amortization to adjusted net Interest Expense ("Adjusted EBITDA"/"Adjusted Net Interest Expense").

In February 2023, the Company entered into an amendment to its 5 -Year Credit Agreement to:

(a) amend the definition of Adjusted EBITDA to allow for additional adjustment addbacks, not to exceed $ 500 million in the aggregate, for amounts incurred during each four fiscal quarter period beginning with the period ending in the third quarter of 2023 through the period ending in the second quarter of 2024, and (b) amend the minimum interest coverage ratio from 3.5 times to not less than 1.5 to 1.0 times computed quarterly, on a rolling twelve months (last twelve months) basis, for the period from and including the third quarter of 2023 through the second quarter of 2024.

The minimum interest coverage ratio will revert back to 3.5 times for periods after the second quarter of 2024.

The minimum interest coverage ratio will revert back to

3.5 times for periods after the second quarter of 2024.

The amended provisions described above also apply to the 2023 Syndicated 364 -Day Credit Agreement.

FINANCIAL INSTRUMENTS

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As part of the Company’s risk management program, a variety of financial instruments such as interest rate swaps, currency swaps, purchased currency options, foreign exchange contracts and commodity contracts, may be used to mitigate interest rate exposure, foreign currency exposure and commodity price exposure.

If the Company elects to do so and if the instrument meets the criteria specified in ASC 815, management designates its derivative instruments as cash flow hedges, fair value hedges or net investment hedges.

If the Company elects to do so and if the instrument meets the criteria specified in ASC 815, Derivatives and Hedging , management designates its derivative instruments as cash flow hedges, fair value hedges or net investment hedges.

Generally, commodity price exposures are not hedged with derivative financial instruments and instead are actively managed through customer pricing initiatives, procurement-driven cost reduction initiatives and other productivity improvement projects.

Financial instruments are not utilized for speculative purposes.

A summary of the fair values of the Company’s derivatives recorded in the Consolidated Balance Sheets at December 31, 2022 and January 1, 2022 follows:

A summary of the fair values of the Company’s derivatives recorded in the Consolidated Balance Sheets at December 30, 2023 and December 31, 2022 is as follows:

(Millions of Dollars) Balance Sheet

2 unchanged sentences

Derivatives designated as hedging instruments:

Interest Rate Contracts Cash Flow Other current assets $ — $ 1.2 Accrued expenses $ — $ 1.9

Foreign Exchange Contracts Cash Flow Other current assets $ 0.1 $ 4.5 Accrued expenses $ 4.9 $ 4.2

Net Investment Hedge Other current assets — 2.5 Accrued expenses — —

LT other assets — 3.3 LT other liabilities — —

Non-derivative designated as hedging instrument:

Net Investment Hedge $ — $ — Short-term borrowings $ 399.7 $ —

Total Designated as hedging instruments $ 0.1 $ 4.5 $ 404.6 $ 4.2

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The Company limits its exposure and concentration of risk by contracting with diverse financial institutions and does not anticipate non-performance by any of its counterparties.

Further, as more fully discussed in Note M, Fair Value Measurements , the Company considers non-performance risk of its counterparties at each reporting period and adjusts the carrying value of these assets accordingly.

The Company considers non-performance risk of its counterparties at each reporting period and adjusts the carrying value of these assets accordingly.

The risk of default is considered remote.

As of December 31, 2022 and January 1, 2022, there were no assets that had been posted as collateral related to the above mentioned financial instruments.

Cash flows related to derivatives, including those that are separately discussed below, resulted in net cash received of $ 86.2 million in 2022, net cash paid of $ 166.8 million in 2021, and net cash received of $ 33.4 million in 2020.

CASH FLOW HEDGES — There were after-tax mark-to-market losses of $ 44.5 million and $ 49.8 million as of December 31, 2022 and January 1, 2022, respectively, reported for cash flow hedge effectiveness in Accumulated other

comprehensive loss.

As of December 30, 2023 and December 31, 2022, there were no assets that had been posted as collateral related to the above mentioned financial instruments.

Cash flows related to derivatives, including those that are separately discussed below, resulted in net cash paid of $ 30.1 million in 2023, net cash received of $ 86.2 million in 2022, and net cash paid of $ 166.8 million in 2021.

CASH FLOW HEDGES — There were after-tax mark-to-market losses of $ 42.5 million and $ 44.5 million as of December 30, 2023 and December 31, 2022, respectively, reported for cash flow hedge effectiveness in Accumulated other comprehensive loss.

An after-tax loss of $ 4.9 million is expected to be reclassified to earnings as the hedged transactions occur or as amounts are amortized within the next twelve months.

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Reclassified from

OCI to Income

(Effective Portion) Gain (Loss)

Recognized in

(Ineffective Portion)

OCI to Income Gain (Loss) Recognized in Income on Amounts Excluded from Effectiveness Testing

Interest Rate Contracts $ 14.9 Interest expense $ ( 3.9 ) $ —

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1 Inclusive of the gain/loss amortization on terminated derivative financial instruments.

For 2022, after-tax gains of $ 26.4 million were reclassified from Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative financial instruments) during the periods in which the underlying hedged transactions affected earnings.

For 2021 and 2020, after-tax losses of $ 17.0 million and $ 15.4 million, respectively, were reclassified.

For 2023, after-tax losses of $ 3.6 million were reclassified from Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative instruments) during the periods in which the underlying hedged transactions affected earnings.

After-tax gains of $ 26.4 million and after-tax losses of $ 17.0 million were reclassified in 2022 and 2021, respectively.

Interest Rate Contracts:

The Company enters into interest rate swap agreements in order to obtain the lowest cost source of funds within a targeted range of variable to fixed-rate debt proportions.

The cash flows stemming from the maturity and termination of such interest rate swaps designated as cash flow hedges discussed below are presented within financing activities in the Consolidated Statements of Cash Flows.

The Company has no outstanding forward starting swaps as of December 31, 2022, and had $ 400.0 million of forward starting swaps outstanding as of January 1, 2022.

In prior years, the Company entered into interest rate swap agreements in order to obtain the lowest cost source of funds within a targeted range of variable to fixed-debt proportions.

These swap agreements, which were designated as cash flow hedges, subsequently matured or were terminated and the gain/loss was recorded in Accumulated other comprehensive loss and is being amortized to interest expense.

The cash flows stemming from the maturity and termination of the swaps are presented within financing activities in the Consolidated Statements of Cash Flows.

As of December 30, 2023 and December 31, 2022, the Company did not have any outstanding forward starting swaps designated as cash flow hedges.

During 2021, the Company entered into forward starting interest rate swaps totaling $ 400.0 million to offset expected variability on future interest rate payments associated with debt instruments expected to be issued in the future.

During 2022, these swaps were terminated resulting in a gain of $ 22.7 million which was recorded in Accumulated other comprehensive loss and is being amortized to interest expense over future periods.

In addition, during 2021, swaps entered into in 2019 totaling $ 400.0 million matured resulting in a loss of $ 75.3 million, which was recorded in Accumulated other comprehensive loss and is being amortized to interest expense over future periods.

During 2020, the Company entered into forward starting interest rate swaps totaling $ 1.0 billion to offset expected variability on future interest rate payments associated with debt instruments expected to be issued in the future.

The Company terminated these swaps in 2020 resulting in a loss of $ 20.5 million, which was recorded in Accumulated other comprehensive loss and is being amortized to interest expense over future periods.

In December 2020, the Company redeemed all of the outstanding 2021 Term Notes and 2022 Term Notes, as further discussed in Note H, Long-Term Debt and Financing Arrangements.

As a result, the Company recorded a pre-tax loss of $ 19.6 million relating to the remaining unamortized loss on cash flow swap terminations related to the 2022 Term Notes.

Foreign Currency Contracts

During 2022, these swaps were terminated resulting in a gain of $ 22.7 million which is recorded in Accumulated other comprehensive loss and is being amortized to interest expense over future periods.

Forward Contracts:

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There are no components excluded from the assessment of effectiveness for these contracts.

At December 31, 2022, and January 1, 2022, the notional values of the forward currency contracts outstanding were $ 281.7 million, maturing in 2023, and $ 512.1 million, maturing in 2022, respectively.

At December 30, 2023 and December 31, 2022, the notional value of forward currency contracts outstanding is $ 300.0 million, maturing in 2024, and $ 281.7 million, maturing in 2023, respectively.

FAIR VALUE HEDGES

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Amortization of the gain/loss on previously terminated swaps is reported as a reduction of interest expense.

Prior to termination, the changes in fair value of the swaps and the offsetting changes in fair value related to the underlying notes were recognized in earnings.

The Company did not have any active fair value interest rate swaps at December 31, 2022 or January 1, 2022.

Prior to termination, the changes in the fair value of the swaps and the offsetting changes in fair value related to the underlying notes were recognized in earnings.

The Company did not have any active fair value interest rate swaps at December 30, 2023 or December 31, 2022.

A summary of the pre-tax effect of fair value hedge accounting on the Consolidated Statements of Operations for 2023, 2022 and 2021 is as follows:

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Amortization of gain on terminated swaps $ ( 0.4 ) $ ( 0.4 ) $ ( 0.4 )

In December 2020, the Company redeemed all of the outstanding 2021 Term Notes and 2022 Term Notes, as further discussed in Note H, Long-Term Debt and Financing Arrangements.

As a result, the Company recorded a pre-tax gain of $ 3.5 million relating to the remaining unamortized gain on fair value swap terminations related to the 2021 Term Notes.

A summary of the amounts recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of December 31, 2022 and January 1, 2022 is as follows:

A summary of the amounts recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of December 30, 2023 and December 31, 2022 is as follows:

(Millions of Dollars) 2023 Carrying Amount of Hedged Liability 1

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NET INVESTMENT HEDGES

Foreign Exchange Contracts:

The Company utilizes net investment hedges to offset the translation adjustment arising from re-measurement of its investment in the assets and liabilities of its foreign subsidiaries.

The total after-tax amounts in Accumulated other comprehensive loss were gains of $ 73.8 million and $ 71.8 million at December 31, 2022 and January 1, 2022, respectively.

As of December 31, 2022, the Company has no outstanding foreign exchange contracts.

As of January 1, 2022, the Company had a foreign exchange contract with a notional value of $ 75.0 million maturing in 2022 hedging a portion of its Taiwan dollar denominated net investments and a cross currency swap with a notional value of $ 100.0 million maturing in 2023 hedging a portion of its Japanese yen denominated net investments.

During 2022, this swap was terminated resulting in a gain of $ 4.0 million.

Maturing foreign exchange contracts resulted in net cash received of $ 10.6 million in 2022, net cash paid of $ 55.1 million during 2021 and net cash received of $ 41.0 million during 2020.

The total after-tax amounts in Accumulated other comprehensive loss were gains of $ 64.9 million and $ 73.8 million at December 30, 2023 and December 31, 2022, respectively.

As of December 30, 2023 and December 31, 2022, the Company did not have any net investment hedges with a notional value outstanding.

As of December 30, 2023, the Company had Euro denominated commercial paper with a value of $ 399.7 million, maturing in 2024, hedging a portion of the Company's Euro denominated net investments.

As of December 31, 2022, the Company did not have any Euro denominated commercial paper.

Maturing foreign exchange contracts resulted in no cash paid or received in 2023, net cash received of $ 10.6 million during 2022 and net cash paid of $ 55.1 million during 2021.

Gains and losses on net investment hedges remain in Accumulated other comprehensive loss until disposal of the underlying assets.

1 unchanged sentence

Gains and losses after a hedge has been de-designated are recorded directly to the Consolidated Statements of Operations in Other, net.

The pre-tax gains and losses from fair value changes during 2022, 2021 and 2020 were as follows:

The pre-tax gain or loss from fair value changes during 2023, 2022 and 2021 were as follows:

(Millions of Dollars) Total Gain (Loss) Recorded in OCI Excluded Component Recorded in OCI Income Statement Classification Total Gain (Loss) Reclassified from OCI to Income Excluded Component Amortized from OCI to Income

Forward Contracts $ 0.4 $ — Other, net $ — $ —

Cross Currency Swap $ ( 1.2 ) $ 2.5 Other, net $ 1.5 $ 1.5

Non-derivative designated as Net Investment Hedge $ ( 12.0 ) $ — Other, net $ — $ —

9 unchanged sentences

Foreign Exchange Contracts:

Currency swaps and foreign exchange forward contracts are used to reduce risks arising from the change in fair value of certain foreign currency denominated assets and liabilities (such as affiliate loans, payables and receivables).

The objective of these practices is to minimize the impact of foreign currency fluctuations on operating results.

Foreign exchange forward contracts are used to reduce risks arising from the change in fair value of certain foreign currency denominated assets and liabilities (such as affiliate loans, payables and receivables).

The objective is to minimize the impact of foreign currency fluctuations on operating results.

The total notional amount of the forward contracts outstanding at December 30, 2023 was $ 1.0 billion maturing on various dates through 2024.

The total notional amount of the forward contracts outstanding at January 1, 2022 was $ 1.2 billion maturing on various dates through 2022.

The gain (loss) recorded in the Consolidated Statements of Operations from changes in the fair value related to derivatives not designated as hedging instruments under ASC 815 for 2022, 2021 and 2020 are as follows:

The total notional amount of the forward contracts outstanding at December 31, 2022 was $ 1.1 billion maturing on various dates through 2023.

The gain (loss) recorded in the Consolidated Statements of Operations from changes in the fair value related to derivatives not designated as

hedging instruments under ASC 815 for 2023, 2022 and 2021 is as follows:

(Millions of Dollars) Income Statement

2 unchanged sentences

CAPITAL STOCK

EARNINGS PER SHARE — The following table reconciles net earnings attributable to common shareowners and the weighted-average shares outstanding used to calculate basic and diluted earnings per share for the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021.

EARNINGS PER SHARE — The following table reconciles net (loss) earnings attributable to common shareowners and the weighted-average shares outstanding used to calculate basic and diluted (loss) earnings per share for the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022.

2023 2022 2021

Numerator (in millions):

Net Earnings from Continuing Operations Attributable to Common Shareowners $ 164.3 $ 1,538.3 $ 1,129.8

Net (Loss) Earnings from Continuing Operations Attributable to Common Shareowners $ ( 281.7 ) $ 164.3 $ 1,538.3

Contract adjustment payments accretion — 1.2 1.3

Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted 165.5 1,539.6 1,131.5

Net earnings from discontinued operations 892.4 136.7 79.9

Net Earnings Attributable to Common Shareowners - Diluted $ 1,057.9 $ 1,676.3 $ 1,211.4

Net (Loss) Earnings from Continuing Operations Attributable to Common Shareowners - Diluted ( 281.7 ) 165.5 1,539.6

Net (loss) earnings from discontinued operations ( 28.8 ) 892.4 136.7

Net (Loss) Earnings Attributable to Common Shareowners - Diluted $ ( 310.5 ) $ 1,057.9 $ 1,676.3

2023 2022 2021

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Diluted weighted-average shares outstanding 149,751 156,553 165,024

Earnings per share of common stock:

Basic earnings per share of common stock:

(Loss) earnings per share of common stock:

Basic (loss) earnings per share of common stock:

Continuing operations $ ( 1.88 ) $ 1.11 $ 9.69

Discontinued operations $ ( 0.19 ) $ 6.02 $ 0.86

Total basic earnings per share of common stock $ 7.13 $ 10.55 $ 7.85

Diluted earnings per share of common stock:

Total basic (loss) earnings per share of common stock $ ( 2.07 ) $ 7.13 $ 10.55

Diluted (loss) earnings per share of common stock:

Continuing operations $ ( 1.88 ) $ 1.06 $ 9.33

Discontinued operations $ ( 0.19 ) $ 5.70 $ 0.83

Total dilutive earnings per share of common stock $ 6.76 $ 10.16 $ 7.46

Total diluted (loss) earnings per share of common stock $ ( 2.07 ) $ 6.76 $ 10.16

The following weighted-average stock options were not included in the computation of weighted-average diluted shares outstanding because the effect would be anti-dilutive (in thousands):

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Each unit had a stated amount of $ 100 and initial ly consisted of a three-year forward stock purchase contract ( “ 2022 Purchase Contracts”) for the purchase of a variable number of shares of common stock, on November 15, 2022, for a price of $ 100 and a 10 % beneficial ownership interest in one share of 0 % Series D Cumulative Perpetual Convertible Preferred Stock, without par, with a liquidation preference of $ 1,000 per share (“Series D Preferred Stock”).

The shares associated with the forward stock purchase contracts component of the 2019 Equity Units have been reflected in diluted earnings per share using the if-converted method.

The shares associated with the forward stock purchase contracts component of the 2019 Equity Units were reflected in diluted earnings per share using the if-converted method.

Upon the adoption of ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and

Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) , in the first quarter of 2022, the common shares that would be required to settle the applicable conversion value of the Series D Preferred Stock were included in the denominator of diluted earnings per share using the if-converted method through the date of redemption as discussed below.

In accordance with the standard, the Company increased weighted-average shares outstanding used to calculate diluted earnings per share for the year ended December 31, 2022 by 3.6 million shares.

In November 2022, the Company generated cash proceeds of $ 750 million from the successful remarketing of the Series D Preferred Stock (the "Remarketed Series D Preferred Stock").

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In December 2022, the Company redeemed the Remarketed Series D Preferred Stock, paying $ 750 million in cash.

Upon the adoption of ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) , beginning in the first quarter of 2022, the common shares that would be required to settle the applicable conversion value of the Series D Preferred Stock were included in the denominator of diluted earnings per share using the if-converted method.

In accordance with the standard, the Company increased weighted-average shares outstanding used to calculate diluted earnings per share for the year ended December 31, 2022 by 3.6 million shares.

In May 2017, the Company issued Equity Units with a total notional value of $ 750.0 million (“2017 Equity Units”).

Each unit had a stated amount of $ 100 and initially consisted of a three-year forward stock purchase contract ( “ 2020 Purchase Contracts”) for the purchase of a variable number of shares of common stock, on May 15, 2020, for a price of $ 100 , and a 10 % beneficial ownership interest in one share of 0 % Series C Cumulative Perpetual Convertible Preferred Stock, without par, with a liquidation preference of $ 1,000 per share (“Series C Preferred Stock”).

The shares associated with the forward stock

purchase contracts component of the 2017 Equity Units have been reflected in diluted earnings per share using the if-converted method.

Each unit consisted of a three-year forward stock purchase contract (“2020 Purchase Contracts”) for the purchase of a variable number of shares of common stock, for a price of $ 100 , and a 10 % beneficial ownership interest in one share of 0 % Series C Cumulative Perpetual Convertible Preferred Stock, without par, with a liquidation preference of $ 1,000 per share (“Series C Preferred Stock”).

In May 2020, the Company successfully remarketed the Series C Preferred Stock (the “Remarketed Series C Preferred Stock”) resulting in cash proceeds of $ 750.0 million.

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Holders of the Remarketed Series C Preferred Stock were entitled to receive cumulative dividends, if declared by the Board of Directors, at an initial fixed rate equal to 5.0 % per annum of the $ 1,000 per share liquidation preference (equivalent to $ 50.00 per annum per share).

Beginning on May 15, 2020, the holders had the option to convert the Remarketed Series C Preferred Stock into common stock.

At the election of the Company, upon conversion, the Company could deliver cash, common stock, or a combination thereof.

In connection with the remarketing, the conversion rate was reset to 6.7352 shares of the Company's common stock per one share of Remarketed Series C Preferred Stock, which was equivalent to a conversion price of approximately $ 148.47 per share of common stock.

Dividends were cumulative on the $ 1,000 liquidation preference per share and were payable, as declared by the Board of Directors, quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, beginning on August 15, 2020.

Dividends accrued on the Remarketed Series C Preferred Stock reduced net earnings for purposes of calculating earnings per share.

On April 28, 2021, the Company informed holders that it would redeem all outstanding shares of the Remarketed Series C Preferred Stock on June 3, 2021 at $ 1,002.50 per share in cash, which was equal to 100 % of the liquidation preference of a share of Remarketed Series C Preferred Stock, plus accumulated and unpaid dividends to, but excluding June 3, 2021.

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Therefore, before any redemption or conversion, the common shares that would be required to settle the applicable conversion value in excess of the liquidation preference were included in the denominator of diluted earnings per share in periods in which they were dilutive.

See “ Other Equity Arrangements” below for further details of the above transactions.

COMMON STOCK ACTIVITY — Common stock activity for 2023, 2022 and 2021 was as follows:

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Upon completion of the remarketing of the Series D Preferred Stock in November 2022, the holders of the 2019 Equity Units received 4,723,500 common shares and the Company issued 750,000 shares of Remarketed Series D Preferred Stock.

Upon completion of the remarketing of the Series C Preferred Stock in May 2020, the holders of the 2017 Equity Units received 5,463,750 shares of common stock and the Company issued 750,000 shares of Remarketed Series C Preferred Stock.

In June 2021, the Company redeemed the Remarketed Series C Preferred Stock and settled all conversions, paying $ 750 million in cash and issuing 1,469,055 common shares.

In addition, the Company net-share settled the remaining capped call options on its common stock related to the Remarketed Series C Preferred Stock and received 344,004 shares using an average reference price of $ 209.80 per common share.

In March 2015, the Company entered into a forward share purchase contract with a financial institution counterparty for 3,645,510 shares of common stock.

The contract obligates the Company to pay $ 350.0 million, plus an additional amount

related to the forward component of the contract.

The contract obligates the Company to pay $ 350.0 million, plus an additional amount related to the forward component of the contract.

In November 2022, the Company amended the forward share purchase contract and updated the final settlement date to November 2024, or earlier at the Company's option.

The reduction of common shares outstanding was recorded at the inception of the forward share purchase contract in March 2015 and factored into the calculation of weighted-average shares outstanding at that time.

COMMON STOCK RESERVED — Common stock shares reserved for issuance under various employee and director stock plans at December 31, 2022 and January 1, 2022 are as follows:

COMMON STOCK RESERVED — Common stock shares reserved for issuance under various employee and director stock plans at December 30, 2023 and December 31, 2022 are as follows:

Employee stock purchase plan 1,070,126 1,251,699

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Treasury securities with maturities equal to the expected life of the option;

and a forfeiture rate of seven to nine percent is assumed.

and a forfeiture rate of eight to ten percent is assumed.

The Company uses historical data in order to estimate forfeitures and holding period behavior for valuation purposes.

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Options Price

Outstanding, beginning of year 5,573,672 $ 151.46

Outstanding, December 31, 2022 5,281,713 $ 140.22

Granted 848,394 89.87

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Forfeited ( 553,334 ) 141.37

Outstanding, end of year 5,281,713 $ 140.22

Exercisable, end of year 3,591,149 $ 145.59

Outstanding, December 30, 2023 5,490,848 $ 133.22

Exercisable, December 30, 2023 3,877,759 $ 144.12

At December 30, 2023, the range of exercise prices on outstanding stock options was $ 77.83 to $ 193.97 per share.

Stock option expense was $ 27.1 million, $ 36.4 million and $ 31.6 million for the years ended December 31, 2022, January 1, 2022 and January 2, 2021, respectively.

Stock option expense was $ 26.6 million, $ 27.1 million and $ 36.4 million for 2023, 2022 and 2021, respectively.

At December 30, 2023, the Company had $ 27.9 million of unrecognized pre-tax compensation expense for stock options.

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The related cash tax benefit from the exercise of these options wa s $ 0.2 million.

During 2022, 2021 and 2020, the total intrinsic value of options exercised was $ 4.6 million, $ 85.3 million and $ 104.3 million, respectively.

D uring 2023, 2022 and 2021, the total intrinsic value of options exercised was $ 1.0 million, $ 4.6 million and $ 85.3 million, respectively.

When options are exercised, the related shares are issued from treasury stock.

An excess tax benefit is generated on the extent to which the actual gain, or spread, an optionee receives upon exercise of an option exceeds the fair value determined at the grant date;

that excess spread over the fair value of the option times the applicable tax rate represents the excess tax benefit.

During 2022, the shortfall recognized was $ 0.1 million.

During 2021 and 2020, the excess tax benefit arising from tax deductions in excess of recognized compensation cost totaled $ 14.1 million and $ 17.6 million, respectively, and was recorded in income tax expense.

that excess spread over the fai r value of the option times the applicable tax rate represents the excess tax benefit.

During 2023 and 2022, the shortfall recognized was $ 0.1 million in both years.

During 2021, the excess tax benefit arising from tax deductions in excess of recognized compensation cost totaled $ 14.1 million and was recorded in income tax expense.

Outstanding and exercisable stock option information at December 30, 2023 follows:

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The expense for retirement eligible employees (those aged 55 and over and with 10 or more years of service) is recognized by the date they become retirement eligible, as such employees may retain their options for the 10 -year contractual term in the event they retire prior to the end of the vesting period stipulated in the grant.

As of December 31, 2022, both the aggregate intrinsic value of stock options outstanding and stock options exercisable was zero.

As of December 30, 2023, the aggregate intrinsic value of stock options outstanding and stock options exercisable was $ 21.9 million and $ 5.6 million, respectively.

Employee Stock Purchase Plan:

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The fair value of ESPP shares was estimated using the Black-Scholes option pricing model.

ESPP compensation cost is recognized ratably over

the one-year term based on actual employee stock purchases under the plan.

ESPP compensation cost is recognized ratably over the one-year term based on actual employee stock purchases under the plan.

The fair value of the employees’ purchase rights under the ESPP was estimated using the following assumptions for 2023, 2022 and 2021, respectively:

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Total compensation expense recognized for ESPP was $ 3.6 million in 2023, $ 3.3 million in 2022 and $ 4.4 million in 2021.

Restricted Share Units and Awards:

Compensation cost for restricted share units and awards, including restricted shares granted to French employees in lieu of RSUs, (collectively “RSUs”) granted to employees is recognized ratably over the vesting term, which varies but is generally three or four years .

Restricted Share Units:

Compensation cost for restricted share units (“RSUs”) granted to employees is recognized ratably over the vesting term, which varies but is generally three or four years .

RSU grants totaled 827,133 shares, 870,848 shares and 463,084 shares in 2023, 2022 and 2021, respectively.

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Total compensation expense recognized for RSUs amounted to $ 53.9 million, $ 50.6 million and $ 47.3 million in 2023, 2022 and 2021, respectively.

The actual tax benefit received related to the shares that were delivered in 2022 was $ 6.2 million .

The related cash tax benefit received related to the shares that were delivered in 2023 was $ 7.7 million.

The shortfall recognized in 2023 was $ 1.9 million .

The e xcess tax benefit recognized in 2021 and 2020 was $ 2.5 million and $ 2.3 million, respectively.

The shortfall recognized in 2022 was $ 3.6 million and the e xcess tax benefit recognized in 2021 was $ 2.5 million.

As of December 30, 2023, unrecognized compensation expense for RSUs amounted to $ 86.1 million and will be recognized over a weighted-average period of 1.5 years.

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Date Fair Value

Non-vested at January 1, 2022 978,351 $ 173.06

Non-vested at December 31, 2022 1,266,462 $ 115.02

Granted 827,133 90.09

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Prior to 2020, non-employee members of the Board of Directors received annual restricted share-based grants which must be cash settled and accordingly mark-to-market accounting is applied.

In 2022, the Company recognized $ 9.8 million of income for these awards.

In 2021 and 2020, the Company recognized $ 1.1 million and $ 1.6 million of expense for these awards, respectively.

In 2023, the Company recognized $ 1.5 million of expense for these awards.

In 2022 and 2021, the Company recognized $ 9.8 million of income and $ 1.1 million of expense for these awards, respectively.

Beginning in 2020, the annual grant issued to non-employee members of the Board of Directors is stock settled.

The expense related to the annual grant in 2023, 2022 and 2021 was $ 1.9 million, $ 1.8 million, and $ 2.0 million respectively.

Additionally, members of the Board of Directors were granted restricted share units for which compensation expense of $ 1.2 million, $ 1.4 million, and $ 1.0 million was recognized for 2022, 2021 and 2020, respectively.

Additionally, non-employee members of the Board of Directors may defer any or all of their cash retainer fees, which would subsequently be settled as RSU awards.

Compensation expense related to these RSUs was $ 1.1 million, $ 1.2 million, and $ 1.4 million for 2023, 2022 and 2021, respectively.

Management Incentive Compensation Plan Performance Stock Units:

In 2020 and 2019, the Company granted Performance Stock Units (collectively "MICP-PSUs") under the Management Incentive Compensation Plan ("MICP") to participating employees.

Awards are payable in shares of common stock and generally no award is made if the employee terminates employment prior to the settlement dates.

The delivery of the shares related to the 2020 and 2019 MICP-PSU grant will occur ratably in 2021, 2022, and 2023 for the 2020 MICP and in 2020, 2021, and 2022 for the 2019 MICP.

The total shares to be delivered are based on actual 2020 and 2019 performance in relation to the established goals.

In 2020, the Company granted Performance Stock Units (collectively "MICP-PSUs") under the Management Incentive Compensation Plan ("MICP") to participating employees.

Awards were payable in shares of common stock and generally no award was made if the employee terminated employment prior to the settlement dates.

The delivery of the shares related to the 2020 MICP-PSU grant occurred ratably in 2021, 2022, and 2023.

The total shares delivered were based on actual 2020 performance in relation to the established goals.

A summary of the activity pertaining to the maximum number of shares that may be issued is as follows:

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Date Fair Value

Non-vested at January 1, 2022 249,730 $ 100.73

Non-vested at December 31, 2022 67,698 $ 93.58

Vested ( 67,698 ) 93.58

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Non-vested at December 30, 2023 — $ —

Compensation cost for these performance awards is recognized ratably over the vesting term of three years .

Total expense recognized in 2022, 2021 and 2020 related to these MICP-PSUs approximated $ 9.1 million, $ 15.7 million and $ 18.5 million, respectively.

The actual tax benefit received related to the shares that were delivered in 2022 and 2021 was $ 3.6 million a nd $ 5.6 million, respectively.

Compensation cost for these performance awards was recognized ratably over the vesting term of three years .

Total income recognized in 2023 related to these MICP-PSUs approxi mated $ 5.0 million.

The total expense recognized in 2022 and 2021 related to these MICP-PSUs approxi mated $ 9.1 million and $ 15.7 million, respectively.

The related cash tax benefit received related to the shares that were delivered in 2023, 2022 and 2021 was $ 0.9 million, $ 3.6 million and $ 5.6 million, respectively.

Long-Term Performance Awards:

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Each grant has two separate annual performance goals for each year within the respective three-year performance period and one market-based metric measured over the three-year performance period.

Earnings per share and cash flow return on investment represent 75 % of the grant value.

The market-based metric, representing 25 % of the total grant value measures the Company’s common stock return relative to peers over the three-year performance period.

For grants made in 2023, organic sales growth and cash flow return on investment represent 75 % of the grant value.

For grants made in 2021 and 2022, earnings per share and cash flow return on investment represent 75 % of the grant value.

For all years, the market-based metric, which represents 25 % of the total grant value, measures the Company’s common stock return relative to peers over the three-year performance period.

The ultimate delivery of shares will occur in 2024, 2025 and 2026 for the 2021, 2022 and 2023 grants, respectively.

Share settlements are based on actual performance in relation to these goals.

In 2022, income of $ 2.4 million was recognized related to these performance awards.

Expense recognized for these performance awards amounted to $ 11.1 million in 2021 and $ 17.1 million in 2020.

With the exception of the market-based metric comprising 25 % of the award, in the event performance goals are not met, compensation cost is not recognized and any previously recognized compensation cost is reversed.

The actual tax benefit received related to the shares that were delivered in 2022 and 2021 was $ 1.3 million and $ 0.8 million, respectively.

The shortfall recognized in 2022 was less than $ 0.1 million.

The excess tax benefit recognized was $ 0.1 million and $ 0.7 million in 2021 and 2020, respectively.

In 2023, expense recognized for these performance awards amounted to $ 1.7 million.

In 2022, income of $ 2.4 million was recognized related to these performance awards and in 2021 expense recognized for these performance awards amounted to $ 11.1 million.

The related cash tax benefit received related to the shares that were delivered in 2023, 2022, and 2021 was $ 0.3 million, $ 1.3 million and $ 0.8 million, respectively.

The shortfall recognized in 2023 and 2022 was $ 0.5 million and less than $ 0.1 million, respectively.

The excess tax benefit recognized in 2021 was $ 0.1 million.

A summary of the activity pertaining to the maximum number of shares that may be issued is as follows:

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Date Fair Value

Non-vested at January 1, 2022 649,806 $ 145.90

Non-vested at December 31, 2022 534,586 $ 158.18

Granted 393,040 81.36

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Non-vested at December 30, 2023 731,128 $ 119.90

OTHER EQUITY ARRANGEMENTS

2019 Equity Units and Capped Call Transactions

In November 2019, in conjunction with the issuance of the 2019 Equity Units, as further discussed above, the Company received approximately $ 734.5 million in cash proceeds, net of offering expenses and underwriting costs and commissions.

The proceeds were attributed to the issuance of 750,000 shares of Series D Preferred Stock for $ 620.3 million and $ 114.2 million for the present value of the quarterly payments to holders of the 2022 Purchase Contracts (“Contract Adjustment Payments”), as discussed further below.

The proceeds were used, together with cash on hand, to redeem long-term debt.

The Company also used $ 19.2 million of the proceeds to enter into capped call transactions utilized to hedge potential economic dilution as described in more detail below.

The 2019 Equity Units were accounted for as one unit of account based on the economic linkage between the 2022 Purchase Contracts and Series D Preferred Stock, as well as the combination criteria outlined in ASC 815.

The 2019 Equity Units represented mandatorily convertible preferred stock.

In November 2019, the Company issued 750,000 shares of Series D Preferred Stock, without par, with a liquidation preference of $ 1,000 per share.

The convertible preferred stock initially did not bear any dividends and the liquidation preference of the convertible preferred stock did not accrete.

The convertible preferred stock had no maturity date and remained outstanding unless converted by holders or redeemed by the Company.

Holders of shares of the convertible preferred stock generally had no voting rights.

The Series D Preferred Stock was pledged as collateral to support holders’ purchase obligations under the 2022 Purchase Contracts.

In November 2022, upon completion of the remarketing, the holders of the 2019 Equity Units converted their Series D Preferred Stock, valued at $ 620.3 million, and received 4,723,500 common shares using a reference price of $ 131.32 per common share.

The Company generated cash proceeds of $ 750.0 million from the successful remarketing and issued 750,000 shares of Remarketed Series D Preferred Stock.

The Company paid Contract Adjustment Payments to holders of the 2022 Purchase Contracts at a rate of 5.25 % per annum, payable quarterly in arrears on February 15, May 15, August 15 and November 15, which commenced on February 15, 2020.

The $ 114.2 million present value of the Contract Adjustment Payments reduced the Series D Preferred Stock at inception.

As each quarterly Contract Adjustment Payment was made, the related liability was reduced and the difference between the cash payment and the present value accreted to interest expense, approximately $ 1.3 million per year over the three-year term.

On November 15, 2022, the Company paid the final contract adjustment payment related to the 2022 Purchase Contracts.

Capped Call Transactions

In order to offset the potential economic dilution associated with the common shares issuable upon conversion of the Series D Preferred Stock, to the extent that the conversion value of the convertible preferred stock exceeds its liquidation preference, the Company entered into capped call transactions with three major financial institutions.

The Company paid $ 19.2 million, or an average of $ 4.90 per option, to enter into capped call transactions on 3.9 million shares of common stock.

The $ 19.2 million premium paid was recorded as a reduction of Shareowners’ Equity.

The capped call transactions had a term of approximately three years and were intended to cover the number of shares issuable upon conversion of the Series D Preferred Stock.

Subject to customary anti-dilution adjustments, the capped call had an initial lower strike price of $ 191.34 , which corresponded to the minimum 5.2263 settlement rate of the Series D Preferred Stock, and an upper strike price of $ 207.29 , which was approximately 30 % higher than the closing price of the Company’s common stock on November 7, 2019.

In November 2022, the capped call options expired out of the money.

2017 Equity Units and Capped Call Transactions

In conjunction with the issuance of the 2017 Equity Units in May 2017, as further discussed abo ve, t he Company received approximately $ 727.5 million in cash proceeds, net of offering expenses and underwriting costs and commissions.

The proceeds were attributed to the issuance of 750,000 shares of Series C Preferred Stock for $ 605.0 million, $ 117.1 million for the present value of the Contract Adjustment Payments, and a beneficial conversion feature of $ 5.4 million.

The proceeds were used for general corporate purposes, including repayment of short-term borrowings.

The Company also used $ 25.1 million of the proceeds to enter into capped call transactions utilized to hedge potential economic dilution as described in more detail below.

The 2017 Equity Units were accounted for as one unit of account based on the economic linkage between the 2020 Purchase Contracts and the Series C Preferred Stock, as well as the combination criteria outlined in ASC 815.

The 2017 Equity Units represented mandatorily convertible preferred stock.

In May 2017, the Company issued 750,000 shares of Series C Preferred Stock, without par, with a liquidation preference of $ 1,000 per share.

The convertible preferred stock initially did not bear any dividends and the liquidation preference of the convertible preferred stock did not accrete.

The convertible preferred stock had no maturity date and remained outstanding unless converted by holders or redeemed by the Company.

Holders of shares of the convertible preferred stock generally had no voting rights.

The Series C Preferred Stock was pledged as collateral to support holders’ purchase obligations under the 2020 Purchase Contracts.

As discussed further above, the Company successfully remarketed the Series C Preferred Stock in May 2020.

Subsequent to the remarketing, holders of the Remarketed Series C Preferred Stock were entitled to receive, if declared by the Board of Directors, cumulative dividends (i) from, and including May 15, 2020 to, but excluding, May 15, 2023 (the "dividend step-up date ” ) at a fixed rate equal to 5.0 % per annum of the $ 1,000 per share liquidation preference (equivalent to $ 50.00 per annum per share) and (ii) from, and including, the dividend step-up date at a fixed rate equal to 10.0 % per annum of the $ 1,000 per share liquidation preference (equivalent to $ 100.00 per annum per share).

Dividends accrued on the Remarketed Series C Preferred Stock reduced net earnings for purposes of calculating earnings per share.

In May 2020, the Company generated cash proceeds of $ 750.0 million from the successful remarketing of the Series C Preferred Stock.

Upon completion of the remarketing in May 2020, the holders of the 2017 Equity Units received 5,463,750 common shares using the maximum settlement rate of 0.7285 (equivalent to a reference price of $ 137.26 per common share), and the Company issued 750,000 shares of Remarketed Series C Preferred Stock.

The Company paid Contract Adjustment Payments to the holders of the 2020 Purchase Contracts at a rate of 5.375 % per annum, payable quarterly in arrears on February 15, May 15, August 15 and November 15, which commenced August 15, 2017.

The $ 117.1 million initial present value of these Contract Adjustment Payments reduced the Series C Preferred Stock at inception.

As each quarterly Contract Adjustment Payment was made, the related liability was reduced and the difference between the cash payments and the present value accreted to interest expense, approximately $ 1.3 million per year over the three-year term.

On May 15, 2020, the Company paid the final contract adjustment payment related to the 2020 Purchase Contracts.

Capped Call Transactions

In May 2017, the Company entered into capped call transactions with three major financial institutions (the “counterparties”) in order to offset the potential economic dilution associated with the common shares issuable upon conversion of the Series C Preferred Stock, to the extent that the conversion value of the convertible preferred stock exceeds its liquidation preference.

The Company paid $ 25.1 million, or an average of $ 5.43 per option, to enter into capped call transactions on 4.6 million shares of common stock.

The $ 25.1 million premium paid was recorded as a reduction of Shareowners' Equity.

The capped call transactions had a term of approximately three years and were intended to cover the number of shares issuable upon conversion of the Series C Preferred Stock.

Subject to customary anti-dilution adjustments, the capped call had an initial lower strike price of $ 162.27 , which corresponded to the minimum 6.1627 settlement rate of the Series C Preferred Stock at inception, and an upper strike price of $ 179.53 , which was approximately 30 % higher than the closing price of the Company ’ s common stock on May 11, 2017.

In June 2020, the capped call options expired out of the money.

2018 Capped Call Transactions

In March 2018, the Company purchased from a financial in stitution “at-the money” ca pped call options with an approximate term of three years , on 3.2 million shares of its common stock (subject to customary anti-dilution adjustments) for an aggregate premium of $ 57.3 million, or an average of $ 17.96 per share.

The premium paid was recorded as a reduction of Sha reowners’

The purpose of the capped call options was to hedge the risk of stock price appreciation between the lower and upper strike prices of the capped call options for a future share repurchase.

In February 2020, the Company net-share settled 0.6 million of the 3.2 million capped call options on its common stock and received 61,767 shares using an average reference price of $ 162.26 per common share.

On June 9, 2020, the Company amended the 2018 capped call options to align with and offset the potential economic dilution associated with the common shares issuable upon conversion of the Remarketed Series C Preferred Stock, as further discussed above.

Subsequent to the amendment, the capped call options, subject to anti-dilution, had an initial lower strike price of $ 148.34 and an upper strike price of $ 165.00 , which was approximately 30 % higher than the closing price of the Company ’ s common stock on June 9, 2020.

During the second quarter of 2021, the Company net-share settled the remaining capped call options on its common stock and received 344,004 shares using an average reference price of $ 209.80 per common share.

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table summarizes the changes in the accumulated balances for each component of Accumulated other

comprehensive loss:

The following table summarizes the changes in the accumulated balances for each component of Accumulated other comprehensive loss:

(Millions of Dollars) Currency translation adjustment and other (Losses) gains on cash flow hedges, net of tax Gains (losses) on net investment hedges, net of tax Pension (losses) gains, net of tax Total

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Other comprehensive (loss) income before reclassifications ( 328.3 ) 31.7 3.7 73.4 ( 219.5 )

Reclassification adjustments to earnings — 17.0 ( 3.9 ) 16.6 29.7

Net other comprehensive (loss) income ( 307.7 ) 53.2 ( 1.0 ) 123.6 ( 131.9 )

Balance - January 1, 2022 $ ( 1,543.0 ) $ ( 49.8 ) $ 71.8 $ ( 324.6 ) $ ( 1,845.6 )

Other comprehensive (loss) income before reclassifications ( 328.3 ) 31.7 3.7 73.4 ( 219.5 )

Adjustments related to sales of businesses ( 36.1 ) — — — ( 36.1 )

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Balance - December 31, 2022 $ ( 1,907.4 ) $ ( 44.5 ) $ 73.8 $ ( 241.4 ) $ ( 2,119.5 )

Other comprehensive income (loss) before reclassifications 75.1 ( 1.6 ) ( 8.9 ) ( 26.9 ) 37.7

Reclassification adjustments to earnings — 3.6 — 9.1 12.7

Net other comprehensive income (loss) 75.1 2.0 ( 8.9 ) ( 17.8 ) 50.4

Balance - December 30, 2023 $ ( 1,832.3 ) $ ( 42.5 ) $ 64.9 $ ( 259.2 ) $ ( 2,069.1 )

The Company uses the portfolio method for releasing the stranded tax effects from Accumulated other comprehensive loss.

The reclassifications out of Accumulated other comprehensive loss for the years ended December 31, 2022 and January 1, 2022 were as follows:

The reclassifications out of Accumulated other comprehensive loss for the years ended December 30, 2023 and December 31, 2022 were as follows:

(Millions of Dollars) 2023 2022

Components of Accumulated other comprehensive loss Reclassification adjustments Reclassification adjustments Affected line item in Consolidated Statements of Operations

Realized gains (losses) on cash flow hedges $ 53.3 $ ( 26.1 ) Cost of sales

Realized (losses) gains on cash flow hedges $ ( 0.6 ) $ 53.3 Cost of sales

Realized losses on cash flow hedges ( 6.1 ) ( 5.8 ) Interest expense

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Tax effect 3.1 ( 21.1 ) Income taxes

Realized gains (losses) on cash flow hedges, net of tax $ 26.4 $ ( 17.0 )

Realized (losses) gains on cash flow hedges, net of tax $ ( 3.6 ) $ 26.4

Realized gains on net investment hedges $ — $ 2.2 Other, net

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The employer match benefit totaled $ 32.8 million, $ 32.2 million and $ 28.0 million in 2023, 2022 and 2021, respectively.

In 2020, the employer match benefit was suspended from the second quarter to the end of the year.

In addition, approximately 12,670 U.S.

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Allocations for benefits earned under the Core plan were $ 38.8 million, $ 28.9 million, and $ 31.1 million in 2023, 2022 and 2021, respectively.

In 2020, the Core allocations were also suspended from the second quarter to the end of the year.

Assets held in participant Core accounts are invested in target date retirement funds which have an age-based allocation of investments.

Prior to 2021, shares of the Company's common stock that were purchased with the proceeds of borrowings from the Company in 1991 ("1991 internal loan") were held by the ESOP.

Shareowners' equity reflected a reduction equal to the cost basis of unallocated shares purchased with the internal borrowings.

Unallocated shares were released from the trust based on current period debt principal and interest payments as a percentage of total future debt principal and interest payments.

Dividends on both allocated and unallocated shares were used for debt service and to credit participant accounts for dividends earned on allocated shares.

Dividends paid on the shares acquired with the 1991 internal loan were used solely to pay internal loan debt service in all periods.

There were no unallocated shares remaining as of December 31, 2022, as all shares in the ESOP trust holding account were released as of the first quarter of 2020.

The Company’s net ESOP activity resulted in expense of $ 61.1 million, $ 59.1 million, and $ 4.4 million in 2022, 2021, and 2020 respectively.

Net ESOP activity recognized for 2022 and 2021 is comprised of the aforementioned Core and 401(k) match defined contribution benefits.

Net ESOP activity for 2020 is comprised of the cost basis of shares released, the cost of the aforementioned Core and 401(k) match defined contribution benefits, less the fair value of shares released and dividends on unallocated ESOP shares and was affected by the market value of the Company’s common stock on the monthly dates when shares were released.

The weighted-average market value of shares released was $ 146.08 per share in 2020.

The Company made cash contributions totaling $ 67.8 million in 2022, $ 35.7 million in 2021 and $ 9.2 million in 2020, excluding additional contributions of $ 7.2 million in 2020, which was used by the ESOP to make additional payments on the 1991 internal loan.

These payments triggered the release of 226,212 shares of unallocated stock in 2020.

Dividends on ESOP shares, which were charged to shareowners’ equity as declared, were $ 1.3 million in 2020, net of the tax benefit which was recorded in earnings.

Interest costs incurred by the ESOP on the 1991 internal loan, which had no earnings impact, were $ 0.1 million for 2020.

Both allocated and unallocated ESOP shares were treated as outstanding for purposes of computing earnings per share.

The Company’s net ESOP activity resulted in expense of $ 71.6 million, $ 61.1 million, and $ 59.1 million in 2023, 2022, and 2021, respectively, and is compromised of the aforementioned Core and 401(k) match defined contribution benefits.

The Company made cash contributions totaling $ 61.0 million in 2023, $ 67.8 million in 2022 and $ 35.7 million in 2021.

PENSION AND OTHER BENEFIT PLANS — The Company sponsors pension plans covering most domestic hourly and certain executive employees, and approximately 12,673 foreign employees.

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In addition to the multi-employer plans, various other defined contribution plans are sponsored worldwide.

As of December 31, 2022 and January 2, 2021, the Company had $ 95.6 million and $ 135.8 million, respectively, of liabilities pertaining to an unfunded supplemental defined contribution plan for certain U.S.

As of December 30, 2023 and December 31, 2022, the Company had $ 104.7 million and $ 95.6 million, respectively, of liabilities pertaining to an unfunded supplemental defined contribution plan for certain U.S.

The expense (benefit) for defined contribution plans, aside from the earlier discussed ESOP plans, are as follows:

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Multi-employer plan expense $ 3.5 $ 6.0 $ 7.1

Other defined contribution plan (benefit) expense $ ( 2.4 ) $ 28.6 $ 24.9

The components of net periodic pension (benefit) expense are as follows:

Other defined contribution plan expense (benefit) $ 43.3 $ ( 2.4 ) $ 28.6

The components of net periodic pension expense (benefit) are as follows:

Plans Non-U.S.

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Settlement / curtailment loss 0.3 0.2 0.4 0.7 0.2 0.7

Net periodic pension (benefit) expense $ ( 14.1 ) $ ( 14.7 ) $ ( 7.1 ) $ 7.7 $ 6.5 $ 9.2

Net periodic pension expense (benefit) $ 10.7 $ ( 14.1 ) $ ( 14.7 ) $ 16.8 $ 7.7 $ 6.5

The Company provides medical and dental benefits for certain retired employees in the United States, Brazil, and Canada.

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(Millions of Dollars) 2023

Current year actuarial gain $ ( 75.1 )

Current year actuarial loss $ 28.8

Amortization of actuarial loss ( 11.1 )

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Settlements/curtailments ( 5.6 ) ( 10.7 ) ( 7.6 ) ( 4.4 ) — ( 0.4 )

Actuarial gain ( 314.7 ) ( 47.2 ) ( 409.5 ) ( 92.4 ) ( 9.5 ) ( 6.6 )

Actuarial loss (gain) 40.2 ( 314.7 ) 26.6 ( 409.5 ) ( 2.3 ) ( 9.5 )

Plan amendments — 0.7 — 0.1 — 0.4

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Net amount recognized $ 124.0 $ 119.9 $ ( 11.8 ) $ ( 18.3 ) $ ( 54.4 ) $ ( 60.7 )

Actuarial losses and gains reflected in the table above are driven by changes in demographic experience, changes in assumptions, and differences in actual returns on investments compared to estimated returns from the prior year.

For the year ended December 31, 2022, the overall funded position improved and the benefit obligation decreased primarily driven by the improvement in the single equivalent discount rate used to measure these obligations.

However, the actual return on plan assets during the year was less than assumed which partially offsets and decreases the funded position.

The accumulated benefit obligation for all benefit plans was $ 2.023 billion at December 31, 2022 and $ 2.943 billion at January 1, 2022.

The following table provides information regarding pension plans in which accumulated benefit obligations exceed plan assets as of December 31, 2022 and January 1, 2022:

Actuarial gains and losses reflected in the table above are driven by changes in demographic experience, changes in assumptions, and differences in actual returns on investments compared to estimated returns from the prior year.

For the year ended December 30, 2023, the increase in the benefit obligation is primarily driven by the decline in the single equivalent discount rate used to measure these obligations.

These actuarial losses were partially offset by a slightly improved funded position, as the actual return on plan assets during the year exceeded the estimated return, along with updated mortality and inflation rate projections which slightly reduced the projected obligation.

The accumulated benefit obligation for all benefit plans was $ 2.084 billion at December 30, 2023 and $ 2.023 billion at December 31, 2022.

The following table provides information regarding pension plans in which accumulated benefit obligations exceed plan assets as of December 30, 2023 and December 31, 2022:

Plans Non-U.S.

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Fair value of plan assets $ 979.1 $ 862.0 $ 31.5 $ 25.7

The following table provides information regarding pension plans in which projected benefit obligations (inclusive of anticipated future compensation increases) exceed plan assets as of December 31, 2022 and January 1, 2022:

Plans Non-U.S.

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PENSION PLAN ASSETS — Plan assets are invested in equity securities, government and corporate bonds and other fixed income securities, money market instruments and insurance contracts.

The Company’s worldwide asset allocations at December 31, 2022 and January 1, 2022 by asset category and the level of the valuation inputs within the fair value hierarchy established by ASC 820, Fair Value Measurement , were as follows:

The Company’s worldwide asset allocations at December 30, 2023 and December 31, 2022 by asset category and the level of the valuation inputs within the fair value hierarchy established by ASC 820, Fair Value Measurement , were as follows:

Asset Category (Millions of Dollars)

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Corporate fixed income securities include publicly traded U.S.

and foreign investment grade and to a small extent high yield securities.

and foreign investment

grade and to a small extent high yield securities.

Assets held in insurance contracts are invested in the general asset pools of the various insurers, mainly debt and equity securities with guaranteed returns.

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The Company’s target asset allocations include approximately 10 %- 30 % in equity securities, approximately 60 %- 80 % in fixed income securities and approximately 10 % in other securities.

The funded status percentage (total plan assets divided by total projected benefit obligation) of all global pension plans was 87 % in both 2022 and 2021 and 80 % in 2020.

The funded status percentage (total plan assets divided by total projected benefit obligation) of all global pension plans was 87 % in 2023, 2022, and 2021.

CONTRIBUTIONS — The Company’s funding policy for its defined benefit plans is to contribute amounts determined annually on an actuarial basis to provide for current and future benefits in accordance with federal law and other regulations.

The Company expects to contribute approxim ately $ 37 million to its pension and other post-retirement benefit plans in 2023.

The Company expects to contribute approximately $ 35 million to its pension and other post-retirement benefit plans in 2024.

EXPECTED FUTURE BENEFIT PAYMENTS — Benefit payments, inclusive of amounts attributable to estimated future employee service, are expected to be paid over the next 10 years as follows:

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exchange or market price quotations of similar instruments, time value and volatility factors, the Company’s own credit rating and the credit rating of the counterparty.

Recurring Fair Value Measurements

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis for each of the hierarchy levels:

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Money market fund $ 12.3 $ 12.3 $ — $ —

Equity security $ 3.2 $ 3.2 $ — $ —

Deferred compensation plan investments $ 20.2 $ 20.2 $ — $ —

$ 19.0 $ 19.0 $ — $ —

Derivative assets $ 8.5 $ — $ 8.5 $ —

Derivative liabilities $ 17.9 $ — $ 17.9 $ —

Non-derivative hedging instrument $ 399.7 $ — $ 399.7 $ —

Contingent consideration liability $ 208.8 $ — $ — $ 208.8

January 1, 2022

December 31, 2022

Money market fund $ 9.4 $ 9.4 $ — $ —

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The following table provides information about the Company's financial assets and liabilities not carried at fair value:

December 31, 2022 January 1, 2022

December 30, 2023 December 31, 2022

(Millions of Dollars) Carrying

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The money market fund and other investments related to the West Coast Loading Corporation ("WCLC") trust are considered Level 1 instruments within the fair value hierarchy.

The equity security is considered a Level 1 instrument and is recorded at its quoted market price.

The deferred compensation plan investments are considered Level 1 instruments and are recorded at their

quoted market price.

The deferred compensation plan investments are considered Level 1 instruments and are recorded at their quoted market price.

The fair values of the derivative financial instruments in the table above are based on current settlement values.

Prior to the sale of the equity security in the first quarter of 2023, it was considered a Level 1 instrument and was recorded at its quoted market price.

The long-term debt instruments are considered Level 2 instruments and are measured using a discounted cash flow analysis based on the Company’s marginal borrowing rates.

The differences between the carrying values and fair values of long-term debt are attributable to the stated interest rates differing from the Company's marginal borrowing rates.

The fair values of the Company's variable rate short-term borrowings approximate their carrying values at December 31, 2022 and January 1, 2022.

The fair values of derivative financial instruments in the table above are based on current settlement values.

The fair values of the Company's variable rate short-term borrowings approximate their carrying values at December 30, 2023 and December 31, 2022.

As part of the Craftsman® brand acquisition in March 2017, the Company recorded a contingent consideration liability representing the Company's obligation to make future payments to Transform Holdco, LLC, which operates Sears and Kmart retail locations, of between 2.5 % and 3.5 % on sales of Craftsman products in new Stanley Black & Decker, Inc.

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The estimated fair value of the contingent consideration liability is determined using a discounted cash flow analysis taking into consideration future sales projections, forecasted payments to Transform Holdco, LLC, based on contractual royalty rates, and the related tax impacts.

The estimated fair value of the contingent consideration liability was $ 268.7 million and $ 288.6 million as of December 31, 2022 and January 1, 2022, respectively.

The estimated fair value of the contingent consideration liability was $ 208.8 million and $ 268.7 million as of December 30, 2023 and December 31, 2022 , respectively.

Adjustments to the contingent consideration liability, with the exception of cash payments, are recorded in SG&A in the Consolidated Statements of Operations.

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The Company's judgments used to determine the estimated contingent consideration liability discussed above, including estimated future sales projections, can materially impact the Company's results of operations.

The Company had no significant non-recurring fair value measurements, nor any other financial assets or liabilities measured using Level 3 inputs, during 2022 or 2021.

Refer to Note I, Financial Instruments , for more details regarding derivative financial instruments, Note S, Contingencies, for more details regarding the other investments related to the WCLC trust, and Note H, Long-Term Debt and Financing Arrangements , for more information regarding the carrying values of the Company's long-term debt.

Non-Recurring Fair Value Measurements

As previously discussed, the Company recorded an impairment charge in the fourth quarter of 2023 as a result of entering into an agreement to sell the Infrastructure business and an impairment charge in 2022 relating to the Oil & Gas business, both of which are considered Level 3 fair value measurements.

Refer to Note T, Divestitures for further discussion.

Furthermore, as previously discussed, the Company recorded an impairment charge in the third quarter of 2023 related to the Irwin and Troy-Bilt trade names, which is considered a Level 3 fair value measurement.

Refer to Note F, Goodwill and Intangible Assets .

The Company had no other significant non-recurring fair value measurements, nor any other financial assets or liabilities measured using Level 3 inputs, during 2023 or 2022.

OTHER COSTS AND EXPENSES

Other, net is primarily comprised of intangible asset amortization expense (see Note F, Goodwill and Intangible Assets ), currency-related gains or losses, environmental remediation expense, deal costs and related consulting costs, and certain pension gains or losses.

Deal costs and related consulting costs of $ 9.8 million, $ 24.2 million, and $ 27.4 million were included in Other, net for the years ended December 31, 2022, January 1, 2022, and January 2, 2021, respectively.

In 2022, Other, net also included a $ 7.1 million special termination benefit charge associated with a voluntary retirement program.

In 2020, Other, net included a $ 19.6 million loss relating to the unamortized loss on cash flow swap terminations, a $ 14.1 million special termination benefit charge associated with a voluntary retirement program, and a $ 55.3 million release of a contingent consideration liability relating to the CAM acquisition.

Refer to Note E, Acquisitions and Investments, for further discussion of the CAM contingent consideration.

The year-over-year increase in 2022 in Other, net was primarily driven by higher intangible asset amortization expense and appreciation of investments in 2021.

The year-over-year decrease in 2021 in Other, net was primarily due to appreciation of investments.

During 2020, the Company recognized pre-tax charges of approximately $ 185.0 million related to the comprehensive cost reduction and efficiency program in response to the impact of the COVID-19 pandemic.

The charges were primarily related to costs associated with a voluntary retirement program as well as restructuring costs related to headcount actions.

Other, net is primarily comprised of intangible asset amortization expense, currency-related gains or losses, environmental remediation expense, deal costs and related consulting costs, and certain pension gains or losses.

Other, net amounted to $ 320.1 million, $ 274.8 million and $ 189.5 million for fiscal years 2023, 2022 and 2021, respectively.

The year-over-year increases are driven by higher pension and environmental remediation costs as well as write-downs on certain investments, partially offset by income related to providing transition services to previously divested businesses.

Research and development costs, which are classified in SG&A, were $ 362.0 million, $ 357.4 million and $ 276.3 million for fiscal years 2023, 2022 and 2021, respectively.

RESTRUCTURING CHARGES

A summary of the restructuring reserve activity from January 1, 2022 to December 31, 2022 is as follows:

(Millions of Dollars) January 1, 2022 Net

A summary of the restructuring reserve activity from December 31, 2022 to December 30, 2023 is as follows:

(Millions of Dollars) December 31, 2022 Net

Additions Usage Currency December 30, 2023

Severance and related costs $ 57.0 $ 20.3 $ ( 51.1 ) $ ( 0.4 ) $ 25.8

Facility closures and asset impairments 3.5 14.9 ( 13.2 ) 0.1 5.3

Facility closures and other 5.3 19.1 ( 21.3 ) — 3.1

Total $ 62.3 $ 39.4 $ ( 72.4 ) $ ( 0.4 ) $ 28.9

During 2022, the Company recognized net restructuring charges of $ 140.8 million, primarily related to severance and related costs.

During 2023, the Company recognized net restructuring charges of $ 39.4 million, primarily related to severance and facility closures associated with the footprint rationalization actions under the supply chain transformation.

The majority of the $ 28.9 million of reserves remaining as of December 30, 2023 is expected to be utilized within the next 12 months.

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Tools & Outdoor and Industrial.

The Tools & Outdoor segment is comprised of the Power Tools Group ("PTG"), Hand Tools, Accessories & Storage ("HTAS") and Outdoor Power Equipment ("Outdoor") businesses.

The PTG business includes both professional and consumer products.

Professional products include professional grade corded and cordless electric power tools and equipment including drills, impact wrenches and drivers, grinders, saws, routers and sanders, as well as pneumatic tools and fasteners including nail guns, nails, staplers and staples, and concrete and masonry anchors.

Consumer products include corded and cordless electric power tools sold primarily under the BLACK+DECKER® brand, and home products such as hand-held vacuums, paint tools and cleaning appliances.

The HTAS business sells hand tools, power tool accessories and storage products.

The Tools & Outdoor segment is comprised of the Power Tools Group ("PTG"), Hand Tools, Accessories & Storage ("HTAS") and Outdoor Power Equipment ("Outdoor") product lines.

The PTG product line includes both professional and consumer products.

Professional products, primarily under the DEWALT® brand, include professional grade corded and cordless electric power tools and equipment including drills, impact wrenches and drivers, grinders, saws, routers and sanders, as well as pneumatic tools and fasteners including nail guns, nails, staplers and staples, and concrete and masonry anchors.

DIY and tradesperson focused products include corded and cordless electric power tools sold primarily under the CRAFTSMAN® brand, and consumer home products such as hand-held vacuums, paint tools and cleaning appliances primarily under the BLACK+DECKER® brand.

The HTAS product line sells hand tools, power tool accessories and storage products.

Hand tools include measuring, leveling and layout tools, planes, hammers, demolition tools, clamps, vises, knives, saws, chisels and industrial and automotive tools.

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Storage products include tool boxes, sawhorses, medical cabinets and engineered storage solution products.

The Outdoor business primarily sells corded and cordless electric lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, pressure washers and related accessories, and gas powered lawn and garden products, including lawn tractors, zero turn ride on mowers, walk behind mowers, snow blowers, residential robotic mowers, utility terrain vehicles (UTVs), hand-held outdoor power equipment, garden tools, and parts and accessories to professionals and consumers under the DEWALT®, CUB CADET®, BLACK+DECKER®, CRAFTSMAN®, TROY-BILT®, and HUSTLER® brand names.

The Outdoor product line primarily sells corded and cordless electric lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, pressure washers and related accessories, and gas powered lawn and garden products, including lawn tractors, zero turn ride on mowers, walk behind mowers, snow blowers, residential robotic mowers, utility terrain vehicles (UTVs), hand-held outdoor power equipment, garden tools, and parts and accessories to professionals and consumers under the DEWALT®, CRAFTSMAN®, CUB CADET®, BLACK+DECKER®, and HUSTLER® brand names.

The Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses.

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The product lines include externally threaded fasteners, blind rivets and tools, blind inserts and tools, drawn arc weld studs and systems, engineered plastic and mechanical fasteners, self-piercing riveting systems, precision nut running systems, micro fasteners, high-strength structural fasteners, axel swage, latches, heat shields, pins, and couplings.

The Infrastructure business sells hydraulic tools and high quality, performance-driven heavy equipment attachment tools for off-highway applications.

The Infrastructure business designs, manufactures, and sells attachments, typically used on excavators, and handheld hydraulic and battery-powered tools for applications in infrastructure, construction, scrap recycling, demolition, and railroad infrastructure.

The Company utilizes segment profit, which is defined as net sales minus cost of sales and SG&A inclusive of the provision for credit losses (aside from corporate overhead expense), and segment profit as a percentage of net sales to assess the profitability of each segment.

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Industrial 2,414.0 2,523.4 2,463.1

Corporate Overhead & Other 0.3 0.8 67.6

Corporate Overhead — 0.3 0.8

Consolidated $ 15,781.1 $ 16,947.4 $ 15,281.3

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Segment Profit 954.1 1,208.1 2,242.0

Corporate Overhead & Other ( 294.0 ) ( 342.9 ) ( 302.1 )

Corporate Overhead ( 312.2 ) ( 294.0 ) ( 342.9 )

Other, net ( 320.1 ) ( 274.8 ) ( 189.5 )

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Gain on equity method investment — — 68.0

Asset impairment charge ( 168.4 ) — —

Loss on debt extinguishment — — ( 46.9 )

Asset impairment charges ( 274.8 ) ( 168.4 ) —

Interest income 186.9 54.7 9.8

Interest expense ( 559.4 ) ( 338.5 ) ( 185.4 )

Earnings from continuing operations before income taxes and equity interest $ 37.9 $ 1,586.9 $ 1,183.7

(Loss) earnings from continuing operations before income taxes and equity interest $ ( 375.7 ) $ 37.9 $ 1,586.9

Capital and Software Expenditures

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Industrial 74.0 85.6 123.3

Corporate Overhead & Other — — 0.2

Discontinued operations — 6.3 20.0

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Industrial 171.6 184.2 201.4

Corporate Overhead & Other — — 0.3

Discontinued operations — 0.4 62.8

Consolidated $ 625.1 $ 572.2 $ 577.1

Segment Assets 2022 2021

Segment Assets December 30, 2023 December 31, 2022

Tools & Outdoor $ 18,960.8 $ 20,202.0

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Consolidated $ 23,663.8 $ 24,963.3

Corporate Overhead & Other includes the results of the commercial electronic security business in five countries in Europe and emerging markets through its disposition in the fourth quarter of 2020, as well as the corporate overhead element of SG&A, which is not allocated to the business segments.

Corporate Overhead includes the corporate overhead element of SG&A, which is not allocated to the business segments.

Corporate assets primarily consist of cash, deferred taxes, property, plant and equipment and right-of-use lease assets.

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As described in Note A, Significant Accounting Policies , the Company recognizes revenue at a point in time from the sale of tangible products or over time depending on when the performance obligation is satisfied.

For the years ended December 31, 2022, January 1, 2022, and January 2, 2021, the majority of the Company’s revenue was recognized at the time of sale.

The percent of total segment revenue recognized over time for the Industrial segment for the years ended December 31, 2022, January 1, 2022 and January 2, 2021 was 4.6 %, 6.6 % and 9.2 %, respectively.

The following table is a further disaggregation of the Industrial segment revenue for the years ended December 31, 2022, January 1, 2022 and January 2, 2021:

For the years ended December 30, 2023, December 31, 2022, and January 1, 2022, the majority of the Company’s revenue was recognized at the time of sale.

The percent of total segment revenue recognized over time for the Industrial segment for the years ended December 30, 2023, December 31, 2022 and January 1, 2022 was 2.2 %, 4.6 % and 6.6 %, respectively.

The following table is a further disaggregation of the Industrial segment revenue for the years ended December 30, 2023, December 31, 2022 and January 1, 2022:

(Millions of Dollars) 2023 2022 2021

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Other Americas 870.9 839.4 833.6

France 489.8 488.8 393.0

Other Europe 2,664.9 2,847.2 2,288.7

Europe 3,024.7 3,154.7 3,336.0

Asia 1,262.7 1,384.5 1,342.6

Consolidated $ 15,781.1 $ 16,947.4 $ 15,281.3

December 31, 2022 January 1, 2022

(Millions of Dollars) December 30, 2023 December 31, 2022

Property, Plant & Equipment, net

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Other Americas 253.2 249.8

France 30.7 36.6

Other Europe 272.9 318.9

Europe 300.0 303.6

Asia 303.0 326.5

Consolidated $ 2,169.9 $ 2,353.1

Significant components of the Company’s deferred tax assets and liabilities from continuing operations at the end of each fiscal year were as follows:

Significant components of the Company’s deferred tax assets and liabilities from continuing operations, excluding 2023 amounts classified as held for sale, at the end of each fiscal year were as follows:

(Millions of Dollars) 2023 2022

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Capitalized research and development costs 194.6 134.7

Interest expense carryforward 152.7 27.7

Other 159.1 176.6

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Valuation Allowance $ ( 1,046.9 ) $ ( 1,032.5 )

Net Deferred Tax Liability after Valuation Allowance $ ( 33.3 ) $ ( 239.0 )

The increase in intangible deferred tax assets relates to the intra-entity asset transfer of certain intangible assets between two of the Company's foreign subsidiaries.

The recognized deferred tax benefit represents the difference between the basis of the intellectual property for financial statement purposes and the basis of the intellectual property for tax purposes.

Net Deferred Tax Asset/ (Liability) after Valuation Allowance $ 450.7 $ ( 33.3 )

The increase in intangible deferred tax assets relates to an intra-entity asset transfer of certain intangible assets from a wholly-owned, non-U.S.

subsidiary to another wholly-owned, non-U.S.

subsidiary located in the United Kingdom in order to better align with current and future business operations.

The transfer resulted in a step-up in tax basis driven by the fair value of the transferred intellectual property (“IP”), which was determined using an income approach taking into consideration future revenue projections, royalty rates and discount rates.

The Company expects to realize the deferred tax asset recorded as a result of the IP transfer and will periodically assess such realizability.

The tax-deductible amortization related to the transferred IP will be recognized over a 20-year period.

A valuation allowance is recorded on certain deferred tax assets if it has been determined it is more likely than not that all or a portion of these assets will not be realized.

The Company recorded a valuation allowance of $ 1,032.5 million and $ 1,067.2 million on deferred tax assets existing as of December 31, 2022 and January 1, 2022, respectively.

The valuation allowances in 2022 and 2021 are primarily attributable to foreign and state net operating loss carryforwards, intangible assets, foreign capital loss carryforwards, and state tax credits.

The Company recorded a valuation allowance of $ 1,046.9 million and $ 1,032.5 million on deferred tax assets existing as of December 30, 2023 and December 31, 2022, respectively.

The valuation allowances in 2023 and 2022 are primarily attributable to foreign and state net operating loss carryforwards, certain intangible assets unrelated to the IP transfer discussed above, foreign capital loss carryforwards, and state tax credits.

As of December 30, 2023, the Company has approximately $ 4.6 billion of unremitted foreign earnings and profits.

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The income taxes applicable to such earnings and other outside basis differences are not readily determinable or practicable to calculate.

Net operating loss carryforwards of $ 3.0 billion as of December 31, 2022 are available to reduce future tax obligations of certain U.S.

and foreign companies.

As of December 30, 2023, the Company has approximately $ 1.5 billion and $ 3.1 billion of net operating loss carryforwards available to reduce future tax obligations in certain U.S.

state and foreign jurisdictions, respectively.

The Company’s foreign net operating loss carryforwards primarily relate to its subsidiaries’ operations in Luxembourg ($ 2.4 billion), France ($ 202.5 million), Germany ($ 168.4 million), Brazil ($ 106.1 million), and other foreign jurisdictions ($ 218.4 million).

The net operating loss carryforwards have various expiration dates beginning in 2024 with certain jurisdictions having indefinite carryforward periods.

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foreign tax credit carryforward balance as of December 30, 2023 totaled $ 1.6 million with various expiration dates beginning in 2033.

foreign tax credit carryforward of $ 12.9 million is included in unrecognized tax benefits and subject to an annual limitation, which constitutes a change of ownership as defined under the Internal Revenue Code Section 382.

State tax credit carryforward balance as of December 30, 2023 totaled $ 19.3 million.

The carryforward balance is made up of various credit types spanning multiple state taxing jurisdictions and various expiration dates beginning in 2024.

On August 9, 2022, the U.S.

government enacted the Creating Helpful Incentives to Produce Semiconductors (“CHIPS Act”), which includes an advanced manufacturing investment tax credit and tax incentives related to semiconductor manufacturing, among other provisions.

On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act (“IRA”), which imposes a new corporate alternative minimum tax (“CAMT”), an excise tax on stock buybacks, and significant tax incentives for energy and climate initiatives, among other provisions.

The CAMT is effective for tax years beginning after December 31, 2022, while the excise tax applies to repurchases of stock after December 31, 2022.

The effective dates of the energy related incentives vary.

In response to a technical inquiry, the FASB provided guidance permitting a company to make an accounting policy election to either consider the effect of CAMT when evaluating the need for, and the amount of, a valuation allowance or account for the effects on deferred tax assets in the period they arise.

The Company has elected to account for the effects of CAMT on deferred tax assets in the period they arise.

The Company evaluated the impacts of the CHIPS Act and the IRA and concluded that they do not have a material impact on the Company’s consolidated financial statements.

The components of earnings from continuing operations before income taxes and equity interest consisted of the following:

The components of (loss) earnings from continuing operations before income taxes and equity interest consisted of the following:

(Millions of Dollars) 2023 2022 2021

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Foreign 1,009.3 1,271.7 1,664.6

Earnings before income taxes and equity interest $ 37.9 $ 1,586.9 $ 1,183.7

(Loss) earnings before income taxes and equity interest $ ( 375.7 ) $ 37.9 $ 1,586.9

Income taxes on continuing operations consisted of the following:

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Net income taxes paid for continuing operations during 2023, 2022 and 2021 were $ 415.2 million, $ 482.6 million and $ 441.8 million, respectively.

The 2022, 2021 and 2020 amounts include refunds of $ 41.8 million, $ 50.1 million and $ 43.8 million, respectively, primarily related to prior year overpayments and settlement of tax audits.

The 2023, 2022 and 2021 amounts include refunds of $ 25.3 million, $ 41.8 million and $ 50.1 million, respectively.

The reconciliation of the U.S.

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Tax credits ( 13.8 ) ( 8.8 ) ( 6.7 )

Capital loss — — ( 40.4 )

federal tax expense (benefit) on foreign earnings 61.1 55.7 ( 118.1 )

Intra-entity asset transfer of intellectual property ( 131.3 ) ( 153.3 ) ( 114.2 )

Withholding taxes 38.9 5.4 12.0

Impairment on assets held for sale 30.4 — —

Other ( 1.2 ) ( 7.1 ) ( 12.4 )

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Statute of limitations expirations ( 16.8 ) ( 8.5 ) ( 9.2 )

Reclassification to long-term liabilities held for sale ( 21.5 ) — —

Balance at end of year $ 481.3 $ 502.7 $ 487.7

The gross unrecognized tax benefits from continuing operations at December 31, 2022 and January 1, 2022 include $ 496.0 million and $ 478.4 million, respectively, of tax benefits that, if recognized, would impact the effective tax rate.

The liability for potential penalties and interest related to unrecognized tax benefits from continuing operations decreased by $ 11.2 million in 2022, increased by $ 9.6 million in 2021 and decreased by $ 3.4 million in 2020.

The liability for potential penalties and interest totaled $ 48.8 million as of December 31, 2022, $ 60.0 million as of January 1, 2022, and $ 49.2 million as of January 2, 2021.

The gross unrecognized tax benefits from continuing operations at December 30, 2023 and December 31, 2022 include $ 475.7 million and $ 496.0 million, respectively, of tax benefits that, if recognized, would impact the effective tax rate.

The liability for potential penalties and interest related to unrecognized tax benefits from continuing operations, excluding 2023 amounts reclassified to liabilities held for sale, increased by $ 15.5 million in 2023, decreased by $ 11.2 million in 2022 and increased by $ 9.6 million in 2021.

The liability for potential penalties and interest totaled $ 64.3 million as of December 30, 2023, $ 48.8 million as of December 31, 2022, and $ 60.0 million as of January 1, 2022.

The Company classifies all tax-related interest and penalties as income tax expense.

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COMMITMENTS — The Company has numerous assets, predominantly real estate, vehicles and equipment, under various lease arrangements.

At inception of arrangements with vendors, the Company determines whether the contract is or contains a

lease based on each party’s rights and obligations under the arrangement.

At inception of arrangements with vendors, the Company determines whether the contract is or contains a lease based on each party’s rights and obligations under the arrangement.

If the lease arrangement also contains non-lease components, the lease and non-lease elements are separately accounted for in accordance with the appropriate accounting guidance for each item.

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The following is a summary of the Company's right-of-use-assets and lease liabilities:

(Millions of Dollars) December 31, 2022 January 1, 2022

(Millions of Dollars) December 30, 2023 December 31, 2022

Right-of-use assets $ 502.9 $ 431.5

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The Company determines its incremental borrowing rate based on interest rates from its debt issuances, taking into consideration adjustments for collateral, lease terms and foreign currency.

As a result of acquiring right-of-use assets from new leases entered into during the years ended December 31, 2022 and January 1, 2022, the Company's lease liabilities increased approximately $ 115.8 million and $ 84.1 million, respectively.

As of December 30, 2023, $ 19.4 million and $ 19.5 million of right-of-use assets and lease liabilities, respectively, were reclassified to held for sale due to the pending divestiture of the Infrastructure business.

As a result of acquiring right-of-use assets from new leases entered into during the years ended December 30, 2023 and December 31, 2022, the Company's lease liabilities increased approximately $ 206.1 million and $ 115.8 million, respectively.

The Company has variable rate leases for certain manufacturing facilities, distribution centers and office buildings in which the periodic rental payments vary based on benchmark interest rates.

The following is a summary of the Company's total lease cost for the years ended December 31, 2022, January 1, 2022, and January 2, 2021:

The following is a summary of the Company's total lease cost for the years ended December 30, 2023, December 31, 2022, and January 1, 2022:

(Millions of Dollars) 2023 2022 2021

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Lease obligations $ 613.0 $ 135.4 $ 105.7 $ 90.5 $ 69.5 $ 56.3 $ 155.6

The amounts above include undiscounted future lease obligations related to the pending divestiture of the Infrastructure business totaling $ 21.1 million;

$ 4.7 million in 2024, $ 4.5 million in 2025, $ 4.5 million in 2026, $ 4.1 million in 2027, $ 1.9 million in 2028, and $ 1.4 million thereafter.

The following is a summary of the Company’s future marketing commitments at December 30, 2023:

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Supplier agreements $ 199.1 $ 87.8 $ 44.0 $ 37.9 $ 22.1 $ 7.3 $ —

The Company has arrangements with third-party financial institutions that offer voluntary supply chain finance ("SCF") programs.

These arrangements enable certain of the Company’s suppliers, at the supplier’s sole discretion, to sell receivables due from the Company to the financial institutions on terms directly negotiated with the financial institutions.

The Company negotiates commercial terms with its suppliers, including prices, quantities, and payment terms, regardless of suppliers’ decisions to finance the receivables due from the Company under these SCF programs.

The Company has no economic interest in a supplier’s decision to participate in these SCF programs, and no direct financial relationship with the financial institutions, as it relates to these SCF programs.

The amounts due to the financial institutions for suppliers that voluntarily participate in these SCF programs were presented within Accounts payable on the Company’s Consolidated Balance Sheets and totaled $ 528.1 million and $ 607.5 million as of December 30, 2023 and December 31, 2022, respectively.

GUARANTEES — The Company's financial guarantees at December 30, 2023 are as follows:

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Guarantees on the residual values of leased properties One to nine years

Standby letters of credit Up to three years

Standby letters of credit Up to twenty years

Commercial customer financing arrangements Up to six years

Total $ 436.0 $ 15.5

The Company has guaranteed a portion of the residual values associated with the variable rate leases mentioned previously.

The Company has guaranteed a portion of the residual values associated with certain of its variable rate leases.

The lease guarantees are for an amount up to $ 157.4 million while the fair value of the underlying assets is estimated at $ 210.5 million.

The related assets would be available to satisfy the guarantee obligations and therefore it is unlikely the Company will incur any future loss associated with these guarantees.

The related assets would be available to satisfy the guarantee obligations.

The Company has issued $ 185.5 million in standby letters of credit that guarantee future payments which may be required under certain insurance programs and in relation to certain environmental remediation activities described more fully in Note S, Contingencies .

The Company provides various limited and full recourse guarantees to financial institutions that provide financing to U.S.

and Canadian Mac Tool distributors and franchisees for their initial purchase of the inventory and trucks necessary to function as a distributor and franchisee.

and Canadian Mac Tools distributors and franchisees for their initial purchase of the inventory and trucks necessary to function as a distributor and franchisee.

In addition, the Company provides limited and full recourse guarantees to financial institutions that extend credit to certain end retail customers of its U.S.

Mac Tool distributors and franchisees.

Mac Tools distributors and franchisees.

The gross amount guaranteed in these arrangements is $ 93.1 million and the $ 15.5 million carrying value of the guarantees issued is recorded in Other liabilities in the Consolidated Balance Sheets.

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Adjustments are recorded to the warranty liability as new information becomes available.

The changes in the carrying amount of product warranties for the years ended December 31, 2022, January 1, 2022, and January 2, 2021 are as follows:

The changes in the carrying amount of product warranties for the years ended December 30, 2023, December 31, 2022, and January 1, 2022 are as follows:

(Millions of Dollars) 2023 2022 2021

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Management believes that the ultimate disposition of these matters will not have a material adverse effect on operations or financial condition taken as a whole.

Government Investigations

On January 19, 2024, the Company was notified by the Compliance and Field Operations Division (the “Division”) of the Consumer Product Safety Commission that the Division intends to recommend the imposition of a civil penalty of approximately $ 32 million for alleged untimely reporting in relation to certain utility bars and miter saws that were subject to voluntary recalls in September 2019 and March 2022, respectively.

The Company is currently evaluating and believes there are defenses to the Division’s claims, and the Company is cooperating with the Division.

However, given the early stage of this matter, at this time, the Company is not in a position to assess the likelihood of any potential loss or adverse effect on its financial condition or to estimate the amount of potential loss, if any, from this matter.

The Company previously disclosed that it had identified certain undisclosed perquisites in prior periods.

The Company voluntarily disclosed this information to the U.S.

Securities and Exchange Commission (the “SEC” or the “Commission”) and cooperated with the SEC’s investigation of this matter.

On June 20, 2023, the SEC issued a Cease-and-Desist Order (the “Order”) that resolved this matter.

The Order reflects that the Company neither admitted to nor denied the allegations contained in the Order, and that the SEC did not impose any monetary penalties on the Company.

The Order credited the Company’s self-reporting, cooperation, and remediation efforts.

In a parallel action, the SEC issued a Cease-and-Desist Order against a former executive of the Company (the “Parallel Resolution”).

The SEC’s press release announcing both resolutions noted that, with respect to the Parallel Resolution, “[a]fter consideration of Stanley Black & Decker’s self-reporting, cooperation, and remediation, the SEC declined to bring charges against the company related to [the former executive’s] conduct.”

Also, as previously disclosed, the Company has identified certain transactions relating to its international operations that may raise compliance questions under the U.S.

Foreign Corrupt Practices Act (“FCPA”) and voluntarily disclosed this information to the U.S.

Department of Justice (“DOJ”) and the SEC in January 2023.

The Company is cooperating with both agencies in their investigations of these transactions (the “FCPA Matters”).

Currently, the Company does not believe that the FCPA Matters will have a material impact on its financial condition or results of operations, although it is possible that a loss related to the FCPA Matters may be incurred.

Given the ongoing nature of the FCPA Matters, management cannot predict the duration, scope, or outcome of the DOJ’s or SEC’s investigations or estimate the potential magnitude of any such loss or range of loss, or the cost of the ongoing investigations.

Any determination that certain transactions relating to the Company’s international operations were not in compliance with the FCPA could result in the imposition of fines, civil or criminal penalties, equitable remedies, including disgorgement, injunctive relief, or other sanctions against the Company.

The Company also may become a party to litigation or other legal proceedings over the FCPA Matters described above.

The Company is committed to upholding the highest standards of corporate governance and is continuously focused on ensuring the effectiveness of its policies, procedures, and controls.

The Company is in the process, with the assistance of professional advisors, of reviewing and further enhancing relevant policies, procedures, and controls.

Class Action Litigation

As previously disclosed, on March 24, 2023, a putative class action lawsuit titled Naresh Vissa Rammohan v.

Stanley Black & Decker, Inc., et al ., Case No.

3:23-cv-00369-KAD (the “ Rammohan Class Action”), was filed in the United States District Court for the District of Connecticut against the Company and certain of the Company’s current and former officers and directors.

The complaint was filed on behalf of a purported class consisting of all purchasers of Stanley Black & Decker common stock between October 28, 2021 and July 28, 2022, inclusive.

The complaint asserts violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 based on allegedly false and misleading statements related to consumer demand for the Company’s products amid changing COVID-19 trends and macroeconomic conditions.

The complaint seeks unspecified damages and an award of costs and expenses.

On October 13, 2023, Lead Plaintiff General Retirement System of the City of Detroit filed an Amended Complaint that asserts the same claims and seeks the same forms of relief as the original complaint.

The Company intends to vigorously defend this action in all respects and on December 14, 2023 filed a motion to dismiss the Amended Complaint in its entirety.

Briefing on that motion is expected to conclude in April 2024.

Given the early stage of this litigation, at this time, the Company is not in a position to assess the likelihood of any potential loss or adverse effect on its financial condition or to estimate the amount or range of potential losses, if any, from this action.

Derivative Actions

As previously disclosed, on August 2, 2023 and September 20, 2023, derivative complaints were filed in the United States District Court for the District of Connecticut, titled Callahan v.

Allan, et al ., Case No.

3:23-cv-01028-OAW (the “ Callahan Derivative Action”) and Applebaum v.

Allan, et al ., Case No.

3:23-cv-01234-OAW (the “ Applebaum Derivative Action”), respectively, by putative stockholders against certain current and former directors and officers of the Company premised on the same allegations as the Rammohan Class Action.

The Callahan and Applebaum Derivative Actions were consolidated by Court order on November 6, 2023 and defendants’ responses to both complaints have been stayed pending the disposition of any motions to dismiss in the Rammohan Class Action.

The individual defendants intend to vigorously defend the Callahan and Applebaum Derivative Actions in all respects.

However, given the early stage of this litigation, at this time, the Company is not in a position to assess the likelihood of any potential loss or adverse effect on its financial condition or to estimate the amount or range of potential losses, if any, from these actions.

On October 19, 2023, a derivative complaint was filed in Connecticut Superior Court, titled Vladimir Gusinsky Revocable Trust v.

Allan, et al ., Docket Number HHBCV236082260S, by a putative stockholder against certain current and former directors and officers of the Company.

Plaintiff seeks to recover for alleged breach of fiduciary duties and unjust enrichment under Connecticut state law premised on the same allegations as the Rammohan Class Action.

By Court order on November 11, 2023, the Connecticut Superior Court granted the parties’ motion to stay defendants’ response to the complaint pending the disposition of any motions to dismiss in the Rammohan Class Action.

The individual defendants intend to vigorously defend this action in all respects.

Environmental

In the normal course of business, the Company is a party to administrative proceedings and litigation, before federal and state regulatory agencies, relating to environmental remediation with respect to claims involving the discharge of hazardous substances into the environment, generally at current and former manufacturing facilities.

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As assessments and remediation progress at individual sites, the amounts recorded are reviewed periodically and adjusted to reflect additional technical and legal information that becomes available.

As of December 31, 2022 and January 1, 2022, the Company had reserves of $ 129.3 million and $ 159.1 million, respectively, for remediation activities associated with Company-owned properties, as well as for Superfund sites, for losses that are probable and estimable.

As of December 30, 2023 and December 31, 2022, the Company had reserves of $ 124.5 million and $ 129.3 million, respectively, for remediation activities associated with Company-owned properties, as well as for Superfund sites, for losses that are probable and estimable.

Of the December 30, 2023 amount, $ 46.0 million is classified as current and $ 78.5 million as long-term which is expected to be paid over the estimated remediation period.

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The Company and approximately 47 other companies comprise the Lower Passaic Cooperating Parties Group (the “CPG”).

The CPG members and other companies are parties to a May 2007 Administrative Settlement Agreement and Order on Consent (“AOC”) with the EPA to perform a remedial investigation/feasibility study (“RI/FS”) of the lower seventeen miles of the

Lower Passaic River in New Jersey (the “River”).

The Company’s potential liability stems from former operations in Newark, New Jersey.

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On September 30, 2016, Occidental Chemical Corporation ("OCC") entered into an agreement with the EPA to perform the remedial design for the cleanup plan for the lower 8.3 miles of the River.

The remedial design is expected to be substantially completed in 2023.

The remedial design is expected to be substantially completed in the first quarter of 2024.

On June 30, 2018, OCC filed a complaint in the United States District Court for the District of New Jersey against over 100 companies, including the Company, seeking CERCLA cost recovery or contribution for past costs relating to various investigations and cleanups OCC has conducted or is conducting in connection with the River.

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OCC also seeks a declaratory judgment to hold the defendants liable for their proper shares of future response costs for OCC's ongoing activities in connection with the River.

The Company and other defendants have answered the complaint and currently are engaged in discovery with OCC.

The Company and other defendants have answered the complaint and have been engaged in discovery with OCC.

On February 24, 2021, the Company and other defendants filed a third party complaint against the Passaic Valley Sewerage Commissioners and forty-two municipalities to require those entities to pay their equitable share of response costs.

On October 10, 2018, the EPA issued a letter directing the CPG to prepare a streamlined feasibility study for the upper 9 miles of the River based on an iterative approach using adaptive management strategies.

The CPG submitted a revi sed draft Interim Remedy Feasibility Study to the EPA on December 4, 2020, which identifies various targeted dredge and cap alternatives with costs that range from $ 420 million to $ 468 million (net present value).

The CPG submitted a revi sed draft Interim Remedy Feasibility Study to the EPA on December 4, 2020, which identified various targeted dredge and cap alternatives with costs that range from $ 420 million to $ 468 million (net

present value).

The EPA approved the Interim Remedy Feasibility Study on December 11, 2020.

The EPA issued the Interim Remedy Proposed Plan on April 14, 2021, selecting an alternative that the EPA estimates will cost $ 441 million (net present value).

The CPG continues to conduct work to complete the RI/FS for the entire 17 -mile River.

The EPA issued the Interim Remedy ROD on September 28, 2021.

The EPA issued the Interim Remedy Proposed Plan on April 14, 2021 and the Interim Remedy ROD on September 28, 2021, selecting an alternative that the EPA estimates will cost $ 441 million (net present value).

The CPG has substantially completed the RI/FS for the entire 17 -mile River.

The Company and 105 other parties received a letter dated March 31, 2016 from the EPA notifying such parties of potential liability for the costs of the cleanup of the lower 8.3 miles of the River and a letter dated March 30, 2017 stating that the EPA had offered 20 of the parties (not including the Company) an early cash out settlement.

In a letter dated May 17, 2017, the EPA stated that these 20 parties did not discharge any of the eight hazardous substances identified as the contaminants of concern in the lower 8.3 mile ROD.

In the March 30, 2017 letter, the EPA stated that other parties who did not discharge dioxins, furans or polychlorinated biphenyls (which are considered the contaminants of concern posing the greatest risk to human health or the environment) may also be eligible for cash out settlement, but expects those parties' allocation to be determined through a complex settlement analysis using a third-party allocator.

In the March 30, 2017 letter, the EPA stated that other parties who did not discharge dioxins, furans or polychlorinated biphenyls (which are considered the contaminants of concern posing the greatest risk to human health or the environment) may also be eligible for cash out settlement, but expected those parties' allocation to be determined through a complex settlement analysis using a third-party allocator.

The EPA subsequently clarified this statement to say that such parties would be eligible to be "funding parties" for the lower 8.3 mile remedial action with each party's share of the costs determined by the EPA based on the allocation process and the remaining parties would be "work parties" for the remedial action.

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2:22-cv-07326) that addresses the liability of 85 parties (including the Company) for an aggregate amount of $ 150 million based on the EPA-sponsored allocation report that found OCC 99.4 % responsible for the cleanup costs of the River.

The Consent Decree is subject to a 45-day public comment period (which may be extended by the Court) after which the Court will enter or disapprove the Consent Decree.

On December 20, 2022, various defendants (including the Company) in the OCC litigation filed an unopposed motion to stay the litigation for six months.

The Court has not yet ruled on the motion to stay.

The Consent Decree was subject to a 90-day public comment period, which ended March 22, 2023.

On November 21, 2023, the United States informed the Court that it concluded, based on the public comments, that a small number of parties (not including the Company) should be removed from the settlement, that a change should be made to the United States’ reservation of rights (which was agreed to by the remaining settling parties) and that it intends to file a Motion to Enter the modified Consent Decree (without soliciting additional public comments) no later than January 31, 2024.

On December 12, 2023, the Court ordered the United States to file the proposed modified Consent Decree on or before January 17, 2024 and its Motion to Enter the modified Consent Decree no later than January 31, 2024 and established a schedule to complete briefing by July 2024.

After the United States moves to enter the modified Consent Decree the Court will enter or disapprove.

On December 20, 2022, various defendants (including the Company) in the OCC litigation filed an unopposed motion to stay the litigation for six months which was granted by the Court on March 1, 2023.

On March 2, 2023, the EPA issued a Unilateral Administrative Order requiring OCC to design the interim remedy for the upper 9 miles of the River (the “2023 UAO”).

Notwithstanding the stay of the litigation commenced in 2018 (and two days after the public comment period on the Consent Decree closed), OCC filed a complaint named Occidental Chem.

Givaudan Fragrances Corp., et al.

2:23‑cv-1699 at 2, 5 (D.N.J.

24, 2023) (the “2023 Litigation”) against forty parties (not including the Company) for recovery of past and future response costs it will incur in complying with the 2023 UAO.

All of the defendants named in the 2023 Litigation are also defendants or third-party defendants in the litigation commenced in 2018.

Pursuant to a settlement agreement by and among the Maxus Liquidating Trust, YPF and Repsol submitted to the bankruptcy court on April 7, 2023, YPF and Repsol will jointly pay a combined sum of $ 573 million to various creditors.

Based on the waterfall payout of the bankruptcy plan, it is currently estimated that the CPG will receive approximately $ 9 million, which will be used either to offset future CPG costs, including EPA RI/FS oversight and legal and administrative costs, or to reimburse CPG members for a portion of their past contributions to the RI/FS costs .

At this time, the Company cannot reasonably estimate its liability related to the litigation and remediation efforts, excluding the RI/FS and remediation actions at mile 10.9 , as the OCC litigation is pending and the EPA settlement process has not been completed and requires court approval.

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On March 15, 2017, the Company received formal notification from the EPA that the EPA had issued a ROD selecting the preferred alternative identified in the Proposed Cleanup Plan.

On or about November 2, 2023, the Multistate Trust managing the remediation revised the estimated remediation costs for work to be performed in 2024, and the Company adjusted the reserve for its percentage share of such costs accordingly.

As of December 30, 2023, the Company has reserved $ 28.2 million for this site.

The environmental liability for certain sites that have cash payments beyond the current year that are fixed or reliably determinable have been discounted using a rate of 4.4 % to 5.5 %, depending on the expected timing of disbursements.

discounted and undiscounted amount of the liability relative to these sites is $ 38.6 million and $ 48.7 million, respectively.

The discounted and undiscounted amount of the liability relative to these sites is $ 34.3 million and $ 47.0 million, respectively.

The payments relative to these sites are expected to be $ 3.2 million in 2024, $ 3.2 million in 2025, $ 3.2 million in 2026, $ 2.4 million in 2027, $ 2.4 million in 2028, and $ 32.6 million thereafter.

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Actual costs to be incurred in future periods may vary from the estimates, given the inherent uncertainties in evaluating certain exposures.

Subject to the imprecision in estimating future contingent liability costs, the Company does not expect that any sum it may have to pay in connection with these matters in excess of the amounts recorded will have a materially adverse effect on its financial position, results of operations or liquidity.

Subject to the imprecision

in estimating future contingent liability costs, the Company does not expect that any sum it may have to pay in connection with these environmental matters in excess of the amounts recorded will have a materially adverse effect on its financial position, results of operations or liquidity.

PENDING DIVESTITURE

Infrastructure business

In December 2023, the Company announced that it had entered into a definitive agreement for the sale of its Infrastructure business as part of the Company's strategic commitment to simplify and streamline its portfolio to focus on the core Tools & Outdoor and Industrial businesses.

Based on management's commitment to sell this business, the assets and liabilities related to the Infrastructure business were classified as held for sale on the Company's Consolidated Balance Sheet as of December 30, 2023.

This pending divestiture does not qualify for discontinued operations and therefore, its results are included in the Company's continuing operations within the Industrial segment for all periods presented.

Following is the pre-tax income for this business for the years ended December 30, 2023, December 31, 2022 and January 1, 2022:

(Millions of Dollars) 2023 2022 2021

Pre-tax income $ 52.0 $ 54.3 $ 65.1

In addition, the Company recognized a $ 150.8 million pre-tax asset impairment charge in the fourth quarter of 2023 to adjust the carrying amount of the long-lived assets of the Infrastructure business to its estimated fair value less selling cost based on the contractual sale price outlined in the agreement.

The transaction is subject to regulatory approval and other customary closing conditions.

The carrying amounts of the assets and liabilities that were aggregated in assets held for sale and liabilities held for sale as of December 30, 2023 are presented in the following table:

(Millions of Dollars) December 30, 2023

Cash and cash equivalents $ 0.6

Accounts and notes receivable, net 41.3

Inventories, net 96.5

Other current assets 2.4

Property, plant and equipment, net 70.4

Goodwill 389.7

Intangibles, net 214.3

Other assets 42.4

Total assets $ 857.6

Accounts payable and accrued expenses $ 44.1

Other long-term liabilities 84.8

Total liabilities $ 128.9

2022 DIVESTITURES

Oil & Gas business

On August 19, 2022, the Company completed the previously announced sale of its Oil & Gas business comprised of the pipeline services and equipment businesses to Pipeline Technique Limited and recognized a pre-tax loss of $ 8.6 million.

This divestiture did not qualify for discontinued operations and therefore, its results are included in the Company's continuing operations within the Industrial segment for all periods presented through the date of sale.

Following is the pre-tax (losses) income for this business for the years ended December 31, 2022, January 1, 2022 and January 2, 2021:

(Millions of Dollars) 2022 2021 2020

Pre-tax (losses) income $ ( 2.7 ) $ ( 16.8 ) $ 9.1

On August 19, 2022, the Company completed the sale of its Oil & Gas business comprised of the pipeline services and equipment businesses to Pipeline Technique Limited and recognized a pre-tax loss of $ 8.6 million.

This divestiture did not qualify for discontinued operations and therefore, its results were included in the Company's continuing operations within the Industrial segment for all periods presented through the date of sale.

For the years ended December 31, 2022 and January 1, 2022, the Company recognized pre-tax losses of $ 2.7 million and $ 16.8 million for this business, respectively.

In addition, the Company recognized a $ 168.4 million pre-tax asset impairment charge to adjust the carrying amount of the long-lived assets of the Oil & Gas business to its fair value less the costs to sell during the second quarter of 2022.

Commercial Electronic Security and Healthcare businesses

On July 22, 2022, the Company completed the previously announced sale of its Convergent Security Solutions ("CSS") business comprised of the commercial electronic security and healthcare businesses to Securitas AB for net proceeds of $ 3.1 billion and a pre-tax gain of $ 588 million.

As part of the purchase and sale agreement, the Company will perform transition services relating to certain administrative functions for Securitas AB for an initial period of one year or less, pending integration of these functions into their pre-existing business processes.

A portion of the $ 3.1 billion net proceeds received at closing was deferred to reimburse the Company for transition service costs expected to be incurred.

On July 22, 2022, the Company completed the sale of its Convergent Security Solutions ("CSS") business comprised of the commercial electronic security and healthcare businesses to Securitas AB for net proceeds of approximately $ 3.1 billion and recorded a pre-tax gain of $ 574 million.

As part of the purchase and sale agreement, the Company provided transition services relating to certain administrative functions for Securitas AB from the date of close through January 2024.

A portion of the net proceeds received at closing was deferred to reimburse the Company for transition service costs incurred over the service period.

Mechanical Access Solutions business

On July 5, 2022, the Company completed the sale of its Mechanical Access Solutions ("MAS") business comprised of the automatic doors business to Allegion plc for net proceeds of $ 922.2 million and a pre-tax gain of $ 609 million.

As part of the purchase and sale agreement, the Company will perform transition services relating to certain administrative functions for Allegion plc for an initial period of two years or less, pending integration of these functions into their pre-existing business processes.

As such, the operating results of CSS and MAS are reported as discontinued operations.

Amounts previously reported have been reclassified to conform to this presentation to allow for meaningful comparison of continuing operations.

These divestitures allow the Company to invest in other areas that fit into its long-term strategy.

As part of the purchase and sale agreement, the Company is providing transition services relating to certain administrative functions for Allegion plc for an initial period of two years or less, with extensions up to six months for certain services, pending integration of these functions into their pre-existing business processes.

The CSS and MAS divestitures represented a single plan to exit the Security segment and were considered a strategic shift that had a major effect on the Company’s operations and financial results.

As such, the 2022 and 2021 operating results of CSS and MAS were reported as discontinued operations.

These divestitures allowed the Company to invest in other areas that fit into its long-term strategy.

Summarized operating results of discontinued operations are presented in the following table for each fiscal year ended:

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— 308.0 529.2

Gain on sale of discontinued operations 1,197.4 — —

(Loss) gain on sale of discontinued operations ( 14.3 ) 1,197.4 —

Other, net and restructuring charges — 47.3 59.2

Earnings from discontinued operations before income taxes $ 1,210.9 $ 124.3 $ 83.3

(Loss) earnings from discontinued operations before income taxes $ ( 14.3 ) $ 1,210.9 $ 124.3

Income taxes on discontinued operations 14.5 318.5 ( 12.4 )

Net earnings from discontinued operations $ 892.4 $ 136.7 $ 79.9

Net (loss) earnings from discontinued operations $ ( 28.8 ) $ 892.4 $ 136.7

(1) Includes provision for credit losses.

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Stock-based compensation $ 17.5 $ 7.9

As of January 1, 2022, the assets and liabilities related to CSS and MAS were classified as held for sale on the Company's Consolidated Balance Sheets.

There were no assets or liabilities held for sale relating to the Oil & Gas business as of January 1, 2022.

The carrying amounts of the assets and liabilities that were aggregated in assets held for sale and liabilities held for sale as of January 1, 2022 are presented in the following table:

(Millions of Dollars) January 1, 2022

Cash and cash equivalents $ 145.1

Accounts and notes receivable, net 513.9

Inventories, net 169.4

Other current assets 41.2

Property, plant and equipment, net 84.3

Goodwill and other intangibles, net 2,270.2

Other assets 281.3

Total assets $ 3,505.4

Accounts payable and accrued expenses $ 460.4

Other long-term liabilities 137.4

Total liabilities $ 597.8

2020 DIVESTITURES

On November 2, 2020, the Company sold its commercial electronic security businesses in five countries in Europe and emerging markets within the Security segment, which resulted in net proceeds of $ 60.9 million.

The Company also sold a product line within Oil & Gas in the Industrial segment during the fourth quarter of 2020.

As a result of these sales, the Company recognized a net pre-tax loss of $ 13.5 million in 2020, consisting of a $ 17.7 million loss on the sale of a product line within Oil & Gas partially offset by a $ 4.2 million gain on the sale of the commercial electronic security businesses.

During the first quarter of 2021, the Company recognized a pre-tax loss of $ 1.0 million as a result of the finalization of the purchase price for the commercial electronic security divestiture.

These divestitures allow the Company to invest in other areas that fit into its long-term strategy.

These disposals do not qualify as discontinued operations and are included in the Company's Consolidated Statements of Operations for all periods presented through their respective dates of sale in 2020.

Pre-tax income for these businesses totaled $ 4.1 million for the year ended January 2, 2021.

SELECTED QUARTERLY FINANCIAL DATA (unaudited)

(Millions of Dollars, except per share amounts) First Second Third Fourth Year

Net Sales $ 4,448.0 $ 4,393.0 $ 4,119.6 $ 3,986.8 $ 16,947.4

Gross profit 1,305.4 1,207.1 1,018.1 753.5 4,284.1

Selling, general and administrative (1)

960.3 852.7 799.8 757.2 3,370.0

Net earnings (loss) from continuing operations 155.6 78.7 36.6 ( 100.6 ) 170.3

Net earnings attributable to non-controlling interest 0.1 0.1 — — 0.2

Preferred stock dividends and beneficial conversion feature — — — 5.8 5.8

Net Earnings (Loss) from Continuing Operations Attributable to Common Shareowners $ 155.5 $ 78.6 $ 36.6 $ ( 106.4 ) $ 164.3

Contract adjustment payments accretion 0.3 0.4 0.3 0.2 1.2

Net Earnings (Loss) from Continuing Operations Attributable to Common Shareowners - Diluted $ 155.8 $ 79.0 $ 36.9 $ ( 106.2 ) $ 165.5

Net earnings from discontinued operations 19.8 9.0 808.0 55.6 892.4

Net Earnings (Loss) Attributable to Common Shareowners - Diluted $ 175.6 $ 88.0 $ 844.9 $ ( 50.6 ) $ 1,057.9

Basic earnings (loss) per share of common stock:

Continuing operations $ 1.00 $ 0.54 $ 0.25 $ ( 0.72 ) $ 1.11

Discontinued operations $ 0.13 $ 0.06 $ 5.60 $ 0.38 $ 6.02

Total basic earnings (loss) per share of common stock $ 1.13 $ 0.60 $ 5.85 $ ( 0.35 ) $ 7.13

Diluted earnings (loss) per share of common stock:

Continuing operations $ 0.94 $ 0.51 $ 0.24 $ ( 0.72 ) $ 1.06

Discontinued operations $ 0.12 $ 0.06 $ 5.26 $ 0.37 $ 5.70

Total diluted earnings (loss) per share of common stock $ 1.06 $ 0.57 $ 5.50 $ ( 0.34 ) $ 6.76

Net Sales $ 3,720.8 $ 3,798.9 $ 3,779.7 $ 3,981.9 $ 15,281.3

Gross profit 1,387.8 1,361.8 1,215.6 1,127.0 5,092.2

Selling, general and administrative (1)

719.1 767.1 773.5 933.4 3,193.1

Net earnings from continuing operations 459.6 432.5 379.5 279.2 1,550.8

Net losses attributable to non-controlling interest ( 0.6 ) ( 1.0 ) ( 0.1 ) — ( 1.7 )

Preferred stock dividends and beneficial conversion feature 9.4 4.8 — — 14.2

Net Earnings from Continuing Operations Attributable to Common Shareowners $ 450.8 $ 428.7 $ 379.6 $ 279.2 $ 1,538.3

Contract adjustment payments accretion 0.2 0.3 0.4 0.4 1.3

Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted $ 451.0 $ 429.0 $ 380.0 $ 279.6 $ 1,539.6

Net earnings from discontinued operations 27.2 26.0 34.6 48.9 136.7

Net Earnings Attributable to Common Shareowners - Diluted $ 478.2 $ 455.0 $ 414.6 $ 328.5 $ 1,676.3

Basic earnings per share of common stock:

Continuing operations $ 2.86 $ 2.70 $ 2.38 $ 1.75 $ 9.69

Discontinued operations $ 0.17 $ 0.16 $ 0.22 $ 0.31 $ 0.86

Total basic earnings per share of common stock $ 3.04 $ 2.87 $ 2.60 $ 2.06 $ 10.55

Diluted earnings per share of common stock:

Continuing operations $ 2.74 $ 2.60 $ 2.30 $ 1.69 $ 9.33

Discontinued operations $ 0.17 $ 0.16 $ 0.21 $ 0.30 $ 0.83

Total diluted earnings per share of common stock $ 2.91 $ 2.75 $ 2.51 $ 1.99 $ 10.16

(1) Includes provision for credit losses.

The 2022 year-to-date results above include $ 642 million of pre-tax acquisition-related and other charges and an $ 84 million tax benefit related to these charges.

The net impact of the above items and effect on diluted earnings per share by quarter was as follows:

Acquisition-Related Charges & Other Diluted EPS Impact

• Q1 2022 — $ 221 million loss ($ 192 million after-tax)

$( 1.16 ) per diluted share

• Q2 2022 — $ 248 million loss ($ 195 million after-tax)

$( 1.26 ) per diluted share

• Q3 2022 — $ 119 million loss ($ 79 million after-tax)

$( 0.52 ) per diluted share

• Q4 2022 — $ 54 million loss ($ 92 million after-tax)

$( 0.62 ) per diluted share

The 2021 year-to-date results above include $ 194 million of pre-tax acquisition-related and other charges, a $ 64 million tax benefit related to these charges, as well as $ 11 million of after-tax charges related to the Company's share of equity method investment earnings.

The net impact of the above items and effect on diluted earnings per share by quarter was as follows:

Acquisition-Related Charges & Other Diluted EPS Impact

• Q1 2021 — $ 24 million loss ($ 18 million after-tax and equity interest)

$( 0.11 ) per diluted share

• Q2 2021 — $ 33 million loss ($ 36 million after-tax and equity interest)

$( 0.21 ) per diluted share

• Q3 2021 — $ 33 million loss ($ 26 million after-tax and equity interest)

$( 0.15 ) per diluted share

• Q4 2021 — $ 104 million loss ($ 61 million after-tax and equity interest)

$( 0.37 ) per diluted share

EXHIBIT INDEX

21 unchanged sentences

(j) Certificate of Amendment to the Restated Certificate of Incorporation, dated November 15, 2022 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on November 17, 2022).

3.2 Amended and Restated Bylaws, effective May 12, 2021 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on May 13, 2021).

4.1 (a) Indenture, dated as of June 26, 1998, by and among Black & Decker Holdings Inc., as Issuer, The Black & Decker Corporation, as Guarantor, and The First National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 4.9 to the Company’s Current Report on Form 8-K filed on March 12, 2010).

3.2 Bylaws, effective October 24, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on From 8-K filed on October 24, 2023).

4.1 Indenture, dated as of June 26, 1998, by and among Black & Decker Holdings Inc., as Issuer, The Black & Decker Corporation, as Guarantor, and The First National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 4.9 to the Company’s Current Report on Form 8-K filed on March 12, 2010).

4.2 (a) Indenture, dated as of November 1, 2002 between The Stanley Works and The Bank of New York Mellon Trust Company, N.A., as successor trustee to JPMorgan Chase Bank (incorporated by reference to Exhibit 4(vi) to the Company’s Annual Report on Form 10-K for the period ended December 28, 2002 filed on February 28, 2003).

11 unchanged sentences

and The Bank of New York Mellon Trust Company, N.A., as trustee, relating to the 2.300% Notes due 2025 and the 3.000% Notes due 2032 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on February 24, 2022).

(h) Eleventh Supplemental Indenture, dated as of March 6, 2023, between Stanley Black & Decker, Inc.

and The Bank of New York Mellon Trust Company, N.A., as trustee, relating to the 6.272% Notes due 2026 and the 6.000% Notes due 2028 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on March 6, 2023).

4.3 Indenture, dated as of November 22, 2005, between The Stanley Works and HSBC Bank USA, National Association, as indenture trustee (incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on November 29, 2005).

9 unchanged sentences

2 to Amended and Restated Five Year Credit Agreement, dated as of February 23, 2023, by and among Stanley Black & Decker, Inc., the lenders identified on the signature pages thereto, and Citibank, N.A., as agent for the lenders (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 23, 2023).

10.2 (a) Syndicated 364-Day Credit Agreement, dated as of September 7, 2022 among Stanley Black & Decker, Inc., the initial lenders named therein and Citibank, N.A.

as administrative agent for the lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 13, 2022).

(b) Amendment No.

1 to Syndicated 364-Day Credit Agreement, dated as of February 23, 2023, by and among Stanley Black & Decker, Inc., the lenders identified on the signature pages thereto, and Citibank, N.A., as agent for the lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 23, 2023).

(c) Club 364-Day Credit Agreement, dated as of September 7, 2022 among Stanley Black & Decker, Inc., the initial lenders named therein and Citibank, N.A.

10.2 Syndicated 364-Day Credit Agreement, made as of September 6, 2023 among Stanley Black & Decker, Inc., the initial lenders named therein and Citibank, N.A.

as administrative agent for the lenders (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 8, 2023).

(d) Amendment No.

1 to Club 364-Day Credit Agreement, dated as of February 23, 2023, by and among Stanley Black & Decker, Inc., the lenders identified on the signature pages thereto, and Citibank, N.A., as agent for the lenders (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 23, 2023).

10.3 Agreement and Mutual Release, dated as of August 4, 2022, between Stanley Black & Decker, Inc.

and James Loree (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended October 1, 2022 filed on October 27, 2022).*

10.3 Letter Agreement, dated as of May 31, 2022, between Stanley Black & Decker, Inc.

1 unchanged sentence

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 1, 2022).*

10.5 Letter Agreement between Stanley Black & Decker, Inc.

Wyatt dated as of December 22, 2014, as amended February 17, 2016 (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the period ended January 2, 2016 filed on February 19, 2016).*

10.6 Agreement and General Release, by and between Jeffery D.

Ansell and Stanley Black & Decker, Inc., dated as of February 4, 2022 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 4.

10.4 Employment Agreement Amendment, dated January 24, 2024, between Stanley Black & Decker, Inc.

and Donald Allan, Jr.(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 24, 2024).

10.5 Change in Control Severance Agreement, dated December 4, 2018 between Stanley Black & Decker, Inc.

1 unchanged sentence

(incorporated by reference to Exhibit 10.5 to the Company's Annual Report on Form 10-K for the period ended December 29, 2018 filed on February 26, 2019).*

10.8 Form of Change in Control Severance Agreement (John H.

Wyatt) (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the period ended January 2, 2021 filed on February 18, 2021).*

10.6 Form C of Change in Control Severance Agreement.

Corbin Walburger is party to a Change in Control Severance Agreement in this Form (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 28, 2013).*

10.7 Deferred Compensation Plan for Non-Employee Directors, as amended through October 1, 2020 (incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the period ended January 2, 2021 filed on February 18, 2021).*

1 unchanged sentence

10.9 Stanley Black & Decker Supplemental Retirement Account Plan (as in effect January 1, 2019) (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended July 2, 2022 filed on July 28, 2022).*

10.12 Stanley Black & Decker, Inc.

Supplemental Executive Retirement Program as amended and restated effective October 15, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 16, 2015).*

10.10 New 1991 Loan Agreement, dated June 30, 1998, between The Stanley Works, as lender, and Citibank, N.A.

13 unchanged sentences

10.14 (a) The Stanley Black & Decker 2022 Omnibus Award Plan (incorporated by reference to Exhibit 99.1(a) to the Registration Statement on Form S-8 filed on April 5, 2022).*

(b) Form of stock option certificate for grants to executive officers pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

(c) Form of restricted stock unit award certificate for grants to executive officers pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

(d) Form of restricted stock unit retention award certificate for grants to executive officers pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

(b) Form of stock option certificate for 2022 fiscal year grants to executive officers pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (incorporated by reference to Exhibit 10.17(b) on the Company's Annual Report on Form 10-K for the period ended December 31, 2022 filed on February 23, 2023).*

(c) Form of restricted stock unit award certificate for 2022 fiscal year grants to executive officers pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (incorporated by reference to Exhibit 10.17(c) on the Company's Annual Report on Form 10-K for the period ended December 31, 2022 filed on February 23, 2023).*

(d) Form of restricted stock unit retention award certificate for 2022 fiscal year grants to executive officers pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (incorporated by reference to Exhibit 10.17(d) on the Company's Annual Report on Form 10-K for the period ended December 31, 2022 filed on February 23, 2023)*

(e) Letter regarding 2022-2024 Long-Term Incentive Program – Special Grant to Donald Allan, Jr.

pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (incorporated by reference to Exhibit 10.17(e) on the Company's Annual Report on Form 10-K for the period ended December 31, 2022 filed on February 23, 2023).*

(f) Form of award document for 2023 Management Incentive Compensation Plan pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the period ended April 1, 2023 filed on May 4, 2023).*

(g) Form of award document for 2023-2025 Long-Term Incentive Program (for award valued as percentage of salary) pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the period ended April 1, 2023 filed on May 4, 2023).*

(h) Form of award document for 2023-2025 Long-Term Incentive Program (for award at specified fair value) pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the period ended April 1, 2023 filed on May 4, 2023).*

(i) Restricted Stock Unit Award Agreement for grants to Christopher J.

Nelson pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

(j) Form of stock option certificate for 2023 fiscal year grants to executive officers pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

(k) Form of restricted stock unit award certificate for 2023 fiscal year grants to executive officers pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

(l) Form of restricted stock unit retention award certificate for 2023 fiscal year grants to executive officer pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

(m) Form of award document for 2024 Management Incentive Compensation Plan pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

(n) Form of award document for 2024-2026 Long-Term Incentive Program (for award at specified fair value) pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

(o) Form of stock option certificate for 2024 fiscal year grants to executive officers pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

(p) Form of restricted stock unit award certificate for 2024 fiscal year grants to executive officers pursuant to the Stanley Black & Decker 2022 Omnibus Award Plan (filed herewith).*

10.15 The Stanley Black & Decker, Inc.

4 unchanged sentences

2020 Restricted Stock Unit Deferral Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.19 on the Company's Annual Report on Form 10-K for the period ended December 28, 2019 filed on February 21, 2020).*

10.21 Special Severance Policy for Management Incentive Compensation Plan Participants Levels 1-5 as amended effective June 24, 2016 (filed herewith).*

10.18 Special Severance Policy for Management Incentive Compensation Plan Participants Levels 1-5 as amended effective June 24, 2016 (incorporated by reference to Exhibit 10.21 on the Company's Annual Report on Form 10-K for the period ended December 31, 2022 filed on February 23, 2023)*

10.19 Executive Officer Cash Severance Policy effective as of February 15, 2023 (incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A filed on March 10, 2023).*

10.20 Global Omnibus Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.1(a) to the Company’s Registration Statement on Form S-8 filed on November 13, 2019).*

3 unchanged sentences

and Graham Robinson (incorporated by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the period ended January 2, 2021 filed on February 18, 2021).*

10.23 Employment Offer Letter, dated January 13, 2023, between Stanley Black & Decker, Inc.

Lucas (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the period ended April 1, 2023 filed on May 4, 2023).*

10.24 Employment Offer Letter, dated January 19, 2023, between Stanley Black & Decker, Inc.

and Patrick Hallinan (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the period ended April 1, 2023 filed on May 4, 2023).*

10.25 Employment Offer Letter, dated May 2, 2023, between Stanley Black & Decker, Inc.

and Christopher J.

Nelson (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended July 1, 2023 filed on August 1, 2023).*

10.26 Employment Offer Letter, dated November 19, 2023, by and between Stanley Black & Decker, Inc.

and Tamer Abuaita (filed herewith).*

10.27 Change in Control Severance Agreement (all other executive officers except Donald Allan Jr.

Wyatt) (incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the period ended January 2, 2021 filed on February 18.

10.26 Underwriting Agreement, dated as of February 22, 2022, between Stanley Black & Decker, Inc.

and BofA Securities, Inc., Citigroup Global Markets Inc., J.P.

Morgan Securities LLC and Wells Fargo Securities, LLC.

(incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on February 24, 2022).

and Corbin Walburger) (incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the period ended January 2, 2021 filed on February 18.

21 Subsidiaries of Registrant.

2 unchanged sentences

31.1 (a) Certification by President and Chief Executive Officer pursuant to Rule 13a-14(a).

31.1 (b) Certification by Interim Chief Financial Officer pursuant to Rule 13a-14(a).

31.1 (b) Certification by Executive Vice President and Chief Financial Officer pursuant to Rule 13a-14(a).

32.1 Certification by President and Chief Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification by Interim Chief Financial Officer pursuant to 18 U.S.C.

32.2 Certification by Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97 Stanley Black & Decker, Inc.

Financial Statement Compensation Recoupment Policy (filed herewith).

99.1 Policy on Confidential Proxy Voting and Independent Tabulation and Inspection of Elections as adopted by The Board of Directors October 23, 1991 (incorporated by reference to Exhibit (28)(i) to the Quarterly Report on Form 10-Q for the quarter ended September 28, 1991).

101 The following materials from Stanley Black & Decker Inc.'s Annual Report on Form 10-K for the year ended December 30, 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language):

(i) Consolidated Statements of Operations for the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021;

(ii) Consolidated Statements of Comprehensive Income for the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021;

(iii) Consolidated Balance Sheets at December 31, 2022 and January 1, 2022;

(iv) Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021;

(v) Consolidated Statements of Changes in Shareowners' Equity for the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021;

(i) Consolidated Statements of Operations for the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022;

(ii) Consolidated Statements of Comprehensive (Loss) Income for the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022;

(iii) Consolidated Balance Sheets at December 30, 2023 and December 31, 2022;

(iv) Consolidated Statements of Cash Flows for the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022;

(v) Consolidated Statements of Changes in Shareowners' Equity for the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022;

and (vi) Notes to Consolidated Financial Statements.**

7 unchanged sentences

otherwise are not subject to liability under those sections.

STANLEY BLACK & DECKER, INC.

/s/ Donald Allan, Jr.

Donald Allan, Jr., President and Chief Executive Officer

February 27, 2024

Signature Title Date

/s/ Donald Allan, Jr.

President and Chief Executive Officer February 27, 2024

Donald Allan, Jr.

/s/ Patrick Hallinan Executive Vice President and Chief Financial Officer February 27, 2024

Patrick Hallinan

/s/ Scot Greulach Chief Accounting Officer February 27, 2024

Scot Greulach

* Director February 27, 2024

(As Attorney-in-Fact)

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 9A. Controls and Procedures