UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~April 2,~~October 1, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [ ] to [ ]

Commission File Number 001-05224


STANLEY BLACK & DECKER, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


CT						06-0548860
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)						(I.R.S. EMPLOYER IDENTIFICATION NUMBER)

1000 STANLEY DRIVE

NEW BRITAIN, CT 06053

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE 860 225-5111

Securities registered pursuant to Section 12(b) of the Act:


Title Of Each Class		Trading Symbol	Name Of Each Exchange On Which Registered
Common Stock	$2.50 Par Value per Share	SWK	New York Stock Exchange
Corporate Units		SWT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

Non-Accelerated Filer

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

~~150,964,631~~147,941,786 shares of the registrant’s common stock were outstanding as of ~~April 22,~~October 21, 2022.

TABLE OF CONTENTS

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

THREE AND NINE MONTHS ENDED ~~APRIL 2,~~OCTOBER 1, 2022 AND ~~APRIL 3,~~OCTOBER 2, 2021

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


		Year-to-Date			Third Quarter						Year-to-Date
			2022			2021			2022		2021		2022		2021
Net Sales	Net Sales		$	4,448.0		$	3,720.8	Net Sales	$	4,119.6	$	3,779.7	$	12,960.6	$	11,299.4
Costs and Expenses	Costs and Expenses							Costs and Expenses
Cost of sales	Cost of sales		$	3,142.6		$	2,333.0	Cost of sales	$	3,101.5	$	2,564.1	$	9,430.0	$	7,334.2
Selling, general and administrative	Selling, general and administrative		949.2			716.9		Selling, general and administrative	799.0		770.8		2,597.6		2,259.7
Provision for credit losses	Provision for credit losses		11.1			2.2		Provision for credit losses	0.8		2.7		15.2		—
Other, net	Other, net		62.0			48.0		Other, net	69.1		28.9		210.2		119.4
Loss on sale of business			—			1.0
Loss on sales of businesses								Loss on sales of businesses	8.6		—		8.4		3.6
Asset impairment charge								Asset impairment charge	—		—		168.4		—
Restructuring charges	Restructuring charges		52.7			1.8		Restructuring charges	68.6		0.6		140.8		12.8
Interest income	Interest income		(2.8)			(2.9)		Interest income	(15.4)		(2.2)		(24.7)		(7.8)
Interest expense	Interest expense		54.7			47.5		Interest expense	91.7		45.6		224.6		139.6
			$	4,269.5		$	3,147.5		$	4,123.9	$	3,410.5	$	12,770.5	$	9,861.5
Earnings from continuing operations before income taxes and equity interest			178.5			573.3
(Loss) earnings from continuing operations before income taxes and equity interest								(Loss) earnings from continuing operations before income taxes and equity interest	(4.3)		369.2		190.1		1,437.9
Income taxes on continuing operations	Income taxes on continuing operations		22.9			115.5		Income taxes on continuing operations	(40.9)		(0.5)		(80.8)		182.3
Net earnings from continuing operations before equity interest	Net earnings from continuing operations before equity interest		155.6			457.8		Net earnings from continuing operations before equity interest	36.6		369.7		270.9		1,255.6
Share of net earnings of equity method investment	Share of net earnings of equity method investment		—			1.8		Share of net earnings of equity method investment	—		9.8		—		16.0
Net earnings from continuing operations	Net earnings from continuing operations		155.6			459.6		Net earnings from continuing operations	36.6		379.5		270.9		1,271.6
Less: Net earnings (losses) attributable to non-controlling interests			0.1			(0.6)
Less: Net (losses) earnings attributable to non-controlling interests								Less: Net (losses) earnings attributable to non-controlling interests	—		(0.1)		0.2		(1.7)
Net earnings from continuing operations attributable to Stanley Black & Decker, Inc.	Net earnings from continuing operations attributable to Stanley Black & Decker, Inc.		$	155.5		$	460.2	Net earnings from continuing operations attributable to Stanley Black & Decker, Inc.	$	36.6	$	379.6	$	270.7	$	1,273.3
Less: Preferred stock dividends and beneficial conversion feature	Less: Preferred stock dividends and beneficial conversion feature		—			9.4		Less: Preferred stock dividends and beneficial conversion feature	—		—		—		14.2
Net Earnings from Continuing Operations Attributable to Common Shareowners	Net Earnings from Continuing Operations Attributable to Common Shareowners		$	155.5		$	450.8	Net Earnings from Continuing Operations Attributable to Common Shareowners	$	36.6	$	379.6	$	270.7	$	1,259.1
Add: Contract adjustment payments accretion	Add: Contract adjustment payments accretion		0.3			0.2		Add: Contract adjustment payments accretion	0.3		0.4		1.0		0.9
Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted	Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted		$	155.8		$	451.0	Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted	$	36.9	$	380.0	$	271.7	$	1,260.0
Earnings from discontinued operations before income taxes			22.2			31.1
Income taxes on discontinued operations			2.4			3.9
Earnings from discontinued operations before income taxes (including pre-tax gain on Security sale of $1,220.0 million)								Earnings from discontinued operations before income taxes (including pre-tax gain on Security sale of $1,220.0 million)	1,204.9		34.7		1,233.5		98.2
Income taxes on discontinued operations (including income taxes for gain on Security sale of $390.7 million)								Income taxes on discontinued operations (including income taxes for gain on Security sale of $390.7 million)	396.9		0.1		396.7		10.4
Net earnings from discontinued operations	Net earnings from discontinued operations		$	19.8		$	27.2	Net earnings from discontinued operations	$	808.0	$	34.6	$	836.8	$	87.8
Net Earnings Attributable to Common Shareowners - Diluted	Net Earnings Attributable to Common Shareowners - Diluted		$	175.6		$	478.2	Net Earnings Attributable to Common Shareowners - Diluted	$	844.9	$	414.6	$	1,108.5	$	1,347.8
Net Earnings Attributable to Stanley Black & Decker, Inc.	Net Earnings Attributable to Stanley Black & Decker, Inc.		$	175.3		$	487.4	Net Earnings Attributable to Stanley Black & Decker, Inc.	$	844.6	$	414.2	$	1,107.5	$	1,361.1
Total Comprehensive Income Attributable to Common Shareowners	Total Comprehensive Income Attributable to Common Shareowners		$	147.6		$	380.3	Total Comprehensive Income Attributable to Common Shareowners	$	569.3	$	326.4	$	526.8	$	1,185.8
Basic earnings per share of common stock:	Basic earnings per share of common stock:							Basic earnings per share of common stock:
Continuing operations	Continuing operations		$	1.00		$	2.86	Continuing operations	$	0.25	$	2.38	$	1.82	$	7.94
Discontinued operations	Discontinued operations		$	0.13		$	0.17	Discontinued operations	$	5.60	$	0.22	$	5.64	$	0.55
Total basic earnings per share of common stock	Total basic earnings per share of common stock		$	1.13		$	3.04	Total basic earnings per share of common stock	$	5.85	$	2.60	$	7.46	$	8.50
Diluted earnings per share of common stock:	Diluted earnings per share of common stock:							Diluted earnings per share of common stock:
Continuing operations	Continuing operations		$	0.94		$	2.74	Continuing operations	$	0.24	$	2.30	$	1.72	$	7.64
Discontinued operations	Discontinued operations		$	0.12		$	0.17	Discontinued operations	$	5.26	$	0.21	$	5.30	$	0.53
Total diluted earnings per share of common stock	Total diluted earnings per share of common stock		$	1.06		$	2.91	Total diluted earnings per share of common stock	$	5.50	$	2.51	$	7.02	$	8.17

See Notes to Unaudited Condensed Consolidated Financial Statements.

Table of Contents

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

~~CONDENSED~~ CONSOLIDATED BALANCE SHEETS

~~APRIL 2,~~OCTOBER 1, 2022 AND JANUARY 1, 2022

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


		April 2, 2022		January 1, 2022			October 1, 2022		January 1, 2022
ASSETS	ASSETS					ASSETS
Current Assets	Current Assets					Current Assets
Cash and cash equivalents	Cash and cash equivalents	$	165.8	$	142.1	Cash and cash equivalents	$	408.7	$	142.1
Accounts and notes receivable, net	Accounts and notes receivable, net	1,842.0		1,481.7		Accounts and notes receivable, net	1,503.2		1,481.7
Inventories, net	Inventories, net	6,267.7		5,419.9		Inventories, net	6,347.2		5,419.9
Current assets held for sale	Current assets held for sale	864.0		869.6		Current assets held for sale	—		869.6
Prepaid expenses	Prepaid expenses	495.3		507.0		Prepaid expenses	436.8		507.0
Other current assets	Other current assets	101.4		106.1		Other current assets	108.7		106.1
Total Current Assets	Total Current Assets	9,736.2		8,526.4		Total Current Assets	8,804.6		8,526.4
Property, plant and equipment, net	Property, plant and equipment, net	2,365.6		2,336.8		Property, plant and equipment, net	2,305.6		2,336.8
Goodwill	Goodwill	8,597.0		8,590.7		Goodwill	8,354.6		8,590.7
Customer Relationships, net		1,955.2		2,000.0
Trade Names, net		2,672.3		2,681.8
Other intangible Assets, net		12.8		13.2
Customer relationships, net						Customer relationships, net	1,857.6		2,000.0
Trade names, net						Trade names, net	2,639.3		2,681.8
Other intangible assets, net						Other intangible assets, net	9.4		13.2
Long-term assets held for sale	Long-term assets held for sale	2,628.5		2,635.8		Long-term assets held for sale	—		2,635.8
Other assets	Other assets	1,391.1		1,395.3		Other assets	1,552.8		1,395.3
Total Assets	Total Assets	$	29,358.7	$	28,180.0	Total Assets	$	25,523.9	$	28,180.0
LIABILITIES AND SHAREOWNERS' EQUITY	LIABILITIES AND SHAREOWNERS' EQUITY					LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities	Current Liabilities					Current Liabilities
Short-term borrowings	Short-term borrowings	$	5,086.4	$	2,241.1	Short-term borrowings	$	2,569.2	$	2,241.1
Current maturities of long-term debt	Current maturities of long-term debt	1.2		1.3		Current maturities of long-term debt	1.2		1.3
Accounts payable	Accounts payable	3,367.7		3,423.6		Accounts payable	2,492.8		3,423.6
Accrued expenses	Accrued expenses	2,036.2		2,641.0		Accrued expenses	2,543.8		2,641.0
Liabilities held for sale	Liabilities held for sale	463.5		460.4		Liabilities held for sale	—		460.4
Total Current Liabilities	Total Current Liabilities	10,955.0		8,767.4		Total Current Liabilities	7,607.0		8,767.4
Long-term debt	Long-term debt	5,355.5		4,353.6		Long-term debt	5,350.5		4,353.6
Deferred taxes	Deferred taxes	662.8		711.2		Deferred taxes	674.3		711.2
Post-retirement benefits	Post-retirement benefits	454.9		474.1		Post-retirement benefits	403.5		474.1
Long-term liabilities held for sale	Long-term liabilities held for sale	129.1		137.4		Long-term liabilities held for sale	—		137.4
Other liabilities	Other liabilities	2,446.6		2,143.9		Other liabilities	1,939.9		2,143.9
Commitments and Contingencies (Notes R and S)	Commitments and Contingencies (Notes R and S)	0		0		Commitments and Contingencies (Notes R and S)
Shareowners’ Equity	Shareowners’ Equity					Shareowners’ Equity
Stanley Black & Decker, Inc. Shareowners’ Equity	Stanley Black & Decker, Inc. Shareowners’ Equity					Stanley Black & Decker, Inc. Shareowners’ Equity
Preferred stock, without par value: Authorized 10,000,000 shares in 2022 and 2021 Issued and outstanding 750,000 shares in 2022 and 2021	Preferred stock, without par value: Authorized 10,000,000 shares in 2022 and 2021 Issued and outstanding 750,000 shares in 2022 and 2021	620.3		620.3		Preferred stock, without par value: Authorized 10,000,000 shares in 2022 and 2021 Issued and outstanding 750,000 shares in 2022 and 2021	620.3		620.3
Common stock, par value $2.50 per share: Authorized 300,000,000 shares in 2022 and 2021 Issued 176,902,738 shares in 2022 and 2021	Common stock, par value $2.50 per share: Authorized 300,000,000 shares in 2022 and 2021 Issued 176,902,738 shares in 2022 and 2021	442.3		442.3		Common stock, par value $2.50 per share: Authorized 300,000,000 shares in 2022 and 2021 Issued 176,902,738 shares in 2022 and 2021	442.3		442.3
Retained earnings	Retained earnings	8,801.4		8,742.4		Retained earnings	9,504.1		8,742.4
Additional paid in capital	Additional paid in capital	4,705.5		4,999.2		Additional paid in capital	5,023.4		4,999.2
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(1,873.3)		(1,845.6)		Accumulated other comprehensive loss	(2,426.3)		(1,845.6)
		12,696.2		12,958.6			13,163.8		12,958.6
Less: cost of common stock in treasury (25,964,890 shares in 2022 and 13,573,962 shares in 2021)		(3,343.4)		(1,368.1)
Less: cost of common stock in treasury (28,965,585 shares in 2022 and 13,964,054 shares in 2021)						Less: cost of common stock in treasury (28,965,585 shares in 2022 and 13,964,054 shares in 2021)	(3,617.2)		(1,368.1)
Stanley Black & Decker, Inc. Shareowners’ Equity	Stanley Black & Decker, Inc. Shareowners’ Equity	9,352.8		11,590.5		Stanley Black & Decker, Inc. Shareowners’ Equity	9,546.6		11,590.5
Non-controlling interests	Non-controlling interests	2.0		1.9		Non-controlling interests	2.1		1.9
Total Shareowners’ Equity	Total Shareowners’ Equity	9,354.8		11,592.4		Total Shareowners’ Equity	9,548.7		11,592.4
Total Liabilities and Shareowners’ Equity	Total Liabilities and Shareowners’ Equity	$	29,358.7	$	28,180.0	Total Liabilities and Shareowners’ Equity	$	25,523.9	$	28,180.0

See Notes to Unaudited Condensed Consolidated Financial Statements.

Table of Contents

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE AND NINE MONTHS ENDED ~~APRIL 2,~~OCTOBER 1, 2022 AND ~~APRIL 3,~~OCTOBER 2, 2021

(Unaudited, Millions of Dollars)

Year-to-Date
2022 2021
OPERATING ACTIVITIES
Net earnings from continuing operations $ 155.6 $ 459.6
Net earnings from discontinued operations 19.8 27.2
Adjustments to reconcile net earnings to cash used in operating activities:
Depreciation and amortization of property, plant and equipment 92.0 93.5
Amortization of intangibles 51.7 50.5
Loss on sale of business — 1.0
Share of net earnings of equity method investment — (1.8)
Changes in working capital (1,336.1) (720.4)
Changes in other assets and liabilities (224.1) (67.4)
Cash used in operating activities (1,241.1) (157.8)
INVESTING ACTIVITIES
Capital and software expenditures (139.8) (88.3)
Proceeds from sales of assets 9.0 1.3
Business acquisitions, net of cash acquired (36.5) (0.2)
Purchases of investments (0.1) (7.0)
Net investment hedge settlements 4.7 (52.6)
Other (0.7) (1.1)
Cash used in investing activities (163.4) (147.9)
FINANCING ACTIVITIES
Proceeds from debt issuances, net of fees 994.8 —
Stock purchase contract fees (9.8) (9.8)
Net short-term borrowings (repayments) 2,844.8 (0.7)
Proceeds from issuances of common stock 13.7 64.1
Purchases of common stock for treasury (2,313.0) (14.9)
Craftsman contingent consideration (9.8) (7.0)
Termination of interest rate swaps 22.7 —
Cash dividends on common stock (116.3) (110.1)
Cash dividends on preferred stock — (9.4)
Other (1.7) (7.2)
Cash provided by (used in) financing activities 1,425.4 (95.0)
Effect of exchange rate changes on cash, cash equivalents and restricted cash 4.8 (38.9)
Change in cash, cash equivalents and restricted cash 25.7 (439.6)
Cash, cash equivalents and restricted cash, beginning of period 294.8 1,398.3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 320.5 $ 958.7


	Third Quarter				Year-to-Date
	2022		2021		2022		2021
OPERATING ACTIVITIES
Net earnings from continuing operations	$	36.6	$	379.5	$	270.9	$	1,271.6
Net earnings from discontinued operations	808.0		34.6		836.8		87.8
Adjustments to reconcile net earnings to cash (used in) provided by operating activities:
Depreciation and amortization of property, plant and equipment	88.4		93.9		272.3		279.3
Amortization of intangibles	49.6		50.3		152.8		151.3
Gain on sale of discontinued operations	(1,220.0)		—		(1,220.0)		—
Loss on sales of businesses	8.6		—		8.4		3.6
Asset impairment charge	—		—		168.4		—
Share of net earnings of equity method investment	—		(9.8)		—		(16.0)
Changes in working capital	(393.3)		(456.7)		(2,297.4)		(1,373.5)
Changes in other assets and liabilities	196.5		(87.2)		(302.8)		(112.9)
Cash (used in) provided by operating activities	(425.6)		4.6		(2,110.6)		291.2
INVESTING ACTIVITIES
Capital and software expenditures	(114.4)		(129.1)		(399.9)		(322.5)
Proceeds from sales of assets	24.7		1.7		39.9		7.1
Proceeds from sales of businesses, net of cash sold	4,146.9		—		4,147.1		(1.9)
Business acquisitions, net of cash acquired	(26.5)		(9.3)		(72.1)		(10.8)
Purchases of investments	(2.9)		(3.5)		(12.2)		(14.5)
Acquisition of assets	(14.4)		(0.5)		(15.2)		(1.4)
Net investment hedge settlements	1.7		(1.3)		10.6		(53.9)
Other	(0.2)		(1.0)		(1.0)		(1.8)
Cash provided by (used in) investing activities	4,014.9		(143.0)		3,697.2		(399.7)
FINANCING ACTIVITIES
Proceeds from debt issuances, net of fees	—		—		992.6		—
Stock purchase contract fees	(9.9)		(9.9)		(29.5)		(29.5)
Net short-term (repayments) borrowings	(3,263.4)		149.6		328.0		150.7
Proceeds from issuances of common stock	3.4		7.7		23.0		108.1
Purchases of common stock for treasury	(4.6)		(2.8)		(2,318.7)		(20.1)
Redemption and conversion of preferred stock	—		—		—		(750.0)
Craftsman contingent consideration	(11.4)		(7.6)		(32.5)		(21.5)
Termination of interest rate swaps	—		—		22.7		—
Cash dividends on common stock	(115.5)		(126.0)		(345.8)		(347.7)
Cash dividends on preferred stock	—		—		—		(18.9)
Other	(3.2)		(3.2)		(10.8)		(11.6)
Cash (used in) provided by financing activities	(3,404.6)		7.8		(1,371.0)		(940.5)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(78.2)		(15.5)		(95.8)		(45.9)
Change in cash, cash equivalents and restricted cash	106.5		(146.1)		119.8		(1,094.9)
Cash, cash equivalents and restricted cash, beginning of period	308.1		449.5		294.8		1,398.3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD	$	414.6	$	303.4	$	414.6	$	303.4

Table of Contents

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances as of ~~April 2,~~October 1, 2022 and January 1, 2022, as shown above:


		April 2, 2022		January 1, 2022			October 1, 2022		January 1, 2022
Cash and cash equivalents	Cash and cash equivalents	$	165.8	$	142.1	Cash and cash equivalents	$	408.7	$	142.1
Restricted cash included in Other current assets	Restricted cash included in Other current assets	3.9		7.6		Restricted cash included in Other current assets	5.9		7.6
Cash and cash equivalents included in Current assets held for sale	Cash and cash equivalents included in Current assets held for sale	150.8		145.1		Cash and cash equivalents included in Current assets held for sale	—		145.1
Cash, cash equivalents and restricted cash	Cash, cash equivalents and restricted cash	$	320.5	$	294.8	Cash, cash equivalents and restricted cash	$	414.6	$	294.8

See Notes to Unaudited Condensed Consolidated Financial Statements.

Table of Contents

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY

THREE AND NINE MONTHS ENDED ~~APRIL 2,~~OCTOBER 1, 2022 AND ~~APRIL 3,~~OCTOBER 2, 2021

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


		Preferred Stock		Common Stock		Additional Paid In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Non- Controlling Interests		Shareowners’ Equity			Preferred Stock		Common Stock		Additional Paid In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Non- Controlling Interests		Shareowners’ Equity
Balance January 1, 2022	Balance January 1, 2022	$	620.3	$	442.3	$	4,999.2	$	8,742.4	$	(1,845.6)	$	(1,368.1)	$	1.9	$	11,592.4	Balance January 1, 2022	$	620.3	$	442.3	$	4,999.2	$	8,742.4	$	(1,845.6)	$	(1,368.1)	$	1.9	$	11,592.4
Net earnings	Net earnings	—		—		—		175.3		—		—		0.1		175.4		Net earnings	—		—		—		175.3		—		—		0.1		175.4
Other comprehensive loss	Other comprehensive loss	—		—		—		—		(27.7)		—		—		(27.7)		Other comprehensive loss	—		—		—		—		(27.7)		—		—		(27.7)
Cash dividends declared — $0.79 per common share	Cash dividends declared — $0.79 per common share	—		—		—		(116.3)		—		—		—		(116.3)		Cash dividends declared — $0.79 per common share	—		—		—		(116.3)		—		—		—		(116.3)
Issuance of common stock (338,897 shares)	Issuance of common stock (338,897 shares)	—		—		(24.0)		—		—		37.7		—		13.7		Issuance of common stock (338,897 shares)	—		—		(24.0)		—		—		37.7		—		13.7
Repurchase of common stock (12,729,825 shares)	Repurchase of common stock (12,729,825 shares)	—		—		(300.0)		—		—		(2,013.0)		—		(2,313.0)		Repurchase of common stock (12,729,825 shares)	—		—		(300.0)		—		—		(2,013.0)		—		(2,313.0)
Stock-based compensation related	Stock-based compensation related	—		—		30.3		—		—		—		—		30.3		Stock-based compensation related	—		—		30.3		—		—		—		—		30.3
Balance April 2, 2022	Balance April 2, 2022	$	620.3	$	442.3	$	4,705.5	$	8,801.4	$	(1,873.3)	$	(3,343.4)	$	2.0	$	9,354.8	Balance April 2, 2022	$	620.3	$	442.3	$	4,705.5	$	8,801.4	$	(1,873.3)	$	(3,343.4)	$	2.0	$	9,354.8

Net earnings																		Net earnings	—		—		—		87.6		—		—		0.1		87.7
Other comprehensive loss																		Other comprehensive loss	—		—		—		—		(277.7)		—		—		(277.7)
Cash dividends declared — $0.79 per common share																		Cash dividends declared — $0.79 per common share	—		—		—		(114.0)		—		—		—		(114.0)
Issuance of common stock (83,264 shares)																		Issuance of common stock (83,264 shares)	—		—		(4.4)		—		—		10.3		—		5.9
Repurchase of common stock (3,219,632 shares)																		Repurchase of common stock (3,219,632 shares)	—		—		299.9		—		—		(301.0)		—		(1.1)
Stock-based compensation related																		Stock-based compensation related	—		—		26.3		—		—		—		—		26.3
Balance July 2, 2022																		Balance July 2, 2022	$	620.3	$	442.3	$	5,027.3	$	8,775.0	$	(2,151.0)	$	(3,634.1)	$	2.1	$	9,081.9
Net earnings																		Net earnings	—		—		—		844.6		—		—		—		844.6
Other comprehensive loss																		Other comprehensive loss	—		—		—		—		(275.3)		—		—		(275.3)
Cash dividends declared — $0.80 per common share																		Cash dividends declared — $0.80 per common share	—		—		—		(115.5)		—		—		—		(115.5)
Issuance of common stock (186,290 shares)																		Issuance of common stock (186,290 shares)	—		—		(18.1)		—		—		21.5		—		3.4
Repurchase of common stock (50,617 shares)																		Repurchase of common stock (50,617 shares)	—		—		—		—		—		(4.6)		—		(4.6)
Stock-based compensation related																		Stock-based compensation related	—		—		14.2		—		—		—		—		14.2
Balance October 1, 2022																		Balance October 1, 2022	$	620.3	$	442.3	$	5,023.4	$	9,504.1	$	(2,426.3)	$	(3,617.2)	$	2.1	$	9,548.7

Preferred
Stock Common
Stock Additional
Paid In
Capital Retained
Earnings Accumulated
Other
Comprehensive
Loss Treasury
Stock Non-
Controlling
Interests Shareowners’
Equity
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
Net earnings (loss) — — — 487.4 — — (0.6) 486.8
Other comprehensive loss — — — — (97.7) — — (97.7)
Cash dividends declared — $0.70 per share — — — (110.1) — — — (110.1)
Cash dividends declared - $50.00 per annum per preferred share — — — (9.4) — — — (9.4)
Issuance of common stock (848,275 shares) — — (12.7) — — 76.8 — 64.1
Repurchase of common stock (80,310 shares) — — — — — (14.9) — (14.9)
Non-controlling interest buyout — — (2.8) — — — (3.2) (6.0)
Stock-based compensation related — — 25.6 — — — — 25.6
Balance April 3, 2021 $ 1,370.3 $ 442.3 $ 4,977.9 $ 7,910.1 $ (1,811.4) $ (1,487.4) $ 3.0 $ 11,404.8

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	Preferred Stock		Common Stock		Additional Paid In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Non- Controlling Interests		Shareowners’ Equity
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
Net earnings (loss)	—		—		—		487.4		—		—		(0.6)		486.8
Other comprehensive loss	—		—		—		—		(97.7)		—		—		(97.7)
Cash dividends declared — $0.70 per common share	—		—		—		(110.1)		—		—		—		(110.1)
Cash dividends declared - $50.00 per annum per preferred share	—		—		—		(9.4)		—		—		—		(9.4)
Issuance of common stock (848,275 shares)	—		—		(12.7)		—		—		76.8		—		64.1
Repurchase of common stock (80,310 shares)	—		—		—		—		—		(14.9)		—		(14.9)
Non-controlling interest buyout	—		—		(2.8)		—		—		—		(3.2)		(6.0)
Stock-based compensation related	—		—		25.6		—		—		—		—		25.6
Balance April 3, 2021	$	1,370.3	$	442.3	$	4,977.9	$	7,910.1	$	(1,811.4)	$	(1,487.4)	$	3.0	$	11,404.8
Net earnings (loss)	—		—		—		459.5		—		—		(1.0)		458.5
Other comprehensive income	—		—		—		—		24.4		—		—		24.4
Cash dividends declared — $0.70 per common share	—		—		—		(111.6)		—		—		—		(111.6)
Cash dividends declared - $50.00 per annum per preferred share	—		—		—		(4.8)		—		—		—		(4.8)
Issuance of common stock (305,153 shares)	—		—		8.1		—		—		28.2		—		36.3
Repurchase of common stock (355,751 shares)	—		—		72.2		—		—		(74.6)		—		(2.4)
Redemption and conversion of preferred stock (1,469,055 shares)	(750.0)		—		(137.3)		—		—		137.3		—		(750.0)
Stock-based compensation related	—		—		30.8		—		—		—		—		30.8
Balance July 3, 2021	$	620.3	$	442.3	$	4,951.7	$	8,253.2	$	(1,787.0)	$	(1,396.5)	$	2.0	$	11,086.0
Net earnings (loss)	—		—		—		414.2		—		—		(0.1)		414.1
Other comprehensive loss	—		—		—		—		(87.8)		—		—		(87.8)
Cash dividends declared — $0.79 per common share	—		—		—		(126.0)		—		—		—		(126.0)
Issuance of common stock (96,462 shares)	—		—		(1.3)		—		—		9.0		—		7.7
Repurchase of common stock (14,153 shares)	—		—		—		—		—		(2.8)		—		(2.8)
Stock-based compensation related	—		—		27.0		—		—		—		—		27.0
Balance October 2, 2021	$	620.3	$	442.3	$	4,977.4	$	8,541.4	$	(1,874.8)	$	(1,390.3)	$	1.9	$	11,318.2

See Notes to Unaudited Condensed Consolidated Financial Statements.

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STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL 2,~~OCTOBER 1, 2022

A. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (hereinafter referred to as “generally accepted accounting principles”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations for the interim periods have been included and are of a normal, recurring nature. Operating results for the three and nine months ended ~~April 2,~~October 1, 2022 are not necessarily indicative of the results that may be expected for a full fiscal year. For further information, refer to the consolidated financial statements and footnotes included in Stanley Black & Decker, Inc.’s (the “Company”) Form 10-K for the year ended January 1, 2022, and subsequent related filings with the Securities and Exchange Commission ("SEC").

In December 2021, the Company acquired the remaining 80 percent ownership stake in MTD Holdings Inc. ("MTD"), a privately held global manufacturer of outdoor power equipment. The Company previously acquired a 20 percent interest in MTD in January 2019. Prior to closing on the remaining 80 percent ownership stake, the Company applied the equity method of accounting to the 20% investment in MTD. In November 2021, the Company acquired Excel Industries ("Excel"), a leading designer and manufacturer of premium commercial and residential turf-care equipment. These acquisitions are being 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 April~~On July 5, 2022, the Company completed the previously announced ~~that it had reached a definitive agreement for the~~ sale of its Mechanical Access Solutions ("MAS") business, the automatic doors business. ~~In December 2021,~~On July 22, 2022, the Company completed the previously announced ~~it reached a definitive agreement for the~~ sale of its Convergent Security Solutions ("CSS") business comprising of the commercial electronic security and healthcare businesses. Based on management's commitment to sell these businesses, the assets and liabilities related to MAS and CSS were classified as held for sale on the Company's ~~Condensed~~ Consolidated Balance Sheets as of ~~April 2, 2022 and~~ January 1, 2022.

The MAS and CSS 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 MAS and CSS 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 ~~Standard~~Standards Codification ("ASC") 205, Presentation of Financial Statements ("ASC 205"), to allow for meaningful comparison of continuing operations.

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

Refer to Note F, Acquisitions and Investments, and Note T, Divestitures, for further discussion of these transactions.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. Certain amounts reported in previous years have been reclassified to conform to the 2022 presentation.

B. NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS ADOPTED — In October 2021, the ~~FASB~~Financial Accounting Standards Board ("FASB") issued ~~ASU~~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, Revenue from Contracts with Customers. The ASU is effective for fiscal years beginning after

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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.

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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. ~~Early adoption is permitted, including adoption in an interim period. The standard should be applied prospectively.~~ 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 both the three and nine months ended ~~April 2,~~October 1, 2022 by 4.1 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 C, Earnings Per Share 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. The Company's adoption of this standard 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): Disclosure of Supplier Finance Program Obligations. The new standard requires that a buyer in a supplier finance program disclose sufficient information about the key terms of the program, the amount of outstanding confirmed obligations at period end, where the obligations are presented in the balance sheet, and a rollforward of the obligations during the annual period. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. 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 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): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The new standard clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring the fair value of the security. The new standard also requires certain disclosures related to equity securities with contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. 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 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The new standard eliminates the recognition and measurement guidance for troubled debt restructurings (TDRs) for creditors that have adopted ASC 326 and requires public entities to present gross write-offs by year of origination in their vintage disclosures. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The standard should be applied prospectively, and it allows for a modified retrospective transition method resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. The

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

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C. 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 three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021:


		Year-to-Date			Third Quarter						Year-to-Date
			2022			2021			2022		2021		2022		2021
Numerator (in millions):	Numerator (in millions):							Numerator (in millions):
Net Earnings from Continuing Operations Attributable to Common Shareowners	Net Earnings from Continuing Operations Attributable to Common Shareowners		$	155.5		$	450.8	Net Earnings from Continuing Operations Attributable to Common Shareowners	$	36.6	$	379.6	$	270.7	$	1,259.1
Add: Contract adjustment payments accretion	Add: Contract adjustment payments accretion		0.3			0.2		Add: Contract adjustment payments accretion	0.3		0.4		1.0		0.9
Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted	Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted		$	155.8		$	451.0	Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted	$	36.9	$	380.0	$	271.7	$	1,260.0
Net earnings from discontinued operations	Net earnings from discontinued operations		19.8			27.2		Net earnings from discontinued operations	808.0		34.6		836.8		87.8
Net Earnings Attributable to Common Shareowners - Diluted	Net Earnings Attributable to Common Shareowners - Diluted		$	175.6		$	478.2	Net Earnings Attributable to Common Shareowners - Diluted	$	844.9	$	414.6	$	1,108.5	$	1,347.8


		Year-to-Date		Third Quarter				Year-to-Date
			2022		2021		2022	2021	2022	2021
Denominator (in thousands):	Denominator (in thousands):					Denominator (in thousands):
Basic weighted-average shares outstanding	Basic weighted-average shares outstanding		155,433		157,490	Basic weighted-average shares outstanding	144,379	159,444	148,384	158,494
Dilutive effect of stock contracts and awards	Dilutive effect of stock contracts and awards		9,980		6,859	Dilutive effect of stock contracts and awards	9,221	5,892	9,582	6,406
Diluted weighted-average shares outstanding	Diluted weighted-average shares outstanding		165,413		164,349	Diluted weighted-average shares outstanding	153,600	165,336	157,966	164,900


								Third Quarter				Year-to-Date
								2022		2021		2022		2021
Earnings per share of common stock:	Earnings per share of common stock:			Earnings per share of common stock:
Basic earnings per share of common stock:	Basic earnings per share of common stock:						Basic earnings per share of common stock:
Continuing operations	Continuing operations	$	1.00		$	2.86	Continuing operations	$	0.25	$	2.38	$	1.82	$	7.94
Discontinued operations	Discontinued operations	$	0.13		$	0.17	Discontinued operations	$	5.60	$	0.22	$	5.64	$	0.55
Total basic earnings per share of common stock	Total basic earnings per share of common stock	$	1.13		$	3.04	Total basic earnings per share of common stock	$	5.85	$	2.60	$	7.46	$	8.50

Diluted earnings per share of common stock:	Diluted earnings per share of common stock:						Diluted earnings per share of common stock:
Continuing operations	Continuing operations	$	0.94		$	2.74	Continuing operations	$	0.24	$	2.30	$	1.72	$	7.64
Discontinued operations	Discontinued operations	$	0.12		$	0.17	Discontinued operations	$	5.26	$	0.21	$	5.30	$	0.53
Total dilutive earnings per share of common stock	Total dilutive earnings per share of common stock	$	1.06		$	2.91	Total dilutive earnings per share of common stock	$	5.50	$	2.51	$	7.02	$	8.17

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):

Year-to-Date
2022 2021
Number of stock options 2,545 1,096


	Third Quarter		Year-to-Date
	2022	2021	2022	2021
Number of stock options	4,627	1,042	3,780	948

In November 2019, the Company issued 7,500,000 Equity Units with a total notional value of $750.0 million ("2019 Equity Units"). Each unit has a stated amount of $100 and initially consists 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.

On and after November 15, 2022, the Series D Preferred Stock may be converted into common stock at the option of the holder. At the election of the Company, upon conversion, the Company may deliver cash, common stock, or a combination thereof.

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The conversion rate was initially 5.2263 shares of common stock per one share of Series D Preferred Stock, which was equivalent to an initial conversion price of approximately $191.34 per share of common stock. As of ~~April 2,~~October 1, 2022, due to customary anti-dilution provisions, the conversion rate was ~~5.2362,~~5.2475, equivalent to a conversion price of approximately ~~$190.98~~

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$190.57 per share of common stock. 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 ~~totaling 4.1 million are~~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 both the three and nine months ended October 1, 2022 by 4.1 million shares.

In May 2017, the Company issued 7,500,000 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 per share, 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. Upon completion of the remarketing, the holders of the 2017 Equity Units received 5,463,750 common shares and the Company issued 750,000 shares of Remarketed Series C Preferred Stock, without par, with a liquidation preference of $1,000 per share. 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 may deliver cash, common stock, or a combination thereof. In connection with the remarketing described above, 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.

In April 2021, the Company informed holders that it would redeem all outstanding shares of the Remarketed Series C Preferred Stock on June 3, 2021 (the “Redemption Date”) at $1,002.50 per share in cash (the “Redemption Price”) 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, the Redemption Date. If a holder elected to convert its shares of Remarketed Series C Preferred Stock prior to the Redemption Date, the Company elected a combination settlement with a specified cash amount of $1,000 per share. 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. The conversion rate used was 6.7548 (equivalent to a conversion price set at $148.04 per common share). Prior to the Redemption Date, the Remarketed Series C Preferred Stock was excluded from the denominator of the diluted earnings per share calculation on the basis that the Remarketed Series C Preferred Stock would be settled in cash except to the extent that the conversion value exceeded its liquidation preference. 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.

Refer to Note J, Equity Arrangements, for further discussion of the above transactions.

D. ACCOUNTS AND NOTES RECEIVABLE, NET


(Millions of Dollars)	(Millions of Dollars)	April 2, 2022		January 1, 2022		(Millions of Dollars)	October 1, 2022		January 1, 2022
Trade accounts receivable	Trade accounts receivable	$	1,773.1	$	1,398.2	Trade accounts receivable	$	1,433.6	$	1,398.2
Trade notes receivable	Trade notes receivable	71.6		75.3		Trade notes receivable	81.2		75.3
Other accounts receivable	Other accounts receivable	105.1		104.1		Other accounts receivable	96.4		104.1
Gross accounts and notes receivable	Gross accounts and notes receivable	$	1,949.8	$	1,577.6	Gross accounts and notes receivable	$	1,611.2	$	1,577.6
Allowance for credit losses	Allowance for credit losses	(107.8)		(95.9)		Allowance for credit losses	(108.0)		(95.9)
Accounts and notes receivable, net	Accounts and notes receivable, net	$	1,842.0	$	1,481.7	Accounts and notes receivable, net	$	1,503.2	$	1,481.7

Trade receivables are dispersed among a large number of retailers, distributors and industrial accounts in many countries. Adequate reserves have been established to cover anticipated credit losses.

The changes in the allowance for credit losses for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021 are as follows:

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						Third Quarter				Year-to-Date
(Millions of Dollars)	(Millions of Dollars)	April 2, 2022		April 3, 2021	(Millions of Dollars)	2022		2021		2022		2021
Beginning Balance	Beginning Balance	$	95.9	106.2	Beginning Balance	$	102.2	$	103.1	$	95.9	$	106.2
Charged To Costs and Expenses	Charged To Costs and Expenses	11.1		2.2	Charged To Costs and Expenses	0.8		2.7		15.2		—
Other, including recoveries and deductions (a)	Other, including recoveries and deductions (a)	0.8		0.9	Other, including recoveries and deductions (a)	5.0		(4.0)		(3.1)		(4.4)
Balance end of period	Balance end of period	$	107.8	109.3	Balance end of period	$	108.0	$	101.8	$	108.0	$	101.8

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

The Company's payment terms are generally consistent with the industries in which their businesses operate and typically range from 30-90 days globally. 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. Any significant financing components for contracts greater than one year are included in revenue over time.

At ~~April 2,~~October 1, 2022 and January 1, 2022, the Industrial segment operating lease receivable was ~~$18.8~~$0.6 million and $21.2 million, respectively, from leasing equipment to customers. The decrease as of October 1, 2022 is primarily due to the sale of the Oil & Gas business. Net sales from operating lease revenue were ~~$12.7~~$10.4 million and ~~$19.6~~$39.1 million for the three and nine months ended ~~April~~October 1, 2022, respectively. Net sales from operating lease revenue were $17.1 million and $47.7 million for the three and nine months ended October 2, ~~2022 and April 3,~~ 2021, respectively.

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"). 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. The purpose of the program is to provide liquidity to the Company. These transfers qualify as sales under ASC 860, Transfers and Servicing, and receivables are derecognized from the Company’s consolidated balance sheet when the BRS sells those receivables to the Purchaser. The Company has no retained interests in the transferred receivables, other than collection and administrative responsibilities. At ~~April 2,~~October 1, 2022 and January 1, 2022, 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 ~~April 2,~~October 1, 2022 and January 1, 2022, net receivables of approximately ~~$86.4~~$89.5 million and $100.0 million, respectively, were derecognized. Proceeds from transfers of receivables to the Purchaser totaled ~~$82.3~~$107.7 million and $322.3 million for the three and nine months ended October 1, 2022, respectively, and payments to the Purchaser totaled $128.2 million and $332.8 million, respectively. Proceeds from transfers of receivables to the Purchaser totaled $114.1 million and ~~$63.4~~$296.8 million for the three and nine months ended ~~April~~October 2, ~~2022 and April 3,~~ 2021, respectively, and payments to the Purchaser totaled ~~$95.9~~$114.1 million and ~~$85.9~~$283.6 million, respectively. The program resulted in a pre-tax loss of ~~$0.4~~$1.2 million and $2.5 million for the three and nine months ended October 1, 2022, respectively, which included service fees of $0.3 million and $0.7 million, respectively. The program resulted in a pre-tax loss of $0.5 million and ~~$0.4~~$1.3 million for the three and nine months ended ~~April~~October 2, ~~2022 and April 3,~~ 2021, respectively, which included service fees of $0.2 million ~~in both periods.~~ and $0.6 million, respectively. All cash flows under the program are reported as a component of changes in ~~accounts receivable~~working capital within operating activities in the Condensed Consolidated Statements of Cash Flows since all the cash from the Purchaser is received upon the initial sale of the receivable.

As of ~~April 2,~~October 1, 2022 and January 1, 2022, the Company's deferred revenue totaled ~~$118.8~~$126.9 million and $117.1 million, respectively, of which ~~$37.3~~$30.6 million and $35.0 million, respectively, was classified as current.Revenue recognized for the ~~three~~nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021 that was previously deferred as of January 1, 2022 and January 2, 2021 totaled ~~$5.9~~$19.2 million and ~~$6.8~~$15.3 million, respectively.

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E. INVENTORIES

The components of Inventories, net at ~~April 2,~~October 1, 2022 and January 1, 2022 are as follows:


(Millions of Dollars)	(Millions of Dollars)	April 2, 2022		January 1, 2022		(Millions of Dollars)	October 1, 2022		January 1, 2022
Finished products	Finished products	$	4,022.8	$	3,486.2	Finished products	$	3,840.2	$	3,486.2
Work in process	Work in process	428.9		394.8		Work in process	357.3		394.8
Raw materials	Raw materials	1,816.0		1,538.9		Raw materials	2,149.7		1,538.9
Total	Total	$	6,267.7	$	5,419.9	Total	$	6,347.2	$	5,419.9

F. ACQUISITIONS AND INVESTMENTS

2021 ACQUISITIONS

MTD

~~Table of Contents~~

On December 1, 2021, the Company acquired the remaining 80 percent ownership stake in MTD, a privately held global manufacturer of outdoor power equipment, for $1.5 billion, net of cash acquired. The Company previously acquired a 20 percent interest in MTD in January 2019 for $234 million. The Company’s pre-existing 20 percent equity investment in MTD was remeasured at fair value of $295.1 million as of the transaction date based on the purchase price for the remaining 80 percent ownership, which was calculated using an EBITDA-based formula. As a result, the Company recorded a $68.0 million gain on investment during the fourth quarter of 2021.

MTD designs, manufactures and distributes lawn tractors, zero turn ride on mowers, walk behind mowers, snow blowers, residential robotic mowers, handheld outdoor power equipment and garden tools for both residential and professional consumers under well-known brands like Cub Cadet® and Troy-Bilt®. This combination will create a global leader in the outdoor category, with strong brands and growth opportunities. The results of MTD subsequent to the date of acquisition are included in the Company's Tools & Outdoor segment.

The MTD acquisition is being 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 following table summarizes the estimated acquisition date value of identifiable net assets acquired and liabilities assumed:


(Millions of Dollars)
Cash and cash equivalents	$	111.6
Accounts receivable, net	~~276.4~~275.5
Inventories, net	~~900.7~~893.2
Prepaid expenses and other assets	97.7
Property, plant and equipment	~~222.8~~258.7
Trade names	390.0
Customer relationships	~~450.0~~460.0
Other assets	37.8
Accounts payable	~~(394.4)~~(394.6)
Accrued expenses	~~(258.7)~~(257.6)
Deferred revenue	(0.9)
Long-term debt	(110.9)
Deferred taxes	~~(195.6)~~(205.4)
Other liabilities	(68.4)
Total identifiable net assets	$	~~1,458.1~~1,486.7
Goodwill	~~478.6~~450.0
Total consideration	$	1,936.7

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The weighted-average useful life assigned to the definite-lived intangible assets is 15 years.

~~Table of Contents~~

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. It is estimated that $0.6 million of goodwill will be deductible for tax purposes.

The acquisition accounting for MTD is ~~preliminary in certain respects. During~~substantially complete with the ~~measurement period, the Company expects to record adjustments relating to the finalization~~exception of ~~intangible assets, inventory and property, plant and equipment valuations,~~ working capital accounts and opening balance sheet ~~contingencies, amongst others.~~contingencies.

A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The Company’s judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results from operations.

Excel

On November 12, 2021, the Company acquired Excel Industries ("Excel") for ~~$373.6~~$373.7 million, net of cash ~~acquired and an estimated working capital adjustment.~~acquired. Excel is a leading designer and manufacturer of premium commercial and residential turf-care equipment under the ~~brands of~~ Hustler Turf ~~Equipment and BigDog Mower Co.~~Equipment® brand. The results of Excel subsequent to the date of acquisition are included in the Company's Tools & Outdoor segment.

The Company believes this is a strategically important bolt-on acquisition as it builds an outdoor products leader. The Excel acquisition is being accounted for as a business combination, which requires, among other things, certain assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date. The estimated value of identifiable net assets acquired, which includes ~~$37.2~~$36.7 million of working capital, ~~$48.7~~$48.5 million of deferred tax liabilities, and $203.5 million of intangible assets, is $200.4 million. The related goodwill is ~~$173.2~~$173.3 million. The amount allocated to intangible assets includes $158.0 million for customer relationships. The weighted-average useful life assigned to the intangible assets is 14 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. ItGoodwill is ~~estimated that $0.6 million of goodwill will~~not expected to be deductible for tax purposes.

The acquisition accounting for Excel is ~~preliminary in certain respects. During~~substantially complete with the ~~measurement period, the Company expects to record adjustments relating to the finalization~~exception of ~~intangible and inventory valuations,~~ working capital accounts and opening balance sheet ~~contingencies, amongst others.~~contingencies.

Other 2021 Acquisitions

During 2021, the Company completed two other acquisitions for a total purchase price of $207.7 million, net of cash acquired. The estimated acquisition date value of the identifiable net assets acquired is ~~$51.6~~$51.1 million and working capital is ~~$36.7~~$36.5 million. The related goodwill is ~~$156.1~~$156.6 million. The results of these acquisitions subsequent to the dates of acquisition are included in the Company's Tools & Outdoor segment.

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. It is estimated that ~~$44.7~~$44.9 million of goodwill will be deductible for tax purposes.

The acquisition accounting for these acquisitions is ~~preliminary in certain respects. During~~substantially complete with the ~~measurement period, the Company expects to record adjustments relating to~~exception of working capital accounts, ~~various~~ opening balance sheet contingencies, and various income tax matters, amongst others.

ACTUAL AND PRO-FORMA IMPACT OF THE ACQUISITIONS

Actual Impact from Acquisition

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The Company did not complete any material acquisitions in the first ~~quarter~~nine months of 2022. As such, there was no material impact from new acquisitions on the Company's Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~ for the three and nine months ended ~~April 2,~~October 1, 2022.

Pro-forma Impact from Acquisitions

The following table presents supplemental pro-forma information as if the 2021 acquisitions had occurred on December 29, 2019. The pro-forma consolidated results are not necessarily indicative of what the Company’s consolidated net sales and net earnings would have been had the Company completed the acquisitions on the aforementioned date. In addition, the pro-forma consolidated results do not purport to project the future results of the Company.


(Millions of Dollars, except per share amounts)	(Millions of Dollars, except per share amounts)	First Quarter 2022		First Quarter 2021		(Millions of Dollars, except per share amounts)	Third Quarter				Year-To-Date
							2022		2021		2022		2021
Net sales	Net sales	$	4,448.0	$	4,594.8	Net sales	$	4,119.6	$	4,369.8	$	12,960.6	$	13,637.4
Net earnings from continuing operations attributable to common shareowners - Diluted	Net earnings from continuing operations attributable to common shareowners - Diluted	$	242.9	$	475.8	Net earnings from continuing operations attributable to common shareowners - Diluted	$	49.5	$	403.7	$	399.8	$	1,331.3
Diluted earnings per share of common stock - Continuing operations	Diluted earnings per share of common stock - Continuing operations	$	1.47	$	2.90	Diluted earnings per share of common stock - Continuing operations	$	0.32	$	2.44	$	2.53	$	8.07

2022 Pro-forma Results

The 2022 pro-forma results were calculated by combining the actual results of Stanley Black & Decker for the three and nine months ended ~~April 2,~~October 1, 2022, inclusive of the results of MTD and Excel, with the following adjustment:

•Because the 2021 acquisitions were assumed to occur on December 29, 2019, there were no acquisition-related costs or inventory step-up charges factored into the 2022 pro-forma period, as such expenses would have occurred in the first year following the assumed acquisition date.

2021 Pro-forma Results

The 2021 pro-forma results were calculated by combining the results of Stanley Black & Decker with the stand-alone results of the 2021 acquisitions for their respective pre-acquisition period. Accordingly, the following adjustment was made:

•Elimination of the historical pre-acquisition intangible asset amortization expense and the addition of intangible asset amortization expense related to intangibles valued as part of the acquisition accounting that would have been incurred from January 2, 2021 to ~~April 3,~~October 2, 2021.

•Because the 2021 acquisitions were assumed to occur on December 29, 2019, there were no acquisition-related costs or inventory step-up charges factored into the 2021 pro-forma year, as such expenses would have occurred in the first year following the assumed acquisition date.

INVESTMENTS

During 2022 and 2021, the Company made additional immaterial investments in new and emerging start-up companies focused on innovation, breakthrough products and advanced technologies. ~~These~~With the exception of one immaterial investment, these investments, which are included in Other assets in the ~~Condensed~~ 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.

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G. GOODWILL

Changes in the carrying amount of goodwill by segment are as follows:


(Millions of Dollars)	(Millions of Dollars)	Tools & Outdoor		Industrial		Total		(Millions of Dollars)	Tools & Outdoor		Industrial		Total
Balance January 1, 2022	Balance January 1, 2022	$	5,973.7	$	2,617.0	$	8,590.7	Balance January 1, 2022	$	5,973.7	$	2,617.0	$	8,590.7
Acquisitions	Acquisitions	40.1		—		40.1		Acquisitions	46.8		—		46.8
Foreign currency translation		(25.8)		(8.0)		(33.8)
Balance April 2, 2022		$	5,988.0	$	2,609.0	$	8,597.0
Foreign currency translation & other								Foreign currency translation & other	(212.3)		(70.6)		(282.9)
Balance October 1, 2022								Balance October 1, 2022	$	5,808.2	$	2,546.4	$	8,354.6

Goodwill totaling ~~$2,073.8~~$2,088.0 million ~~and $2,088.0 million~~from the previously reported Security segment was reclassified to assets held for sale as of ~~April 2, 2022 and~~ January 1, 2022. In July 2022, ~~respectively.~~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, 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 Footnote T, Divestitures, for additional information.

H. LONG-TERM DEBT AND FINANCING ARRANGEMENTS

Long-term debt and financing arrangements at ~~April 2,~~October 1, 2022 and January 1, 2022 are as follows:


			April 2, 2022												January 1, 2022				October 1, 2022												January 1, 2022
(Millions of Dollars)	(Millions of Dollars)	Interest Rate	Original Notional		Unamortized Discount		Unamortized Gain/(Loss) Terminated Swaps 1		Purchase Accounting FV Adjustment		Deferred Financing Fees		Carrying Value		Carrying Value		(Millions of Dollars)	Interest Rate	Notional Value		Unamortized Discount		Unamortized Gain/(Loss) Terminated Swaps 1		Purchase Accounting FV Adjustment		Deferred Financing Fees		Carrying Value		Carrying Value
Notes payable due 2025	Notes payable due 2025	2.30%	$	500.0	$	(0.7)	$	—	$	—	$	(1.2)	$	498.1	$	—	Notes payable due 2025	2.30%	$	500.0	$	(0.6)	$	—	$	—	$	(2.0)	$	497.4	$	—
Notes payable due 2026	Notes payable due 2026	3.40%	500.0		(0.4)		—		—		(1.7)		497.9		497.8		Notes payable due 2026	3.40%	500.0		(0.3)		—		—		(1.5)		498.2		497.8
Notes payable due 2026	Notes payable due 2026	3.42%	25.0		—		—		1.6		—		26.6		24.9		Notes payable due 2026	3.42%	25.0		—		—		1.5		—		26.5		24.9
Notes payable due 2026	Notes payable due 2026	1.84%	28.5		—		—		0.8		(0.1)		29.2		28.4		Notes payable due 2026	1.84%	24.5		—		—		1.3		—		25.8		28.4
Notes payable due 2028	Notes payable due 2028	7.05%	150.0		—		6.8		6.6		—		163.4		163.9		Notes payable due 2028	7.05%	150.0		—		6.3		6.0		—		162.3		163.9
Notes payable due 2028	Notes payable due 2028	4.25%	500.0		(0.3)		—		—		(2.9)		496.8		496.8		Notes payable due 2028	4.25%	500.0		(0.2)		—		—		(2.7)		497.1		496.8
Notes payable due 2028	Notes payable due 2028	3.52%	50.0		0				4.3		(0.2)		54.1		49.9		Notes payable due 2028	3.52%	50.0		—		—		4.1		(0.1)		54.0		49.9
Notes payable due 2030	Notes payable due 2030	2.30%	750.0		(2.0)		—		—		(4.1)		743.9		743.7		Notes payable due 2030	2.30%	750.0		(1.8)		—		—		(3.9)		744.3		743.7
Notes payable due 2032	Notes payable due 2032	3.00%	500.0		(0.9)		—		—		(2.3)		496.8		—		Notes payable due 2032	3.00%	500.0		(0.9)		—		—		(3.3)		495.8		—
Notes payable due 2040	Notes payable due 2040	5.20%	400.0		(0.2)		(27.2)		—		(2.5)		370.1		369.7		Notes payable due 2040	5.20%	400.0		(0.2)		(26.5)		—		(2.4)		370.9		369.7
Notes payable due 2048	Notes payable due 2048	4.85%	500.0		(0.5)		—		—		(4.9)		494.6		494.6		Notes payable due 2048	4.85%	500.0		(0.5)		—		—		(4.8)		494.7		494.6
Notes payable due 2050	Notes payable due 2050	2.75%	750.0		(1.9)		—		—		(8.0)		740.1		740.0		Notes payable due 2050	2.75%	750.0		(1.8)		—		—		(7.9)		740.3		740.0
Notes payable due 2060 (junior subordinated)	Notes payable due 2060 (junior subordinated)	4.00%	750.0		—		—		—		(9.0)		741.0		740.9		Notes payable due 2060 (junior subordinated)	4.00%	750.0		—		—		—		(8.9)		741.1		740.9
Other, payable in varying amounts 2022 through 2027	Other, payable in varying amounts 2022 through 2027	3.47%-4.31%	4.3		—		—		—		(0.2)		4.1		4.3		Other, payable in varying amounts 2022 through 2027	3.47%-4.31%	3.3		—		—		—		—		3.3		4.3
Total Long-term debt, including current maturities	Total Long-term debt, including current maturities		$	5,407.8	$	(6.9)	$	(20.4)	$	13.3	$	(37.1)	$	5,356.7	$	4,354.9	Total Long-term debt, including current maturities		$	5,402.8	$	(6.3)	$	(20.2)	$	12.9	$	(37.5)	$	5,351.7	$	4,354.9
Less: Current maturities of long-term debt	Less: Current maturities of long-term debt												(1.2)		(1.3)		Less: Current maturities of long-term debt												(1.2)		(1.3)
Long-term debt	Long-term debt												$	5,355.5	$	4,353.6	Long-term debt												$	5,350.5	$	4,353.6

1Unamortized gain/(loss) associated with interest rate swaps are more fully discussed in Note I, Financial Instruments.

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”). The 2025 Term Notes will accrue interest at a fixed rate of 2.3% per annum and the 2032 Term Notes at a fixed rate of 3.0% per annum, with interest

payable semi-annually in arrears, and 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 approximately ~~$994.8~~$992.6 million, net of approximately ~~$5.2~~$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.

The Company has a $3.5 billion commercial paper program which includes Euro denominated borrowings in addition to U.S. Dollars. As of ~~April 2,~~October 1, 2022 and January 1, 2022, the Company had commercial paper borrowings outstanding of ~~$2.8~~$2.6 billion and $2.2 billion, respectively.

The Company has a five-year $2.5 billion committed credit facility (the “5-Year Credit Agreement”). Borrowings under the 5-Year Credit Agreement may be made in U.S. Dollars, Euros or Pounds Sterling. A sub-limit amount of $814.3 million is designated for swing line advances which may be drawn in Euros pursuant to the terms of the 5-Year Credit Agreement. Borrowings bear interest at a floating rate plus an applicable margin dependent upon the denomination of the borrowing and specific terms of the 5-Year Credit Agreement. The Company must repay all advances under the 5-Year Credit Agreement by the earlier of September 8, 2026 or upon termination. The 5-Year Credit Agreement is designated to be a liquidity back-stop for the Company's $3.5 billion U.S. Dollar and Euro commercial paper program. As of ~~April 2,~~October 1, 2022, and January 1, 2022, the Company had not drawn on its five-year committed credit facility.

~~The~~In September 2022, the Company ~~has a 364-Day~~terminated its 364-Day $1.0 billion ~~committed~~committed 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 syndicated 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. 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 Syndicated 364-Day Credit Agreement. The Company must repay all advances under the Syndicated 364-Day Credit Agreement by the earlier of September ~~7, 2022 or upon 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 first 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. The 364-Day Credit Agreement serves as part of the liquidity back-stop for the Company’s $3.5 billion U.S. Dollar and Euro commercial paper program. ~~As of April 2, 2022, and January 1, 2022, the Company had not drawn on its 364-Day Credit Agreement~~.

~~The Company has a second 364-Day $1.0 billion committed credit facility (the "Second 364-Day Credit A~~greement"). Borrowings under the Second 364-Day Credit Agreement may be made in U.S. Dollars and Euros and bear interest at a base rate plus an applicable margin determined at the time of borrowing. The Company must repay all advances under the Second 364-Day Credit Agreement by the earlier of November 15, 20226, 2023 or upon 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 first 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. The Syndicated 364-Day Credit Agreement serves as part of the liquidity back-stop for the Company’s $3.5 billion U.S. Dollar and Euro commercial paper program. As of ~~April 2, 2022 and January~~October 1, 2022, the Company had not drawn on its ~~Second~~Syndicated 364-Day Credit Agreement.

In ~~January~~September 2022, the Company ~~executed a third~~terminated its second 364-Day ~~$2.5~~$1.0 billion committed credit facility (the ~~"Third~~"Second 364-Day Credit Agreement"), 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 ~~Third~~Club 364-Day Credit Agreement ~~shall~~may be made in U.S. Dollars and Euros and bear interest at a ~~base~~floating rate plus an applicable margin ~~determined at~~dependent upon the ~~time~~denomination of the ~~borrowing.~~borrowing and pursuant to the terms of the Club 364-Day Credit Agreement. The Company must repay all advances under the ~~Third~~Club 364-Day Credit Agreement by the earlier of ~~January 25,~~September 6, 2023 or ~~upon~~upon 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 first anniversary of the termination date provided ~~tha~~tthat the Company, among other things, pays a fee to the administrative agent for the account of each lender. As of ~~April 2,~~October 1, 2022, the Company had not drawn on its Club 364-Day Credit Agreement.

In August 2022, the Company ~~had $2.3~~paid $2.5 billion ~~outstand~~to settle the outstanding amount of its third 364-Day committed credit facility (the "Third 364-Day Credit Agreement"), dated January 2022, usi~~ing on its~~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.~~Agreement upon termination. The Company did not incur any termination penalties in connection with the termination.

I. FINANCIAL INSTRUMENTS

The Company is exposed to market risk from changes in foreign currency exchange rates, interest rates, stock prices and commodity prices. 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, Derivatives and Hedging, management designates its derivative instruments as cash flow hedges, fair value hedges or net investment hedges. Generally,

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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 ~~Condensed~~ Consolidated Balance Sheets at ~~April 2,~~October 1, 2022 and January 1, 2022 is as follows:


(Millions of Dollars)	(Millions of Dollars)	Balance Sheet Classification	April 2, 2022		January 1, 2022		Balance Sheet Classification	April 2, 2022		January 1, 2022		(Millions of Dollars)	Balance Sheet Classification	October 1, 2022		January 1, 2022		Balance Sheet Classification	October 1, 2022		January 1, 2022
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:											Derivatives designated as hedging instruments:
Interest Rate Contracts Cash Flow	Interest Rate Contracts Cash Flow	Other current assets	$	—	$	1.2	Accrued expenses	$	—	$	1.9	Interest Rate Contracts Cash Flow	Other current assets	$	—	$	1.2	Accrued expenses	$	—	$	1.9
Foreign Exchange Contracts Cash Flow	Foreign Exchange Contracts Cash Flow	Other current assets	17.1		18.3		Accrued expenses	1.0		0.8		Foreign Exchange Contracts Cash Flow	Other current assets	12.9		18.3		Accrued expenses	—		0.8
													LT other assets	1.4		—		LT other liabilities	—		—
Net Investment Hedge	Net Investment Hedge	Other current assets	2.9		2.5		Accrued expenses	—		—		Net Investment Hedge	Other current assets	—		2.5		Accrued expenses	—		—
		LT other assets	—		3.3		LT other liabilities	—		—			LT other assets	—		3.3		LT other liabilities	—		—
Total designated as hedging	Total designated as hedging		$	20.0	$	25.3		$	1.0	$	2.7	Total designated as hedging		$	14.3	$	25.3		$	—	$	2.7
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:											Derivatives not designated as hedging instruments:
Foreign Exchange Contracts	Foreign Exchange Contracts	Other current assets	$	9.9	$	7.8	Accrued expenses	$	10.8	$	6.0	Foreign Exchange Contracts	Other current assets	$	21.0	$	7.8	Accrued expenses	$	26.1	$	6.0
Total	Total		$	29.9	$	33.1		$	11.8	$	8.7	Total		$	35.3	$	33.1		$	26.1	$	8.7

The counterparties to all of the above mentioned financial instruments are major international financial institutions. The Company is exposed to credit risk for net exchanges under these agreements, but not for the notional amounts. The credit risk is limited to the asset amounts noted above. 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 risk of default is considered remote. As of

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~~April 2,~~ October 1, 2022 and January 1, 2022, there were no assets that had been posted as collateral related to the above mentioned financial instruments.

During the ~~three~~nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021, cash flows related to derivatives, including those that are separately discussed below, resulted in net cash received of ~~$36.6~~$81.7 million and net cash paid of ~~$71.7~~$99.4 million, respectively.

CASH FLOW HEDGES

There were after-tax mark-to-market losses of ~~$30.8~~$20.5 million and $49.8 million as of ~~April 2,~~October 1, 2022 and January 1, 2022, respectively, reported for cash flow hedge effectiveness in Accumulated other comprehensive loss. An after-tax gain of ~~$8.6~~$11.2 million is expected to be reclassified to earnings as the hedged transactions occur or as amounts are amortized within the next twelve months. The ultimate amount recognized will vary based on fluctuations of the hedged currencies and interest rates through the maturity dates.

The tables below detail pre-tax amounts of derivatives designated as cash flow hedges in Accumulated other comprehensive loss during the periods in which the underlying hedged transactions affected earnings for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021:

Year-to-Date 2022
(Millions of Dollars) Gain (Loss)
Recorded in OCI Classification of
Gain (Loss)
Reclassified from
OCI to Income Gain (Loss)
Reclassified from
OCI to Income Gain (Loss)
Recognized in
Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts $ 23.4 Interest expense $ (1.2) $ —
Foreign Exchange Contracts $ 6.5 Cost of sales $ 6.1 $ —


		Year-to-Date 2021								Third Quarter 2022
(Millions of Dollars)		Gain (Loss) Recorded in OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income		Gain (Loss) Recognized in Income on Amounts Excluded from Effectiveness Testing
(Millions of dollars)									(Millions of dollars)	Gain (Loss) Recorded in OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income		Gain (Loss) Recognized in Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts	Interest Rate Contracts	$	52.4	Interest expense	$	(1.1)	$	—	Interest Rate Contracts	$	—	Interest expense	$	(1.5)	$	—
Foreign Exchange Contracts	Foreign Exchange Contracts	$	4.3	Cost of sales	$	(3.8)	$	—	Foreign Exchange Contracts	$	15.8	Cost of sales	$	14.8	$	—

1820

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	Year-to-Date 2022
(Millions of Dollars)	Gain (Loss) Recorded in OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income		Gain (Loss) Recognized in Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts	$	23.4	Interest expense	$	(4.2)	$	—
Foreign Exchange Contracts	$	39.2	Cost of sales	$	28.1	$	—


	Third Quarter 2021
(Millions of dollars)	Gain (Loss) Recorded in OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income		Gain (Loss) Recognized in Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts	$	2.9	Interest expense	$	(0.8)	$	—
Foreign Exchange Contracts	$	11.0	Cost of sales	$	(9.9)	$	—


	Year-to-Date 2021
(Millions of Dollars)	Gain (Loss) Recorded in OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income		Gain (Loss) Recognized in Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts	$	30.3	Interest expense	$	(2.9)	$	—
Foreign Exchange Contracts	$	19.2	Cost of sales	$	(21.3)	$	—

A summary of the pre-tax effect of cash flow hedge accounting on the Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~ for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021 is as follows:


		Year-to-Date 2022					Third Quarter 2022				Year-to-Date 2022
(Millions of Dollars)	(Millions of Dollars)		Cost of Sales		Interest Expense			(Millions of Dollars)	Cost of Sales		Interest Expense		Cost of Sales		Interest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive Income (Loss) in which the effects of the cash flow hedges are recorded			$	3,142.6	$	54.7
Total amount in the Consolidated Statements of Operations and Comprehensive Income in which the effects of the cash flow hedges are recorded								Total amount in the Consolidated Statements of Operations and Comprehensive Income in which the effects of the cash flow hedges are recorded	$	3,101.5	$	91.7	$	9,430.0	$	224.6
Gain (loss) on cash flow hedging relationships:	Gain (loss) on cash flow hedging relationships:							Gain (loss) on cash flow hedging relationships:
Foreign Exchange Contracts:	Foreign Exchange Contracts:							Foreign Exchange Contracts:
Hedged Items	Hedged Items		$	(6.1)	$	—		Hedged Items	$	(14.8)	$	—	$	(28.1)	$	—
Gain (loss) reclassified from OCI into Income	Gain (loss) reclassified from OCI into Income		$	6.1	$	—		Gain (loss) reclassified from OCI into Income	$	14.8	$	—	$	28.1	$	—
Interest Rate Swap Agreements:	Interest Rate Swap Agreements:							Interest Rate Swap Agreements:
Gain (loss) reclassified from OCI into Income 1	Gain (loss) reclassified from OCI into Income 1		$	—	$	(1.2)		Gain (loss) reclassified from OCI into Income 1	$	—	$	(1.5)	$	—	$	(4.2)


		Year-to-Date 2021					Third Quarter 2021				Year-to-Date 2021
(Millions of Dollars)	(Millions of Dollars)		Cost of Sales		Interest Expense			(Millions of Dollars)	Cost of Sales		Interest Expense		Cost of Sales		Interest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive Income (Loss) in which the effects of the cash flow hedges are recorded			$	2,333.0	$	47.5
Total amount in the Consolidated Statements of Operations and Comprehensive Income in which the effects of the cash flow hedges are recorded								Total amount in the Consolidated Statements of Operations and Comprehensive Income in which the effects of the cash flow hedges are recorded	$	2,564.1	$	45.6	$	7,334.2	$	139.6
Gain (loss) on cash flow hedging relationships:	Gain (loss) on cash flow hedging relationships:							Gain (loss) on cash flow hedging relationships:
Foreign Exchange Contracts:	Foreign Exchange Contracts:							Foreign Exchange Contracts:
Hedged Items	Hedged Items		$	3.8	$	—		Hedged Items	$	9.9	$	—	$	21.3	$	—
Gain (loss) reclassified from OCI into Income	Gain (loss) reclassified from OCI into Income		$	(3.8)	$	—		Gain (loss) reclassified from OCI into Income	$	(9.9)	$	—	$	(21.3)	$	—
Interest Rate Swap Agreements:	Interest Rate Swap Agreements:							Interest Rate Swap Agreements:
Gain (loss) reclassified from OCI into Income 1	Gain (loss) reclassified from OCI into Income 1		$	—	$	(1.1)		Gain (loss) reclassified from OCI into Income 1	$	—	$	(0.8)	$	—	$	(2.9)

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

An after-tax gain of ~~$2.5~~$5.7 million and loss of ~~$2.9~~$5.3 million were reclassified from Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative instruments) for the three months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021, respectively. An after-tax gain of $10.4 million and loss of $13.5 million were reclassified from Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative instruments) for the nine months ended October 1, 2022 and October 2, 2021, respectively.

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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-debt proportions. The cash flows stemming from the maturity of such interest rate swaps designated as cash flow hedges are presented within financing activities in the Condensed Consolidated Statements of Cash Flows. The Company has no outstanding forward starting swaps designated as cash flow hedges as of October 1, 2022, and had $400.0 million outstanding in forward starting swaps designated as cash flow hedges as of January 1, 2022.

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 is recorded in Accumulated other comprehensive loss and is being amortized to interest expense over future periods.

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

The Company has no outstanding forward starting swaps designated as cash flow hedges as of April 2, 2022, and had $400.0 million outstanding in forward starting swaps designated as cash flow hedges as of January 1, 2022.

Foreign Currency Contracts

Forward Contracts: Through its global businesses, the Company enters into transactions and makes investments denominated in multiple currencies that give rise to foreign currency risk. The Company and its subsidiaries regularly purchase inventory from subsidiaries with functional currencies different than their own, which creates currency-related volatility in the Company’s results of operations. The Company utilizes forward contracts to hedge these forecasted purchases and sales of inventory. Gains and losses reclassified from Accumulated other comprehensive loss are recorded in Cost of sales as the hedged item affects earnings. There are no components excluded from the assessment of effectiveness for these contracts. At ~~April 2,~~October 1, 2022 and January 1, 2022, the notional value of forward currency contracts outstanding was ~~$434.3~~$220.6 million and $512.1 million ~~respectively,~~ maturing on various dates through ~~2022.~~2023 and 2022, respectively.

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FAIR VALUE HEDGES

Interest Rate Risk: In an effort to optimize the mix of fixed versus floating rate debt in the Company’s capital structure, the Company enters into interest rate swaps. In prior years, the Company entered into interest rate swaps related to certain of its notes payable which were subsequently terminated. Amortization of the gain/loss on previously terminated swaps is reported as a reduction of interest expense. 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. As of ~~April 2,~~October 1, 2022 and January 1, 2022, the Company did not have any active fair value interest rate swaps.

A summary of the pre-tax effect of fair value hedge accounting on the Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~ for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021 is as follows:


(Millions of Dollars)	(Millions of Dollars)	Year-to-Date 2022 Interest Expense		Year-to-Date 2021 Interest Expense		(Millions of Dollars)	Third Quarter 2022 Interest Expense		Year-to-Date 2022 Interest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive Income (Loss) in which the effects of the fair value hedges are recorded		$	54.7	$	47.5
Total amount in the Consolidated Statements of Operations and Comprehensive Income in which the effects of the fair value hedges are recorded						Total amount in the Consolidated Statements of Operations and Comprehensive Income in which the effects of the fair value hedges are recorded	$	91.7	$	224.6
Amortization of gain on terminated swaps	Amortization of gain on terminated swaps	$	(0.1)	$	(0.1)	Amortization of gain on terminated swaps	$	(0.1)	$	(0.3)


(Millions of Dollars)	Third Quarter 2021 Interest Expense		Year-to-Date 2021 Interest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive Income in which the effects of the fair value hedges are recorded	$	45.6	$	139.6
Amortization of gain on terminated swaps	$	(0.1)	$	(0.3)

A summary of the amounts recorded in the ~~Condensed~~ Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of ~~April 2,~~October 1, 2022 and January 1, 2022 is as follows:


		April 2, 2022						October 1, 2022
(Millions of Dollars)	(Millions of Dollars)	Carrying Amount of Hedged Liability (1)		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability			(Millions of Dollars)	Carrying Amount of Hedged Liability (1)		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability

Current Maturities of Long-Term Debt	Current Maturities of Long-Term Debt	$	—	Terminated Swaps	$	—	Current Maturities of Long-Term Debt	$	—	Terminated Swaps	$	—
Long-Term Debt	Long-Term Debt	$	533.5	Terminated Swaps	$	(20.4)	Long-Term Debt	$	533.2	Terminated Swaps	$	(20.2)

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	January 1, 2022
(Millions of Dollars)	Carrying Amount of Hedged Liability (1)		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability

Current Maturities of Long-Term Debt	$	—	Terminated Swaps	$	—
Long-Term Debt	$	533.6	Terminated Swaps	$	(20.4)

(1) Represents hedged items no longer designated in qualifying fair value hedging relationships.

NET INVESTMENT HEDGES

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 ~~$71.7~~$72.7 million and $71.8 million at ~~April 2,~~October 1, 2022 and January 1, 2022, respectively.

As of ~~April 2,~~October 1, 2022, ~~and~~the Company had no net investment hedges with a notional value outstanding. 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. As of January 1, 2022, the Company had~~investments, and a cross currency swap with a notional value of $100.0 million that was hedging a portion of its Japanese yen denominated net investments and was scheduled to mature in 2023. During 2022, this swap was terminated resulting in a gain of $4.0 million.

Maturing foreign exchange contracts resulted in net cash received of ~~$4.7~~$10.6 million and net cash paid of ~~$52.6~~$53.9 million for the ~~three~~nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021, respectively.

Gains and losses on net investment hedges remain in Accumulated other comprehensive ~~(loss) income~~loss until disposal of the underlying assets. Gains and losses representing components excluded from the assessment of effectiveness are recognized in earnings in Other, net on a straight-line basis over the term of the hedge. Gains and losses after a hedge has been de-designated are recorded directly to earnings in Other, net.

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The pre-tax gain or loss from fair value changes for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021 was as follows:


	Third Quarter 2022
(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	$	0.1	$	—	Other, net	$	—		$	—
Cross Currency Swap	$	(0.7)	$	—	Other, net	$	—		$	—

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


								—


		Year-to-Date 2022										Year-to-Date 2022
(Millions of Dollars)	(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		(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	Forward Contracts	$	2.8	$	0.6	Other, net	$	0.5	$	0.5	Forward Contracts	$	5.4	$	0.6	Other, net	$	0.7	$	0.7
Cross Currency Swap	Cross Currency Swap	$	(0.8)	$	2.5	Other, net	$	1.5	$	1.5	Cross Currency Swap	$	(2.1)	$	2.5	Other, net	$	1.5	$	1.5
Non-derivative designated as Net Investment Hedge	Non-derivative designated as Net Investment Hedge	$	(0.1)	$	—	Other, net	$	—	$	—	Non-derivative designated as Net Investment Hedge	$	(0.1)	$	—	Other, net	$	—	$	—


	Third Quarter 2021
(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)	$	0.3	Other, net	$	0.4	$	0.4
Cross Currency Swap	$	(0.2)	$	6.0	Other, net	$	0.8	$	0.8

Year-to-Date 2021
(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) $ 0.8 Other, net $ — $ —
Cross Currency Swap $ 8.1 $ 7.4 Other, net $ 1.3 $ 1.3
Non-derivative designated as Net Investment Hedge $ — $ — Other, net $ — $ —

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	Year-to-Date 2021
(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	$	(1.4)	$	1.1	Other, net	$	1.1	$	1.1
Cross Currency Swap	$	9.1	$	19.9	Other, net	$	2.9	$	2.9

UNDESIGNATED HEDGES

Foreign Exchange Contracts: 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 April 2,~~was $1.1 billion as of October 1, 2022 and January 1, ~~2022 was $1.2 billion, maturing~~2022. These forward contracts mature on various dates through 2022. The gain (loss) recorded in income from changes in the fair value related to derivatives not designated as hedging instruments under ASC 815 for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021 are as follows:


(Millions of Dollars)	(Millions of Dollars)	Income Statement Classification	Year-to-Date 2022		Year-to-Date 2021		(Millions of Dollars)	Income Statement Classification	Third Quarter 2022		Year-to-Date 2022		Third Quarter 2021		Year-to-Date 2021
Foreign Exchange Contracts	Foreign Exchange Contracts	Other, net	$	0.9	$	(16.1)	Foreign Exchange Contracts	Other, net	$	(4.2)	$	3.7	$	3.4	$	(20.1)

J. EQUITY ARRANGEMENTS

In March 2022, the Company executed an accelerated share repurchase ("ASR") agreements with a notional amount of $2.0 billion, which was funded through borrowings under one of its existing 364-Day committed credit facilities. The ASR terms ~~provide~~provided for an initial delivery of 85% of the total notional share equivalent at execution or 10,756,770 ~~shares.~~shares of common stock. In May 2022, the Company received an additional 3,211,317 shares in aggregate, determined by the volume-weighted average price of the Company’s common stock during the term of the transaction. The final ~~delivery~~shares delivered reflect a blended settlement price of $143.18 per share for the remaining shares under the ASR is expected to be completed by the end of the second quarter of 2022. The total amount of shares to be ultimately delivered will be determined at the end of the calculation period based on the volume weighted average price ("VWAP") of the Company's stock (inclusive of a VWAP discount) during that period. In the event that the Company's stock price increases significantly during the calculation period, the Company may be required to settle the transaction by delivering common shares or may elect to make a cash payment.entire transaction. In February 2022, the Company also executed open market share repurchases for a total of 1,888,601 shares of common stock for $300.0 million.

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. In February 2022, the Company amended the settlement date to April 2023, 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.

2019 Equity Units and Capped Call Transactions

In conjunction with the issuance of the 2019 Equity Units in November 2019, as further discussed in Note C, Earnings Per Share, 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

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Adjustment Payments"), as discussed further below. The proceeds were used, together with cash on hand, to redeem long-term borrowings in December 2019. 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 are 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 represent 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 will initially not bear any dividends and the liquidation preference of the convertible preferred stock will not accrete. The convertible preferred stock has no maturity date and will remain outstanding unless converted by holders or redeemed by the Company. Holders of shares of the convertible preferred stock will generally have no voting rights.

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

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Contracts and will be remarketed. On October 20, 2022, the Company informed the holders of the Company’s intent to remarket the Series D Preferred Stock in November 2022, with final settlement to coincide with the settlement of the 2022 Purchase Contracts on November 15, 2022. In connection with any successful remarketing, the Company may (but is not required to) modify certain terms of the convertible preferred stock, including the dividend rate, the conversion rate, and the earliest redemption date. After any successful remarketing in connection with which the dividend rate on the convertible preferred stock is increased, the Company will pay cumulative dividends on the convertible preferred stock, if declared by the Board of Directors, quarterly in arrears from the applicable remarketing settlement date.

The Company may not redeem the Series D Preferred Stock prior to December 22, 2022. At the election of the Company, on or after December 22, 2022, the Company may redeem for cash, all or any portion of the outstanding shares of the Series D Preferred Stock at a redemption price equal to 100% of the liquidation preference, plus any accumulated and unpaid dividends. If the Company calls the Series D Preferred Stock for redemption, holders may convert their shares immediately preceding the redemption date.

The 2022 Purchase Contracts obligate the holders to purchase, on November 15, 2022, for a price of $100 ~~in cash,~~per share, a maximum number of 4.7 million shares of the Company’s common stock (subject to customary anti-dilution adjustments). The 2022 Purchase Contract holders may elect to settle their obligation early, in cash. The Series D Preferred Stock is pledged as collateral to guarantee the holders’ obligations to purchase common stock under the terms of the 2022 Purchase Contracts. The initial settlement rate determining the number of shares that each holder must purchase will not exceed the maximum settlement rate and is determined over a market value averaging period immediately preceding November 15, 2022.

The initial maximum settlement rate of 0.6272 was calculated using an initial reference price of $159.45, equal to the last reported sale price of the Company's common stock on November 7, 2019. As of ~~April 2,~~October 1, 2022, due to the customary anti-dilution provisions, the maximum settlement rate was ~~0.6284,~~0.6298, equivalent to a reference price of ~~$159.13.~~$158.79. If the applicable market value of the Company's common stock is less than or equal to the reference price, the settlement rate will be the maximum settlement rate; and if the applicable market value of the Company's common stock is greater than the reference price, the settlement rate will be a number of shares of the Company's common stock equal to $100 per share divided by the applicable market value. Upon a successful remarketing of the Series D Preferred Stock (the "Remarketed Series D Preferred Stock"), the Company will receive additional cash proceeds of $750 million and issue shares of Remarketed Series D Preferred Stock.

The Company pays Contract Adjustment Payments to the 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 is made, the related liability is reduced and the difference between the cash payment and the present value will accrete to interest expense, approximately $1.3 million per year over the three-year term. As of ~~April 2,~~October 1, 2022, the present value of the Contract Adjustment Payments was ~~$28.8~~$9.7 million.

The holders can settle the purchase contracts early, for cash, subject to certain exceptions and conditions in the prospectus supplement. Upon early settlement of any purchase contracts, the Company will deliver the number of shares of its common stock equal to 85% of the number of shares of common stock that would have otherwise been deliverable.

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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 3three major financial institutions.

The capped call transactions have a term of approximately three years and are 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. As of ~~April 2,~~October 1, 2022, due to the customary anti-dilution provisions, the capped call transactions were at an adjusted lower strike price of ~~$190.98~~$190.57 and an adjusted upper strike price of ~~$206.89.~~$206.45.

The capped call transactions may be settled by net share settlement (the default settlement method) or, at the Company’s option and subject to certain conditions, cash settlement, physical settlement or modified physical settlement. The number of shares the Company will receive will be determined by the terms of the contracts using a volume-weighted average price calculation for the market value of the Company's common stock, over an averaging period. The market value determined will then be

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measured against the applicable strike price of the capped call transactions. The Company expects the capped call transactions to offset the potential dilution upon conversion of the Series D Preferred Stock if the calculated market value is greater than the lower strike price but less than or equal to the upper strike price of the capped call transactions. Should the calculated market value exceed the upper strike price of the capped call transactions, the dilution mitigation will be limited based on such capped value as determined under the terms of the contracts.

With respect to the impact on the Company, the capped call transactions and 2019 Equity Units, when taken together, result in the economic equivalent of having the conversion price on the 2019 Equity Units at ~~$206.89,~~$206.45, the upper strike price of the capped call as of ~~April 2,~~October 1, 2022.

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 aggregate fair value of the options at ~~April 2,~~October 1, 2022 was ~~$3.1~~less than $0.1 million.

2017 Equity Units and Capped Call Transactions

In conjunction with the issuance of the 2017 Equity Units in May 2017, as further discussed in Note C, Earnings Per Share, the 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 are 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 represent 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.

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As discussed further in Note C, Earnings Per Share, 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 were cumulative on the $1,000 liquidation preference per share and will be payable, if 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.

The Company did not have the right to redeem the Remarketed Series C Preferred Stock prior to May 15, 2021. 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 (the “Redemption Date”) at $1,002.50 per share in cash (the “Redemption Price”), 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, the Redemption Date. If a holder elected to convert its shares of Remarketed Series C Preferred Stock prior to the Redemption Date, the Company elected a combination settlement with a specified cash amount of $1,000 per share. 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. The conversion rate used was 6.7548 (equivalent to a conversion price set at $148.04 per

common share).

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.

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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 3three 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 institution “at-the-money” capped 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 Shareowners’ Equity. 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.

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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.

K. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following tables summarize the changes in the balances for each component of Accumulated other comprehensive loss:

(Millions of Dollars) Currency translation adjustment and other Unrealized (losses) gains on cash flow hedges, net of tax Unrealized gains (losses) on net investment hedges, net of tax Pension (losses) gains, net of tax Total
Balance - January 1, 2022 $ (1,543.0) $ (49.8) $ 71.8 $ (324.6) $ (1,845.6)
Other comprehensive (loss) income before reclassifications (55.8) 21.5 (1.6) 6.6 (29.3)
Reclassification adjustments to earnings — (2.5) 1.5 2.6 1.6
Net other comprehensive (loss) income (55.8) 19.0 (0.1) 9.2 (27.7)
Balance - April 2, 2022 $ (1,598.8) $ (30.8) $ 71.7 $ (315.4) $ (1,873.3)

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(Millions of Dollars)	(Millions of Dollars)	Currency translation adjustment and other		Unrealized (losses) gains on cash flow hedges, net of tax		Unrealized gains (losses) on net investment hedges, net of tax		Pension (losses) gains, net of tax		Total		(Millions of Dollars)	Currency translation adjustment and other		Unrealized (losses) gains on cash flow hedges, net of tax		Unrealized gains (losses) on net investment hedges, net of tax		Pension (losses) gains, net of tax		Total
Balance - January 2, 2021		$	(1,235.3)	$	(103.0)	$	72.8	$	(448.2)	$	(1,713.7)
Balance - January 1, 2022												Balance - January 1, 2022	$	(1,543.0)	$	(49.8)	$	71.8	$	(324.6)	$	(1,845.6)
Other comprehensive (loss) income before reclassifications	Other comprehensive (loss) income before reclassifications	(154.2)		43.8		5.9		0.5		(104.0)		Other comprehensive (loss) income before reclassifications	(616.7)		39.7		2.6		34.1		(540.3)
Adjustments related to sales of businesses												Adjustments related to sales of businesses	(36.1)		—		—		—		(36.1)
Reclassification adjustments to earnings	Reclassification adjustments to earnings	—		2.9		(1.0)		4.4		6.3		Reclassification adjustments to earnings	—		(10.4)		(1.7)		7.8		(4.3)
Net other comprehensive (loss) income	Net other comprehensive (loss) income	(154.2)		46.7		4.9		4.9		(97.7)		Net other comprehensive (loss) income	(652.8)		29.3		0.9		41.9		(580.7)
Balance -April 3, 2021		$	(1,389.5)	$	(56.3)	$	77.7	$	(443.3)	$	(1,811.4)
Balance - October 1, 2022												Balance - October 1, 2022	$	(2,195.8)	$	(20.5)	$	72.7	$	(282.7)	$	(2,426.3)


(Millions of Dollars)	Currency translation adjustment and other		Unrealized (losses) gains on cash flow hedges, net of tax		Unrealized gains (losses) on net investment hedges, net of tax		Pension (losses) gains, net of tax		Total
Balance - January 2, 2021	$	(1,235.3)	$	(103.0)	$	72.8	$	(448.2)	$	(1,713.7)
Other comprehensive (loss) income before reclassifications	(239.7)		42.9		5.9		6.6		(184.3)
Reclassification adjustments to earnings	—		13.5		(3.0)		12.7		23.2
Net other comprehensive (loss) income	(239.7)		56.4		2.9		19.3		(161.1)
Balance - October 2, 2021	$	(1,475.0)	$	(46.6)	$	75.7	$	(428.9)	$	(1,874.8)

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 ~~three~~nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021 were as follows:

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(Millions of Dollars)	(Millions of Dollars)	2022		2021		Affected line item in Consolidated Statements of Operations And Comprehensive Income (Loss)	(Millions of Dollars)	2022		2021		Affected line item in Consolidated Statements of Operations And Comprehensive Income
Realized gains (losses) on cash flow hedges	Realized gains (losses) on cash flow hedges	$	6.1	$	(3.8)	Cost of sales	Realized gains (losses) on cash flow hedges	$	28.1	$	(21.3)	Cost of sales
Realized losses on cash flow hedges	Realized losses on cash flow hedges	(1.2)		(1.1)		Interest expense	Realized losses on cash flow hedges	(4.2)		(2.9)		Interest expense
Total before taxes	Total before taxes	$	4.9	$	(4.9)		Total before taxes	$	23.9	$	(24.2)
Tax effect	Tax effect	(2.4)		2.0		Income taxes	Tax effect	(13.5)		10.7		Income taxes
Realized gains (losses) on cash flow hedges, net of tax	Realized gains (losses) on cash flow hedges, net of tax	$	2.5	$	(2.9)		Realized gains (losses) on cash flow hedges, net of tax	$	10.4	$	(13.5)

Realized (losses) gains on net investment hedges		$	(2.0)	$	1.3	Other, net
Realized gains on net investment hedges							Realized gains on net investment hedges	$	2.2	$	4.0	Other, net
Tax effect	Tax effect	0.5		(0.3)		Income taxes	Tax effect	(0.5)		(1.0)		Income taxes
Realized (losses) gains on net investment hedges, net of tax		$	(1.5)	$	1.0
Realized gains on net investment hedges, net of tax							Realized gains on net investment hedges, net of tax	$	1.7	$	3.0

Amortization of defined benefit pension items:	Amortization of defined benefit pension items:						Amortization of defined benefit pension items:
Actuarial losses and prior service costs / credits	Actuarial losses and prior service costs / credits	$	(3.5)	$	(5.7)	Other, net	Actuarial losses and prior service costs / credits	$	(10.2)	$	(17.0)	Other, net
Settlement loss		—		(0.1)		Other, net
Settlement (loss) gain							Settlement (loss) gain	(0.2)		0.2		Other, net
Total before taxes	Total before taxes	$	(3.5)	$	(5.8)		Total before taxes	$	(10.4)	$	(16.8)
Tax effect	Tax effect	0.9		1.4		Income taxes	Tax effect	2.6		4.1		Income taxes
Amortization of defined benefit pension items, net of tax	Amortization of defined benefit pension items, net of tax	$	(2.6)	$	(4.4)		Amortization of defined benefit pension items, net of tax	$	(7.8)	$	(12.7)

L. NET PERIODIC BENEFIT COST — DEFINED BENEFIT PLANS

Following are the components of net periodic pension (benefit) expense for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021:

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		Year-to-Date													Third Quarter
		Pension Benefits								Other Benefits					Pension Benefits								Other Benefits
		U.S. Plans				Non-U.S. Plans				All Plans					U.S. Plans				Non-U.S. Plans				All Plans
(Millions of Dollars)	(Millions of Dollars)	2022		2021		2022		2021		2022		2021		(Millions of Dollars)	2022		2021		2022		2021		2022		2021
Service cost	Service cost	$	1.6	$	1.3	$	3.9	$	4.2	$	0.1	$	0.1	Service cost	$	1.4	$	1.5	$	3.6	$	4.1	$	0.1	$	0.2
Interest cost	Interest cost	8.0		5.7		6.0		4.2		0.2		0.2		Interest cost	8.5		5.7		5.3		4.2		0.2		0.2
Expected return on plan assets	Expected return on plan assets	(15.1)		(13.7)		(10.2)		(9.9)		—		—		Expected return on plan assets	(14.9)		(13.1)		(9.0)		(10.0)		—		—
Amortization of prior service cost (credit)	Amortization of prior service cost (credit)	0.2		0.3		(0.2)		(0.2)		—		(0.2)		Amortization of prior service cost (credit)	0.3		0.3		(0.1)		(0.2)		—		(0.2)
Amortization of net loss (gain)	Amortization of net loss (gain)	1.5		2.3		2.1		3.5		(0.1)		—		Amortization of net loss (gain)	1.2		2.3		1.9		3.4		(0.3)		—
Settlement / curtailment loss		—		—		—		0.1		—		—
Settlement / curtailment gain														Settlement / curtailment gain	—		—		—		(0.3)		—		—
Net periodic pension (benefit) expense	Net periodic pension (benefit) expense	$	(3.8)	$	(4.1)	$	1.6	$	1.9	$	0.2	$	0.1	Net periodic pension (benefit) expense	$	(3.5)	$	(3.3)	$	1.7	$	1.2	$	—	$	0.2


	Year-to-Date
	Pension Benefits								Other Benefits
	U.S. Plans				Non-U.S. Plans				All Plans
(Millions of Dollars)	2022		2021		2022		2021		2022		2021
Service cost	$	4.2	$	4.3	$	11.1	$	12.7	$	0.2	$	0.3
Interest cost	25.2		17.2		17.0		12.7		1.0		0.7
Expected return on plan assets	(45.1)		(40.5)		(28.7)		(30.2)		—		—
Amortization of prior service cost (credit)	0.7		0.9		(0.5)		(0.6)		—		(0.5)
Amortization of net loss (gain)	4.5		6.8		6.0		10.4		(0.5)		—
Settlement / curtailment loss (gain)	—		—		0.2		(0.2)		—		—
Special termination benefit	—		—		—		—		6.9		—
Net periodic pension (benefit) expense	$	(10.5)	$	(11.3)	$	5.1	$	4.8	$	7.6	$	0.5

The components of net periodic benefit cost other than the service cost component are included in Other, net in the Consolidated Statements of Operations and Comprehensive Income.

M. FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurement, defines, establishes a consistent framework for measuring, and expands disclosure requirements about fair value. ASC 820 requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1 — Quoted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs and significant value drivers are observable.

Level 3 — Instruments that are valued using unobservable inputs.

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The Company is exposed to market risk from changes in foreign currency exchange rates, interest rates, stock prices and commodity prices. The Company holds various financial instruments to manage these risks. These financial instruments are carried at fair value and are included within the scope of ASC 820. The Company determines the fair value of these financial instruments through the use of matrix or model pricing, which utilizes observable inputs such as market interest and currency rates. When determining fair value for which Level 1 evidence does not exist, the Company considers various factors including the following: 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.

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:

(Millions of Dollars) Total
Carrying
Value Level 1 Level 2 Level 3
April 2, 2022
Money market fund $ 12.7 $ 12.7 $ — $ —
Equity Security $ 7.7 $ 7.7 0 $ —
Deferred compensation plan investments $ 23.7 $ 23.7 $ — $ —
Derivative assets $ 29.9 $ — $ 29.9 $ —
Derivative liabilities $ 11.8 $ — $ 11.8 $ —
Contingent consideration liability $ 289.3 $ — $ — $ 289.3
January 1, 2022
Money market fund $ 11.0 $ 11.0 $ — $ —
Equity Security $ 13.8 $ 13.8 $ — $ —
Deferred compensation plan investments $ 26.2 $ 26.2 $ — $ —
Derivative assets $ 33.1 $ — $ 33.1 $ —
Derivative liabilities $ 8.7 $ — $ 8.7 $ —
Contingent consideration liability $ 288.6 $ — $ — $ 288.6

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(Millions of Dollars)	Total Carrying Value		Level 1		Level 2		Level 3
October 1, 2022
Money market fund	$	11.6	$	11.6	$	—	$	—
Equity Security	$	4.6	$	4.6	$	—	$	—
Deferred compensation plan investments	$	18.2	$	18.2	$	—	$	—
Derivative assets	$	35.3	$	—	$	35.3	$	—
Derivative liabilities	$	26.1	$	—	$	26.1	$	—
Contingent consideration liability	$	275.2	$	—	$	—	$	275.2
January 1, 2022
Money market fund	$	11.0	$	11.0	$	—	$	—
Equity Security	$	13.8	$	13.8	$	—	$	—
Deferred compensation plan investments	$	26.2	$	26.2	$	—	$	—
Derivative assets	$	33.1	$	—	$	33.1	$	—
Derivative liabilities	$	8.7	$	—	$	8.7	$	—
Contingent consideration liability	$	288.6	$	—	$	—	$	288.6

The following table provides information about the Company's financial assets and liabilities not carried at fair value:


		April 2, 2022				January 1, 2022					October 1, 2022				January 1, 2022
(Millions of Dollars)	(Millions of Dollars)	Carrying Value		Fair Value		Carrying Value		Fair Value		(Millions of Dollars)	Carrying Value		Fair Value		Carrying Value		Fair Value
Other investments	Other investments	$	9.3	$	9.5	$	11.2	$	11.6	Other investments	$	9.3	$	9.3	$	11.2	$	11.6
Long-term debt		$	5,356.7	$	5,401.5	$	4,354.9	$	4,850.2
Long-term debt, including current portion										Long-term debt, including current portion	$	5,351.7	$	4,620.4	$	4,354.9	$	4,850.2

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 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 ~~April 2,~~October 1, 2022 and January 1, 2022. The fair values of the derivative financial instruments in the table above are based on current settlement values.

As part of the Craftsman® brand acquisition in March 2017, the Company recorded a contingent consideration liability representing the Company's obligation to make 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 channels through March 2032. During the ~~three~~nine months ended ~~April 2,~~October 1, 2022, the Company paid approximately ~~$9.8~~$32.5 million for royalties owed. The Company will continue making future payments quarterly through the second quarter of 2032. 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 $~~289.3~~275.2 million and $288.6 million as of ~~April 2,~~October 1, 2022 and January 1, 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 and Comprehensive ~~Income (Loss).~~Income. A 100 basis point reduction in the discount rate would result in an increase to the liability of approximately ~~$10.1~~$9.2 million as of ~~April 2,~~October 1, 2022.

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A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The Company's judgments used to determine the estimated contingent consideration liabilities discussed above, including estimated future sales projections, can materially impact the Company’s results from operations.

The Company had no significant non-recurring fair value measurements, nor any other financial assets or liabilities measured using Level 3 inputs, during the first ~~three~~nine months of 2022 or 2021.

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Refer to Note I, Financial Instruments, for more details regarding derivative financial instruments, Note R, 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 long-term debt.

N. OTHER COSTS AND EXPENSES

Other, net is primarily comprised of intangible asset amortization expense, currency-related gains or losses, environmental remediation expense, acquisition-related transaction and consulting costs, and certain pension gains or losses. Acquisition-related transaction and consulting costs of ~~$1.0~~$2.7 million and ~~$1.6~~$7.5 million, respectively, were included in Other, net during the three and nine months ended ~~April~~October 1, 2022. Other, net also included a $7.1 million charge related to a voluntary retirement program during the nine months ended October 1, 2022. Acquisition-related transaction and consulting costs of $8.1 million and $10.2 million, respectively, were included in Other, net during the three and nine months ended October 2, ~~2022 and April 3, 2021, respectively.~~2021.

O. RESTRUCTURING CHARGES

A summary of the restructuring reserve activity from January 1, 2022 to ~~April 2,~~October 1, 2022 is as follows:


(Millions of Dollars)	(Millions of Dollars)	January 1, 2022		Net Additions		Usage		Currency		April 2, 2022		(Millions of Dollars)	January 1, 2022		Net Additions		Usage		Currency		October 1, 2022
Severance and related costs	Severance and related costs	$	28.2	$	51.1	$	(22.8)	$	0.6	$	57.1	Severance and related costs	$	28.2	$	128.2	$	(65.6)	$	3.6	$	94.4
Facility closures and asset impairments	Facility closures and asset impairments	3.5		1.6		(2.5)		0.1		2.7		Facility closures and asset impairments	3.5		12.6		(10.6)		0.3		5.8
Total	Total	$	31.7	$	52.7	$	(25.3)	$	0.7	$	59.8	Total	$	31.7	$	140.8	$	(76.2)	$	3.9	$	100.2

For the three and nine months ended ~~April 2,~~October 1, 2022, the Company recognized net restructuring charges of ~~$52.7~~$68.6 million and $140.8 million, respectively, primarily related to severance and related costs. The majority of the ~~$59.8~~$100.2 million of reserves remaining as of ~~April 2,~~October 1, 2022 is expected to be utilized within the next 12 months.

Segments: The ~~$53~~$141 million of net restructuring charges for the nine months ended October 1, 2022 includes: $81 million in the Tools & Outdoor segment; $26 million in the Industrial segment; and $34 million in Corporate.

The $69 million of net restructuring charges for the three months ended ~~April 2,~~October 1, 2022 includes: ~~$43~~$36 million in the Tools & Outdoor segment; $8$10 million in the Industrial segment; and $2$23 million in Corporate.

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P. INCOME TAXES

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 Company recognized an income tax ~~expense~~benefit on continuing operations of ~~$22.9~~$40.9 million and $80.8 million for the three and nine months ended October 1, 2022, respectively, resulting in effective tax rates of 951.2% and (42.5)%. The effective tax rate for the three months ended ~~April 2,~~October 1, 2022 ~~resulting~~differs from the U.S. statutory tax rate primarily due to the continued reorganization of the supply chain and the impact of lower forecasted earnings in anNorth America, offset by tax on foreign earnings and the re-measurement of uncertain tax positions. The effective tax rate for the nine months ended October 1, 2022 differs from the U.S. statutory tax rate primarily due to a benefit associated with the disposition of ~~12.8%~~the Company's Oil & Gas business in addition to the items discussed above. Excluding the impacts of the acquisition-related and other charges, the effective tax rates were (1.3)% and 5.3% for the three and nine months ended October 1, 2022, respectively. These effective tax rates differ from the U.S. statutory tax rate due to the items discussed above, excluding the benefit associated with the disposition of the Company's Oil & Gas business.

The Company recognized an income tax benefit on continuing operations of $0.5 million and expense of $182.3 million for the three and nine months ended October 2, 2021, respectively, resulting in effective tax rates of (0.1)% and 12.7%. Excluding the impacts of the acquisition-related and other charges, the effective tax ~~rate was 13.2%~~rates were 1.6% and 13.3% for the three and nine months ended ~~April~~October 2, ~~2022.~~2021, respectively. These effective tax rates differ from the U.S. statutory tax rate primarily due to a benefit associated with the ~~Company’s~~Company's supply chain reorganization, tax on foreign earnings and the re-measurement of uncertain tax position reserves. The Company recognized income tax expense of $115.5 million for the three months ended April 3, 2021, resulting in effective tax rate of 20.1%. Excluding the impacts of the acquisition-related and other charges, the effective tax rate was 20.3% for the three months ended April 3, 2021. These effective tax rates differ from the U.S. statutory tax rate primarily due to tax on foreign earnings, the re-measurement of uncertain tax position reserves, the re-measurement of the deferred tax assets and liabilities due to foreign corporate income tax rate changes, and the tax benefit of equity-based compensation.

The Company considers many factors when evaluating and estimating its tax positions and the impact on income tax expense, which may require periodic adjustments, and which may not accurately anticipate actual outcomes. It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company's unrecognized tax positions will significantly increase or decrease within the next twelve months. However, based on the uncertainties associated with finalizing audits with the relevant tax authorities including formal legal proceedings, it is not possible to reasonably estimate the impact of any such change.

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Q. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

The Company’s operations are classified into 2two reportable business segments: 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, 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. Hand tools include measuring, leveling and layout tools, planes, hammers, demolition tools, clamps, vises, knives, saws, chisels and industrial and automotive tools. Power tool accessories include drill bits, screwdriver bits, router bits, abrasives, saw blades and threading products. 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), handheld 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 Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses. The Engineered Fastening business primarily sells highly engineered components such as fasteners, fittings and various engineered products, which are designed for specific application across multiple verticals. 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 consists of the Attachment Tools ~~and Oil & Gas~~ product ~~lines. Attachment Tools~~line and sells hydraulic tools and high quality, performance-driven heavy equipment attachment tools for off-highway applications. ~~Oil & Gas sells and rents custom pipe handling, joint welding and coating equipment used in the construction of large and small diameter pipelines and provides pipeline inspection services.~~

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. Transactions between segments are not material. Segment assets primarily include cash, accounts receivable, inventory, other current assets, property, plant and equipment, right-of-use lease assets and intangible assets. Net sales and long-lived assets are attributed to the geographic regions based on the geographic locations of the end customer and the Company subsidiary, respectively.


		Year-to-Date			Third Quarter						Year-to-Date
(Millions of Dollars)	(Millions of Dollars)		2022			2021		(Millions of Dollars)	2022		2021		2022		2021
Net Sales	Net Sales							Net Sales
Tools & Outdoor	Tools & Outdoor		$	3,801.2		$	3,062.9	Tools & Outdoor	$	3,494.7	$	3,185.9	$	11,040.8	$	9,445.3
Industrial	Industrial		646.6			657.7		Industrial	624.8		593.5		1,919.5		1,853.4
Other	Other		0.2			0.2		Other	0.1		0.3		0.3		0.7
Consolidated	Consolidated		$	4,448.0		$	3,720.8	Consolidated	$	4,119.6	$	3,779.7	$	12,960.6	$	11,299.4
Segment Profit	Segment Profit							Segment Profit
Tools & Outdoor	Tools & Outdoor		$	378.5		$	644.7	Tools & Outdoor	$	228.4	$	478.5	$	968.5	$	1,750.2
Industrial	Industrial		41.3			99.8		Industrial	68.4		42.6		168.0		202.9
Segment Profit	Segment Profit		419.8			744.5		Segment Profit	296.8		521.1		1,136.5		1,953.1
Corporate Overhead	Corporate Overhead		(74.7)			(75.8)		Corporate Overhead	(78.5)		(79.0)		(218.7)		(247.6)
Other, net	Other, net		(62.0)			(48.0)		Other, net	(69.1)		(28.9)		(210.2)		(119.4)
Loss on sale of business			—			(1.0)
Loss on sales of businesses								Loss on sales of businesses	(8.6)		—		(8.4)		(3.6)
Asset impairment charge								Asset impairment charge	—		—		(168.4)		—
Restructuring charges	Restructuring charges		(52.7)			(1.8)		Restructuring charges	(68.6)		(0.6)		(140.8)		(12.8)
Interest income	Interest income		2.8			2.9		Interest income	15.4		2.2		24.7		7.8
Interest expense	Interest expense		(54.7)			(47.5)		Interest expense	(91.7)		(45.6)		(224.6)		(139.6)
Earnings from continuing operations before income taxes and equity interest			$	178.5		$	573.3
(Loss) earnings from continuing operations before income taxes and equity interest								(Loss) earnings from continuing operations before income taxes and equity interest	$	(4.3)	$	369.2	$	190.1	$	1,437.9

Corporate Overhead includes the corporate overhead element of SG&A, which is not allocated to the business segments.

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~~As described in~~ ~~Note A, Significant Accounting Policies, the~~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 three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 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 three and nine months ended ~~April~~October 1, 2022 was 4.0% and 5.4%, respectively. The percent of total segment revenue recognized over time for the Industrial segment for the three and nine months ended October 2, ~~2022 and April 3,~~ 2021 was ~~5.9%~~6.4% and ~~5.7%~~5.4%, respectively.

The following table is a further disaggregation of the Industrial segment revenue for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021:


		Year-to-Date			Third Quarter						Year-to-Date
(Millions of Dollars)	(Millions of Dollars)		2022			2021		(Millions of Dollars)	2022		2021		2022		2021
Engineered Fastening	Engineered Fastening		$	480.1		$	496.8	Engineered Fastening	$	468.1	$	435.7	$	1,414.3	$	1,389.0
Infrastructure	Infrastructure		166.5			160.9		Infrastructure	156.7		157.8		505.2		464.4
Industrial	Industrial		$	646.6		$	657.7	Industrial	$	624.8	$	593.5	$	1,919.5	$	1,853.4

The following table is a summary of total assets by segment as of ~~April 2,~~October 1, 2022 and January 1, 2022:


(Millions of Dollars)	(Millions of Dollars)	April 2, 2022		January 1, 2022		(Millions of Dollars)	October 1, 2022		January 1, 2022
Tools & Outdoor	Tools & Outdoor	$	20,522.5	$	19,537.9	Tools & Outdoor	$	20,382.9	$	19,537.9
Industrial	Industrial	5,639.0		5,627.8		Industrial	5,245.9		5,627.8
		26,161.5		25,165.7			25,628.8		25,165.7
Assets held for sale	Assets held for sale	3,492.5		3,505.4		Assets held for sale	—		3,505.4
Corporate assets	Corporate assets	(295.3)		(491.1)		Corporate assets	(104.9)		(491.1)
Consolidated	Consolidated	$	29,358.7	$	28,180.0	Consolidated	$	25,523.9	$	28,180.0

Corporate assets primarily consist of cash, deferred taxes, property, plant and equipment, and right-of-use lease assets. Based on the nature of the Company's cash pooling arrangements, at times the corporate-related cash accounts will be in a net liability position.

GEOGRAPHIC AREAS

The following table is a summary of net sales by geographic area for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021:


		Year-to-Date			Third Quarter						Year-to-Date
(Millions of Dollars)	(Millions of Dollars)		2022			2021		(Millions of Dollars)	2022		2021		2022		2021
United States	United States		$	2,744.5		$	2,132.0	United States	$	2,664.3	$	2,253.3	$	8,140.3	$	6,587.0
Canada	Canada		236.6			186.3		Canada	189.5		175.9		669.5		530.5
Other Americas	Other Americas		198.3			197.1		Other Americas	218.2		224.6		632.6		631.4
France	France		140.0			135.1		France	102.4		108.8		370.4		371.0
Other Europe	Other Europe		773.5			738.1		Other Europe	587.9		695.3		2,091.3		2,196.7
Asia	Asia		355.1			332.2		Asia	357.3		321.8		1,056.5		982.8
Consolidated	Consolidated		$	4,448.0		$	3,720.8	Consolidated	$	4,119.6	$	3,779.7	$	12,960.6	$	11,299.4

R. CONTINGENCIES

The Company is involved in various legal proceedings relating to environmental issues, employment, product liability, workers’ compensation claims and other matters. The Company periodically reviews the status of these proceedings with both inside and outside counsel, as well as an actuary for risk insurance. 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.

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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. In addition, some of these claims assert that the Company is responsible for damages and liability, for remedial investigation and clean-up costs, with respect to sites that have never been owned or operated by the Company, but the Company has been identified as a potentially responsible party ("PRP").

In connection with the 2010 merger with Black & Decker, the Company assumed certain commitments and contingent liabilities. Black & Decker is a party to litigation and administrative proceedings with respect to claims involving the discharge of hazardous substances into the environment at current and former manufacturing facilities and has also been named as a PRP in certain administrative proceedings.

The Company, along with many other companies, has been named as a PRP in numerous administrative proceedings for the remediation of various waste sites, including 2928 active Superfund sites. Current laws potentially impose joint and several liabilities upon each PRP. In assessing its potential liability at these sites, the Company has considered the following: whether responsibility is being disputed, the terms of existing agreements, experience at similar sites, and the Company’s volumetric contribution at these sites.

The Company’s policy is to accrue environmental investigatory and remediation costs for identified sites when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If no amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. The amount of liability recorded is based on an evaluation of currently available facts with respect to each individual site and includes such factors as existing technology, presently enacted laws and regulations, and prior experience in remediation of contaminated sites. The liabilities recorded do not take into account any claims for recoveries from insurance or third parties. 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 ~~April 2,~~October 1, 2022 and January 1, 2022, the Company had reserves of ~~$156.6~~$136.8 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. Of the 2022 amount, ~~$49.6~~$40.9 million is classified as current and ~~$107.0~~$95.9 million as long-term which is expected to be paid over the estimated remediation period. As of ~~April 2,~~October 1, 2022, the range of environmental remediation costs that is reasonably possible is ~~$92.6~~$64.2 million to ~~$226.0~~$229.1 million which is subject to change in the near term. The Company may be liable for environmental remediation of sites it no longer owns. Liabilities have been recorded on those sites in accordance with the Company's policy.

As of ~~April 2,~~October 1, 2022, the Company has recorded ~~$16.2~~$16.3 million in other assets related to funding received by the Environmental Protection Agency (“EPA”) and placed in a trust in accordance with the final settlement with the EPA, embodied in a Consent Decree approved by the United States District Court for the Central District of California on July 3, 2013. Per the Consent Decree, Emhart Industries, Inc. (a dissolved and liquidated former indirectly wholly-owned subsidiary of The Black & Decker Corporation) (“Emhart”) has agreed to be responsible for an interim remedy at a site located in Rialto, California and formerly operated by West Coast Loading Corporation (“WCLC”), a defunct company for which Emhart was alleged to be liable as a successor. The remedy will be funded by (i) the amounts received from the EPA as gathered from multiple parties, and, to the extent necessary, (ii) Emhart's affiliate. The interim remedy requires the construction of a water treatment facility and the filtering of ground water at or around the site for a period of approximately 30 years or more. As of ~~April 2,~~October 1, 2022, the Company's net cash obligation associated with remediation activities, including WCLC assets, is ~~$140.4~~$120.5 million.

The EPA also asserted claims in federal court in Rhode Island against Black & Decker and Emhart related to environmental contamination found at the Centredale Manor Restoration Project Superfund Site ("Centredale"), located in North Providence, Rhode Island. The EPA discovered a variety of contaminants at the site, including but not limited to, dioxins, polychlorinated biphenyls, and pesticides. The EPA alleged that Black & Decker and Emhart are liable for site clean-up costs under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") as successors to the liability of Metro-Atlantic, Inc., a former operator at the site, and demanded reimbursement of the EPA’s costs related to this site. Black & Decker and Emhart then vigorously litigated the issue of their liability for environmental conditions at the Centredale site, including completing trial on Phase 1 of the proceedings in late July 2015 and completing trial on Phase 2 of the proceedings in April 2017. On July 9, 2018, a Consent Decree was lodged with the United States District Court documenting the terms of a settlement between the Company and the United States for reimbursement of EPA's past costs and remediation of environmental contamination found at the Centredale site. The terms of the Consent Decree were subject to public comment and Court approval. After a full hearing on March 19, 2019, the Court approved and entered the Consent Decree on April 8, 2019. The settlement resolves outstanding issues relating to Phase 1 and 2 of the litigation with the United States. The Company is complying with the terms of the settlement. The District Court's entry of the Consent Decree was appealed by several PRPs at the site to the United States Court of Appeals for the First Circuit. The District Court's actions were affirmed by the First Circuit

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on February 17, 2021. Phase 3 of the litigation, is addressing the potential allocation of liability to other PRPs who may have

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contributed to contamination of the Centredale site with dioxins, polychlorinated biphenyls and other contaminants of concern. As of ~~April 2,~~October 1, 2022, the Company has a remaining reserve of ~~$54.5~~$38.0 million for this site.

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 17seventeen miles of the Lower Passaic River in New Jersey (the “River”). The Company’s potential liability stems from former operations in Newark, New Jersey. As an interim step related to the 2007 AOC, on June 18, 2012, the CPG members voluntarily entered into an AOC with the EPA for remediation actions focused solely at mile 10.9 of the River. The Company’s estimated costs related to the RI/FS and focused remediation action at mile 10.9, based on an interim allocation, are included in its environmental reserves. On April 11, 2014, the EPA issued a Focused Feasibility Study (“FFS”) and proposed plan which addressed various early action remediation alternatives for the lower 8.3 miles of the River. The EPA received public comment on the FFS and proposed plan (including comments from the CPG and other entities asserting that the FFS and proposed plan do not comply with CERCLA) which public comment period ended on August 20, 2014. The CPG submitted to the EPA a draft RI report in February 2015 and draft FS report in April 2015 for the entire lower 17seventeen miles of the River. On March 4, 2016, the EPA issued a Record of Decision ("ROD") selecting the remedy for the lower 8.3 miles of the River. The cleanup plan adopted by the EPA is now considered a final action for the lower 8.3 miles of the River and will include the removal of 3.5 million cubic yards of sediment, placement of a cap over the entire lower 8.3 miles of the River, and, according to the EPA, will cost approximately $1.4 billion and take 6 years to implement after the remedial design is completed. 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. 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. The Company asserts that it did not discharge dioxins, furans or polychlorinated biphenyls and should be eligible to be a "funding party" for the lower 8.3 mile remedial action. The Company participated in the allocation process. The allocator selected by the EPA issued a confidential allocation report on December 28, 2020, which was reviewed by the EPA. As a result of the allocation process, on February 11, 2022, the EPA and certain parties (including the Company) reached an agreement in principle ~~subject to~~and are in the ~~negotiation and court entry~~process of finalizing a consent decree ~~concerning~~that, subject to court entry, will result in a cash-out settlement for remediation of the entire 17-mile Lower Passaic River. 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 the fourth quarter of 2022. 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. According to the complaint, OCC has incurred or is incurring costs which include the estimated cost ($165 million) to complete the remedial design for the cleanup plan for the lower 8.3 miles of the River. 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. On February 24, 2021, the Company and other defendants filed a third party complaint against the Passaic Valley Sewerage Commissioners and ~~NaN~~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 revised 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 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. 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 ~~is ongoing~~has not been completed and ~~the parties that will participate in funding the remediation and their respective allocations are not yet known.~~ requires court approval.

Per the terms of a Final Order and Judgment approved by the United States District Court for the Middle District of Florida on January 22, 1991, Emhart is responsible for a percentage of remedial costs arising out of the Kerr McGee Chemical Corporation Superfund Site located in Jacksonville, Florida. 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. As of ~~April 2,~~October 1, 2022, the Company has reserved ~~$22.2~~$21.8 million for this site.

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The amount recorded for identified contingent liabilities is based on estimates. Amounts recorded are reviewed periodically and adjusted to reflect additional technical and legal information that becomes available. 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.

S. COMMITMENTS AND GUARANTEES

COMMITMENTS — The Company has numerous assets, predominantly real estate, vehicles and equipment, under various lease arrangements. The following is a summary of the Company's right-of-use-assets and lease liabilities:

(Millions of Dollars)

April 2, 2022

January 1, 2022

(Millions of Dollars)

October 1, 2022

January 1, 2022

Right-of-use assets

$420.1

$426.0

Right-of-use assets

$402.7

$426.0

Lease liabilities

$430.5

$439.1

Lease liabilities

$411.5

$439.1

Weighted-average incremental borrowing rate

3.4%

3.5%

Weighted-average incremental borrowing rate

3.4%

3.5%

Weighted-average remaining term

6 years

Weighted-average remaining term

6 years

Right-of-use assets are included within Other assets in the ~~Condensed~~ Consolidated Balance Sheets, while lease liabilities are included within Accrued expenses and Other liabilities, as appropriate. 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 of October 1, 2022, the Company had unrecognized commitments that require the future purchase of goods or services (unconditional purchase obligations) to provide it with access to products and services at competitive prices. These obligations consist of supplier agreements with long-term minimum material purchase requirements and freight forwarding arrangements with minimum quantity commitments. As of October 1, 2022, the Company had unconditional purchase obligations related to these supplier agreements of $564.7 million, consisting of $48.5 million in 2022, $246.7 million in 2023, $263.1 million in 2024, and $6.4 million in 2025.

GUARANTEES — The Company’s financial guarantees at ~~April 2,~~October 1, 2022 are as follows:


(Millions of Dollars)	(Millions of Dollars)	Term	Maximum Potential Payment		Carrying Amount of Liability		(Millions of Dollars)	Term	Maximum Potential Payment		Carrying Amount of Liability
Guarantees on the residual values of leased assets	Guarantees on the residual values of leased assets	One to five years	$	89.6	$	—	Guarantees on the residual values of leased assets	One to five years	$	74.5	$	—
Standby letters of credit	Standby letters of credit	Up to three years	165.7		—		Standby letters of credit	Up to three years	174.2		—
Commercial customer financing arrangements	Commercial customer financing arrangements	Up to six years	69.5		8.7		Commercial customer financing arrangements	Up to six years	75.5		11.9
Total	Total		$	324.8	$	8.7	Total		$	324.2	$	11.9

The Company has guaranteed a portion of the residual values of certain leased assets, including ~~the previously discussed leases for 1~~one of its major distribution centers and 2two of its office buildings. The lease guarantees are for an amount up to ~~$89.6~~$74.5 million while the fair value of the underlying assets is estimated at ~~$119.0~~$101.8 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 Company has issued ~~$165.7~~$174.2 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 R, 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. 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. The gross amount guaranteed in these arrangements is ~~$69.5~~$75.5 million and the ~~$8.7~~$11.9 million carrying value of the guarantees issued is recorded in Other liabilities in the ~~Condensed~~ Consolidated Balance Sheets.

The Company provides warranties on certain products across its businesses. The types of product warranties offered generally range from one year to limited lifetime. There are also certain products with no warranty. Further, the Company sometimes incurs discretionary costs to service its products in connection with product performance issues. Historical warranty and service

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claim experience forms the basis for warranty obligations recognized. Adjustments are recorded to the warranty liability as new information becomes available.

~~Table of Contents~~

The changes in the carrying amount of product warranties for the ~~three~~nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021 are as follows:

(Millions of Dollars) 2022 2021
Balance beginning of period $ 134.5 $ 107.9
Warranties and guarantees issued 39.6 36.3
Warranty payments and currency (38.0) (41.3)
Balance end of period $ 136.1 $ 102.9

~~Product warranties totaling $5.2 million and $5.7 million were reclassified to held for sale as of April 2, 2022 and April 3, 2021, respectively.~~


(Millions of Dollars)	2022		2021
Balance beginning of period	$	134.5	$	107.9
Warranties and guarantees issued	117.0		108.9
Warranty payments and currency	(129.4)		(118.0)
Balance end of period	$	122.1	$	98.8

T. DIVESTITURES

~~PENDING DIVESTITURES~~Oil & Gas business

On August 19, 2022, the Company completed the previously announced sale of its Oil & Gas business comprising of 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 income (losses) for this business for the three and nine months ended October 1, 2022 and October 2, 2021:


	Third Quarter				Year-to-Date
(Millions of Dollars)	2022		2021		2022		2021
Pre-tax income (losses)	$	2.9	$	(3.2)	$	(2.7)	$	(13.3)

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.

Mechanical Access Solutions business

~~In April~~On July 5, 2022, the Company completed the previously announced ~~that it had reached a definitive agreement for the~~ sale of its ~~remaining Security assets to Allegion plc for $900 million in cash. The proposed transaction includes the Company's~~ Mechanical Access Solutions ("MAS") business comprising of the automatic doors ~~business. As~~business to Allegion plc for net proceeds of ~~April 2, 2022~~$922.2 million and January 2, 2022, the assets and liabilities related to MAS were classified as held for sale on the Company's Condensed Consolidated Balance Sheets. The sale is subject to regulatory approval and other customary closing conditions, and is expected to close mid-year.a pre-tax gain of $618 million.

As part of the purchase and sale agreement, the Company will perform transition services relating to certain administrative functions for ~~Purchaser primarily~~Allegion plc for aan initial period of two years or less, pending integration of these functions into their pre-existing business processes.

Commercial Electronic Security and Healthcare businesses

~~In December 2021,~~On July 22, 2022, the Company completed the previously announced ~~that it had reached a definitive agreement for the~~ sale of ~~most of~~ its ~~Security assets to Securitas AB ("Purchaser") for approximately $3.2 billion in cash. The proposed transaction includes the~~ Company's Convergent Security Solutions ("CSS") business comprising of the commercial electronic security and healthcare ~~businesses. As~~businesses to Securitas AB for net proceeds of $3.1 billion and a result, the assets and liabilities related to CSS were classified as held for sale on the Company's Condensed Consolidated Balance Sheets. The sale is subject to regulatory approvals and other customary closing conditions, and the Company's current expectation is the transaction will close mid-year.pre-tax gain of $602 million.

As part of the purchase and sale agreement, the Company will perform transition services relating to certain administrative functions for ~~Purchaser primarily~~Securitas AB for aan initial period of one year or less, pending integration of these functions into their pre-existing business processes. A portion of the ~~$3.2~~$3.1 billion received at closing reimburses the Company for transition service costs expected to be incurred.

The MAS and CSS 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. As such, the operating results of ~~the~~ MAS and CSS 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 of the Company that fit into its long-term growth strategy.

Summarized operating results of discontinued operations are presented in the following table for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021:

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		Year-to-Date					Third Quarter				Year-to-Date
(Millions of Dollars)	(Millions of Dollars)	2022		2021		(Millions of Dollars)	2022		2021		2022		2021
Net Sales	Net Sales	$	488.3	$	476.3	Net Sales	$	78.2	$	483.5	$	1,056.3	$	1,461.8
Cost of sales	Cost of sales	312.6		299.8		Cost of sales	49.0		307.6		687.5		927.6
Selling, general, and administrative(1)	Selling, general, and administrative(1)	138.2		133.7		Selling, general, and administrative(1)	30.2		125.3		308.0		393.6
Gain on sale of discontinued operations						Gain on sale of discontinued operations	1,220.0		—		1,220.0		—
Other, net and restructuring charges	Other, net and restructuring charges	15.3		11.7		Other, net and restructuring charges	14.1		15.9		47.3		42.4
Earnings from discontinued operations before income taxes	Earnings from discontinued operations before income taxes	$	22.2	$	31.1	Earnings from discontinued operations before income taxes	$	1,204.9	$	34.7	$	1,233.5	$	98.2
Income taxes on discontinued operations	Income taxes on discontinued operations	2.4		3.9		Income taxes on discontinued operations	396.9		0.1		396.7		10.4
Net earnings from discontinued operations	Net earnings from discontinued operations	$	19.8	$	27.2	Net earnings from discontinued operations	$	808.0	$	34.6	$	836.8	$	87.8

(1) Includes provision for credit losses.

The following table presents the significant non-cash items and capital expenditures for the discontinued operations with respect to MAS and CSS that are included in the Condensed Consolidated Statements of Cash Flows ~~(in millions)~~ for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021:


		Year-to-Date					Third Quarter				Year-to-Date
(Millions of Dollars)	(Millions of Dollars)	2022		2021		(Millions of Dollars)	2022		2021		2022		2021
Depreciation and amortization	Depreciation and amortization	$	1.3	$	16.6	Depreciation and amortization	$	—	$	16.4	$	0.4	$	51.2
Capital expenditures	Capital expenditures	$	4.0	$	4.9	Capital expenditures	$	—	$	6.4	$	6.3	$	13.2
Stock-based compensation	Stock-based compensation	$	9.3	$	2.0	Stock-based compensation	$	(1.0)	$	1.8	$	17.5	$	5.7

As of January 1, 2022, the assets and liabilities related to MAS and CSS were classified as held for sale on the Company's Consolidated Balance Sheet. 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 ~~April 2, 2022 and~~ January 1, 2022 are presented in the following table:

(Millions of Dollars) April 2, 2022 January 1, 2022
Cash and cash equivalents $ 150.8 $ 145.1
Accounts and notes receivable, net 495.7 513.9
Inventories, net 170.5 169.4
Other current assets 47.0 41.2
Property, plant and equipment, net 90.9 84.3
Goodwill and other intangibles, net 2,250.6 2,270.2
Other assets 287.0 281.3
Total assets $ 3,492.5 $ 3,505.4
Accounts payable and accrued expenses $ 463.5 $ 460.4
Other long-term liabilities 129.1 137.4
Total liabilities $ 592.6 $ 597.8


(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

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains statements reflecting the Company's views about its future performance that constitute “forward-looking statements” under the Private Securities Litigation Act of 1995. There are a number of important factors that could cause actual results to differ materially from those indicated by such forward-looking statements. Please read the information under the caption entitled “Cautionary Statement under the Private Securities Litigation Reform Act of 1995."

Throughout this Management's Discussion and Analysis (“MD&A”), references to Notes refer to the "Notes To (Unaudited) Condensed Consolidated Financial Statements" in Part 1, Item 1 of this Form 10-Q, unless otherwise indicated.

BUSINESS OVERVIEW

Strategy

The Company is a ~~diversified~~ global provider of hand tools, power tools, outdoor products and related accessories, as well as a leading provider of engineered fastening ~~systems~~solutions and ~~products, and services and equipment~~attachment tools for ~~oil & gas and~~ infrastructure applications. The Company ~~continues to execute~~has executed a growth and acquisition strategy that involves industry, geographic and customer diversification to foster sustainable revenue, earnings and cash flow ~~growth. The~~growth over the long term. Over the next two to three years, the Company ~~remains~~is focused on ~~delivering above-market~~leveraging past acquisitions through an organic strategy that optimizes the newly focused portfolio surrounding its Tools & Outdoor and Industrial businesses. Execution of this strategy means reducing complexity and optimizing the operating structure to invest in the Company’s leading franchises to deliver organic growth at 2 to 3 times the market and to transform the supply chain to be shorter, closer to customers and more responsive to demand with 35+ gross margin ~~expansion by leveraging its proven and~~rates.

A key enabler of the strategy is the long-standing Stanley Black & Decker Operating Model (“SBD Operating Model”) which has continually evolved over the past 15 years as times have changed. ~~At the center~~The core tenets of the SBD Operating Model isinclude the concept of the interrelationship between people and technology, which intersect and interact with the other key ~~elements: Performance Resiliency, Extreme Innovation, Operations Excellence~~elements that are focused on delivering capital efficient growth and Extraordinary Customer Experience. Each of these elements co-exists synergistically with the others in a systems-based approach. The Company will leverage the SBD Operating Model to continue making strides towards achieving its vision of delivering top-quartile financial performance, becoming known as one of the world’s leading innovators and elevating its commitment to social responsibility.margin expansion.

The Company’s growth ~~and acquisition~~ strategy is interdependent with its social responsibility strategy focused on workforce upskilling, product innovation, and environmental preservation including mitigating the impacts of climate change. These are core business issues that ensure the long-term viability of the Company, its customers, suppliers, and communities. The Company has established environmental, social and corporate governance ("ESG") targets embodied in its 2030 ESG strategy that include empowering 10 million makers and creators, enhancing 500 million lives through purpose-driven product innovation, becoming carbon-neutral, landfill-free across its operations, and reducing water use in water stressed and scarce areas. The carbon neutrality target includes third-party approved science-based targets to reduce absolute scope 1 and 2 greenhouse gas emissions by greater than 100% by 2030, and to reduce supply chain emissions by 35%. The Company’s ESG strategy considers all life-cycle stages including material procurement from supply chain partners, product design, manufacturing, distribution and transportation, product use, product service and end-of-life. Refer to section "Human Capital Management" in Item 11. Business of the Company’s Form 10-K for the year ended January 1, 2022 for additional information regarding the Company's commitment to upskilling its employees and improving diversity, equity and inclusion.

In terms of capital allocation, the Company remains committed, over ~~time,~~the long-term, to returning approximately 50% of excess capital to shareholders through a strong and growing dividend as well as opportunistically repurchasing shares. The remaining capital (approximately 50%) will be deployed towards acquisitions. Over the next two to three years, the Company expects to prioritize return of excess capital to shareholders.

Share Repurchases And Other Securities

During the first quarter of 2022, the Company repurchased 12,645,371 shares of common stock for approximately $2.3 billion through a combination of an accelerated share repurchase ("ASR") and open market share repurchases. The ASR terms ~~provide~~provided for an initial delivery of 85% of the total notional share equivalent at execution, or 10,756,770 shares. The final delivery of the remaining shares totaling 3,211,317 under the ASR ~~is expected to be~~was completed ~~by the end of~~during the second quarter of 2022. ~~The Company plans to complete the remaining share repurchases of its planned $4 billion share repurchase program in 2023.~~ Refer to Note J, Equity Arrangements, for further discussion.

In addition, on April 23, 2021, the Board of Directors approved repurchases by the Company of its outstanding securities other than common stock up to an aggregate amount of $3.0 billion. No repurchases have been executed pursuant to this authorization to date.

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~~Pending~~

Sale of Oil & Gas business

On August 19, 2022, the Company completed the previously announced sale of its Oil & Gas business comprising of pipeline services and equipment businesses to Pipeline Technique Limited.

Sale of Mechanical Access Solutions ("MAS")

~~In April~~On July 5, 2022, the Company completed the previously announced ~~that it had reached a definitive agreement for the~~ sale of its MAS business comprising of the automatic doors business to Allegion plc for ~~$900 million in cash. The sale is subject to regulatory approval and other customary closing conditions, and is expected to close mid-year.~~net proceeds of $922.2 million.

~~Pending~~ Sale of Convergent Security Solutions ("CSS")

~~In December 2021,~~On July 22, 2022, the Company completed the previously announced ~~that it had reached a definitive agreement for the~~ sale of ~~most of~~ its ~~Security assets to Securitas AB for $3.2 billion in cash. The proposed transaction includes the Company's~~ CSS business comprising of commercial electronic security and healthcare ~~businesses. The transaction does not include the Company's automatic doors business. The sale is subject~~businesses to ~~regulatory approvals and other customary closing conditions, and the Company's current expectation is the transaction will close mid-year.~~Securitas AB for net proceeds of $3.1 billion.

~~Net proceeds~~Proceeds from the sale of ~~MAS and CSS are expected to be~~these businesses were used to ~~fund debt reduction and~~repay borrowings made in the first quarter of 2022 to ~~contribute to~~fund the Company's ~~previously announced~~ share repurchase ~~program.~~program previously discussed. The use of ~~net~~ proceeds ~~towards~~to support a ~~planned~~ share repurchase program is consistent with the Company's long-term capital allocation ~~strategy focused on value maximization.~~strategy.

Acquisitions

On December 1, 2021, the Company acquired the remaining 80 percent ownership stake in MTD Holdings Inc. ("MTD"), a privately held global manufacturer of outdoor power equipment. The Company previously acquired a 20 percent interest in MTD in January 2019. With over $2.6 billion of revenue in 2021, MTD designs, manufactures and distributes lawn tractors, zero turn ride on mowers, walk behind mowers, snow blowers, residential robotic mowers, handheld outdoor power equipment and garden tools for both residential and professional consumers under well-known brands like Cub Cadet® and Troy-Bilt®.

On November 12, 2021, the Company acquired Excel Industries ("Excel"). Excel is a leading designer and manufacturer of premium commercial and residential turf-care equipment under the ~~brands of~~ Hustler Turf Equipment® ~~and BigDog Mower Co®.~~brand. The Company believes this is a strategically important bolt-on acquisition that bolsters ~~the~~its presence in the independent dealer network.

The Company expects the combination of MTD, Excel and its existing outdoor strategic business unit in Tools & Outdoor will create a global leader in the $25 billion and growing outdoor category, with strong brands and growth opportunities. As part of the integration of these businesses, the Company plans to design, develop and manufacture battery and electric-powered solutions for professional and residential users. This will position the combined businesses to be a leader as preferences shift from gas powered equipment toward electrified solutions in outdoor power equipment.

Refer to Note F, Acquisitions and Investments, for further discussion.

~~COVID-19 Pandemic~~

Global Cost Reduction Program Update

The ~~novel coronavirus ("COVID-19") outbreak has adversely affected the Company's workforce and operations, as well as the operations~~Company’s primary areas of its customers, distributors, suppliers and contractors. The COVID-19 pandemic has also resulted in significant volatility and uncertainty in the markets in which the Company operates. To successfully navigate through this unprecedented period, the Company has remained focused on the following key priorities:strategic focus are:

•~~Ensuring~~Continuing to advance innovation, electrification and global market penetration to achieve organic growth of 2-3 times the ~~health~~market;

•Streamlining and ~~safety of its employees~~simplifying the organization, as well as shifting resources to prioritize investments believed to have a positive and more direct impact to customers;

•Accelerating the operations and supply chain ~~partners;~~

•~~Maintaining business continuity~~transformation to improve fill rates and ~~financial strength and stability;~~

•~~Serving~~better match the needs of its customers ~~as they provide essential products and services~~while improving gross margins back to ~~the world;~~historical 35%+ levels; and

•~~Doing its part~~Prioritizing cash flow generation and inventory optimization.

The Company advanced a series of initiatives in the third quarter designed to ~~mitigate~~generate cost savings by resizing the ~~impact~~organization and reducing inventory with the ultimate objective of driving long-term growth, improving profitability and generating strong cash flow. These initiatives are expected to optimize the ~~virus across~~cost base as well as provide a platform to fund investments to accelerate growth in the ~~globe.~~core businesses. The Company remains on track and expects these initiatives to generate cost savings of approximately $150 to $200 million in 2022, $1 billion by the end of 2023 and grow to approximately $2 billion by 2025.

The program consists of a selling, general, and administrative ("SG&A") reduction of $500 million and a supply chain transformation expected to deliver $1.5 billion of cumulative cost savings to achieve 35%+ adjusted gross margins. The $500 million SG&A savings is generated by simplifying the corporate structure, optimizing organizational spans and layers and reducing indirect spend and is expected to be achieved by the end of 2023. These savings are intended to fund $300 million to

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$500 million of innovation and commercial investments over the next three years to accelerate organic growth. The charges associated with the SG&A savings are reflected in the full year estimate of acquisiton-related and other charges detailed below in 2022 Outlook.

The supply chain transformation consists of:

•Leveraging strategic sourcing and contract manufacturing;

•Consolidating facilities and optimizing the distribution network;

•Executing the SBD Operating Model to deliver operational excellence through efficiency, simplified organizational design and inventory optimization; and

•Platforming products and implementing initiatives to drive a SKU reduction.

The investment required over the next two to three years to achieve the $1.5 billion of cumulative supply chain cost savings is approximately $700 to $750 million, of which approximately 45% is expected to be capital expenditures.

During the third quarter, the Company realized $65 million of savings primarily from lower headcount and indirect spend reductions. In addition, the Company reduced inventory by approximately $290 million sequentially and expects further inventory and working capital reductions in the fourth quarter to support free cash flow generation.

Segments

The Company’s operations are classified into two reportable business segments: Tools & Outdoor and Industrial.

Tools & Outdoor

The Tools & Outdoor segment is comprised of the Power Tools Group ("PTG"), Hand Tools, Accessories & Storage ("HTAS"), and Outdoor Power Equipment ("Outdoor") businesses. Annual revenues in the Tools & Outdoor segment were $12.8 billion in 2021, representing 82% of the Company’s total revenues.

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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, 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. Hand tools include measuring, leveling and layout tools, planes, hammers, demolition tools, clamps, vises, knives, saws, chisels and industrial and automotive tools. Power tool accessories include drill bits, screwdriver bits, router bits, abrasives, saw blades and threading products. 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), handheld 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.

Industrial

The Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses. Annual revenues in the Industrial segment were $2.5 billion in 2021, representing 16% of the Company’s total revenues.

The Engineered Fastening business primarily sells highly engineered components such as fasteners, fittings and various engineered products, which are designed for specific application across multiple verticals. 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 consists of the Attachment Tools ~~and Oil & Gas~~ product ~~lines. Attachment Tools~~line and sells hydraulic tools and high quality, performance-driven heavy equipment attachment tools for off-highway applications. ~~Oil & Gas sells and rents custom pipe handling, joint welding and coating equipment used in the construction of large and small diameter pipelines and provides pipeline inspection services.~~

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RESULTS OF OPERATIONS

The Company’s results represent continuing operations and exclude the commercial electronic security, healthcare, and automatic doors businesses, unless specifically noted. These 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. Therefore, the operating results of these businesses have been classified as discontinued operations. The divestiture of the Oil & Gas business 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 in the third quarter of 2022.

Certain Items Impacting Earnings

The Company has provided a discussion of its results both inclusive and exclusive of acquisition-related and other charges. Organic growth is also utilized to describe results aside from the impacts of foreign currency fluctuations, acquisitions during their initial 12 months of ownership, and divestitures. The results and measures, including gross profit, ~~selling, general, and administrative ("~~SG~~&A"),~~&A, Other, net, and segment profit, on a basis excluding acquisition-related and other charges, and organic growth are Non-GAAP financial measures. The Company considers the use of Non-GAAP financial measures relevant to aid analysis and understanding of the Company’s results and business trends aside from the material impact of these items and ensures appropriate comparability to operating results of prior periods.

The Company’s operating results at the consolidated level as discussed below include and exclude acquisition-related and other charges impacting gross profit, SG&A, and Other, net. The Company’s business segment results as discussed below include and exclude acquisition-related and other charges impacting gross profit and SG&A. These amounts for the ~~first quarters~~third quarter and year-to-date periods of 2022 and 2021 are as follows:

Third Quarter 2022


	(Millions of Dollars)	GAAP		Acquisition- Related Charges & Other		Non-GAAP
	Gross profit	$	1,018.1	$	(2.5)	$	1,015.6
	Selling, general and administrative1	799.8		(41.3)		758.5
	Operating profit	218.3		38.8		257.1
	(Loss) earnings from continuing operations before income taxes and equity interest	(4.3)		118.7		114.4
	Income taxes on continuing operations	(40.9)		39.4		(1.5)
	Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted	36.9		79.3		116.2
	Diluted earnings per share of common stock - Continuing operations	$	0.24	$	0.52	$	0.76
1	Includes provision for credit losses

The Acquisition-Related Charges and Other in the table above relate to the following:

•A net benefit to Gross profit primarily pertaining to reserve adjustments relating to the Russia business closure;

•Charges in SG&A primarily related to integration-related costs;

•Other charges included in (Loss) earnings from continuing operations before income taxes and equity interest consisting of:

◦$2.7 million in Other, net primarily related to deal transaction costs;

◦$8.6 million loss pertaining to the sale of the Oil & Gas business; and

◦$68.6 million of restructuring charges primarily pertaining to severance and related costs;

•Income taxes on continuing operations include the tax effect on the above net charges.

Year-To-Date 2022

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~~First Quarter 2022~~

GAAP
Acquisition-
Related Charges & Other
Non-GAAP
Gross profit $ 1,305.4 $ 88.8 $ 1,394.2
Selling, general and administrative1
960.3 (78.9) 881.4
Operating profit 345.1 167.7 512.8
Earnings from continuing operations before income taxes and equity interest 178.5 221.4 399.9
Income taxes on continuing operations 22.9 29.8 52.7
Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted 155.8 191.6 347.4
Diluted earnings per share of common stock - Continuing operations $ 0.94 $ 1.16 $ 2.10
1 Includes provision for credit losses


	(Millions of Dollars)	GAAP		Acquisition- Related Charges & Other		Non-GAAP
	Gross profit	$	3,530.6	$	102.9	$	3,633.5
	Selling, general and administrative1	2,612.8		(153.1)		2,459.7
	Operating profit	917.8		256.0		1,173.8
	Earnings from continuing operations before income taxes and equity interest	190.1		588.2		778.3
	Income taxes on continuing operations	(80.8)		121.7		40.9
	Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted	271.7		466.5		738.2
	Diluted earnings per share of common stock - Continuing operations	$	1.72	$	2.95	$	4.67
1	Includes provision for credit losses

The Acquisition-Related Charges and Other in the table above relate to the following:

•Charges reducing Gross profit primarily pertaining to inventory step-up charges and the Russia business closure;

•Charges in SG&A primarily related to integration-related costs, a voluntary retirement program, ~~integration-related costs,~~ and the Russia business closure;

•Other charges included in Earnings from continuing operations before income taxes and equity interest consisting of:

◦$~~1.0~~14.6 million in Other, net primarily related to a voluntary retirement program and deal transaction costs;

◦$8.4 million net loss primarily relating to the sale of the Oil & Gas business;

◦$168.4 million asset impairment charge related to the Oil & Gas business; and

◦$~~52.7~~140.8 million of restructuring charges primarily pertaining to severance and related costs;

•Income taxes on continuing operations include the tax effect on the above net charges.

~~First~~Third Quarter 2021

GAAP
Acquisition-
Related Charges & Other
Non-GAAP
Gross profit $ 1,387.8 $ 4.4 $ 1,392.2
Selling, general and administrative1
719.1 (15.0) 704.1
Operating profit 668.7 19.4 688.1
Earnings from continuing operations before income taxes and equity interest 573.3 23.8 597.1
Income taxes on continuing operations 115.5 6.0 121.5
Share of net earnings of equity method investment 1.8 0.2 2.0
Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted 451.0 18.0 469.0
Diluted earnings per share of common stock - Continuing operations $ 2.74 $ 0.11 $ 2.85
1 Includes provision for credit losses


	(Millions of Dollars)	GAAP		Acquisition- Related Charges & Other		Non-GAAP
	Gross profit	$	1,215.6	$	5.1	$	1,220.7
	Selling, general and administrative1	773.5		(18.7)		754.8
	Operating profit	442.1		23.8		465.9
	Earnings from continuing operations before income taxes and equity interest	369.2		32.5		401.7
	Income taxes on continuing operations	(0.5)		6.8		6.3
	Share of net earnings of equity method investment	9.8		—		9.8
	Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted	380.0		25.7		405.7
	Diluted earnings per share of common stock - Continuing operations	$	2.30	$	0.15	$	2.45
1	Includes provision for credit losses

The Acquisition-Related Charges and Other in the table above relate to the following:

•Charges reducing Gross profit pertaining to facility-related charges;

•Charges in SG&A primarily for functional transformation initiatives;

•Other charges included in Earnings from continuing operations before income taxes and equity interest consisting of:

◦$~~1.6~~8.1 million in Other, net primarily related to deal transactions costs; and

◦$0.6 million of restructuring charges;

•Income taxes on continuing operations include the tax effect on the above net charges.

Year-To-Date 2021

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	(Millions of Dollars)	GAAP		Acquisition- Related Charges & Other		Non-GAAP
	Gross profit	$	3,965.2	$	10.8	$	3,976.0
	Selling, general and administrative1	2,259.7		(52.1)		2,207.6
	Operating profit	1,705.5		62.9		1,768.4
	Earnings from continuing operations before income taxes and equity interest	1,437.9		89.5		1,527.4
	Income taxes on continuing operations	182.3		21.2		203.5
	Share of net earnings of equity method investment	16.0		11.2		27.2
	Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted	1,260.0		79.5		1,339.5
	Diluted earnings per share of common stock - Continuing operations	$	7.64	$	0.48	$	8.12
1	Includes provision for credit losses

The Acquisition-Related Charges and Other in the table above relate to the following:

•Charges reducing Gross profit pertaining to facility-related charges;

•Charges in SG&A primarily for functional transformation initiatives;

•Other charges included in Earnings from continuing operations before income taxes and equity interest consisting of:

◦$10.2 million in Other, net primarily related to deal transactions costs;

◦$~~1.0~~3.6 million net loss pertaining to a previously divested business; and

◦$~~1.8~~12.8 million of restructuring charges pertaining to severance and facility closures;

•Income taxes on continuing operations include the tax effect on the above net charges.

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Below is a summary of the Company’s operating results at the consolidated level, followed by an overview of business segment performance.

Consolidated Results

Net Sales: Net sales were ~~$4.448~~$4.120 billion in the third quarter of 2022 compared to $3.780 billion in the third quarter of 2021, representing an increase of 9%, primarily driven by a 16% increase from strategic outdoor power equipment acquisitions and an 8% increase from price realization, partially offset by a 10% decrease in volume, 4% decrease from foreign currency, and a 1% decrease from divestitures. Tools & Outdoor net sales increased 10% compared to the third quarter of 2021 due to an 18% increase from the MTD and Excel acquisitions and a 7% increase in price, partially offset by a 12% decline in volume and a 3% decrease from foreign currency. Industrial net sales increased by 5% compared to the third quarter of 2021 as a 9% increase in price and 5% increase in volume was partially offset by a 6% impact from foreign currency and a 3% impact from the Oil & Gas divestiture.

Net sales were $12.961 billion in the first ~~three~~nine months of 2022 compared to ~~$3.721~~$11.299 billion in the first ~~three~~nine months of 2021, representing an increase of ~~20%~~15%, primarily driven by a ~~23%~~21% increase from strategic outdoor power equipment acquisitions and a 5%7% increase from price realization, partially offset by ~~a 6%~~10% and ~~2% decrease~~3% decreases from volume and foreign currency, respectively. ~~Volume was in line with expectations, but constrained by temporary electronic component supply challenges, which have continued to improve.~~ Tools & Outdoor net sales increased ~~24%~~17% compared to the first ~~three~~nine months of 2021 due to a ~~27%~~25% increase from the MTD and Excel acquisitions and a 5%7% increase in price, partially offset by a 6%12% decline in volume and a 2%3% decrease from foreign currency. Industrial net sales ~~declined 2%~~increased 4% compared to the first ~~three~~nine months of 2021 as ~~a 5%~~an 8% increase in price ~~was more than~~and 1% increase in volume were partially offset by a ~~5% decline in volume and a 2%~~4% impact from foreign ~~currency.~~currency and a 1% impact from the Oil & Gas divestiture.

Gross Profit: Gross profit was ~~$1.305~~$1.018 billion, or ~~29.3%~~24.7% of net sales, in the ~~first three months~~third quarter of 2022 compared to ~~$1.388~~$1.216 billion, or ~~37.3%~~32.2% of net sales, in the ~~first three months~~third quarter of 2021. Acquisition-related and other charges ~~which reduced gross profit,~~ were ~~$88.8~~a net benefit of $2.5 million for the three months ended ~~April 2,~~October 1, 2022 and ~~$4.4~~a $5.1 million charge for the three months ended ~~April 3,~~October 2, 2021. Excluding these ~~charges,~~items, gross profit was ~~31.3%~~24.7% of net sales for the three months ended ~~April 2,~~October 1, 2022, compared to ~~37.4%~~32.3% for the three months ended ~~April 3,~~October 2, 2021, as price realization was more than offset by commodity inflation, higher supply chain costs, ~~to serve demand~~including the impact of planned production curtailments, and lower ~~volumes.~~volume.

Gross profit was $3.531 billion, or 27.2% of net sales, in the first nine months of 2022 compared to $3.965 billion, or 35.1% of net sales, in the first nine months of 2021. Acquisition-related and other charges, which reduced gross profit, were $102.9 million for the nine months ended October 1, 2022 and $10.8 million for the nine months ended October 2, 2021. Excluding

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these items, gross profit was 28.0% of net sales for the nine months ended October 1, 2022, compared to 35.2% for the nine months ended October 2, 2021, driven by the factors discussed above that impacted the third quarter of 2022.

SG&A Expenses: SG&A, inclusive of the provision for credit losses, was ~~$960.3~~$799.8 million, or ~~21.6%~~19.4% of net sales, in the third quarter of 2022, compared to $773.5 million, or 20.5% of net sales, in the third quarter of 2021. Within SG&A, acquisition-related and other charges totaled $41.3 million for the three months ended October 1, 2022 and $18.7 million for the three months ended October 2, 2021. Excluding these charges, SG&A was 18.4% of net sales for the three months ended October 1, 2022, compared to 20.0% for the three months ended October 2, 2021 due to the successful implementation of cost control actions.

SG&A, inclusive of the provision for credit losses, was $2.613 billion, or 20.2% of net sales, in the first ~~three~~nine months of 2022, compared to ~~$719.1 million,~~$2.260 billion, or ~~19.3%~~20.0% of net sales, in the first ~~three~~nine months of 2021. Within SG&A, acquisition-related and other charges totaled ~~$78.9~~$153.1 million for the ~~three~~nine months ended ~~April 2,~~October 1, 2022 and ~~$15.0~~$52.1 million for the ~~three~~nine months ended ~~April 3,~~October 2, 2021. Excluding these charges, SG&A was ~~19.8%~~19.0% of net sales for the ~~three~~nine months ended ~~April 2,~~October 1, 2022, compared to ~~18.9%~~19.5% for the ~~three~~nine months ended ~~April 3, 2021, due to growth investments deployed across the businesses.~~October 2, 2021.

Distribution center costs (i.e. warehousing and fulfillment facility and associated labor costs) are classified within SG&A. This classification may differ from other companies who may report such expenses within cost of sales. Due to diversity in practice, to the extent the classification of these distribution costs differs from other companies, the Company’s gross margins may not be comparable.

Other, net: Other, net amounted to ~~$62.0~~$69.1 million and ~~$48.0~~$28.9 million in the ~~first three months~~third quarter of 2022 and 2021, respectively. Excluding acquisition-related and other charges of ~~$1.0~~$2.7 million, Other, net totaled ~~$61.0~~$66.4 million for the three months ended ~~April 2,~~October 1, 2022. Excluding acquisition-related and other charges of ~~$1.6~~$8.1 million, Other, net totaled ~~$46.4~~$20.8 million for the three months ended ~~April 3,~~October 2, 2021. The increase in 2022 compared to 2021 is driven by higher intangible asset amortization in 2022 due to the MTD and Excel ~~acquisitions.~~acquisitions and appreciation of Stanley Ventures' investments in the third quarter of 2021.

Other, net amounted to $210.2 million and $119.4 million in the first nine months of 2022 and 2021, respectively. Excluding acquisition-related and other charges of $14.6 million, Other, net totaled $195.6 million for the nine months ended October 1, 2022. Excluding acquisition-related and other charges of $10.2 million, Other, net totaled $109.2 million for the nine months ended October 2, 2021. The increase in 2022 compared to 2021 is driven by the factors discussed above.

Loss on ~~Sale~~Sales of ~~Business~~Businesses: During the ~~first~~third quarter of ~~2021,~~2022, the Company ~~reported a~~recorded an $8.6 million pre-tax loss related to the sale of ~~$1.0~~the Oil & Gas business. The Company also recognized a $0.2 million pre-tax gain in the second quarter of 2022 related to a previously divested business, resulting in a net loss of $8.4 million for the first nine months of 2022.

During the first nine months of 2021, the Company recorded a pre-tax loss of $3.6 million related to previously divested businesses.

Asset Impairment Charge: During the second quarter of 2022, the Company recorded a pre-tax impairment loss of $168.4 million related to the Oil & Gas business. Refer to Footnote T, Divestitures, for additional information on the divestiture of the Oil & Gas business.

Interest, net: Net interest expense was ~~$51.9~~$76.3 million in the ~~first~~third quarter of 2022 compared to ~~$44.6~~$43.4 million in the ~~first~~third quarter of 2021. On a year-to-date basis, net interest expense was $199.9 million in 2022 and $131.8 million in 2021. The year-over-year increase was primarily driven by higher U.S. interest rates and higher average balances relating to the Company's commercial paper borrowings, as well as the ~~$2.25 billion credit facility and~~ $1.0 billion issuance of debt in the first quarter of 2022.

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Income Taxes: The Company recognized an income tax ~~expense~~benefit on continuing operations of ~~$22.9~~$40.9 million and $80.8 million for the three and nine months ended October 1, 2022, respectively, resulting in effective tax rates of 951.2% and (42.5)%. The effective tax rate for the three months ended ~~April 2,~~October 1, 2022 ~~resulting~~differs from the U.S. statutory tax rate primarily due to the continued reorganization of the supply chain and the impact of lower forecasted earnings in anNorth America, offset by tax on foreign earnings and the re-measurement of uncertain tax positions. The effective tax rate for the nine months ended October 1, 2022 differs from the U.S. statutory tax rate primarily due to a benefit associated with the disposition of ~~12.8%~~the Company's Oil & Gas business in addition to the items discussed above. Excluding the impacts of the acquisition-related and other charges, the effective tax rates were (1.3)% and 5.3% for the three and nine months ended October 1, 2022, respectively. These effective tax rates differ from the U.S. statutory tax rate due to the items discussed above, excluding the benefit associated with the disposition of the Company's Oil & Gas business.

The Company recognized an income tax benefit on continuing operations of $0.5 million and expense of $182.3 million for the three and nine months ended October 2, 2021, respectively, resulting in effective tax rates of (0.1)% and 12.7%. Excluding the impacts of the acquisition-related and other charges, the effective tax ~~rate was 13.2%~~rates were 1.6% and 13.3% for the three and nine months ended ~~April~~October 2, ~~2022.~~2021, respectively. These effective tax rates differ from the U.S. statutory tax rate primarily due to a benefit associated with the ~~Company’s~~Company's supply chain reorganization, tax on foreign earnings and the re-measurement of uncertain tax position reserves. The Company recognized income tax expense of $115.5 million for the three months ended April 3, 2021, resulting in an effective tax rate of 20.1%. Excluding the impacts of the acquisition-related and other charges, the effective tax rate was 20.3% for the three months ended April 3, 2021. These effective tax rates differ from the U.S. statutory tax rate primarily due to tax on foreign earnings, the re-measurement of uncertain tax position reserves, the re-measurement of the deferred tax assets and liabilities due to foreign corporate income tax rate changes, and the tax benefit of equity-based compensation.

Business Segment Results

~~Table of Contents~~

The Company’s reportable segments are aggregations of businesses that have similar products, services and end markets, among other factors. 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.

The Company’s operations are classified into two reportable business segments: Tools & Outdoor and Industrial.

Tools & Outdoor:


		Year-to-Date				Third Quarter								Year-to-Date
(Millions of Dollars)	(Millions of Dollars)		2022				2021			(Millions of Dollars)	2022			2021			2022			2021
Net sales	Net sales		$	3,801.2			$	3,062.9		Net sales	$	3,494.7		$	3,185.9		$	11,040.8		$	9,445.3
Segment profit	Segment profit		$	378.5			$	644.7		Segment profit	$	228.4		$	478.5		$	968.5		$	1,750.2
% of Net sales	% of Net sales		10.0		%		21.0		%	% of Net sales	6.5		%	15.0		%	8.8		%	18.5		%

Tools & Outdoor net sales increased ~~$738.3~~$308.8 million, or ~~24%~~10%, in the ~~first three months~~third quarter of 2022 compared to the ~~first three months~~third quarter of 2021, ~~primarily driven by a 27%~~as an 18% increase from the MTD and Excel acquisitions and a 7% increase in price were partially offset by lower volume of 12% and 3% from unfavorable currency impacts. The overall 5% organic decline was a result of lower consumer and DIY market demand. Regional year-over-year organic revenue declines were 2%, 4%, and 12% in emerging markets, North America, and Europe, respectively. U.S. retail point-of-sale demand was supported by price increases and professional demand, which remained stable compared to levels exiting the second quarter of 2022.

Tools & Outdoor net sales increased $1.596 billion, or 17%, in the first nine months of 2022 compared to the first nine months of 2021, primarily driven by a 25% increase from the MTD and Excel acquisitions and a 7% increase in price, partially offset by lower volume of 6%12% and 2%3% from unfavorable currency impacts. Organic ~~growth from pricing improved 60 basis points versus the fourth quarter as the Company implemented new global price increases~~revenue in ~~response to commodity inflation and higher costs to serve. Regional organic revenue was relatively in line with the anticipated supply-constrained performance with~~ emerging markets ~~at 5%~~increased 2% year-over-year and declined in both Europe ~~at 2%,~~ and North America ~~at a 3% decline. Sales from outdoor acquisitions were modestly~~by 6%. The overall 5% organic decline was primarily driven by the same factors that impacted ~~by a later start~~the third quarter of 2022, as discussed above.

Segment profit for the third quarter of 2022 was $228.4 million, or 6.5% of net sales, compared to ~~the merchandising season due to colder weather, and are expected to be recovered~~$478.5 million, or 15.0% of net sales, in the ~~second~~third quarter of 2021. Excluding acquisition-related and other charges of $10.6 million and $14.2 million for the three months ended October 1, 2022 and October 2, 2021, respectively, segment profit was 6.8% of net sales in the third ~~quarter.~~quarter of 2022 and 15.5% in the third quarter of 2021, as the benefit from price realization was more than offset by commodity inflation, higher supply chain costs, production curtailment costs and lower volume.

Segment profit for the first ~~three~~nine months of 2022 was ~~$378.5~~$968.5 million, or ~~10.0%~~8.8% of net sales, compared to ~~$644.7 million,~~$1.750 billion, or ~~21.0%~~18.5% of net sales, in the first ~~three~~nine months of 2021. Excluding acquisition-related and other charges of ~~$153.7~~$205.6 million and ~~$4.2~~$27.6 million for the ~~three~~nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021, respectively, segment profit was ~~14.0%~~10.6% of net sales in the first ~~three~~nine months of 2022 and ~~21.2%~~18.8% in the first ~~three~~nine months of 2021, asprimarily driven by the ~~initial benefit from price realization was more than offset by inflation, higher supply chain costs, growth investments and lower volume.~~same factors discussed above.

Industrial:

Year-to-Date
(Millions of Dollars) 2022 2021
Net sales $ 646.6 $ 657.7
Segment profit $ 41.3 $ 99.8
% of Net sales 6.4 % 15.2 %

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	Third Quarter						Year-to-Date
(Millions of Dollars)	2022			2021			2022			2021
Net sales	$	624.8		$	593.5		$	1,919.5		$	1,853.4
Segment profit	$	68.4		$	42.6		$	168.0		$	202.9
% of Net sales	10.9		%	7.2		%	8.8		%	10.9		%

Industrial net sales ~~decreased $11.1~~increased $31.3 million, or 2%5%, in the third quarter of 2022 compared to the third quarter of 2021, driven by a 9% increase in price and 5% increase in volume, partially offset by 6% from unfavorable currency impacts and a 3% impact from the Oil & Gas divestiture. Engineered Fastening organic revenues were up 15%, with growth in the aerospace, automotive and general industrial markets. Infrastructure organic revenues were up 12%, with Attachment Tools delivering 19% growth, with a continued strong backlog.

Industrial net sales increased $66.1 million, or 4%, in the first ~~three~~nine months of 2022 compared to the first ~~three~~nine months of 2021, asdriven by a 5%8% increase in price ~~was more than~~and 1% increase in volume, partially offset by 4% from foreign currency and a ~~5% decline in volume and 2%~~1% impact from ~~unfavorable currency impacts.~~the Oil & Gas divestiture. Engineered Fastening ~~organic revenues were down 1% as general industrial fastener growth was primarily offset by a market driven decline in automotive.~~and Infrastructure organic revenues ~~were up 4%~~grew 7% and 14%, ~~as 13% growth in Attachment Tools was partially offset~~respectively, primarily driven by ~~lower pipeline project activity in Oil & Gas.~~the same factors discussed above.

Industrial segment profit for the ~~first three months~~third quarter of 2022 totaled ~~$41.3~~$68.4 million, or ~~6.4%~~10.9% of net sales, compared to ~~$99.8~~$42.6 million, or ~~15.2%~~7.2% of net sales, in the corresponding 2021 period. Excluding acquisition-related and other charges of ~~$3.5~~$1.0 million and ~~$3.6~~$3.2 million for the three months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021, respectively, segment profit amounted to ~~6.9%~~11.1% of net sales in the third quarter of 2022, up 340 basis points from 7.7% in the third quarter of 2021 as volume growth and price realization were partially offset by commodity inflation and higher supply chain costs.

Industrial segment profit for the first nine months of 2022 totaled $168.0 million, or 8.8% of net sales, compared to $202.9 million, or 10.9% of net sales, in the corresponding 2021 period. Excluding acquisition-related and other charges of $6.4 million and $9.8 million for the nine months ended October 1, 2022 and October 2, 2021, respectively, segment profit amounted to 9.1% of net sales in the first ~~three~~nine months of 2022 compared to ~~15.7%~~11.5% in the first ~~three~~nine months of 2021 as ~~the initial benefit from~~volume growth and price realization ~~was~~were more than offset by commodity inflation, higher supply chain costs and ~~lower volume in higher-margin automotive and aerospace fasteners.~~adverse mix.

Corporate Overhead

Corporate Overhead includes the corporate overhead element of SG&A, which is not allocated to the business segments. Corporate Overhead amounted to ~~$74.7~~$78.5 million and $79.0 million in the third quarter of 2022 and 2021, respectively. Excluding acquisition-related and other charges of $27.2 million for the three months ended October 1, 2022 and $6.4 million for the three months ended October 2, 2021, the corporate overhead element of SG&A was $51.3 million and $72.6 million for the three months ended October 1, 2022 and October 2, 2021, respectively. The decrease in 2022 compared to 2021 was primarily due to lower employee-related costs.

On a year-to-date basis, the corporate overhead element of SG&A amounted to $218.7 million in 2022 compared to ~~$75.8~~$247.6 million in 2021. Excluding acquisition-related and other charges of ~~$10.5~~$44.0 million for the ~~three~~nine months ended ~~April 2,~~October 1, 2022 and ~~$11.6~~$25.5 million for the ~~three~~nine months ended ~~April 3,~~October 2, 2021, the corporate overhead element of SG&A was ~~$64.2~~$174.7 million and $222.1 million for the ~~three~~nine months ended ~~April 2,~~October 1, 2022 and ~~April 3, 2021.~~

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October 2, 2021, respectively, primarily driven by the same factor discussed above.

RESTRUCTURING ACTIVITIES

A summary of the restructuring reserve activity from January 1, 2022 to ~~April 2,~~October 1, 2022 is as follows:


(Millions of Dollars)	(Millions of Dollars)	January 1, 2022		Net Additions		Usage		Currency		April 2, 2022		(Millions of Dollars)	January 1, 2022		Net Additions		Usage		Currency		October 1, 2022
Severance and related costs	Severance and related costs	$	28.2	$	51.1	$	(22.8)	$	0.6	$	57.1	Severance and related costs	$	28.2	$	128.2	$	(65.6)	$	3.6	$	94.4
Facility closures and asset impairments	Facility closures and asset impairments	3.5		1.6		(2.5)		0.1		2.7		Facility closures and asset impairments	3.5		12.6		(10.6)		0.3		5.8
Total	Total	$	31.7	$	52.7	$	(25.3)	$	0.7	$	59.8	Total	$	31.7	$	140.8	$	(76.2)	$	3.9	$	100.2

For the three and nine months ended ~~April 2,~~October 1, 2022, the Company recognized net restructuring charges of ~~$52.7~~$68.6 million and $140.8 million, respectively, primarily related to severance and related costs. The Company expects to achieve annual net cost savings of approximately ~~$137~~$270 million by the end of ~~2022~~2023 related to the restructuring costs incurred during the ~~three~~nine months ended ~~April 2,~~October 1, 2022. The majority of the ~~$59.8~~$100.2 million of reserves remaining as of ~~April 2,~~October 1, 2022 is expected to be utilized within the next 12 months.

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Segments:

The ~~$53~~$141 million of net restructuring charges for the nine months ended October 1, 2022 includes: $81 million in the Tools & Outdoor segment; $26 million in the Industrial segment; and $34 million in Corporate.

The anticipated annual net cost savings of approximately ~~$53~~$270 million related to the 2022 restructuring actions include: ~~$110~~$165 million in the Tools & Outdoor segment; ~~$14~~$32 million in the Industrial segment; and ~~$13~~$73 million in Corporate.

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2022 OUTLOOK

This outlook discussion is intended to provide broad insight into the Company's near-term earnings and cash flow generation prospects. ~~For the full year 2022, the Company projects mid-twenties total revenue growth year-over-year.~~ The Company is revising its 2022 diluted earnings per share outlook to ~~$7.20 - $8.30~~$0.10 to $0.80 on a diluted GAAP basis, from ~~$10.10~~$0.80 to ~~$10.70,~~$2.05, and on an adjusted diluted EPS basis to ~~$9.50~~$4.15 to ~~$10.50~~$4.65 from ~~$12.00~~$5.00 to ~~$12.50.~~$6.00. Free cash flow is expected to be approximately ~~$1.0~~$0.3 billion to ~~$1.5~~$0.6 billion asin the Company focuses on serving its customers while leveraging the SBD Operating Model to drive working capital efficiency. Through the first quarter, $2.3 billion of the planned $4 billion share repurchase was initiated and the Company expects completion of the total program in 2023.fourth quarter. The Company remains focused on disciplined capital allocation, ~~which aims~~and intends to balance share repurchase activity with its commitment to dividends, debt reduction and strong investment grade credit ratings.

The Company has changed the following assumptions for 2022 from its prior outlook: ~~MAS divestiture~~lower fourth quarter revenue, primarily driven by Europe, will approximate $0.30 of dilution to earnings per share; ~~Russia business closure~~currency translation will approximate ~~$0.15~~$0.23 of dilution to earnings per share; ~~an incremental $600 million in commodity~~the impact from higher production curtailment and ~~transit inflation~~destocking costs will approximate ~~$3.50~~$0.82 of ~~incremental~~ dilution to earnings per share; and ~~incremental pricing actions, first quarter out performance and other~~the 2022 tax impact from lower earnings will approximate ~~$1.70~~$0.25 of ~~incremental~~ accretion per diluted share.

The difference between the 2022 diluted earnings per share outlook and the diluted earnings per share range, excluding charges, is ~~$2.20 - $2.30,~~$3.85 to $4.05, consisting of acquisition-related and other charges. These forecasted charges primarily relate to restructuring expenses, a voluntary retirement program, the Russia business closure, ~~integration~~integration-related costs, a non-cash impairment charge for Oil & Gas, and non-cash inventory step-up charges.

FINANCIAL CONDITION

Liquidity, Sources and Uses of Capital: The Company’s primary sources of liquidity are cash flows generated from operations and available lines of credit under various credit facilities.

Operating Activities: Cash flows used in operations were ~~$1.241 billion~~$425.6 million in the ~~first~~third quarter of ~~2021~~2022 compared to ~~$157.8~~cash provided by operations of $4.6 million in the corresponding period of 2021, primarily driven by lower payable balances and lower earnings from continuing operations, partially offset by lower inventory balances. Year-to-date cash flows used in operations were $2.111 billion in 2022 compared to cash provided by operations of $291.2 million in 2021. The year-over-year change was mainly attributable to ~~higher inventory levels to meet demand within the Tools & Outdoor segment, coupled with longer lead times related to the global supply chain,~~lower payable balances and ~~to a lesser extent,~~ lower ~~earnings.~~earnings from continuing operations.

Free Cash Flow: Free cash flow, as defined in the table below, was an outflow of ~~$1.381 billion~~$540.0 million and $124.5 million in the ~~first~~third quarter of 2022 ~~compared to $246.1~~and 2021, respectively. On a year-to-date basis, free cash flow was an outflow of $2.511 billion and $31.3 million in ~~the corresponding period of 2021.~~2022 and 2021, respectively. The ~~year-over-year~~ decrease in free cash flow ~~was~~during both periods were primarily due to ~~increased~~the same factors discussed above in operating activities. The Company has implemented significant production curtailments to slow finished goods manufacturing and expects inventory ~~investments~~ to ~~support the strong demand outlook. This inventory level is planned~~continue to decline sequentially ~~[beginning~~ in the ~~back half~~fourth quarter of ~~2022].~~2022 to support strong free cash flow generation. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and provide dividends to shareowners, and is useful information for investors. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common and preferred stock and business acquisitions, among other items.


		Year-to-Date			Third Quarter						Year-to-Date
(Millions of Dollars)	(Millions of Dollars)		2022			2021		(Millions of Dollars)	2022		2021		2022		2021
Net cash used in operating activities			$	(1,241.1)		$	(157.8)
Net cash (used in) provided by operating activities								Net cash (used in) provided by operating activities	$	(425.6)	$	4.6	$	(2,110.6)	$	291.2
Less: capital and software expenditures	Less: capital and software expenditures		(139.8)			(88.3)		Less: capital and software expenditures	(114.4)		(129.1)		(399.9)		(322.5)
Free cash flow	Free cash flow		$	(1,380.9)		$	(246.1)	Free cash flow	$	(540.0)	$	(124.5)	$	(2,510.5)	$	(31.3)

Investing Activities: Cash flows provided by investing activities totaled $4.015 billion in the third quarter of 2022, primarily due to proceeds from sales of businesses, net of cash sold of $4.147 billion, partially offset by capital and software expenditures of $114.4 million. Cash flows used in investing activities ~~totaled $163.4~~were $143.0 million in the ~~first~~third quarter of ~~2022~~2021, primarily due to capital and software expenditures of ~~$139.8 million~~$129.1 million.

Year-to-date cash flows provided by investing activities totaled $3.697 billion in 2022 primarily due to proceeds from sales of businesses, net of cash sold of 4.147 billion, partially offset by capital and ~~purchase price adjustment payments for previously acquired businesses~~software expenditures of ~~$36.5~~$399.9 million. Cash flows used in investing activities totaled ~~$147.9~~$399.7 million in the first ~~three~~nine months of 2021, primarily due to capital and software expenditures of ~~$88.3~~$322.5 million and net investment hedge settlements of ~~$52.6~~$53.9 million.

Financing Activities: Cash flows ~~provided by~~used in financing activities totaled ~~$1.425~~$3.405 billion in the ~~first~~third quarter of 2022 primarily driven by net repayments of short-term borrowings of ~~$2.845 billion and proceeds from debt issuances, net of fees, of $994.8 million, partially offset by share repurchases of $2.313~~$3.263 billion and cash dividend payments on common stock of ~~$116.3~~$115.5 million. Cash flows provided by financing activities totaled $7.8 million in the third quarter of 2021 primarily driven by net short-term

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borrowings under the Company's commercial paper program of $149.6 million, partially offset by cash dividend payments on common stock of $126.0 million.

Year-to-date cash flows used in financing activities totaled $1.371 billion in the first nine months of 2022 primarily driven by share repurchases of $2.319 billion and cash dividend payments on common stock of $345.8 million, partially offset by proceeds from debt issuances, net of fees, of $992.6 million and net short-term borrowings of $328.0 million. Cash flows used in financing activities totaled ~~$95.0~~$940.5 million in the first ~~three~~nine months of 2021 primarily driven by the redemption and conversion of the Remarketed Series C Preferred Stock for $750.0 million and cash dividend payments on common stock of ~~$110.1~~$347.7 million, partially offset by net short-term borrowings under the Company's commercial paper program of $150.7 million and proceeds from issuances of common stock of ~~$64.1~~$108.1 million.

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Credit Ratings & Liquidity:

The Company maintains strong investment grade credit ratings from the major U.S. rating agencies on its senior unsecured debt (S&P A, Fitch A-, Moody's Baa1), as well as its commercial paper program (S&P A-1, Fitch F1, Moody's P-2). There were no changes to any of the Company's credit ratings, however Moody's Corporation changed the Company's outlook from "stable" to "negative" during the ~~first~~second quarter of ~~2022.~~2022 and Fitch changed the Company's outlook from "stable" to "negative" during the third quarter of 2022 . Failure to maintain strong investment grade credit rating levels could adversely affect the Company’s cost of funds, liquidity and access to capital markets, but would not have an adverse effect on the Company’s ability to access its existing committed credit facilities.

Cash and cash equivalents totaled ~~$165.8~~$408.7 million as of October 1, 2022, which was primarily held in foreign jurisdictions, and $142.1 million as of ~~April 2, 2022 and~~ January 1, 2022, ~~respectively,~~ which was primarily held in the U.S.

As a result of the Tax Cuts and Jobs Act (the “Act”), the Company's tax liability related to the one-time transition tax associated with unremitted foreign earnings and profits totaled ~~$287~~$252 million at ~~April 2,~~October 1, 2022. The Act permits a U.S. company to elect to pay the net tax liability interest-free over a period of up to eight years. The Company has considered the implications of paying the required one-time transition tax and believes it will not have a material impact on its liquidity.

The Company has a five-year $2.5 billion committed credit facility (the “5-Year Credit Agreement”). Borrowings under the 5-Year Credit Agreement may be made in U.S. Dollars, Euros or Pounds Sterling. A sub-limit amount of $814.3 million is designated for swing line advances which may be drawn in Euros pursuant to the terms of the 5-Year Credit Agreement. Borrowings bear interest at a floating rate plus an applicable margin dependent upon the denomination of the borrowing and specific terms of the 5-Year Credit Agreement. The Company must repay all advances under the 5-Year Credit Agreement by the earlier of September 8, 2026 or upon termination. The 5-Year Credit Agreement is designated to be a liquidity back-stop for the Company's $3.5 billion U.S. Dollar and Euro commercial paper program. As of ~~April 2,~~October 1, 2022, and January 1, 2022,, the Company had not drawn on its five-year committed credit facility.

~~The~~In September 2022, the Company ~~has a 364-Day~~terminated its 364-Day $1.0 billion ~~committed~~committed 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 syndicated 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. 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 Syndicated 364-Day Credit Agreement. The Company must repay all advances under the Syndicated 364-Day Credit Agreement by the earlier of September ~~7, 2022~~6, 2023 or upon 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 first 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. The Syndicated 364-Day Credit Agreement serves as part of the liquidity back-stop for the Company’s $3.5 billion U.S. Dollar and Euro commercial paper program. As of ~~April 2, 2022 and~~ ~~January~~October 1, 2022,, the Company had not drawn on its Syndicated 364-Day ~~committed credit facility.~~Credit Agreement.

~~The~~In September 2022 the Company ~~has a~~terminated its second 364-Day $1.0 billion committed credit facility (the "Second 364-Day Credit Agreement"), 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 ~~Second~~Club 364-Day Credit Agreement may be made in U.S. Dollars and Euros and bear

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interest at a ~~base~~floating rate plus an applicable margin ~~determined at~~dependent upon the ~~time~~denomination of the ~~borrowing.~~borrowing and pursuant to the terms of the Club 364-Day Credit Agreement. The Company must repay all advances under the ~~Second~~Club 364-Day Credit Agreement by the earlier of ~~November 15, 2022~~September 6, 2023 or ~~upon~~upon 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 first 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 ~~April 2, 2022 and January~~October 1, 2022, the Company had not drawn on its ~~Second~~Club 364-Day Credit Agreement.

In ~~January~~August 2022, the Company ~~executed a~~paid $2.5 billion to settle the outstanding amount of its third 364-Day ~~$2.5 billion~~ committed credit facility (the "Third 364-Day Credit Agreement")~~. Borrowings~~, dated January 2022, using 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 ~~shall be made in U.S. Dollars and bear interest at a base rate plus an applicable margin determined at the time of the borrowing.~~upon termination. The Company ~~must repay all advances under~~did not incur any termination penalties in connection with the ~~Third 364-Day Credit Agreement by the earlier of January 25, 2023 or upon~~ 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 first 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 April 2, 2022, the Company had $2.3 billion outstanding on its Third 364-Day Credit Agreement.~~

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unsubordinated debt. The Company received total net proceeds from this offering of approximately ~~$991.9~~$992.6 million, net of approximately ~~$8.1~~$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 November 2019, the Company issued 7,500,000 Equity Units with a total notional value of $750 million ("2019 Equity Units"). Each unit has a stated amount of $100 and initially consists 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 per share, 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 Company received approximately $735 million in cash proceeds from the 2019 Equity Units, net of offering expenses and underwriting costs and commissions, and issued 750,000 shares of Series D Preferred Stock. The proceeds were used, together with cash on hand, to redeem the 2052 Junior Subordinated Debentures in December 2019. The Company also used $19 million of the proceeds to enter into capped call transactions utilized to hedge potential economic dilution. On and after November 15, 2022, the Series D Preferred Stock may be converted into common stock at the option of the holder. At the election of the Company, upon conversion, the Company may deliver cash, common stock, or a combination thereof. On or after December 22, 2022, the Company may elect to redeem for cash, all or any portion of the outstanding shares of the Series D Preferred Stock at a redemption price equal to 100% of the liquidation preference, plus any accumulated and unpaid dividends. If the Company calls the Series D Preferred Stock for redemption, holders may convert their shares immediately preceding the redemption date. Upon a successful remarketing of the Series D Preferred Stock (the "Remarketed Series D Preferred Stock"), the Company will receive additional cash proceeds of $750 million and issue shares of Remarketed Series D Preferred Stock. On October 20, 2022, the Company informed the holders of the Company’s intent to remarket the Series D Preferred Stock in November 2022, with final settlement to coincide with the settlement of the 2022 Purchase Contracts on November 15, 2022.The Company pays the holders of the 2022 Purchase Contracts quarterly contract adjustment payments, which commenced February 15, 2020. As of ~~April 2,~~October 1, 2022, the present value of the contract adjustment ~~payments~~payments was approximately ~~$29~~$10 million.

Refer to Note H, Long-Term Debt and Financing Arrangements, and Note J, Equity Arrangements, for further discussion of the Company's financing arrangements.

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OTHER MATTERS

Critical Accounting Estimates: There have been no significant changes in the Company’s critical accounting estimates during the ~~first~~third quarter of 2022.

Refer to the “Other Matters” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Form 10-K for the year ended January 1, 2022 for a discussion of the Company’s critical accounting estimates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no significant change in the Company’s exposure to market risk during the ~~first~~third quarter of 2022. Refer to the Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Form 10-K for the year ended January 1, 2022 and subsequent related filings with the Securities and Exchange Commission for further discussion.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Under the supervision and with the participation of management, including the Company’s President and Chief Executive Officer and its ~~President and~~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 ~~President and~~Interim Chief Financial Officer have concluded that, as of ~~April 2,~~October 1, 2022, the Company’s disclosure controls and procedures are effective.

~~Remediation of Material Weakness~~

To address the previously reported material weakness 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 weakness has been remediated.

Changes in Internal Control Over Financial Reporting

~~Except for the changes related to the Company's remediation efforts described above, there~~There has been no change in the Company’s internal control over financial reporting that occurred during the ~~first~~third quarter of 2022 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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CAUTIONARY STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION

REFORM ACT OF 1995

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections or guidance of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include, among others, the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “anticipate” or any other similar words.

Although the Company believes that the expectations reflected in any of its forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of its forward-looking statements. The Company's future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in the Company's filings with the Securities and Exchange Commission.

Important factors that could cause the Company's actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in its forward-looking statements include, among others, the following: (i) successfully developing, marketing and achieving sales from new products and services and the continued acceptance of current products and services; (ii) macroeconomic factors, including global and regional business conditions (such as Brexit), commodity prices, inflation and deflation, and currency exchange rates; (iii) laws, regulations and governmental policies affecting the Company's activities in the countries where it does business, including those related to tariffs, taxation, data privacy, anti-bribery, anti-corruption, government contracts and trade controls such as section 301 tariffs and section 232 steel and aluminum tariffs; (iv) the economic, political, cultural and legal environment of emerging markets, particularly Latin America, Russia, China and Turkey; (v) realizing the anticipated benefits of mergers, acquisitions, joint ventures, strategic alliances or divestitures; (vi) pricing pressure and other changes within competitive markets; (vii) availability and price of raw materials, component parts, freight, energy, labor and sourced finished goods; (viii) the impact the tightened credit markets and change to LIBOR and other benchmark rates may have on the Company or its customers or suppliers; (ix) the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; (x) the Company's ability to identify and effectively execute productivity improvements and cost reductions; (xi) potential business and distribution disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, pandemics, sanctions, political unrest, war, terrorism or natural disasters; (xii) the continued consolidation of customers, particularly in consumer channels and the Company’s continued reliance on significant customers; (xiii) managing franchisee relationships; (xiv) the impact of poor weather conditions and climate change; (xv) maintaining or improving production rates in the Company's manufacturing facilities, responding to significant changes in customer preferences, product demand and fulfilling demand for new and existing products, and learning, adapting and integrating new technologies into products, services and processes; (xvi) changes in the competitive landscape in the Company's markets; (xvii) the Company's non-U.S. operations, including sales to non-U.S. customers; (xviii) the impact from demand changes within world-wide markets associated with homebuilding and remodeling; (xix) potential adverse developments in new or pending litigation and/or government investigations; (xx) the incurrence of debt and changes in the Company's ability to obtain debt on commercially reasonable terms and at competitive rates; (xxi) substantial pension and other postretirement benefit obligations; (xxii) potential regulatory liabilities, including environmental, privacy, data breach, workers compensation and product liabilities; (xxiii) attracting and retaining key employees, managing a workforce in many jurisdictions, work stoppages or other labor disruptions; (xxiv) the Company's ability to keep abreast with the pace of technological change; (xxv) changes in accounting estimates; (xxvi) the Company’s ability to protect its intellectual property rights and associated reputational impacts; (xxvii) the continued adverse effects of the COVID-19 pandemic and an indeterminate recovery period; (xxviii) the possibility that the Company does not achieve the intended financial benefits from the acquisition of ~~MTD;~~MTD and Excel including failure to achieve the Company’s plans to design, develop and manufacture battery and electric-powered solutions for professional and residential users; and (xxix) the ~~failure~~Company’s ability to ~~consummate, or a delay in the consummation of, the Security sale transactions for various reasons (including but not limited to failure to receive, or delay in receiving, required regulatory approvals~~implement, and ~~meet customary closing conditions); (xxx) the failure to undertake or complete, or a delay in the timing of, the share repurchase program; and (xxxi) failure to realize~~achieve the expected benefits (including cost savings and reduction in working capital) from its Global Cost Reduction Program including: continuing to advance innovation, electrification and global market penetration to achieve organic growth of 2-3 times the ~~Company's capital allocation strategy~~market; streamlining and ~~share repurchase program.~~simplifying the organization, as well as shifting resources to prioritize investments believed to have a positive and more direct impact to customers; accelerating the operations and supply chain transformation to improve fill rates and better match the needs of its customers while improving gross margins back to historical 35%+ levels; prioritizing cash flow generation and inventory optimization; leveraging strategic sourcing and contract manufacturing; consolidating facilities and optimizing the distribution network; executing the SBD Operating Model to deliver operational excellence through efficiency, simplified organizational design and inventory optimization; and platforming products.

Additional factors that could cause actual results to differ materially from forward-looking statements are set forth in the Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q, including under the heading “Risk Factors,” ~~“Management’s~~

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“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the Condensed Consolidated Financial Statements and the related Notes.

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Forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date hereof, and forward-looking statements in documents attached that are incorporated by reference speak only as of the date of those documents. The Company does not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company has identified that certain expenses it incurred in previous years constituted undisclosed perquisites. The Company has voluntarily disclosed this information to the U.S. Securities and Exchange Commission ("SEC") and is cooperating with the SEC’s investigation of this matter.

For the named executive officers in fiscal year 2021, the Company has calculated the amount of the undisclosed perquisites to be approximately $204,000 in 2020 and approximately $335,000 in 2019. These amounts relate principally to use of corporate aircraft and have been included in the Company’s proxy statement for its 2022 annual shareholders meeting.

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.

Currently the Company does not believe that this matter will have a material impact on its financial condition or results of operations, although it is possible that a loss related to this matter may be incurred. Given the ongoing nature of this matter, management cannot predict the duration, scope, or outcome of the SEC’s investigation or estimate the potential magnitude of any such loss or range of loss, or the cost of the ongoing SEC investigation. Any determination that the Company’s expense and perquisite reporting practices were not in compliance with existing laws or regulations 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 these matters.

In the normal course of business, the Company is involved in various lawsuits and claims, including product liability, environmental, intellectual property, contract and commercial, advertising, employment and distributor claims, and administrative proceedings. The Company does not expect that the resolution of these matters will have a materially adverse effect on the Company’s consolidated financial position, results of operations or liquidity.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors as disclosed in the Company’s Form 10-K for the year ended January 1, 2022 filed with the Securities and Exchange Commission on February 22, 2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table provides information about the Company’s purchases of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act during the three months ended ~~April 2,~~October 1, 2022:

2022 Total
Number Of
Shares
Purchased
(a) Average Price
Paid Per
Share
Total Number
Of Shares
Purchased As
Part Of A Publicly
Announced Plan Or Program
(In Millions)
Maximum Number
Of Shares That
May Yet Be
Purchased Under
The Program
(b)
January 2 - February 5 — $ — — 20
February 6 - March 5 12,681,866 154.82 10,756,770 7
March 6 - April 2 47,851 145.10 — 7
Total 12,729,717 $ 154.79 10,756,770 7


2022	Total Number Of Shares Purchased (a)	Average Price Paid Per Share		Total Number Of Shares Purchased As Part Of A Publicly Announced Plan Or Program	(In Millions) Maximum Number Of Shares That May Yet Be Purchased Under The Program (b)
July 3 - August 6	34,826	$	113.91	—	20
August 7 - September 3	9,113	106.82		—	20
September 4 - October 1	267	85.91		—	20
Total	44,206	$	112.28	—	20

(a)Shares of common stock in this column ~~totaling 36,495 and 47,851 for the months ended March 5, 2022 and April 2, 2022, respectively,~~ were deemed surrendered to the Company by participants in various benefit plans of the Company to satisfy the participants’ taxes related to vesting or delivery of time-vesting restricted share units under those plans. ~~Shares in this column totaling 1,888,601 for the month ended March 5, 2022 were open market share repurchases.~~

(b)On February 16, 2022, the Board of Directors terminated the previous repurchase program (the "April 2021 Program") and approved a new repurchase program of up to the greater of (i) 20.0 million shares of the Company’s common stock; and (ii) the number of shares of the Company’s common stock in the aggregate that can be purchased for an amount up to $2.5 billion (the "February 2022 Program"). On April 21, 2022, the Board ~~terminated the February 2022 Program and~~ approved a ~~new~~ share repurchase program of up to 20 million shares of the Company’s common stock (the “April 2022

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Program”). The April 2022 Program does not have an expiration date. The Company may repurchase shares under the April 2022 Program through open market purchases, privately negotiated transactions or share repurchase programs, including one or more accelerated share repurchase programs (under which an initial payment for the entire repurchase amount may be made at the inception of the program). Such repurchases may be funded from cash on hand, short-term borrowings or other sources of cash at the Company’s discretion, and the

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Company is under no obligation to repurchase any shares pursuant to the repurchase program. The currently authorized shares available for repurchase under the April 2022 Program do not include ~~(i)~~ approximately 3.6 million shares reserved and authorized for purchase under the Company’s approved repurchase program in place prior to the April 2022 Program relating to a forward share purchase contract entered into in March 2015; or (ii) the shares reserved and authorized for repurchase under the February 2022 Program relating to the remaining shares to be delivered pursuant to the ASR (defined below) in the second quarter of 2022. In March 2022, the Company executed an accelerated share repurchase ("ASR") with a notional amount of $2.0 billion, which was funded through borrowings under one of its existing 364-Day committed credit facilities. The ASR terms provide for an initial delivery of 85% of the total notional share equivalent at execution, or approximately 10.8 million shares. The final delivery of the remaining shares under the ASR is expected to be completed by the end of the second quarter of 2022. The total amount of shares to be ultimately delivered will be determined at the end of the calculation period based on the volume weighted average price ("VWAP") of the Company's stock (inclusive of a VWAP discount) during that period. In the event that the Company's stock price increases significantly during the calculation period, the Company may be required to settle the transaction by delivering common shares or may elect to make a cash payment. Refer to ~~Note J, Equity Arrangements,~~ ~~of the~~ ~~Notes to (Unaudited) Condensed Consolidated Financial Statements~~ in ~~Part I, Item 1~~ ~~for further discussion.~~

2015.

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ITEM 6. EXHIBITS


~~(4.1)~~(10.1)			~~Tenth Supplemental Indenture,~~Ag reement and Mut ual Release , dated ~~as of February 24,~~August 4 , 2022, between Stanley Black & Decker, Inc. 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~~James Loree (~~(incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K~~ filed ~~on February 24, 2022).~~herewith

~~(4.2)~~			~~Form of Stanley Black & Decker, Inc.’s 2.300% Notes due 2025(incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on February 24, 2022)~~).

~~(4.3)~~(10.2)			~~Form of Stanley Black & Decker, Inc.’s 3.000% Notes due 2032(incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on February 24, 2022)~~.

~~(10.1)~~			Syndicated 364-Day Credit Agreement, made as of ~~January 26,~~September 7, 2022 among Stanley Black & Decker, Inc., the initial lenders named therein and Citibank, N.A. as administrative agent for the lenders ~~(incorporated~~ (incorporated by reference to Exhibit 10.1 ~~on the Company’s Current Report on Form 8-K filed on January 28,2022)~~.

~~(10.2)~~			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,~~September 13, 2022).

(10.3)			Club 364-Day Credit Agreement, made 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 10.2 to the Company’s Current Report on Form 8-K filed on September 13, 2022).

~~(11)~~(10.4)			~~Statement re-computation~~Amendment No. 1 to Amended and Restated Five Year Credit Agreement, dated as of ~~per share earnings (the information required~~September 7, 2022 among Stanley Black & Decker, Inc., the lenders party thereto and Citibank, N.A. as administrative agent for the lenders (incorporated by reference to ~~be presented in this exhibit appears in Note C~~Exhibit 10.3 to the Company’s ~~(Unaudited) Condensed Consolidated Financial Statements set forth in this Quarterly~~Current Report on Form ~~10-Q)~~8-K filed on September 13, 2022).

(31)(i)(a)			Certification by President and Chief Executive Officer pursuant to Rule 13a-14(a).

(i)(b)			Certification by ~~President and~~Interim Chief Financial Officer pursuant to Rule 13a-14(a).

(32)(i)			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.

(ii)			Certification by ~~President and~~Interim Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(101)			The following materials from Stanley Black & Decker Inc.'s Quarterly Report on Form 10-Q for the quarter ended ~~April 2,~~October 1, 2022, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~ for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021; (ii) ~~Condensed~~ Consolidated Balance Sheets at ~~April 2,~~October 1, 2022 and January 1, 2022; (iii) Condensed Consolidated Statements of Cash Flows for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021; (iv) Consolidated Statements of Changes in Shareowners' Equity for the three and nine months ended ~~April 2,~~October 1, 2022 and ~~April 3,~~October 2, 2021; and (v) Notes to (Unaudited) Condensed Consolidated Financial Statements**.

(104)			The cover page of Stanley Black & Decker Inc.'s Quarterly Report on Form 10-Q for the quarter ended ~~April 2,~~October 1, 2022, formatted in iXBRL (included within Exhibit 101 attachments).


*			Management contract or compensation plan or arrangement.
**			Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

STANLEY BLACK & DECKER, INC.

Date:

~~April 28,~~October 27, 2022

By:

/s/ ~~DONALD ALLAN, JR.~~CORBIN WALBURGER

~~Donald Allan, Jr.~~Corbin Walburger

~~President and~~Interim Chief Financial Officer

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PART I — FINANCIAL INFORMATION			3
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			3
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			3640
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			4653
ITEM 4. CONTROLS AND PROCEDURES			4653
PART II — OTHER INFORMATION			4956
ITEM 1. LEGAL PROCEEDINGS			4956
ITEM 1A. RISK FACTORS			4956
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			4956
ITEM 6. EXHIBITS			5158
SIGNATURE			5259