UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K
þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 29, 2018
or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
COMMISSION FILE 1-5224

STANLEY BLACK & DECKER, INC.

(Exact Name Of Registrant As Specified In Its Charter)

Connecticut 06-0548860
(State Or Other Jurisdiction Of (I.R.S. Employer
Incorporation Or Organization) Identification Number)
1000 Stanley Drive
New Britain, Connecticut 06053
(Address Of Principal Executive Offices) (Zip Code)
860-225-5111
(Registrant’s Telephone Number)

Securities Registered Pursuant To Section 12(b) Of The Act:

Title Of Each Class Name Of Each Exchange On Which Registered

Common Stock-$2.50 Par Value per Share New York Stock Exchange
Securities Registered Pursuant To Section 12(g) Of The Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes þ No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
Yes ¨ No þ
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 þ 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 and post such files).
Yes þ No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ
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. (Check one):

Large accelerated filer þ Accelerated filer ¨

Non-accelerated filer ¨ (Do not check if a smaller reporting company) 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 Exchange Act Rule 12b-2).
Yes ¨ No þ
As of June 29, 2018, the aggregate market values of voting common equity held by non-affiliates of the registrant was $20.3 billion based on the New York Stock Exchange closing
price for such shares on that date. On February 15, 2019, the registrant had 151,356,989 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s definitive proxy statement relating to its 2019 annual meeting of shareholders (the "2019 Proxy Statement") are incorporated by reference into Part III of
this Annual Report on Form 10-K where indicated. The 2019 Proxy Statement will be filed with the U.S. Securities Exchange Commission within 120 days after the end of the fiscal
year to which this report relates.
 TABLE OF CONTENTS

PART I
ITEM 1. BUSINESS 3
ITEM 1A. RISK FACTORS 8
ITEM 1B. UNRESOLVED STAFF COMMENTS 18
ITEM 2. PROPERTIES 19
ITEM 3. LEGAL PROCEEDINGS 19
ITEM 4. MINE SAFETY DISCLOSURES 19

PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES 20
ITEM 6. SELECTED FINANCIAL DATA 22
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 24
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 44
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 44
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE 44
ITEM 9A. CONTROLS AND PROCEDURES 45
ITEM 9B. OTHER INFORMATION 45

PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 46
ITEM 11. EXECUTIVE COMPENSATION 48
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS 48
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 50
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 50

PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 50
ITEM 16. FORM 10-K SUMMARY 52
SIGNATURES 53
EX-10.4
EX-10.5
EX-10.16(e)
EX-10.16(f)
EX-10.17
EX-21
EX-23
EX-24
EX-31.1.a
EX-31.1.b
EX-32.1
EX-32.2

2
 FORM 10-K
PART I
ITEM 1. BUSINESS
Stanley Black & Decker, Inc. ("the Company") was founded over 175 years ago, in 1843, by Frederick T. Stanley and incorporated in Connecticut in 1852. In
March 2010, the Company completed a merger ("the Merger") with The Black & Decker Corporation (“Black & Decker”), a company founded by S. Duncan
Black and Alonzo G. Decker and incorporated in Maryland in 1910. At that time, the Company changed its name from The Stanley Works ("Stanley") to
Stanley Black & Decker, Inc.

The Company is a diversified global provider of hand tools, power tools and related accessories, engineered fastening systems and products, services and
equipment for oil & gas and infrastructure applications, commercial electronic security and monitoring systems, healthcare solutions, and mechanical access
solutions (primarily automatic doors), with 2018 consolidated annual revenues of $14.0 billion. Approximately 55% of the Company’s 2018 revenues were
generated in the United States, with the remainder largely from Europe (22%), emerging markets (14%) and Canada (4%).

The Company continues to execute a growth and acquisition strategy that involves industry, geographic and customer diversification to foster sustainable
revenue, earnings and cash flow growth. The Company remains focused on organic growth, including increasing its presence in emerging markets, and
leveraging the Stanley Fulfillment System ("SFS 2.0"), which focuses on digital excellence, commercial excellence, breakthrough innovation, core SFS
operating principles, and functional transformation. In addition, the Company continues to make strides towards achieving its 22/22 Vision of reaching $22
billion in revenue by 2022 while expanding the margin rate, by becoming known as one of the world’s leading innovators, delivering top-quartile financial
performance and elevating its commitment to social responsibility.

Execution of the above strategy has resulted in approximately $9.4 billion of acquisitions since 2002 (excluding the Black & Decker merger and pending
acquisition of the International Equipment Solutions Attachments Group, as discussed below), which was enabled by strong cash flow generation and
increased debt capacity. In recent years, the Company completed the acquisitions of Nelson Fastener Systems ("Nelson") for approximately $430 million, the
Tools business of Newell Brands ("Newell Tools") for approximately $1.84 billion, and the Craftsman® brand from Sears Holdings Corporation ("Sears
Holdings") for an estimated cash purchase price of approximately $937 million on a discounted basis. The Nelson acquisition is complementary to the
Company's product offerings, enhances its presence in the general industrial end markets, and expands its portfolio of highly-engineered fastening solutions.
The Newell Tools acquisition, which included the industrial cutting, hand tool and power tool accessory brands IRWIN® and LENOX®, enhances the
Company’s position within the global tools & storage industry and broadens the Company’s product offerings and solutions to customers and end users,
particularly within power tool accessories. The Craftsman acquisition provides the Company with the rights to develop, manufacture and sell Craftsman®-
branded products in non-Sears Holdings channels. Furthermore, the Company reached an agreement to acquire International Equipment Solutions
Attachments Group ("IES Attachments"), a manufacturer of high quality, performance-driven heavy equipment attachment tools for off-highway applications.
The acquisition will further diversify the Company's presence in the industrial markets, expand its portfolio of attachment solutions and provide a
meaningful platform for continued growth. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to
close in the first half of 2019.

On January 2, 2019, the Company acquired a 20 percent interest in MTD Holdings Inc. ("MTD"), a privately held global manufacturer of outdoor power
equipment, for $234 million in cash. Under the terms of the agreement, the Company has the option to acquire the remaining 80 percent of MTD beginning
on July 1, 2021. The investment in MTD increases the Company's presence in the $20 billion global lawn and garden market and will allow the two
companies to work together to pursue revenue and cost opportunities, improve operational efficiency, and introduce new and innovative products for
professional and residential outdoor equipment customers, utilizing each company's respective portfolios of strong brands.

In February 2017, the Company completed the sale of the majority of its mechanical security businesses, which included the commercial hardware brands of
Best Access, phi Precision and GMT, for net proceeds of approximately $717 million. This sale allowed the Company to deploy capital in a more accretive
and growth-oriented manner. The Company has also divested several smaller businesses in recent years that did not fit into its long-term strategic objectives.

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

At December 29, 2018, the Company employed 60,767 people worldwide. The Company’s principal executive office is located at 1000 Stanley Drive, New
Britain, Connecticut 06053 and its telephone number is (860) 225-5111.

3
Description of the Business

The Company’s operations are classified into three reportable business segments, which also represent its operating segments: Tools & Storage, Industrial and
Security. All segments have significant international operations and are exposed to translational and transactional impacts from fluctuations in foreign
currency exchange rates.

Additional information regarding the Company’s business segments and geographic areas is incorporated herein by reference to the material captioned
“Business Segment Results” in Item 7 and Note P, Business Segments and Geographic Areas, of the Notes to Consolidated Financial Statements in Item 8.

Tools & Storage

The Tools & Storage segment is comprised of the Power Tools and Equipment ("PTE") and Hand Tools, Accessories & Storage ("HTAS") businesses. Annual
revenues in the Tools & Storage segment were $9.8 billion in 2018, representing 70% of the Company’s total revenues.

The PTE 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, lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, edgers and related accessories, 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 segment sells its products to professional end users, distributors, retail consumers and industrial customers in a wide variety of industries and
geographies. The majority of sales are distributed through retailers, including home centers, mass merchants, hardware stores, and retail lumber yards, as well
as third-party distributors and a direct sales force.

Industrial
The Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses. Annual revenues in the Industrial segment were $2.2 billion
in 2018, representing 16% of the Company’s total revenues.

The Engineered Fastening business primarily sells engineered fastening products and systems designed for specific applications. The product lines include
blind rivets and tools, blind inserts and tools, drawn arc weld studs and systems, engineered plastic and mechanical fasteners, self-piercing riveting systems
and precision nut running systems, micro fasteners, and high-strength structural fasteners. The business sells to customers in the automotive, manufacturing,
electronics, construction, and aerospace industries, amongst others, and its products are distributed through direct sales forces and, to a lesser extent, third-
party distributors.

The Infrastructure business consists of the Oil & Gas and Hydraulics businesses. The Oil & Gas business 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 Hydraulics business
sells hydraulic tools and accessories. The Infrastructure businesses sell to the oil and natural gas pipeline industry and other industrial customers. The
products and services are primarily distributed through a direct sales force and, to a lesser extent, third-party distributors.

Security
The Security segment is comprised of the Convergent Security Solutions ("CSS") and Mechanical Access Solutions ("MAS") businesses. Annual revenues in
the Security segment were $2.0 billion in 2018, representing 14% of the Company’s total revenues.

The CSS business designs, supplies and installs commercial electronic security systems and provides electronic security services, including alarm
monitoring, video surveillance, fire alarm monitoring, systems integration and system maintenance. Purchasers of these systems typically contract for
ongoing security systems monitoring and maintenance at the time of initial equipment installation. The business also sells healthcare solutions, which
include asset tracking, infant protection, pediatric protection, patient protection, wander management, fall management, and emergency call products. The
CSS business sells to consumers, retailers, educational, financial and healthcare institutions, as well as commercial, governmental and industrial

4
customers. The MAS business primarily sells automatic doors to commercial customers. Products for both businesses are sold predominantly on a direct sales
basis.

Other Information

Competition
The Company competes on the basis of its reputation for product quality, its well-known brands, its commitment to customer service, its strong customer
relationships, the breadth of its product lines, its innovative products and customer value propositions.

The Company encounters active competition in the Tools & Storage and Industrial segments from both larger and smaller companies that offer the same or
similar products and services. Certain large customers offer private label brands (“house brands”) that compete across a wider spectrum of the Company’s
Tools & Storage segment product offerings. Competition in the Security segment is generally fragmented via both large international players and regional
companies. Competition tends to be based primarily on price and the quality and comprehensiveness of services offered to customers.

Major Customers
A significant portion of the Company’s Tools & Storage products are sold to home centers and mass merchants in the U.S. and Europe. A consolidation of
retailers both in North America and abroad has occurred over time. While this consolidation and the domestic and international expansion of these large
retailers have provided the Company with opportunities for growth, the increasing size and importance of individual customers creates a certain degree of
exposure to potential sales volume loss. One customer, Lowe's, accounted for approximately 12% and 11% of the Company's consolidated net sales in 2018
and 2017, respectively. No other customer exceeded 10% of consolidated sales in 2018, 2017 or 2016.

Working Capital
The Company continues to practice the five operating principles encompassed by Core SFS, one component of the SFS 2.0 operating system, which work in
concert: sales and operations planning ("S&OP"), operational lean, complexity reduction, global supply management, and order-to-cash excellence. The
Company develops standardized business processes and system platforms to reduce costs and provide scalability. Core SFS / Industry 4.0 has been
instrumental in reducing working capital and creating significant opportunities to generate incremental free cash flow (defined as cash flow from operations
less capital and software expenditures). Working capital turns were 8.8 at the end of 2018, a slight decrease from 2017, reflecting higher levels of inventory
associated with the Craftsman rollout as well as impacts from integrating recent acquisitions. The Company plans to continue leveraging Core SFS / Industry
4.0 to generate ongoing improvements, both in the existing business and future acquisitions, in working capital turns, cycle times, complexity reduction and
customer service levels, with a long-term goal of sustaining 10+ working capital turns.

Raw Materials
The Company’s products are manufactured using resins, ferrous and non-ferrous metals including, but not limited to, steel, zinc, copper, brass, aluminum and
nickel. The Company also purchases components such as batteries, motors, and electronic components to use in manufacturing and assembly operations
along with resin-based molded parts. The raw materials required are procured globally and generally available from multiple sources at competitive prices. As
part of the Company's Enterprise Risk Management, the Company has implemented a supplier risk mitigation strategy in order to identify and address any
potential supply disruption associated with commodities, components, finished goods and critical services. The Company does not anticipate difficulties in
obtaining supplies for any raw materials or energy used in its production processes.

Backlog
Due to short order cycles and rapid inventory turnover primarily in the Company's Tools & Storage segment, backlog is generally not considered a
significant indicator of future performance. At February 2, 2019, the Company had approximately $1,001 million in unfilled orders, which mainly related to
the Engineered Fastening and Security businesses. Substantially all of these orders are reasonably expected to be filled within the current fiscal year. As of
February 3, 2018 and February 4, 2017, unfilled orders amounted to $929 million and $838 million, respectively.

Patents and Trademarks

No business segment is solely dependent, to any significant degree, on patents, licenses, franchises or concessions, and the loss of one or several of these
patents, licenses, franchises or concessions would not have a material adverse effect on any of the Company's businesses. The Company owns numerous
patents, none of which individually is material to the Company's

5
operations as a whole. These patents expire at various times over the next 20 years. The Company holds licenses, franchises and concessions, none of which
individually or in the aggregate are material to the Company's operations as a whole. These licenses, franchises and concessions vary in duration, but
generally run from one to 40 years.

The Company has numerous trademarks that are used in its businesses worldwide. In the Tools & Storage segment, significant trademarks include
STANLEY®, BLACK+DECKER®, DEWALT®, FLEXVOLT®, IRWIN®, LENOX®, CRAFTSMAN®, PORTER-CABLE®, BOSTITCH®, FATMAX®,
Powers®, Guaranteed Tough®, MAC TOOLS®, PROTO®, Vidmar®, FACOM®, USAG™, LISTA® and the yellow & black color scheme for power tools and
accessories. Significant trademarks in the Industrial segment include STANLEY®, CRC®, NELSON®, LaBounty®, Dubuis®, CribMaster®, Expert®,
SIDCHROME™, POP®, Avdel®, HeliCoil®, Tucker®, NPR®, Spiralock® and STANLEY® Assembly Technologies. The Security segment includes
significant trademarks such as STANLEY®, Blick™, HSM®, SONITROL®, Stanley Access Technologies™, AeroScout®, Hugs®, WanderGuard®, Roam
Alert®, MyCall®, Arial® and Bed-Check®. The terms of these trademarks typically vary from 10 to 20 years, with most trademarks being renewable
indefinitely for like terms.

Environmental Regulations
The Company is subject to various environmental laws and regulations in the U.S. and foreign countries where it has operations. In the normal course of
business, the Company is involved in various legal proceedings relating to environmental issues. 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. In the event that 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 December 29, 2018 and December 30, 2017, the
Company had reserves of $246.6 million and $176.1 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 2018 amount, $58.1 million is classified as current and $188.5 million as long-term,
which is expected to be paid over the estimated remediation period. As of December 29, 2018, the Company has recorded $12.4 million in other assets related
to funding by the Environmental Protection Agency ("EPA") and monies received have been placed in trust in accordance with the Consent Decree
associated with the West Coast Loading Corporation ("WCLC") proceedings, as further discussed in Note S, Contingencies, of the Notes to Consolidated
Financial Statements in Item 8. Accordingly, the Company's cash obligation as of December 29, 2018 associated with the aforementioned remediation
activities is $234.2 million. The range of environmental remediation costs that is reasonably possible is $214.0 million to $344.3 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 policy.

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. Additional information regarding environmental matters is available in Note S, Contingencies, of the Notes to Consolidated
Financial Statements in Item 8.

Employees
At December 29, 2018, the Company had 60,767 employees, 16,801 of whom were employed in the U.S. Employees in the U.S. totaling 1,433 are covered by
collective bargaining agreements negotiated with 27 different local labor unions who are, in turn, affiliated with approximately 7 different international labor
unions. The majority of the Company’s hourly-paid and weekly-paid employees outside the U.S. are not covered by collective bargaining agreements. The
Company’s labor agreements in the U.S. expire between 2019 and 2021. There have been no significant interruptions of the Company’s operations in recent
years due to labor disputes. The Company believes it has a good relationship with its employees.

Research and Development Costs

Research and development costs, which are classified in Selling, general and administrative ("SG&A"), were $275.8 million, $252.3 million and $204.4
million for fiscal years 2018, 2017 and 2016, respectively. The increases in 2018 and 2017 reflect the Company's continued focus on becoming known as
one of the world's greatest innovators and its commitment to continue generating new core and breakthrough innovations.

6
Available Information
The Company’s website is located at http://www.stanleyblackanddecker.com. This URL is intended to be an inactive textual reference only. It is not intended
to be an active hyperlink to the Company's website. The information on the Company's website is not, and is not intended to be, part of this Form 10-K and is
not incorporated into this report by reference. The Company makes its Forms 10-K, 10-Q, 8-K and amendments to each available free of charge on its website
as soon as reasonably practicable after filing them with, or furnishing them to, the U.S. Securities and Exchange Commission ("SEC"). Also available on the
Company's website is the Company's Code of Ethics for its CEO and senior financial officers.

7
ITEM 1A. RISK FACTORS

The Company’s business, operations and financial condition are subject to various risks and uncertainties. You should carefully consider the risks and
uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including those risks set forth under the
heading entitled "Cautionary Statements Under the Private Securities Litigation Reform Act of 1995" in Item 7, and in other documents that the Company
files with the SEC, before making any investment decision with respect to its securities. If any of the risks or uncertainties actually occur or develop, the
Company’s business, financial condition, results of operations and future growth prospects could change. Under these circumstances, the trading prices of
the Company’s securities could decline, and you could lose all or part of your investment in the Company’s securities.

Changes in customer preferences, the inability to maintain mutually beneficial relationships with large customers, inventory reductions by customers, and
the inability to penetrate new channels of distribution could adversely affect the Company’s business.

The Company has certain significant customers, particularly home centers and major retailers. The two largest customers comprised approximately 22% of
net sales, with U.S. and international mass merchants and home centers collectively comprising approximately 37% of net sales. The loss or material
reduction of business, the lack of success of sales initiatives, or changes in customer preferences or loyalties for the Company’s products, related to any such
significant customer could have a material adverse impact on the Company’s results of operations and cash flows. In addition, the Company’s major
customers are volume purchasers, a few of which are much larger than the Company and have strong bargaining power with suppliers. This limits the ability
to recover cost increases through higher selling prices. Furthermore, unanticipated inventory adjustments by these customers can have a negative impact on
net sales.

If customers in the Convergent Security Solutions ("CSS") business are dissatisfied with services and switch to competitive services, or disconnect for other
reasons such as preference for digital technology products or other technology enhancements not then offered by CSS, the Company's attrition rates may
increase. In periods of increasing attrition rates, recurring revenue and results of operations may be materially adversely affected. The risk is more pronounced
in times of economic uncertainty, as customers may reduce amounts spent on the products and services the Company provides.

In times of tough economic conditions, the Company has experienced significant distributor inventory corrections reflecting de-stocking of the supply chain
associated with difficult credit markets. Such distributor de-stocking exacerbated sales volume declines pertaining to weak end user demand and the broader
economic recession. The Company’s results may be adversely impacted in future periods by such customer inventory adjustments. Further, the inability to
continue to penetrate new channels of distribution may have a negative impact on the Company’s future results.

The Company faces active global competition and if it does not compete effectively, its business may suffer.

The Company faces active competition and resulting pricing pressures. The Company’s products compete on the basis of, among other things, its reputation
for product quality, its well-known brands, price, innovation and customer service capabilities. The Company competes with both larger and smaller
companies that offer the same or similar products and services or that produce different products appropriate for the same uses. These companies are often
located in countries such as China, Taiwan and India where labor and other production costs are substantially lower than in the U.S., Canada and Western
Europe. Also, certain large customers offer house brands that compete with some of the Company’s product offerings as a lower-cost alternative. To remain
profitable and defend market share, the Company must maintain a competitive cost structure, develop new products and services, lead product innovation,
respond to competitor innovations and enhance its existing products in a timely manner. The Company may not be able to compete effectively on all of these
fronts and with all of its competitors, and the failure to do so could have a material adverse effect on its sales and profit margins.

Core SFS / Industry 4.0 is a continuous operational improvement process applied to many aspects of the Company’s business such as procurement, quality in
manufacturing, maximizing customer fill rates, integrating acquisitions and other key business processes. In the event the Company is not successful in
effectively applying the Core SFS principles to its key business processes, including those of acquired businesses, its ability to compete and future earnings
could be adversely affected.

In addition, the Company may have to reduce prices on its products and services, or make other concessions, to stay competitive and retain market share.
Price reductions taken by the Company in response to customer and competitive pressures, as well as price reductions and promotional actions taken to drive
demand that may not result in anticipated sales levels, could also negatively impact its business. The Company engages in restructuring actions, sometimes
entailing shifts of production to low-cost countries, as part of its efforts to maintain a competitive cost structure. If the Company does not execute
restructuring actions well, its ability to meet customer demand may decline, or earnings may otherwise be adversely impacted. Similarly, if

8
such efforts to reform the cost structure are delayed relative to competitors or other market factors, the Company may lose market share and profits.

Customer consolidation could have a material adverse effect on the Company’s business.

A significant portion of the Company’s products are sold through home centers and mass merchant distribution channels in the U.S. and Europe. A
consolidation of retailers in both North America and abroad has occurred over time and the increasing size and importance of individual customers creates
risk of exposure to potential volume loss. The loss of certain larger home centers as customers would have a material adverse effect on the Company’s
business until either such customers were replaced or the Company made the necessary adjustments to compensate for the loss of business.

Low demand for new products and the inability to develop and introduce new products at favorable margins could adversely impact the Company’s
performance and prospects for future growth.

The Company’s competitive advantage is due in part to its ability to develop and introduce new products in a timely manner at favorable margins. The
uncertainties associated with developing and introducing new products, such as market demand and costs of development and production, may impede the
successful development and introduction of new products on a consistent basis. Introduction of new technology may result in higher costs to the Company
than that of the technology replaced. That increase in costs, which may continue indefinitely or until increased demand and greater availability in the sources
of the new technology drive down its cost, could adversely affect the Company’s results of operations. Market acceptance of the new products introduced in
recent years and scheduled for introduction in future years may not meet sales expectations due to various factors, such as the failure to accurately predict
market demand, end-user preferences, evolving industry standards, or the emergence of new or disruptive technologies. Moreover, the ultimate success and
profitability of the new products may depend on the Company’s ability to resolve technical and technological challenges in a timely and cost-effective
manner, and to achieve manufacturing efficiencies. The Company’s investments in productive capacity and commitments to fund advertising and product
promotions in connection with these new products could erode profits if those expectations are not met.

The Company’s brands are important assets of its businesses and violation of its trademark rights by imitators, or the failure of its licensees or vendors to
comply with the Company’s product quality, manufacturing requirements, marketing standards, and other requirements could negatively impact revenues
and brand reputation.

The Company’s trademarks have a reputation for quality and value and are important to the Company's success and competitive position. Unauthorized use
of the Company’s trademark rights may not only erode sales of the Company’s products, but may also cause significant damage to its brand name and
reputation, interfere with its ability to effectively represent the Company to its customers, contractors, suppliers, and/or licensees, and increase litigation
costs. Similarly, failure by licensees or vendors to adhere to the Company’s standards of quality and other contractual requirements could result in loss of
revenue, increased litigation, and/or damage to the Company’s reputation and business. There can be no assurance that the Company’s ongoing efforts to
protect its brand and trademark rights and ensure compliance with its licensing and vendor agreements will prevent all violations.

Successful sales and marketing efforts depend on the Company’s ability to recruit and retain qualified employees.
The success of the Company’s efforts to grow its business depends on the contributions and abilities of key executives, its sales force and other personnel,
including the ability of its sales force to adapt to any changes made in the sales organization and achieve adequate customer coverage. The Company must
therefore continue to recruit, retain and motivate management, sales and other personnel sufficiently to maintain its current business and support its projected
growth. A shortage of these key employees might jeopardize the Company’s ability to implement its growth strategy.

The Company has significant operations outside of the United States, which are subject to political, legal, economic and other risks arising from operating
outside of the United States.

The Company generates a significant portion of its total revenue outside of the United States. Business operations outside of the United States are subject to
political, economic and other risks inherent in operating in certain countries, such as:
• the difficulty of enforcing agreements and protecting assets through legal systems outside the U.S.;
• managing widespread operations and enforcing internal policies and procedures such as compliance with U.S. and foreign anti-bribery and anti-
corruption regulations;
• trade protection measures and import or export licensing requirements including those related to the U.S.'s relationship with China;
• the application of certain labor regulations outside of the United States, including data privacy;

9
 • compliance with a wide variety of non-U.S. laws and regulations;
• changes in the general political and economic conditions in the countries where the Company operates, particularly in emerging markets;
• the threat of nationalization and expropriation;
• increased costs and risks of doing business in a wide variety of jurisdictions;
• government controls limiting importation of goods;
• government controls limiting payments to suppliers for imported goods;
• limitations on, or impacts from, the repatriation of foreign earnings; and
• exposure to wage, price and capital controls.

Changes in the political or economic environments in the countries in which the Company operates could have a material adverse effect on its financial
condition, results of operations or cash flows. Additionally, the Company is subject to complex U.S., foreign and other local laws and regulations that are
applicable to its operations abroad, such as the Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010 and other anti-bribery and anti-corruption
laws. Although the Company has implemented internal controls, policies and procedures and employee training and compliance programs to deter prohibited
practices, such measures may not be effective in preventing employees, contractors or agents from violating or circumventing such internal policies and
violating applicable laws and regulations. Any determination that the Company has violated anti-bribery or anti-corruption laws could have a material
adverse effect on the Company’s business, operating results and financial condition. Compliance with international and U.S. laws and regulations that apply
to the Company’s international operations increases the cost of doing business in foreign jurisdictions. Violations of such laws and regulations may result in
severe fines and penalties, criminal sanctions, administrative remedies or restrictions on business conduct, and could have a material adverse effect on the
Company’s reputation, its ability to attract and retain employees, its business, operating results and financial condition.

The Company’s business is subject to risks associated with sourcing and manufacturing overseas.

The Company imports large quantities of finished goods, component parts and raw materials. Substantially all of its import operations are subject to customs
requirements and to tariffs and quotas set by governments through mutual agreements, bilateral actions or, in some cases unilateral action. In addition, the
countries in which the Company’s products and materials are manufactured or imported from (including importation into the U.S. of the Company's products
manufactured overseas) may from time to time impose additional quotas, duties, tariffs or other restrictions on its imports (including restrictions on
manufacturing operations) or adversely modify existing restrictions. For example, changes in U.S. policy regarding international trade, including import and
export regulation and international trade agreements, could also negatively impact the Company’s business. In 2018, the U.S. imposed tariffs on steel and
aluminum as well as on goods imported from China and certain other countries, which has resulted in retaliatory tariffs by China and other countries.
Additional tariffs imposed by the U.S. on a broader range of imports, or further retaliatory trade measures taken by China or other countries in response, could
result in an increase in supply chain costs that the Company may not be able to offset or otherwise adversely impact the Company’s results of operations.
Furthermore, imported products and materials may be subject to future tariffs or other trade measures in the U.S. Imports are also subject to unpredictable
foreign currency variation which may increase the Company’s cost of goods sold. Adverse changes in these import costs and restrictions, or the Company’s
suppliers’ failure to comply with customs regulations or similar laws, could harm the Company’s business.

The Company’s operations are also subject to the effects of international trade agreements and regulations such as the United States-Mexico-Canada
Agreement, and the activities and regulations of the World Trade Organization. Although these trade agreements generally have positive effects on trade
liberalization, sourcing flexibility and cost of goods by reducing or eliminating the duties and/or quotas assessed on products manufactured in a particular
country, trade agreements can also impose requirements that adversely affect the Company’s business, such as setting quotas on products that may be
imported from a particular country into key markets including the U.S. or the European Union ("EU"), or making it easier for other companies to compete, by
eliminating restrictions on products from countries where the Company’s competitors source products.

The Company’s ability to import products in a timely and cost-effective manner may also be affected by conditions at ports or issues that otherwise affect
transportation and warehousing providers, such as port and shipping capacity, labor disputes, severe weather or increased homeland security requirements in
the U.S. and other countries. These issues could delay importation of products or require the Company to locate alternative ports or warehousing providers to
avoid disruption to customers. These

10
alternatives may not be available on short notice or could result in higher transit costs, which could have an adverse impact on the Company’s business and
financial condition.

In addition, the Company has a number of key suppliers in South Korea. Escalation of hostilities with North Korea and/or military action in the region could
cause disruptions in the Company's supply chain which could, in turn, cause product shortages, delays in delivery and/or increases in the Company's cost
incurred to produce and deliver products to its customers.

The Company’s success depends on its ability to improve productivity and streamline operations to control or reduce costs.

The Company is committed to continuous productivity improvement and evaluating opportunities to reduce fixed costs, simplify or improve processes, and
eliminate excess capacity. The Company has undertaken restructuring actions, the savings of which may be mitigated by many factors, including economic
weakness, competitive pressures, and decisions to increase costs in areas such as sales promotion or research and development above levels that were
otherwise assumed. Failure to achieve, or delays in achieving, projected levels of efficiencies and cost savings from such measures, or unanticipated
inefficiencies resulting from manufacturing and administrative reorganization actions in progress or contemplated, would adversely affect the Company’s
results.

The Company is exposed to risks related to cybersecurity and data privacy compliance.

The Company’s operations rely on the secure processing, storage and transmission of confidential, sensitive, proprietary and other types of information
relating to its business operations, as well as confidential and sensitive information about its customers and employees maintained in the Company’s
computer systems and networks, certain products and services, and in the computer systems and networks of its third-party vendors. Cyber threats are rapidly
evolving as data thieves and hackers have become increasingly sophisticated and carry out large-scale, complex automated attacks. The Company may not
be able to anticipate or prevent all such attacks and could be held liable for any resulting security breach or data loss. In addition, it is not always possible to
deter misconduct by employees or third-party vendors.

Breaches of the Company’s or the Company’s vendors’ technology and systems, whether from circumvention of security systems, denial-of-service attacks or
other cyber-attacks, hacking, “phishing” attacks, computer viruses, ransomware or malware, employee or insider error, malfeasance, social engineering,
physical breaches or other actions, may result in manipulation or corruption of sensitive data, material interruptions or malfunctions in the Company’s or
such vendors’ websites, applications, data processing, and certain products and services, or disruption of other business operations. Furthermore, any such
breaches could compromise the confidentiality and integrity of material information held by the Company (including information about the Company’s
business, employees or customers), as well as sensitive personally identifiable information (“PII”), the disclosure of which could lead to identity theft.
Measures that the Company takes to avoid, detect, mitigate or recover from material incidents, including implementing and conducting training on insider
trading policies for the Company’s employees and maintaining contractual obligations for the Company’s third-party vendors, can be expensive, and may be
insufficient, circumvented, or may become ineffective.

To conduct its operations, the Company regularly moves data across national borders, and consequently is subject to a variety of continuously evolving and
developing laws and regulations in the United States and abroad regarding privacy, data protection and data security. The scope of the laws that may be
applicable to the Company is often uncertain and may be conflicting, particularly with respect to foreign laws. For example, the European Union’s General
Data Protection Regulation (“GDPR”), which became effective in May 2018, greatly increased the jurisdictional reach of European Union law and added a
broad array of requirements for handling personal data, including the public disclosure of significant data breaches. Additionally, other countries have
enacted or are enacting data localization laws that require data to stay within their borders. In many cases, these laws and regulations apply not only to
transfers between unrelated third parties but also to transfers between the Company and its subsidiaries. All of these evolving compliance and operational
requirements impose significant costs that are likely to increase over time. Implementation of the GDPR and data localization laws will continue to require
changes to certain business practices, thereby increasing costs, or may result in negative publicity, require significant management time and attention, and
may subject the Company to remedies that may harm its business, including fines or demands or orders that the Company modify or cease existing business
practices.

The Company has invested and continues to invest in risk management and information security and data privacy measures in order to protect its systems and
data, including employee training, organizational investments, incident response plans, table top exercises and technical defenses. The cost and operational
consequences of implementing, maintaining and enhancing further data or system protection measures could increase significantly to overcome increasingly
intense, complex, and sophisticated global cyber threats. Despite the Company’s best efforts, it is not fully insulated from data breaches and system
disruptions. Recent well-publicized security breaches at other companies have led to enhanced government and regulatory scrutiny of the

11
measures taken by companies to protect against cyber-attacks, and may in the future result in heightened cybersecurity requirements, including additional
regulatory expectations for oversight of vendors and service providers. Any material breaches of cybersecurity, including the accidental loss, inadvertent
disclosure or unapproved dissemination of proprietary information or sensitive or confidential data, or media reports of perceived security vulnerabilities to
the Company’s systems, products and services or those of the Company’s third parties, even if no breach has been attempted or occurred, could cause the
Company to experience reputational harm, loss of customers and revenue, fines, regulatory actions and scrutiny, sanctions or other statutory penalties,
litigation, liability for failure to safeguard the Company’s customers’ information, or financial losses that are either not insured against or not fully covered
through any insurance maintained by the Company. Any of the foregoing may have a material adverse effect on the Company’s business, operating results
and financial condition.

The performance of the Company may suffer from business disruptions or other costs associated with information technology, cyber attacks, system
implementations, data privacy, or catastrophic losses affecting distribution centers and other infrastructure.

The Company relies heavily on computer systems, including those of third parties, to manage and operate its businesses, and record and process transactions.
Computer systems are important to production planning, customer service and order fulfillment among other business-critical processes. Consistent and
efficient operation of the computer hardware and software systems is imperative to the successful sales and earnings performance of the various businesses in
many countries.

Despite efforts to prevent such situations and maintaining insurance policies and loss control and risk management practices that partially mitigate these
risks, the Company’s systems may be affected by damage or interruption from, among other causes, power outages, system failures or computer viruses.
Computer hardware and storage equipment that is integral to efficient operations, such as e-mail, telephone and other functionality, is concentrated in certain
physical locations in the various continents in which the Company operates. Additionally, the Company relies on software applications and enterprise cloud
storage systems and cloud computing services provided by third-party vendors, and the Company's business may be adversely affected by service disruptions
or security breaches in such third-party systems.

In addition, the Company is in the process of system conversions to SAP as well as other applications to provide a common platform across most of its
businesses. There can be no assurances that expected expense synergies will be achieved or that there will not be delays to the expected timing of such
synergies. It is possible the costs to complete the system conversions may exceed current expectations, and that significant costs may be incurred that will
require immediate expense recognition as opposed to capitalization. The risk of disruption to key operations is increased when complex system changes such
as SAP conversions are undertaken. If systems fail to function effectively, or become damaged, operational delays may ensue and the Company may be forced
to make significant expenditures to remedy such issues. Any significant disruption in the Company’s computer operations could have a material adverse
impact on its business and results.

The Company’s operations are significantly dependent on infrastructure, notably certain distribution centers and security alarm monitoring facilities, which
are concentrated in various geographic locations. Factors that are hard to predict or beyond the Company’s control, like weather (including any potential
effects of climate change), natural disasters, supply and commodity shortages, fire, explosions, terrorism, political unrest, cybersecurity breaches, generalized
labor unrest or health pandemics could damage or disrupt the Company’s infrastructure, or that of its suppliers or distributors. If the Company does not
effectively plan for or respond to disruptions in its operations, or cannot quickly repair damage to its information, production or supply systems, the
Company may be late in delivering or unable to deliver products and services to its customers, and the quality and safety of its products and services might
be negatively affected. If a material or extended disruption occurs, the Company may lose its customers’ or business partners’ confidence or suffer damage to
its reputation, and long-term consumer demand for its products and services could decline. Although the Company maintains business interruption insurance,
it may not fully protect the Company against all adverse effects that could result from significant disruptions. These events could materially and adversely
affect the Company’s product sales, financial condition and results of operations.

The Company’s results of operations could be negatively impacted by inflationary or deflationary economic conditions which could affect the ability to
obtain raw materials, component parts, freight, energy, labor and sourced finished goods in a timely and cost-effective manner.

The Company’s products are manufactured using both ferrous and non-ferrous metals including, but not limited to, steel, zinc, copper, brass, aluminum, and
nickel. Additionally, the Company uses other commodity-based materials for components and packaging including, but not limited to, plastics, resins, wood
and corrugated products. The Company’s cost base also reflects significant elements for freight, energy and labor. The Company also sources certain finished
goods directly from vendors. If the Company is unable to mitigate any inflationary increases through various customer pricing actions and cost reduction
initiatives, its profitability may be adversely affected.

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Conversely, in the event there is deflation, the Company may experience pressure from its customers to reduce prices, and there can be no assurance that the
Company would be able to reduce its cost base (through negotiations with suppliers or other measures) to offset any such price concessions which could
adversely impact results of operations and cash flows.

Further, as a result of inflationary or deflationary economic conditions, the Company believes it is possible that a limited number of suppliers may either
cease operations or require additional financial assistance from the Company in order to fulfill their obligations. In a limited number of circumstances, the
magnitude of the Company’s purchases of certain items is of such significance that a change in established supply relationships with suppliers or increase in
the costs of purchased raw materials, component parts or finished goods could result in manufacturing interruptions, delays, inefficiencies or an inability to
market products. Changes in value-added tax rebates, currently available to the Company or to its suppliers, could also increase the costs of the Company’s
manufactured products, as well as purchased products and components, and could adversely affect the Company’s results.

In addition, many of the Company’s products incorporate battery technology. As other industries begin to adopt similar battery technology for use in their
products, the increased demand could place capacity constraints on the Company’s supply chain. In addition, increased demand for battery technology may
also increase the costs to the Company for both the battery cells as well as the underlying raw materials. If the Company is unable to mitigate any possible
supply constraints or related increased costs, its profitably and financial results could be negatively impacted.

Uncertainty about the financial stability of economies outside the U.S. could have a significant adverse effect on the Company's business, results of
operations and financial condition.

The Company generates approximately 45% of its revenues from outside the U.S., including 22% from Europe and 14% from various emerging market
countries. Each of the Company’s segments generates sales from these marketplaces. While the Company believes any downturn in the European or emerging
marketplaces might be offset to some degree by the relative stability in North America, the Company’s future growth, profitability and financial liquidity
could be affected, in several ways, including but not limited to the following:
• depressed consumer and business confidence may decrease demand for products and services;
• customers may implement cost-reduction initiatives or delay purchases to address inventory levels;
• significant declines of foreign currency values in countries where the Company operates could impact both the revenue growth and overall
profitability in those geographies;
• a slowing or contracting Chinese economy could reduce China’s consumption and negatively impact the Company’s sales in that region, as well as
globally;
• a devaluation of foreign currencies could have an effect on the credit worthiness (as well as the availability of funds) of customers in those regions
impacting the collectability of receivables;
• a devaluation of foreign currencies could have an adverse effect on the value of financial assets of the Company in the effected countries;
• the impact of an event (individual country default, Brexit, or break up of the Euro) could have an adverse impact on the global credit markets and
global liquidity potentially impacting the Company’s ability to access these credit markets and to raise capital. With respect to Brexit, until the
terms of the UK’s exit from the EU in March 2019 are determined, including any transition period, it is difficult to predict its impact. It is possible
that the withdrawal could, among other things, affect the legal and regulatory environments to which the Company’s businesses are subject, impact
trade between the UK and the EU and other parties and create economic and political uncertainty in the region.
The Company is exposed to market risk from changes in foreign currency exchange rates which could negatively impact profitability.
The Company manufactures and sells its products in many countries throughout the world. As a result, there is exposure to foreign currency risk as the
Company enters into transactions and makes investments denominated in multiple currencies. The Company’s predominant currency exposures are related to
the Euro, Canadian Dollar, British Pound, Australian Dollar, Brazilian Real, Argentine Peso, Chinese Renminbi (“RMB”) and the Taiwan Dollar. In preparing
its financial statements, for foreign operations with functional currencies other than the U.S. dollar, asset and liability accounts are translated at current
exchange rates, while income and expenses are translated using average exchange rates. With respect to the effects on translated earnings, if the U.S. dollar
strengthens relative to local currencies, the Company’s earnings could be negatively impacted. In 2018, translational and transactional foreign currency
fluctuations negatively impacted pre-tax earnings by approximately $100.0 million and diluted earnings per share by approximately $0.55. The translational
and transactional impacts will vary over time and may be more material in the future. Although the Company utilizes risk management tools,

13
including hedging, as it deems appropriate, to mitigate a portion of potential market fluctuations in foreign currencies, there can be no assurance that such
measures will result in all market fluctuation exposure being eliminated. The Company generally does not hedge the translation of its non-U.S. dollar
earnings in foreign subsidiaries, but may choose to do so in certain instances.

The Company sources many products from China and other low-cost countries for resale in other regions. To the extent the RMB or other currencies
appreciate, the Company may experience cost increases on such purchases. The Company may not be successful at implementing customer pricing or other
actions in an effort to mitigate the related cost increases and thus its profitability may be adversely impacted.

The Company has incurred, and may incur in the future, significant indebtedness, or issue additional equity securities, in connection with mergers or
acquisitions which may impact the manner in which it conducts business or the Company’s access to external sources of liquidity. The potential issuance of
such securities may limit the Company’s ability to implement elements of its growth strategy and may have a dilutive effect on earnings.

As described in Note H, Long-Term Debt and Financing Arrangements, of the Notes to Consolidated Financial Statements in Item 8, the Company has a five-
year $2.0 billion committed credit facility and a 364-day $1.0 billion committed credit facility. No amounts were outstanding against either of these
facilities at December 29, 2018.

The instruments and agreements governing certain of the Company’s current indebtedness contain requirements or restrictive covenants that include, among
other things:
• a limitation on creating liens on certain property of the Company and its subsidiaries;
• a restriction on entering into certain sale-leaseback transactions;
• customary events of default. If an event of default occurs and is continuing, the Company might be required to repay all amounts outstanding under
the respective instrument or agreement; and
• maintenance of a specified financial ratio. The Company has an interest coverage covenant that must be maintained to permit continued access to its
committed revolving credit facilities. The interest coverage ratio tested for covenant compliance compares adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization to adjusted Interest Expense ("adjusted EBITDA"/"adjusted Interest Expense"); such adjustments to interest or
EBITDA include, but are not limited to, removal of non-cash interest expense and stock-based compensation expense. The interest coverage ratio
must not be less than 3.5 times and is computed quarterly, on a rolling twelve months (last twelve months) basis. Under this covenant definition, the
interest coverage ratio was 8.5 times EBITDA or higher in each of the 2018 quarterly measurement periods. Management does not believe it is
reasonably likely the Company will breach this covenant. Failure to maintain this ratio could adversely affect further access to liquidity.

Future instruments and agreements governing indebtedness may impose other restrictive conditions or covenants. Such covenants could restrict the
Company in the manner in which it conducts business and operations as well as in the pursuit of its growth and repositioning strategies.

The Company is exposed to counterparty risk in its hedging arrangements.

From time to time, the Company enters into arrangements with financial institutions to hedge exposure to fluctuations in currency and interest rates,
including forward contracts, options and swap agreements. The failure of one or more counterparties to the Company’s hedging arrangements to fulfill their
obligations could adversely affect the Company’s results of operations.

Tight capital and credit markets or the failure to maintain credit ratings could adversely affect the Company by limiting the Company’s ability to borrow
or otherwise access liquidity.

The Company’s long-term growth plans are dependent on, among other things, the availability of funding to support corporate initiatives and complete
appropriate acquisitions and the ability to increase sales of existing product lines. While the Company has not encountered financing difficulties to date, the
capital and credit markets have experienced extreme volatility and disruption in the past and may again in the future. Market conditions could make it more
difficult for the Company to borrow or otherwise obtain the cash required for significant new corporate initiatives and acquisitions. In addition, changes in
regulatory standards or industry practices, such as the transition away from LIBOR to the Secured Overnight Financing Rate ("SOFR") as a benchmark
reference for short-term interests, could create incremental uncertainty in obtaining financing or increase the cost of borrowing.

14
Furthermore, there could be a number of follow-on effects from a credit crisis on the Company’s businesses, including insolvency of key suppliers resulting in
product delays; inability of customers to obtain credit to finance purchases of the Company’s products and services and/or customer insolvencies.

In addition, the major rating agencies regularly evaluate the Company for purposes of assigning credit ratings. The Company’s ability to access the credit
markets, and the cost of these borrowings, is affected by the strength of its credit ratings and current market conditions. Failure to maintain credit ratings that
are acceptable to investors may adversely affect the cost and other terms upon which the Company is able to obtain financing, as well as its access to the
capital markets.

The Company’s acquisitions, as well as general business reorganizations, may result in significant costs and certain risks for its business and operations.

In 2018, the Company completed the Nelson acquisition as well as a number of other smaller acquisitions. In addition, the Company reached an agreement to
acquire International Equipment Solutions Attachments Group ("IES Attachments"), which is expected to close in the first half of 2019, and may make
additional acquisitions in the future.

Acquisitions involve a number of risks, including:

• the failure to identify the most suitable candidates for acquisitions;
• the ability to identify and close on appropriate acquisition opportunities within desired time frames at reasonable cost;
• the anticipated additional revenues from the acquired companies do not materialize, despite extensive due diligence;
• the possibility that the acquired companies will not be successfully integrated or that anticipated cost savings, synergies, or other benefits will not
be realized;
• the acquired businesses will lose market acceptance or profitability;
• the diversion of Company management’s attention and other resources;
• the incurrence of unexpected costs and liabilities, including those associated with undisclosed pre-closing regulatory violations by the acquired
business; and
• the loss of key personnel, clients or customers of acquired companies.
In addition, the success of the Company’s long-term growth and repositioning strategy will depend in part on successful general reorganization including its
ability to:
• combine businesses and operations;
• integrate departments, systems and procedures; and
• obtain cost savings and other efficiencies from such reorganizations, including the Company's functional transformation initiative.

Failure to effectively consummate or manage the pending IES Attachments acquisition and any future acquisitions or general business reorganizations, and
mitigate the related risks, may adversely affect the Company’s existing businesses and harm its operational results due to large write-offs, significant
restructuring costs, contingent liabilities, substantial depreciation, and/or adverse tax or other consequences. The Company cannot ensure that such
integrations and reorganizations will be successfully completed or that all of the planned synergies and other benefits will be realized.

Expansion of the Company's activity in emerging markets may result in risks due to differences in business practices and cultures.

The Company's growth plans include efforts to increase revenue from emerging markets through both organic growth and acquisitions. Local business
practices in these regions may not comply with U.S. laws, local laws or other laws applicable to the Company. When investigating potential acquisitions, the
Company seeks to identify historical practices of target companies that would create liability or other exposures for the Company were they to continue post-
completion or as a successor to the target. Where such practices are discovered, the Company assesses the risk to determine whether it is prepared to proceed
with the transaction. In assessing the risk, the Company looks at, among other factors, the nature of the violation, the potential liability, including any fines
or penalties that might be incurred, the ability to avoid, minimize or obtain indemnity for the risks, and the likelihood that the Company would be able to
ensure that any such practices are discontinued following completion of the acquisition through implementation of its own policies and procedures. Due
diligence and risk assessment are, however, imperfect processes, and it is possible that the Company will not discover problematic practices until after
completion, or that the Company will underestimate the risks associated with historical activities. Should that occur, the Company may incur fees,

15
fines, penalties, injury to its reputation or other damage that could negatively impact the Company's earnings.

Significant judgment and certain estimates are required in determining the Company’s worldwide provision for income taxes. Future tax law changes and
audit results may materially increase the Company’s prospective income tax expense.

The Company is subject to income taxation in the U.S. as well as numerous foreign jurisdictions. Significant judgment is required in determining the
Company’s worldwide income tax provision and accordingly there are many transactions and computations for which the final income tax determination is
uncertain. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments,
and which may not accurately anticipate actual outcomes. The Company periodically assesses its liabilities and contingencies for all tax years still subject to
audit based on the most currently available information, which involves inherent uncertainty. The Company is routinely audited by income tax authorities in
many tax jurisdictions. Although management believes the recorded tax estimates are reasonable, the ultimate outcome of any audit (or related litigation)
could differ materially from amounts reflected in the Company’s income tax accruals. Additionally, the global income tax provision can be materially
impacted due to foreign currency fluctuations against the U.S. dollar since a significant amount of the Company’s earnings are generated outside the United
States. Lastly, it is possible that future income tax legislation may be enacted that could have a material impact on the Company’s worldwide income tax
provision beginning with the period that such legislation becomes enacted.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“the Act”). Changes
include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, changes to U.S.
international taxation, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017.
Following enactment of the Act and the associated one-time transition tax, in general, repatriation of foreign earnings to the United States can be completed
with no incremental U.S. tax. However, repatriation of foreign earnings could subject the Company to U.S. state and non-U.S. jurisdictional taxes (including
withholding taxes) on distributions. While repatriation of some foreign earnings held outside the United States may be restricted by local laws, most of the
Company’s foreign earnings as of December 31, 2017 could be repatriated to the United States. Pursuant to Staff Accounting Bulletin No. 118 (“SAB 118”)
issued by the SEC in December 2017, issuers were permitted up to one year from the enactment of the Act to complete the accounting for the income tax
effects of the Act (“the measurement period”). The Company completed its accounting for the tax effects of the Act within the measurement period and has
included those effects in Income Taxes in the Consolidated Statements of Operations.

The Company’s failure to continue to successfully avoid, manage, defend, litigate and accrue for claims and litigation could negatively impact its results
of operations or cash flows.

The Company is exposed to and becomes involved in various litigation matters arising out of the ordinary routine conduct of its business, including, from
time to time, actual or threatened litigation relating to such items as commercial transactions, product liability, workers compensation, arrangements between
the Company and its distributors, franchisees or vendors, intellectual property claims and regulatory actions.

In addition, the Company is subject to environmental laws in each jurisdiction in which business is conducted. Some of the Company’s products incorporate
substances that are regulated in some jurisdictions in which it conducts manufacturing operations. The Company could be subject to liability if it does not
comply with these regulations. In addition, the Company is currently, and may in the future be held responsible for remedial investigations and clean-up
costs resulting from the discharge of hazardous substances into the environment, including sites that have never been owned or operated by the Company but
at which it has been identified as a potentially responsible party under federal and state environmental laws and regulations. Changes in environmental and
other laws and regulations in both domestic and foreign jurisdictions could adversely affect the Company’s operations due to increased costs of compliance
and potential liability for non-compliance.

The Company manufactures products, configures and installs security systems and performs various services that create exposure to product and professional
liability claims and litigation. If such products, systems and services are not properly manufactured, configured, installed, designed or delivered, personal
injuries, property damage or business interruption could result, which could subject the Company to claims for damages. The costs associated with defending
product liability claims and payment of damages could be substantial. The Company’s reputation could also be adversely affected by such claims, whether or
not successful.

There can be no assurance that the Company will be able to continue to successfully avoid, manage and defend such matters. In addition, given the inherent
uncertainties in evaluating certain exposures, actual costs to be incurred in future periods may vary from the Company’s estimates for such contingent
liabilities.

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The Company’s products could be recalled.

The Consumer Product Safety Commission or other applicable regulatory bodies may require the recall, repair or replacement of the Company’s products if
those products are found not to be in compliance with applicable standards or regulations. A recall could increase costs and adversely impact the Company’s
reputation.

The Company is exposed to credit risk on its accounts receivable.

The Company’s outstanding trade receivables are not generally covered by collateral or credit insurance. While the Company has procedures to monitor and
limit exposure to credit risk on its trade and non-trade receivables, there can be no assurance such procedures will effectively limit its credit risk and avoid
losses, which could have an adverse effect on the Company’s financial condition and operating results.

If the Company were required to write-down all or part of its goodwill, indefinite-lived trade names, or other definite-lived intangible assets, its net income
and net worth could be materially adversely affected.

As a result of the Black and Decker merger and other acquisitions, the Company has approximately $9.0 billion of goodwill, approximately $2.2 billion of
indefinite-lived trade names and approximately $1.3 billion of net definite-lived intangible assets at December 29, 2018. The Company is required to
periodically, at least annually, determine if its goodwill or indefinite-lived trade names have become impaired, in which case it would write down the
impaired portion of the asset. The definite-lived intangible assets, including customer relationships, are amortized over their estimated useful lives and are
evaluated for impairment when appropriate. Impairment of intangible assets may be triggered by developments outside of the Company’s control, such as
worsening economic conditions, technological change, intensified competition or other factors resulting in deleterious consequences.

If the investments in employee benefit plans do not perform as expected, the Company may have to contribute additional amounts to these plans, which
would otherwise be available to cover operating expenses or other business purposes.

The Company sponsors pension and other post-retirement defined benefit plans. The Company’s defined benefit plan assets are currently invested in equity
securities, government and corporate bonds and other fixed income securities, money market instruments and insurance contracts. The Company’s funding
policy is generally to contribute amounts determined annually on an actuarial basis to provide for current and future benefits in accordance with applicable
law which require, among other things, that the Company make cash contributions to under-funded pension plans. During 2018, the Company made cash
contributions to its defined benefit plans of approximately $45 million and it expects to contribute $44 million to its defined benefit plans in 2019.

There can be no assurance that the value of the defined benefit plan assets, or the investment returns on those plan assets, will be sufficient in the future. It is
therefore possible that the Company may be required to make higher cash contributions to the plans in future years which would reduce the cash available for
other business purposes, and that the Company will have to recognize a significant pension liability adjustment which would decrease the net assets of the
Company and result in higher expense in future years. The fair value of the defined benefit plan assets at December 29, 2018 was approximately $2.0 billion.

17
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

18
ITEM 2. PROPERTIES
As of December 29, 2018, the Company and its subsidiaries owned or leased significant facilities used for manufacturing, distribution and sales offices in 20
states and 16 foreign countries. The Company leases its corporate headquarters in New Britain, Connecticut. The Company has 88 other facilities that are
larger than 100,000 square feet, as follows:

Owned Leased Total

Tools & Storage 45 20 65
Industrial 12 5 17
Security 2 2 4
Corporate 1 1 2
Total 60 28 88

The combined size of these facilities is approximately 23 million square feet. The buildings are in good condition, suitable for their intended use, adequate to
support the Company’s operations, and generally fully utilized.

ITEM 3. LEGAL PROCEEDINGS

In the normal course of business, the Company is involved in various lawsuits and claims, including product liability, environmental 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 4. MINE SAFETY DISCLOSURES

Not applicable.

19
PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES

The Company’s common stock is listed and traded on the New York Stock Exchange, Inc. (“NYSE”) under the abbreviated ticker symbol “SWK”, and is a
component of the Standard & Poor’s (“S&P”) 500 Composite Stock Price Index. The Company’s high and low quarterly stock prices on the NYSE for the
years ended December 29, 2018 and December 30, 2017 follow:

2018 2017
Dividend Per Dividend Per
Common Common
High Low Share High Low Share
QUARTER:
First $ 175.91 $ 150.84 $ 0.63 $ 132.87 $ 115.75 $ 0.58
Second $ 157.38 $ 132.81 $ 0.63 $ 143.05 $ 130.57 $ 0.58
Third $ 154.36 $ 131.84 $ 0.66 $ 152.30 $ 137.07 $ 0.63
Fourth $ 147.51 $ 108.45 $ 0.66 $ 170.03 $ 154.53 $ 0.63
Total $ 2.58 $ 2.42

As of February 1, 2019, there were 9,705 holders of record of the Company’s common stock. Information required by Item 201(d) of Regulation S-K
concerning securities authorized for issuance under equity compensation plans can be found under Item 12 of this Annual Report on Form 10-K.

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 for the three months ended December 29, 2018:

Total Number Of Shares (b) Maximum Number Of

Purchased As Part Of A Shares That May
(a) Total Number Of Shares Average Price Paid Per Publicly Announced Plan Yet Be Purchased Under The
2018 Purchased Share or Program Program
September 30 - November 3 7,366 $ 122.04 — 11,500,000
November 4 - December 1 — $ — — 11,500,000
December 2 - December 29 89,899 $ 129.85 — 11,500,000
Total 97,265 $ 129.26 — 11,500,000

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

(b) On July 20, 2017, the Board of Directors approved a new repurchase program for up to 15.0 million shares of the Company’s common stock and
terminated its previously approved repurchase program. As of December 29, 2018, the authorized shares available for repurchase under the new
repurchase program totaled approximately 11.5 million shares. The currently authorized shares available for repurchase do not include approximately
3.6 million shares reserved and authorized for purchase under the Company’s previously approved repurchase program relating to a forward share
purchase contract entered into in March 2015. Refer to Note J, Capital Stock, of the Notes to Consolidated Financial Statements in Item 8 for further
discussion.

20
Stock Performance Graph

The following line graph compares the yearly percentage change in the Company’s cumulative total shareholder return for the last five years to that of the
Standard & Poor’s (S&P) 500 Index and the S&P 500 Industrials Index. The Company has decided to use the S&P 500 Industrials Index, which is utilized by
a number of the Company’s industrial peers, for the purpose of this disclosure.

THE POINTS IN THE ABOVE TABLE ARE AS

FOLLOWS: 2013 2014 2015 2016 2017 2018
Stanley Black & Decker $ 100.00 $ 121.28 $ 137.64 $ 150.93 $ 227.12 $ 161.98
S&P 500 $ 100.00 $ 114.10 $ 115.69 $ 129.52 $ 157.79 $ 149.56
S&P 500 Industrials $ 100.00 $ 112.75 $ 116.07 $ 127.87 $ 156.91 $ 150.95

The comparison assumes $100 invested at the closing price on December 27, 2013 in the Company’s common stock, S&P 500 Index, and S&P 500
Industrials Index. Total return assumes reinvestment of dividends.

21
ITEM 6. SELECTED FINANCIAL DATA

Acquisitions and divestitures completed by the Company during the five-year period presented below affect comparability of results. Refer to Note E,
Acquisitions, and Note T, Divestitures, of the Notes to Consolidated Financial Statements in Item 8 and prior year 10-K filings for further information.

(Millions of Dollars, Except Per Share Amounts) 2018 (a) 2017 1 (b) 2016 1 2015 1 2014 (c)
Net sales $ 13,982 $ 12,967 $ 11,594 $ 11,172 $ 11,339
Net earnings from continuing operations attributable to common
shareowners $ 605 $ 1,227 $ 968 $ 904 $ 857
Net loss from discontinued operations(d) $ — $ — $ — $ (20) $ (96)
Net Earnings Attributable to Common Shareowners $ 605 $ 1,227 $ 968 $ 884 $ 761
Basic earnings (loss) per share:
Continuing operations $ 4.06 $ 8.20 $ 6.63 $ 6.10 $ 5.49
Discontinued operations(d) $ — $ — $ — $ (0.14) $ (0.62)
Total basic earnings per share $ 4.06 $ 8.20 $ 6.63 $ 5.96 $ 4.87
Diluted earnings (loss) per share:
Continuing operations $ 3.99 $ 8.05 $ 6.53 $ 5.92 $ 5.37
Discontinued operations(d) $ — $ — $ — $ (0.13) $ (0.60)
Total diluted earnings per share $ 3.99 $ 8.05 $ 6.53 $ 5.79 $ 4.76
Percent of net sales (Continuing operations):
Cost of sales 65.3% 63.1% 63.2% 63.6% 63.8%
Selling, general and administrative(e) 22.7% 23.1% 22.7% 22.3% 22.9%
Other, net 2.1% 2.1% 1.6% 2.0% 2.1%
Restructuring charges and asset impairments 1.1% 0.4% 0.4% 0.4% 0.2%
Interest, net 1.5% 1.4% 1.5% 1.5% 1.4%
Earnings before income taxes 7.3% 11.8% 10.6% 10.3% 9.6%
Net earnings from continuing operations attributable to common
shareowners 4.3% 9.5% 8.3% 8.1% 7.6%
Balance sheet data:
Total assets $ 19,408 $ 19,098 $ 15,655 $ 15,128 $ 15,803
Long-term debt, including current maturities $ 3,822 $ 3,806 $ 3,806 $ 3,797 $ 3,800
Stanley Black & Decker, Inc.’s shareowners’ equity $ 7,836 $ 8,302 $ 6,374 $ 5,816 $ 6,429
Ratios:
Total debt to total capital 34.9% 31.5% 37.4% 39.5% 37.2%
Income tax rate - continuing operations 40.7% 19.7% 21.3% 21.6% 20.9%
Common stock data:
Dividends per share $ 2.58 $ 2.42 $ 2.26 $ 2.14 $ 2.04
Equity per basic share at year-end $ 53.07 $ 55.20 $ 42.80 $ 39.11 $ 41.34
Market price per share — high $ 175.91 $ 170.03 $ 125.78 $ 110.17 $ 97.36
Market price per share — low $ 108.45 $ 115.75 $ 90.14 $ 90.51 $ 75.64
Weighted-average shares outstanding (in 000’s):
Basic 148,919 149,629 146,041 148,234 156,090
Diluted 151,643 152,449 148,207 152,706 159,737
Other information:
Average number of employees 60,785 57,076 53,231 51,815 50,375
Shareowners of record at end of year 9,727 10,014 10,313 10,603 10,932
12017 and 2016 amounts have been recast as a result of the adoption of the new revenue and pension standards. 2015 Stanley Black & Decker, Inc.'s shareowners' equity includes a
$4.3 million adjustment for the adoption of the new revenue standard for periods prior to fiscal year 2016. Impacts from the adoption of the new pension standard on periods prior to
2016 were not significant. Refer to Note A, Significant Accounting Policies, for further discussion.

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

22
 percentage of Net sales, Cost of sales was 47 basis points higher, Selling, general, & administrative was 113 basis points higher, Other, net was 77
basis points higher, Restructuring charges and asset impairments was 84 basis points higher, and Earnings before income taxes was 322 basis points
lower. The Company also recorded a net tax charge of $181 million, which is comprised of charges related to the Tax Cuts and Jobs Act ("the Act")
partially offset by the tax benefit of the above pre-tax charges. Overall, the amounts described above resulted in a decrease to Net earnings
attributable to common shareowners of $631 million (or $4.16 per diluted share). The Income tax rate - continuing operations was 247 basis points
higher.
(b) The Company's 2017 results include $156 million of pre-tax acquisition-related charges and a $264 million pre-tax gain on sales of businesses,
primarily related to the divestiture of the mechanical security businesses. As a result, as a percentage of Net sales, Cost of sales was 36 basis points
higher, Selling, general, & administrative was 29 basis points higher, Other, net was 45 basis points higher, Restructuring charges and asset
impairments was 11 basis points higher, and Earnings before income taxes was 83 basis points higher. The net tax benefit of the acquisition-related
charges and gain on sales of businesses was $7 million. Income taxes on continuing operations for 2017 also includes a one-time net tax charge of
$24 million related to the Act. Overall, the acquisition-related charges, gain on sales of businesses, and one-time net tax charge related to the
recently enacted U.S. tax legislation resulted in a net increase to the Company's 2017 net earnings from continuing operations attributable to
common shareowners of $91 million (or $0.59 per diluted share).
(c) The Company's 2014 results include $54 million of pre-tax charges related to merger and acquisition-related charges. As a result of these charges,
net earnings attributable to common shareowners were reduced by $49 million (or $0.30 per diluted share). As a percentage of Net sales, Cost of sales
was 2 basis points higher, Selling, general & administrative was 28 basis points higher, Other, net was 2 basis points higher, Earnings before income
taxes was 48 basis points lower, and Net earnings attributable to common shareowners was 43 basis points lower. The Income tax rate - continuing
operations was 53 basis points higher.
(d) Discontinued operations in 2015 reflects a $20 million loss, or $0.13 per diluted share, primarily related to operating losses associated with the
Security segment’s Spain and Italy operations (“Security Spain and Italy”), which were classified as held for sale in the fourth quarter of 2014 and
subsequently sold in 2015. Amounts in 2014 reflect a $96 million loss, or $0.60 per diluted share, associated with Security Spain and Italy as well as
two small businesses that were divested in 2014.
(e) SG&A is inclusive of the Provision for Doubtful Accounts.

23
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The financial and business analysis below provides information which the Company believes is relevant to an assessment and understanding of its
consolidated financial position, results of operations and cash flows. This financial and business analysis should be read in conjunction with the
Consolidated Financial Statements and related notes. All references to “Notes” in this Item 7 refer to the Notes to Consolidated Financial Statements
included in Item 8 of this Annual Report.

The following discussion and certain other sections of this Annual Report on Form 10-K contain statements reflecting the Company’s views about its future
performance that constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are
based on current expectations, estimates, forecasts and projections about the industry and markets in which the Company operates as well as management’s
beliefs and assumptions. Any statements contained herein (including without limitation statements to the effect that Stanley Black & Decker, Inc. or its
management “believes,” “expects,” “anticipates,” “plans” and similar expressions) that are not statements of historical fact should be considered forward-
looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to
predict. There are a number of important factors that could cause actual results to differ materially from those indicated by such forward-looking statements.
These factors include, without limitation, those set forth, or incorporated by reference, below under the heading “Cautionary Statements Under The Private
Securities Litigation Reform Act Of 1995.” The Company does not intend to update publicly any forward-looking statements whether as a result of new
information, future events or otherwise.

Strategic Objectives

The Company continues to pursue a growth and acquisition strategy, which involves industry, geographic and customer diversification to foster sustainable
revenue, earnings and cash flow growth, and employ the following strategic framework in pursuit of its vision to reach $22 billion in revenue by 2022 while
expanding its margin rate ("22/22 Vision"):

• Continue organic growth momentum by utilizing the Stanley Fulfillment System ("SFS") 2.0 operating system, diversifying toward higher-growth,
higher-margin businesses, and increasing the relative weighting of emerging markets;

• Be selective and operate in markets where brand is meaningful, the value proposition is definable and sustainable through innovation, and global
cost leadership is achievable; and

• Pursue acquisitive growth on multiple fronts by building upon its existing global tools platform, expanding the Industrial platform in Engineered
Fastening and Infrastructure, consolidating the commercial electronic security industry, and pursuing adjacencies with sound industrial logic.

Execution of the above strategy has resulted in approximately $9.4 billion of acquisitions since 2002 (excluding the Black & Decker merger), several
divestitures, improved efficiency in the supply chain and manufacturing operations, and enhanced investments in organic growth, enabled by cash flow
generation and increased debt capacity. In addition, the Company's continued focus on diversification and organic growth has resulted in improved financial
results and an increase in its global presence. The Company also remains focused on increasing its presence in emerging markets, with a goal of generating
greater than 20% of annual revenues from those markets over time, and leveraging SFS 2.0 to upgrade innovation and digital capabilities, maintain
commercial and supply chain excellence, and focus on reducing SG&A, in part, through functional transformation. Lastly, the Company continues to make
strides towards achieving its 22/22 Vision by becoming known as one of the world’s leading innovators, delivering top-quartile financial performance and
elevating its commitment to social responsibility.

The Company’s long-term financial objectives remain as follows:

• 4-6% organic revenue growth;

• 10-12% total revenue growth;
• 10-12% total EPS growth (7-9% organically) excluding acquisition-related charges;
• Free cash flow equal to, or exceeding, net income; and
• Sustain 10+ working capital turns.

In terms of capital allocation, the Company remains committed, over time, to returning approximately 50% of free cash flow to shareholders through a strong
and growing dividend as well as opportunistically repurchasing shares. The remaining free cash flow (approximately 50%) will be deployed towards
acquisitions.

24
The following represents recent examples of the Company executing its strategic objectives:

Acquisitions and Other Transactions

On January 2, 2019, the Company acquired a 20 percent interest in MTD Holdings Inc. ("MTD"), a privately held global manufacturer of outdoor power
equipment, for $234 million in cash. With 2017 revenues of $2.4 billion, MTD manufactures and distributes gas-powered lawn tractors, zero turn mowers,
walk behind mowers, snow throwers, trimmers, chain saws, utility vehicles and other outdoor power equipment. Under the terms of the agreement, the
Company has the option to acquire the remaining 80 percent of MTD beginning on July 1, 2021 and ending on January 2, 2029. In the event the option is
exercised, the companies have agreed to a valuation multiple based on MTD’s 2018 EBITDA, with an equitable sharing arrangement for future EBITDA
growth. The investment in MTD increases the Company's presence in the $20 billion global lawn and garden segment and will allow the two companies to
work together to pursue revenue and cost opportunities, improve operational efficiency, and introduce new and innovative products for professional and
residential outdoor equipment customers, utilizing each company's respective portfolios of strong brands.

On April 2, 2018, the Company acquired Nelson Fastener Systems (“Nelson”) from the Doncasters Group for approximately $430 million. This acquisition is
complementary to the Company's product offerings, enhances its presence in the general industrial end markets, expands its portfolio of highly-engineered
fastening solutions, and will deliver cost synergies. The results of Nelson are being consolidated into the Industrial segment.

On March 9, 2017, the Company acquired the Tools business of Newell Brands ("Newell Tools") for approximately $1.86 billion, which included the highly
attractive industrial cutting, hand tool and power tool accessory brands IRWIN® and LENOX®. The acquisition enhanced the Company’s position within
the global tools & storage industry and broadened the Company’s product offerings and solutions to customers and end-users, particularly within power tool
accessories. The Newell Tools results have been consolidated into the Company's Tools & Storage segment.

On March 8, 2017, the Company purchased the Craftsman® brand from Sears Holdings Corporation (“Sears Holdings”) for an estimated cash purchase price
of approximately $937 million on a discounted basis. The acquisition provided the Company with the rights to develop, manufacture and sell Craftsman®-
branded products in non-Sears Holdings channels. The Company plans to significantly increase the availability of Craftsman®-branded products to
consumers in previously underpenetrated channels, enhance innovation, and add manufacturing jobs in the U.S. to support growth. The Craftsman results
have been consolidated into the Company's Tools & Storage segment.

Pending Acquisition

On August 6, 2018, the Company reached an agreement to acquire International Equipment Solutions Attachments Group ("IES Attachments"), a
manufacturer of high quality, performance-driven heavy equipment attachment tools for off-highway applications. On January 29, 2019, the agreement was
amended to exclude the mobile processors business. The Company expects the acquisition to further diversify the Company's presence in the industrial
markets, expand its portfolio of attachment solutions and provide a meaningful platform for continued growth. This transaction is expected to close in the
first half of 2019 subject to customary closing conditions, including regulatory approvals.

Refer to Note E, Acquisitions, for further discussion of the Company's acquisitions.

Divestitures

On February 22, 2017, the Company sold the majority of its mechanical security businesses, which included the commercial hardware brands of Best Access,
phi Precision and GMT, for net proceeds of approximately $717 million. The sale allowed the Company to deploy capital in a more accretive and growth-
oriented manner.

Refer to Note T, Divestitures, for further discussion of the Company's divestitures.

Certain Items Impacting Earnings

Throughout MD&A, the Company has provided a discussion of the outlook and results both inclusive and exclusive of acquisition-related charges, a non-
cash fair value adjustment, gains or losses on sales of businesses, an environmental remediation settlement, charges associated with a cost reduction program,
an incremental freight charge related to a service provider's bankruptcy, and tax charges primarily related to the Tax Cuts and Jobs Act ("the Act"). The results
and measures, including gross profit and segment profit, on a basis excluding these amounts are considered relevant to aid analysis and understanding of the
Company's results aside from the material impact of these items. These amounts are as follows:

25
2018

The Company reported $450 million in pre-tax charges during 2018, which were comprised of the following:

• $66 million reducing Gross Profit primarily pertaining to amortization of the inventory step-up adjustment for the Nelson acquisition and an
incremental freight charge recorded in the fourth quarter of 2018 due to nonperformance by a third-party service provider;
• $158 million in SG&A primarily for integration-related costs, consulting fees, and a non-cash fair value adjustment;
• $108 million in Other, net primarily related to deal transaction costs and the settlement with the Environmental Protection Agency ("EPA");
• $1 million related to a previously divested business; and
• $117 million in Restructuring charges which primarily related to a cost reduction program in the fourth quarter of 2018.

The Company also recorded a net tax charge of $181 million, which is comprised of charges related to the Act partially offset by the tax benefit of the above
pre-tax charges. The above amounts resulted in net after-tax charges of $631 million, or $4.16 per diluted share.

2017

The Company reported $156 million in pre-tax acquisition-related charges, which were comprised of the following:

• $47 million reducing Gross Profit primarily pertaining to amortization of the inventory step-up adjustment for the Newell Tools acquisition;
• $38 million in SG&A primarily for integration-related costs and consulting fees;
• $58 million in Other, net primarily for deal transaction and consulting costs; and
• $13 million in Restructuring charges pertaining to facility closures and employee severance.

The Company also reported a $264 million pre-tax gain on sales of businesses in 2017, primarily relating to the sale of the majority of the mechanical
security businesses. The net tax benefit of the acquisition-related charges and gain on sales of businesses was $7 million. Furthermore, in the fourth quarter of
2017, the Company recorded a $24 million net tax charge relating to the Act.

The acquisition-related charges, gain on sales of businesses, and net tax charge relating to the Act resulted in a net after-tax gain of $91 million, or $0.59 per
diluted share.

Driving Further Profitable Growth by Fully Leveraging Our Core Franchises

Each of the Company's franchises share common attributes: they have world-class brands and attractive growth characteristics, they are scalable and
defensible, they can differentiate through innovation, and they are powered by our SFS 2.0 operating system.

• The Tools & Storage business is the tool company to own, with strong brands, proven innovation, global scale, and a broad offering of power tools,
hand tools, accessories, and storage & digital products across many channels in both developed and developing markets.

• The Engineered Fastening business is a highly profitable, GDP+ growth business offering highly engineered, value-added innovative solutions with
recurring revenue attributes and global scale.

• The Security business, with its attractive recurring revenue, presents a significant margin accretion opportunity over the longer term and has
historically provided a stable revenue stream through economic cycles, is a gateway into the digital world and an avenue to capitalize on rapid
digital changes. Security has embarked on a business transformation which will apply technology to lower its cost to serve and create new offerings
for its small to medium enterprise and large key account customers.

While diversifying the business portfolio through strategic acquisitions remains important, management recognizes that the core franchises described above
are important foundations that continue to provide strong cash flow and growth prospects. Management is committed to growing these businesses through
innovative product development, brand support, continued investment in emerging markets and a sharp focus on global cost-competitiveness.

26
Continuing to Invest in the Stanley Black & Decker Brands

The Company has a strong portfolio of brands associated with high-quality products including STANLEY®, BLACK+DECKER®, DE WALT®,
FLEXVOLT®, IRWIN®, LENOX®, CRAFTSMAN®, PORTER-CABLE®, BOSTITCH®, PROTO®, MAC TOOLS®, FACOM®, AeroScout®, Powers®,
LISTA®, SIDCHROME®, Vidmar®, SONITROL®, and GQ®. Among the Company's most valuable assets, the STANLEY®, BLACK+DECKER® and
DE WALT® brands are recognized as three of the world's great brands, while the CRAFTSMAN® brand is recognized as a premier American brand.

During 2018, the STANLEY®, DE WALT® and CRAFTSMAN® brands had prominent signage in Major League Baseball ("MLB") stadiums appearing in
many MLB games. The Company has also maintained long-standing NASCAR and NHRA racing sponsorships, which provided brand exposure during
nearly 60 events in 2018 with the STANLEY®, DE WALT®, CRAFTSMAN®, IRWIN® and MAC TOOLS® brands. The Company also advertises in the
English Premier League, which is the number one soccer league in the world, featuring STANLEY®, STANLEY Security, BLACK+DECKER® and
DEWALT® brands to a global audience. Starting in 2014, the Company became a sponsor for one of the world’s most popular football clubs, FC Barcelona
("FCB"), including player image rights, hospitality assets and stadium signage. In 2018, the Company was announced as the first ever shirt sponsor for the
FCB Women's team in support of its commitment to global diversity and inclusion. Also in 2018, the Company joined forces by sponsoring the Envision
Virgin Racing Formula E team, in support of the Company's commitment to sustainability and the future of electric mobility.

The above marketing initiatives highlight the Company's strong emphasis on brand building and support, which has resulted in more than 300 billion brand
impressions via digital and traditional advertising annually and a steady improvement across the spectrum of brand awareness measures. The Company will
continue allocating its brand and advertising spend wisely to capture the emerging digital landscape, whilst continuing to evolve proven marketing
programs to deliver famous global brands that are deeply committed to societal improvement, along with transformative technologies to build relevant and
meaningful 1:1 customer, consumer, employee and shareholder relationships in support of the Company's 22/22 Vision.

The Stanley Fulfillment System and SFS 2.0

Over the years, the Company has successfully leveraged SFS to drive efficiency throughout the supply chain and improve working capital performance in
order to generate incremental free cash flow. Historically, SFS focused on streamlining operations, which helped reduce lead times, realize synergies during
acquisition integrations, and mitigate material and energy price inflation. In 2015, the Company launched a refreshed and revitalized SFS operating system,
entitled SFS 2.0, to drive from a more programmatic growth mentality to a true organic growth culture by more deeply embedding breakthrough innovation
and commercial excellence into its businesses, and at the same time, becoming a significantly more digitally-enabled enterprise.

Leveraging SFS 2.0, the Company is building a culture in which it strives to become known as one of the world’s great innovative companies by embracing
the current environment of rapid innovation and digital transformation. To pursue faster innovation, the Company is building a vast ecosystem to remain
aware of and open to new technologies and advances by leveraging both internal initiatives and external partnerships. The innovation ecosystem and focus
on digital disruption will allow the Company to apply innovation to its core processes in manufacturing and back office functions to reduce operating costs
and inefficiencies, develop core and breakthrough product innovations within each of its businesses, and pursue disruptive business models to either push
into new markets or change existing business models before competition or new market entrants capture the opportunity. The Company has already made
progress towards these objectives, as evidenced by the creation of breakthrough innovation teams in each business, the Stanley Ventures group, which
invests capital in new and emerging start-ups in core focus areas, the Techstars partnership, which selects start-ups from around the world with the goal of
bringing breakthrough manufacturing technologies to market, and a Silicon Valley based team, which is building its own set of disruptive initiatives and
exploring new business models.

The Company has made a significant commitment to SFS 2.0 and management believes that its success will be characterized by continued organic growth in
the 4-6% range as well as expanded operating margin rates over the next 3 to 5 years as the Company leverages the growth and reduces structural SG&A
levels.

SFS 2.0 is transforming the Company by focusing its employees on the following five key pillars:

• Digital Excellence uses the power of digital to contemporize, be disruptive, and create value throughout the Company's array of products, processes
and business models. Digital Excellence means leveraging the power of emerging technologies across the Company's businesses to connected
devices, the Internet of Things ("IoT"), and big data, as well as social and mobile, even more than what is being done today. Digital is penetrating all
aspects of the organization and feeds into and supports the other elements of SFS 2.0 - enabling better asset efficiency through Core

27
 SFS / Industry 4.0, greater cost effectiveness via the Company's support functions, and improving revenues and margins via customer-facing
opportunities.

• Commercial Excellence is about how the Company becomes more effective and efficient in its customer-facing processes resulting in continued
share gains and margin expansion throughout its businesses. The Company views Commercial Excellence as world-class execution across seven
areas: customer insights, innovation and portfolio management, pricing and promotion, brand and marketing, sales force deployment and
effectiveness, channel programs, and the customer experience.

• Breakthrough Innovation is aimed at developing a culture to identify and commercialize market disrupting innovations, each with revenue
generation potential greater than $100 million annually. The Company's focus remains on utilizing technologies to come up with major
breakthroughs in the industries in which the Company operates which, when combined with its existing strong core innovation machine, will drive
outsized share gains and margin expansion.

• Core SFS / Industry 4.0, which targets cost and asset efficiency, remains as the foundation for the Company's operating system and has yielded
significant advances in improving working capital turns and free cash flow generation. The five operating principles encompassed by Core SFS /
Industry 4.0, which work in concert, include: sales and operations planning ("S&OP"), operational lean, complexity reduction, global supply
management, and order-to-cash excellence. The Company plans to continue leveraging these principles to further enhance the Company's already
strong asset efficiency performance. Additionally, the Company is making investments behind the adoption of Industry 4.0 and advancing the
Company's capabilities surrounding the automation of manufacturing that includes IoT, cloud computing, Artificial Intelligence ("AI"), 3-D
printing, robotics, and advanced materials, among others.

• Functional Transformation takes a clean-sheet approach to redesigning the Company's key support functions such as Finance, HR, IT and others,
which although highly effective, after roughly a hundred acquisitions are not as efficient as they can be based on external benchmarks. This presents
the Company with an opportunity to reduce complexity in order to realize the benefits from scale, reduce its SG&A as a percent of sales, and become
a cost effectiveness enabler with the side benefit of helping to fund the other aspects of SFS 2.0 over the long term and to support margin expansion.

SFS 2.0 will serve as a powerful value driver in the years ahead, feeding the Company's innovation ecosystem, embracing outstanding commercial and supply
chain excellence, embedding digital into the various business models, and funding it with world-class functional efficiency. Taken together, the five pillars
above will directly support achievement of the Company's long-term financial objectives, including its 22/22 Vision, and further enable its shareholder-
friendly capital allocation approach, which has served the Company well in the past and will continue to do so in the future.

Outlook for 2019

This outlook discussion is intended to provide broad insight into the Company’s near-term earnings and cash flow generation prospects. The Company
expects 2019 diluted earnings per share to approximate $7.45 to $7.65 ($8.45 to $8.65 excluding acquisition-related and other charges), and free cash flow
conversion, defined as free cash flow divided by net income, to approximate 85% to 90%. The 2019 outlook for adjusted diluted earnings per share assumes
approximately $0.30 to $0.40 of accretion related to organic sales volume growth; approximately $1.05 of accretion due to the benefit from the cost
reduction program partially offset by modest investments; approximately $0.10 of accretion related to the benefits from the MTD partnership and lower
shares partially offset by higher interest expense; approximately $0.90 to $1.00 of dilution from incremental tariffs, commodity inflation, and currency
partially offset by pricing actions; and approximately $0.15 of dilution due to an expected tax rate of approximately 17.5%.

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RESULTS OF OPERATIONS

Below is a summary of the Company’s operating results at the consolidated level, followed by an overview of business segment performance. Certain
amounts reported in the previous years have been recast as a result of the retrospective adoption of new accounting standards in the first quarter of 2018.
Refer to Note A, Significant Accounting Policies, for further discussion.

Terminology: The term “organic” is utilized to describe results aside from the impacts of foreign currency fluctuations, acquisitions during their initial
12 months of ownership, and divestitures. This ensures appropriate comparability to operating results of prior periods.

Net Sales: Net sales were $13.982 billion in 2018 compared to $12.967 billion in 2017, representing an increase of 8% with strong organic growth of 5%.
Acquisitions, primarily Newell Tools and Nelson, increased sales by 3%. Tools & Storage net sales increased 9% compared to 2017 due to strong organic
growth of 7%, fueled by solid growth across all regions, and acquisition growth of 2%. Industrial net sales increased 11% compared to 2017 primarily due to
acquisition growth of 9% and favorable currency of 2%. Security net sales increased 2% compared to 2017 due to increases of 1% in price, 3% in small bolt-
on commercial electronic security acquisitions and 1% in foreign currency, partially offset by declines of 1% from the sale of the majority of the mechanical
security businesses and 2% from lower volumes.

Net sales were $12.967 billion in 2017 compared to $11.594 billion in 2016, representing an increase of 12% fueled by strong organic growth of 7%.
Acquisitions, primarily Newell Tools, and foreign currency increased sales by 7% and 1%, respectively, while the impact of divestitures decreased sales by
3%. Tools & Storage net sales increased 19% compared to 2016 due to strong innovation-fueled organic growth of 9%, with solid growth across all regions,
and acquisition growth of 10%. Industrial net sales increased 6% relative to 2016 due to a 6% increase in sales volume, which was mainly driven by strong
automotive system shipments in the Engineered Fastening business and successful commercial actions and higher inspection and onshore pipeline project
activity in the Infrastructure business. Net sales in the Security segment decreased 8% compared to 2016 primarily due to a 12% decline from the sale of the
majority of the mechanical security businesses, which more than offset increases from organic growth and small bolt-on commercial electronic security
acquisitions of 1% and 3%, respectively.

Gross Profit: The Company reported gross profit of $4.851 billion, or 34.7% of net sales, in 2018 compared to $4.778 billion, or 36.9% of net sales, in 2017.
Acquisition-related and other charges, which reduced gross profit, were $65.7 million in 2018 and $46.8 million in 2017. Excluding these charges, gross
profit was 35.2% of net sales in 2018, compared to 37.2% in 2017, as volume leverage, productivity and price were more than offset by external headwinds,
including commodity inflation, foreign exchange and tariffs.

The Company reported gross profit of $4.778 billion, or 36.9% of net sales, in 2017 compared to $4.268 billion, or 36.8% of net sales, in 2016. Excluding
acquisition-related charges of $46.8 million, which primarily related to the amortization of the inventory step-up adjustment for the Newell Tools
acquisition, gross profit was 37.2% of net sales in 2017. The year-over-year increase in the profit rate was attributable to volume leverage, productivity and
cost control, which more than offset increasing commodity inflation and the impact from the mechanical security business divestiture.

SG&A Expense: Selling, general and administrative expenses, inclusive of the provision for doubtful accounts (“SG&A”), were $3.172 billion, or 22.7% of
net sales, in 2018 compared to $2.999 billion, or 23.1% of net sales, in 2017. Within SG&A, acquisition-related and other charges totaled $157.8 million in
2018 and $37.7 million in 2017. Excluding these charges, SG&A was 21.6% of net sales in 2018 compared to 22.8% in 2017, due primarily to prudent cost
management and volume leverage.

SG&A expenses were $2.999 billion, or 23.1% of net sales, in 2017 compared to $2.633 billion, or 22.7% of net sales, in 2016. Excluding acquisition-related
charges of $37.7 million, SG&A was 22.8% of net sales in 2017. The slight year-over-year increase was driven by investments in growth initiatives partially
offset by continued tight cost management.

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. Such distribution costs classified in SG&A amounted to $316.0 million
in 2018, $279.8 million in 2017 and $235.3 million in 2016.

Corporate Overhead: The corporate overhead element of SG&A, which is not allocated to the business segments, amounted to $202.8 million, or 1.5% of net
sales, in 2018, $217.4 million, or 1.7% of net sales, in 2017 and $190.9 million, or 1.6% of net sales, in 2016. Excluding acquisition-related charges of $12.7
million and $0.7 million in 2018 and 2017, respectively, the corporate overhead element of SG&A was 1.4% of net sales in 2018 compared to 1.7% of net
sales in 2017 reflecting cost management. The increase in 2017 compared to 2016 was primarily due to investments in SFS 2.0 initiatives.

29
Other, net: Other, net totaled $287.0 million in 2018 compared to $269.2 million in 2017 and $185.9 million in 2016. Excluding the aforementioned EPA
settlement charge and acquisition-related charges which totaled $108.1 million in 2018 and acquisition-related charges of $58.2 million in 2017, Other, net
totaled $178.9 million and $211.0 million in 2018 and 2017, respectively. The year-over-year decrease in 2018 was driven by an environmental remediation
charge of $17 million in 2017 relating to a legacy Black & Decker site and a favorable resolution of a prior claim in 2018, which more than offset higher
intangible amortization expense in 2018. The increase in 2017 compared to 2016 was primarily driven by higher amortization expense related to the 2017
acquisitions, negative impacts of foreign currency and the environmental remediation charge of $17 million discussed above.

Refer to Note S, Contingencies, for additional information regarding the EPA settlement discussed above.

Loss (Gain) on Sales of Businesses: During 2018, the Company reported a $0.8 million pre-tax loss relating to a previously divested business. During 2017,
the Company reported a $264.1 million pre-tax gain primarily relating to the sale of the majority of the Company's mechanical security businesses, as
previously discussed.

Pension Settlement: Pension settlement of $12.2 million in 2017 reflects losses previously reported in Accumulated other comprehensive loss related to a
non-U.S. pension plan for which the Company settled its obligation by purchasing an annuity and making lump sum payments to participants.

Interest, net: Net interest expense in 2018 was $209.2 million compared to $182.5 million in 2017 and $171.3 million in 2016. The increase in 2018
compared to 2017 was primarily due to higher interest rates and higher average balances relating to the Company's U.S. commercial paper borrowings
partially offset by higher interest income. The increase in net interest expense in 2017 versus 2016 was primarily due to the termination of interest rate swaps
in June 2016 hedging the Company's fixed rate debt.

Income Taxes: The Company's effective tax rate was 40.7% in 2018, 19.7% in 2017, and 21.3% in 2016. The 2018 effective tax rate includes net charges
associated with the Act, which primarily related to the re-measurement of existing deferred tax balances, adjustments to the one-time transition tax, and the
provision of deferred taxes on unremitted foreign earnings and profits for which the Company no longer asserts indefinite reinvestment. Excluding the
impacts of the net charge related to the Act as well as the acquisition-related and other charges previously discussed, the effective tax rate in 2018 was
16.0%. This effective tax rate differs from the U.S. statutory tax rate primarily due to a portion of the Company's earnings being realized in lower-taxed
foreign jurisdictions and the favorable effective settlements of income tax audits.

The 2017 effective tax rate included a one-time net charge relating to the provisional amounts recorded associated with the U.S. tax legislation enacted in
December 2017. The net charge primarily related to the re-measurement of existing deferred tax balances and the one-time transition tax. Excluding the
impact of the divestitures, acquisition-related charges, and the net charge related to the Act, the effective tax rate was 20.0% in 2017. This effective tax rate
differed from the U.S. statutory rate primarily due to a portion of the Company's earnings being realized in lower-taxed foreign jurisdictions, the favorable
settlement of certain income tax audits, and the acceleration of certain tax credits resulting in a tax benefit. The effective tax rate in 2016 differed from the
U.S. statutory rate primarily due to a portion of the Company's earnings being realized in lower-taxed foreign jurisdictions, adjustments to tax positions
relating to undistributed foreign earnings, and reversals of valuation allowances for certain foreign and U.S. state net operating losses, which had become
realizable.

Business Segment Results

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 doubtful accounts (aside from corporate
overhead expense), and segment profit as a percentage of net sales to assess the profitability of each segment. Segment profit excludes the corporate overhead
expense element of SG&A, other, net (inclusive of intangible asset amortization expense), loss (gain) on sales of businesses, pension settlement, restructuring
charges and asset impairments, interest income, interest expense, and income taxes. Corporate overhead is comprised of world headquarters facility expense,
cost for the executive management team and expenses pertaining to certain centralized functions that benefit the entire Company but are not directly
attributable to the businesses, such as legal and corporate finance functions. Refer to Note F, Goodwill and Intangible Assets, and Note O, Restructuring
Charges and Asset Impairments, for the amount of intangible asset amortization expense and net restructuring charges and asset impairments, respectively,
attributable to each segment.

30
The Company classifies its business into three reportable segments, which also represent its operating segments: Tools & Storage, Industrial and Security.

Tools & Storage:

The Tools & Storage segment is comprised of the Power Tools & Equipment ("PTE") and Hand Tools, Accessories & Storage ("HTAS") businesses. The PTE
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, lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, edgers and related accessories, 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.

(Millions of Dollars) 2018 2017 2016

Net sales $ 9,814 $ 9,045 $ 7,619
Segment profit $ 1,393 $ 1,439 $ 1,258
% of Net sales 14.2% 15.9% 16.5%

Tools & Storage net sales increased $769.0 million, or 9%, in 2018 compared to 2017. Organic sales increased 7%, with a 6% increase in volume and 1%
increase in price, reflecting strong growth in each of the regions, and acquisitions, primarily Newell Tools, increased net sales by 2%. North America growth
was driven by new product innovation, the rollout of the Craftsman brand and price realization. Europe growth was supported by new products and successful
commercial actions. The growth in emerging markets was driven by mid-price-point product releases, e-commerce strategies and pricing actions.

Segment profit amounted to $1.393 billion, or 14.2% of net sales, in 2018 compared to $1.439 billion, or 15.9% of net sales, in 2017. Excluding acquisition-
related and other charges of $142.6 million and $81.8 million in 2018 and 2017, respectively, segment profit amounted to 15.6% of net sales in 2018
compared to 16.8% in 2017, as the benefits from volume leverage, pricing and cost control were more than offset by the impacts from currency, commodity
inflation and tariffs.

Tools & Storage net sales increased $1.426 billion, or 19%, in 2017 compared to 2016. Organic sales increased 9%, with strong organic growth in each of the
regions, and acquisitions, primarily Newell, increased net sales by 10%. North America growth was supported by share gains from strong commercial
execution and market-leading innovation, including sales from the FLEXVOLT® system, as well as a healthy U.S. tool market. Europe delivered above-
market organic growth enabled by successful commercial actions and new product launches. The strong organic growth in emerging markets was supported
by mid-price-point product releases, higher e-commerce volumes and strong commercial execution. Foreign currency increased sales by 1% while the sales of
two small businesses in 2017 resulted in a 1% decrease.

Segment profit amounted to $1.439 billion, or 15.9% of net sales, in 2017 compared to $1.258 billion, or 16.5% of net sales, in 2016. Excluding acquisition-
related charges of $81.8 million, segment profit amounted to 16.8% of net sales in 2017 compared to 16.5% in 2016, as volume leverage and productivity
more than offset growth investments and increased commodity inflation.

Industrial:
The Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses. The Engineered Fastening business primarily sells engineered
fastening products and systems designed for specific applications. The product lines include 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, and high-
strength structural fasteners. The Infrastructure business consists of the Oil & Gas and Hydraulics businesses. The Oil & Gas business 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 Hydraulics business sells hydraulic tools and accessories.

31
(Millions of Dollars) 2018 2017 2016
Net sales $ 2,188 $ 1,974 $ 1,864
Segment profit $ 320 $ 346 $ 300
% of Net sales 14.6% 17.5% 16.1%

Industrial net sales increased $213.5 million, or 11%, in 2018 compared to 2017, due to acquisition growth of 9% and favorable foreign currency of 2%.
Engineered Fastening organic revenues increased 1% due primarily to industrial and automotive fastener penetration gains which were partially offset by the
expected impact from lower automotive system shipments. Infrastructure organic revenues were down 1% due to anticipated lower pipeline project activity in
the Oil & Gas business, partially offset by volume growth within the Hydraulics business.

Segment profit totaled $319.8 million, or 14.6% of net sales, in 2018 compared to $345.9 million, or 17.5% of net sales, in 2017. Excluding acquisition-
related and other charges of $26.0 million in 2018, segment profit amounted to 15.8% of net sales in 2018 compared to 17.5% in 2017, as productivity gains
and cost control were more than offset by commodity inflation and the modestly dilutive impact from the Nelson acquisition.

Industrial net sales increased $110.3 million, or 6%, in 2017 compared to 2016, due to a 6% increase in organic sales. Engineered Fastening organic sales
increased 4% as strong automotive system shipments and volume growth in general industrial markets more than offset lower volumes within electronics.
Infrastructure organic sales increased 12% due to successful commercial actions and improved market conditions in the Hydraulics business and higher
inspection and North American onshore pipeline project activity in the Oil & Gas business.

Segment profit totaled $345.9 million, or 17.5% of net sales, in 2017 compared to $300.1 million, or 16.1% of net sales, in 2016. The year-over-year increase
in segment profit rate was primarily due to volume leverage, productivity gains and cost control.

Security:
The Security segment is comprised of the Convergent Security Solutions ("CSS") and the Mechanical Access Solutions ("MAS") businesses. The CSS
business designs, supplies and installs commercial electronic security systems and provides electronic security services, including alarm monitoring, video
surveillance, fire alarm monitoring, systems integration and system maintenance. Purchasers of these systems typically contract for ongoing security systems
monitoring and maintenance at the time of initial equipment installation. The business also sells healthcare solutions, which include asset tracking, infant
protection, pediatric protection, patient protection, wander management, fall management, and emergency call products. The MAS business primarily sells
automatic doors.

(Millions of Dollars) 2018 2017 2016

Net sales $ 1,981 $ 1,947 $ 2,110
Segment profit $ 169 $ 212 $ 268
% of Net sales 8.5% 10.9% 12.7%

Security net sales increased $33.3 million, or 2%, in 2018 compared to 2017, primarily due to increases of 1% in price, 3% in small bolt-on commercial
electronic security acquisitions and 1% in foreign currency, partially offset by declines of 1% from the sale of the majority of the mechanical security
businesses and 2% from lower volumes. Organic sales for North America decreased 1% as higher volumes within automatic doors were offset by lower
installations in commercial electronic security. Europe declined 1% organically as strength within the Nordics was offset by weakness in the U.K. and France.

Segment profit amounted to $169.3 million, or 8.5% of net sales, in 2018 compared to $211.7 million, or 10.9% of net sales, in 2017. Excluding acquisition-
related and other charges of $42.2 million and $2.0 million in 2018 and 2017, respectively, segment profit amounted to 10.7% of net sales in 2018 compared
to 11.0% in 2017. The year-over-year change in segment profit rate reflects investments to support business transformation in commercial electronic security
and the impact from the sale of the majority of the mechanical security business, partially offset by a continued focus on cost containment.

Security net sales decreased $163.0 million, or 8%, in 2017 compared to 2016, primarily due to a 12% decline from the sale of the majority of the mechanical
security businesses. Organic sales and small bolt-on commercial electronic security acquisitions provided increases of 1% and 3%, respectively. North
America organic sales increased 2% on higher installation volumes within the commercial electronic security and automatic doors businesses and growth
within healthcare. Europe organic growth was relatively flat as strength within the U.K. and the Nordics was mostly offset by anticipated ongoing weakness
in France.

32
Segment profit amounted to $211.7 million, or 10.9% of net sales, in 2017 compared to $267.9 million, or 12.7% of net sales, in 2016. Excluding
acquisition-related charges of $2.0 million in 2017, segment profit amounted to 11.0% of net sales in 2017 compared to 12.7% in 2016. The decrease in the
2017 segment profit rate reflected an approximate 90 basis point decline related to the sale of the mechanical security businesses, as well as impacts from mix
and funding growth investments.

RESTRUCTURING ACTIVITIES
A summary of the restructuring reserve activity from December 30, 2017 to December 29, 2018 is as follows:

(Millions of Dollars) 12/30/2017 Net Additions Usage Currency 12/29/2018

Severance and related costs $ 20.0 $ 151.0 $ (64.1) $ (1.2) $ 105.7
Facility closures and asset impairments 3.2 9.3 (9.4) — 3.1
Total $ 23.2 $ 160.3 $ (73.5) $ (1.2) $ 108.8

During 2018, the Company recognized net restructuring charges and asset impairments of $160.3 million, which primarily relates to the cost reduction
program in the fourth quarter of 2018. This amount reflects $151.0 million of net severance charges associated with the reduction of 4,184 employees and
$9.3 million of facility closure and other restructuring costs. The Company expects the 2018 actions to result in annual net cost savings of approximately
$230 million by the end of 2019.

The majority of the $108.8 million of reserves remaining as of December 29, 2018 is expected to be utilized within the next twelve months.

During 2017, the Company recognized net restructuring charges and asset impairments of $51.5 million. This amount reflected $40.6 million of net
severance charges associated with the reduction of 1,584 employees and $10.9 million of facility closure and other restructuring costs. The 2017 actions
resulted in annual net cost savings of approximately $45 million in 2018, primarily in the Tools & Storage and Security segments.

During 2016, the Company recognized net restructuring charges and asset impairments of $49.0 million. This amount reflected $27.3 million of net
severance charges associated with the reduction of 1,326 employees. The Company also recognized $11.0 million of facility closure costs and $10.7 million
of asset impairments. The 2016 actions resulted in annual net cost savings of approximately $20 million in each segment.

Segments: The $160 million of net restructuring charges and asset impairments for the year ended December 29, 2018 includes: $80 million pertaining to the
Tools & Storage segment; $30 million pertaining to the Industrial segment; $36 million pertaining to the Security segment; and $14 million pertaining to
Corporate.

The anticipated annual net cost savings of approximately $230 million related to the 2018 restructuring actions include: $115 million pertaining to the
Tools & Storage segment; $30 million pertaining to the Industrial segment; $55 million relating to the Security segment; and $30 million relating to
Corporate.

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. Below is a summary of the Company’s cash flow results. Certain amounts reported in the previous years have been recast as a
result of the adoption of new accounting standards in the first quarter of 2018. Refer to Note A, Significant Accounting Policies, for further discussion.

Operating Activities: Cash flows provided by operations were $1.261 billion in 2018 compared to $669 million in 2017. As discussed further in Note A,
Significant Accounting Policies, operating cash flows in 2017 have decreased by approximately $750 million as a result of the retrospective adoption of new
cash flow standards in the first quarter of 2018. Excluding the impact of the new standards, cash flows provided by operations in 2018 decreased year-over-
year primarily due to higher income tax payments and higher payments associated with acquisition-related and other charges.

In 2017, cash flows from operations were $669 million compared to $1.186 billion in 2016. Excluding the impacts of the new cash flow standards described
above, operating cash flows in 2017 decreased slightly compared to 2016 due primarily to higher cash outflows from working capital to support outsized
organic growth in the Tools & Storage segment, partially offset by higher earnings excluding the impacts of non-cash items (gain on sales of businesses and
amortization of inventory step-up).

Free Cash Flow: Free cash flow, as defined in the table below, was $769 million in 2018 compared to $226 million in 2017 and $839 million in 2016.
Excluding the retrospective impacts of the previously discussed new cash flow standards adopted in the first quarter of 2018, free cash flow totaled $976
million in 2017 and $1.138 billion in 2016. Management considers free cash

33
flow an important indicator of its liquidity, as well as its ability to fund future growth and provide dividends to shareowners. Free cash flow does not include
deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among
other items.

(Millions of Dollars) 2018 2017 1 2016 1

Net cash provided by operating activities $ 1,261 $ 669 $ 1,186

Less: capital and software expenditures (492) (443) (347)
Free cash flow $ 769 $ 226 $ 839
1Certain amounts reported in the previous years have been recast as a result of the adoption of new accounting standards in the first quarter of 2018. Refer to Note A, Significant
Accounting Policies, for further discussion.

Investing Activities: Cash flows used in investing activities totaled $989 million in 2018, primarily due to business acquisitions of $525 million, mainly
related to the Nelson acquisition, and capital and software expenditures of $492 million. The increase in capital and software expenditures in 2018 was
primarily due to technology-related and capacity investments to support the Company's strong organic growth and its SFS 2.0 initiatives.

Cash flows used in investing activities in 2017 totaled $1.567 billion, which primarily consisted of business acquisitions of $2.584 billion, mainly related to
the Newell Tools and Craftsman acquisitions, and capital and software expenditures of $443 million, partially offset by proceeds of $757 million from sales
of businesses and $705 million from the deferred purchase price receivable related to an accounts receivable sales program, which was terminated in February
2018. The increase in capital and software expenditures in 2017 was due to growth in the Company's supply chain and investments related to functional
transformation.

Cash flows provided by investing activities in 2016 totaled $61 million, which primarily consisted of $345 million of proceeds from the deferred purchase
price receivable related to the terminated accounts receivable sales program discussed above and net investment hedge settlements of $105 million, partially
offset by capital and software expenditures of $347 million. The proceeds from net investment hedge settlements were primarily driven by the significant
fluctuations in foreign currency rates during 2016 associated with foreign exchange contracts hedging a portion of the Company's pound sterling, Canadian
dollar, and Euro denominated net investments.

Financing Activities: Cash flows used in financing activities totaled $562 million in 2018 due primarily to the repurchase of common shares for $527 million
and cash dividend payments of $385 million, partially offset by $433 million of net proceeds from short-term borrowings under the Company's commercial
paper program.

Cash flows provided by financing activities totaled $295 million in 2017 primarily due to $726 million in proceeds from the issuance of equity units,
partially offset by $363 million of cash payments for dividends and $77 million of net repayments of short-term borrowings under the Company's commercial
paper program.

Cash flows used in financing activities in 2016 totaled $433 million, primarily due to share repurchases of $374 million, cash payments for dividends of
$331 million, and the settlement of the October 2014 forward share purchase contract for $147 million, partially offset by proceeds from issuances of
common stock of $419 million, which mainly related to the issuance of 3.5 million shares associated with the settlement of the 2013 Equity Purchase
Contracts.

Fluctuations in foreign currency rates negatively impacted cash by $54 million in 2018 due to the strengthening of the U.S. Dollar against the Company's
other currencies. Foreign currency positively impacted cash by $81 million in 2017 and negatively impacted cash by $102 million in 2016 due to
movements in the U.S. Dollar against other currencies.

Refer to Note H, Long-Term Debt and Financing Arrangements, and Note J, Capital Stock, for further discussion regarding the Company's debt and equity
arrangements.

Credit Ratings and 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 F2, Moody's P-2). There have been no changes to any of the ratings during 2018. Failure to
maintain strong investment grade 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 $289 million as of December 29, 2018, comprised of $60 million in the U.S. and $229 million in foreign jurisdictions. As
of December 30, 2017, cash and cash equivalents totaled $638 million, comprised of $54 million in the U.S. and $584 million in foreign jurisdictions.

34
As a result of the Act, the Company's tax liability related to the one-time transition tax associated with unremitted foreign earnings and profits totaled $366
million at December 29, 2018. 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. See the
Contractual Obligations table below for the estimated amounts due by period. 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. Refer to Note Q, Income Taxes, for further discussion of the impacts of the Act.

In November 2018, the Company issued $500 million of senior unsecured notes, maturing on November 15, 2028 ("2028 Term Notes") and $500 million of
senior unsecured notes, maturing on November 15, 2048 ("2048 Term Notes"). The 2028 Term Notes and 2048 Term Notes will accrue interest at fixed rates
of 4.25% per annum and 4.85% per annum, respectively, with interest payable semi-annually in arrears on both notes. The notes are unsecured and rank
equally with all of the Company's existing and future unsecured and unsubordinated debt. The Company received net proceeds of $990.0 million which
reflects a discount of $0.9 million and $9.1 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 other borrowings. Contemporaneously with the issuance of the 2028 Term
Notes and 2048 Term Notes, the Company paid $977.5 million to settle its remaining obligations of two unsecured notes that matured in November 2018,
which related to the Equity Units issued in December 2013 and the Convertible Preferred Units issued in November 2010. Refer to Note H, Long-Term Debt
and Financing Arrangements, for further discussion of these arrangements.

In May 2017, the Company issued 7,500,000 Equity Units with a total notional value of $750.0 million ("$750 million Equity Units"). Each unit has a stated
amount of $100 and initially consisted of a three-year forward stock purchase contract ("2020 Purchase Contracts") for the purchase of a variable number of
shares of common stock, on May 15, 2020, for a price of $100, and a 10% beneficial ownership interest in one share of 0% Series C Cumulative Perpetual
Convertible Preferred Stock, without par, with a liquidation preference of $1,000 per share ("Series C Preferred Stock"). The Company received approximately
$726 million in cash proceeds from the $750 million Equity Units, net of underwriting costs and commissions, before offering expenses, and issued 750,000
shares of Series C Preferred Stock, recording $750.0 million in preferred stock. 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. On and after May 15, 2020, the Series C 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 June 22, 2020, the Company may elect to
redeem for cash, all or any portion of the outstanding shares of the Series C 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 C Preferred Stock for redemption, holders may convert their shares immediately
preceding the redemption date. Upon settlement of the 2020 Purchase Contracts, the Company will receive additional cash proceeds of $750 million. The
Company will pay the holders of the 2020 Purchase Contracts quarterly contract adjustment payments, which commenced in August 2017. As of December
29, 2018, the present value of the contract adjustment payments was $58.8 million.

In January 2017, the Company amended its existing $2.0 billion commercial paper program to increase the maximum amount of notes authorized to be
issued to $3.0 billion and to include Euro denominated borrowings in addition to U.S. Dollars. As of December 29, 2018, the Company had $373.0 million of
borrowings outstanding against the Company's $3.0 billion commercial paper program, of which approximately $228.9 million in Euro denominated
commercial paper was designated as a Net Investment Hedge as described in more detailed in Note I, Financial Instruments. At December 30, 2017, the
Company had no borrowings outstanding against the Company’s $3.0 billion commercial paper program.

In September 2018, the Company amended and restated its existing five-year $1.75 billion committed credit facility with the concurrent execution of a new
five-year $2.0 billion committed credit facility (the "5 Year Credit Agreement"). Borrowings under the Credit Agreement may be made in U.S. Dollars, Euros
or Pounds Sterling. A sub-limit of $653.3 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 12, 2023 or upon
termination. The 5 Year Credit Agreement is designated to be a liquidity back-stop for the Company's $3.0 billion U.S. Dollar and Euro commercial paper
program. As of December 29, 2018 and December 30, 2017, the Company had not drawn on its five-year committed credit facility.

In September 2018, the Company terminated its previous 364-day $1.25 billion committed credit facility and concurrently executed a new 364-Day $1.0
billion committed credit facility (the "364 Day Credit Agreement"). Borrowings under the 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 364 Day
Credit Agreement. The Company must repay all advances under the 364 Day Credit Agreement by the earlier of September 11, 2019 or upon termination. The

35
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 a liquidity back-stop for the Company's $3.0 billion U.S. Dollar and Euro commercial paper program. As of December 29, 2018,
the Company had not drawn on its 364-Day committed credit facility.

In addition, the Company has other short-term lines of credit that are primarily uncommitted, with numerous banks, aggregating $455.4 million, of which
$357.8 million was available at December 29, 2018. Short-term arrangements are reviewed annually for renewal.

At December 29, 2018, the aggregate amount of committed and uncommitted lines of credit, long-term and short-term, was $3.5 billion. At December 29,
2018, $376.1 million was recorded as short-term borrowings relating to commercial paper and amounts outstanding against uncommitted lines. In addition,
$97.6 million of the short-term credit lines was utilized primarily pertaining to outstanding letters of credit for which there are no required or reported debt
balances. The weighted-average interest rates on U.S. dollar denominated short-term borrowings for the years ended December 29, 2018 and December 30,
2017 were 2.3% and 1.2%, respectively. The weighted-average interest rate on Euro denominated short-term borrowings for the years ended December 29,
2018 and December 30, 2017 was negative 0.3%.

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 June 2018, the
Company amended the settlement date to April 2021, or earlier at the Company's option.

In December 2013, the Company issued $400.0 million 5.75% fixed-to-floating rate junior subordinated debentures maturing December 15, 2053 (“2053
Junior Subordinated Debentures”) that bore interest at a fixed rate of 5.75% per annum, up to, but excluding December 15, 2018. From and including
December 15, 2018, the 2053 Junior Subordinated Debentures will bear interest at an annual rate equal to three-month LIBOR plus 4.304%. The debentures
subordination and long tenor provides significant credit protection measures for senior creditors and as a result, the debentures were awarded a 50% equity
credit by S&P and Fitch, and 25% equity credit by Moody's. The net proceeds from the offering were primarily used to repay commercial paper borrowings.
On February 25, 2019, the Company redeemed all of the outstanding 2053 Junior Subordinated Debentures for $405.7 million, which represented 100% of
the principal amount plus accrued and unpaid interest to the redemption date.

Refer to Note H, Long-Term Debt and Financing Arrangements, and Note J, Capital Stock, for further discussion regarding the Company's debt and equity
arrangements.

Contractual Obligations: The following table summarizes the Company’s significant contractual obligations and commitments that impact its liquidity:

Payments Due by Period

(Millions of Dollars) Total 2019 2020-2021 2022-2023 Thereafter
Long-term debt (a) $ 3,862 $ 403 $ 401 $ 758 $ 2,300
Interest payments on long-term debt (b) 3,065 161 310 258 2,336
Short-term borrowings 373 373 — — —
Operating leases 533 135 188 98 112
Inventory purchase commitments (c) 466 466 — — —
Deferred compensation 27 3 5 1 18
Marketing obligations 52 32 16 4 —
Derivatives (d) 8 — — 8 —
Forward stock purchase contract (e) 350 — 350 — —
Pension funding obligations (f) 44 44 — — —
Contract adjustment fees (g) 60 40 20 — —
Purchase price (h) 250 — 250 — —
U.S. income tax (i) 366 — 62 102 202
Total contractual cash obligations $ 9,456 $ 1,657 $ 1,602 $ 1,229 $ 4,968

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 (a) Future payments on long-term debt encompass all payments related to aggregate debt maturities, excluding certain fair value adjustments included in
long-term debt. As previously discussed, the Company redeemed all of the outstanding 2053 Junior Subordinated Debentures on February 25, 2019.
Accordingly, the payment related to the redemption has been reflected in 2019 in the table above. Refer to Note H, Long-Term Debt and Financing
Arrangements, for further discussion.
(b) Future interest payments on long-term debt reflect the applicable fixed interest rate or variable rate for floating rate debt in effect at December 29,
2018. In addition, interest payments related to the 2053 Junior Subordinated Debentures have been adjusted accordingly as a result of the February
25, 2019 redemption discussed in (a) above.
(c) Inventory purchase commitments primarily consist of open purchase orders to purchase raw materials, components, and sourced products.
(d) Future cash flows on derivative instruments reflect the fair value and accrued interest as of December 29, 2018. The ultimate cash flows on these
instruments will differ, perhaps significantly, based on applicable market interest and foreign currency rates at their maturity.
(e) In March 2015, the Company entered into a forward share purchase contract with a financial institution counterparty which obligates the Company to
pay $350 million, plus an additional amount related to the forward component of the contract. In June 2018, the Company amended the settlement
date to April 2021, or earlier at the Company's option. See Note J, Capital Stock, for further discussion.
(f) This amount principally represents contributions either required by regulations or laws or, with respect to unfunded plans, necessary to fund current
benefits. The Company has not presented estimated pension and post-retirement funding beyond 2019 as funding can vary significantly from year to
year based upon changes in the fair value of the plan assets, actuarial assumptions, and curtailment/settlement actions.
(g) These amounts represent future contract adjustment payments to holders of the Company's 2020 Purchase Contracts. See Note J, Capital Stock, for
further discussion.
(h) The Company acquired the Craftsman® brand from Sears Holdings in March 2017. As part of the purchase price, the Company is obligated to pay
$250 million in March 2020. See Note E, Acquisitions, for further discussion.
(i) Income tax liability for the one-time deemed repatriation tax on unremitted foreign earnings and profits. See Note Q, Income Taxes, for further
discussion.

To the extent the Company can reliably determine when payments will occur, the related amounts will be included in the table above. However, due to the
high degree of uncertainty regarding the timing of potential future cash flows associated with the contingent consideration liability related to the Craftsman
acquisition and the unrecognized tax liabilities of $169 million and $460 million, respectively, at December 29, 2018, the Company is unable to make a
reliable estimate of when (if at all) these amounts may be paid. Refer to Note E, Acquisitions, Note M, Fair Value Measurements, and Note Q, Income Taxes,
for further discussion.

Payments of the above contractual obligations (with the exception of payments related to debt principal, the forward stock purchase contract, contract
adjustment fees, the March 2020 purchase price, and tax obligations) will typically generate a cash tax benefit such that the net cash outflow will be lower
than the gross amounts summarized above.

Other Significant Commercial Commitments:

Amount of Commitment Expirations Per Period

(Millions of Dollars) Total 2019 2020-2021 2022-2023 Thereafter
U.S. lines of credit $ 3,000 $ 1,000 $ — $ 2,000 $ —

Short-term borrowings, long-term debt and lines of credit are explained in detail within Note H, Long-Term Debt and Financing Arrangements.

MARKET RISK
Market risk is the potential economic loss that may result from adverse changes in the fair value of financial instruments, currencies, commodities and other
items traded in global markets. The Company is exposed to market risk from changes in foreign currency exchange rates, interest rates, stock prices, bond
prices and commodity prices, amongst others.

Exposure to foreign currency risk results because the Company, through its global businesses, enters into transactions and makes investments denominated in
multiple currencies. The Company’s predominant currency exposures are related to the Euro, Canadian Dollar, British Pound, Australian Dollar, Brazilian
Real, Argentine Peso, Chinese Renminbi (“RMB”) and the Taiwan Dollar. Certain cross-currency trade flows arising from both trade and affiliate sales and
purchases are consolidated and netted prior to obtaining risk protection through the use of various derivative financial instruments which may include:
purchased basket options, purchased options, collars, cross-currency swaps and currency forwards. The Company is thus able

37
to capitalize on its global positioning by taking advantage of naturally offsetting exposures and portfolio efficiencies to reduce the cost of purchasing
derivative protection. At times, the Company also enters into foreign exchange derivative contracts to reduce the earnings and cash flow impact of non-
functional currency denominated receivables and payables, primarily for affiliate transactions. Gains and losses from these hedging instruments offset the
gains or losses on the underlying net exposures. Management determines the nature and extent of currency hedging activities, and in certain cases, may elect
to allow certain currency exposures to remain un-hedged. The Company may also enter into cross-currency swaps and forward contracts to hedge the net
investments in certain subsidiaries and better match the cash flows of operations to debt service requirements. Management estimates the foreign currency
impact from its derivative financial instruments outstanding at the end of 2018 would have been an incremental pre-tax loss of approximately $52 million
based on a hypothetical 10% adverse movement in all net derivative currency positions. The Company follows risk management policies in executing
derivative financial instrument transactions, and does not use such instruments for speculative purposes. The Company generally does not hedge the
translation of its non-U.S. dollar earnings in foreign subsidiaries, but may choose to do so in certain instances in future periods.

As mentioned above, the Company routinely has cross-border trade and affiliate flows that cause an impact on earnings from foreign exchange rate
movements. The Company is also exposed to currency fluctuation volatility from the translation of foreign earnings into U.S. dollars and the economic
impact of foreign currency volatility on monetary assets held in foreign currencies. It is more difficult to quantify the transactional effects from currency
fluctuations than the translational effects. Aside from the use of derivative instruments, which may be used to mitigate some of the exposure, transactional
effects can potentially be influenced by actions the Company may take. For example, if an exposure occurs from a European entity sourcing product from a
U.S. supplier it may be possible to change to a European supplier. Management estimates the combined translational and transactional impact, on pre-tax
earnings, of a 10% overall movement in exchange rates is approximately $174 million, or approximately $0.96 per diluted share. In 2018, translational and
transactional foreign currency fluctuations negatively impacted pre-tax earnings by approximately $100.0 million and diluted earnings per share by
approximately $0.55.

The Company’s exposure to interest rate risk results from its outstanding debt and derivative obligations, short-term investments, and derivative financial
instruments employed in the management of its debt portfolio. The debt portfolio including both trade and affiliate debt, is managed to achieve capital
structure targets and reduce the overall cost of borrowing by using a combination of fixed and floating rate debt as well as interest rate swaps, and cross-
currency swaps.

The Company’s primary exposure to interest rate risk comes from its floating rate debt in the U.S. which is based on LIBOR rates. At December 29, 2018, the
impact of a hypothetical 10% increase in the interest rates associated with the Company’s floating rate debt instruments would have an immaterial effect on
the Company’s financial position and results of operations.

The Company has exposure to commodity prices in many businesses, particularly brass, nickel, resin, aluminum, copper, zinc, steel, and energy used in the
production of finished goods. Generally, commodity price exposures are not hedged with derivative financial instruments, but instead are actively managed
through customer product and service pricing actions, procurement-driven cost reduction initiatives and other productivity improvement projects.

Fluctuations in the fair value of the Company’s common stock affect domestic retirement plan expense as discussed below in the Employee Stock Ownership
Plan ("ESOP") section of MD&A. Additionally, the Company has $85 million of liabilities as of December 29, 2018 pertaining to unfunded defined
contribution plans for certain U.S. employees for which there is mark-to-market exposure.

The assets held by the Company’s defined benefit plans are exposed to fluctuations in the market value of securities, primarily global stocks and fixed-
income securities. The funding obligations for these plans would increase in the event of adverse changes in the plan asset values, although such funding
would occur over a period of many years. In 2018, 2017, and 2016, investment returns on pension plan assets resulted in a $72 million decrease, a $217
million increase, and a $260 million increase, respectively. The Company expects funding obligations on its defined benefit plans to be approximately $44
million in 2019. The Company employs diversified asset allocations to help mitigate this risk. Management has worked to minimize this exposure by
freezing and terminating defined benefit plans where appropriate.

The Company has access to financial resources and borrowing capabilities around the world. There are no instruments within the debt structure that would
accelerate payment requirements due to a change in credit rating.

The Company’s existing credit facilities and sources of liquidity, including operating cash flows, are considered more than adequate to conduct business as
normal. Accordingly, based on present conditions and past history, management believes it is unlikely that operations will be materially affected by any
potential deterioration of the general credit markets that may occur. The Company believes that its strong financial position, operating cash flows, committed
long-term credit facilities and borrowing capacity, and ability to access equity markets, provide the financial flexibility necessary to continue its record of

38
annual dividend payments, to invest in the routine needs of its businesses, to make strategic acquisitions and to fund other initiatives encompassed by its
growth strategy and maintain its strong investment grade credit ratings.

OTHER MATTERS

Employee Stock Ownership Plan ("ESOP") — As detailed in Note L, Employee Benefit Plans, the Company has an ESOP under which the ongoing U.S. Core
and 401(k) defined contribution plans are funded. Overall ESOP expense is affected by the market value of the Company’s stock on the monthly dates when
shares are released, among other factors. The Company’s net ESOP activity resulted in expense of $0.4 million in 2018, income of $1.3 million in 2017, and
expense of $3.1 million in 2016. ESOP expense could increase in the future if the market value of the Company’s common stock declines. In addition, ESOP
expense will increase once all remaining unallocated shares are released, which could occur as early as 2019.

CRITICAL ACCOUNTING ESTIMATES — Preparation of the Company’s Consolidated Financial Statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Significant accounting policies used in the preparation of the
Consolidated Financial Statements are described in Note A, Significant Accounting Policies. Management believes the most complex and sensitive
judgments, because of their significance to the Consolidated Financial Statements, result primarily from the need to make estimates about the effects of
matters with inherent uncertainty. The most significant areas involving management estimates are described below. Actual results in these areas could differ
from management’s estimates.

ALLOWANCE FOR DOUBTFUL ACCOUNTS — The Company’s estimate for its allowance for doubtful accounts related to trade receivables is based on two
methods. The amounts calculated from each of these methods are combined to determine the total amount reserved. First, a specific reserve is established for
individual accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, management uses its
judgment, based on the surrounding facts and circumstances, to record a specific reserve for those customers against amounts due to reduce the receivable to
the amount expected to be collected. These specific reserves are reevaluated and adjusted as additional information is received. Second, a reserve is
determined for all customers based on a range of percentages applied to receivable aging categories. These percentages are based on historical collection and
write-off experience.

If circumstances change, for example, due to the occurrence of higher-than-expected defaults or a significant adverse change in a major customer’s ability to
meet its financial obligation to the Company, estimates of the recoverability of receivable amounts due could be reduced.

INVENTORIES — Inventories in the U.S. are primarily valued at the lower of Last-In First-Out (“LIFO”) cost or market, while non-U.S. inventories are
primarily valued at the lower of First-In, First-Out (“FIFO”) cost and net realizable value. The calculation of LIFO reserves, and therefore the net inventory
valuation, is affected by inflation and deflation in inventory components. The Company continually reviews the carrying value of discontinued product lines
and stock-keeping-units (“SKUs”) to determine that these items are properly valued. The Company also continually evaluates the composition of its
inventory and identifies obsolete and/or slow-moving inventories. Inventory items identified as obsolete and/or slow-moving are evaluated to determine if
write-downs are required. The Company assesses the ability to dispose of these inventories at a price greater than cost. If it is determined that cost is less than
market or net realizable value, as applicable, cost is used for inventory valuation. If market value or net realizable value, as applicable, is less than cost, the
Company writes down the related inventory to that value.

GOODWILL AND INTANGIBLE ASSETS — The Company acquires businesses in purchase transactions that result in the recognition of goodwill and
intangible assets. The determination of the value of intangible assets requires management to make estimates and assumptions. In accordance with ASC 350-
20, Goodwill, acquired goodwill and indefinite-lived intangible assets are not amortized but are subject to impairment testing at least annually or when an
event occurs or circumstances change that indicate it is more likely than not an impairment exists. Definite-lived intangible assets are amortized and are
tested for impairment when an event occurs or circumstances change that indicate it is more likely than not that an impairment exists. Goodwill represents
costs in excess of fair values assigned to the underlying net assets of acquired businesses. At December 29, 2018, the Company reported $8.957 billion of
goodwill, $2.199 billion of indefinite-lived trade names and $1.286 billion of net definite-lived intangibles.

Management tests goodwill for impairment at the reporting unit level. A reporting unit is an operating segment as defined in ASC 280, Segment Reporting, or
one level below an operating segment (component level) as determined by the availability of discrete financial information that is regularly reviewed by
operating segment management or an aggregate of component levels of an operating segment having similar economic characteristics. If the carrying value of
a reporting unit (including the value of goodwill) is greater than its estimated fair value, an impairment may exist. An impairment charge would be recorded
to the extent that the recorded value of goodwill exceeded the implied fair value.

39
As required by the Company’s policy, goodwill was tested for impairment in the third quarter of 2018. In accordance with Accounting Standards Update
("ASU") 2011-08, Intangibles - Goodwill and Other (Topic 350): Testing Goodwill for Impairment, companies are permitted to first assess qualitative factors
to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is
necessary to perform the two-step quantitative goodwill impairment test. Under the two-step quantitative goodwill impairment test, the fair value of the
reporting unit is compared to its respective carrying amount including goodwill. If the fair value exceeds the carrying amount, then no impairment exists. If
the carrying amount exceeds the fair value, further analysis is performed to assess impairment. Such tests are completed separately with respect to the
goodwill of each of the Company’s reporting units. Accordingly, for its annual impairment testing performed in the third quarter of 2018, the Company
applied the qualitative assessment for two of its reporting units, while performing the quantitative test for three of its reporting units. Based on the results of
this testing, the Company determined that the fair values of each of its reporting units exceeded their respective carrying amounts.

In performing the qualitative assessments, the Company identified and considered the significance of relevant key factors, events, and circumstances that
could affect the fair value of each reporting unit. These factors include external factors such as macroeconomic, industry, and market conditions, as well as
entity-specific factors, such as actual and planned financial performance. The Company also assessed changes in each reporting unit's fair value and carrying
value since the most recent date a fair value measurement was performed. As a result of the qualitative assessments performed, the Company concluded that it
is more likely than not that the fair value of each reporting unit exceeded its respective carrying value and therefore, no additional quantitative impairment
testing was performed.

With respect to the quantitative tests, the Company assessed the fair values of the three reporting units based on a discounted cash flow valuation model. The
key assumptions applied to the cash flow projections were discount rates, which ranged from 8.0% to 9.5%, near-term revenue growth rates over the next five
years, which represented cumulative annual growth rates ranging from approximately 5% to 8%, and perpetual growth rates of 3%. These assumptions
contemplated business, market and overall economic conditions. Based on the results of this testing, the Company determined that the fair values of each of
the three reporting units exceeded their respective carrying amounts. Furthermore, management performed sensitivity analyses on the estimated fair values
from the discounted cash flow valuation models utilizing more conservative assumptions that reflect reasonably likely future changes in the discount rate
and perpetual growth rate. The discount rate was increased by 100 basis points with no impairment indicated. The perpetual growth rate was decreased by
150 basis points with no impairment indicated.

The Company also tested its indefinite-lived trade names for impairment during the third quarter of 2018 utilizing a discounted cash flow model. The key
assumptions used included discount rates, royalty rates, and perpetual growth rates applied to the projected sales. Based on these quantitative impairment
tests, the Company determined that the fair values of the indefinite-lived trade names exceeded their respective carrying amounts.

In the event that future operating results of any of the Company's reporting units or indefinite-lived trade names do not meet current expectations,
management, based upon conditions at the time, would consider taking restructuring or other strategic actions, as necessary, to maximize revenue growth and
profitability. A thorough analysis of all the facts and circumstances existing at that time would need to be performed to determine if recording an impairment
loss would be appropriate.

DEFINED BENEFIT OBLIGATIONS — The valuation of pension and other postretirement benefits costs and obligations is dependent on various
assumptions. These assumptions, which are updated annually, include discount rates, expected return on plan assets, future salary increase rates, and health
care cost trend rates. The Company considers current market conditions, including interest rates, to establish these assumptions. Discount rates are developed
considering the yields available on high-quality fixed income investments with maturities corresponding to the duration of the related benefit obligations.
The Company’s weighted-average discount rates used to determine benefit obligations at December 29, 2018 for the United States and international pension
plans were 4.20% and 2.62%, respectively. The Company’s weighted-average discount rates used to determine benefit obligations at December 30, 2017 for
the United States and international pension plans were 3.53% and 2.24%, respectively. As discussed further in Note L, Employee Benefit Plans, the Company
develops the expected return on plan assets considering various factors, which include its targeted asset allocation percentages, historic returns, and expected
future returns. The Company’s expected rate of return assumptions for the United States and international pension plans were 6.25% and 4.37%, respectively,
at December 29, 2018. The Company will use a 5.51% weighted-average expected rate of return assumption to determine the 2019 net periodic benefit cost.
A 25 basis point reduction in the expected rate of return assumption would increase 2019 net periodic benefit cost by approximately $5 million on a pre-tax
basis.

The Company believes that the assumptions used are appropriate; however, differences in actual experience or changes in the assumptions may materially
affect the Company’s financial position or results of operations. To the extent that actual (newly measured) results differ from the actuarial assumptions, the
difference is recognized in accumulated other comprehensive loss, and, if in excess of a specified corridor, amortized over future periods. The expected return
on plan assets is determined using

40
the expected rate of return and the fair value of plan assets. Accordingly, market fluctuations in the fair value of plan assets can affect the net periodic benefit
cost in the following year. The projected benefit obligation for defined benefit plans exceeded the fair value of plan assets by $616 million at December 29,
2018. A 25 basis point reduction in the discount rate would have increased the projected benefit obligation by approximately $81 million at December 29,
2018. The primary Black & Decker U.S. pension and post employment benefit plans were curtailed in late 2010, as well as the only material Black & Decker
international plan, and in their place the Company implemented defined contribution benefit plans. The vast majority of the projected benefit obligation
pertains to plans that have been frozen; the remaining defined benefit plans that are not frozen are predominantly small domestic union plans and those that
are statutorily mandated in certain international jurisdictions. The Company recognized $4 million of defined benefit plan income in 2018, which may
fluctuate in future years depending upon various factors including future discount rates and actual returns on plan assets.

ENVIRONMENTAL — The Company incurs costs related to environmental issues as a result of various laws and regulations governing current operations as
well as the remediation of previously contaminated 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. 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 December 29, 2018, the Company had reserves of $246.6 million for remediation activities associated with Company-owned properties as well as for
Superfund sites, for losses that are probable and estimable. The range of environmental remediation costs that is reasonably possible is $214.0 million to
$344.3 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 this policy.

INCOME TAXES — The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes, which
requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial
statements. Deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities
using the enacted tax rates in effect for the year in which the differences are expected to reverse. Any changes in tax rates on deferred tax assets and liabilities
are recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent that it is more likely than not that these assets will be realized. In making this determination,
management considers all available positive and negative evidence, including future reversals of existing temporary differences, estimates of future taxable
income, tax-planning strategies, and the realizability of net operating loss carryforwards. In the event that it is determined that an asset is not more likely that
not to be realized, a valuation allowance is recorded against the asset. Valuation allowances related to deferred tax assets can be impacted by changes to tax
laws, changes to statutory tax rates and future taxable income levels. In the event the Company were to determine that it would not be able to realize all or a
portion of its deferred tax assets in the future, the unrealizable amount would be charged to earnings in the period in which that determination is made.
Conversely, if the Company were to determine that it would be able to realize deferred tax assets in the future in excess of the net carrying amounts, it would
decrease the recorded valuation allowance through a favorable adjustment to earnings in the period that the determination was made.

The Act subjects a U.S. shareholder to current tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. The Financial
Accounting Standards Board ("FASB") Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an
accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax
expense related to GILTI in the year the tax is incurred. The Company has elected to recognize the tax on GILTI as a period expense in the period the tax is
incurred.

The Company records uncertain tax positions in accordance with ASC 740, which requires a two-step process. First, management determines whether it is
more likely than not that a tax position will be sustained based on the technical merits of the position and second, for those tax positions that meet the more
likely than not threshold, management recognizes the largest amount of the tax benefit that is greater than 50 percent likely to be realized upon ultimate
settlement with the related taxing authority. The Company maintains an accounting policy of recording interest and penalties on uncertain tax positions as a
component of Income taxes in the Consolidated Statements of Operations.

The Company is subject to income tax in a number of locations, including many state and foreign jurisdictions. Significant judgment is required when
calculating the worldwide provision for income taxes. Many factors are considered when evaluating

41
and estimating the Company's tax positions and tax benefits, 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. These changes may be the result of settlements of ongoing audits or final decisions in
transfer pricing matters. The Company periodically assesses its liabilities and contingencies for all tax years still subject to audit based on the most current
available information, which involves inherent uncertainty.

Additional information regarding income taxes is available in Note Q, Income Taxes.

RISK INSURANCE — To manage its insurance costs efficiently, the Company self insures for certain U.S. business exposures and generally has low
deductible plans internationally. For domestic workers’ compensation, automobile and product liability (liability for alleged injuries associated with the
Company’s products), the Company generally purchases insurance coverage only for severe losses that are unlikely, and these lines of insurance involve the
most significant accounting estimates. While different self insured retentions, in the form of deductibles and self insurance through its captive insurance
company, exist for each of these lines of insurance, the maximum self insured retention is set at no more than $5 million per occurrence. The process of
establishing risk insurance reserves includes consideration of actuarial valuations that reflect the Company’s specific loss history, actual claims reported, and
industry trends among statistical and other factors to estimate the range of reserves required. Risk insurance reserves are comprised of specific reserves for
individual claims and additional amounts expected for development of these claims, as well as for incurred but not yet reported claims discounted to present
value. The cash outflows related to risk insurance claims are expected to occur over a period of approximately 14 years. The Company believes the liabilities
recorded for these U.S. risk insurance reserves, totaling $86 million and $87 million as of December 29, 2018, and December 30, 2017, respectively, are
adequate. Due to judgments inherent in the reserve estimation process, it is possible the ultimate costs will differ from this estimate.

WARRANTY — The Company provides product and service warranties which vary across its businesses. The types of warranties offered generally range from
one year to limited lifetime, and certain branded products recently acquired carry a lifetime warranty. 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 claim experience forms the basis for warranty obligations recognized. Adjustments are recorded to the warranty liability as new information becomes
available. The Company believes the $102 million reserve for expected warranty claims as of December 29, 2018 is adequate, but due to judgments inherent
in the reserve estimation process, including forecasting future product reliability levels and costs of repair as well as the estimated age of certain products
submitted for claims, the ultimate claim costs may differ from the recorded warranty liability. The Company also establishes a reserve for product recalls on a
product-specific basis during the period in which the circumstances giving rise to the recall become known and estimable for both company-initiated actions
and those required by regulatory bodies.

OFF-BALANCE SHEET ARRANGEMENT

SYNTHETIC LEASES — The Company is a party to synthetic leasing programs for certain locations, including one of its major distribution centers and two
of its office buildings. The programs qualify as operating leases for accounting purposes, where only the monthly lease expense is recorded in the
Consolidated Statements of Operations and the liability and value of the underlying assets are off-balance sheet.

These lease programs are utilized primarily to reduce overall cost and to retain flexibility. The cash outflows for lease payments approximate the $2 million
of rent expense recognized in fiscal 2018. As of December 29, 2018, the estimated fair value of the underlying assets and lease guarantees of the residual
values for these properties were $117 million and $100 million, respectively.

42
 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 other, 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 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, and trade controls, including section 301 tariffs and
section 232 steel and aluminum tariffs; (iv) the economic 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 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, sanctions or natural disasters; (xii) the continued consolidation of customers,
particularly in consumer channels; (xiii) managing franchisee relationships; (xiv) the impact of poor weather conditions; (xv) maintaining or improving
production rates in the Company's manufacturing facilities, responding to significant changes in product demand and fulfilling demand for new and existing
products; (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) 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 environmental liabilities;
(xxiii) work stoppages or other labor disruptions; and (xxiv) changes in accounting estimates.

Additional factors that could cause actual results to differ materially from forward-looking statements are set forth in this Annual Report on Form 10-
K, including under the heading “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the
Consolidated Financial Statements and the related Notes.

Forward-looking statements in this Annual Report on Form 10-K 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.

43
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company incorporates by reference the material captioned “Market Risk” in Item 7 and in Note I, Financial Instruments, of the Notes to Consolidated
Financial Statements in Item 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Item 15 for an index to Financial Statements and Financial Statement Schedule. Such Financial Statements and Financial Statement Schedule are
incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

44
ITEM 9A. CONTROLS AND PROCEDURES
The management of Stanley Black & Decker, Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial
reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of
America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

In April 2018, the Company acquired the industrial business of Nelson Fastener Systems ("Nelson") for approximately $430 million. Since Stanley Black &
Decker, Inc. has not yet fully incorporated the internal controls and procedures of Nelson into Stanley Black & Decker, Inc.'s internal control over financial
reporting, management excluded this business from its assessment of the effectiveness of internal control over financial reporting as of December 29, 2018.
Nelson accounted for 3% of Stanley Black & Decker, Inc.'s total assets as of December 29, 2018 and 1% of Stanley Black & Decker, Inc.'s net sales for the
year then ended.

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 29, 2018. In making its assessment,
management has utilized the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal Control —
Integrated Framework (2013 Framework). Management concluded that based on its assessment, the Company’s internal control over financial reporting was
effective as of December 29, 2018. Ernst & Young LLP, the auditor of the financial statements included in this annual report, has issued an attestation report
on the registrant’s internal control over financial reporting, a copy of which appears on page 57.

Under the supervision and with the participation of management, including the Company’s President and Chief Executive Officer and its Executive Vice
President and Chief Financial Officer, the Company has, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined under Rule 13a-15(e) of the Exchange
Act). Based upon that evaluation, the Company’s President and Chief Executive Officer and its Executive Vice President and Chief Financial Officer have
concluded that, as of December 29, 2018, the Company’s disclosure controls and procedures are effective. There has been no change in the Company’s
internal control over financial reporting that occurred during the fiscal year ended December 29, 2018 that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting aside from the previously mentioned acquisition of Nelson. As part of the ongoing
integration activities, the Company will complete an assessment of existing controls and incorporate its controls and procedures into Nelson.

ITEM 9B. OTHER INFORMATION

None.

45
PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE OF THE REGISTRANT
The information required by this Item, except for certain information with respect to the Company’s Code of Ethics, the identification of the executive
officers of the Company and any material changes to the procedures by which security holders may recommend nominees to the Company’s Board of
Directors, as set forth below, is incorporated herein by reference to the information set forth in the section of the Company’s definitive proxy statement
(which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the close of the Company’s fiscal year) under the headings
“Information Concerning Nominees for Election as Directors,” “Board of Directors,” and “Section 16(a) Beneficial Ownership Reporting Compliance.”

In addition to Business Conduct Guidelines that apply to all directors and employees of the Company, the Company has adopted a Code of Ethics that
applies to the Company’s Chief Executive Officer and all senior financial officers, including the Chief Financial Officer and principal accounting officer. A
copy of the Company’s Code of Ethics is available on the Company’s website at www.stanleyblackanddecker.com.

46
The following is a list of the executive officers of the Company as of February 26, 2019:
Date Elected to
Name and Age Office Office
James M. Loree (60) President & Chief Executive Officer since August 2016. President & Chief Operating 7/19/1999
Officer (2013); Executive Vice President and Chief Operating Officer (2009); Executive
Vice President Finance and Chief Financial Officer (1999).

Donald Allan, Jr. (54) Executive Vice President & Chief Financial Officer since October 2016. Senior Vice 10/24/2006
President & Chief Financial Officer (2010); Vice President & Chief Financial Officer
(2009); Vice President & Corporate Controller (2002); Corporate Controller (2000);
Assistant Controller (1999).

Jeffery D. Ansell (51) Executive Vice President & President, Tools & Storage since October 2016. Senior Vice 2/22/2006
President and Group Executive, Global Tools & Storage (2015); Senior Vice President and
Group Executive, Construction and DIY (2010); Vice President & President, Stanley
Consumer Tools Group (2006); President - Consumer Tools and Storage (2004); President
of Industrial Tools & Storage (2002); Vice President - Global Consumer Tools Marketing
(2001); Vice President Consumer Sales America (1999).

Janet M. Link (49) Senior Vice President, General Counsel and Secretary since July 2017. Executive Vice 7/19/2017
President, General Counsel, JC Penney Company, Inc. (2015); Vice President, Deputy
General Counsel, JC Penney Company, Inc. (2014); Vice President, Deputy General
Counsel, Clear Channel Companies (2013).

Jaime A. Ramirez (51) Senior Vice President & President, Global Emerging Markets since October 2012. 3/12/2010
President, Construction & DIY, Latin America (2010); Vice President and General
Manager - Latin America, Power Tools & Accessories, The Black & Decker Corporation
(2008); Vice President and General Manager - Andean Region The Black & Decker
Corporation (2007).

Joseph R. Voelker (63) Senior Vice President, Chief Human Resources Officer since April 2013. VP Human 4/1/2013
Resources (2009); VP Human Resources - ITG/Corporate Staff (2006); VP Human
Resources - Tools Group/Operations (2004); HR Director, Tools Group (2003); HR
Director, Operations (1999).

John H. Wyatt (60) President, Stanley Engineered Fastening since January 2016. President, Sales & Marketing 3/12/2010
- Global Tools & Storage (2015); President, Construction & DIY, Europe and ANZ (2012);
President, Construction & DIY, EMEA (2010); President-Europe, Middle East, and Africa,
Power Tools and Accessories, The Black & Decker Corporation (2008); Vice President-
Consumer Products (Europe, Middle East and Africa), The Black & Decker Corporation
(2006).

47
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference to the information set forth under the sections entitled "Compensation Discussion &
Analysis" and “2018 Executive Compensation” of the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A under the
Exchange Act within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by Item 403 of Regulation S-K is incorporated herein by reference to the information set forth under the sections entitled "Security
Ownership of Certain Beneficial Owners," "Security Ownership of Directors and Officers," "Compensation Discussion & Analysis" and “2018 Executive
Compensation” of the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A under the Exchange Act within 120 days after
the end of the fiscal year covered by this Annual Report on Form 10-K.

EQUITY COMPENSATION PLAN INFORMATION

Compensation plans under which the Company’s equity securities are authorized for issuance at December 29, 2018 follow:

(A) (B) (C)

Number of securities
remaining available for
Number of securities to be Weighted- future issuance under equity
issued upon exercise of average exercise compensation plans
outstanding options and stock price of outstanding (excluding securities
Plan Category awards options reflected in column (A))
Equity compensation plans approved by security holders 9,141,523 (1) $ 107.36 (2) 15,884,117 (3)

Equity compensation plans not approved by security

holders (4) — — —
Total 9,141,523 $ 107.36 15,884,117

(1) Consists of 7,352,263 shares underlying outstanding stock options (whether vested or unvested) with a weighted-average exercise price of $107.36
and a weighted-average term of 6.35 years; 1,702,142 shares underlying time-vesting restricted stock units that have not yet vested and the maximum
number of shares that will be issued pursuant to outstanding long-term performance awards if all established goals are met; and 87,118 of shares
earned but related to which participants elected deferral of delivery. All stock-based compensation plans are discussed in Note J, Capital Stock, of the
Notes to Consolidated Financial Statements in Item 8.
(2) There is no cost to the recipient for shares issued pursuant to time-vesting restricted stock units or long-term performance awards. Because there is no
strike price applicable to these stock awards they are excluded from the weighted-average exercise price which pertains solely to outstanding stock
options.
(3) Consists of 1,606,224 of shares available for purchase under the employee stock purchase plan ("ESPP") at the election of employees and 14,277,893
securities available for future grants by the Board of Directors under stock-based compensation plans. On January 22, 2018, the Board of Directors
adopted the 2018 Omnibus Award Plan (the "2018 Plan") and authorized the issuance of 16,750,000 shares of the Company's common stock in
connection with the awards pursuant to the 2018 Plan. No further awards will be issued under the Company's 2013 Long-Term Incentive Plan.
(4) U.S. employees are eligible to contribute from 1% to 25% of their salary to a qualified tax deferred savings plan as described in the Employee Stock
Ownership Plan ("ESOP") section of Note L, Employee Benefit Plans, of the Notes to the Consolidated Financial Statements in Item 8. The Company
contributes an amount equal to one half of the employee contribution up to the first 7% of salary. There is a non-qualified tax deferred savings plan
for highly compensated salaried employees which mirrors the qualified plan provisions, but was not specifically approved by security holders.
Eligible highly compensated salaried U.S. employees are eligible to contribute from 1% to 50% of their salary to the non-qualified tax deferred
savings plan. The same matching arrangement was provided for highly compensated salaried employees in the non-qualified plan, to the extent the
match was not fully met in the qualified plan, except that the arrangement for these employees is outside of the ESOP, and is not funded in advance of
distributions. Effective January 1, 2019, the Company, at its discretion, will determine whether matching and core contributions will be made for the
non-qualified tax deferred savings plan for a particular year. If the Company decides to make matching contributions for a year, it will make
contributions, in an amount determined in its discretion, that may constitute part or all of or more than the matching contributions that would have
been made pursuant to the

48
provisions of the Stanley Black & Decker Supplemental Retirement Account Plan that were in effect prior to 2019. For both qualified and non-
qualified plans, the investment of the employee’s contribution and the Company’s contribution is controlled by the employee and may include an
election to invest in Company stock. Shares of the Company’s common stock may be issued at the time of a distribution from the qualified plan. The
number of securities remaining available for issuance under the plans at December 29, 2018 is not determinable, since the plans do not authorize a
maximum number of securities.

49
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

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

PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
(a) Index to documents filed as part of this report:
1. and 2. Financial Statements and Financial Statement Schedule.
The response to this portion of Item 15 is submitted as a separate section of this report beginning with an index thereto on page 51.
3. Exhibits
See Exhibit Index in this Form 10-K on page 116.
(b) See Exhibit Index in this Form 10-K on page 116.
(c) The response in this portion of Item 15 is submitted as a separate section of this Form 10-K with an index thereto beginning on page 51.

50
FORM 10-K
ITEM 15(a) (1) AND (2)
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

Schedule II — Valuation and Qualifying Accounts is included in Item 15 (page 54).

Management’s Report on Internal Control Over Financial Reporting (page 55).
Report of Independent Registered Public Accounting Firm — Financial Statement Opinion (page 56).
Report of Independent Registered Public Accounting Firm — Internal Control Opinion (page 57).
Consolidated Statements of Operations — fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016 (page 58).
Consolidated Statements of Comprehensive Income — fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016 (page 59).
Consolidated Balance Sheets — December 29, 2018 and December 30, 2017 (page 60).
Consolidated Statements of Cash Flows — fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016 (page 61).
Consolidated Statements of Changes in Shareowners’ Equity — fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016
(page 63).
Notes to Consolidated Financial Statements (page 64).
Selected Quarterly Financial Data (Unaudited) (page 115).
Consent of Independent Registered Public Accounting Firm (Exhibit 23).

All other schedules are omitted because either they are not applicable or the required information is shown in the financial statements or the notes thereto.

51
ITEM 16. FORM 10-K SUMMARY
Not applicable.

52
 SIGNATURES

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

STANLEY BLACK & DECKER, INC.

By: /s/ James M. Loree

James M. Loree, President and Chief Executive Officer

Date: February 26, 2019

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

Signature Title Date

/s/ James M. Loree President and Chief Executive Officer February 26, 2019
James M. Loree

/s/ Donald Allan, Jr. Executive Vice President and Chief Financial Officer February 26, 2019
Donald Allan, Jr.

/s/ Jocelyn S. Belisle Vice President and Chief Accounting Officer February 26, 2019
Jocelyn S. Belisle

* Director February 26, 2019

Andrea J. Ayers

* Director February 26, 2019

George W. Buckley

* Director February 26, 2019

Patrick D. Campbell

* Director February 26, 2019

Carlos M. Cardoso

* Director February 26, 2019

Robert B. Coutts

* Director February 26, 2019

Debra A. Crew

* Director February 26, 2019

Michael D. Hankin

* Director February 26, 2019

Marianne M. Parrs

* Director February 26, 2019

Robert L. Ryan

* Director February 26, 2019

James H. Scholefield

* Director February 26, 2019

Dmitri L. Stockton

*By: /s/ Janet M. Link

Janet M. Link
(As Attorney-in-Fact)

53
 Schedule II — Valuation and Qualifying Accounts
Stanley Black & Decker, Inc. and Subsidiaries
Fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016
(Millions of Dollars)

ADDITIONS
Charged To Charged
Beginning Costs And To Other (a) Ending
Balance Expenses Accounts (b) Deductions Balance
Allowance for Doubtful Accounts:
Year Ended 2018 $ 80.4 $ 28.0 $ 12.5 $ (18.9) $ 102.0
Year Ended 2017 $ 78.5 $ 16.3 $ 8.9 $ (23.3) $ 80.4
Year Ended 2016 $ 72.9 $ 23.2 $ 4.5 $ (22.1) $ 78.5
Tax Valuation Allowance:
Year Ended 2018 (c) $ 516.7 $ 146.2 $ (6.4) $ (29.8) $ 626.7
Year Ended 2017 $ 525.5 $ 262.4 $ 22.8 $ (294.0) $ 516.7
Year Ended 2016 $ 480.7 $ 74.5 $ 4.4 $ (34.1) $ 525.5

(a) With respect to the allowance for doubtful accounts, deductions represent amounts charged-off less recoveries of accounts previously charged-off.
(b) Amounts represent the impact of foreign currency translation, acquisitions and net transfers to/from other accounts.
(c) Refer to Note Q, Income Taxes, of the Notes to Consolidated Financial Statements in Item 8 for further discussion.

54
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Stanley Black & Decker, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. Internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America. Because of
its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

In April 2018, the Company acquired the industrial business of Nelson Fastener Systems ("Nelson") for approximately $430 million. Since Stanley Black &
Decker, Inc. has not yet fully incorporated the internal controls and procedures of Nelson into Stanley Black & Decker, Inc.'s internal control over financial
reporting, management excluded this business from its assessment of the effectiveness of internal control over financial reporting as of December 29, 2018.
Nelson accounted for 3% of Stanley Black & Decker, Inc.'s total assets as of December 29, 2018 and 1% of Stanley Black & Decker, Inc.'s net sales for the
year then ended.

Management has assessed the effectiveness of Stanley Black & Decker, Inc.’s internal control over financial reporting as of December 29, 2018. In making its
assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal
Control — Integrated Framework (2013 Framework). Management concluded that based on its assessment, Stanley Black & Decker, Inc.’s internal control
over financial reporting was effective as of December 29, 2018. Ernst & Young LLP, Registered Public Accounting Firm included in this annual report, has
issued an attestation report on the registrant’s internal control over financial reporting, a copy of which appears on page 57.

/s/ James M. Loree

James M. Loree, President and Chief Executive Officer

/s/ Donald Allan, Jr.

Donald Allan, Jr., Executive Vice President and Chief Financial Officer

55
 Report of Independent Registered Public Accounting Firm

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

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Stanley Black & Decker, Inc. (the Company) as of December 29, 2018 and December 30,
2017, and the related consolidated statements of operations, comprehensive income, shareowners' equity and cash flows for each of the three fiscal years in
the period ended December 29, 2018, and the related notes (collectively referred to as the “financial statements”). Our audits also included the financial
statement schedule listed in the Index at Item 15(a). In our opinion, the financial statements and schedule present fairly, in all material respects, the
consolidated financial position of the Company at December 29, 2018 and December 30, 2017, and the consolidated results of its operations and its cash
flows for each of the three fiscal years in the period ended December 29, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s
internal control over financial reporting as of December 29, 2018, based on criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2019 expressed an unqualified
opinion thereon.

Adoption of ASU 2016-15 and ASU 2014-09

As discussed in Note A to the consolidated financial statements, the Company changed its method for accounting for cash flows and revenue from contracts
with customers in fiscal years 2016, 2017, and 2018 due to the adoption of ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, and
ASU 2014-09, Revenue from Contracts with Customers.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial
statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1932.

Hartford, Connecticut
February 26, 2019

56
 Report of Independent Registered Public Accounting Firm

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

Opinion on Internal Control over Financial Reporting

We have audited Stanley Black & Decker, Inc.’s internal control over financial reporting as of December 29, 2018, based on criteria established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
In our opinion, Stanley Black & Decker, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of
December 29, 2018, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the
effectiveness of internal control over financial reporting did not include the internal controls of Nelson Fastener Systems, which is included in the 2018
consolidated financial statements of the Company and constituted 3% of total assets as of December 29, 2018 and 1% of net sales for the fiscal year then
ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial
reporting of Nelson Fastener Systems.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated
balance sheets of the Company as of December 29, 2018 and December 30, 2017, and the related consolidated statements of operations, comprehensive
income, shareowners' equity and cash flows for each of the three fiscal years in the period ended December 29, 2018, and the related notes (collectively
referred to as the “financial statements”). Our audits also included the financial statement schedule listed in the Index at Item 15(a) and our report dated
February 26, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our
responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Hartford, Connecticut
February 26, 2019

57
 Consolidated Statements of Operations
Fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016
(Millions of Dollars, Except Per Share Amounts)

2018 2017 2016

Net Sales $ 13,982.4 $ 12,966.6 $ 11,593.5
Costs and Expenses
Cost of sales $ 9,131.3 $ 8,188.3 $ 7,325.5
Selling, general and administrative 3,143.7 2,982.9 2,609.3
Provision for doubtful accounts 28.0 16.3 23.2
Other, net 287.0 269.2 185.9
Loss (gain) on sales of businesses 0.8 (264.1) —
Pension settlement — 12.2 —
Restructuring charges and asset impairments 160.3 51.5 49.0
Interest income (68.7) (40.1) (23.2)
Interest expense 277.9 222.6 194.5
$ 12,960.3 $ 11,438.8 $ 10,364.2
Earnings before income taxes 1,022.1 1,527.8 1,229.3
Income taxes 416.3 300.9 261.7
Net earnings $ 605.8 $ 1,226.9 $ 967.6
Less: Net earnings (loss) attributable to non-controlling interests 0.6 (0.4) (0.4)
Net Earnings Attributable to Common Shareowners $ 605.2 $ 1,227.3 $ 968.0
Earnings per share of common stock:
Basic $ 4.06 $ 8.20 $ 6.63
Diluted $ 3.99 $ 8.05 $ 6.53

See Notes to Consolidated Financial Statements.

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 Consolidated Statements of Comprehensive Income
Fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016
(Millions of Dollars)

2018 2017 2016

Net Earnings Attributable to Common Shareowners $ 605.2 $ 1,227.3 $ 968.0
Other comprehensive (loss) income:
Currency translation adjustment and other (373.0) 478.5 (285.8)
Unrealized gains (losses) on cash flow hedges, net of tax 85.8 (66.3) 5.8
Unrealized gains (losses) on net investment hedges, net of tax 59.9 (85.2) 76.8
Pension gains (losses), net of tax 2.1 5.5 (24.2)
Other comprehensive (loss) income $ (225.2) $ 332.5 $ (227.4)
Comprehensive income attributable to common shareowners $ 380.0 $ 1,559.8 $ 740.6

See Notes to Consolidated Financial Statements.

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 Consolidated Balance Sheets
December 29, 2018 and December 30, 2017
(Millions of Dollars)

2018 2017
ASSETS
Current Assets
Cash and cash equivalents $ 288.7 $ 637.5
Accounts and notes receivable, net 1,607.8 1,628.7
Inventories, net 2,373.5 2,018.4
Prepaid expenses 240.5 234.6
Other current assets 58.9 39.8
Total Current Assets 4,569.4 4,559.0
Property, Plant and Equipment, net 1,915.2 1,742.5
Goodwill 8,956.7 8,776.1
Customer Relationships, net 1,165.2 1,170.7
Trade Names, net 2,254.8 2,248.9
Other Intangible Assets, net 64.4 87.8
Other Assets 482.3 512.7
Total Assets $ 19,408.0 $ 19,097.7

LIABILITIES AND SHAREOWNERS' EQUITY

Current Liabilities
Short-term borrowings $ 376.1 $ 5.3
Current maturities of long-term debt 2.5 977.5
Accounts payable 2,233.2 2,021.0
Accrued expenses 1,389.8 1,387.7
Total Current Liabilities 4,001.6 4,391.5
Long-Term Debt 3,819.8 2,828.2
Deferred Taxes 705.3 436.1
Post-Retirement Benefits 595.4 629.9
Other Liabilities 2,446.0 2,507.0
Commitments and Contingencies (Notes R and S)
Shareowners’ Equity
Stanley Black & Decker, Inc. Shareowners’ Equity
Preferred stock, without par value:
Authorized 10,000,000 shares in 2018 and 2017
Issued and outstanding 750,000 shares in 2018 and 2017 750.0 750.0
Common stock, par value $2.50 per share:
Authorized 300,000,000 shares in 2018 and 2017
Issued 176,902,738 shares in 2018 and 2017 442.3 442.3
Retained earnings 6,219.0 5,998.7
Additional paid in capital 4,621.0 4,643.2
Accumulated other comprehensive loss (1,814.3) (1,589.1)
ESOP (10.5) (18.8)
10,207.5 10,226.3
Less: cost of common stock in treasury (25,600,288 shares in 2018 and 22,864,707 shares in 2017) (2,371.3) (1,924.1)
Stanley Black & Decker, Inc. Shareowners’ Equity 7,836.2 8,302.2
Non-controlling interests 3.7 2.8
Total Shareowners’ Equity 7,839.9 8,305.0
Total Liabilities and Shareowners’ Equity $ 19,408.0 $ 19,097.7

See Notes to Consolidated Financial Statements.

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 Consolidated Statements of Cash Flows
Fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016
(Millions of Dollars)

2018 2017 2016

Operating Activities:
Net earnings $ 605.8 $ 1,226.9 $ 967.6
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization of property, plant and equipment 331.2 296.9 263.6
Amortization of intangibles 175.3 163.8 144.4
Inventory step-up amortization 9.6 43.2 —
Loss (gain) on sales of businesses 0.8 (264.1) —
Stock-based compensation expense 76.5 78.7 81.2
Provision for doubtful accounts 28.0 16.3 23.2
Deferred tax expense (benefit) 191.1 (103.0) (25.7)
Other non-cash items 10.1 24.4 40.0
Changes in operating assets and liabilities:
Accounts receivable (48.8) (905.6) (410.3)
Inventories (401.6) (303.0) (23.9)
Accounts payable 211.0 240.4 159.7
Deferred revenue 1.5 1.6 (12.0)
Other current assets (4.4) (5.9) 54.0
Other long-term assets 28.9 84.9 (67.1)
Accrued expenses 70.1 123.3 6.9
Defined benefit liabilities (44.7) (66.5) (56.8)
Other long-term liabilities 20.5 16.2 40.7
Net cash provided by operating activities 1,260.9 668.5 1,185.5
Investing Activities:
Capital and software expenditures (492.1) (442.4) (347.0)
Sales of assets 45.2 50.2 10.6
Business acquisitions, net of cash acquired (524.6) (2,583.5) (59.3)
Sales of businesses, net of cash sold (3.0) 756.9 24.0
Net investment hedge settlements 25.7 (23.3) 104.7
Proceeds related to deferred purchase price receivable — 704.7 345.1
Other (40.3) (29.4) (17.0)
Net cash (used in) provided by investing activities (989.1) (1,566.8) 61.1
Financing Activities:
Payments on long-term debt (977.5) (2.8) —
Proceeds from debt issuance, net of fees 990.0 — —
Net short-term borrowings (repayments) 433.2 (76.7) 1.9
Stock purchase contract fees (40.3) (20.0) (13.8)
Purchases of common stock for treasury (527.1) (28.7) (374.1)
Proceeds from issuances of preferred stock — 726.0 —
Cash settlement on forward stock purchase contracts — — (147.4)
Premium paid on equity option (57.3) (25.1) —
Proceeds from issuances of common stock 38.5 90.8 418.5
Cash dividends on common stock (384.9) (362.9) (330.9)
Other (36.2) (5.4) 12.7
Net cash (used in) provided by financing activities
(561.6) 295.2 (433.1)
Effect of exchange rate changes on cash and cash equivalents (53.9) 81.0 (101.7)
Change in cash, cash equivalents and restricted cash (343.7) (522.1) 711.8
Cash, cash equivalents and restricted cash, beginning of year 655.1 1,177.2 465.4
Cash, cash equivalents and restricted cash, end of year $ 311.4 $ 655.1 $ 1,177.2

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The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances as of December 29, 2018 and December 30, 2017, as
shown above:

December 29, 2018 December 30, 2017

Cash and cash equivalents $ 288.7 $ 637.5
Restricted cash included in Other current assets 22.7 17.6
Cash, cash equivalents and restricted cash $ 311.4 $ 655.1

See Notes to Consolidated Financial Statements.

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 Consolidated Statements of Changes in Shareowners’ Equity
Fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016
(Millions of Dollars, Except Per Share Amounts)

Accumulated
Additional Other Non-
Preferred Common Paid In Retained Comprehensive Treasury Controlling Shareowners’
Stock Stock Capital Earnings Loss ESOP Stock Interests Equity
Balance January 2, 2016 $ — $ 442.3 $ 4,421.7 $4,496.0 $ (1,694.2) $(34.9) $(1,815.0) $ 47.6 $ 5,863.5
Net earnings 968.0 (0.4) 967.6
Other comprehensive loss (227.4) (227.4)
Cash dividends declared — $2.26 per share (330.9) (330.9)
Issuance of common stock 20.9 386.1 407.0
Settlement of forward share repurchase contract 150.0 (150.0) —
Repurchase of common stock (4,651,463 shares) 76.9 (451.0) (374.1)
Non-controlling interest buyout 12.2 (40.6) (28.4)
Stock-based compensation related 81.2 81.2
Tax benefit related to stock options exercised 11.5 11.5
ESOP and related tax benefit 1.2 9.0 10.2
Balance December 31, 2016 $ — $ 442.3 $ 4,774.4 $5,134.3 $ (1,921.6) $(25.9) $(2,029.9) $ 6.6 $ 6,380.2
Net earnings 1,227.3 (0.4) 1,226.9
Other comprehensive income 332.5 332.5
Cash dividends declared — $2.42 per share (362.9) (362.9)
Issuance of common stock (43.7) 134.5 90.8
Repurchase of common stock (202,075 shares) (28.7) (28.7)
Issuance of preferred stock (750,000 shares) 750.0 (24.0) 726.0
Equity units - stock contract fees (117.1) (117.1)
Non-controlling interest buyout (3.4) (3.4)
Premium paid on equity option (25.1) (25.1)
Stock-based compensation related 78.7 78.7
ESOP 7.1 7.1
Balance December 30, 2017 $ 750.0 $ 442.3 $ 4,643.2 $5,998.7 $ (1,589.1) $(18.8) $(1,924.1) $ 2.8 $ 8,305.0
Net earnings 605.2 0.6 605.8
Other comprehensive loss (225.2) (225.2)
Cash dividends declared — $2.58 per share (384.9) (384.9)
Issuance of common stock (41.4) 79.9 38.5
Repurchase of common stock (3,677,435 shares) (527.1) (527.1)
Premium paid on equity option (57.3) (57.3)
Non-controlling interest dissolution 0.3 0.3
Stock-based compensation related 76.5 76.5
ESOP 8.3 8.3
Balance December 29, 2018 $ 750.0 $ 442.3 $ 4,621.0 $6,219.0 $ (1,814.3) $(10.5) $(2,371.3) $ 3.7 $ 7,839.9

See Notes to Consolidated Financial Statements.

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 Notes to Consolidated Financial Statements

A. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION — The Consolidated Financial Statements include the accounts of Stanley Black & Decker, Inc. and its majority-owned
subsidiaries (collectively the “Company”) which require consolidation, after the elimination of intercompany accounts and transactions. The Company’s
fiscal year ends on the Saturday nearest to December 31. There were 52 weeks in each of the fiscal years 2018, 2017 and 2016.

In April 2018, the Company acquired the industrial business of Nelson Fastener Systems ("Nelson") from the Doncasters Group, which excluded Nelson's
automotive stud welding business. The acquisition is being accounted for as a business combination and the results are being consolidated into the
Company's Industrial segment. In March 2017, the Company acquired the Tools business of Newell Brands ("Newell Tools") and the Craftsman® brand,
which were both accounted for as business combinations. The results of these acquisitions have been consolidated into the Company's Tools & Storage
segment. Refer to Note E, Acquisitions, for further discussion on these acquisitions.

In the first quarter of 2017, the Company sold the majority of its mechanical security businesses within the Security segment, which included the commercial
hardware brands of Best Access, phi Precision and GMT, and sold a small business within the Tools & Storage segment. The Company also sold a small
business in the Industrial segment in the third quarter of 2017 and a small business in the Tools & Storage segment in the fourth quarter of 2017. The
operating results of these businesses have been reported in the Consolidated Financial Statements through their respective dates of sale in 2017 and for the
year ended December 31, 2016. Refer to Note T, Divestitures, for further discussion.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the amounts reported in the financial statements. 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 2018 presentation. Furthermore, as discussed in "New Accounting Standards" below, certain amounts reported in
previous years have been recast as a result of the retrospective adoption of new accounting standards in the first quarter of 2018.

FOREIGN CURRENCY — For foreign operations with functional currencies other than the U.S. dollar, asset and liability accounts are translated at current
exchange rates, while income and expenses are translated using average exchange rates. Translation adjustments are reported in a separate component of
shareowners’ equity and exchange gains and losses on transactions are included in earnings.

CASH EQUIVALENTS — Highly liquid investments with original maturities of three months or less are considered cash equivalents.

ACCOUNTS AND FINANCING RECEIVABLE — Trade receivables are stated at gross invoice amounts less discounts, other allowances and provisions for
uncollectible accounts. Financing receivables are initially recorded at fair value, less impairments or provisions for credit losses. Interest income earned from
financing receivables that are not delinquent is recorded on the effective interest method. The Company considers any financing receivable that has not been
collected within 90 days of original billing date as past-due or delinquent. Additionally, the Company considers the credit quality of all past-due or
delinquent financing receivables as nonperforming.

ALLOWANCE FOR DOUBTFUL ACCOUNTS — The Company estimates its allowance for doubtful accounts using two methods. First, a specific reserve
is established for individual accounts where information indicates the customers may have an inability to meet financial obligations. Second, a reserve is
determined for all customers based on a range of percentages applied to aging categories. These percentages are based on historical collection and write-off
experience. Actual write-offs are charged against the allowance when collection efforts have been unsuccessful.

INVENTORIES — U.S. inventories are primarily valued at the lower of Last-In First-Out (“LIFO”) cost or market because the Company believes it results in
better matching of costs and revenues. Other inventories are primarily valued at the lower of First-In, First-Out (“FIFO”) cost and net realizable value because
LIFO is not permitted for statutory reporting outside the U.S. Refer to Note C, Inventories, for a quantification of the LIFO impact on inventory valuation.

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PROPERTY, PLANT AND EQUIPMENT — The Company generally values property, plant and equipment (“PP&E”), including capitalized software, at
historical cost less accumulated depreciation and amortization. Costs related to maintenance and repairs which do not prolong the asset's useful life are
expensed as incurred. Depreciation and amortization are provided using straight-line methods over the estimated useful lives of the assets as follows:
Useful Life
(Years)
Land improvements 10 — 20
Buildings 40
Machinery and equipment 3 — 15
Computer software 3—7

Leasehold improvements are depreciated over the shorter of the estimated useful life or the term of the lease.

The Company reports depreciation and amortization of property, plant and equipment in cost of sales and selling, general and administrative expenses based
on the nature of the underlying assets. Depreciation and amortization related to the production of inventory and delivery of services are recorded in cost of
sales. Depreciation and amortization related to distribution center activities, selling and support functions are reported in selling, general and administrative
expenses.

The Company assesses its long-lived assets for impairment when indicators that the carrying amounts may not be recoverable are present. In assessing long-
lived assets for impairment, the Company groups its long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are
generated (“asset group”) and estimates the undiscounted future cash flows that are directly associated with, and expected to be generated from, the use of
and eventual disposition of the asset group. If the carrying value is greater than the undiscounted cash flows, an impairment loss must be determined and the
asset group is written down to fair value. The impairment loss is quantified by comparing the carrying amount of the asset group to the estimated fair value,
which is generally determined using weighted-average discounted cash flows that consider various possible outcomes for the disposition of the asset group.

GOODWILL AND INTANGIBLE ASSETS — Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired
businesses. Intangible assets acquired are recorded at estimated fair value. Goodwill and intangible assets deemed to have indefinite lives are not amortized,
but are tested for impairment annually during the third quarter, and at any time when events suggest an impairment more likely than not has occurred.

To assess goodwill for impairment, the Company, depending on relevant facts and circumstances, performs either a qualitative assessment, as permitted by
Accounting Standards Update ("ASU") 2011-08, Intangibles - Goodwill and Other (Topic 350): Testing Goodwill for Impairment, or a quantitative analysis
utilizing a discounted cash flow valuation model. In performing a qualitative assessment, the Company first assesses relevant factors to determine whether it
is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the
two-step quantitative goodwill impairment test. The Company identifies and considers the significance of relevant key factors, events, and circumstances that
could affect the fair value of each reporting unit. These factors include external factors such as macroeconomic, industry, and market conditions, as well as
entity-specific factors, such as actual and planned financial performance. The Company also considers changes in each reporting unit's fair value and carrying
amount since the most recent date a fair value measurement was performed. In performing a quantitative analysis, the Company determines the fair value of a
reporting unit using management’s assumptions about future cash flows based on long-range strategic plans. This approach incorporates many assumptions
including discount rates, future growth rates and expected profitability. In the event the carrying amount of a reporting unit exceeded its fair value, an
impairment loss would be recognized to the extent the carrying amount of the reporting unit’s goodwill exceeded the implied fair value of the goodwill.

Indefinite-lived intangible assets are tested for impairment utilizing either a qualitative assessment or a quantitative analysis. For a qualitative assessment,
the Company identifies and considers relevant key factors, events, and circumstances to determine whether it is necessary to perform a quantitative
impairment test. The key factors considered include macroeconomic, industry, and market conditions, as well as the asset's actual and forecasted results. For
the quantitative impairment tests, the Company compares the carrying amounts to the current fair market values, usually determined by the estimated cost to
lease the assets from third parties. Intangible assets with definite lives are amortized over their estimated useful lives generally using an accelerated method.
Under this accelerated method, intangible assets are amortized reflecting the pattern over which the economic benefits of the intangible assets are consumed.
Definite-lived intangible assets are also evaluated for impairment when impairment indicators are present. If the carrying amount exceeds the total
undiscounted future cash flows, a discounted cash flow analysis is performed to determine the fair value of the asset. If the carrying amount of the asset was to
exceed the fair value, it would be written down to fair value. No significant goodwill or other intangible asset impairments were recorded during 2018, 2017
or 2016.

65
FINANCIAL INSTRUMENTS — Derivative financial instruments are employed to manage risks, including foreign currency, interest rate exposures and
commodity prices and are not used for trading or speculative purposes. 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. The Company recognizes all derivative instruments in the balance sheet at
fair value.

Changes in the fair value of derivatives are recognized periodically either in earnings or in shareowners’ equity as a component of other comprehensive
income (loss) ("OCI"), depending on whether the derivative financial instrument is undesignated or qualifies for hedge accounting, and if so, whether it
represents a fair value, cash flow, or net investment hedge. Changes in the fair value of derivatives accounted for as fair value hedges are recorded in earnings
in the same caption as the changes in the fair value of the hedged items. Gains and losses on derivatives designated as cash flow hedges, to the extent they are
included in the assessment of effectiveness, are recorded in OCI and subsequently reclassified to earnings to offset the impact of the hedged items when they
occur. In the event it becomes probable the forecasted transaction to which a cash flow hedge relates will not occur, the derivative would be terminated and
the amount in accumulated other comprehensive income (loss) would be recognized in earnings. Changes in the fair value of derivatives that are designated
and qualify as a hedge of the net investment in foreign operations, to the extent they are included in the assessment of effectiveness, are reported in OCI and
are deferred until disposal of the underlying assets. Gains and losses representing components excluded from the assessment of effectiveness for cash flow and
fair value hedges are recognized in earnings on a straight-line basis in the same caption as the hedged item over the term of the hedge. Gains and losses
representing components excluded from the assessment of effectiveness for net investment hedges are recognized in earnings on a straight-line basis in Other,
net over the term of the hedge.

The net interest paid or received on interest rate swaps is recognized as interest expense. Gains and losses resulting from the early termination of interest rate
swap agreements are deferred and amortized as adjustments to interest expense over the remaining period of the debt originally covered by the terminated
swap.

Changes in the fair value of derivatives not designated as hedges are reported in Other, net in the Consolidated Statements of Operations. Refer to Note I,
Financial Instruments, for further discussion.

REVENUE RECOGNITION — The Company’s revenues result from the sale of goods or services and reflect the consideration to which the Company
expects to be entitled. The Company records revenue based on a five-step model in accordance with Accounting Standards Codification ("ASC") 606,
Revenue from Contracts with Customers ("ASC 606"). For its customer contracts, the Company identifies the performance obligations (goods or services),
determines the transaction price, allocates the contract transaction price to the performance obligations, and recognizes the revenue when (or as) the
performance obligation is transferred to the customer. A good or service is transferred when (or as) the customer obtains control of that good or service. The
majority of the Company’s revenues are recorded at a point in time from the sale of tangible products.

Provisions for customer volume rebates, product returns, discounts and allowances are variable consideration and are recorded as a reduction of revenue in
the same period the related sales are recorded. Such provisions are calculated using historical averages adjusted for any expected changes due to current
business conditions. Consideration given to customers for cooperative advertising is recognized as a reduction of revenue except to the extent that there is a
distinct good or service and evidence of the fair value of the advertising, in which case the expense is classified as selling, general, and administrative
expense.

The Company’s revenues can be generated from contracts with multiple performance obligations. When a sales agreement involves multiple performance
obligations, each obligation is separately identified and the transaction price is allocated based on the amount of consideration the Company expects to be
entitled to in exchange for transferring the promised good or service to the customer.

Sales of security monitoring systems may have multiple performance obligations, including equipment, installation and monitoring or maintenance services.
In most instances, the Company allocates the appropriate amount of consideration to each performance obligation based on the standalone selling price
("SSP") of the distinct goods or services performance obligation. In circumstances where SSP is not observable, the Company allocates the consideration for
the performance obligations by utilizing one of the following methods: expected cost plus margin, the residual approach, or a mix of these estimation
methods.

For performance obligations that the Company satisfies over time, revenue is recognized by consistently applying a method of measuring progress toward
complete satisfaction of that performance obligation. The Company utilizes the method that most accurately depicts the progress toward completion of the
performance obligation.

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The Company’s contract sales for the installation of security intruder systems and other construction-related projects are generally recorded under the input
method. The input method recognizes revenue on the basis of the Company’s efforts or inputs to the satisfaction of a performance obligation relative to the
total inputs expected to satisfy that performance obligation. Revenue recognized on security contracts in process are based upon the allocated contract price
and related total inputs of the project at completion. The extent of progress toward completion is generally measured using input methods based on labor
metrics. Revisions to these estimates as contracts progress have the effect of increasing or decreasing profits each period. Provisions for anticipated losses are
made in the period in which they become determinable. The revenues for monitoring and monitoring-related services are recognized as services are rendered
over the contractual period.

The Company utilizes the output method for contract sales in the Oil & Gas business. The output method recognizes revenue based on direct measurements
of the customer value of the goods or services transferred to date relative to the remaining goods or services promised under the contract. The output method
includes methods such as surveys of performance completed to date, appraisals of results achieved, milestones reached, time elapsed, and units produced or
units delivered.

Contract assets or liabilities result from transactions with revenue recorded over time. If the measure of remaining rights exceeds the measure of the remaining
performance obligations, the Company records a contract asset. Conversely, if the measure of the remaining performance obligations exceeds the measure of
the remaining rights, the Company records a contract liability.

Incremental costs of obtaining or fulfilling a contract with a customer that are expected to be recovered are recognized and classified in Other current assets or
Other assets in the Consolidated Balance Sheets and are typically amortized over the contract period. The Company recognizes the incremental costs of
obtaining or fulfilling a contract as expense when incurred if the amortization period of the asset is one year or less.

Customer billings for services not yet rendered are deferred and recognized as revenue as the services are rendered. The associated deferred revenue is
included in Accrued expenses or Other liabilities, as appropriate, in the Consolidated Balance Sheets.

Refer to Note B, Accounts and Notes Receivable, for further discussion.

COST OF SALES AND SELLING, GENERAL & ADMINISTRATIVE — Cost of sales includes the cost of products and services provided reflecting costs
of manufacturing and preparing the product for sale. These costs include expenses to acquire and manufacture products to the point that they are allocable to
be sold to customers and costs to perform services pertaining to service revenues (e.g. installation of security systems, automatic doors, and security
monitoring costs). Cost of sales is primarily comprised of freight, direct materials, direct labor as well as overhead which includes indirect labor and facility
and equipment costs. Cost of sales also includes quality control, procurement and material receiving costs as well as internal transfer costs. Selling, general &
administrative costs ("SG&A") include the cost of selling products as well as administrative function costs. These expenses generally represent the cost of
selling and distributing the products once they are available for sale and primarily include salaries and commissions of the Company’s sales force,
distribution costs, notably salaries and facility costs, as well as administrative expenses for certain support functions and related overhead.

ADVERTISING COSTS — Television advertising is expensed the first time the advertisement airs, whereas other advertising is expensed as incurred.
Advertising costs are classified in SG&A and amounted to $101.3 million in 2018, $123.3 million in 2017 and $124.1 million in 2016. Expense pertaining
to cooperative advertising with customers reported as a reduction of Net Sales was $315.8 million in 2018, $297.4 million in 2017 and $232.5 million in
2016. Cooperative advertising with customers classified as SG&A expense amounted to $5.4 million in 2018, $6.1 million in 2017 and $6.6 million in 2016.

SALES TAXES — Sales and value added taxes collected from customers and remitted to governmental authorities are excluded from Net Sales reported in
the Consolidated Statements of Operations.

SHIPPING AND HANDLING COSTS — The Company generally does not bill customers for freight. Shipping and handling costs associated with inbound
and outbound freight are reported in Cost of sales. Distribution costs are classified in SG&A and amounted to $316.0 million, $279.8 million and $235.3
million in 2018, 2017 and 2016, respectively.

STOCK-BASED COMPENSATION — Compensation cost relating to stock-based compensation grants is recognized on a straight-line basis over the
vesting period, which is generally four years. The expense for stock options and restricted stock units awarded to retirement-eligible employees (those aged
55 and over, and with 10 or more years of service) is recognized on the grant date, or (if later) by the date they become retirement-eligible.

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POSTRETIREMENT DEFINED BENEFIT PLAN — The Company uses the corridor approach to determine expense recognition for each defined benefit
pension and other postretirement plan. The corridor approach defers actuarial gains and losses resulting from variances between actual and expected results
(based on economic estimates or actuarial assumptions) and amortizes them over future periods. For pension plans, these unrecognized gains and losses are
amortized when the net gains and losses exceed 10% of the greater of the market-related value of plan assets or the projected benefit obligation at the
beginning of the year. For other postretirement benefits, amortization occurs when the net gains and losses exceed 10% of the accumulated postretirement
benefit obligation at the beginning of the year. For ongoing, active plans, the amount in excess of the corridor is amortized on a straight-line basis over the
average remaining service period for active plan participants. For plans with primarily inactive participants, the amount in excess of the corridor is amortized
on a straight-line basis over the average remaining life expectancy of inactive plan participants.

INCOME TAXES — The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes, which
requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial
statements. Deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities
using the enacted tax rates in effect for the year in which the differences are expected to reverse. Any changes in tax rates on deferred tax assets and liabilities
are recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent that it is more likely than not that these assets will be realized. In making this determination,
management considers all available positive and negative evidence, including future reversals of existing temporary differences, estimates of future taxable
income, tax-planning strategies, and the realizability of net operating loss carryforwards. In the event that it is determined that an asset is not more likely that
not to be realized, a valuation allowance is recorded against the asset. Valuation allowances related to deferred tax assets can be impacted by changes to tax
laws, changes to statutory tax rates and future taxable income levels. In the event the Company were to determine that it would not be able to realize all or a
portion of its deferred tax assets in the future, the unrealizable amount would be charged to earnings in the period in which that determination is made.
Conversely, if the Company were to determine that it would be able to realize deferred tax assets in the future in excess of the net carrying amounts, it would
decrease the recorded valuation allowance through a favorable adjustment to earnings in the period that the determination was made. The Company records
uncertain tax positions in accordance with ASC 740, which requires a two-step process. First, management determines whether it is more likely than not that a
tax position will be sustained based on the technical merits of the position and second, for those tax positions that meet the more likely than not threshold,
management recognizes the largest amount of the tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related
taxing authority. The Company maintains an accounting policy of recording interest and penalties on uncertain tax positions as a component of Income
taxes in the Consolidated Statements of Operations.
The Company is subject to income tax in a number of locations, including many state and foreign jurisdictions. Significant judgment is required when
calculating the worldwide provision for income taxes. Many factors are considered when evaluating and estimating the Company's tax positions and tax
benefits, 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. These changes may be the result of settlements of ongoing audits or final decisions in transfer pricing matters. The Company periodically
assesses its liabilities and contingencies for all tax years still subject to audit based on the most current available information, which involves inherent
uncertainty.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“the Act”). Changes
include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, changes to U.S.
international taxation, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. Pursuant
to Staff Accounting Bulletin No. 118 (“SAB 118”) issued by the SEC in December 2017, issuers were permitted up to one year from the enactment of the Act
to complete the accounting for the income tax effects of the Act (“the measurement period”). The Company completed its accounting for the tax effects of the
Act within the measurement period and has included those effects within Income taxes in the Consolidated Statements of Operations.

The Act subjects a U.S. shareholder to current tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. The Financial
Accounting Standards Board ("FASB") Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an
accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax
expense related to GILTI in the year the tax is incurred. The Company has elected to recognize the tax on GILTI as a period expense in the period the tax is
incurred.

68
Refer to Note Q, Income Taxes, for further discussion.

EARNINGS PER SHARE — Basic earnings per share equals net earnings attributable to common shareowners divided by weighted-average shares
outstanding during the year. Diluted earnings per share include the impact of common stock equivalents using the treasury stock method when the effect is
dilutive.

NEW ACCOUNTING STANDARDS ADOPTED — In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715) (“new
pension standard”). The new pension standard improves the presentation of net periodic pension cost and net periodic postretirement benefit cost. The
Company adopted this standard in the first quarter of 2018 utilizing the full retrospective method. As a result of the adoption, all components other than
service cost were reclassified from Cost of sales and SG&A to Other, net in the Consolidated Statements of Operations.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The
objective of this update is to provide additional guidance and reduce diversity in practice when classifying certain transactions within the statement of cash
flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This new standard requires that the
statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or
restricted cash equivalents. The Company adopted these standards ("new cash flow standards") in the first quarter of 2018 utilizing the retrospective
transition method. The impacts of the new standards relate to the presentation of restricted cash as well as certain cash flows related to an accounts receivable
sale program that was terminated in the first quarter of 2018. Refer to Note B, Accounts and Notes Receivable, for further discussion.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“new revenue standard”). The new revenue standard
outlines a comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue
recognition guidance. The new model provides a five-step analysis in determining when and how revenue is recognized. The core principle of the new
guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. The standard allows for initial application to be performed
retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption.

The Company adopted the new revenue standard in the first quarter of 2018 using the full retrospective method. Accordingly, certain prior period amounts
have been recast to reflect the financial results of the Company in accordance with the new revenue standard. The Company recognized the cumulative effect
of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings for the earliest balance sheet period presented.

As a result of the adoption of the new revenue standard, outbound freight is recorded as a component of cost of sales as opposed to a reduction of net sales.
The new revenue standard also requires companies to record an asset for anticipated customer return of inventory and a sales return reserve at the gross
amount of the initial sale, rather than at the net margin amount. Additionally, certain sales to distributors subject to a guarantee with a third-party financier
that were previously deferred are now recognized upon shipment in accordance with the new revenue standard and the associated short-term and long-term
accounts receivable and short-term and long-term debt balances have been recast. Lastly, for certain product warranties provided to customers that meet the
criteria of a service-type warranty, a portion of consideration paid by customers must now be deferred and recognized as revenue over the anticipated service
warranty period.

69
As a result of the adoption of the new revenue and pension standards, certain amounts in the Consolidated Statements of Operations for the years ended
December 30, 2017 and December 31, 2016 have been recast, as follows:

Adoption of ASU Adoption of ASU

(Millions of Dollars, except per share amounts) 20171 2014-09 2017-07 2017
Net Sales $ 12,747.2 $ 219.4 $ — $ 12,966.6
Cost of sales $ 7,969.2 $ 215.9 $ 3.2 $ 8,188.3
Selling, general and administrative $ 2,965.7 $ — $ 17.2 $ 2,982.9
Provision for doubtful accounts $ 14.4 $ 1.9 $ — $ 16.3
Other, net $ 289.7 $ — $ (20.5) $ 269.2
Earnings before income taxes $ 1,526.1 $ 1.7 $ — $ 1,527.8
Income taxes $ 300.5 $ 0.4 $ — $ 300.9
Net earnings $ 1,225.6 $ 1.3 $ — $ 1,226.9
Diluted earnings per share of common stock $ 8.04 $ 0.01 $ — $ 8.05
1 As previously reported in the Company's 2017 Form 10-K.

Adoption of ASU Adoption of ASU

(Millions of Dollars, except per share amounts) 20161 2014-09 2017-07 2016
Net Sales $ 11,406.9 $ 186.6 $ — $ 11,593.5
Cost of sales $ 7,139.7 $ 182.0 $ 3.8 $ 7,325.5
Selling, general and administrative $ 2,602.0 $ — $ 7.3 $ 2,609.3
Provision for doubtful accounts $ 21.9 $ 1.3 $ — $ 23.2
Other, net $ 196.9 $ 0.1 $ (11.1) $ 185.9
Earnings before income taxes $ 1,226.1 $ 3.2 $ — $ 1,229.3
Income taxes $ 261.2 $ 0.5 $ — $ 261.7
Net earnings $ 964.9 $ 2.7 $ — $ 967.6
Diluted earnings per share of common stock $ 6.51 $ 0.02 $ — $ 6.53
1 As previously reported in the Company's 2017 Form 10-K.

As a result of the adoption of the new revenue standard, certain balances as of December 30, 2017 in the Consolidated Balance Sheets have been recast, as
follows:

(Millions of Dollars) 20171 Adoption of ASU 2014-09 2017

ASSETS
Accounts and notes receivable, net $ 1,635.9 $ (7.2) $ 1,628.7
Other assets $ 487.8 $ 24.9 $ 512.7

LIABILITIES AND SHAREOWNERS' EQUITY

Current maturities of long-term debt $ 983.4 $ (5.9) $ 977.5
Accrued expenses $ 1,352.1 $ 35.6 $ 1,387.7
Long-term debt $ 2,843.0 $ (14.8) $ 2,828.2
Deferred taxes $ 434.2 $ 1.9 $ 436.1
Other liabilities $ 2,511.1 $ (4.1) $ 2,507.0
Retained earnings 2 $ 5,990.4 $ 8.3 $ 5,998.7
Accumulated other comprehensive loss $ (1,585.9) $ (3.2) $ (1,589.1)
1 As previously reported in the Company's 2017 Form 10-K.
2 Adjustment includes the cumulative effect of the adoption of $4.3 million for periods prior to fiscal year 2016.

70
As a result of the adoption of the new revenue and cash flows standards, certain amounts for the years ended December 30, 2017 and December 31, 2016 in
the Consolidated Statements of Cash Flows have been recast, as follows:
Adoption of ASU Adoption of ASU
(Millions of Dollars) 20171 2014-09 2016-15 & 2016-18 2017
OPERATING ACTIVITIES
Net earnings $ 1,225.6 $ 1.3 $ — $ 1,226.9
Provision for doubtful accounts $ 14.4 $ 1.9 $ — $ 16.3
Accounts receivable $ (200.6) $ (0.3) $ (704.7) $ (905.6)
Deferred revenue $ 2.1 $ (0.5) $ — $ 1.6
Other current assets $ 42.8 $ (3.3) $ (45.4) $ (5.9)
Other long-term assets $ 83.6 $ 1.3 $ — $ 84.9
Accrued expenses $ 120.1 $ 3.2 $ — $ 123.3
Other long-term liabilities $ 19.8 $ (3.6) $ — $ 16.2
Net cash provided by operating activities $ 1,418.6 $ — $ (750.1) $ 668.5
INVESTING ACTIVITIES
Business acquisitions, net of cash acquired $ (2,601.1) $ — $ 17.6 $ (2,583.5)
Proceeds related to deferred purchase price receivable $ — $ — $ 704.7 $ 704.7
Net cash (used in) provided by investing activities $ (2,289.1) $ — $ 722.3 $ (1,566.8)

Change in cash, cash equivalents and restricted cash $ (494.3) $ — $ (27.8) $ (522.1)
Cash, cash equivalents and restricted cash, beginning of year $ 1,131.8 $ — $ 45.4 $ 1,177.2
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END
OF YEAR $ 637.5 $ — $ 17.6 $ 655.1
1 As previously reported in the Company's 2017 Form 10-K with the exception of certain amounts that have been reclassified to conform to the 2018 presentation.

Adoption of ASU Adoption of ASU

(Millions of Dollars) 20161 2014-09 2016-15 & 2016-18 2016
OPERATING ACTIVITIES
Net earnings $ 964.9 $ 2.7 $ — $ 967.6
Provision for doubtful accounts $ 21.9 $ 1.3 $ — $ 23.2
Accounts receivable $ (69.4) $ 4.2 $ (345.1) $ (410.3)
Deferred revenue $ (9.2) $ (2.8) $ — $ (12.0)
Other current assets $ 26.0 $ (17.4) $ 45.4 $ 54.0
Other long-term assets $ (45.9) $ (21.2) $ — $ (67.1)
Accrued expenses $ (28.1) $ 35.0 $ — $ 6.9
Other long-term liabilities $ 42.5 $ (1.8) $ — $ 40.7
Net cash provided by operating activities $ 1,485.2 $ — $ (299.7) $ 1,185.5
INVESTING ACTIVITIES
Proceeds related to deferred purchase price receivable $ — $ — $ 345.1 $ 345.1
Net cash (used in) provided by investing activities $ (284.0) $ — $ 345.1 $ 61.1

Change in cash, cash equivalents and restricted cash $ 666.4 $ — $ 45.4 $ 711.8
Cash, cash equivalents and restricted cash, beginning of year $ 465.4 $ — $ — $ 465.4
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END
OF YEAR $ 1,131.8 $ — $ 45.4 $ 1,177.2
1 As previously reported in the Company's 2017 Form 10-K with the exception of certain amounts that have been reclassified to conform to the 2018 presentation.

71
In August 2018, the SEC issued Disclosure Update and Simplification Release (“DUSTR”) modifying various disclosure requirements. The amendments are
effective for all filings made on or after November 5, 2018. However, the SEC staff has provided an extended transition period for companies to comply with
the new interim disclosure requirement to provide a reconciliation of changes in shareholders’ equity (either in a separate statement or note to the financial
statements). The extended transition period allows companies to first present the reconciliation of changes in shareholders' equity in its Form 10-Q for the
first quarter that begins after the effective date of November 5, 2018. There was no significant change to the Company's annual disclosures as a result of this
guidance.

In December 2017, the SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the Act. SAB 118 provided a measurement
period not to extend beyond one year from the Act enactment date for companies to complete the accounting under ASC 740, Income Taxes, (the
"measurement period"). The Company completed its accounting for the tax effects of the Act within the measurement period and has included those effects
within Income Taxes in the Consolidated Statements of Operations. Refer to Note Q, Income Taxes, for further discussion.

In August 2017, the FASB issued ASU 2017-12, Derivatives And Hedging (Topic 815): Targeted Improvements to Accounting for Hedge Activities. The new
standard amends the hedge accounting recognition and presentation requirements in ASC 815. As permitted by ASU 2017-12, the Company early adopted
this standard in the first quarter of 2018 on a prospective basis. See above for the updated financial instruments policy reflecting the adoption of this
standard.

In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610). The new
standard provides guidance for recognizing gains and losses of nonfinancial assets in contracts with non-customers. The Company adopted this standard in
the first quarter of 2018 and it did not have an impact on its Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The new standard narrows the
definition of a business and provides a framework for evaluation. The Company adopted this standard prospectively in the first quarter of 2018.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The new standard
eliminates the exception to the principle in ASC 740, for all intra-entity sales of assets other than inventory, to be deferred, until the transferred asset is sold
to a third party or otherwise recovered through use. The Company adopted this standard in the first quarter of 2018 and it did not have a material impact on
its Consolidated Financial Statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and
Financial Liabilities. The main objective of this update is to enhance the reporting model for financial instruments to provide users of financial statements
with more decision-useful information. The new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial
instruments. The Company adopted this standard in the first quarter of 2018 and it did not have a material impact on its Consolidated Financial Statements.

RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED — In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and
Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a
Service Contract. The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with
the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU is effective for fiscal years beginning
after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the timing of
adopting the new guidance as well as the impact it may have on its Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20). The standard modifies
disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The ASU is effective for fiscal years ending after
December 15, 2020. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its Consolidated
Financial Statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The standard modifies disclosure requirements of fair value
measurements. The ASU is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Early adoption is
permitted. The Company is currently evaluating the timing of adopting the new guidance as well as the impact it may have on its Consolidated Financial
Statements.

72
In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects
from Accumulated Other Comprehensive Income. The new guidance permits, but does not require, companies to reclassify the stranded tax effects of the Act
on items within accumulated other comprehensive income to retained earnings. This ASU is effective for fiscal years beginning after December 15, 2018,
including interim periods within those fiscal years. Early adoption is permitted. The Company does not plan to reclassify these stranded tax effects and
therefore, does not expect this standard to have an impact on its Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350). The new standard simplifies the subsequent measurement of
goodwill by eliminating the second step of the goodwill impairment test. This ASU will be applied prospectively and is effective for annual or interim
goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests
performed on testing dates after January 1, 2017. The Company is currently evaluating the timing of its adoption of this standard.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326). The new standard amends guidance on reporting credit losses
for assets held at amortized cost basis and available-for-sale debt securities. This ASU is effective for financial statements issued for fiscal years beginning
after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating this guidance to determine the impact it
may have on its Consolidated Financial Statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("new lease standard"). The objective of the new lease standard is to increase
transparency and comparability among organizations by requiring recognition of all lease assets and lease liabilities on the balance sheet and disclosing key
information about leasing arrangements. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, and ASU 2018-11,
Targeted Improvements, Leases (Topic 842), which provide clarification on how to apply certain aspects of the new lease standard and allow entities to
initially apply the standards from the adoption date. In December 2018, the FASB issued ASU 2018-20, Leases (Topic 842): Narrow-Scope Improvements for
Lessors, which clarified how lessors should apply certain aspects of the new lease standard. These standards are effective for fiscal years beginning after
December 15, 2018, including interim periods within those fiscal years. The Company expects to utilize the new transition method to apply the standards
from the adoption date effective the first quarter of 2019. Upon adoption, the Company expects to record lease liabilities and right-of-use assets of
approximately $425 million - $475 million on its consolidated balance sheets. The Company does not expect the standards to impact its consolidated
statements of operations or retained earnings.

B. ACCOUNTS AND NOTES RECEIVABLE

(Millions of Dollars) 2018 2017 1

Trade accounts receivable $ 1,437.1 $ 1,388.1

Trade notes receivable 150.0 158.7
Other accounts receivable 122.7 162.3
Gross accounts and notes receivable 1,709.8 1,709.1
Allowance for doubtful accounts (102.0) (80.4)
Accounts and notes receivable, net $ 1,607.8 $ 1,628.7
Long-term receivable, net $ 153.7 $ 176.9
1 Certain prior year amounts have been recast as a result of the adoption of the new revenue standard. Refer to Note A, Significant Accounting Policies, for further discussion.

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. Long-term receivable, net, of $153.7 million and $176.9 million at December 29, 2018 and December 30, 2017,
respectively, are reported within Other Assets in the Consolidated Balance Sheets. The Company's financing receivables are predominantly related to certain
security equipment leases with commercial businesses. Generally, the Company retains legal title to any equipment leases and bears the right to repossess
such equipment in an event of default. All financing receivables are interest bearing and the Company has not classified any financing receivables as held-
for-sale. Interest income earned from financing receivables that are not delinquent is recorded on the effective interest method.

The Company considers any financing receivable that has not been collected within 90 days of original billing date as past-due or delinquent. Additionally,
the Company considers the credit quality of all past-due or delinquent financing receivables as nonperforming. The Company does not adjust the promised
amount of consideration for the effects of a significant financing

73
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.

In October 2018, the Company entered into a new accounts receivable sale program. According to the terms, the Company is required to sell certain of its
trade accounts receivables at fair value to a wholly owned, consolidated, bankruptcy-remote special purpose subsidiary (“BRS"). The BRS, in turn, is required
to 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 and receivables are
derecognized from the Company’s Consolidated Balance Sheets 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 December 29, 2018, the Company did not record a
servicing asset or liability related to its retained responsibility, based on its assessment of the servicing fee, market values for similar transactions and its cost
of servicing the receivables sold.

At December 29, 2018, $100.1 million of net receivables were derecognized. Gross receivables sold amounted to $618.3 million ($481.8 million, net) for the
year ended December 29, 2018. These sales resulted in a pre-tax loss of $0.7 million for the year ended December 29, 2018, which included servicing fees of
$0.2 million. Proceeds from transfers of receivables to the Purchaser totaled $194.3 million for the year ended December 29, 2018. Collections of previously
sold receivables resulted in payments to the Purchaser of $94.3 million for the year ended December 29, 2018. All cash flows under the program are reported
as a component of changes in accounts receivable within operating activities in the Consolidated Statements of Cash Flows since all the cash from the
Purchaser is received upon the initial sale of the receivable.

Prior to January 2018, the Company had a separate accounts receivable sale program. According to the terms of that program, the Company was required to
sell certain of its trade accounts receivables at fair value to the BRS. The BRS, in turn, was required to sell such receivables to a third-party financial
institution (“Purchasing Institution”) for cash and a deferred purchase price receivable. The Purchasing Institution’s maximum cash investment in the
receivables at any time was $100.0 million. The purpose of the program was to provide liquidity to the Company. The Company accounted for these transfers
as sales under ASC 860, Transfers and Servicing. Receivables were derecognized from the Company’s Consolidated Balance Sheets when the BRS sold those
receivables to the Purchasing Institution. The Company had no retained interests in the transferred receivables, other than collection and administrative
responsibilities and its right to the deferred purchase price receivable. In January 2018, the Company signed an amendment that changed the structure of this
program which eliminated the deferred purchase price receivable from the Purchasing Institution and resulted in the BRS retaining ownership of the trade
accounts receivables. This program was then terminated on February 1, 2018.

At December 30, 2017, $100.8 million of net receivables were derecognized. Gross receivables sold amounted to $2.181 billion ($1.830 billion, net) and
resulted in a pre-tax loss of $7.5 million for the year ended December 30, 2017, which included servicing fees of $1.4 million. Proceeds from transfers of
receivables to the Purchasing Institution totaled $1.023 billion for the year ended December 30, 2017. Collections of previously sold receivables, including
deferred purchase price receivables, and all fees, which were settled one month in arrears, resulted in payments to the Purchasing Institution of $1.785 billion
for the year ended December 30, 2017.

The Company’s risk of loss following the sale of the receivables was limited to the deferred purchase price receivable, which was $106.9 million at
December 30, 2017. The deferred purchase price receivable was settled in full in January 2018, and historically was repaid in cash as receivables were
collected, generally within 30 days. As such, the carrying value of the receivable recorded at December 30, 2017 approximated fair value. Delinquencies and
credit losses on receivables sold were $0.2 million for the year ended December 30, 2017. Cash inflows related to the deferred purchase price receivable
totaled $704.7 million for the year ended December 30, 2017. In accordance with the adoption of the new cash flows standards described in Note A,
Significant Accounting Policies, the proceeds related to the deferred purchase price receivable are classified as investing activities.

As of December 29, 2018 and December 30, 2017, the Company's deferred revenue totaled $202.0 million and $117.0 million, respectively, of which $98.6
million and $95.6 million, respectively, was classified as current.

Revenue recognized for the years ended December 29, 2018 and December 30, 2017 that was previously deferred as of December 30, 2017 and December 31,
2016 totaled $89.3 million and $76.3 million, respectively.

As of December 29, 2018, approximately $1.160 billion of revenue from long-term contracts primarily in the Security segment was unearned related to
customer contracts which were not completely fulfilled and will be recognized on a decelerating basis over the next 5 years. This amount excludes any of the
Company's contracts with an original expected duration of one year or less.

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C. INVENTORIES

(Millions of Dollars) 2018 2017

Finished products $ 1,707.4 $ 1,461.4
Work in process 150.8 155.5
Raw materials 515.3 401.5
Total $ 2,373.5 $ 2,018.4

Net inventories in the amount of $1.2 billion at December 29, 2018 and $896.9 million at December 30, 2017 were valued at the lower of LIFO cost or
market. If the LIFO method had not been used, inventories would have been $44.6 million higher than reported at December 29, 2018 and $2.9 million lower
than reported at December 30, 2017.

As part of the Nelson acquisition in the second quarter of 2018, the Company acquired net inventory with an estimated fair value of $48.6 million. Refer to
Note E, Acquisitions, for further discussion of the Nelson acquisition.

D. PROPERTY, PLANT AND EQUIPMENT

(Millions of Dollars) 2018 2017

Land $ 115.9 $ 110.9
Land improvements 52.2 53.0
Buildings 625.6 611.8
Leasehold improvements 157.8 140.0
Machinery and equipment 2,566.1 2,343.7
Computer software 452.5 400.1
Property, plant & equipment, gross $ 3,970.1 $ 3,659.5
Less: accumulated depreciation and amortization (2,054.9) (1,917.0)
Property, plant & equipment, net $ 1,915.2 $ 1,742.5

Depreciation and amortization expense associated with property, plant and equipment was as follows:

(Millions of Dollars) 2018 2017 2016

Depreciation $ 288.4 $ 253.6 $ 221.8
Amortization 42.8 43.3 41.8
Depreciation and amortization expense $ 331.2 $ 296.9 $ 263.6

E. ACQUISITIONS

PENDING ACQUISITION

On August 6, 2018, the Company reached an agreement to acquire International Equipment Solutions Attachments Group ("IES Attachments"), a
manufacturer of high quality, performance-driven heavy equipment attachment tools for off-highway applications. On January 29, 2019, the agreement was
amended to exclude the mobile processors business. The Company expects the acquisition to further diversify the Company's presence in the industrial
markets, expand its portfolio of attachment solutions and provide a meaningful platform for continued growth. The acquisition will be accounted for as a
business combination and consolidated into the Company's Industrial segment. The transaction is expected to close in the first half of 2019 subject to
customary closing conditions, including regulatory approvals.

2019 TRANSACTION

On January 2, 2019, the Company acquired a 20 percent interest in MTD Holdings Inc. ("MTD"), a privately held global manufacturer of outdoor power
equipment, for $234 million in cash. With 2017 revenues of $2.4 billion, MTD manufactures and distributes gas-powered lawn tractors, zero turn mowers,
walk behind mowers, snow throwers, trimmers, chain saws, utility vehicles and other outdoor power equipment. Under the terms of the agreement, the
Company has the option to acquire the remaining 80 percent of MTD beginning on July 1, 2021 and ending on January 2, 2029. In the event the option is
exercised, the companies have agreed to a valuation multiple based on MTD’s 2018 EBITDA, with an equitable sharing arrangement for future EBITDA
growth. The investment in MTD increases the Company's presence in the $20 billion global lawn and garden segment and will allow the two companies to
work together to pursue revenue and cost opportunities, improve

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operational efficiency, and introduce new and innovative products for professional and residential outdoor equipment customers, utilizing each company's
respective portfolios of strong brands. The Company will apply the equity method of accounting to the MTD investment.

2018 ACQUISITIONS

Nelson Fasteners Systems

On April 2, 2018, the Company acquired the industrial business of Nelson Fastener Systems ("Nelson") from the Doncasters Group, which excluded Nelson's
automotive stud welding business, for $430.1 million, net of cash acquired and an estimated working capital adjustment. Nelson is complementary to the
Company's product offerings, enhances its presence in the general industrial end markets, expands its portfolio of highly-engineered fastening solutions, and
will deliver cost synergies. The results of Nelson are being consolidated into the Industrial segment.

The Nelson acquisition is being accounted for as a business combination, which requires, among other things, the assets acquired and liabilities assumed to
be recognized at their fair values as of the acquisition date. The estimated fair value of identifiable net assets acquired, which includes $64.9 million of
working capital and $167.0 million of intangible assets, is $210.6 million. The related goodwill is $219.5 million. The amount allocated to intangible assets
includes $149.0 million for customer relationships. The useful lives assigned to the intangible assets range from 12 to 15 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, assembled workforce, and the going concern nature of Nelson. Goodwill is not expected to be deductible for tax purposes.

The purchase price allocation for Nelson is substantially complete with the exception of certain opening balance sheet contingencies, including
environmental, and tax matters. The Company will complete its purchase price allocation within the measurement period. Any measurement period
adjustments resulting from the finalization of the Company's purchase accounting assessment are not expected to be material.

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.

Other 2018 Acquisitions

During 2018, the Company completed six smaller acquisitions for a total purchase price of $105.2 million, net of cash acquired. The estimated fair value of
the identifiable net assets acquired, which includes $13.0 million of working capital and $35.5 million of intangible assets, is $37.8 million. The related
goodwill is $67.4 million. The amount allocated to intangible assets includes $32.0 million for customer relationships. The useful lives assigned to
intangible assets ranges from 10 to 14 years.

The purchase price allocation for these acquisitions is substantially complete with the exception of certain working capital accounts, various opening
balance sheet contingencies and tax matters. These adjustments are not expected to have a material impact on the Company’s Consolidated Financial
Statements.

2017 ACQUISITIONS

Newell Tools

On March 9, 2017, the Company acquired Newell Tools for approximately $1.86 billion, net of cash acquired. The Newell Tools results have been
consolidated into the Company's Tools & Storage segment.

The Newell Tools acquisition was accounted for as a business combination. The purchase price allocation for Newell Tools is complete. The measurement
period adjustments recorded in 2018 did not have a material impact to the Company's Consolidated Financial Statements. The following table summarizes
the estimated fair values of assets acquired and liabilities assumed:

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(Millions of Dollars)
Cash and cash equivalents $ 20.0
Accounts and notes receivable, net 19.7
Inventories, net 195.5
Prepaid expenses and other current assets 27.1
Property, plant and equipment, net 112.4
Trade names 283.0
Customer relationships 548.0
Other assets 8.8
Accounts payable (70.3)
Accrued expenses (40.7)
Deferred taxes (269.4)
Other liabilities (7.9)
Total identifiable net assets $ 826.2
Goodwill 1,031.8
Total consideration paid $ 1,858.0

The trade names were determined to have indefinite lives. The weighted-average useful life assigned to the customer relationships is 15 years.

Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies
of the combined business, assembled workforce, and the going concern nature of Newell Tools. It is estimated that $15.7 million of goodwill, relating to the
pre-acquisition historical tax basis of goodwill, will be deductible for tax purposes.

Craftsman Brand

On March 8, 2017, the Company purchased the Craftsman® brand from Sears Holdings Corporation ("Sears Holdings") for a total estimated cash purchase
price of $936.7 million on a discounted basis, which consists of an initial cash payment of $568.2 million, a cash payment due in March 2020 with an
estimated present value at acquisition date of $234.0 million, and future payments to Sears Holdings of between 2.5% and 3.5% on sales of Craftsman
products in new Stanley Black & Decker channels through March 2032, which was valued at $134.5 million at the acquisition date based on estimated future
sales projections. Refer to Note M, Fair Value Measurements, for additional details. In addition, as part of the acquisition the Company also granted a
perpetual license to Sears Holdings to continue selling Craftsman®-branded products in Sears Holdings-related channels. The perpetual license will be
royalty-free until March 2032, which represents an estimated value of approximately $293.0 million, and 3% thereafter. The Craftsman results have been
consolidated into the Company's Tools & Storage segment.

The Craftsman® brand acquisition was accounted for as a business combination. The purchase price allocation for Craftsman is complete. The measurement
period adjustments recorded in 2018 did not have a material impact on the Company's consolidated financial statements. The estimated fair value of
identifiable net assets acquired, which includes $40.2 million of working capital and $418.0 million of intangible assets, is $482.6 million. The related
goodwill is $747.1 million. The amount allocated to intangible assets includes $396.0 million of an indefinite-lived trade name. The useful life assigned to
the customer relationships is 17 years.
Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies
of the combined business and the going concern nature of the Craftsman® brand. It is estimated that $442.7 million of goodwill will be deductible for tax
purposes.

Other 2017 Acquisitions

During 2017, the Company completed four smaller acquisitions for a total purchase price of $182.9 million, net of cash acquired, which have been
consolidated into the Company's Tools & Storage and Security segments. The purchase price allocation for these acquisitions is complete. The estimated fair
value of the identifiable net assets acquired, which includes $35.3 million of working capital and $54.4 million of intangible assets, is $88.1 million. The
related goodwill is $94.8 million.

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The amount allocated to intangible assets includes $51.4 million for customer relationships. The useful lives assigned to the customer relationships range
between 10 and 15 years.

2016 ACQUISITIONS

During 2016, the Company completed five acquisitions for a total purchase price of $59.3 million, net of cash acquired, which have been consolidated into
the Company’s Tools & Storage and Security segments. The total purchase price for the acquisitions was allocated to the assets and liabilities assumed based
on their estimated fair values. The purchase accounting for these acquisitions is complete.

ACTUAL AND PRO-FORMA IMPACT FROM ACQUISITIONS

Actual Impact from Acquisitions

The net sales and net loss from the 2018 acquisitions included in the Company's Consolidated Statements of Operations for the year ended December 29,
2018 are shown in the table below. The net loss includes amortization relating to inventory step-up and intangible assets recorded upon acquisition,
transaction costs, and other integration-related costs.

(Millions of Dollars) 2018

Net sales $ 216.5
Net loss attributable to common shareowners $ (12.3)

Pro-forma Impact from Acquisitions

The following table presents supplemental pro-forma information for the years ended December 29, 2018 and December 30, 2017, as if the 2017 and 2018
acquisitions had occurred on January 1, 2017. 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 January 1, 2017. 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) 2018 2017

Net sales $ 14,065.3 $ 13,486.2
Net earnings attributable to common shareowners 628.1 1,230.1
Diluted earnings per share $ 4.14 $ 8.07

2018 Pro-forma Results

The 2018 pro-forma results were calculated by combining the results of Stanley Black & Decker with the stand-alone results of the 2018 acquisitions for their
respective pre-acquisition periods. Accordingly the following adjustments were 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 purchase price allocation that would have been incurred from December 31, 2017 to the acquisition dates.

• Depreciation expense for the property, plant, and equipment fair value adjustments that would have been incurred from December 31, 2017 to the
acquisition date of Nelson.

• Because the 2018 acquisitions were assumed to occur on January 1, 2017, there were no deal costs or inventory step-up amortization factored into
the 2018 pro-forma year, as such expenses would have occurred in the first year following the acquisition.

2017 Pro-forma Results

The 2017 pro-forma results were calculated by combining the results of Stanley Black & Decker with the stand-alone results of the 2017 and 2018
acquisitions for their respective pre-acquisition periods. Accordingly the following adjustments were 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 purchase price allocation that would have been

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 incurred from January 1, 2017 to the acquisition dates of the 2017 acquisitions and for the year ended December 30, 2017 for the 2018 acquisitions.

• Additional depreciation expense for the property, plant, and equipment fair value adjustments that would have been incurred from January 1, 2017
to the acquisition date of Newell Tools and for the year ended December 30, 2017 for the Nelson acquisition.

• Additional expense for deal costs and inventory step-up, which would have been amortized as the corresponding inventory was sold, relating to the
2018 acquisitions.

F. GOODWILL AND INTANGIBLE ASSETS

GOODWILL — The changes in the carrying amount of goodwill by segment are as follows:

(Millions of Dollars) Tools & Storage Industrial Security Total

Balance December 30, 2017 $ 5,189.7 $ 1,454.4 $ 2,132.0 $ 8,776.1
Acquisitions 59.8 225.5 55.0 340.3
Foreign currency translation and other (95.2) (0.2) (64.3) (159.7)
Balance December 29, 2018 $ 5,154.3 $ 1,679.7 $ 2,122.7 $ 8,956.7

As required by the Company's policy, goodwill and indefinite-lived trade names were tested for impairment in the third quarter of 2018. The Company
assessed the fair values of three of its reporting units utilizing a discounted cash flow valuation model and determined that the fair values exceeded the
respective carrying amounts. The key assumptions used were discount rates and perpetual growth rates applied to cash flow projections. Also inherent in the
discounted cash flow valuations were near-term revenue growth rates over the next five years. These assumptions contemplated business, market and overall
economic conditions. For the remaining two reporting units, the Company determined qualitatively that it was not more likely than not that goodwill was
impaired, and thus, the quantitative goodwill impairment test was not required. In making this determination, the Company considered the significant excess
of fair value over carrying amount as calculated in the most recent quantitative analysis, each reporting unit's 2018 performance compared to prior year and
their respective industries, analyst multiples and other positive qualitative information. Based on the results of the annual impairment testing performed in
the third quarter of 2018, the Company determined that the fair values of each of its reporting units exceeded their respective carrying amounts.

The fair values of the Company's indefinite-lived trade names were assessed using quantitative analyses, which utilized discounted cash flow valuation
models taking into consideration appropriate discount rates, royalty rates and perpetual growth rates applied to projected sales. Based on the results of this
testing, the Company determined that the fair values of each of its indefinite-lived trade names exceeded their respective carrying amounts.

INTANGIBLE ASSETS — Intangible assets at December 29, 2018 and December 30, 2017 were as follows:

2018 2017
Gross Gross
Carrying Accumulated Carrying Accumulated
(Millions of Dollars) Amount Amortization Amount Amortization
Amortized Intangible Assets — Definite lives
Patents and copyrights $ 42.5 $ (40.6) $ 44.1 $ (41.0)
Trade names 170.8 (114.9) 154.0 (111.0)
Customer relationships 2,435.0 (1,269.8) 2,326.1 (1,155.4)
Other intangible assets 236.1 (173.6) 260.3 (175.6)
Total $ 2,884.4 $ (1,598.9) $ 2,784.5 $ (1,483.0)

Indefinite-lived trade names totaled $2.199 billion at December 29, 2018 and $2.206 billion at December 30, 2017. The year-over-year change is due to
currency fluctuations.

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Intangible assets amortization expense by segment was as follows:

(Millions of Dollars) 2018 2017 2016

Tools & Storage $ 75.5 $ 68.0 $ 36.8
Industrial 50.7 45.4 49.8
Security 49.1 50.4 57.8
Consolidated $ 175.3 $ 163.8 $ 144.4

Future amortization expense in each of the next five years amounts to $168.6 million for 2019, $150.5 million for 2020, $141.9 million for 2021, $132.7
million for 2022, $123.7 million for 2023 and $568.1 million thereafter.

G. ACCRUED EXPENSES
Accrued expenses at December 29, 2018 and December 30, 2017 were as follows:

(Millions of Dollars) 2018 2017 1

Payroll and related taxes $ 297.0 $ 339.5

Income and other taxes 67.5 142.0
Customer rebates and sales returns 116.6 134.0
Insurance and benefits 69.4 73.7
Restructuring costs 108.8 23.2
Derivative financial instruments 7.5 103.1
Warranty costs 65.5 71.3
Deferred revenue 98.6 95.6
Freight costs 87.3 30.5
Environmental costs 58.1 22.5
Other 413.5 352.3
Total $ 1,389.8 $ 1,387.7
1 Certain prior year amounts have been recast as a result of the adoption of the new revenue standard. Refer to Note A, Significant Accounting Policies, for further discussion.

H. LONG-TERM DEBT AND FINANCING ARRANGEMENTS

Long-term debt and financing arrangements at December 29, 2018 and December 30, 2017 were as follows:

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 December 30,
December 29, 2018 2017
Unamortized Gain Purchase
Interest Original Unamortized (Loss) Terminated Accounting FV Deferred Carrying Carrying
(Millions of Dollars) Rate Notional Discount Swaps1 Adjustment Financing Fees Value Value2
Notes payable due 2018 2.45% $ — $ — $ — $ — $ — $ — $ 630.9
Notes payable due 2018 1.62% — — — — — — 344.1
Notes payable due 2021 3.40% 400.0 (0.1) 10.2 — (1.0) 409.1 412.1
Notes payable due 2022 2.90% 754.3 (0.3) — — (2.4) 751.6 750.9
Notes payable due 2028 7.05% 150.0 — 10.4 10.0 — 170.4 172.6
Notes payable due 2028 4.25% 500.0 (0.4) — — (3.9) 495.7 —
Notes payable due 2040 5.20% 400.0 (0.2) (31.9) — (3.0) 364.9 363.3
Notes payable due 2048 4.85% 500.0 (0.6) — — (5.0) 494.4 —
Notes payable due 2052 (junior
subordinated) 5.75% 750.0 — — — (18.4) 731.6 731.0
Notes payable due 2053 (junior
subordinated) 7.08% 400.0 — 4.6 — (7.9) 396.7 $ 396.6
Other, payable in varying amounts 0.00% -
through 2022 4.50% 7.9 — — — — 7.9 4.2
Total long-term debt, including
current maturities $ 3,862.2 $ (1.6) $ (6.7) $ 10.0 $ (41.6) $ 3,822.3 $ 3,805.7
Less: Current maturities of long-
term debt (2.5) (977.5)
Long-term debt $ 3,819.8 $ 2,828.2
1 Unamortized gain (loss) associated with interest rate swaps are more fully discussed in Note I, Financial Instruments.
2
Certain prior year amounts have been recast as a result of the adoption of the new revenue standard. Refer to Note A, Significant Accounting Policies, for further discussion .

As of December 29, 2018, the aggregate annual principal maturities of long-term debt for each of the years from 2019 to 2023 are $2.9 million for 2019, $0.4
million for 2020, $400.4 million for 2021, $758.5 million for 2022, no principal maturities for 2023, and $2.700 billion thereafter. These maturities represent
the principal amounts to be paid and accordingly exclude the remaining $10.0 million of unamortized fair value adjustments made in purchase accounting,
which increased the Black & Decker note payable due 2028, as well as a net loss of $8.3 million pertaining to unamortized termination gain/loss on interest
rate swaps and unamortized discount on the notes as described in Note I, Financial Instruments, and $41.6 million of unamortized deferred financing fees.
Interest paid during 2018, 2017 and 2016 amounted to $249.6 million, $198.3 million and $176.6 million, respectively.

In November 2018, the Company issued $500 million of senior unsecured notes, maturing on November 15, 2028 ("2028 Term Notes") and $500 million of
senior unsecured notes, maturing on November 15, 2048 ("2048 Term Notes"). The 2028 Term Notes and 2048 Term Notes will accrue interest at fixed rates
of 4.25% per annum and 4.85% per annum, respectively, with interest payable semi-annually in arrears on both notes. The notes are unsecured and rank
equally with all of the Company's existing and future unsecured and unsubordinated debt. The Company received net proceeds of $990.0 million which
reflects a discount of $0.9 million and $9.1 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 other borrowings.

Contemporaneously with the issuance of the 2028 Term Notes and 2048 Term Notes, the Company paid $977.5 million to settle its remaining obligations of
two unsecured notes which matured in November 2018. These notes are described in more detail below.

In December 2013, the Company issued $400.0 million aggregate principal amount of 5.75% fixed-to-floating rate junior subordinated debentures maturing
December 15, 2053 (“2053 Junior Subordinated Debentures”). The 2053 Junior Subordinated Debentures bore interest at a fixed rate of 5.75% per annum,
payable semi-annually in arrears to, but excluding December 15, 2018. From and including December 15, 2018, the 2053 Junior Subordinated Debentures
bear interest at an annual rate equal to three-month LIBOR plus 4.304%, payable quarterly in arrears. The 2053 Junior Subordinated Debentures are
unsecured and rank subordinate and junior in right of payment to all of the Company’s existing and future senior debt. The 2053 Junior Subordinated
Debentures rank equally in right of payment with all of the Company’s other unsecured junior subordinated debt. The Company received proceeds from the
offering of $392.0 million, net of $8.0 million of underwriting discounts and commissions, before offering expenses. The Company used the net proceeds
primarily to repay commercial paper borrowings. The Company may, so long as there is no event of default with respect to the debentures, defer interest
payments on the debentures, from time to time, for one or more Optional Deferral Periods (as defined in the indenture

81
governing the 2053 Junior Subordinated Debentures) of up to five consecutive years. Deferral of interest payments cannot extend beyond the maturity date of
the debentures. The 2053 Junior Subordinated Debentures include an optional redemption provision whereby the Company may elect to redeem the
debentures, in whole or in part, at a "make-whole" premium based on United States Treasury rates, plus accrued and unpaid interest if redeemed before
December 15, 2018, or at 100% of their principal amount plus accrued and unpaid interest if redeemed after December 15, 2018. In addition, the Company
could have redeemed the debentures in whole, but not in part, before December 15, 2018, if certain changes in tax laws, regulations or interpretations
occurred at 100% of their principal amount plus accrued and unpaid interest. On February 25, 2019, the Company redeemed all of the outstanding 2053
Junior Subordinated Debentures for $405.7 million, which represented 100% of the principal amount plus accrued and unpaid interest to the redemption
date.

In November 2012, the Company issued $800.0 million of senior unsecured term notes, maturing on November 1, 2022 (“2022 Term Notes”) with fixed
interest payable semi-annually, in arrears, at a rate of 2.90% per annum. The 2022 Term Notes are unsecured and rank equally with all of the Company's
existing and future unsecured and unsubordinated debt. The Company received net proceeds of $793.9 million, which reflected a discount of $0.7 million
and $5.4 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 short-term borrowings. The 2022 Term Notes include a Change of Control provision that would apply should a
Change of Control event (as defined in the Indenture governing the 2022 Term Notes) occur. The Change of Control provision states that the holders of the
2022 Term Notes may require the Company to repurchase, in cash, all of the outstanding 2022 Term Notes for a purchase price at 101.0% of the original
principal amount, plus any accrued and unpaid interest outstanding up to the repurchase date. In December 2014, the Company repurchased $45.7 million of
the 2022 Term Notes and paid $45.3 million in cash and recognized a net pre-tax gain of less than $0.1 million after expensing $0.3 million of related loan
discount costs and deferred financing fees. At December 29, 2018, the carrying value of the 2022 Term Notes includes $0.3 million of unamortized discount.

In July 2012, the Company issued $750.0 million of junior subordinated debentures, maturing on July 25, 2052 (“2052 Junior Subordinated Debentures”)
with fixed interest payable quarterly, in arrears, at a rate of 5.75% per annum. The 2052 Junior Subordinated Debentures are unsecured and rank subordinate
and junior in right of payment to all of the Company's existing and future senior debt. The Company received net proceeds of $729.4 million and paid $20.6
million of fees associated with the transaction. The Company used the net proceeds from the offering for general corporate purposes, including repayment of
debt and refinancing of near-term debt maturities. The Company may, so long as there is no event of default with respect to the debentures, defer interest
payments on the debentures, from time to time, for one or more Optional Deferral Periods (as defined in the indenture governing the 2052 Junior
Subordinated Debentures) of up to five consecutive years per period. Deferral of interest payments cannot extend beyond the maturity date of the debentures.
Additionally, the 2052 Junior Subordinated Debentures include an optional redemption whereby the Company may elect to redeem the debentures at 100%
of their principal amount plus accrued and unpaid interest.

Commercial Paper and Credit Facilities

In January 2017, the Company amended its existing $2.0 billion commercial paper program to increase the maximum amount of notes authorized to be
issued to $3.0 billion and to include Euro denominated borrowings in addition to U.S. Dollars. As of December 29, 2018, the Company had $373.0 million of
borrowings outstanding against the Company's $3.0 billion commercial paper program, of which approximately $228.9 million in Euro denominated
commercial paper was designated as Net Investment Hedge as described in more detailed in Note I, Financial Instruments. At December 30, 2017, the
Company had no borrowings outstanding against the Company’s $3.0 billion commercial paper program.

In September 2018, the Company amended and restated its existing five-year $1.75 billion committed credit facility with the concurrent execution of a new
five-year $2.0 billion committed credit facility (the "5 Year Credit Agreement"). Borrowings under the Credit Agreement may be made in U.S. Dollars, Euros
or Pounds Sterling. A sub-limit of $653.3 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 12, 2023 or upon
termination. The 5 Year Credit Agreement is designated to be a liquidity back-stop for the Company's $3.0 billion U.S. Dollar and Euro commercial paper
program. As of December 29, 2018 and December 30, 2017, the Company had not drawn on its five-year committed credit facility.

In September 2018, the Company terminated its previous 364-day $1.25 billion committed credit facility and concurrently executed a new 364-Day $1.0
billion committed credit facility (the "364 Day Credit Agreement"). Borrowings under the 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 364 Day
Credit Agreement. The Company

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must repay all advances under the 364 Day Credit Agreement by the earlier of September 11, 2019 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 a
liquidity back-stop for the Company's $3.0 billion U.S. Dollar and Euro commercial paper program. As of December 29, 2018, the Company had not drawn
on its 364-Day committed credit facility.

In addition, the Company has other short-term lines of credit that are primarily uncommitted, with numerous banks, aggregating $455.4 million, of which
$357.8 million was available at December 29, 2018. Short-term arrangements are reviewed annually for renewal.

At December 29, 2018, the aggregate amount of committed and uncommitted lines of credit, long-term and short-term, was $3.5 billion. At December 29,
2018, $376.1 million was recorded as short-term borrowings relating to commercial paper and amounts outstanding against uncommitted lines. In addition,
$97.6 million of the short-term credit lines was utilized primarily pertaining to outstanding letters of credit for which there are no required or reported debt
balances. The weighted-average interest rates on U.S. dollar denominated short-term borrowings for the years ended December 29, 2018 and December 30,
2017 were 2.3% and 1.2%, respectively. The weighted-average interest rate on Euro denominated short-term borrowings for the years ended December 29,
2018 and December 30, 2017 was negative 0.3%.

Equity Units

In December 2013, the Company issued 3,450,000 Equity Units (the “Equity Units”), each with a stated value of $100. The Equity Units were initially
comprised of a 1/10, or 10%, undivided beneficial ownership in a $1,000 principal amount 2.25% junior subordinated note due 2018 (the “2018 Junior
Subordinated Note”) and a forward common stock purchase contract (the “Equity Purchase Contract”). The Company received approximately $334.7 million
in cash proceeds from the Equity Units, net of underwriting discounts and commissions, before offering expenses, and recorded $345.0 million in long-term
debt. The proceeds from the issuance of the Equity Units were used primarily to repay commercial paper borrowings. The Company also used $9.7 million of
the proceeds to enter into capped call transactions utilized to hedge potential economic dilution as described in more detail below.

Equity Purchase Contracts:

On November 17, 2016, the Company settled all Equity Purchase Contracts by issuing 3,504,165 common shares and received $345.0 million in cash
proceeds generated from the remarketing described in detail below. The number of shares of common stock issuable upon settlement of each purchase
contract (the “settlement rate”) was rounded to the nearest ten-thousandth of a share and was determined by calculating the applicable market value, equal to
the average of the daily volume-weighted average price of common stock for each of the 20 consecutive trading days during the market value averaging
period, October 21, 2016 through November 17, 2016. The conversion rate used in calculating the average of the daily volume-weighted average price of
common stock during the market value averaging period was 1.0157 (equivalent to the purchase contract settlement rate and a conversion price of $98.45 per
common share).

Holders of the Equity Purchase Contracts were paid contract adjustment payments (“contract adjustment payments”) at a rate of 4.00% per annum, payable
quarterly in arrears on February 17, May 17, August 17 and November 17 of each year, commencing February 17, 2014. The $40.2 million present value of
the Contract Adjustment Payments reduced Shareowners’ Equity upon issuance of the Equity Units and a related liability for the present value of the cash
payments of $40.2 million was recorded. As each quarterly contract adjustment payment was made, the related liability was relieved with the difference
between the cash payment and the present value accreted to interest expense over the three-year term. On November 17, 2016, the Company made the final
contract adjustment payment.

2018 Junior Subordinated Notes:

Prior to November 17, 2016, the 2018 Junior Subordinated Notes bore interest at a rate of 2.25% per annum, payable quarterly in arrears. The Company
successfully remarketed the 2018 Junior Subordinated Notes in November 2016 ("Subordinated Notes"). In connection with the remarketing, the interest rate
on the notes was reset, effective on the settlement date to a rate of 1.622% per annum, payable semi-annually in arrears through November 2018.

The remarketing resulted in proceeds of $345.0 million, which the Company did not directly receive, and were automatically applied to satisfy in full the
related unit holders’ obligations to purchase common stock under their Equity Purchase Contracts.

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In November 2018, the $345.0 million aggregate principal amount of the Subordinated Notes matured and was paid by the Company to settle its remaining
obligation.

Interest expense of $4.9 million for 2018 and $5.6 million for 2017 was recorded related to the contractual interest coupon on the Subordinated Notes based
on the annual rate of 1.622%. Interest expense of $6.8 million in 2016 was recorded related to the 2.25% contractual interest coupon on the 2018 Junior
Subordinated Notes.

Capped Call Transactions:

In order to offset the potential economic dilution associated with the common shares issuable upon settlement of the Equity Purchase Contracts, the
Company entered into capped call transactions with a major financial institution (the “counterparty”). The capped call transactions covered, subject to
customary anti-dilution adjustments, the number of shares equal to the number of shares issuable upon settlement of the Equity Purchase Contracts. The
capped call transactions had a term of approximately three years and initially had a lower strike price of $98.80, which corresponded to the minimum
settlement rate of the Equity Purchase Contracts, and an upper strike price of $112.91, which was approximately 40% higher than the closing price of the
Company's common stock on November 25, 2013, and were subject to customary anti-dilution adjustments. The Company paid $9.7 million of cash to fund
the cost of the capped call transactions, which was recorded as a reduction of Shareowners’ Equity. In October and November 2016, the Company’s capped
call options on its common stock expired and were net-share settled resulting in the Company receiving 418,234 shares of common stock.

Convertible Preferred Units

In November 2010, the Company issued 6,325,000 Convertible Preferred Units (the “Convertible Preferred Units”), each with a stated amount of $100. The
Convertible Preferred Units were comprised of a 1/10, or 10%, undivided beneficial ownership in a $1,000 principal amount junior subordinated note (the
“Notes”) and a Purchase Contract (the “Purchase Contract”) obligating holders to purchase one share of the Company’s 4.75% Series B Perpetual Cumulative
Convertible Preferred Stock (the “Convertible Preferred Stock”). The Company received $613.5 million in cash proceeds from the Convertible Preferred Units
offering, net of underwriting fees.

In November 2015, the Notes were successfully remarketed with the proceeds automatically applied to satisfy in full the related unit holders’ obligations to
purchase Convertible Preferred Stock under their Purchase Contracts. Accordingly, the Company issued 6,325,000 shares of Convertible Preferred Stock
resulting in cash proceeds to the Company of $632.5 million. In December 2015, the Company converted, redeemed, and settled all Convertible Preferred
Stock by paying $632.5 million in cash and issuing 2.9 million common shares for the excess value of the conversion feature above the face value.

In November 2018, the $632.5 million principal amount of the Notes matured and was paid by the Company to settle its remaining obligation.

Interest expense of $13.6 million in 2018 and $15.5 million in 2017 and 2016 was recorded related to the contractual interest coupon on the Notes based
upon the 2.45% annual rate.
I. FINANCIAL INSTRUMENTS
In the first quarter of 2018, the Company elected to early adopt ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting
for Hedge Activities, which amends the hedge accounting recognition and presentation requirements of ASC 815. ASU 2017-12 requires the presentation and
disclosure requirements to be applied prospectively and as a result, certain disclosures for fiscal years 2017 and 2016 conform to the presentation and
disclosure requirements prior to the adoption.
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, management designates its derivative instruments as cash flow
hedges, fair value hedges or net investment hedges. Generally, commodity price exposures are not hedged with derivative financial instruments and instead
are actively managed through customer pricing initiatives, procurement-driven cost reduction initiatives and other productivity improvement projects.
Financial instruments are not utilized for speculative purposes.

A summary of the fair values of the Company’s derivatives recorded in the Consolidated Balance Sheets at December 29, 2018 and December 30, 2017
follows:

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 Balance Sheet Balance Sheet
(Millions of Dollars) Classification 2018 2017 Classification 2018 2017
Derivatives designated as hedging
instruments:
Interest Rate Contracts Cash Flow Other current assets $ — $ — Accrued expenses $ — $ 55.7
LT other assets — — LT other liabilities — —
Foreign Exchange Contracts Cash Flow Other current assets 18.1 4.1 Accrued expenses 0.6 33.4
LT other assets — — LT other liabilities — 5.2
Net Investment Hedge Other current assets 5.7 6.6 Accrued expenses 1.5 7.0
LT other assets — — LT other liabilities 13.8 5.8
Non-derivative designated as hedging
instrument:
Net Investment Hedge — — Short-term borrowings 228.9 —
Total Designated as hedging instruments $ 23.8 $ 10.7 $ 244.8 $ 107.1
Derivatives not designated as hedging
instruments:
Foreign Exchange Contracts Other current assets $ 9.1 $ 7.3 Accrued expenses $ 5.4 $ 6.9
Total $ 32.9 $ 18.0 $ 250.2 $ 114.0

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.

In 2018, 2017 and 2016, cash flows related to derivatives, including those that are separately discussed below, resulted in net cash received of $2.4 million,
$2.6 million and $94.7 million, respectively.

CASH FLOW HEDGES — There were after-tax mark-to-market losses of $26.8 million and $112.6 million as of December 29, 2018 and December 30, 2017,
respectively, reported for cash flow hedge effectiveness in Accumulated other comprehensive loss. An after-tax loss of $1.9 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 for active derivatives during
the periods in which the underlying hedged transactions affected earnings for 2018, 2017 and 2016:

Classification of Gain (Loss) Gain (Loss)

Gain (Loss) Reclassified from Recognized in
(Loss) Gain Reclassified from OCI to Income Income on Amounts Excluded
2018 (Millions of Dollars) Recorded in OCI OCI to Income from Effectiveness Testing
Interest Rate Contracts $ 33.1 Interest expense $ — $ —
Foreign Exchange Contracts $ 35.9 Cost of sales $ (17.9) $ —

Classification of Gain (Loss) Gain (Loss)

Gain (Loss) Reclassified from Recognized in
(Loss) Gain Reclassified from OCI to Income Income
2017 (Millions of Dollars) Recorded in OCI OCI to Income (Effective Portion) (Ineffective Portion*)
Interest Rate Contracts $ (8.4) Interest expense $ — $ —
Foreign Exchange Contracts $ (66.6) Cost of sales $ 8.4 $ —

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 Classification of Gain (Loss) Gain (Loss)
Gain (Loss) Reclassified from Recognized in
(Loss) Gain Reclassified from OCI to Income Income
2016 (Millions of Dollars) Recorded in OCI OCI to Income (Effective Portion) (Ineffective Portion*)
Interest Rate Contracts $ (6.2) Interest expense $ — $ —
Foreign Exchange Contracts $ 19.3 Cost of sales $ 21.7 $ —
* Includes ineffective portion and amount excluded from effectiveness testing on derivatives.

A summary of the pre-tax effect of cash flow hedge accounting on the Consolidated Statements of Operations for 2018 is as follows:

2018
(Millions of dollars) Cost of Sales Interest Expense
Total amount in the Consolidated Statements of Operations in which the effects of the cash flow hedges are recorded $ 9,131.3 $ 277.9
Gain (loss) on cash flow hedging relationships:
Foreign Exchange Contracts:
Hedged Items $ 17.9 $ —
Gain (loss) reclassified from OCI into Income $ (17.9) $ —
Interest Rate Swap Agreements:
Gain (loss) reclassified from OCI into Income 1 $ — $ (15.3)
1
Inclusive of the gain/loss amortization on terminated derivative financial instruments.

For 2017 and 2016, the hedged items’ impact to the Consolidated Statement of Operations were losses of $8.4 million and $21.7 million, respectively, in
Cost of Sales which are offsetting the amounts shown above. There was no impact related to the interest rate contracts’ hedged items for any period presented.

For 2018 and 2017, an after-tax loss of $15.4 million and $4.7 million, respectively, and for 2016 an after-tax gain of $3.3 million were reclassified from
Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative financial instruments) during the
periods in which the underlying hedged transactions affected earnings.

Interest Rate Contracts: The Company enters into interest rate swap agreements in order to obtain the lowest cost source of funds within a targeted range of
variable to fixed-rate debt proportions. As of December 29, 2018, all interest rate swaps designated as cash flow hedges matured as discussed below. As of
December 30, 2017, the Company had $400 million of forward starting swaps which were executed in 2014.

In November 2018, forward starting interest rate swaps with an aggregate notional amount of $400 million fixing 10 years of interest payments ranging from
4.25%-4.85% matured. The objective of the hedges was to offset the expected variability on future payments associated with the interest rate on debt
instruments. This resulted in a loss of $22.7 million, which was recorded in Accumulated other comprehensive loss and is being amortized to earnings as
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 other financing activities in the Consolidated Statements of Cash Flows.

In January and February 2019, the Company entered into forward starting interest rate swaps totaling $450 million to offset the expected variability on future
interest payments associated with debt instruments expected to be issued in the future.

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 December 29, 2018, and December 30, 2017
the notional values of the forward currency contracts outstanding was $240.0 million and $559.9 million, respectively, maturing on various dates through
2019.

Purchased Option Contracts: The Company and its subsidiaries have entered into various intercompany transactions whereby the notional values are
denominated in currencies other than the functional currencies of the party executing the trade. In order

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to better match the cash flows of its intercompany obligations with cash flows from operations, the Company enters into purchased option contracts. 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 December 29, 2018 and December 30, 2017, the notional value of option contracts
outstanding was $370.0 million and $400.0 million, respectively, maturing on various dates through 2019.

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 previous years, the Company entered into interest rate swaps on the first five years of the Company's $400 million 5.75% notes due 2053 and
interest rate swaps with notional values which equaled the Company's $400 million 3.40% notes due 2021 and the Company's $150 million 7.05% notes due
2028. These interest rate swaps effectively converted the Company's fixed rate debt to floating rate debt based on LIBOR, thereby hedging the fluctuation in
fair value resulting from changes in interest rates. In 2016, the Company terminated all of the above interest rate swaps and there were no open contracts as of
December 29, 2018 and December 30, 2017. The terminations resulted in cash receipts of $27.0 million. This gain was deferred and is being amortized to
earnings over the remaining life of the notes.

A summary of the pre-tax effect of fair value hedge accounting on the Consolidated Statements of Operations for 2018 is as follows:
2018
(Millions of dollars) Interest Expense
Total amount in the Consolidated Statements of Operations in which the effects of the fair value hedges are recorded $ 277.9
Amortization of gain on terminated swaps $ (3.2)

Prior to termination of the Company's interest rate swaps discussed above, the changes in fair value of the swaps and the offsetting changes in fair value
related to the underlying notes were recognized in earnings. A summary of the fair value adjustments relating to these swaps is as follows:

2017 2016
(Loss)/Gain on Gain /(Loss) on Gain/(Loss) on (Loss)/Gain on
Income Statement Classification (Millions of Dollars) Swaps* Borrowings Swaps* Borrowings
Interest expense $ — $ — $ (3.3) $ 3.8
* Includes ineffective portion and amount excluded from effectiveness testing on derivatives.

Amortization of the gain on terminated swaps of $3.2 million was reported as a reduction of interest expense in 2017. In addition to the fair value adjustments
in the table above, net swap accruals and amortization of the gain/loss on terminated swaps of $6.9 million was reported as a reduction of interest expense in
2016. Interest expense on the underlying debt was $19.9 million in 2016 when the hedges were active.

A summary of the amounts recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of December 29,
2018 is as follows:
Carrying Amount of Cumulative Amount of Fair Value Hedging Adjustment
(Millions of dollars) Hedged Liability 1 Included in the Carrying Amount of the Hedged Liability
Current maturities of long-term debt $ 2.5 Terminated Swaps $ 2.1
Long-Term Debt $ 3,819.8 Terminated Swaps $ (10.0)
1Represents hedged items no longer designated in qualifying fair value hedging relationships.

NET INVESTMENT HEDGES

Foreign Exchange Contracts: The Company utilizes net investment hedges to offset the translation adjustment arising from re-measurement of its investment
in the assets and liabilities of its foreign subsidiaries. The total after-tax amounts in Accumulated other comprehensive loss were a gain of $63.3 million and
$3.4 million at December 29, 2018 and December 30, 2017, respectively.

As of December 29, 2018, the Company had foreign exchange contracts that mature on various dates through 2019 with notional values totaling $262.4
million outstanding hedging a portion of its British pound sterling, Swedish krona and Euro

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denominated net investments; a cross currency swap with a notional value totaling $250.0 million maturing 2023 hedging a portion of its Japanese yen
denominated net investment; an option contract with a notional value totaling $35.1 million maturing in 2019 hedging a portion of its Mexican peso
denominated net investment; and Euro denominated commercial paper with a value of $228.9 million maturing in 2019 hedging a portion of its Euro
denominated net investments. As of December 30, 2017, the Company had foreign exchange contracts maturing on various dates through 2018 with notional
values totaling $751.2 million outstanding hedging a portion of its British pound sterling, Mexican peso, Swedish krona, Euro and Canadian denominated
net investment and a cross currency swap with a notional value totaling $250.0 million maturing 2023 hedging a portion of its Japanese yen denominated
net investment.

In January 2019, the Company entered into cross currency swaps with notional values totaling $1.25 billion maturing 2020 hedging a portion of its Euro,
Swedish krona and Swiss franc denominated net investments.

Maturing foreign exchange contracts resulted in net cash received of $25.7 million, cash paid of $23.3 million and cash received of $104.7 million during
2018, 2017 and 2016, respectively.

Gains and losses on net investment hedges remain in Accumulated other comprehensive loss until disposal of the underlying assets. Upon adoption of ASU
2017-12, 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. Prior to the adoption of ASU 2017-12, no components were excluded from the assessment of effectiveness. Refer to Note A,
Significant Accounting Policies, for further discussion. Gains and losses after a hedge has been de-designated are recorded directly to the Consolidated
Statements of Operations in Other, net.

The pre-tax gain or loss from fair value changes for 2018 was as follows:

2018
Total Gain (Loss) Excluded Component
Total Gain (Loss) Excluded Component Income Statement Reclassified from Amortized from OCI
(Millions of Dollars) Recorded in OCI Recorded in OCI Classification OCI to Income to Income
Forward Contracts $ 37.1 $ 8.6 Other, net $ 8.2 $ 8.2
Cross Currency Swap $ (2.3) $ 5.8 Other, net $ 6.8 $ 6.8
Option Contracts $ (2.0) $ — Other, net $ — $ —
Non-derivative designated as Net Investment
Hedge $ 61.8 $ — Other, net $ — $ —
The pre-tax gain or loss from fair value changes for 2017 and 2016 was as follows:

2017 2016
Effective Ineffective Effective Ineffective
Amount Portion Portion* Portion Portion*
Recorded in Recorded Recorded in Amount Recorded Recorded in
Income Statement Classification (Millions of OCI in Income Income Recorded in OCI in Income Income
Dollars) Gain (Loss) Statement Statement Gain (Loss) Statement Statement
Other-net $ (131.3) $ — $ — $ 117.8 $ — $ —
* Includes ineffective portion.

As discussed in Note H, Long-Term Debt and Financing Arrangements, the Company amended its existing $2.0 billion commercial paper program in 2017 to
increase the maximum amount of notes authorized to be issued to $3.0 billion and to include Euro denominated borrowings in addition to U.S. Dollars. Euro
denominated borrowings against this commercial paper program during 2018 and 2017 were designated as a Net Investment Hedge against a portion of its
Euro denominated net investment. As of December 29, 2018, the Company has $228.9 million in Euro denominated borrowings outstanding against this
commercial paper program. As of December 30, 2017, the Company had no borrowings outstanding against this commercial paper program.

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UNDESIGNATED HEDGES
Foreign Exchange Contracts: Currency swaps and foreign exchange forward contracts are used to reduce risks arising from the change in fair value of certain
foreign currency denominated assets and liabilities (such as affiliate loans, payables and receivables). The objective of these practices is to minimize the
impact of foreign currency fluctuations on operating results. The total notional amount of the forward contracts outstanding at December 29, 2018 was $1.0
billion maturing on various dates through 2019. The total notional amount of the forward contracts outstanding at December 30, 2017 was $1.0 billion
maturing on various dates through 2018. The income statement impacts related to derivatives not designated as hedging instruments under ASC 815 for
2018, 2017 and 2016 are as follows:
2018 2017 2016
Amount of Amount of Amount of
Gain (Loss) Gain (Loss) (Loss) Gain
Recorded in Recorded in Recorded in
Income Statement Income on Income on Income on
(Millions of Dollars) Classification Derivative Derivative Derivative
Foreign Exchange Contracts Other-net $ 17.0 $ 51.5 $ (21.1)

J. CAPITAL STOCK

EARNINGS PER SHARE — The following table reconciles net earnings attributable to common shareowners and the weighted-average shares outstanding
used to calculate basic and diluted earnings per share for the fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016.

2018 2017 2016

Numerator (in millions):
Net Earnings Attributable to Common Shareowners1 $ 605.2 $ 1,227.3 $ 968.0

Denominator (in thousands):

Basic weighted-average shares outstanding 148,919 149,629 146,041
Dilutive effect of stock contracts and awards 2,724 2,820 2,166
Diluted weighted-average shares outstanding 151,643 152,449 148,207

Earnings per share of common stock 1 :

Basic $ 4.06 $ 8.20 $ 6.63
Diluted $ 3.99 $ 8.05 $ 6.53
1 Prior year amounts have been recast as a result of the adoption of the new revenue standard. Refer to Note A, Significant Accounting Policies, for further discussion.

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

2018 2017 2016

Number of stock options 1,339 389 734

As described in detail below under "Other Equity Arrangements," the Company issued 7,500,000 Equity Units in May 2017 with a total notional value of
$750.0 million. Each unit initially consists of 750,000 shares of convertible preferred stock and forward stock purchase contracts. On and after May 15, 2020,
the convertible 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. The conversion rate was initially 6.1627 shares of common stock per one share of
convertible preferred stock, which is equivalent to an initial conversion price of approximately $162.27 per share of common stock. As of December 29,
2018, due to the customary anti-dilution provisions, the conversion rate was 6.1783, equivalent to a conversion price of approximately $161.86 per share of
common stock. The convertible preferred stock is excluded from the denominator of the diluted earnings per share calculation on the basis that the
convertible preferred stock will be settled in cash except to the extent that the conversion value of the convertible preferred stock exceeds 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, if the Company elects to settle such excess in common shares, are included in the denominator of diluted earnings per share in
periods in which they are dilutive. The shares related to the convertible preferred stock were anti-dilutive during most of 2018.

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As described in detail below under "Other Equity Arrangements," the Company issued Equity Units in December 2013 comprised of $345.0 million of Notes
and Equity Purchase Contracts, which obligated the holders to purchase on November 17, 2016, for $100, between 1.0122 and 1.2399 shares of the
Company’s common stock. The shares related to the Equity Purchase Contracts were anti-dilutive during certain months in 2016. Upon the November 17,
2016 settlement date, the Company issued 3,504,165 shares of common stock and received cash proceeds of $345.0 million.

COMMON STOCK ACTIVITY — Common stock activity for 2018, 2017 and 2016 was as follows:

2018 2017 2016

Outstanding, beginning of year 154,038,031 152,559,767 153,944,291
Issued from treasury 941,854 1,680,339 4,870,761
Returned to treasury (3,677,435) (202,075) (6,255,285)
Outstanding, end of year 151,302,450 154,038,031 152,559,767
Shares subject to the forward share purchase contract (3,645,510) (3,645,510) (3,645,510)
Outstanding, less shares subject to the forward share purchase contract 147,656,940 150,392,521 148,914,257

In April 2018, the Company repurchased 1,399,732 shares of common stock for approximately $200.0 million. In July 2018, the Company repurchased
2,086,792 shares of common stock for approximately $300.0 million.

In 2016, the Company repurchased 3,940,087 shares of common stock for approximately $374.1 million. Additionally, the Company net-share settled
capped call options on its common stock and received 711,376 shares during 2016.

In November 2016, the Company issued 3,504,165 shares of common stock to settle the purchase contracts of the 2013 Equity Units.

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

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 June 2018, the
Company amended the settlement date to April 2021, 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.

In October 2014, the Company entered into a forward share purchase contract on its common stock. The contract obligated the Company to pay $150.0
million, plus an additional amount related to the forward component of the contract, to the financial institution counterparty not later than October 2016, or
earlier at the Company’s option, for the 1,603,822 shares purchased. The reduction of common shares outstanding was recorded at the inception of the
forward share purchase contract in October 2014 and factored into the calculation of weighted-average shares outstanding at that time. In October 2016, the
Company physically settled the contract, receiving 1,603,822 shares for a settlement amount of $147.4 million. These shares are reflected as "Returned to
treasury" in the table above.

COMMON STOCK RESERVED — Common stock shares reserved for issuance under various employee and director stock plans at December 29, 2018 and
December 30, 2017 are as follows:

2018 2017
Employee stock purchase plan 1,606,224 1,745,939
Other stock-based compensation plans 14,277,893 2,526,337
Total shares reserved 15,884,117 4,272,276

On January 22, 2018, the Board of Directors adopted the 2018 Omnibus Award Plan (the "2018 Plan") and authorized the issuance of 16,750,000 shares of the
Company's common stock in connection with the awards pursuant to the 2018 Plan. No further awards will be issued under the Company's 2013 Long-Term
Incentive Plan.

PREFERRED STOCK PURCHASE RIGHTS — Prior to March 10, 2016, each outstanding share of common stock had a 1 share purchase right. Each
purchase right could be exercised to purchase one two-hundredth of a share of Series A Junior Participating Preferred Stock at an exercise price of $220.00,
subject to adjustment. The rights, which did not have voting

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rights, expired on March 10, 2016. There were no outstanding rights or shares of Series A Junior Participating Preferred Stock as of December 29, 2018.

STOCK-BASED COMPENSATION PLANS — The Company has stock-based compensation plans for salaried employees and non-employee members of
the Board of Directors. The plans provide for discretionary grants of stock options, restricted stock units and other stock-based awards.

The plans are generally administered by the Compensation and Talent Development Committee of the Board of Directors, consisting of non-employee
directors.

Stock Option Valuation Assumptions:

Stock options are granted at the fair market value of the Company’s stock on the date of grant and have a 10-year term. Generally, stock option grants vest
ratably over 4 years from the date of grant.

The following describes how certain assumptions affecting the estimated fair value of stock options are determined: the dividend yield is computed as the
annualized dividend rate at the date of grant divided by the strike price of the stock option; expected volatility is based on an average of the market implied
volatility and historical volatility for the 5.25 year expected life; the risk-free interest rate is based on U.S. Treasury securities with maturities equal to the
expected life of the option; and a seven percent forfeiture rate is assumed. The Company uses historical data in order to estimate forfeitures and holding
period behavior for valuation purposes.

The fair value of stock option grants is estimated on the date of grant using the Black-Scholes option pricing model. The following weighted-average
assumptions were used to value grants made in 2018, 2017 and 2016.

2018 2017 2016

Average expected volatility 23.0% 20.0% 24.1%
Dividend yield 2.0% 1.5% 2.0%
Risk-free interest rate 2.9% 2.2% 2.0%
Expected term 5.3 years 5.2 years 5.3 years
Fair value per option $ 26.54 $ 30.71 $ 23.41
Weighted-average vesting period 2.9 years 2.9 years 2.4 years

Stock Options:
The number of stock options and weighted-average exercise prices as of December 29, 2018 are as follows:

Options Price
Outstanding, beginning of year 6,561,404 $ 102.56
Granted 1,255,750 130.88
Exercised (267,378) 80.66
Forfeited (197,513) 133.60
Outstanding, end of year 7,352,263 $ 107.36
Exercisable, end of year 4,601,357 $ 88.87

At December 29, 2018, the range of exercise prices on outstanding stock options was $30.03 to $168.78. Stock option expense was $23.9 million, $21.3
million and $22.8 million for the years ended December 29, 2018, December 30, 2017 and December 31, 2016, respectively. At December 29, 2018, the
Company had $53.3 million of unrecognized pre-tax compensation expense for stock options. This expense will be recognized over the remaining vesting
periods which are 1.8 years on a weighted-average basis.

During 2018, the Company received $21.6 million in cash from the exercise of stock options. The related tax benefit from the exercise of these options was
$3.3 million. During 2018, 2017 and 2016, the total intrinsic value of options exercised was $18.3 million, $72.7 million and $35.9 million, respectively.
When options are exercised, the related shares are issued from treasury stock.

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An excess tax benefit is generated on the extent to which the actual gain, or spread, an optionee receives upon exercise of an option exceeds the fair value
determined at the grant date; that excess spread over the fair value of the option times the applicable tax rate represents the excess tax benefit. During 2018
and 2017, the excess tax benefit arising from tax deductions in excess of recognized compensation cost totaled $2.3 million and $18.3 million, respectively,
and was recorded in income tax expense. Prior to the adoption of ASU 2016-09, the 2016 excess tax benefit of $9.1 million was recorded in additional paid-
in capital.

Outstanding and exercisable stock option information at December 29, 2018 follows:

Outstanding Stock Options Exercisable Stock Options

Weighted- Weighted-
Average Weighted- Average Weighted-
Remaining Average Remaining Average
Exercise Price Ranges Options Contractual Life Exercise Price Options Contractual Life Exercise Price
$75.00 and below 2,031,976 2.20 $ 62.36 2,031,976 2.20 $ 62.36
$75.01 — $125.00 2,960,794 6.73 105.54 2,267,023 6.45 102.14
$125.01 and higher 2,359,493 9.43 148.40 302,358 8.78 167.51
7,352,263 6.35 $ 107.36 4,601,357 4.73 $ 88.87

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

As of December 29, 2018, the aggregate intrinsic value of stock options outstanding and stock options exercisable was $154.5 million and $152.8 million,
respectively.

Employee Stock Purchase Plan:

The Employee Stock Purchase Plan (“ESPP”) enables eligible employees in the United States, Canada and Israel to purchase shares of common stock at the
lower of 85.0% of the fair market value of the shares on the grant date ($135.30 per share for fiscal year 2018 purchases) or 85.0% of the fair market value of
the shares on the last business day of each month. A maximum of 6,000,000 shares are authorized for subscription. During 2018, 2017 and 2016, 139,715
shares, 190,154 shares and 168,233 shares, respectively, were issued under the plan at average prices of $121.00, $103.35, and $84.46 per share, respectively,
and the intrinsic value of the ESPP purchases was $3.1 million, $8.7 million and $4.8 million, respectively. For 2018, the Company received $16.9 million in
cash from ESPP purchases, and there was no related tax benefit. The fair value of ESPP shares was estimated using the Black-Scholes option pricing model.
ESPP compensation cost is recognized ratably over the one-year term based on actual employee stock purchases under the plan. The fair value of the
employees’ purchase rights under the ESPP was estimated using the following assumptions for 2018, 2017 and 2016, respectively: dividend yield of 1.6%,
1.8% and 2.1%; expected volatility of 16.0%, 21.0% and 20.0%; risk-free interest rates of 1.6%, 0.9%, and 0.5%; and expected lives of one year. The
weighted-average fair value of those purchase rights granted in 2018, 2017 and 2016 was $43.69, $35.70 and $29.68, respectively. Total compensation
expense recognized for ESPP amounted to $6.6 million for 2018, $6.7 million for 2017, and $4.7 million for 2016.

Restricted Share Units and Awards:

Compensation cost for restricted share units and awards, including restricted shares granted to French employees in lieu of RSUs, (collectively “RSUs”)
granted to employees is recognized ratably over the vesting term, which varies but is generally 4 years. RSU grants totaled 413,838 shares, 304,976 shares
and 445,155 shares in 2018, 2017 and 2016, respectively. The weighted-average grant date fair value of RSUs granted in 2018, 2017 and 2016 was $133.90,
$160.04 and $118.20 per share, respectively.

Total compensation expense recognized for RSUs amounted to $40.1 million, $31.7 million and $32.6 million in 2018, 2017 and 2016, respectively. The
actual tax benefit received in the period the shares were delivered was $10.1 million. The excess tax benefit recognized was $1.8 million, $4.9 million, and
$2.4 million in 2018, 2017 and 2016, respectively. As of December 29, 2018, unrecognized compensation expense for RSUs amounted to $93.0 million and
will be recognized over a weighted-average period of 2 years.

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A summary of non-vested restricted stock unit and award activity as of December 29, 2018, and changes during the twelve month period then ended is as
follows:
Weighted-Average
Restricted Share Grant
Units & Awards Date Fair Value
Non-vested at December 30, 2017 1,084,675 $ 121.89
Granted 413,838 133.90
Vested (352,625) 111.79
Forfeited (71,153) 124.62
Non-vested at December 29, 2018 1,074,735 $ 129.65

The total fair value of shares vested (market value on the date vested) during 2018, 2017 and 2016 was $46.8 million, $46.6 million and $37.0 million,
respectively.

Non-employee members of the Board of Directors received restricted share-based grants which must be cash settled and accordingly mark-to-market
accounting is applied. The Company recognized $3.4 million of income for these awards in 2018 and expense of $7.0 million and $2.2 million for 2017 and
2016, respectively. Additionally, the Board of Directors were granted restricted share units for which compensation expense of $1.2 million, $1.0 million, and
$1.1 million was recognized for 2018, 2017 and 2016, respectively.

Long-Term Performance Awards:

The Company has granted Long-Term Performance Awards (“LTIP”) under its 2018 Omnibus Award Plan and 2013 Long Term Incentive Plan to senior
management employees for achieving Company performance measures. Awards are payable in shares of common stock, which may be restricted if the
employee has not achieved certain stock ownership levels, and generally no award is made if the employee terminates employment prior to the payout date.
LTIP grants were made in 2016, 2017 and 2018. Each grant has separate annual performance goals for each year within the respective three-year performance
period. Earnings per share and cash flow return on investment represent 75% of the share payout of each grant. There is a third market-based element,
representing 25% of the total grant, which measures the Company’s common stock return relative to peers over the performance period. The ultimate delivery
of shares will occur in 2019, 2020 and 2021 for the 2016, 2017 and 2018 grants, respectively. Total payouts are based on actual performance in relation to
these goals.

Expense recognized for these performance awards amounted to $4.7 million in 2018, $18.0 million in 2017, and $20.0 million in 2016. With the exception
of the market-based award, in the event performance goals are not met, compensation cost is not recognized and any previously recognized compensation
cost is reversed.

A summary of the activity pertaining to the maximum number of shares that may be issued is as follows:
Weighted-Average
Grant
Share Units Date Fair Value
Non-vested at December 30, 2017 692,913 $ 97.80
Granted 184,435 155.83
Vested (178,738) 91.90
Forfeited (71,203) 95.11
Non-vested at December 29, 2018 627,407 $ 116.85

OTHER EQUITY ARRANGEMENTS

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 reduction of Shareowners' equity. The purpose of the capped call options is 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.

The capped call has an initial lower strike price of $156.86 and upper strike price of $203.92, which is approximately 30% higher than the closing price of
the Company's common stock on March 13, 2018. As of December 29, 2018, due to the

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customary anti-dilution provisions, the capped call transactions had an adjusted lower strike price of $156.79 and an adjusted upper strike price of $203.83.
The aggregate fair value of the options at December 29, 2018 was $21.5 million.

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 average period. The
market value determined will then be measured against the applicable strike price of the capped call transactions.

In November 2013, the Company purchased from certain financial institutions “out-of-the-money” capped call options on 12.2 million shares of its common
stock (subject to customary anti-dilution adjustments) for an aggregate premium of $73.5 million, or an average of $6.03 per share. 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. The premium paid was recorded as a reduction of Shareowners’ equity. The contracts for the options provided that they may, at the Company’s
election, subject to certain conditions, be cash settled, physically settled, modified-physically settled, or net-share settled (the default settlement method).
The capped call options had various expiration dates and initially had an average lower strike price of $86.07 and an average upper strike price of $106.56,
subject to customary market adjustments. In February 2015, the Company net-share settled 9.1 million of the 12.2 million capped call options on its common
stock and received 911,077 shares using an average reference price of $96.46 per common share. Additionally, the Company purchased directly from the
counterparties participating in the net-share settlement, 3,381,162 shares for $326.1 million, equating to an average price of $96.46 per share. In February
2016, the Company net-share settled the remaining 3.1 million capped call options on its common stock and received 293,142 shares using an average
reference price of $94.34 per common share. Additionally, the Company purchased 1,316,858 shares directly from the counterparty participating in the net-
share settlement for $124.2 million. The Company also repurchased 2,446,287 shares of common stock in February 2016 for $230.9 million, equating to an
average price of $94.34.

Equity Units and Capped Call Transactions

As described more fully in Note H, Long-Term Debt and Financing Arrangements, in December 2013, the Company issued Equity Units comprised of $345.0
million of Notes and Equity Purchase Contracts. The Equity Purchase Contracts obligated the holders to purchase on November 17, 2016, for $100, between
1.0122 and 1.2399 shares of the Company’s common stock, which were equivalent to an initial settlement price of $98.80 and $80.65, respectively, per share
of common stock.

In accordance with the Equity Purchase Contracts, on November 17, 2016, the Company issued 3,504,165 shares of common stock and received additional
cash proceeds of $345.0 million. The conversion rate used in calculating the average of the daily volume-weighted average price of common stock during the
market value averaging period, was 1.0157 (equivalent to the minimum settlement rate and a conversion price of $98.45 per common share) on November 17,
2016.

Contemporaneously with the issuance of the Equity Units described above, the Company paid $9.7 million, or an average of $2.77 per option, to enter into
capped call transactions on 3.5 million shares of common stock with a major financial institution. The purpose of the capped call transactions was to offset
the potential economic dilution associated with the common shares issuable upon the settlement of the Equity Purchase Contracts. The $9.7 million premium
paid was recorded as a reduction to equity. The capped call transactions covered, subject to customary anti-dilution adjustments, the number of shares equal
to the number of shares issuable upon settlement of the Equity Purchase Contracts at the 1.0122 minimum settlement rate. In October and November 2016,
the Company’s capped call options on its common stock expired and were net-share settled resulting in the Company receiving 418,234 shares using an
average reference price of $117.84 per common share. Refer to Note H, Long-Term Debt and Financing Arrangements, for further discussion.

$750 Million Equity Units and Capped Call Transactions

In May 2017, the Company issued 7,500,000 Equity Units with a total notional value of $750.0 million (“$750 million Equity Units”). Each unit has a stated
amount of $100 and initially consists of a three-year forward stock purchase contract (“2020 Purchase Contracts”) for the purchase of a variable number of
shares of common stock, on May 15, 2020, for a price of $100, and a 10% beneficial ownership interest in one share of 0% Series C Cumulative Perpetual
Convertible Preferred Stock, without par, with a liquidation preference of $1,000 per share (“Series C Preferred Stock”). The Company received
approximately $726.0 million in cash proceeds from the $750 million Equity Units, net of underwriting costs and commissions, before offering expenses, and
issued 750,000 shares of Series C Preferred Stock, recording $750.0 million in preferred stock. The proceeds were used for general corporate purposes,
including repayment of short-term borrowings. The Company also

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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.
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 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 C Preferred Stock is pledged as collateral to support holders’ purchase obligations under the 2020 Purchase Contracts and can be remarketed. 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.
On and after May 15, 2020, the Series C Preferred Stock may be converted into common stock at the option of the holder. The initial conversion rate was
6.1627 shares of common stock per one share of Series C Preferred Stock, which is equivalent to an initial conversion price of approximately $162.27 per
share of common stock. As of December 29, 2018, due to the customary anti-dilution provisions, the conversion rate was 6.1783, equivalent to a conversion
price of approximately $161.86 per share of common stock. At the election of the Company, upon conversion, the Company may deliver cash, common
stock, or a combination thereof.
The Company may not redeem the Series C Preferred Stock prior to June 22, 2020. At the election of the Company, on or after June 22, 2020, the Company
may redeem for cash, all or any portion of the outstanding shares of the Series C 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 C Preferred Stock for redemption, holders may convert their shares
immediately preceding the redemption date.
2020 Purchase Contracts
The 2020 Purchase Contracts obligate the holders to purchase, on May 15, 2020, for a price of $100 in cash, a maximum number of 5.4 million shares of the
Company’s common stock (subject to customary anti-dilution adjustments). The 2020 Purchase Contract holders may elect to settle their obligation early, in
cash. The Series C Preferred Stock is pledged as collateral to guarantee the holders’ obligations to purchase common stock under the terms of the 2020
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 May 15, 2020.
The initial maximum settlement rate of 0.7241 was calculated using an initial reference price of $138.10, equal to the last reported sale price of the
Company's common stock on May 11, 2017. As of December 29, 2018, due to the customary anti-dilution provisions, the maximum settlement rate was
0.7259, equivalent to a reference price of $137.76. 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 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 divided by the applicable market value. Upon settlement of the 2020 Purchase
Contracts, the Company will receive additional cash proceeds of $750 million.
The Company will pay the holders of the 2020 Purchase Contracts quarterly payments (“Contract Adjustment Payments”) 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 present value of
the Contract Adjustment Payments reduced Shareowners’ Equity 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 accretes to interest expense, approximately $1.3 million per year over the three-
year term. As of December 29, 2018, the present value of the Contract Adjustment Payments was $58.8 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.
Capped Call Transactions
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 entered into capped call transactions with three
major financial institutions (the “counterparties”).
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
C Preferred Stock. Subject to customary anti-dilution adjustments, the capped call has an initial

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lower strike price of $162.27, which corresponds to the minimum 6.1627 settlement rate of the Series C Preferred Stock, and an upper strike price of $179.53,
which is approximately 30% higher than the closing price of the Company's common stock on May 11, 2017. As of December 29, 2018, due to the customary
anti-dilution provisions, the capped call transactions had an adjusted lower strike price of $161.86 and an adjusted upper strike price of $179.08.
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 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 C 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 $750 million Equity Units, when taken together, result in the economic
equivalent of having the conversion price on $750 million Equity Units at $179.08, the upper strike of the capped call as of December 29, 2018.
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 a reduction of Shareowners’ Equity. The aggregate fair value of the options at December 29, 2018 was $8.8 million.

K. ACCUMULATED OTHER COMPREHENSIVE LOSS

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

Currency Unrealized gains

translation Unrealized (losses) (losses) on net
adjustment and gains on cash flow investment hedges, Pension (losses)
(Millions of Dollars) other 1 hedges, net of tax net of tax gains, net of tax Total
Balance - December 31, 2016 $ (1,586.7) $ (46.3) $ 88.6 $ (377.2) $ (1,921.6)
Other comprehensive income (loss) before
reclassifications 473.8 (71.0) (85.2) (19.1) 298.5
Adjustments related to sales of businesses 4.7 — — 2.6 7.3
Reclassification adjustments to earnings — 4.7 — 22.0 26.7
Net other comprehensive income (loss) 478.5 (66.3) (85.2) 5.5 332.5
Balance - December 30, 2017 $ (1,108.2) $ (112.6) $ 3.4 $ (371.7) $ (1,589.1)
Other comprehensive (loss) income before
reclassifications (373.0) 70.4 71.2 (9.7) (241.1)
Reclassification adjustments to earnings — 15.4 (11.3) 11.8 15.9
Net other comprehensive (loss) income (373.0) 85.8 59.9 2.1 (225.2)
Balance - December 29, 2018 $ (1,481.2) $ (26.8) $ 63.3 $ (369.6) $ (1,814.3)
1 Certain prior year amounts have been recast as a result of the adoption of the new revenue standard. Refer to Note A, Significant Accounting Policies, for further discussion.

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(Millions of Dollars) 2018 2017
Reclassification Reclassification Affected line item in Consolidated
Components of accumulated other comprehensive loss adjustments adjustments Statements of Operations
Realized (losses) gains on cash flow hedges $ (17.9) $ 8.4 Cost of sales
Realized losses on cash flow hedges (15.3) (15.1) Interest expense
Total before taxes $ (33.2) $ (6.7)
Tax effect 17.8 2.0 Income taxes
Realized losses on cash flow hedges, net of tax $ (15.4) $ (4.7)

Realized gains on net investment hedges $ 15.0 $ — Other, net

Tax effect (3.7) — Income taxes
Realized gains on net investment hedges, net of tax 11.3 —

Actuarial losses and prior service costs / credits2 (14.8) (16.2) Other, net
Settlement loss1 — (12.2) Pension settlement
Settlement losses1 (0.7) (3.4) Other, net
Total before taxes (15.5) (31.8)
Tax effect 3.7 9.8 Income taxes
Amortization of defined benefit pension items, net of tax $ (11.8) $ (22.0)
1
Pension settlement losses are more fully discussed in Note L, Employee Benefit Plans.
2Prior year Amortization of actuarial losses and prior service costs / credits of $9.7 million and $6.5 million have been reclassed out of Cost of sales and Selling, general and
administrative, respectively, and into Other, net as a result of the adoption of the new pension standard. Refer to Note A, Significant Accounting Policies, for further discussion.

L. EMPLOYEE BENEFIT PLANS

EMPLOYEE STOCK OWNERSHIP PLAN (“ESOP”) — Most U.S. employees may make contributions that do not exceed 25% of their eligible
compensation to a tax-deferred 401(k) savings plan, subject to restrictions under tax laws. Employees generally direct the investment of their own
contributions into various investment funds. An employer match benefit is provided under the plan equal to one-half of each employee’s tax-deferred
contribution up to the first 7% of their compensation. Participants direct the entire employer match benefit such that no participant is required to hold the
Company’s common stock in their 401(k) account. The employer match benefit totaled $28.0 million, $24.8 million and $21.9 million in 2018, 2017 and
2016, respectively. In addition to the regular employer match, $0.7 million and $4.3 million was allocated to the employee's accounts for forfeitures and a
surplus resulting from appreciation of the Company's share value in 2018 and 2016, respectively. There was no additional allocation in 2017.

In addition, approximately 9,700 U.S. salaried and non-union hourly employees are eligible to receive a non-contributory benefit under the Core benefit
plan. Core benefit allocations range from 2% to 6% of eligible employee compensation based on age. Allocations for benefits earned under the Core plan
were $29.0 million in 2018, $25.4 million in 2017 and $17.6 million in 2016. Assets held in participant Core accounts are invested in target date retirement
funds which have an age-based allocation of investments.

Shares of the Company's common stock held by the ESOP were purchased with the proceeds of borrowings from the Company in 1991 ("1991 internal loan").
Shareowners' equity reflects a reduction equal to the cost basis of unearned (unallocated) shares purchased with the internal borrowings. In 2018, 2017 and
2016, the Company made additional contributions to the ESOP for $7.0 million, $4.8 million, and $7.9 million, respectively, which were used by the ESOP
to make additional payments on the 1991 internal loan. These payments triggered the release of 207,049, 133,694 and 219,492 shares of unallocated stock in
2018, 2017 and 2016, respectively.

Net ESOP activity recognized is comprised of the cost basis of shares released, the cost of the aforementioned Core and 401(k) match defined contribution
benefits, less the fair value of shares released and dividends on unallocated ESOP shares. The Company’s net ESOP activity resulted in expense of $0.4
million in 2018, expense of $1.3 million in 2017 and income of $3.1 million in 2016. ESOP expense is affected by the market value of the Company’s
common stock on the monthly dates when shares are released. The weighted-average market value of shares released was $139.45 per share in 2018, $138.60
per share in 2017 and $103.88 per share in 2016.

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Unallocated shares are released from the trust based on current period debt principal and interest payments as a percentage of total future debt principal and
interest payments. Dividends on both allocated and unallocated shares may be used for debt service and to credit participant accounts for dividends earned
on allocated shares. Dividends paid on the shares acquired with the 1991 internal loan were used solely to pay internal loan debt service in all periods.
Dividends on ESOP shares, which are charged to shareowners’ equity as declared, were $7.7 million in 2018, $8.4 million in 2017 and $9.0 million in 2016,
net of the tax benefit which is recorded in earnings in 2018 and 2017 and within equity for 2016. Dividends on ESOP shares were utilized entirely for debt
service in all years. Interest costs incurred by the ESOP on the 1991 internal loan, which have no earnings impact, were $1.6 million, $2.2 million and $3.1
million for 2018, 2017 and 2016, respectively. Both allocated and unallocated ESOP shares are treated as outstanding for purposes of computing earnings per
share. As of December 29, 2018, the cumulative number of ESOP shares allocated to participant accounts was 14,973,185, of which participants held
2,186,499 shares, and the number of unallocated shares was 568,172. At December 29, 2018, there were 110,670 released shares in the ESOP trust holding
account pending allocation. The Company made cash contributions totaling $2.3 million in 2018, $1.8 million in 2017 and $4.2 million in 2016 excluding
additional contributions of $7.0 million, $4.8 million and $7.9 million in 2018, 2017 and 2016, respectively, as discussed previously.

PENSION AND OTHER BENEFIT PLANS — The Company sponsors pension plans covering most domestic hourly and certain executive employees, and
approximately 15,500 foreign employees. Benefits are generally based on salary and years of service, except for U.S. collective bargaining employees whose
benefits are based on a stated amount for each year of service.

The Company contributes to a number of multi-employer plans for certain collective bargaining U.S. employees. The risks of participating in these
multiemployer plans are different from single-employer plans in the following aspects:
a. Assets contributed to the multiemployer plan by one employer may be used to provide benefit to employees of other participating employers.
b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be inherited by the remaining participating
employers.
c. If the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans an amount
based on the underfunded status of the plan, referred to as a withdrawal liability.

In addition, the Company also contributes to a number of multiemployer plans outside of the U.S. The foreign plans are insured, therefore, the Company’s
obligation is limited to the payment of insurance premiums.

The Company has assessed and determined that none of the multiemployer plans to which it contributes are individually significant to the Company’s
financial statements. The Company does not expect to incur a withdrawal liability or expect to significantly increase its contributions over the remainder of
the contract period.

In addition to the multiemployer plans, various other defined contribution plans are sponsored worldwide.

The expense for such defined contribution plans, aside from the earlier discussed ESOP plans, is as follows:

(Millions of Dollars) 2018 2017 2016

Multi-employer plan expense $ 7.3 $ 7.2 $ 5.1
Other defined contribution plan expense $ 12.9 $ 27.5 $ 15.4

The components of net periodic pension (benefit) expense are as follows:

U.S. Plans Non-U.S. Plans

(Millions of Dollars) 2018 2017 2016 2018 2017 2016
Service cost $ 7.5 $ 8.7 $ 9.4 $ 15.2 $ 13.7 $ 12.5
Interest cost 42.8 43.2 45.3 28.6 29.1 37.0
Expected return on plan assets (68.7) (64.4) (67.9) (46.5) (45.5) (44.5)
Amortization of prior service cost (credit) 1.1 1.1 5.2 (1.3) (1.2) 0.3
Actuarial loss amortization 7.8 8.3 7.1 8.5 9.4 5.9
Settlement / curtailment loss — 2.9 — 0.7 12.7 0.7
Net periodic pension (benefit) expense $ (9.5) $ (0.2) $ (0.9) $ 5.2 $ 18.2 $ 11.9

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The Company provides medical and dental benefits for certain retired employees in the United States and Canada. Approximately 15,000 participants are
covered under these plans. Net periodic post-retirement benefit expense was comprised of the following elements:
Other Benefit Plans
(Millions of Dollars) 2018 2017 2016
Service cost $ 0.5 $ 0.6 $ 0.6
Interest cost 1.6 1.7 1.7
Amortization of prior service credit (1.3) (1.4) (1.2)
Net periodic post-retirement expense $ 0.8 $ 0.9 $ 1.1

In accordance with the adoption of ASU 2017-07, the components of net periodic pension (benefit) expense, other than the service cost component, are
included in Other, net in the Consolidated Statements of Operations.

For the year ended December 30, 2017, the Company recorded pre-tax charges of approximately $12.2 million, reflecting losses previously reported in
accumulated other comprehensive loss, related to a non-U.S. pension plan for which the Company settled its obligation by purchasing an annuity and
making lump sum payments to participants. Also, in accordance with policy, $2.9 million and $0.5 million in pre-tax settlement and curtailment losses were
recorded for other U.S. and non-U.S. plans, respectively, in December 2017 due to standard lump sum benefit payments elected exceeding the sum of service
cost and interest cost.

Changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss in 2018 are as follows:
(Millions of Dollars) 2018
Current year actuarial loss $ 10.6
Amortization of actuarial loss (14.8)
Prior service cost from plan amendments 16.3
Settlement / curtailment loss (0.7)
Currency / other (14.8)
Total decrease recognized in accumulated other comprehensive loss (pre-tax) $ (3.4)

The amounts in Accumulated other comprehensive loss expected to be recognized as components of net periodic benefit costs during 2019 total $15.3
million, representing amortization of actuarial losses.

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The changes in the pension and other post-retirement benefit obligations, fair value of plan assets, as well as amounts recognized in the Consolidated
Balance Sheets, are shown below.

U.S. Plans Non-U.S. Plans Other Benefits

(Millions of Dollars) 2018 2017 2018 2017 2018 2017
Change in benefit obligation
Benefit obligation at end of prior year $ 1,365.3 $ 1,359.0 $ 1,446.1 $ 1,359.8 $ 52.3 $ 54.2
Service cost 7.5 8.7 15.2 13.7 0.5 0.6
Interest cost 42.8 43.2 28.6 29.1 1.6 1.7
Settlements/curtailments — (16.7) (4.3) (35.9) — —
Actuarial (gain) loss (106.2) 98.1 (64.1) 11.4 (6.2) (2.1)
Plan amendments 0.2 0.5 16.0 — 0.1 —
Foreign currency exchange rates — — (77.0) 136.0 (1.0) 0.7
Participant contributions — — 0.3 0.3 — —
Acquisitions, divestitures, and other 34.0 (7.0) 3.4 (11.6) 1.9 2.1
Benefits paid (82.7) (120.5) (58.9) (56.7) (4.4) (4.9)
Benefit obligation at end of year $ 1,260.9 $ 1,365.3 $ 1,305.3 $ 1,446.1 $ 44.8 $ 52.3
Change in plan assets
Fair value of plan assets at end of prior year $ 1,114.1 $ 1,067.1 $ 1,099.2 $ 1,015.3 $ — $ —
Actual return on plan assets (52.9) 153.5 (18.6) 63.5 — —
Participant contributions — — 0.3 0.3 — —
Employer contributions 19.4 37.6 20.9 24.0 4.4 4.9
Settlements — (16.7) (4.2) (35.9) — —
Foreign currency exchange rate changes — — (61.5) 96.4 — —
Acquisitions, divestitures, and other 22.8 (6.9) (2.9) (7.7) — —
Benefits paid (82.7) (120.5) (58.9) (56.7) (4.4) (4.9)
Fair value of plan assets at end of plan year $ 1,020.7 $ 1,114.1 $ 974.3 $ 1,099.2 $ — $ —
Funded status — assets less than benefit obligation $ (240.2) $ (251.2) $ (331.0) $ (346.9) $ (44.8) $ (52.3)
Unrecognized prior service cost (credit) 4.3 5.2 (18.2) (37.0) (3.4) (4.8)
Unrecognized net actuarial loss 272.0 264.9 270.8 294.7 (7.6) (1.7)
Net amount recognized $ 36.1 $ 18.9 $ (78.4) $ (89.2) $ (55.8) $ (58.8)

U.S. Plans Non-U.S. Plans Other Benefits

(Millions of Dollars) 2018 2017 2018 2017 2018 2017
Amounts recognized in the Consolidated Balance Sheets
Prepaid benefit cost (non-current) $ — $ — $ 1.0 $ 1.8 $ — $ —
Current benefit liability (7.7) (8.2) (9.1) (8.9) (4.8) (5.2)
Non-current benefit liability (232.5) (243.0) (322.9) (339.8) (40.0) (47.1)
Net liability recognized $ (240.2) $ (251.2) $ (331.0) $ (346.9) $ (44.8) $ (52.3)
Accumulated other comprehensive loss (pre-tax):
Prior service cost (credit) $ 4.3 $ 5.2 $ (18.2) $ (37.0) $ (3.4) $ (4.8)
Actuarial loss (gain) 272.0 264.9 270.8 294.7 (7.6) (1.7)
$ 276.3 $ 270.1 $ 252.6 $ 257.7 $ (11.0) $ (6.5)
Net amount recognized $ 36.1 $ 18.9 $ (78.4) $ (89.2) $ (55.8) $ (58.8)

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The accumulated benefit obligation for all defined benefit pension plans was $2.513 billion at December 29, 2018 and $2.754 billion at December 30, 2017.
Information regarding pension plans in which accumulated benefit obligations exceed plan assets follows:

U.S. Plans Non-U.S. Plans

(Millions of Dollars) 2018 2017 2018 2017
Projected benefit obligation $ 1,260.9 $ 1,365.3 $ 1,275.7 $ 1,415.9
Accumulated benefit obligation $ 1,257.6 $ 1,358.4 $ 1,228.6 $ 1,368.7
Fair value of plan assets $ 1,020.7 $ 1,114.1 $ 945.0 $ 1,068.5

Information regarding pension plans in which projected benefit obligations (inclusive of anticipated future compensation increases) exceed plan assets
follows:

U.S. Plans Non-U.S. Plans

(Millions of Dollars) 2018 2017 2018 2017
Projected benefit obligation $ 1,260.9 $ 1,365.3 $ 1,301.7 $ 1,445.1
Accumulated benefit obligation $ 1,257.6 $ 1,358.4 $ 1,252.7 $ 1,395.1
Fair value of plan assets $ 1,020.7 $ 1,114.1 $ 969.7 $ 1,096.5

The major assumptions used in valuing pension and post-retirement plan obligations and net costs were as follows:

Pension Benefits
U.S. Plans Non-U.S. Plans Other Benefits
2018 2017 2016 2018 2017 2016 2018 2017 2016
Weighted-average assumptions
used to determine benefit
obligations at year end:
Discount rate 4.20% 3.53% 3.95% 2.62% 2.24% 2.38% 4.03% 3.53% 3.51%
Rate of compensation increase 3.00% 3.00% 3.00% 3.44% 3.45% 3.63% 3.50% 3.50% 3.50%
Weighted-average assumptions
used to determine net periodic
benefit cost:
Discount rate - service cost 3.72% 4.10% 4.32% 2.15% 2.27% 2.54% 5.11% 4.53% 4.27%
Discount rate - interest cost 3.16% 3.30% 3.39% 2.20% 2.31% 2.94% 3.77% 2.93% 2.94%
Rate of compensation increase 3.00% 3.00% 6.00% 3.45% 3.63% 3.24% 3.50% 3.50% 3.50%
Expected return on plan assets 6.25% 6.25% 6.50% 4.37% 4.41% 4.68% — — —

The expected rate of return on plan assets is determined considering the returns projected for the various asset classes and the relative weighting for each asset
class. The Company will use a 5.51% weighted-average expected rate of return assumption to determine the 2019 net periodic benefit cost.

PENSION PLAN ASSETS — Plan assets are invested in equity securities, government and corporate bonds and other fixed income securities, money market
instruments and insurance contracts. The Company’s worldwide asset allocations at December 29, 2018 and December 30, 2017 by asset category and the
level of the valuation inputs within the fair value hierarchy established by ASC 820 are as follows:

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Asset Category (Millions of Dollars) 2018 Level 1 Level 2
Cash and cash equivalents $ 139.5 $ 113.6 $ 25.9
Equity securities
U.S. equity securities 248.7 83.4 165.3
Foreign equity securities 220.0 85.2 134.8
Fixed income securities
Government securities 642.3 205.5 436.8
Corporate securities 656.6 — 656.6
Insurance contracts 37.1 — 37.1
Other 50.8 — 50.8
Total $ 1,995.0 $ 487.7 $ 1,507.3

Asset Category (Millions of Dollars) 2017 Level 1 Level 2

Cash and cash equivalents $ 42.0 $ 19.5 $ 22.5
Equity securities
U.S. equity securities 342.8 103.5 239.3
Foreign equity securities 329.3 111.8 217.5
Fixed income securities
Government securities 707.8 213.3 494.5
Corporate securities 698.3 — 698.3
Insurance contracts 39.2 — 39.2
Other 53.9 — 53.9
Total $ 2,213.3 $ 448.1 $ 1,765.2

U.S. and foreign equity securities primarily consist of companies with large market capitalizations and to a lesser extent mid and small capitalization
securities. Government securities primarily consist of U.S. Treasury securities and foreign government securities with de minimus default risk. Corporate fixed
income securities include publicly traded U.S. and foreign investment grade and to a small extent high yield securities. Assets held in insurance contracts are
invested in the general asset pools of the various insurers, mainly debt and equity securities with guaranteed returns. Other investments include diversified
private equity holdings. The level 2 investments are primarily comprised of institutional mutual funds that are not publicly traded; the investments held in
these mutual funds are generally level 1 publicly traded securities.

The Company's investment strategy for pension assets focuses on a liability-matching approach with gradual de-risking taking place over a period of many
years. The Company utilizes the current funded status to transition the portfolio toward investments that better match the duration and cash flow attributes of
the underlying liabilities. Assets approximating 50% of the Company's current pension liabilities have been invested in fixed income securities, using a
liability / asset matching duration strategy, with the primary goal of mitigating exposure to interest rate movements and preserving the overall funded status
of the underlying plans. Plan assets are broadly diversified and are invested to ensure adequate liquidity for immediate and medium term benefit
payments. The Company’s target asset allocations include approximately 20%-40% in equity securities, approximately 50%-70% in fixed income securities
and approximately 10% in other securities. In 2018, the funded status percentage (total plan assets divided by total projected benefit obligation) of all global
pension plans was 78%, which is consistent with 79% in 2017 and 77% in 2016.

CONTRIBUTIONS — The Company’s funding policy for its defined benefit plans is to contribute amounts determined annually on an actuarial basis to
provide for current and future benefits in accordance with federal law and other regulations. The Company expects to contribute approximately $44 million
to its pension and other post-retirement benefit plans in 2019.

EXPECTED FUTURE BENEFIT PAYMENTS — Benefit payments, inclusive of amounts attributable to estimated future employee service, are expected
to be paid as follows over the next 10 years:

(Millions of Dollars) Total Year 1 Year 2 Year 3 Year 4 Year 5 Years 6-10
Future payments $ 1,400.2 $ 136.1 $ 137.6 $ 139.3 $ 139.5 $ 141.4 $ 706.3

These benefit payments will be funded through a combination of existing plan assets, the returns on those assets, and amounts to be contributed in the future
by the Company.

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HEALTH CARE COST TRENDS — The weighted average annual assumed rate of increase in the per-capita cost of covered benefits (i.e., health care cost
trend rate) is assumed to be 6.7% for 2019, reducing gradually to 4.6% by 2028 and remaining at that level thereafter. A one percentage point change in the
assumed health care cost trend rate would affect the post-retirement benefit obligation as of December 29, 2018 by approximately $1.4 million to $1.6
million, and would have an immaterial effect on the net periodic post-retirement benefit cost.

M. FAIR VALUE MEASUREMENTS

FASB 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.

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 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 counter-party.

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:
Total
Carrying
(Millions of Dollars) Value Level 1 Level 2 Level 3
December 29, 2018
Money market fund $ 4.8 $ 4.8 $ — $ —
Derivative assets $ 32.9 $ — $ 32.9 $ —
Derivative liabilities $ 21.3 $ — $ 21.3 $ —
Non-derivative hedging instrument $ 228.9 $ — $ 228.9 $ —
Contingent consideration liability $ 169.2 $ — $ — $ 169.2
December 30, 2017
Money market fund $ 11.6 $ 11.6 $ — $ —
Derivative assets $ 18.0 $ — $ 18.0 $ —
Derivative liabilities $ 114.0 $ — $ 114.0 $ —
Contingent consideration liability $ 114.0 $ — $ — $ 114.0

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

December 29, 2018 December 30, 2017 1

Carrying Fair Carrying Fair
(Millions of Dollars) Value Value Value Value
Other investments $ 7.6 $ 7.7 $ 7.6 $ 7.9
Long-term debt, including current portion $ 3,822.3 $ 3,905.4 $ 3,805.7 $ 3,991.0
1 Certain prior year amounts have been recast as a result of the adoption of the new revenue standard. Refer to Note A. Significant Accounting Policies, for further discussion

As discussed in Note E, Acquisitions, the Company recorded a contingent consideration liability relating to the Craftsman® brand acquisition representing
the Company's obligation to make future payments to Sears Holdings of between 2.5% and 3.5% on sales of Craftsman products in new Stanley Black &
Decker channels through March 2032, which was valued at $134.5 million as of the acquisition date. The first payment is due the first quarter of 2020
relating to royalties owed for the previous

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eleven quarters, and future payments will be due quarterly through the first 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 Sears Holdings based on
contractual royalty rates, and the related tax impacts.

The estimated fair value of the contingent consideration liability was $169.2 million and $114.0 million as of December 29, 2018 and December 30, 2017,
respectively. The change in fair value was primarily driven by lower expected tax benefits of future payments to Sears Holdings as a result of recent changes
in U.S. tax legislation. Approximately $35 million of the change in fair value was recorded in SG&A in the Consolidated Statements of Operations, while
approximately $20 million was recorded in goodwill as an acquisition-date fair value adjustment. A 100 basis point reduction in the discount rate would
result in an increase to the liability of approximately $8 million as of December 29, 2018.

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 long-term debt instruments are considered Level 2 instruments and are measured using a discounted cash flow analysis based on the
Company’s marginal borrowing rates. The differences between the carrying values and fair values of long-term debt are attributable to the stated interest rates
differing from the Company's marginal borrowing rates. The fair values of the Company's variable rate short-term borrowings approximate their carrying
values at December 29, 2018 and December 30, 2017. The fair values of foreign currency and interest rate swap agreements, comprising the derivative assets
and liabilities in the table above, are based on current settlement values.

The Company had no significant non-recurring fair value measurements, nor any other financial assets or liabilities measured using Level 3 inputs, during
2018 or 2017.

As discussed in Note B, Accounts and Notes Receivable, the Company had a deferred purchase price receivable related to sales of trade receivables. The
deferred purchase price receivable was settled in full in January 2018, and historically was repaid in cash as receivables were collected, generally within 30
days. The carrying value of the receivable as of December 30, 2017 approximated fair value.

Refer to Note I, Financial Instruments, for more details regarding derivative financial instruments, Note S, Contingencies, for more details regarding the other
investments related to the WCLC trust, and Note H, Long-Term Debt and Financing Arrangements, for more information regarding the carrying values of the
long-term debt.

N. OTHER COSTS AND EXPENSES

Other, net is primarily comprised of intangible asset amortization expense (see Note F, Goodwill and Intangible Assets), currency-related gains or losses,
environmental remediation expense, acquisition-related transaction and consulting costs, and certain pension gains or losses. Acquisition-related transaction
and consulting costs of $30.4 million and $58.2 million were included in Other, net for the years ended December 29, 2018 and December 30, 2017,
respectively. In addition, Other, net included a $77.7 million environmental remediation charge recorded in 2018 related to a settlement with the
Environmental Protection Agency ("EPA"). Refer to Note S, Contingencies, for further discussion of the EPA settlement.

Research and development costs, which are classified in SG&A, were $275.8 million, $252.3 million and $204.4 million for fiscal years 2018, 2017 and
2016, respectively. The increase in 2018 reflects the Company's continued focus on becoming known as one of the world's greatest innovators and its
commitment to continue generating new core and breakthrough innovations.

O. RESTRUCTURING CHARGES AND ASSET IMPAIRMENTS

A summary of the restructuring reserve activity from December 30, 2017 to December 29, 2018 is as follows:
Net
(Millions of Dollars) December 30, 2017 Additions Usage Currency December 29, 2018
Severance and related costs $ 20.0 $ 151.0 $ (64.1) $ (1.2) $ 105.7
Facility closures and asset impairments 3.2 9.3 (9.4) — 3.1
Total $ 23.2 $ 160.3 $ (73.5) $ (1.2) $ 108.8

During 2018, the Company recognized net restructuring charges and asset impairments of $160.3 million, which primarily relates to the cost reduction
program in the fourth quarter of 2018. This amount reflects $151.0 million of net severance charges associated with the reduction of 4,184 employees and
$9.3 million of facility closure and other restructuring costs.

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The majority of the $108.8 million of reserves remaining as of December 29, 2018 is expected to be utilized within the next twelve months.

Segments: The $160 million of net restructuring charges and asset impairments for the year ended December 29, 2018 includes: $80 million of net charges
pertaining to the Tools & Storage segment; $30 million of net charges pertaining to the Industrial segment; $36 million of net charges pertaining to the
Security segment; and $14 million of net charges pertaining to Corporate.

P. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

The Company's operations are classified into three reportable segments, which also represent its operating segments: Tools & Storage, Industrial and Security.

The Tools & Storage segment is comprised of the Power Tools & Equipment ("PTE") and Hand Tools, Accessories & Storage ("HTAS") businesses. The PTE
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, lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, edgers and related accessories, 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 Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses. The Engineered Fastening business primarily sells engineered
fastening products and systems designed for specific applications. The product lines include 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, and high-
strength structural fasteners. The Infrastructure business consists of the Oil & Gas and Hydraulics businesses. The Oil & Gas business 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 Hydraulics business sells hydraulic tools and accessories.

The Security segment is comprised of the Convergent Security Solutions ("CSS") and Mechanical Access Solutions ("MAS") businesses. The CSS business
designs, supplies and installs commercial electronic security systems and provides electronic security services, including alarm monitoring, video
surveillance, fire alarm monitoring, systems integration and system maintenance. Purchasers of these systems typically contract for ongoing security systems
monitoring and maintenance at the time of initial equipment installation. The business also sells healthcare solutions, which include asset tracking, infant
protection, pediatric protection, patient protection, wander management, fall management, and emergency call products. The MAS business primarily sells
automatic doors.

The Company utilizes segment profit, which is defined as net sales minus cost of sales and SG&A inclusive of the provision for doubtful accounts (aside from
corporate overhead expense), and segment profit as a percentage of net sales to assess the profitability of each segment. Segment profit excludes the corporate
overhead expense element of SG&A, other, net (inclusive of intangible asset amortization expense), loss (gain) on sales of businesses, pension settlement,
restructuring charges and asset impairments, interest income, interest expense, and income taxes. Corporate overhead is comprised of world headquarters
facility expense, cost for the executive management team and expenses pertaining to certain centralized functions that benefit the entire Company but are not
directly attributable to the businesses, such as legal and corporate finance functions. Refer to Note F, Goodwill and Intangible Assets, and Note O,
Restructuring Charges and Asset Impairments, for the amount of intangible asset amortization expense and net restructuring charges and asset impairments,
respectively, attributable to each segment. Transactions between segments are not material. Segment assets primarily include cash, accounts receivable,
inventory, other current assets, property, plant and equipment 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.

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BUSINESS SEGMENTS

(Millions of Dollars) 2018 2017 1 2016 1

Net Sales
Tools & Storage $ 9,814.0 $ 9,045.0 $ 7,619.2
Industrial 2,187.8 1,974.3 1,864.0
Security 1,980.6 1,947.3 2,110.3
Consolidated $ 13,982.4 $ 12,966.6 $ 11,593.5
Segment Profit
Tools & Storage $ 1,393.1 $ 1,438.9 $ 1,258.4
Industrial 319.8 345.9 300.1
Security 169.3 211.7 267.9
Segment Profit 1,882.2 1,996.5 1,826.4
Corporate overhead (202.8) (217.4) (190.9)
Other, net (287.0) (269.2) (185.9)
(Loss) gain on sales of businesses (0.8) 264.1 —
Pension settlement — (12.2) —
Restructuring charges and asset impairments (160.3) (51.5) (49.0)
Interest income 68.7 40.1 23.2
Interest expense (277.9) (222.6) (194.5)
Earnings before income taxes $ 1,022.1 $ 1,527.8 $ 1,229.3
Capital and Software Expenditures
Tools & Storage $ 353.7 $ 327.2 $ 227.3
Industrial 95.8 76.2 81.1
Security 42.6 39.0 38.6
Consolidated $ 492.1 $ 442.4 $ 347.0
Depreciation and Amortization
Tools & Storage $ 300.1 $ 271.9 $ 203.0
Industrial 125.9 107.4 106.8
Security 80.5 81.4 98.2
Consolidated $ 506.5 $ 460.7 $ 408.0
Segment Assets
Tools & Storage $ 13,122.6 $ 12,870.3 $ 8,524.9
Industrial 3,620.5 3,413.3 3,359.3
Security 3,413.6 3,407.0 3,139.2
20,156.7 19,690.6 15,023.4
Assets held for sale — — 523.4
Corporate assets (748.7) (592.9) 108.2
Consolidated $ 19,408.0 $ 19,097.7 $ 15,655.0
1
Certain prior year amounts have been recast as a result of the adoption of the new revenue and pension standards. Refer to Note A, Significant Accounting Policies, for further
discussion.

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

Sales to Lowe's were approximately 17%, 16% and 15% of the Tools & Storage segment net sales in 2018, 2017 and 2016, respectively. Sales to The Home
Depot were approximately 14%, 13%, and 14% of the Tools & Storage segment net sales in 2018, 2017 and 2016, respectively.

As described in Note A, Significant Accounting Policies, the Company recognizes revenue at a point in time from the sale of tangible products or over time
depending on when the performance obligation is satisfied. For the years ended December 29, 2018 and December 30, 2017, the majority of the Company’s
revenue was recognized at the time of sale. The following table

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provides the percent of total segment revenue recognized over time for the Industrial and Security segments for the years ended December 29, 2018,
December 30, 2017 and December 31, 2016:

2018 2017 2016

Industrial 11.9% 13.4% 12.7%
Security 44.9% 48.1% 41.5%

The following table is a further disaggregation of the Industrial segment revenue for the years ended December 29, 2018, December 30, 2017 and December
31, 2016:

(Millions of Dollars) 2018 2017 2016

Engineered Fastening $ 1,766.6 $ 1,554.3 $ 1,489.0
Infrastructure 421.2 420.0 375.0
Industrial $ 2,187.8 $ 1,974.3 $ 1,864.0

GEOGRAPHIC AREAS

(Millions of Dollars) 2018 2017 1 2016 1

Net Sales
United States $ 7,700.3 $ 7,025.7 $ 6,280.8
Canada 628.3 583.3 519.8
Other Americas 801.5 790.7 650.4
France 627.8 623.8 595.1
Other Europe 2,989.9 2,791.1 2,457.7
Asia 1,234.6 1,152.0 1,089.7
Consolidated $ 13,982.4 $ 12,966.6 $ 11,593.5
Property, Plant & Equipment
United States $ 1,018.3 $ 850.2 $ 663.4
Canada 25.5 30.0 29.3
Other Americas 112.7 111.2 95.8
France 63.9 65.1 57.5
Other Europe 356.9 378.0 322.3
Asia 337.9 308.0 282.9
Consolidated $ 1,915.2 $ 1,742.5 $ 1,451.2
1
Certain prior year amounts have been recast as a result of the adoption of the new revenue standard. Refer to Note A, Significant Accounting Policies, for further discussion.

Q. INCOME TAXES

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“the Act”). Changes
include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, changes to U.S.
international taxation, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. Pursuant
to Staff Accounting Bulletin No. 118 (“SAB 118”) issued by the SEC in December 2017, issuers were permitted up to one year from the enactment of the Act
to complete the accounting for the income tax effects of the Act (“the measurement period”). The Company completed its accounting for the tax effects of the
Act within the measurement period and has included those effects as a component of Income taxes in the Consolidated Statements of Operations.

Deferred tax assets and liabilities: U.S. deferred tax assets and liabilities were remeasured based on the rates at which they are expected to reverse in the
future, resulting in an income tax benefit of approximately $230.6 million. The Company recorded an income tax provision of $21.9 million in 2018 as an
adjustment to its provisional income tax benefit recorded in 2017 of $252.5 million.

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Transition Tax: The one-time transition tax, which totals $450.1 million, is based on the Company’s post-1986 earnings and profits that were previously
deferred from U.S. income taxes. In 2018, the Company recorded a $10.6 million adjustment to its provisional income tax payable of approximately $460.7
million recorded in December 2017. The Company has elected to pay its transition tax over the eight-year period provided in the Act. As of December 29,
2018, the remaining balance of the transition tax obligation is $365.7 million, which will be paid over the next seven years.

Indefinite reinvestment: Following enactment of the Act and the associated one-time transition tax, in general, repatriation of foreign earnings to the United
States can be completed with no incremental U.S. tax. However, repatriation of foreign earnings could subject the Company to U.S. state and non-U.S.
jurisdictional taxes (including withholding taxes) on distributions. While repatriation of some foreign earnings held outside the United States may be
restricted by local laws, most of the Company’s foreign earnings as of December 2017 could be repatriated to the United States. As a result of the Act, the
Company analyzed all unrepatriated foreign earnings as of December 2017, and concluded that it no longer asserts indefinite reinvestment on approximately
$4.8 billion. The deferred tax liability associated with these unrepatriated foreign earnings is approximately $217.7 million. The Company recorded a $188.3
million income tax provision in 2018, mainly comprised of U.S. state and non-U.S. jurisdictional withholding taxes. The Company otherwise continues to
consider the remaining undistributed earnings of its foreign subsidiaries to be permanently reinvested based on its current plans for use outside of the U.S.
and accordingly no taxes have been provided on such earnings.

Significant components of the Company’s deferred tax assets and liabilities at the end of each fiscal year were as follows:
(Millions of Dollars) 2018 2017 1

Deferred tax liabilities:

Depreciation $ 128.5 $ 98.4
Amortization of intangibles 672.8 668.0
Liability on undistributed foreign earnings 202.5 4.9
Deferred revenue 19.1 26.5
Other 54.8 62.2
Total deferred tax liabilities $ 1,077.7 $ 860.0
Deferred tax assets:
Employee benefit plans $ 222.1 $ 256.4
Doubtful accounts and other customer allowances 14.7 16.3
Basis differences in liabilities 93.3 84.5
Operating loss, capital loss and tax credit carryforwards 710.6 632.2
Currency and derivatives 11.6 48.5
Other 121.0 88.6
Total deferred tax assets $ 1,173.3 $ 1,126.5
Net Deferred Tax Asset (Liability) before Valuation Allowance $ 95.6 $ 266.5
Valuation Allowance $ (626.7) $ (516.7)
Net Deferred Tax Liability after Valuation Allowance $ (531.1) $ (250.2)
1
Certain prior year amounts have been recast as a result of the adoption of the new revenue standard. Refer to Note A, Significant Accounting Policies, for further discussion.

A valuation allowance is recorded on certain deferred tax assets if it has been determined it is more likely than not that all or a portion of these assets will not
be realized. The Company recorded a valuation allowance of $626.7 million and $516.7 million on deferred tax assets existing as of December 29, 2018 and
December 30, 2017, respectively. The valuation allowance in 2018 and 2017 was primarily attributable to foreign and state net operating loss carryforwards
and foreign capital loss carryforwards.

As of December 29, 2018, the Company has approximately $5.5 billion of unremitted foreign earnings and profits. Of the total amount, the Company has
provided for deferred taxes of $202.5 million on approximately $3.6 billion, which is not indefinitely reinvested primarily due to the changes brought about
by the Act. The Company otherwise continues to consider the remaining undistributed earnings of its foreign subsidiaries to be permanently reinvested based
on its current plans for use outside of the U.S. and accordingly no taxes have been provided on such earnings. The cash that the Company’s non-U.S.
subsidiaries hold for indefinite reinvestment is generally used to finance foreign operations and investments, including acquisitions. The income taxes
applicable to such earnings are not readily determinable or practicable to calculate.

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Net operating loss carryforwards of $2.6 billion as of December 29, 2018 are available to reduce future tax obligations of certain U.S. and foreign companies.
The net operating loss carryforwards have various expiration dates beginning in 2019 with certain jurisdictions having indefinite carryforward periods. The
foreign capital loss carryforwards of $21.3 million as of December 29, 2018 have indefinite carryforward periods.

The components of earnings before income taxes consisted of the following:

(Millions of Dollars) 2018 2017 1 2016 1

United States $ 444.1 $ 715.2 $ 307.1

Foreign 578.0 812.6 922.2
Earnings before income taxes $ 1,022.1 $ 1,527.8 $ 1,229.3
1
Certain prior year amounts have been recast as a result of the adoption of the new revenue standard. Refer to Note A, Significant Accounting Policies, for further discussion.

Income tax expense (benefit) consisted of the following:

(Millions of Dollars) 2018 2017 1 2016 1

Current:
Federal $ 25.4 $ 590.6 $ 84.8
Foreign 175.0 224.6 191.5
State 24.8 25.4 10.6
Total current $ 225.2 $ 840.6 $ 286.9
Deferred:
Federal $ 29.7 $ (513.0) $ 18.7
Foreign 132.7 (33.0) (26.1)
State 28.7 6.3 (17.8)
Total deferred 191.1 (539.7) (25.2)
Income taxes $ 416.3 $ 300.9 $ 261.7
1
Certain prior year amounts have been recast as a result of the adoption of the new revenue standard. Refer to Note A, Significant Accounting Policies, for further discussion.

Net income taxes paid during 2018, 2017 and 2016 were $339.4 million, $273.6 million and $233.3 million, respectively. The 2018, 2017 and 2016
amounts include refunds of $43.7 million, $28.5 million and $30.5 million, respectively, primarily related to prior year overpayments and settlement of tax
audits.

The reconciliation of the U.S. federal statutory income tax provision to Income taxes in the Consolidated Statements of Operations is as follows:

(Millions of Dollars) 2018 2017 1 2016 1

Tax at statutory rate $ 214.6 $ 534.1 $ 429.1
State income taxes, net of federal benefits 24.7 13.3 12.5
Foreign tax rate differential (33.2) (149.0) (166.3)
Uncertain tax benefits 4.5 64.4 32.0
Tax audit settlements (5.2) (16.5) (10.5)
Change in valuation allowance 5.1 (5.4) 38.9
Change in deferred tax liabilities on undistributed foreign earnings — (94.1) (38.7)
Basis difference for businesses Held for Sale — 27.9 (27.9)
Stock-based compensation (4.1) (23.2) —
Sale of businesses — (47.3) —
U.S. Federal tax reform 199.6 23.6 —
Other-net 10.3 (26.9) (7.4)
Income taxes $ 416.3 $ 300.9 $ 261.7
1
Certain prior year amounts have been recast as a result of the adoption of the new revenue standard. Refer to Note A, Significant Accounting Policies, for further discussion.

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The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and various state, and foreign jurisdictions.
In the normal course, the Company is subject to examinations by taxing authorities throughout the world. The Internal Revenue Service is currently
examining its consolidated U.S. income tax returns for the 2010-2013 tax years. With few exceptions, as of December 29, 2018, the Company is no longer
subject to U.S. federal, state, local, or foreign examinations by tax authorities for years before 2010.

The Company’s liabilities for unrecognized tax benefits relate to U.S. and various foreign jurisdictions. The following table summarizes the activity related
to the unrecognized tax benefits:

(Millions of Dollars) 2018 2017 2016

Balance at beginning of year $ 387.8 $ 309.8 $ 283.1
Additions based on tax positions related to current year 28.3 34.6 14.9
Additions based on tax positions related to prior years 103.0 82.5 53.9
Reductions based on tax positions related to prior years (91.5) (4.2) (34.2)
Settlements (2.5) (0.3) 5.4
Statute of limitations expirations (18.8) (34.6) (13.3)
Balance at end of year $ 406.3 $ 387.8 $ 309.8

The gross unrecognized tax benefits at December 29, 2018 and December 30, 2017 include $397.0 million and $368.7 million, respectively, of tax benefits
that, if recognized, would impact the effective tax rate. The liability for potential penalties and interest related to unrecognized tax benefits was decreased by
$15.8 million in 2018, increased by $3.8 million in 2017 and increased by $4.6 million in 2016. The liability for potential penalties and interest totaled
$52.1 million as of December 29, 2018, $67.9 million as of December 30, 2017, and $64.1 million as of December 31, 2016. The Company classifies all tax-
related interest and penalties as income tax expense.

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 12 months. These changes may be the result of
settlement of ongoing audits or final decisions in transfer pricing matters. The Company cannot reasonably estimate the range of the potential change.

R. COMMITMENTS AND GUARANTEES

COMMITMENTS — The Company has non-cancelable operating lease agreements, principally related to facilities, vehicles, machinery and equipment.
Minimum payments have not been reduced by minimum sublease rentals of $2.2 million due in the future under non-cancelable subleases. Rental expense,
exclusive of sublease income, for operating leases was $177.6 million in 2018, $150.4 million in 2017, and $124.2 million in 2016.

The following is a summary of the Company’s future commitments:

(Millions of Dollars) Total 2019 2020 2021 2022 2023 Thereafter

Operating lease obligations $ 532.4 $ 134.8 $ 107.4 $ 80.3 $ 57.9 $ 40.2 $ 111.8
Marketing commitments 51.8 32.3 9.1 6.8 3.2 0.4 —
Total $ 584.2 $ 167.1 $ 116.5 $ 87.1 $ 61.1 $ 40.6 $ 111.8

The Company has numerous assets, predominantly real estate, vehicles and equipment, under various lease arrangements. The Company routinely exercises
various lease renewal options and from time to time purchases leased assets for fair value at the end of lease terms.

The Company is a party to synthetic leases for one of its major distribution centers and two of its office buildings. The programs qualify as operating leases
for accounting purposes, where only the monthly lease cost is recorded in earnings and the liability and value of the underlying assets are off-balance sheet.

GUARANTEES — The Company's financial guarantees at December 29, 2018 are as follows:

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 Maximum Carrying
Potential Amount of
(Millions of Dollars) Term Payment Liability
Guarantees on the residual values of leased properties One to four years $ 99.6 $ —
Standby letters of credit Up to three years 68.0 —
Commercial customer financing arrangements Up to six years 67.6 7.6
Total $ 235.2 $ 7.6

The Company has guaranteed a portion of the residual value arising from its previously mentioned synthetic leases. The lease guarantees aggregate $99.6
million while the fair value of the underlying assets is estimated at $117.2 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 lease guarantees.

The Company has issued $68.0 million in standby letters of credit that guarantee future payments which may be required under certain insurance programs.

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 truck 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 $67.6 million and the $7.6 million carrying value of the guarantees issued
is recorded in debt and other liabilities as appropriate in the Consolidated Balance Sheets.

The Company provides warranties which vary 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 claim experience forms the basis for warranty obligations recognized. Adjustments are recorded
to the warranty liability as new information becomes available.

Following is a summary of the warranty liability activity for the years ended December 29, 2018, December 30, 2017, and December 31, 2016:

(Millions of Dollars) 2018 2017 2016

Balance beginning of period 1 $ 108.5 $ 103.4 $ 105.4
Warranties and guarantees issued 110.4 105.3 97.2
Warranty payments and currency (116.8) (100.2) (99.2)
Balance end of period 1 $ 102.1 $ 108.5 $ 103.4
1 2018 beginning of period balance and 2017 end of period balance have been recast as a result of the adoption of new accounting standards. Refer to Note A, Significant Accounting
Policies, for further discussion.

S. 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.

On January 25, 2019, IPS Worldwide, LLC ("IPS"), a third-party provider of freight payment processing services for the Company, filed for Chapter 11
bankruptcy protection and listed the Company as an unsecured creditor. As of December 29, 2018, there were outstanding obligations of approximately
$50.8 million owed to certain of the Company's freight carriers. Such amounts had previously been remitted to IPS through a third-party financing program
for ultimate payment to these freight carriers. However, due to nonperformance of IPS with respect to processing these payments and the Company's
obligation to its freight carriers, an incremental $50.8 million charge has been recorded in the fourth quarter of 2018. This charge does not include any
amounts that the Company will attempt to recover from insurance and/or through the bankruptcy proceedings, which could ultimately reduce the loss
exposure recorded.

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

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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 a number of administrative proceedings for the remediation of various waste
sites, including 28 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. In the event that 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
December 29, 2018 and December 30, 2017, the Company had reserves of $246.6 million and $176.1 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 2018 amount, $58.1 million is
classified as current and $188.5 million as long-term which is expected to be paid over the estimated remediation period. The range of environmental
remediation costs that is reasonably possible is $214.0 million to $344.3 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 policy.

As of December 29, 2018, the Company has recorded $12.4 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 December 29, 2018, the Company's net cash obligation associated with remediation activities including WCLC is
$234.2 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
contested the EPA's allegation that they are responsible for the contamination, and asserted contribution claims, counterclaims and cross-claims against a
number of other PRPs, including the federal government as well as insurance carriers. The EPA released its Record of Decision ("ROD") in September 2012,
which identified and described the EPA's selected remedial alternative for the site. Black & Decker and Emhart contested the EPA's selection of the remedial
alternative set forth in the ROD on the grounds that the EPA's actions were arbitrary and capricious and otherwise not in accordance with law, and proposed
other equally-protective, more cost-effective alternatives. On June 10, 2014, the EPA issued an Administrative Order under Sec. 106 of CERCLA, instructing
Black & Decker and Emhart to perform the remediation of Centredale pursuant to the ROD. Black & Decker and Emhart disputed the factual, legal and
scientific bases cited by the EPA for such an administrative order and provided the EPA with numerous good-faith bases for their declination to comply with
the administrative order. 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. Following the
Phase I trial, the Court found that dioxin contamination at the

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Centredale site was not "divisible" and that Black & Decker and Emhart were jointly and severally liable for dioxin contamination at the site. Following the
Phase 2 trial, the Court found that certain components of the EPA's selected remedy were arbitrary and capricious, and remanded the matter to the EPA while
retaining jurisdiction over the ongoing remedy selection and implementation process. The Court also held in Phase 2 that Black & Decker and Emhart had
sufficient cause for their declination to comply with the EPA's June 10, 2014 administrative order and that no associated civil penalties or fines were
warranted. The United States filed a Motion for Reconsideration concerning the Court's Phase 2 rulings and appealed the ruling to the United States Court of
Appeals for the First Circuit. Black & Decker and Emhart's Motion to Dismiss the Appeal was denied without prejudice for consideration with the merits. 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
are subject to public comment and Court approval. Once approved and entered, the settlement will resolve outstanding issues relating to Phase 1 and 2 of the
litigation with the United States. Phase 3 of the litigation, which is in its relatively early stages, will address the potential allocation of liability to other PRPs
who may have contributed to contamination of the Centredale site with dioxins, polychlorinated biphenyls and other contaminants of concern. Based on the
Company's estimated remediation and response cost obligations arising out of the settlement reached with the United States (including the EPA’s past costs
as well as costs of additional investigation, remediation, and related costs such as EPA’s oversight costs), the Company has increased its reserve for this site.
Accordingly, in the second quarter of 2018, a $77.7 million increase was recorded in Other, net in the Consolidated Statements of Operations. As of December
29, 2018, the Company has reserved $145.2 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 seventeen miles of the Lower Passaic River in New Jersey (the “River”). The Company’s potential
liability stems from former operations in Newark, New Jersey. 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 seventeen miles of the River. On March 4, 2016, the EPA issued a Record of Decision 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 EPA estimates that the remedial design will
take four years to complete.) 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 Company currently is participating in the allocation process that is expected to be completed in late
2019. The Company asserts that it did not discharge dioxins, furans or polychlorinated biphenyls and should be eligible for a cash out settlement. 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. 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. As of November 30, 2018, the
Company's joint defense group's motion to dismiss OCC's complaint on various grounds and OCC's opposition brief were filed with the court. A decision on
the motion to dismiss is expected in 2019. There has been no determination as to how the RI/FS will be modified in light of the EPA's decision to implement
a final action for the lower 8.3 miles of the River. 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 RI/FS is ongoing, the ultimate remedial approach and associated cost for the upper
portion of the River has not yet been determined, and the parties that will participate in funding the remediation and their respective allocations are not yet
known.

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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. The cleanup adopted by the EPA is estimated to cost approximately $68.7 million. Accordingly, in the first quarter of 2017, the
Company increased its reserve by $17.1 million which was recorded in Other, net in the Consolidated Statements of Operations.

The environmental liability for certain sites that have cash payments beyond the current year that are fixed or reliably determinable have been discounted
using a rate of 2.3% to 3.3%, depending on the expected timing of disbursements. The discounted and undiscounted amount of the liability relative to these
sites is $39.4 million and $49.8 million, respectively. The payments relative to these sites are expected to be $2.5 million in 2019, $3.0 million in 2020, $3.0
million in 2021, $3.0 million in 2022, $3.0 million in 2023, and $35.3 million thereafter.

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.

T. DIVESTITURES
On January 3, 2017, the Company sold a business within the Tools & Storage segment for $25.6 million. During the second quarter of 2017, the Company
received additional proceeds of $0.5 million as a result of the finalization of the purchase price. On February 22, 2017, the Company sold the majority of its
mechanical security businesses within the Security segment, which included the commercial hardware brands of Best Access, phi Precision and GMT, for net
proceeds of $717.1 million. The Company also sold a small business in the Industrial segment during the third quarter of 2017 and a small business in the
Tools & Storage segment during the fourth quarter of 2017 for total proceeds of approximately $13.7 million. As a result of these sales, the Company
recognized a net pre-tax gain of $264.1 million in 2017, primarily related to the sale of the mechanical security businesses. These disposals do not qualify as
discontinued operations and are included in the Company's Consolidated Statements of Operations for all periods presented through their respective dates of
sale in 2017. The Company recognized pre-tax income for these businesses of $7.0 million and $50.0 million for the years ended December 30, 2017 and
December 31, 2016, respectively.

In January 2019, the Company entered into an agreement to sell its Sargent & Greenleaf mechanical locks business within the Security segment. The
divestiture will allow the Company to invest in other areas of the Security business that fit into its long-term growth strategy. The transaction is expected to
close in the first half of 2019.

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SELECTED QUARTERLY FINANCIAL DATA (unaudited)

Quarter
(Millions of Dollars, except per share amounts) First Second Third Fourth Year
2018
Net Sales $ 3,209.3 $ 3,643.6 $ 3,494.8 $ 3,634.7 $ 13,982.4
Gross profit 1,165.7 1,287.1 1,238.4 1,159.9 4,851.1
Selling, general and administrative (1) 785.6 805.8 798.9 781.4 3,171.7
Net earnings (loss) 170.1 293.4 248.3 (106.0) 605.8
Less: Net (loss) gain attributable to non-controlling
interest (0.5) (0.2) 0.5 0.8 0.6
Net Earnings (Loss) Attributable to Common
Shareowners $ 170.6 $ 293.6 $ 247.8 $ (106.8) $ 605.2
Earnings (loss) per share of common stock:
Basic $ 1.13 $ 1.96 $ 1.67 $ (0.72) $ 4.06
Diluted $ 1.11 $ 1.93 $ 1.65 $ (0.72) $ 3.99
2017
Net Sales (2) $ 2,856.3 $ 3,286.7 $ 3,359.4 $ 3,464.2 $ 12,966.6
Gross profit (2) 1,066.0 1,213.3 1,253.0 1,246.0 4,778.3
Selling, general and administrative (1)(2) 690.3 744.2 768.9 795.8 2,999.2
Net earnings 393.7 277.6 274.5 281.1 1,226.9
Less: Net loss attributable to non-controlling interest — — — (0.4) (0.4)
Net Earnings Attributable to Common Shareowners
(2) $ 393.7 $ 277.6 $ 274.5 $ 281.5 $ 1,227.3
Earnings per share of common stock:
Basic (2) $ 2.64 $ 1.86 $ 1.83 $ 1.88 $ 8.20
Diluted (2) $ 2.60 $ 1.82 $ 1.80 $ 1.84 $ 8.05
(1) Includes provision for doubtful accounts.
(2) Prior year amounts have been recast as a result of the adoption of the new revenue and pension standards. Refer to Note A, Significant Accounting Policies, for further discussion.

The 2018 year-to-date results above include $450 million of pre-tax acquisition-related and other charges, as well as net tax charges of $181 million, which is
comprised of charges related to the Tax Cuts and Jobs Act ("the Act") partially offset by the tax benefit of the pre-tax acquisition-related and other charges.
The net impact of the above items and effect on diluted earnings per share by quarter was as follows:

Acquisition-Related Charges & Other Diluted EPS Impact

• Q1 2018 — $25 million loss ($43 million after-tax) ($0.28) per diluted share
• Q2 2018 — $127 million loss ($98 million after-tax) ($0.64) per diluted share
• Q3 2018 — $85 million loss ($66 million after-tax) ($0.43) per diluted share
• Q4 2018 — $213 million loss ($424 million after-tax) ($2.83) per diluted share

The 2017 year-to-date results above include $156 million of pre-tax acquisition-related charges, a $264 million pre-tax gain on sales of businesses, primarily
related to the sale of the mechanical security businesses in the first quarter, and a one-time net tax charge of $24 million recorded in the fourth quarter related
to the Act. The net impact of the above items and effect on diluted earnings per share by quarter was as follows:

Acquisition-Related Charges & Other Diluted EPS Impact

• Q1 2017 — $211 million gain ($197 million after-tax) $1.30 per diluted share
• Q2 2017 — $43 million loss ($29 million after-tax) ($0.20) per diluted share
• Q3 2017 — $33 million loss ($24 million after-tax) ($0.16) per diluted share
• Q4 2017 — $27 million loss ($53 million after-tax) ($0.34) per diluted share

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 EXHIBIT INDEX
STANLEY BLACK & DECKER, INC.
EXHIBIT LIST

Some of the agreements included as exhibits to this Annual Report on Form 10-K (whether incorporated by reference to earlier filings or otherwise) may
contain representations and warranties, recitals or other statements that appear to be statements of fact. These agreements are included solely to provide
investors with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other
parties to the agreements. Representations and warranties, recitals, and other common disclosure provisions have been included in the agreements solely for
the benefit of the other parties to the applicable agreements and often are used as a means of allocating risk among the parties. Accordingly, such statements
(i) should not be treated as categorical statements of fact; (ii) may be qualified by disclosures that were made to the other parties in connection with the
negotiation of the applicable agreements, which disclosures are not necessarily reflected in the agreement or included as exhibits hereto; (iii) may apply
standards of materiality in a way that is different from what may be viewed as material by or to investors in or lenders to the Company; and (iv) were made
only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, representations and warranties, recitals or other disclosures contained in agreements may not describe the actual state of affairs as of the date
they were made or at any other time and should not be relied on by any person other than the parties thereto in accordance with their terms. Additional
information about the Company may be found in this Annual Report on Form 10-K and the Company’s other public filings, which are available without
charge through the SEC’s website at http://www.sec.gov.

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3.1 (a) Restated Certificate of Incorporation dated September 15, 1998 (incorporated by reference to Exhibit 3(i) to the Company’s Quarterly
Report on Form 10-Q filed on May 13, 2010).

(b) Certificate of Amendment to the Restated Certificate of Incorporation dated December 21, 2009 (incorporated by reference to Exhibit 3(ii)
to the Company’s Quarterly Report on Form 10-Q filed on May 13, 2010).

(c) Certificate of Amendment to the Restated Certificate of Incorporation dated March 12, 2010 (incorporated by reference to Exhibit 3(iii) to
the Company’s Quarterly Report on Form 10-Q filed on May 13, 2010).

(d) Certificate of Amendment to the Restated Certificate of Incorporation dated November 5, 2010 (incorporated by reference to Exhibit 3.1 to
the Company’s Current Report on Form 8-K filed on November 9, 2010).

(e) Certificate of Amendment to the Restated Certificate of Incorporation dated April 17, 2012 (incorporated by reference to Exhibit 3(i) to the
Company’s Quarterly Report on Form 10-Q filed on May 2, 2012).

(f) Certificate of Amendment to the Restated Certificate of Incorporation dated May 17, 2017 (incorporated by reference to Exhibit 3.1 to the
Company’s Current Report on Form 8-K filed on May 17, 2017).

3.2 (a) Amended & Restated ByLaws (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on July 18,
2018).

4.1 (a) Indenture, dated as of June 26, 1998, by and among Black & Decker Holdings Inc., as Issuer, The Black & Decker Corporation, as
Guarantor, and The First National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 4.9 to the Company’s Current Report
on Form 8-K filed on March 12, 2010).

(b) First Supplemental Indenture dated as of March 12, 2010, to the Indenture dated as of June 26, 1998, by and among Black & Decker
Holdings, Inc., as issuer, The Black & Decker Corporation, as guarantor and The First National Bank of Chicago, as trustee (incorporated by
reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on March 12, 2010).

4.2 (a) Senior Indenture, dated as of November 1, 2002 between the Company and The Bank of New York Mellon Trust Company, N.A., as
successor trustee to JPMorgan Chase Bank, defining the rights of holders of 3 1/2% Notes Due November 1, 2007, 4 9/10% Notes due
November 1, 2012 and 6.15% Notes due 2013 (incorporated by reference to Exhibit 4(vi) to the Company’s Annual Report on Form 10-K
for the year ended December 28, 2002).

(b) Second Supplemental Indenture dated as of March 12, 2010 to the Indenture dated as of November 1, 2002 between The Stanley Works
and The Bank of New York Mellon Trust Company, as successor trustee to JPMorgan Chase Bank, N.A. (incorporated by reference to
Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 12, 2010).

(c) Third Supplemental Indenture dated as of September 3, 2010, to the Indenture dated as of November 1, 2002, among Stanley Black &
Decker, Inc., The Black & Decker Corporation and The Bank of New York Mellon Trust Company, N.A., as successor trustee to JPMorgan
Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as trustee (incorporated by reference to the Company’s Current Report on
Form 8-K filed on September 7, 2010).

(d) Fourth Supplemental Indenture, dated as of November 22, 2011, among Stanley Black & Decker, Inc., The Black & Decker Corporation, as
Guarantor, and the Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 3.40% Notes due 2021 (incorporated by
reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on November 22, 2011).

(e) Fifth Supplemental Indenture, dated as of November 6, 2012, among Stanley Black & Decker, Inc., The Black & Decker Corporation, as
Guarantor, and the Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 2.90% Notes due 2022 (incorporated by
reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on November 6, 2012).

(f) Sixth Supplemental Indenture, dated as of November 6, 2018, between the Company and the Bank of New York Mellon Trust Company,
N.A., as trustee, relating to the 4.250% Notes due 2028 and the 4.850% Notes due 2048 (incorporated by reference to Exhibit 4.2 to the
Company’s Form 8-K dated November 6, 2018).

4.3 (a) Indenture, dated November 22, 2005, between The Stanley Works and HSBC Bank USA, National Association, as indenture trustee
(incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K dated November 29, 2005).

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 (b) First Supplemental Indenture, dated November 22, 2005, between The Stanley Works and HSBC Bank USA, National Association, as
indenture trustee (incorporated by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K dated November 29, 2005).

(c) Second Supplemental Indenture dated as of November 5, 2010, to the Indenture dated as of November 22, 2005, between Stanley Black &
Decker, Inc. and HSBC Bank USA, National Association, as trustee (incorporated by reference to Exhibit 4.4 of the Company’s Current
Report on Form 8-K filed on November 9, 2010).

(d) Third Supplemental Indenture dated July 25, 2012, between the Company and HSBC Bank USA, National Association, as trustee, related
to the 5.75% Junior Subordinated Debentures due 2052 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on
Form 8-K filed on July 25, 2012).

(e) Fourth Supplemental Indenture, dated as of December 3, 2013, between the Company and the Trustee, relating to the Notes (incorporated
by reference to Exhibit 4.3 to the Company’s Form 8-K dated December 3, 2013).

(f) Fifth Supplemental Indenture, dated December 3, 2013, between the Company and the Trustee, related to the Debentures (incorporated by
reference to Exhibit 4.9 to the Company’s Form 8-K dated December 3, 2013).

(g) Form of 5.75% Junior Subordinated Debentures due 2052 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on
Form 8-K dated July 25, 2012).

(h) Form of Debenture (incorporated by reference to Exhibit 4.9 to the Company’s Current Report on Form 8-K dated December 3, 2013).

4.4 Purchase Contract and Pledge Agreement, dated May 17, 2017, among the Company, The Bank of New York Mellon Trust Company,
National Association, as Purchase Contract Agent, and HSBC Bank USA, National Association, as Collateral Agent, Custodial Agent and
Securities Intermediary (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed May 17, 2017).

4.5 Form of Corporate Unit (incorporated by reference as part of Exhibit 4.1 of the Company’s Current Report on Form 8-K filed May 17,
2017).

4.6 Form of Treasury Unit (incorporated by reference as part of Exhibit 4.1 of the Company’s Current Report on Form 8-K filed May 17, 2017).

4.7 Form of Cash Settled Unit (incorporated by reference as part of Exhibit 4.1 of the Company’s Current Report on Form 8-K filed May 17,
2017).

4.8 0% Series C Cumulative Perpetual Preferred Stock Certificate (incorporated by reference to Exhibit 4.5 of the Company’s Current Report
on Form 8-K filed May 17, 2017).

10.1 (a) Amended and Restated Five Year Credit Agreement, made as of September 12, 2018 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 14, 2018).

(b) 364-Day Credit Agreement, made as of December 20, 2017 among Stanley Black & Decker, Inc., the initial lenders named therein and
Citibank, N.A. as administrative agent for the Lenders (incorporated by reference to the Company’s Current Report on Form 8-K filed on
December 21, 2017).

(c) 364-Day Credit Agreement, made as of September 12, 2018 among Stanley Black & Decker, Inc., the initial lenders named therein and
Citibank, N.A. as administrative agent for the Lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form
8-K filed on September 14, 2018).

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 10.2 (a) Letter Agreement, dated July 21, 2016, between Stanley Black & Decker, Inc. and James M. Loree (incorporated by reference to Exhibit
10.1 of the Company’s Current Report on Form 8-K filed on July 25, 2016).*

(b) Second Amended and Restated Change in Control Severance Agreement dated July 21, 2016 between Stanley Black & Decker, Inc. and
James M. Loree (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 25, 2016).

10.3 Letter Agreement between Stanley Black & Decker, Inc. and John H. Wyatt effective December 22, 2014, as amended February 17, 2016
(incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K filed on February 19, 2016).*

10.4 Change in Control Severance Agreement, dated December 4, 2018 between Stanley Black & Decker, Inc. and Jeffery D. Ansell.*

10.5 Change in Control Severance Agreement, dated December 4, 2018 between Stanley Black & Decker, Inc. and Donald Allan Jr.*

10.6 Revised Form B of Change in Control Severance Agreement. John H. Wyatt is a Party to a Change In Control Severance Agreement in this
Form and Three of the Company’s other Executive Officers are parties to a Change in Control Severance Agreement in this Form
(incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the period ended December 29, 2012).*

10.7 Form C of Change in Control Severance Agreement. Ten Executive Officers of the Company are parties to Change in Control Severance
Agreements in this Form (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended
September 28, 2013).*

10.8 Deferred Compensation Plan for Non-Employee Directors amended and restated as of July 19, 2017 (incorporated by reference to Exhibit
99 to the Company’s Registration Statement on Form S-8 filed on August 15, 2017).*

10.9 Deferred Compensation Plan for Participants in Stanley’s Management Incentive Plan amended and restated as of December 11, 2007
(incorporated by reference to Exhibit 10(ix) to the Company’s Annual Report on Form 10-K for the year ended December 29, 2007).*

10.10 (a) Stanley Black & Decker Supplemental Retirement Account Plan (as in effect, January 1, 2011, except as otherwise provided therein)
(incorporated by reference to the Company’s Annual Report on Form 10-K for the period ended January 1, 2011).*

(b) Stanley Black & Decker Supplemental Retirement Plan (effective, January 1, 2011, except as otherwise provided therein) (incorporated by
reference to the Company’s Annual Report on Form 10-K for the period ended January 1, 2011).*

10.11 Stanley Black & Decker, Inc. Supplemental Executive Retirement Program as amended and restated effective October 15, 2015,
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 16, 2015).*

10.12 New 1991 Loan Agreement, dated June 30, 1998, between The Stanley Works, as lender, and Citibank, N.A. as trustee under the trust
agreement for the Stanley Account Value Plan, to refinance the 1991 Salaried Employee ESOP Loan and the 1991 Hourly ESOP Loan and
their related promissory notes (incorporated by reference to Exhibit 10(ii) to the Company’s Quarterly Report on Form 10-Q for the quarter
ended July 4, 1998).

10.13 The Stanley Works Non-Employee Directors’ Benefit Trust Agreement dated December 27, 1989 and amended as of January 1, 1991 by
and between The Stanley Works and Fleet National Bank, as successor trustee (incorporated by reference to Exhibit (10)(xvii)(a) to the
Company’s Annual Report on Form 10-K for year ended December 29, 1990). P

10.14 (a) The Stanley Works 2009 Long-Term Incentive Plan (as amended March 12, 2010) (incorporated by reference Exhibit 4.7 to the Company’s
Registration Statement on Form S-8 Reg. No. 333-165454 filed on March 12, 2010).*

(b) Form of award letter for restricted stock unit grants to executive officers pursuant to the Company’s 2009 Long Term Incentive Plan (as
amended March 12, 2010) (incorporated by reference to Exhibit 10(vi)(b) to the Company’s Quarterly Report on Form 10-Q filed on May
13, 2010).*

(c) Form of stock option certificate for executive officers pursuant to the Company’s 2009 Long Term Incentive Plan (as amended March 12,
2010) (incorporated by reference to Exhibit 10(vi)(c) to the Company’s Quarterly Report on Form 10-Q filed on May 13, 2010).*

119
 (d) Terms of special one-time award of restricted stock units to John F. Lundgren under his employment agreement and The Stanley Works
2009 Long-Term Incentive Plan (as amended March 12, 2010) (incorporated by reference to Exhibit 10(vi)(d) to the Company’s Quarterly
Report on Form 10-Q filed on May 13, 2010).*

10.15 (a) The Stanley Black & Decker 2013 Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report
on Form 10-Q for the period ended March 30, 2013).*

(b) Form of Award Document for Performance Awards granted to Executive Officers under 2013 Long Term Incentive Plan, updated 2018
(incorporated by reference to Exhibit 10.16(b) to the Company's Annual Report on Form 10-K for the period ended December 30, 2017).*

(c) Form of stock option certificate for grants to executive officers pursuant to the Company’s 2013 Long Term Incentive Plan (incorporated
by reference to Exhibit 10.18(c) to the Company’s Annual Report on Form 10-K for the period ended December 28, 2013).*

(d) Form of restricted stock unit award certificate for grants of restricted stock units to executive officers pursuant to the Company’s 2013 Long
Term Incentive Plan (incorporated by reference to Exhibit 10.18(d) to the Company’s Annual Report on Form 10-K for the period ended
December 28, 2013).*

(e) Form of restricted stock unit retention award certificate for grants of restricted stock units to executive officers pursuant to the Company’s
2013 Long Term Incentive Plan (incorporated by reference to the Company’s Annual Report on Form 10-K for the period ended December
31, 2016).*

10.16 (a) The Stanley Black & Decker 2018 Omnibus Award Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed on July 20, 2018).*

(b) Form of stock option certificate for grants to executive officers pursuant to the Company’s 2018 Omnibus Award Plan (incorporated by
reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on July 20, 2018).*

(c) Form of restricted stock unit award certificate for grants to executive officers pursuant to the Company’s 2018 Omnibus Award Plan
(incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on July 20, 2018).*

(d) Form of restricted stock unit retention award certificate for grants to executive officers pursuant to the Company’s 2018 Omnibus Award
Plan (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on July 20, 2018).*

(e) Form of Award Document for Performance Award granted to Executive Officers under the 2018 Omnibus Award

(f) Form of Award Document granted to Executive Officers under the 2019 Management Incentive Compensation Plan

10.17 The Stanley Black & Decker, Inc. Deferred Compensation Plan Relating to Long-Term Performance Awards

10.18 (a) The Stanley Works Restricted Stock Unit Plan for Non-Employee Directors amended and restated as of December 11, 2007 (incorporated
by reference to Exhibit 10(xx) to the Company’s Annual Report on Form 10-K for the year ended December 29, 2007).*

(b) Form of Certificate for RSUs issued pursuant to The Stanley Works Restricted Stock Unit Plan for Non-Employee Directors (incorporated
by reference to Exhibit 10(xxv) to the Company’s Annual Report on Form 10-K for the year ended January 1, 2005).*

10.19 The Stanley Black & Decker, Inc. 2017 Management Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to the
Company’s Quarterly Report on Form 10-Q for the period ended April 1, 2017).*

10.20 Special Severance Policy for Management Incentive Compensation Plan Participants Levels 1-5 as amended effective October 17, 2008
(incorporated by reference to Exhibit 10(xxi) to the Company’s Annual Report on Form 10-K for the period ended January 3, 2009).*

10.21 Employee Stock Purchase Plan as amended April 23, 2009 (incorporated by reference to Exhibit 10(iii)(d) to the Company’s Quarterly
Report on Form 10-Q for the quarterly period ended April 4, 2009).*

10.22 The Black & Decker 2003 Stock Option Plan, as amended (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on
Form 8-K filed on March 12, 2010).*

120
10.23 Form of Nonqualified Stock Option Agreement relating to The Black & Decker Corporation’s stock option plans (incorporated by reference
to Exhibit 10(xix) to the Company’s Quarterly Report on Form 10-Q filed on May 13, 2010).*

10.24 (a) The Black & Decker Supplemental Pension Plan, as amended and restated (incorporated by reference to Exhibit 10(xx) to the Company’s
Quarterly Report on Form 10-Q filed on May 13, 2010).*

(b) First Amendment to The Black & Decker Supplemental Pension Plan (incorporated by reference to Exhibit 10(xxi) to the Company’s
Quarterly Report on Form 10-Q filed on May 13, 2010).*

10.25 The Black & Decker Supplemental Executive Retirement Plan, as amended and restated (incorporated by reference to Exhibit 10(xxii) to
the Company’s Quarterly Report on Form 10-Q filed on May 13, 2010).*

10.26 Employment Offer Letter, dated June 12, 2017, between Stanley Black & Decker, Inc. and Janet M. Link (incorporated by reference to
Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the period ended December 30, 2017).*

10.27 Change in Control Severance Agreement, dated December 19, 2017, between Stanley Black & Decker, Inc. and Janet M. Link (incorporated
by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K for the period ended December 30, 2017).*

21 Subsidiaries of Registrant.

23 Consent of Independent Registered Public Accounting Firm.

24 Power of Attorney.

31.1 (a) Certification by Chief Executive Officer pursuant to Rule 13a-14(a).

31.1 (b) Certification by Chief Financial Officer pursuant to Rule 13a-14(a).

32.1 Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.

32.2 Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.

99.1 Policy on Confidential Proxy Voting and Independent Tabulation and Inspection of Elections as adopted by The Board of Directors
October 23, 1991 (incorporated by reference to Exhibit (28)(i) to the Quarterly Report on Form 10-Q for the quarter ended September 28,
1991). P

* Management contract or compensation plan or arrangement.

P Paper Filing

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 EXHIBIT 10.4

CHANGE IN CONTROL SEVERANCE AGREEMENT

THIS AGREEMENT (the “Agreement”), dated December 4, 2018 is made by and between Stanley Black & Decker, Inc., a Connecticut corporation
(the “Company”), and Jeffery D. Ansell (the “Executive”).

WHEREAS, the Board recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control exists and that
such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its shareowners; and

WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of
members of the Company’s management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as
follows:

1. Defined Terms. The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.

2. Term of Agreement. The Term of this Agreement shall commence on the date hereof and shall continue in effect through the first anniversary
hereof; provided, however, that commencing on December 4, 2019 and each December 4 thereafter, the Term shall automatically be extended for one
additional year unless, not later than ninety (90) calendar days prior to such December 4, the Company or the Executive shall have given notice not to extend
the Term; and further provided, however, that if a Change in Control shall have occurred during the Term, the Term shall expire no earlier than twenty-four
(24) months beyond the month in which such Change in Control occurred.

3. Company’s Covenants Summarized. In order to induce the Executive to remain in the employ of the Company and in consideration of the
Executive’s covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance
Payments and the other payments and benefits described herein. Except as provided in Section 10.1 hereof, no Severance Payments shall be payable under
this Agreement unless there shall have been (or, under the terms of the second sentence of Section 6.1 hereof, there shall be deemed to have been) a
termination of the Executive’s employment with the Company following a Change in Control and during the Term. This Agreement shall not be construed as
creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive
shall not have any right to be retained in the employ of the Company.

4. The Executive’s Covenants. The Executive agrees that, subject to the terms and conditions of this Agreement, in the event of a Potential Change
in Control during the Term, the Executive will remain in the employ of the Company until the earliest of (i) a date which is six (6) months from the date of
such Potential Change in Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executive’s employment for Good
Reason or by reason of death, Disability or Retirement, or (iv) the termination by the Company of the Executive’s employment for any reason.

1
 5. Compensation Other Than Severance Payments.

5.1 Following a Change in Control and during the Term, during any period that the Executive fails to perform the Executive’s full-time duties with
the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Executive’s full salary to the Executive at the rate in
effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation
or benefit plan, program or arrangement maintained by the Company during such period (other than any disability plan), until the Executive’s employment is
terminated by the Company for Disability.

5.2 If the Executive’s employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay
the Executive’s full salary to the Executive through the Date of Termination at the rate in effect immediately prior to the Date of Termination or, if higher, the
rate in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, together with all compensation and benefits
payable to the Executive through the Date of Termination under the terms of the Company’s compensation and benefit plans, programs or arrangements as in
effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason.

5.3 If the Executive’s employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay
to the Executive the Executive’s normal post-termination compensation and benefits as such payments become due. Such post-termination compensation
and benefits shall be determined under, and paid in accordance with, the Company’s retirement, insurance and other compensation or benefit plans, programs
and arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good Reason. Notwithstanding anything herein to the contrary and for the avoidance of doubt,
“normal post-termination compensation and benefits” shall not include disability insurance coverage after the Executive’s termination of employment with
the Company.

6. Severance Payments.

6.1 If the Executive incurs a “separation from service” (within the meaning of section 409A) following a Change in Control and during the Term,
other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the benefits described in this Section 6.1 (“Severance Payments”), in addition to any payments and
benefits to which the Executive is entitled under Section 5 hereof. For purposes of this Agreement, the Executive shall be deemed to have incurred a
separation from service following a Change in Control by the Company without Cause or by the Executive with Good Reason, if (i) the Executive’s
employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control occurs) and such termination
was at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in
Control, (ii) the Executive terminates his employment for Good Reason prior to a Change in Control (whether or not a Change in Control occurs) and the
circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (iii) the Executive’s employment is terminated by
the Company without Cause or by the Executive for Good Reason and such termination or the circumstance or event which constitutes Good Reason is
otherwise in connection with or in anticipation of a Change in Control (whether or not a Change in Control occurs). For purposes of Sections 5 and 6 of this
Agreement, no payment that would otherwise be made and no benefit that would otherwise be provided upon a termination of employment will be made or
provided unless and until such termination of employment is also a “separation from service,” as determined in accordance with section 409A.

(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to two and one-
half times the sum of (i) the Executive’s base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior
to the first occurrence of an event or circumstance constituting Good Reason, and (ii) the

2
average annual bonus earned by the Executive pursuant to any annual bonus or incentive plan maintained by the Company in respect of the three
fiscal years ending immediately prior to the fiscal year in which occurs the Date of Termination or, if higher, immediately prior to the fiscal year in
which occurs the first event or circumstance constituting Good Reason.

(B) For the thirty (30) month period immediately following the Date of Termination, the Company provide, or shall arrange to provide, to
the Executive and his dependents life, accident and health insurance benefits substantially similar to those provided to the Executive and his
dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents
immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater cost to the Executive than the cost to
the Executive immediately prior to such date or occurrence. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be
reduced to the extent benefits of the same type are received by or made available to the Executive during the thirty (30) month period following the
Executive’s termination of employment, such as pursuant to the benefit plans of a subsequent employer (and any such benefits received by or made
available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall promptly reimburse the
Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the Date of Termination or, if more
favorable to the Executive, the first occurrence of an event or circumstance constituting Good Reason.

(C) In addition to the benefits to which the Executive is entitled under the DC Pension Plan, the Company shall pay the Executive a lump
sum amount, in cash, equal to the sum of (i) the amount that would have been contributed thereto by the Company on the Executive’s behalf during
the thirty (30) months immediately following the Date of Termination, determined (x) as if the Executive made the maximum permissible
contributions thereto during such period, (y) as if the Executive earned compensation during such period at a rate equal to the Executive’s
compensation (as defined in the DC Pension Plan) during the twelve (12) months immediately preceding the Date of Termination or, if higher,
during the twelve months immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (z) without regard to
any amendment to the DC Pension Plan made subsequent to a Change in Control and on or prior to the Date of Termination, which amendment
adversely affects in any manner the computation of benefits thereunder, and (ii) the excess, if any, of (x) the Executive’s account balance under the
DC Pension Plan as of the Date of Termination over (y) the portion of such account balance that is nonforfeitable under the terms of the DC Pension
Plan. The payments provided in this Section 6.1(C) are in addition to any payment the Executive would otherwise receive under the applicable DC
Plan and are not intended to offset or reduce any payment under such DC Plan.

(D) If the Executive would have become entitled to benefits under the Company’s post-retirement health care or life insurance plans, as in
effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, had the Executive’s employment terminated at any time during the period of thirty (30) months
after the Date of Termination, the Company shall provide such post-retirement health care and/or life insurance benefits to the Executive and the
Executive’s dependents commencing on the later of (i) the date on which such coverage would have first become available and (ii) the date on
which benefits described in subsection (B) of this Section 6.1 terminate.

(E) The Company shall provide the Executive with third-party outplacement services suitable to the Executive’s position for the period
following the Executive’s Date of Termination and ending on December 31 of the second year following such Date of Termination or, if earlier, until
the first acceptance by the Executive of an offer of employment, provided, however, that in no case shall the Company be required to pay in excess
of $50,000 over such period in providing outplacement services and that all reimbursements hereunder shall be paid to the Executive within thirty
(30) calendar days following the date on which the Executive submits the invoice but no later than December 31 of the third calendar year following
the year of the Executive’s Date of Termination.

3
 (F) For the thirty (30) month period immediately following the Date of Termination or until the Executive becomes eligible for
substantially similar benefits from a new employer, whichever occurs earlier, the Company shall continue to provide the Executive with all
perquisites provided by the Company immediately prior to the Date of Termination or, if more favorable to the Executive, immediately prior to the
first occurrence of an event or circumstance constituting Good Reason (including, without limitation, automobile, financial planning, annual
physical and executive whole life insurance).

6.2 (1) Notwithstanding any other provisions in this Agreement, if any of the payments or benefits received or to be received by the Executive
(including any payment or benefits received in connection with a Change in Control or the Executive’s termination of employment, whether pursuant to the
terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, being hereinafter referred to as the “Total
Payments”) would be subject (in whole or part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of
section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that
no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments will only be
reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes
on such reduced Total Payments and after taking into account the phase out, if any, of itemized deductions and personal exemptions attributable to such
reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount
of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect
of such unreduced Total Payments and after taking into account the phase out, if any, of itemized deductions and personal exemptions attributable to such
unreduced Total Payments).

(A) In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are
payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with
amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation
Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1,
Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section
1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity
valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are
determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described
in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following
manner: first, a pro-rata reduction of cash payment and payments and benefits due in respect of any equity not subject to section 409A, and second, a
pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to section 409A as deferred compensation.

(B) For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax and the amount of
such Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such
manner as not to constitute a “payment” within the meaning of section 280G(b) of the Code will be taken into account; (ii) no portion of the Total
Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the Change in Control, the Company’s independent auditor (the “Auditor”), does not constitute
a “parachute payment” within the meaning of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code) and, in
calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes
reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount
allocable to such reasonable compensation; and (iii) the value of any noncash

4
 benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of
the Code.

(C) All determinations required by this Section 6.2 (or requested by either the Executive or the Company in connection with this Section
6.2) will be at the expense of the Company. The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations
contained in this Section 6.2 will not of itself limit or otherwise affect any other rights of the Executive under this Agreement. The Executive and the
Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or
amount of liability for Excise Tax with respect to the Total Payments.

6.3 Subject to Section 6.4, the payments provided in subsections (A) and (C) of Section 6.1 hereof shall be made not later than the fifth (5 th )
business day following the Date of Termination; provided, however, that if the amounts of such payments cannot be finally determined on or before such day,
the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company in accordance with Section 6.2 hereof, of the
minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the
unpaid remainder (or on all such payments to the extent the Company fails to make such payments when due) at 120% of the rate provided in section 1274(b)
(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth (30th) calendar day after the Date of Termination.
In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall be payable by the
Executive to the Company on the fifth (5th) business day after demand by the Company (together with interest at 120% of the rate provided in section
1274(b)(2)(B) of the Code). At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement
setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other
advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall
be attached to the statement).

6.4 (A) Notwithstanding any provisions of this Agreement to the contrary, if the Executive is a “specified employee” (within the meaning of
section 409A and determined pursuant to procedures adopted by the Company) at the time of his separation from service and if any portion of the payments
or benefits to be received by the Executive upon separation from service would be considered deferred compensation under section 409A, amounts that
would otherwise be payable pursuant to this Agreement during the six-month period immediately following the Executive’s separation from service (the
“Delayed Payments”) and benefits that would otherwise be provided pursuant to this Agreement (the “Delayed Benefits”) during the six-month period
immediately following the Executive’s separation from service (such period, the “Delay Period”) shall instead be paid or made available on the earlier of (i)
the first (1 st ) business day of the seventh month following the date of the Executive’s separation from service or (ii) Executive’s death (the applicable date,
the “Permissible Payment Date”). The Company shall also reimburse the Executive for the cost incurred by the Executive in independently obtaining any
Delayed Benefits (the “Additional Delayed Payments”).

(B) With respect to any amount of expenses eligible for reimbursement under Sections 6.1 (B), (D) and (F), such expenses shall be reimbursed by
the Company within thirty (30) calendar days following the date on which the Company receives the applicable invoice from the Executive but in no event
later than December 31 of the year following the year in which the Executive incurs the related expenses; provided, that with respect to reimbursement
relating to the Additional Delayed Payments, such reimbursement shall be made on the Permissible Payment Date. In no event shall the reimbursements or in-
kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable
year, nor shall the Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

(C) For purposes of section 409A, the Executive’s right to receive any “installment” payments pursuant to this Agreement shall be treated as a right
to receive a series of separate and distinct payments.

5
 6.5 The Company shall deposit the estimated Delayed Payments and estimated Additional Delayed Payments into an irrevocable grantor trust (for
purposes of this Section 6, the “Grantor Trust”) not later than the fifth (5 th ) business day following the occurrence of a Potential Change in Control. The
Company shall deposit additional amounts into the Grantor Trust on a monthly basis equal to the interest accrued on the Delayed Payments (and any earlier
interest payments) at the United States 5-year Treasury Rate plus 2%, and the amount held in the Grantor Trust shall be paid to the Executive (in accordance
with the terms of the Grantor Trust) on the Permissible Payment Date.

6.6 The Company also shall pay to the Executive all legal fees and expenses incurred by the Executive in disputing in good faith any issue
hereunder relating to the termination of the Executive’s employment or in seeking in good faith to obtain or enforce any benefit or right provided by this
Agreement. Such payments shall be made within five (5) business days (but in any event no later than December 31 of the year following the year in which
the Executive incurs the expenses) after delivery of the Executive’s written requests for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require, provided that (i) the amount of such legal fees and expenses that the Company is obligated to pay in any
given calendar year shall not affect the legal fees and expenses that the Company is obligated to pay in any other calendar year, (ii) the Executive’s right to
have the Company pay such legal fees and expenses may not be liquidated or exchanged for any other benefit, and (iii) the Executive shall not be entitled to
reimbursement unless he has submitted an invoice for such fees and expenses at least ten (10) business days before the end of the calendar year next
following the calendar year in which such fees and expenses were incurred. The Company shall also pay all legal fees and expenses incurred by the Executive
in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit hereunder.
Payment pursuant to the preceding sentence will be made within fifteen (15) business days after delivery of the Executive’s written request for payment but in
no event later than the end of the calendar year following the calendar year in which the taxes that are the subject of the audit or proceeding are remitted to
the taxing authority, or where as a result of the audit or proceeding no taxes are remitted, the end of the calendar year in which the audit is completed or there
is a final and nonappealable settlement or other resolution of the matter.

7. Termination Procedures and Compensation During Dispute.

7.1 Notice of Termination. After a Change in Control and during the Term, any purported termination of the Executive’s employment (other than
by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 11
hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the
purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s
counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of
the definition of Cause herein, and specifying the particulars thereof in detail.

7.2 Date of Termination. “Date of Termination,” with respect to any purported termination of the Executive’s employment after a Change in
Control and during the Term, shall mean (i) if the Executive incurs a separation from service due to Disability, thirty (30) calendar days after Notice of
Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s duties during such thirty (30)
calendar day period), and (ii) if the Executive incurs a separation from service for any other reason, the date specified in the Notice of Termination (which, in
the case of a termination by the Company, shall be the thirtieth (30 th ) calendar day after the Notice of Termination is given (except in the case of a
termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) calendar days nor more than sixty (60) calendar
days, respectively, from the date such Notice of Termination is given).

6
 8. No Mitigation. The Company agrees that, if the Executive’s employment with the Company terminates during the Term, the Executive is not
required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 hereof.
Further, except as specifically provided in Sections 6.1(B) and 6.1(F) hereof, no payment or benefit provided for in this Agreement shall be reduced by any
compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.

9. Restrictive Covenants.

9.1 The Executive agrees that restrictions on his activities during and after his employment are necessary to protect the goodwill, Confidential
Information and other legitimate interests of the Company and its Subsidiaries, and that the agreed restrictions set forth below will not deprive the Executive
of the ability to earn a livelihood:

(A) While the Executive is in the employment of the Company and, if the Executive is entitled to benefits under Section 6.1 hereof upon
termination of employment, for a period of twenty-four (24) months after such termination of employment (the “Non-Competition Period”), the
Executive shall not, without the express written consent of the Company, in the United States of America, directly or indirectly (i) enter into the
employ of or render any services to any person, firm or corporation engaged in any Competitive Business; (ii) engage in any Competitive Business
for his own account or (iii) become interested in any Competitive Business as an individual, partner, shareholder, creditor, director, officer, principal,
agent, employee, consultant, advisor or in any other relationship or capacity; provided, however, that nothing contained in this Section shall be
deemed to prohibit the Executive from acquiring, solely as an investment through market purchases, securities of any corporation which are
registered under Section 12 of the Exchange Act and which are publicly traded so long as he is not part of any group in control of such corporation.

(B) The Executive agrees that during the Non-Competition Period or in connection with any termination of employment pursuant to
which the Executive is entitled to benefits under Section 6.1, the Executive will not, either directly or through any agent or employee, Solicit any
employee of the Company or any of its Subsidiaries to terminate his or her relationship with the Company or any of its Subsidiaries or to apply for or
accept employment with any enterprise competitive with the business of the Company, or Solicit any customer, supplier, licensee or vendor of the
Company or any of its Subsidiaries to terminate or materially modify its relationship with them, or, in the case of a customer, to conduct with any
person any business or activity which such customer conducts or could conduct with the Company or any of its Subsidiaries.

(C) The Executive acknowledges that the Company and its Subsidiaries continually develop Confidential Information, that the Executive
may develop Confidential Information for the Company or its Subsidiaries and that the Executive may learn of Confidential Information during the
course of his employment under this Agreement. The Executive will comply with the policies and procedures of the Company and its Subsidiaries
for protecting Confidential Information and shall never disclose to any person (except as required by applicable law or legal process or for the proper
performance of his duties and responsibilities to the Company and its Subsidiaries, or in connection with any litigation between the Company and
the Executive (provided that the Company shall be afforded a reasonable opportunity in each case to obtain a protective order)), or use for his own
benefit or gain, any Confidential Information obtained by the Executive incident to his employment or other association with the Company or any
of its Subsidiaries. The Executive understands that this restriction shall continue to apply after his employment terminates, regardless of the reason
for such termination. All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of
the Company or its Subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by the Executive, shall be
the sole and exclusive property of the Company and its Subsidiaries. The Executive shall safeguard all Documents and shall surrender to the
Company at the time his employment terminates, or at

7
 such earlier time or times as the Board or its designee may specify, all Documents then in the Executive’s possession or control.

(D) Without limiting the foregoing, it is understood that the Company shall not be obligated to make any of the payments or to provide
for any of the benefits specified in Sections 6.1 and 6.2 hereof, and shall be entitled to recoup the pro rata portion of any such payments and of the
value of any such benefits previously provided to the Executive in the event of a material breach by the Executive of the provisions of this Section 9
(such pro ration to be determined as a fraction, the numerator of which is the number of days from such breach to the second anniversary of the date
on which the Executive terminates employment and the denominator of which is 730), which breach continues without having been cured within
fifteen (15) calendar days after written notice to the Executive specifying the breach in reasonable detail.

10. Successors; Binding Agreement.

10.1 In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken
place.

10.2 This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive’s
estate.

11. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive’s signature on the final page hereof and, if to the Company, to the address set forth below, or to such
other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only
upon actual receipt:

To the Company: Stanley Black & Decker, Inc.

1000 Stanley Drive
New Britain, Connecticut 06053
Attention: Corporate Secretary

12. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed
to in writing and signed by the Executive and such officer as may be specifically designated by the Board; provided that, nothing in this Agreement shall
prohibit the Company from amending this Agreement in a manner that does not materially or adversely affect the rights of the Executive hereunder. No
waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter
hereof which have been made by either party, including, but not limited to, the Change in Control Severance Agreement dated December 10, 2008; provided,
however, that (1) this Agreement shall supersede any agreement setting forth the terms and conditions of the Executive’s employment with the Company
only in the event that the Executive’s employment with the Company is terminated on or following a Change in Control (or deemed to have been so
terminated), by the Company other than for Cause or by the Executive for Good Reason and (2) to the extent this Agreement does not supersede any
agreement referred to in clause (1), it shall not result in any

8
duplication of benefits to the Executive. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the
State of Connecticut, without regard to its conflicts of law principles. All references to sections of the Exchange Act or the Code shall be deemed also to refer
to any successor provisions to such sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal,
state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under this
Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under
Sections 6 and 7 hereof) shall survive such expiration. To the extent applicable, it is intended that the compensation arrangements under this Agreement be
in full compliance with section 409A. This Agreement shall be construed in a manner to give effect to such intention.

13. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

14. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

15. Settlement of Disputes. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and
shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the
specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for
a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) calendar days
after notification by the Board that the Executive’s claim has been denied. Notwithstanding the above, in the event of any dispute, any decision by the Board
hereunder shall be subject to a de novo review by a court of competent jurisdiction.

Notwithstanding any provision of this Agreement to the contrary, the Executive shall be entitled to seek specific performance of the Executive’s
right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement.

16. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

(A) “Additional Delayed Payments” shall have the meaning set forth in Section 6.4 hereof.

(B) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

(C) “Auditor” shall have the meaning set forth in Section 6.2 hereof.

(D) “Base Amount” shall have the meaning set forth in section 280G(b)(3) of the Code.

(E) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

(F) “Board” shall mean the Board of Directors of the Company.

(G) “Cause” for termination by the Company of the Executive’s employment shall mean (i) the willful and continued failure by the
Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity
due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the
Executive pursuant to Section 7.1 hereof) that has not been cured within thirty (30) calendar days after a written demand for substantial performance
is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not

9
substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially
injurious to the Company or its subsidiaries, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act,
on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application
of this provision, no claim by the Company that Cause exists shall be given effect unless the Company establishes to the Board by clear and
convincing evidence that Cause exists.

(H) A “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have
occurred:

(I) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates) representing 25% or more
of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner
in connection with a transaction described in clause (i) of paragraph (III) below; or

(II) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection
with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for election by the Company’s shareowners was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or recommended; or;

(III) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with
any other corporation or other entity, other than (i) a merger or consolidation which results in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of
the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person
any securities acquired directly from the Company or its Affiliates) representing 25% or more of the combined voting power of the
Company’s then outstanding securities; or

(IV) the shareowners of the Company approve a plan of complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale
or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of
the voting securities of which are owned by shareowners of the Company in substantially the same proportions as their ownership of the
Company immediately prior to such sale.

(I) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(J) “Company” shall mean Stanley Black & Decker, Inc., and, except in determining under Section 15(G) hereof whether or not any
Change in Control of the Company has occurred, shall include any

10
successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.

(K) “Competitive Business” shall mean any line of business that is substantially the same as any line of any operating business engaged
in by the Company during the term of this Agreement and which at the termination of the Executive’s employment the Company was engaged in or
conducting and which during the fiscal year of the Company next preceding the date as of which the determination of competitive status is to be
made constituted at least 5% of the gross sales of the Company and its Subsidiaries. The Executive may, without being deemed in violation of this
section, become a partner or employee of, or otherwise acquire an interest in, a stock or business brokerage firm, consulting or advisory firm,
investment banking firm or similar organization which, as part of its business, trades or invests in securities of Competitive Businesses or which
represents or acts as agent or advisor for Competitive Businesses, but only on condition that the Executive shall not personally render any services
in connection with such Competitive Business either directly to such Competitive Business or other persons or to his firm in connection therewith.

(L) “Confidential Information” means any and all information of the Company and its Subsidiaries that is not generally known by others
with whom they compete or do business, or with whom they plan to compete or do business and any and all information not readily available to the
public, which, if disclosed by the Company or its Subsidiaries could reasonably be of benefit to such person or business in competing with or doing
business with the Company. Confidential Information includes without limitation such information relating to (1) the development, research,
testing, manufacturing, store operational processes, marketing and financial activities, including costs, profits and sales, of the Company and its
Subsidiaries, (2) the products and all formulas therefor, (3) the costs, sources of supply, financial performance and strategic plans of the Company
and its Subsidiaries, (4) the identity and special needs of the customers and suppliers of the Company and its Subsidiaries and (5) the people and
organizations with whom the Company and its Subsidiaries have business relationships and those relationships. Confidential Information also
includes comparable information that the Company or any of its Subsidiaries have received belonging to others or which was received by the
Company or any of its Subsidiaries with an agreement by the Company that it would not be disclosed. Confidential Information does not include
information which (i) is or becomes available to the public generally (other than as a result of a disclosure by the Executive), (ii) was within the
Executive’s possession prior to the date hereof or prior to its being furnished to the Executive by or on behalf of the Company, provided that the
source of such information was not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to
the Company or any other party with respect to such information, (iii) becomes available to the Executive on a non-confidential basis from a source
other than the Company, provided that such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with respect to such information, or (iv) was independently developed the
Executive without reference to the Confidential Information.

(M) “DC Pension Plan” shall mean any tax-qualified, supplemental or excess defined contribution plan maintained by the Company and
any other defined contribution plan or agreement entered into between the Executive and the Company which is designed to provide the executive
with supplemental retirement benefits.

(N) “Date of Termination” shall have the meaning set forth in Section 7.2 hereof.

(O) “Delayed Benefits” shall have the meaning set forth in Section 6.4 hereof.

(P) “Delayed Payments” shall have the meaning set forth in Section 6.4 hereof.

(Q) “Delay Period” shall have the meaning set forth in Section 6.4 hereof.

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 (R) “Disability” shall be deemed the reason for the termination by the Company of the Executive’s employment, if, as a result of the
Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive’s
duties with the Company for a period of six (6) consecutive months, the Company shall have given the Executive a Notice of Termination for
Disability, and, within thirty (30) calendar days after such Notice of Termination is given, the Executive shall not have returned to the full-time
performance of the Executive’s duties.

(S) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

(T) “Excise Tax” shall mean any excise tax imposed under section 4999 of the Code.

(U) “Executive” shall mean the individual named in the first paragraph of this Agreement.

(V) “Good Reason” for termination by the Executive of the Executive’s employment shall mean the occurrence (without the Executive’s
express written consent which specifically references this Agreement) after any Change in Control, or prior to a Change in Control under the
circumstances described in clauses (ii) and (iii) of the second sentence of Section 6.1 hereof (treating all references in paragraphs (I) through (VII)
below to a “Change in Control” as references to a “Potential Change in Control”), of any one of the following acts by the Company, or failures by
the Company to act, unless, in the case of any act or failure to act described in paragraph (I), (V), (VI) or (VII) below, such act or failure to act is
corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof:

(I) the assignment to the Executive of any duties inconsistent with the Executive’s status as a senior executive officer of the
Company or a substantial adverse alteration in the nature or status of the Executive’s responsibilities from those in effect immediately prior
to the Change in Control including, without limitation, if the Executive was, immediately prior to the Change in Control, an executive
officer of a public company, the Executive ceasing to be an executive officer of a public company;

(II) a reduction by the Company in the Executive’s annual base salary as in effect on the date hereof or as the same may be
increased from time to time except for across-the-board salary reductions similarly affecting all senior executives of the Company and all
senior executives of any Person in control of the Company;

(III) the relocation of the Executive’s principal place of employment to a location more than thirty-five (35) miles from the
Executive’s principal place of employment immediately prior to the Change in Control or the Company’s requiring the Executive to be
based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the
Company’s business to an extent substantially consistent with the Executive’s present business travel obligations;

(IV) the failure by the Company to pay to the Executive any portion of the Executive’s current compensation or to pay to the
Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven
(7) calendar days of the date such compensation is due;

(V) the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately
prior to the Change in Control which is material to the Executive’s total compensation, including but not limited to the Company’s 2013
Long-Term Incentive Plan and Management Incentive Compensation Plan or any substitute plans adopted prior to the Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the
failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative

12
 plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the
Executive’s participation relative to other participants, as existed immediately prior to the Change in Control;

(VI) the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the
Executive under any of the Company’s pension, savings, life insurance, medical, health and accident, or disability plans in which the
Executive was participating immediately prior to the Change in Control (except for across the board changes similarly affecting all senior
executives of the Company and all senior executives of any Person in control of the Company), the taking of any other action by the
Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit
enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of
“paid time off” days to which the Executive is entitled on the basis of years of service with the Company in accordance with the Company’s
normal “paid time off” policy in effect at the time of the Change in Control;

(VII) any purported termination of the Executive’s employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1 hereof; for purposes of this Agreement, no such purported termination shall be effective. The
Executive’s right to terminate the Executive’s employment for Good Reason shall not be affected by the Executive’s incapacity due to
physical or mental illness; or

(VIII) a material breach by the Company of any agreement with the Executive, including this Agreement (including, for the
avoidance of doubt, Section 10.1 hereunder).

The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.

For purposes of any determination regarding the existence of Good Reason in connection with a termination of employment other than as described
in the second sentence of Section 6.1 hereof, any claim by the Executive that Good Reason exists shall be presumed to be correct unless the Company
establishes to the Board by clear and convincing evidence that Good Reason does not exist.

(W) “Grantor Trust” shall have the meaning set forth in Section 6.5 hereof.

(X) “Notice of Termination” shall have the meaning set forth in Section 7.1 hereof.

(Y) “Permissible Payment Date” shall have the meaning set forth in Section 6.4 hereof.

(Z) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the shareowners of the Company in substantially the same proportions as their
ownership of stock of the Company.

(AA) “Potential Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall
have occurred:

(I) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

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 (II) the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated,
would constitute a Change in Control;

(III) any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 15% or more of
either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding
securities (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its
affiliates); or

(IV) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

(BB) “Retirement” shall be deemed the reason for the termination by the Executive of the Executive’s employment if such employment is
terminated in accordance with the Company’s retirement policy, including early retirement, generally applicable to its salaried employees.

(CC) “section 409A” shall mean section 409A of the Code and any proposed, temporary or final regulation, or any other guidance,
promulgated with respect to section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

(DD) “Severance Payments” shall have the meaning set forth in Section 6.1 hereof.

(EE) “Solicit” means any direct or indirect communication of any kind whatsoever (other than non-targeted general advertisements),
regardless of by whom initiated, inviting, advising, encouraging or requesting any person or entity, in any manner, with respect to any action.

(FF) “Subsidiary” means any corporation or other business organization of which the securities having a majority of the normal voting
power in electing the board of directors or similar governing body of such entity are, at the time of determination, owned by the Company directly or
indirectly through one or more Subsidiaries.

(GG) “Tax Counsel” shall have the meaning set forth in Section 6.2 hereof.

(HH) “Term” shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described
therein).

(II) “Total Payments” shall mean those payments so described in Section 6.2 hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

STANLEY BLACK & DECKER, INC.

By: /s/ Joseph R. Voelker
Name: Joseph R. Voelker
Title: Senior Vice President, Chief Human Resources Officer

____________________________________
EXECUTIVE /s/ Jeffery D. Ansell
Address: Jeffery D. Ansell
1000 Stanley Drive
New Britain, CT 06053

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 EXHIBIT 10.5

CHANGE IN CONTROL SEVERANCE AGREEMENT

THIS AGREEMENT (the “Agreement”), dated December 4, 2018 is made by and between Stanley Black & Decker, Inc., a Connecticut corporation
(the “Company”), and Donald Allan Jr. (the “Executive”).

WHEREAS, the Board recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control exists and that
such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its shareowners; and

WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of
members of the Company’s management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as
follows:

1. Defined Terms. The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.

2. Term of Agreement. The Term of this Agreement shall commence on the date hereof and shall continue in effect through the first anniversary
hereof; provided, however, that commencing on December 4, 2019 and each December 4 thereafter, the Term shall automatically be extended for one
additional year unless, not later than ninety (90) calendar days prior to such December 4, the Company or the Executive shall have given notice not to extend
the Term; and further provided, however, that if a Change in Control shall have occurred during the Term, the Term shall expire no earlier than twenty-four
(24) months beyond the month in which such Change in Control occurred.

3. Company’s Covenants Summarized. In order to induce the Executive to remain in the employ of the Company and in consideration of the
Executive’s covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance
Payments and the other payments and benefits described herein. Except as provided in Section 10.1 hereof, no Severance Payments shall be payable under
this Agreement unless there shall have been (or, under the terms of the second sentence of Section 6.1 hereof, there shall be deemed to have been) a
termination of the Executive’s employment with the Company following a Change in Control and during the Term. This Agreement shall not be construed as
creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive
shall not have any right to be retained in the employ of the Company.

4. The Executive’s Covenants. The Executive agrees that, subject to the terms and conditions of this Agreement, in the event of a Potential Change
in Control during the Term, the Executive will remain in the employ of the Company until the earliest of (i) a date which is six (6) months from the date of
such Potential Change in Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executive’s employment for Good
Reason or by reason of death, Disability or Retirement, or (iv) the termination by the Company of the Executive’s employment for any reason.

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 5. Compensation Other Than Severance Payments.

5.1 Following a Change in Control and during the Term, during any period that the Executive fails to perform the Executive’s full-time duties with
the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Executive’s full salary to the Executive at the rate in
effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation
or benefit plan, program or arrangement maintained by the Company during such period (other than any disability plan), until the Executive’s employment is
terminated by the Company for Disability.

5.2 If the Executive’s employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay
the Executive’s full salary to the Executive through the Date of Termination at the rate in effect immediately prior to the Date of Termination or, if higher, the
rate in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, together with all compensation and benefits
payable to the Executive through the Date of Termination under the terms of the Company’s compensation and benefit plans, programs or arrangements as in
effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason.

5.3 If the Executive’s employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay
to the Executive the Executive’s normal post-termination compensation and benefits as such payments become due. Such post-termination compensation
and benefits shall be determined under, and paid in accordance with, the Company’s retirement, insurance and other compensation or benefit plans, programs
and arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good Reason. Notwithstanding anything herein to the contrary and for the avoidance of doubt,
“normal post-termination compensation and benefits” shall not include disability insurance coverage after the Executive’s termination of employment with
the Company.

6. Severance Payments.

6.1 If the Executive incurs a “separation from service” (within the meaning of section 409A) following a Change in Control and during the Term,
other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the benefits described in this Section 6.1 (“Severance Payments”), in addition to any payments and
benefits to which the Executive is entitled under Section 5 hereof. For purposes of this Agreement, the Executive shall be deemed to have incurred a
separation from service following a Change in Control by the Company without Cause or by the Executive with Good Reason, if (i) the Executive’s
employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control occurs) and such termination
was at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in
Control, (ii) the Executive terminates his employment for Good Reason prior to a Change in Control (whether or not a Change in Control occurs) and the
circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (iii) the Executive’s employment is terminated by
the Company without Cause or by the Executive for Good Reason and such termination or the circumstance or event which constitutes Good Reason is
otherwise in connection with or in anticipation of a Change in Control (whether or not a Change in Control occurs). For purposes of Sections 5 and 6 of this
Agreement, no payment that would otherwise be made and no benefit that would otherwise be provided upon a termination of employment will be made or
provided unless and until such termination of employment is also a “separation from service,” as determined in accordance with section 409A.

(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to two and one-
half times the sum of (i) the Executive’s base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior
to the first occurrence of an event or circumstance constituting Good Reason, and (ii) the

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average annual bonus earned by the Executive pursuant to any annual bonus or incentive plan maintained by the Company in respect of the three
fiscal years ending immediately prior to the fiscal year in which occurs the Date of Termination or, if higher, immediately prior to the fiscal year in
which occurs the first event or circumstance constituting Good Reason.

(B) For the thirty (30) month period immediately following the Date of Termination, the Company provide, or shall arrange to provide, to
the Executive and his dependents life, accident and health insurance benefits substantially similar to those provided to the Executive and his
dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents
immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater cost to the Executive than the cost to
the Executive immediately prior to such date or occurrence. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be
reduced to the extent benefits of the same type are received by or made available to the Executive during the thirty (30) month period following the
Executive’s termination of employment, such as pursuant to the benefit plans of a subsequent employer (and any such benefits received by or made
available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall promptly reimburse the
Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the Date of Termination or, if more
favorable to the Executive, the first occurrence of an event or circumstance constituting Good Reason.

(C) In addition to the benefits to which the Executive is entitled under the DC Pension Plan, the Company shall pay the Executive a lump
sum amount, in cash, equal to the sum of (i) the amount that would have been contributed thereto by the Company on the Executive’s behalf during
the thirty (30) months immediately following the Date of Termination, determined (x) as if the Executive made the maximum permissible
contributions thereto during such period, (y) as if the Executive earned compensation during such period at a rate equal to the Executive’s
compensation (as defined in the DC Pension Plan) during the twelve (12) months immediately preceding the Date of Termination or, if higher,
during the twelve months immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (z) without regard to
any amendment to the DC Pension Plan made subsequent to a Change in Control and on or prior to the Date of Termination, which amendment
adversely affects in any manner the computation of benefits thereunder, and (ii) the excess, if any, of (x) the Executive’s account balance under the
DC Pension Plan as of the Date of Termination over (y) the portion of such account balance that is nonforfeitable under the terms of the DC Pension
Plan. The payments provided in this Section 6.1(C) are in addition to any payment the Executive would otherwise receive under the applicable DC
Plan and are not intended to offset or reduce any payment under such DC Plan.

(D) If the Executive would have become entitled to benefits under the Company’s post-retirement health care or life insurance plans, as in
effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, had the Executive’s employment terminated at any time during the period of thirty (30) months
after the Date of Termination, the Company shall provide such post-retirement health care and/or life insurance benefits to the Executive and the
Executive’s dependents commencing on the later of (i) the date on which such coverage would have first become available and (ii) the date on
which benefits described in subsection (B) of this Section 6.1 terminate.

(E) The Company shall provide the Executive with third-party outplacement services suitable to the Executive’s position for the period
following the Executive’s Date of Termination and ending on December 31 of the second year following such Date of Termination or, if earlier, until
the first acceptance by the Executive of an offer of employment, provided, however, that in no case shall the Company be required to pay in excess
of $50,000 over such period in providing outplacement services and that all reimbursements hereunder shall be paid to the Executive within thirty
(30) calendar days following the date on which the Executive submits the invoice but no later than December 31 of the third calendar year following
the year of the Executive’s Date of Termination.

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 (F) For the thirty (30) month period immediately following the Date of Termination or until the Executive becomes eligible for
substantially similar benefits from a new employer, whichever occurs earlier, the Company shall continue to provide the Executive with all
perquisites provided by the Company immediately prior to the Date of Termination or, if more favorable to the Executive, immediately prior to the
first occurrence of an event or circumstance constituting Good Reason (including, without limitation, automobile, financial planning, annual
physical and executive whole life insurance).

6.2 (1) Notwithstanding any other provisions in this Agreement, if any of the payments or benefits received or to be received by the Executive
(including any payment or benefits received in connection with a Change in Control or the Executive’s termination of employment, whether pursuant to the
terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, being hereinafter referred to as the “Total
Payments”) would be subject (in whole or part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of
section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that
no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments will only be
reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes
on such reduced Total Payments and after taking into account the phase out, if any, of itemized deductions and personal exemptions attributable to such
reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount
of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect
of such unreduced Total Payments and after taking into account the phase out, if any, of itemized deductions and personal exemptions attributable to such
unreduced Total Payments).

(A) In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are
payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with
amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation
Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1,
Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section
1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity
valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are
determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described
in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following
manner: first, a pro-rata reduction of cash payment and payments and benefits due in respect of any equity not subject to section 409A, and second, a
pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to section 409A as deferred compensation.

(B) For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax and the amount of
such Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such
manner as not to constitute a “payment” within the meaning of section 280G(b) of the Code will be taken into account; (ii) no portion of the Total
Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the Change in Control, the Company’s independent auditor (the “Auditor”), does not constitute
a “parachute payment” within the meaning of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code) and, in
calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes
reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount
allocable to such reasonable compensation; and (iii) the value of any noncash

4
 benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of
the Code.

(C) All determinations required by this Section 6.2 (or requested by either the Executive or the Company in connection with this Section
6.2) will be at the expense of the Company. The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations
contained in this Section 6.2 will not of itself limit or otherwise affect any other rights of the Executive under this Agreement. The Executive and the
Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or
amount of liability for Excise Tax with respect to the Total Payments.

6.3 Subject to Section 6.4, the payments provided in subsections (A) and (C) of Section 6.1 hereof shall be made not later than the fifth (5 th )
business day following the Date of Termination; provided, however, that if the amounts of such payments cannot be finally determined on or before such day,
the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company in accordance with Section 6.2 hereof, of the
minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the
unpaid remainder (or on all such payments to the extent the Company fails to make such payments when due) at 120% of the rate provided in section 1274(b)
(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth (30th) calendar day after the Date of Termination.
In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall be payable by the
Executive to the Company on the fifth (5th) business day after demand by the Company (together with interest at 120% of the rate provided in section
1274(b)(2)(B) of the Code). At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement
setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other
advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall
be attached to the statement).

6.4 (A) Notwithstanding any provisions of this Agreement to the contrary, if the Executive is a “specified employee” (within the meaning of
section 409A and determined pursuant to procedures adopted by the Company) at the time of his separation from service and if any portion of the payments
or benefits to be received by the Executive upon separation from service would be considered deferred compensation under section 409A, amounts that
would otherwise be payable pursuant to this Agreement during the six-month period immediately following the Executive’s separation from service (the
“Delayed Payments”) and benefits that would otherwise be provided pursuant to this Agreement (the “Delayed Benefits”) during the six-month period
immediately following the Executive’s separation from service (such period, the “Delay Period”) shall instead be paid or made available on the earlier of (i)
the first (1 st ) business day of the seventh month following the date of the Executive’s separation from service or (ii) Executive’s death (the applicable date,
the “Permissible Payment Date”). The Company shall also reimburse the Executive for the cost incurred by the Executive in independently obtaining any
Delayed Benefits (the “Additional Delayed Payments”).

(B) With respect to any amount of expenses eligible for reimbursement under Sections 6.1 (B), (D) and (F), such expenses shall be reimbursed by
the Company within thirty (30) calendar days following the date on which the Company receives the applicable invoice from the Executive but in no event
later than December 31 of the year following the year in which the Executive incurs the related expenses; provided, that with respect to reimbursement
relating to the Additional Delayed Payments, such reimbursement shall be made on the Permissible Payment Date. In no event shall the reimbursements or in-
kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable
year, nor shall the Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

(C) For purposes of section 409A, the Executive’s right to receive any “installment” payments pursuant to this Agreement shall be treated as a right
to receive a series of separate and distinct payments.

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 6.5 The Company shall deposit the estimated Delayed Payments and estimated Additional Delayed Payments into an irrevocable grantor trust (for
purposes of this Section 6, the “Grantor Trust”) not later than the fifth (5 th ) business day following the occurrence of a Potential Change in Control. The
Company shall deposit additional amounts into the Grantor Trust on a monthly basis equal to the interest accrued on the Delayed Payments (and any earlier
interest payments) at the United States 5-year Treasury Rate plus 2%, and the amount held in the Grantor Trust shall be paid to the Executive (in accordance
with the terms of the Grantor Trust) on the Permissible Payment Date.

6.6 The Company also shall pay to the Executive all legal fees and expenses incurred by the Executive in disputing in good faith any issue
hereunder relating to the termination of the Executive’s employment or in seeking in good faith to obtain or enforce any benefit or right provided by this
Agreement. Such payments shall be made within five (5) business days (but in any event no later than December 31 of the year following the year in which
the Executive incurs the expenses) after delivery of the Executive’s written requests for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require, provided that (i) the amount of such legal fees and expenses that the Company is obligated to pay in any
given calendar year shall not affect the legal fees and expenses that the Company is obligated to pay in any other calendar year, (ii) the Executive’s right to
have the Company pay such legal fees and expenses may not be liquidated or exchanged for any other benefit, and (iii) the Executive shall not be entitled to
reimbursement unless he has submitted an invoice for such fees and expenses at least ten (10) business days before the end of the calendar year next
following the calendar year in which such fees and expenses were incurred. The Company shall also pay all legal fees and expenses incurred by the Executive
in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit hereunder.
Payment pursuant to the preceding sentence will be made within fifteen (15) business days after delivery of the Executive’s written request for payment but in
no event later than the end of the calendar year following the calendar year in which the taxes that are the subject of the audit or proceeding are remitted to
the taxing authority, or where as a result of the audit or proceeding no taxes are remitted, the end of the calendar year in which the audit is completed or there
is a final and nonappealable settlement or other resolution of the matter.

7. Termination Procedures and Compensation During Dispute.

7.1 Notice of Termination. After a Change in Control and during the Term, any purported termination of the Executive’s employment (other than
by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 11
hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the
purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s
counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of
the definition of Cause herein, and specifying the particulars thereof in detail.

7.2 Date of Termination. “Date of Termination,” with respect to any purported termination of the Executive’s employment after a Change in
Control and during the Term, shall mean (i) if the Executive incurs a separation from service due to Disability, thirty (30) calendar days after Notice of
Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s duties during such thirty (30)
calendar day period), and (ii) if the Executive incurs a separation from service for any other reason, the date specified in the Notice of Termination (which, in
the case of a termination by the Company, shall be the thirtieth (30 th ) calendar day after the Notice of Termination is given (except in the case of a
termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) calendar days nor more than sixty (60) calendar
days, respectively, from the date such Notice of Termination is given).

6
 8. No Mitigation. The Company agrees that, if the Executive’s employment with the Company terminates during the Term, the Executive is not
required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 hereof.
Further, except as specifically provided in Sections 6.1(B) and 6.1(F) hereof, no payment or benefit provided for in this Agreement shall be reduced by any
compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.

9. Restrictive Covenants.

9.1 The Executive agrees that restrictions on his activities during and after his employment are necessary to protect the goodwill, Confidential
Information and other legitimate interests of the Company and its Subsidiaries, and that the agreed restrictions set forth below will not deprive the Executive
of the ability to earn a livelihood:

(A) While the Executive is in the employment of the Company and, if the Executive is entitled to benefits under Section 6.1 hereof upon
termination of employment, for a period of twenty-four (24) months after such termination of employment (the “Non-Competition Period”), the
Executive shall not, without the express written consent of the Company, in the United States of America, directly or indirectly (i) enter into the
employ of or render any services to any person, firm or corporation engaged in any Competitive Business; (ii) engage in any Competitive Business
for his own account or (iii) become interested in any Competitive Business as an individual, partner, shareholder, creditor, director, officer, principal,
agent, employee, consultant, advisor or in any other relationship or capacity; provided, however, that nothing contained in this Section shall be
deemed to prohibit the Executive from acquiring, solely as an investment through market purchases, securities of any corporation which are
registered under Section 12 of the Exchange Act and which are publicly traded so long as he is not part of any group in control of such corporation.

(B) The Executive agrees that during the Non-Competition Period or in connection with any termination of employment pursuant to
which the Executive is entitled to benefits under Section 6.1, the Executive will not, either directly or through any agent or employee, Solicit any
employee of the Company or any of its Subsidiaries to terminate his or her relationship with the Company or any of its Subsidiaries or to apply for or
accept employment with any enterprise competitive with the business of the Company, or Solicit any customer, supplier, licensee or vendor of the
Company or any of its Subsidiaries to terminate or materially modify its relationship with them, or, in the case of a customer, to conduct with any
person any business or activity which such customer conducts or could conduct with the Company or any of its Subsidiaries.

(C) The Executive acknowledges that the Company and its Subsidiaries continually develop Confidential Information, that the Executive
may develop Confidential Information for the Company or its Subsidiaries and that the Executive may learn of Confidential Information during the
course of his employment under this Agreement. The Executive will comply with the policies and procedures of the Company and its Subsidiaries
for protecting Confidential Information and shall never disclose to any person (except as required by applicable law or legal process or for the proper
performance of his duties and responsibilities to the Company and its Subsidiaries, or in connection with any litigation between the Company and
the Executive (provided that the Company shall be afforded a reasonable opportunity in each case to obtain a protective order)), or use for his own
benefit or gain, any Confidential Information obtained by the Executive incident to his employment or other association with the Company or any
of its Subsidiaries. The Executive understands that this restriction shall continue to apply after his employment terminates, regardless of the reason
for such termination. All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of
the Company or its Subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by the Executive, shall be
the sole and exclusive property of the Company and its Subsidiaries. The Executive shall safeguard all Documents and shall surrender to the
Company at the time his employment terminates, or at

7
 such earlier time or times as the Board or its designee may specify, all Documents then in the Executive’s possession or control.

(D) Without limiting the foregoing, it is understood that the Company shall not be obligated to make any of the payments or to provide
for any of the benefits specified in Sections 6.1 and 6.2 hereof, and shall be entitled to recoup the pro rata portion of any such payments and of the
value of any such benefits previously provided to the Executive in the event of a material breach by the Executive of the provisions of this Section 9
(such pro ration to be determined as a fraction, the numerator of which is the number of days from such breach to the second anniversary of the date
on which the Executive terminates employment and the denominator of which is 730), which breach continues without having been cured within
fifteen (15) calendar days after written notice to the Executive specifying the breach in reasonable detail.

10. Successors; Binding Agreement.

10.1 In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken
place.

10.2 This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive’s
estate.

11. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive’s signature on the final page hereof and, if to the Company, to the address set forth below, or to such
other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only
upon actual receipt:

To the Company: Stanley Black & Decker, Inc.

1000 Stanley Drive
New Britain, Connecticut 06053
Attention: Corporate Secretary

12. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed
to in writing and signed by the Executive and such officer as may be specifically designated by the Board; provided that, nothing in this Agreement shall
prohibit the Company from amending this Agreement in a manner that does not materially or adversely affect the rights of the Executive hereunder. No
waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter
hereof which have been made by either party, including, but not limited to, the Change in Control Severance Agreement dated February 23, 2009; provided,
however, that (1) this Agreement shall supersede any agreement setting forth the terms and conditions of the Executive’s employment with the Company
only in the event that the Executive’s employment with the Company is terminated on or following a Change in Control (or deemed to have been so
terminated), by the Company other than for Cause or by the Executive for Good Reason and (2) to the extent this Agreement does not supersede any
agreement referred to in clause (1), it shall not result in any

8
duplication of benefits to the Executive. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the
State of Connecticut, without regard to its conflicts of law principles. All references to sections of the Exchange Act or the Code shall be deemed also to refer
to any successor provisions to such sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal,
state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under this
Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under
Sections 6 and 7 hereof) shall survive such expiration. To the extent applicable, it is intended that the compensation arrangements under this Agreement be
in full compliance with section 409A. This Agreement shall be construed in a manner to give effect to such intention.

13. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

14. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

15. Settlement of Disputes. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and
shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the
specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for
a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) calendar days
after notification by the Board that the Executive’s claim has been denied. Notwithstanding the above, in the event of any dispute, any decision by the Board
hereunder shall be subject to a de novo review by a court of competent jurisdiction.

Notwithstanding any provision of this Agreement to the contrary, the Executive shall be entitled to seek specific performance of the Executive’s
right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement.

16. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

(A) “Additional Delayed Payments” shall have the meaning set forth in Section 6.4 hereof.

(B) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

(C) “Auditor” shall have the meaning set forth in Section 6.2 hereof.

(D) “Base Amount” shall have the meaning set forth in section 280G(b)(3) of the Code.

(E) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

(F) “Board” shall mean the Board of Directors of the Company.

(G) “Cause” for termination by the Company of the Executive’s employment shall mean (i) the willful and continued failure by the
Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity
due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the
Executive pursuant to Section 7.1 hereof) that has not been cured within thirty (30) calendar days after a written demand for substantial performance
is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not

9
substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially
injurious to the Company or its subsidiaries, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act,
on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application
of this provision, no claim by the Company that Cause exists shall be given effect unless the Company establishes to the Board by clear and
convincing evidence that Cause exists.

(H) A “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have
occurred:

(I) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates) representing 25% or more
of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner
in connection with a transaction described in clause (i) of paragraph (III) below; or

(II) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection
with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for election by the Company’s shareowners was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or recommended; or;

(III) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with
any other corporation or other entity, other than (i) a merger or consolidation which results in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of
the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person
any securities acquired directly from the Company or its Affiliates) representing 25% or more of the combined voting power of the
Company’s then outstanding securities; or

(IV) the shareowners of the Company approve a plan of complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale
or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of
the voting securities of which are owned by shareowners of the Company in substantially the same proportions as their ownership of the
Company immediately prior to such sale.

(I) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(J) “Company” shall mean Stanley Black & Decker, Inc., and, except in determining under Section 15(G) hereof whether or not any
Change in Control of the Company has occurred, shall include any

10
successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.

(K) “Competitive Business” shall mean any line of business that is substantially the same as any line of any operating business engaged
in by the Company during the term of this Agreement and which at the termination of the Executive’s employment the Company was engaged in or
conducting and which during the fiscal year of the Company next preceding the date as of which the determination of competitive status is to be
made constituted at least 5% of the gross sales of the Company and its Subsidiaries. The Executive may, without being deemed in violation of this
section, become a partner or employee of, or otherwise acquire an interest in, a stock or business brokerage firm, consulting or advisory firm,
investment banking firm or similar organization which, as part of its business, trades or invests in securities of Competitive Businesses or which
represents or acts as agent or advisor for Competitive Businesses, but only on condition that the Executive shall not personally render any services
in connection with such Competitive Business either directly to such Competitive Business or other persons or to his firm in connection therewith.

(L) “Confidential Information” means any and all information of the Company and its Subsidiaries that is not generally known by others
with whom they compete or do business, or with whom they plan to compete or do business and any and all information not readily available to the
public, which, if disclosed by the Company or its Subsidiaries could reasonably be of benefit to such person or business in competing with or doing
business with the Company. Confidential Information includes without limitation such information relating to (1) the development, research,
testing, manufacturing, store operational processes, marketing and financial activities, including costs, profits and sales, of the Company and its
Subsidiaries, (2) the products and all formulas therefor, (3) the costs, sources of supply, financial performance and strategic plans of the Company
and its Subsidiaries, (4) the identity and special needs of the customers and suppliers of the Company and its Subsidiaries and (5) the people and
organizations with whom the Company and its Subsidiaries have business relationships and those relationships. Confidential Information also
includes comparable information that the Company or any of its Subsidiaries have received belonging to others or which was received by the
Company or any of its Subsidiaries with an agreement by the Company that it would not be disclosed. Confidential Information does not include
information which (i) is or becomes available to the public generally (other than as a result of a disclosure by the Executive), (ii) was within the
Executive’s possession prior to the date hereof or prior to its being furnished to the Executive by or on behalf of the Company, provided that the
source of such information was not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to
the Company or any other party with respect to such information, (iii) becomes available to the Executive on a non-confidential basis from a source
other than the Company, provided that such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with respect to such information, or (iv) was independently developed the
Executive without reference to the Confidential Information.

(M) “DC Pension Plan” shall mean any tax-qualified, supplemental or excess defined contribution plan maintained by the Company and
any other defined contribution plan or agreement entered into between the Executive and the Company which is designed to provide the executive
with supplemental retirement benefits.

(N) “Date of Termination” shall have the meaning set forth in Section 7.2 hereof.

(O) “Delayed Benefits” shall have the meaning set forth in Section 6.4 hereof.

(P) “Delayed Payments” shall have the meaning set forth in Section 6.4 hereof.

(Q) “Delay Period” shall have the meaning set forth in Section 6.4 hereof.

11
 (R) “Disability” shall be deemed the reason for the termination by the Company of the Executive’s employment, if, as a result of the
Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive’s
duties with the Company for a period of six (6) consecutive months, the Company shall have given the Executive a Notice of Termination for
Disability, and, within thirty (30) calendar days after such Notice of Termination is given, the Executive shall not have returned to the full-time
performance of the Executive’s duties.

(S) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

(T) “Excise Tax” shall mean any excise tax imposed under section 4999 of the Code.

(U) “Executive” shall mean the individual named in the first paragraph of this Agreement.

(V) “Good Reason” for termination by the Executive of the Executive’s employment shall mean the occurrence (without the Executive’s
express written consent which specifically references this Agreement) after any Change in Control, or prior to a Change in Control under the
circumstances described in clauses (ii) and (iii) of the second sentence of Section 6.1 hereof (treating all references in paragraphs (I) through (VII)
below to a “Change in Control” as references to a “Potential Change in Control”), of any one of the following acts by the Company, or failures by
the Company to act, unless, in the case of any act or failure to act described in paragraph (I), (V), (VI) or (VII) below, such act or failure to act is
corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof:

(I) the assignment to the Executive of any duties inconsistent with the Executive’s status as a senior executive officer of the
Company or a substantial adverse alteration in the nature or status of the Executive’s responsibilities from those in effect immediately prior
to the Change in Control including, without limitation, if the Executive was, immediately prior to the Change in Control, an executive
officer of a public company, the Executive ceasing to be an executive officer of a public company;

(II) a reduction by the Company in the Executive’s annual base salary as in effect on the date hereof or as the same may be
increased from time to time except for across-the-board salary reductions similarly affecting all senior executives of the Company and all
senior executives of any Person in control of the Company;

(III) the relocation of the Executive’s principal place of employment to a location more than thirty-five (35) miles from the
Executive’s principal place of employment immediately prior to the Change in Control or the Company’s requiring the Executive to be
based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the
Company’s business to an extent substantially consistent with the Executive’s present business travel obligations;

(IV) the failure by the Company to pay to the Executive any portion of the Executive’s current compensation or to pay to the
Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven
(7) calendar days of the date such compensation is due;

(V) the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately
prior to the Change in Control which is material to the Executive’s total compensation, including but not limited to the Company’s 2013
Long-Term Incentive Plan and Management Incentive Compensation Plan or any substitute plans adopted prior to the Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the
failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative

12
 plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the
Executive’s participation relative to other participants, as existed immediately prior to the Change in Control;

(VI) the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the
Executive under any of the Company’s pension, savings, life insurance, medical, health and accident, or disability plans in which the
Executive was participating immediately prior to the Change in Control (except for across the board changes similarly affecting all senior
executives of the Company and all senior executives of any Person in control of the Company), the taking of any other action by the
Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit
enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of
“paid time off” days to which the Executive is entitled on the basis of years of service with the Company in accordance with the Company’s
normal “paid time off” policy in effect at the time of the Change in Control;

(VII) any purported termination of the Executive’s employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1 hereof; for purposes of this Agreement, no such purported termination shall be effective. The
Executive’s right to terminate the Executive’s employment for Good Reason shall not be affected by the Executive’s incapacity due to
physical or mental illness; or

(VIII) a material breach by the Company of any agreement with the Executive, including this Agreement (including, for the
avoidance of doubt, Section 10.1 hereunder).

The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.

For purposes of any determination regarding the existence of Good Reason in connection with a termination of employment other than as described
in the second sentence of Section 6.1 hereof, any claim by the Executive that Good Reason exists shall be presumed to be correct unless the Company
establishes to the Board by clear and convincing evidence that Good Reason does not exist.

(W) “Grantor Trust” shall have the meaning set forth in Section 6.5 hereof.

(X) “Notice of Termination” shall have the meaning set forth in Section 7.1 hereof.

(Y) “Permissible Payment Date” shall have the meaning set forth in Section 6.4 hereof.

(Z) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the shareowners of the Company in substantially the same proportions as their
ownership of stock of the Company.

(AA) “Potential Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall
have occurred:

(I) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

13
 (II) the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated,
would constitute a Change in Control;

(III) any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 15% or more of
either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding
securities (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its
affiliates); or

(IV) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

(BB) “Retirement” shall be deemed the reason for the termination by the Executive of the Executive’s employment if such employment is
terminated in accordance with the Company’s retirement policy, including early retirement, generally applicable to its salaried employees.

(CC) “section 409A” shall mean section 409A of the Code and any proposed, temporary or final regulation, or any other guidance,
promulgated with respect to section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

(DD) “Severance Payments” shall have the meaning set forth in Section 6.1 hereof.

(EE) “Solicit” means any direct or indirect communication of any kind whatsoever (other than non-targeted general advertisements),
regardless of by whom initiated, inviting, advising, encouraging or requesting any person or entity, in any manner, with respect to any action.

(FF) “Subsidiary” means any corporation or other business organization of which the securities having a majority of the normal voting
power in electing the board of directors or similar governing body of such entity are, at the time of determination, owned by the Company directly or
indirectly through one or more Subsidiaries.

(GG) “Tax Counsel” shall have the meaning set forth in Section 6.2 hereof.

(HH) “Term” shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described
therein).

(II) “Total Payments” shall mean those payments so described in Section 6.2 hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

STANLEY BLACK & DECKER, INC.

By: /s/ Joseph R. Voelker
Name: Joseph R. Voelker
Title: Senior Vice President, Chief Human Resources Officer

____________________________________
EXECUTIVE /s/ Donald Allan, Jr.
Address: Donald Allan, Jr.
1000 Stanley Drive
New Britain, CT 06053

14
 EXHIBIT 10.16(e)

James M. Loree
President & Chief Executive Officer
Stanley Black & Decker
1000 Stanley Drive, New Britain, CT 06053
T (860) 827-3837

Date: <Date>
To:
From: Jim Loree
Re: 2019-2020 Long-Term Incentive Program

It is my pleasure to congratulate you for being selected to participate in the Long Term Performance Award Program (the “Program”)
under The Stanley Black & Decker 2018 Omnibus Award Plan (the “2018 Plan”). This Program is intended to provide substantial,
equity-based awards for specified full-time members of our senior executive team, provided specific Corporate goals are achieved
during the Program’s 36 month measurement period (January 2019 -December 2021).

In conjunction with our short-term incentive compensation program (MICP) and our equity award program, the Program is an
important element of your total compensation package, and provides a strong additional incentive to continue increasing shareholder
value.

Bonus Opportunity

Each participant will have an opportunity to earn a number of Performance Shares (PS) based upon achievement of corporate financial
goals, and may earn additional performance shares if the corporate financial goals are exceeded, up to the maximum number of shares
set forth below. Each PS unit represents one share of Stanley Black & Decker Common Stock and, accordingly, the potential value of
a participant’s performance award under the Program may change as our stock price changes.

Each participant is allocated a threshold, target and maximum number of PS units based upon assigned percentages of his or her annual
base salary at the rate in effect as of January 1, 2018. The initial value of each PS unit is $xxx.xx, the average of the high and low price
of a share of company common stock on February [__], 2019.

Your performance award covers the following number of PS units:

Threshold Target Max

% of Pay
# PS

Performance awards will become vested at the time of settlement to the extent that the applicable performance metrics have been
achieved and provided the participant is continuously employed by Stanley Black & Decker until such time, as more fully set forth in
the enclosed Terms and Conditions

1
Applicable to Long Term Performance Awards. There is a new enhancement to the payout in the event of termination for Retirement,
death, or Disability as described in the Terms & Conditions. However, if the Participant has elected to defer all or any portion of his or
her earned Performance Shares in respect of the 2019-2021 Measurement Period, then the settlement of such earned Performance
Shares shall be governed by the terms of the Stanley Black & Decker, Inc. Deferred Compensation Plan Relating to Long-Term
Performance Awards and the Participant’s applicable election form thereunder.

Financial Measurements

The Corporate financial goals for this Program consist of three metrics. Two absolute goals (EPS and CFROI) and one relative goal
(TSR) as set forth in the attached document.

Although this summary includes the key aspects of the Program, it is not intended to represent a full accounting of the rules and
regulations applicable to the Program and is subject to the terms described in the Terms and Conditions Applicable to Long Term
Performance Awards and The Stanley Black & Decker 2018 Omnibus Award Plan (available on request), which together with this
document govern the Program.

If you have any questions, please contact Michele Webster at (860) 827-3877 or Elizabeth Ryen at (860) 438-3440. Once again, thank
you for your continued support and congratulations on being selected to participate in this important Program.

Best regards,

James M. Loree
President & Chief Executive Officer

2
 Terms and Conditions applicable to
Long Term Performance Awards

This certifies that Stanley Black & Decker, Inc. (the “Company”) has, on the Date set forth in Award Letter to which these Terms and
Conditions apply, granted to the Participant named above a performance award (“Performance Award”) of that number of
Performance Shares set forth in the Award Letter, subject to certain restrictions and on the terms and conditions contained in the Award
Documents and the Company’s 2018 Omnibus Award Plan, as amended from time to time (the “2018 Plan”). A copy of the 2018 Plan
is available upon request. In the event of any conflict between the terms of the 2018 Plan and the Award Documents, the terms of the
2018 Plan shall govern. This Performance Award represents the right of the Participant to receive a number of Shares to be issued if the
Company achieves the Performance Goals for the Measurement Period and employment requirements are satisfied.

1. Determination of Earned Performance Shares. As soon as reasonably practicable following the completion of the applicable
Measurement Period, the Committee will determine (i) whether and to what extent the applicable Performance Factor levels for
the Performance Goals have been achieved, and (ii) the number of Performance Shares that are deemed “earned” in respect of
the Measurement Period as a result of such performance, with the number of earned Performance Shares to be linearly
interpolated on a straight-line basis between specified levels of performance (i.e., for performance that falls above “threshold”
level but below “target” level, or above “target” level but below “maximum” level).

In order for any Performance Shares to be earned in respect of a Performance Goal, the “threshold” level of achievement with
respect to such Performance Goal must be achieved; except that, where performance achieved is below “threshold” level for
any metric, the number of Performance Shares to be earned with respect to that metric may be prorated on a linear basis to zero,
in the sole discretion of the Committee. In addition, the number of earned Performance Shares may be adjusted up or down
following the end of the Measurement Period, at the sole discretion of the Committee, but not to exceed the maximum number
of Performance Shares eligible to be earned by the Participant hereunder.

Any Performance Shares determined by the Committee to have been earned in accordance with this Paragraph 1 shall be settled
by the Company in accordance with the terms and conditions set forth herein, which issuance shall be in full settlement of the
Participant’s Performance Award hereunder. Notwithstanding the foregoing, if the Participant has elected to defer all or any
portion of his or her earned Performance Shares, then the settlement of any Performance Shares earned in accordance with this
Paragraph 1 shall be governed by the terms of the Stanley Black & Decker, Inc. Deferred Compensation Plan Relating to Long-
Term Performance Awards (the “Deferred Compensation Plan”) and the Participant’s applicable election form thereunder.

2. Vesting; form of settlement. Performance Awards will become vested and will be settled on the Settlement Date to the extent
that the applicable performance metrics have been achieved and, except as set forth below, provided that the participant is
continuously employed by the Company until such time. Performance Awards will be settled in shares of Company common
stock as soon as practicable following the end of the Measurement Period. Performance Awards will be settled in the form of
Unrestricted Stock.

If a participant’s employment with the Company terminates prior to the date the Performance Awards are settled due to his or
her Retirement, death or Disability and the participant complies with the Restrictive Covenants for the Restriction Period, the
participant’s Performance Award will be settled in the form of Unrestricted Stock at the same time as performance awards for
active participants are

3
 settled, to the extent the applicable performance metrics have been achieved; except that, if the termination occurs during the
first year of the Measurement Period, such settlement shall be prorated based on the number of complete months in the
Measurement Period that the participant was employed by the Company. Unless determined otherwise by the Committee, a
participant whose employment with the Company terminates prior to the Settlement Date for any other reason will forfeit all
rights in respect of his or her Performance Award and will not be entitled to receive any Shares or other payment under the
Program.

In the event that any Performance Shares are settled in connection with a termination of the Participant’s employment with the
Company, the Company may require the Participant to execute an effective release of claims in a form provided by the
Company.

3. Rights of a Shareholder. The Participant shall not have any rights of a shareholder with respect to the Performance Awards or
any Shares issued in settlement thereof prior to the Settlement Date.

4. Transferability. Transferability shall be as set forth in the 2018 Plan.

5. Adjustments. Notwithstanding any other provision hereof, the Committee shall have authority to make adjustments in the terms
and conditions of, and the criteria included in, Performance Awards granted hereunder, as set forth in the 2018 Plan.

6. Miscellaneous. The Committee shall have full authority to administer the Performance Awards and to interpret the terms of the
Award Documents, which authority includes the authority to waive certain conditions in appropriate circumstances. All
decisions or interpretations of the Committee with respect to any question arising in respect of the Performance Awards shall be
binding, conclusive and final. The waiver by the Company of any provision of this document or any other Award Document
shall not operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision of this
document or any other Award Document. The validity and construction of the terms of this document and any other Award
Document shall be governed by the laws of the State of Connecticut. The terms and conditions set forth in this document and
any other Award Document are subject in all respects to the terms and conditions of the 2018 Plan, which shall be controlling.
The Participant agrees to execute such other agreements, documents or assignments as may be necessary or desirable to effect
the purposes hereof.

7. Unfunded Arrangement. The Performance Awards represented in the Award Documents constitute an unfunded unsecured
promise of the Company and the rights of the Participant in respect of the Performance Awards are no greater than the rights of
an unsecured creditor of the Company.

8. Detrimental Activity and Recapture Provisions. The Committee or the Board may provide for the cancellation or forfeiture of
a Performance Award or the forfeiture and repayment to the Company of any gain related to a Performance Award, or other
provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Committee or the
Board from time to time (including under any applicable clawback policy adopted by the Company), including, without
limitation, in the event that a Participant, during employment or other service with the Company or an affiliate, engages in
activity detrimental to the business of the Company. In addition, notwithstanding anything in the 2018 Plan or the Award
Documents to the contrary, the Committee or the Board may also provide for the cancellation or forfeiture of a Performance
Award or the forfeiture and repayment to the Company of any gain related to a Performance Award, or other provisions
intended to have a similar effect, upon such terms and conditions as may be required by the Committee or the Board under
Section 10D of the Exchange Act and any applicable rules or regulations promulgated by the Securities and Exchange
Commission or any national securities exchange or national securities association on which common stock of the Company may
be traded or under any clawback policy adopted by the Company.

9. Capitalized Terms. The following capitalized terms shall have the meaning set forth below for purposes of this Letter. All other
capitalized terms used in this document shall have the meanings set forth in the 2018 Plan.

4
Award Documents. The documents provided to a Participant that advise the Participant that he or she has been selected
to Participate in the Performance Award Program and set forth the Performance Factors, Performance Goals, amounts
payable at the Threshold, Target and Maximum Levels, and the terms and conditions applicable to the Award, which
shall consist of an Award Letter, signed by the Chief Executive Officer or the Chief Human Resources Officer, and the
documents referenced therein.

Disability. Disability has the meaning provided in Section 22(e)(3) of the Internal Revenue Code of 1986, or any
successor provision.

Measurement Period. The period during which financial performance is measured against the applicable Performance
Goals as set forth in the Award Documents.

Performance Factors. Threshold, Target and Maximum performance to be achieved over the Measurement Period.

Performance Goals. Goals established by the Committee or, pursuant to an appropriate delegation of authority, the
Chief Executive Officer, for performance of the Company as a whole and/or specific businesses or functions during the
Measurement Period. The Performance Goals applicable to a Participant for a particular Measurement Period, if not
enclosed with the Award Letter, will be promptly communicated to the Participant by a member of the Company’s
Human Resources Department.

Restriction Period. The period of time between the Termination Date and the Settlement Date, or the period of
restriction contained in any Restrictive Covenant Agreement executed by the Participant with respect to Participant’s
employment with the Company, whichever is longer.

Restrictive Covenants. The Restrictive Covenants contained in any Restrictive Covenant Agreement executed by a
Participant regarding his or her employment with the Company or a subsidiary thereof. To be eligible to receive
distributions of Performance Awards following a termination of employment due to Retirement, death or Disability,
Participant understands and agrees that (i) Participant may not accept employment (as an employee or contractor) for a
competitor of the Company, disparage the Company or any of its employees, solicit customers of the Company, or
solicit employees of the Company for employment directly or indirectly, at any time during the Restriction Period and
(ii) in the event Participant fails to comply with clause (i), Participant will not be eligible to receive any distribution
Participant otherwise would have received under this provision. The Restrictive Covenants set forth herein apply only to
eligibility to receive distributions of Performance Awards following a termination of employment due to Retirement,
death or Disability. Because they serve only as a condition to eligibility to receive a Performance Award, these
Restrictive Covenants are in addition to, and do not supersede, any Restrictive Covenants set forth in any written
employment agreement or other agreement with a Participant. Notwithstanding anything to the contrary set forth herein,
the restrictions contained herein (i) are not intended to, and shall be interpreted in a manner that does not limit or restrict
you from exercising any legally protected whistleblower rights (including pursuant to Rule 21F under the U.S. Securities
Exchange Act of 1934, as amended) and (ii) do not apply to any Participant working from or based in any jurisdiction
where such restrictions are prohibited, including, without limitation, the State of California.

Retirement. The Participant’s termination of employment with the Company and each of its Affiliates after attaining the
age of 55 and completing 10 years of service.

5
Settlement Date. The date payments are made to Participants based on the Performance Goals achieved for the
Measurement Period. The payments will generally occur by March 15 of the year following the Measurement Period.

Shares. Shares of Unrestricted Stock to be issued if Performance Goals are achieved, as specified in the Award
Documents.

Termination Date. The date upon which the participant ceases to be an employee of Stanley Black & Decker, Inc., or a
subsidiary thereof.

Unrestricted Stock. Common Stock of the Company that may be sold at any time.

6
 EXHIBIT 10.16(f)

James M. Loree
President & Chief Executive Officer
Stanley Black & Decker
1000 Stanley Drive, New Britain, CT 06053
T (860) 827-3837

Date: <Date>
To:
From: Jim Loree
Re: 2019 Management Incentive Compensation Plan

It is my pleasure to congratulate you for being selected to participate in the 2019 Management Incentive Compensation Plan (the
“MICP”) under the Stanley Black & Decker 2018 Omnibus Award Plan (the “2018 Plan”).

We have modified the structure of the MICP for 2019 to be granted in Performance Shares (“MICP PSUs”), and stock-settled over a
three-year period, rather than cash to deliver 2019 operating margin savings and preserve cash. This structure will also provide the
potential for stock appreciation between the grant date and vesting dates.

Bonus Opportunity

As a participant, you will have the opportunity to earn a target number of MICP PSUs based on your current MICP level provided that
the applicable Performance Goals (as included with this Award letter) are achieved during the 2019 fiscal year and the applicable
service conditions are satisfied. The initial value of each MICP PSU is [$xxx.xx], representing the average of the high and low price of
a share of company common stock on [March 29], 2019 discounted to fair value to reflect that there will be no dividends during
vesting.

You may earn additional MICP PSUs if the results achieved in relation to the Performance Goals exceed “target” level, up to the
applicable “maximum” level number of MICP PSUs that can be earned, or fewer in the event performance is below the target goals.
Each MICP PSU represents one share of Stanley Black & Decker Common Stock and, accordingly, the potential value will change as
our stock price changes.

You have been allocated a threshold, target and maximum number of MICP PSUs based upon your target MICP % of your annual
base salary at the rate in effect as of January 1, 2019.

Threshold Target Max

2019 MICP Target % % %
MICP PSU $ Amount $ $ $
Number of MICP PSUs

2019 MICP - Officers

The MICP PSUs ultimately deliverable will be determined by the Committee based upon the actual 2019 results achieved in relation to
the Performance Goals. Participants will be eligible to vest in equal installments on [March 29th ] of 2020, 2021 and 2022, provided that
the participant is continuously employed by the Company on each applicable vesting date, at which time the earned MICP PSUs will
be settled in accordance with the terms of this Award Letter and the attached Terms and Conditions (the “Terms and Conditions”).

Financial Measurements

You are eligible to earn between 0%-200% of your target MICP PSUs based on the level of achievement of the specific Performance
Goals applicable to your function or division, and the weighting of those goals, which are provided to you with this Award Letter.

Performance Goals for corporate participants are based on metrics that apply to the Company as a whole; division participants will
have performance metrics based on divisional as well as, in most cases, company-wide metrics. These metrics will be weighted as
follows:

Position Weighting of Objectives

Corporate Divisional

Corporate Participant 100% 0%

Division Participant [25]% [75]%

Although this summary includes the key aspects of the Program, it is not intended to represent a full accounting of the rules and
regulations applicable to the Program and is subject to the attached Terms and Conditions, and the 2018 Plan (available upon request),
which together with this Award Letter govern the 2019 MICP. While we will evaluate further, we expect to revert to the cash-settled
annual MICP for 2020 and future years.

If you have any questions, please contact Elizabeth Ryen at (860) 438-3440 or Michele Webster at (860) 827-3877. Once again, thank
you for your continued support and congratulations on being selected to participate in this important Program.

Best regards,

James M. Loree
President & Chief Executive Officer

2019 MICP - Officers

 Terms and Conditions Applicable to the
2019 Management Incentive Compensation Plan Awards under the
Stanley Black & Decker 2018 Omnibus Award Plan

Performance Share Portion

This certifies that Stanley Black & Decker, Inc. (the “Company”) has, on the date set forth in the [Award Letter] to which these Terms
and Conditions apply, granted to the Participant named above a performance award (“Performance Award”) of that number of target
Performance Shares set forth in the [Award Letter], subject to certain restrictions and on the terms and conditions contained in the
Award Documents and the Company’s 2018 Omnibus Award Plan, as amended from time to time (the “2018 Plan”). A copy of the
2018 Plan is available upon request. In the event of any conflict between the terms of the 2018 Plan and the Award Documents, the
terms of the 2018 Plan shall govern.

Capitalized terms used in these Terms and Conditions shall have the meanings ascribed to them herein, except as expressly stated
otherwise.

1. Performance Award Opportunity. Each Participant will have an opportunity to earn a target number of performance shares
denominated in units of the Company (“Performance Shares”) based upon achievement of the applicable Performance Goals,
and may earn additional Performance Shares if the Performance Goals exceed “target” level, up to the applicable “maximum”
number of Performance Shares that can be earned. Each Performance Share represents one share of Stanley Black & Decker
Common Stock and, accordingly, the potential value of a participant’s Performance Award will change as our stock price
changes.

2. Determination of Earned Performance Shares. As soon as reasonably practicable following the release of the Company’s
financial results in respect of the Measurement Period (which generally occurs in January of each year), the Committee will
determine (i) whether and to what extent the applicable Performance Factor levels for the Performance Goals have been
achieved, and (ii) the number of Performance Shares that are deemed “earned” in respect of the Measurement Period as a result
of such performance, with the number of earned Performance Shares to be linearly interpolated on a straight-line basis between
specified levels of performance (i.e., for performance that falls above “threshold” level but below “target” level, or above
“target” level but below “maximum” level”) (such earned shares, the “Eligible Shares”). Eligible Shares shall also include any
Performance Shares determined by the Committee to have been earned after taking into account any applicable adjustment(s)
described in the immediately following paragraph.
Where performance achieved is below “threshold” level for any metric, the number of Performance Shares to be earned with
respect to that metric may be prorated on a linear basis to zero, in the sole discretion of the Committee. In addition, the number
of Performance Shares which constitute Eligible Shares may be adjusted up or down following the end of the Measurement
Period, at the sole discretion of the Committee, based upon individual performance. However, the number of Eligible Shares
may not exceed the maximum number of Performance Shares eligible to vest as communicated to the Participant at the time of
grant. Once earned, the Eligible Shares (if any) will vest on the applicable Vesting Date subject to the Participant’s satisfaction
of the Service-Based Condition.

Any Performance Shares that do not constitute Eligible Shares following the Committee’s determination thereof shall be
automatically forfeited.

3. Service-Based Vesting Conditions.

a. General. Subject to the exceptions expressly set forth below, 1/3rd of a Participant’s Eligible Shares (if any) will vest on
each of March 15th of 2020, 2021 and 2022 (each a “Vesting Date”), in each case, provided that the participant is
continuously employed by the Company on each applicable Vesting Date. Eligible Shares shall be settled in the form of
Unrestricted Stock as soon as reasonably practicable following the applicable Vesting Date.
Level 3 and up
Not for use with French participants
 b. Retirement. Notwithstanding the foregoing Paragraph 3(a), if a Participant’s employment with the Company terminates
following March 15, 2020 due to Retirement, any Eligible Shares held by the Participant as of the termination date will
vest and be settled in the form of Unrestricted Stock as soon as reasonably practicable following the date of such
Retirement. If the Participant’s employment terminates due to Retirement on or before March 15, 2020, then, unless the
Committee determines otherwise, the Participant’s Performance Shares (including any Eligible Shares) shall be
immediately forfeited and cancelled.
c. Disability; death. Notwithstanding the foregoing Paragraphs 3(a) or (b), if a Participant’s employment with the Company
terminates as a result of death or Disability on or before March 15, 2020, the Participant will remain eligible to vest in
the number of Eligible Shares determined by the Committee to have been earned following the end of the Measurement
Period based on the level of achievement of the Performance Goals, pro-rated by a fraction, the numerator of which is
the number of completed months during which the Participant was employed by the Company during the Measurement
Period, and the denominator of which is 12. Any such pro-rated Eligible Shares will be settled no later than March 15,
2020. If a participant’s employment with the Company terminates due to his or her death or Disability following March
15, 2020, any Eligible Shares held by the participant as of the termination date will vest and be settled in the form of
Unrestricted Stock as soon as reasonably practicable following the date of such termination.
d. Termination without “Cause”. If the participant’s employment with the Company is terminated by the Company without
“Cause” (as defined in the 2018 Plan) (and other than as a result of death, Disability or Retirement), the Committee shall
have the discretion to treat such Participant’s Performance Shares (or, if applicable, Eligible Shares) in accordance with
the treatment set forth in the foregoing paragraph 3(c) above.
e. Compliance with Restrictive Covenants; Release of Claims. Notwithstanding anything in these Terms & Conditions to
the contrary, the Participant must be in continuous compliance with all applicable Restrictive Covenants as of the date
on which any Performance Shares are settled. In the event that any Performance Shares are settled in connection with a
termination of the Participant’s employment with the Company, the Company may require the Participant to execute an
effective release of claims in a form provided by the Company.

4. Change in Control. Upon a Change in Control (as defined in the 2018 Plan), this Performance Award shall be subject to
Section 9 of the 2018 Plan. If a Change in Control occurs and the Participant receives a “Replacement Award” (as defined in the
2018 Plan) in respect of this award, then, (A) if such Change in Control occurs on or following the date on which the Committee
has determined the number of Eligible Shares in respect of the Measurement Period, any Eligible Shares as of the Change in
Control date will be treated in accordance with the provisions of Section 9(a)(iv) of the 2018 Plan, and (B) if such Change in
Control occurs prior to the date on which the Committee has determined the number of Eligible Shares in respect of the
Measurement Period, then the Performance Shares shall be deemed earned at “target” level, and the number of Eligible Shares
that results from such determination with be converted to time-based awards and will be treated in accordance with the
provisions of Section 9(a)(iv) of the 2018 Plan. The determination as to whether an award is a “Replacement Award” shall be
made by the Committee, in good faith, taking into account such factors as it deems appropriate, including the feasibility of
continuing the applicable Performance Goals or Performance Goals based on the resulting entity in the applicable Change in
Control.

5. Rights of a Shareholder. The Participant shall not have any rights of a shareholder with respect to the Performance Shares,
including but not limited to, the right to receive dividends or dividend equivalents in respect thereof. With respect to any Shares
that are issued to the participant in respect of the Performance Award, any rights as a shareholder with respect to such Shares
will only apply on a prospective basis.

6. Transferability. Transferability shall be as set forth in the 2018 Plan.

Level 3 and up
Not for use with French participants
7. Adjustments. Notwithstanding any other provision hereof, the Committee shall have authority to make adjustments in the terms
and conditions of, and the criteria included in, Performance Awards granted hereunder, as set forth in the 2018 Plan.

8. Miscellaneous. The Committee shall have full authority to administer the Performance Awards and to interpret the terms of the
Award Documents, which authority includes the authority to waive certain conditions in appropriate circumstances. All
decisions or interpretations of the Committee with respect to any question arising in respect of the Performance Awards shall be
binding, conclusive and final. The waiver by the Company of any provision of this document or any other Award Document
shall not operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision of this
document or any other Award Document. The validity and construction of the terms of this document and any other Award
Document shall be governed by the laws of the State of Connecticut. The terms and conditions set forth in this document and
any other Award Document are subject in all respects to the terms and conditions of the 2018 Plan, which shall be controlling.
The Participant agrees to execute such other agreements, documents or assignments as may be necessary or desirable to effect
the purposes hereof.

9. Unfunded Arrangement. The Performance Awards constitute an unfunded unsecured promise of the Company, and the rights
of the Participant in respect of the Performance Awards are no greater than the rights of an unsecured creditor of the Company.

10. Compliance with Section 409A of the Code.

To the extent applicable, it is intended that the Performance Awards made hereunder comply with the provisions of Section
409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to Participants. The
2018 Plan and any awards granted thereunder shall be administered in a manner consistent with this intent. Any reference in the
2018 Plan or the Award Documents to Section 409A of the Code will also include any regulations or any other formal guidance
promulgated with respect to Section 409A of the Code by the U.S. Department of the Treasury or the Internal Revenue Service.

If at the time of a Participant’s separation from service (within the meaning of Section 409A of the Code), (i) the Participant
shall be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology
selected by the Company from time to time) and (ii) the Company shall make a good faith determination that an amount payable
hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is
required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or
penalties under Section 409A of the Code, then the Company shall not pay such amount on the otherwise scheduled payment
date, but shall instead pay it, without interest, on the first business day of the seventh month after the Participant’s separation
from service or, if earlier, on the Participant’s death.

With respect to the Performance Award, a termination of employment will not be deemed to have occurred unless such
termination is also a separation from service (within the meaning of Section 409A of the Code), and notwithstanding anything
contained herein to the contrary, the date on which such separation from service takes place will be the termination date.

Each payment under this Agreement is intended to be a “separate payment” and not one of a series of payments for purposes of
Section 409A.

Without limiting anything set forth herein, the Performance Awards shall be subject to Section 10 of the 2018 Plan in all
respects.

11. Detrimental Activity and Recapture Provisions. The Committee or the Board may provide for the cancellation or forfeiture of
a Performance Award or the forfeiture and repayment to the Company of any gain related to a Performance Award, or other
provisions intended to have a similar effect, upon such terms
Level 3 and up
Not for use with French participants
 and conditions as may be determined by the Committee or the Board from time to time (including under any applicable
clawback policy adopted by the Company), including, without limitation, in the event that a Participant, during employment or
other service with the Company or an affiliate, engages in activity detrimental to the business of the Company. In addition,
notwithstanding anything in the 2018 Plan or the Award Documents to the contrary, the Committee or the Board may also
provide for the cancellation or forfeiture of a Performance Award or the forfeiture and repayment to the Company of any gain
related to a Performance Award, or other provisions intended to have a similar effect, upon such terms and conditions as may be
required by the Committee or the Board under Section 10D of the Exchange Act and any applicable rules or regulations
promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association
on which common stock of the Company may be traded or under any clawback policy adopted by the Company.

12. Capitalized Terms. The following capitalized terms shall have the meaning set forth below.

Award Documents. The documents provided to a Participant that advise the Participant that he or she has been selected
to Participate in this program, the Performance Goals, amounts payable at the Threshold, Target and Maximum Levels,
and the terms and conditions applicable to the Performance Award, which shall consist of an Award Letter, signed by
the Chief Executive Officer or the Chief Human Resources Officer, and the documents referenced therein.

Disability. Disability has the meaning provided in Section 22(e)(3) of the Internal Revenue Code of 1986, or any
successor provision.

Measurement Period. Fiscal year 2019.

Performance Factors. Threshold, Target and Maximum performance to be achieved over the Measurement Period.

Performance Goals. Goals established by the Committee or, pursuant to an appropriate delegation of authority, the
Chief Executive Officer, for performance of the Company as a whole and/or specific businesses or functions during the
Measurement Period. The Performance Goals applicable to a Participant for a particular Measurement Period, if not
enclosed with the Award Letter, will be promptly communicated to the Participant by a member of the Company’s
Human Resources Department.

Restrictive Covenants. The Restrictive Covenants contained in any Restrictive Covenant Agreement executed by a
Participant regarding his or her employment with the Company or a subsidiary thereof. To be eligible to receive
distributions of Performance Awards following a termination of employment, Participant understands and agrees that (i)
Participant may not accept employment (as an employee or contractor) for a competitor of the Company, disparage the
Company or any of its employees, solicit customers of the Company, or solicit employees of the Company for
employment directly or indirectly, at any time during the Restriction Period and (ii) in the event Participant fails to
comply with clause (i), Participant will not be eligible to receive any distribution Participant otherwise would have
received under this provision. Because they serve only as a condition to eligibility to receive a Performance Award,
these Restrictive Covenants are in addition to, and do not supersede, any Restrictive Covenants set forth in any written
employment agreement or other agreement with a Participant. Notwithstanding anything to the contrary set forth herein,
the restrictions contained herein (i) are not intended to, and shall be interpreted in a manner that does not limit or restrict
you from exercising any legally protected whistleblower rights (including pursuant to Rule 21F under the U.S. Securities
Exchange Act of 1934, as amended) and (ii) do not apply to any Participant working from or based in any jurisdiction
where such restrictions are prohibited, including, without limitation, the State of California.

Level 3 and up
Not for use with French participants
Retirement. The Participant’s termination of employment with the Company and each of its Affiliates after attaining the
age of 55 and completing 10 years of service.

Service-Based Condition: Participants must satisfy the time-based service requirements set forth in Paragraph 3 of these
Terms and Conditions in order for any Eligible Shares to vest and be settled.

Shares. Shares of Unrestricted Stock to be issued if Performance Goals are achieved, as specified in the Award
Documents.

Terms and Conditions. The terms and conditions applicable to 2019 Management Incentive Compensation Plan
Awards under the Stanley Black & Decker 2018 Omnibus Award Plan.

Unrestricted Stock. Common Stock of the Company that may be sold at any time.

Level 3 and up
Not for use with French participants
 EXHIBIT 10.17

STANLEY BLACK & DECKER, INC.

Deferred Compensation Plan
Relating to
Long-Term Performance Awards

The purpose of the Plan is to give certain participants in the 2018 Omnibus Plan the opportunity to defer the receipt of Shares payable pursuant to
Performance Awards for tax or other reasons suited to the Participant’s own financial strategies. The Plan is intended to, and shall be interpreted to, comply in
all respects with Section 409A, and those provisions of ERISA that are applicable to an unfunded plan maintained primarily to provide deferred
compensation benefits for a select group of “management or highly compensated employees.”

1. Eligibility. Only Eligible Employees shall be permitted to participate in the Plan.

2. Time and Form of Election.

(a) Except as otherwise permitted by Section 409A, no later than December 31 of the calendar year immediately preceding the first day of
the applicable Measurement Period, commencing with grants to be made in fiscal year 2019, each Participant may elect to participate in the Plan by directing
that a percentage of the Shares earned in respect of the applicable Performance Award shall, at the time such Shares are deemed earned under the 2018
Omnibus Plan, be credited to the Participant’s Account.

(b) An election to participate in the Plan shall be made by written notice executed by the Participant and filed with the Plan
Administrator, and such deferral election shall apply only to Performance Awards granted in respect of the Measurement Period to which such election form
relates. The time period during which elections to participate in the Plan will be accepted for each enrollment period will be established by the Plan
Administrator in accordance with Section 409A. To be effective, a Participant’s election form must specify the percentage of his or her Shares to be deferred,
select the time of distribution of the Shares deferred, and provide such other information as the Plan Administrator may require. Amounts credited to a
Participant’s Account shall be distributed only in accordance with the terms of the Plan and the applicable election form, subject in all cases to Section 409A.

(c) Participants may not change or revoke their election for a given deferral period after the enrollment period for such deferral period has
ended, except that a Participant may cancel his or her election form due to a medically determinable physical or mental impairment that can be expected to
result in death, or can be expected to last for a continuous period of not less than 6 months, provided that such cancellation occurs by the later of (i) the end
of the Participant’s taxable year in which the Participant incurs such impairment or (ii) the 15 th day of the third month following the date on which the
Participant incurs such impairment. In addition, the Plan Administrator may, in its sole discretion and at the request of the Participant, cancel a Participant’s
election form for a given deferral period upon a finding that the Participant has suffered an Unforeseeable Emergency Event.

3. Participants’ Accounts. When a Performance Award with respect to which a Participant has made a deferral election is deemed earned in
accordance with the applicable Award Agreement (as defined in the 2018 Omnibus Plan), the portion of the Performance Award that the Participant elected to
defer (i.e., the percentage of the number of Shares earned with respect to the underlying Performance Award) shall be credited to the Participant’s Account.
The Participant shall always be 100% vested in the value of his or her Participant’s Account.

4. Rights as a Stockholder; Dividend Equivalents. The Participant shall not have any interest in any Shares deferred under the Plan until
such Shares have been distributed and issued to the Participant, other than the right to receive dividend equivalents or other distributions on earned Shares
that the Participant would
have otherwise been entitled to receive in respect of the Shares had the Participant been the owner of such Shares on the applicable record date. Any such
dividend equivalents or other distributions shall be paid on a quarterly basis.

5. Distribution from Accounts. In General. The balance of the Participant’s Account under this Plan shall become payable upon the
earliest to occur of (i) the Participant’s Separation from Service with the Company, (ii) the occurrence of a Change in Control, (iii) the Participant becoming
Disabled, or (iv) an Unforeseeable Emergency Event, with such balance, in each case, to be distributed in accordance with the terms of this Plan and the
Participant’s election form, subject in all cases to compliance with Section 409A. Upon distribution, Shares will be rounded to the nearest whole Share.

(a) Distribution upon Separation from Service (other than death or as a result of the Participant becoming Disabled). If the Participant
incurs a Separation from Service (other than death or as a result of the Participant becoming Disabled), the balance of the Participant’s Account shall be
distributed in accordance with the Participant’s election form.

(b) Distribution upon death or the Participant becoming Disabled. If the Participant dies or becomes Disabled prior to the entire balance of
the Participant’s Account being distributed, the then-undistributed balance of the Participant’s Account shall be distributed in accordance with the
Participant’s election form.

(c) Distribution upon Change in Control. Notwithstanding any of the preceding provisions of the Plan, as soon as administratively
practicable following any Change in Control of the Company, but in no event later than 30 days following such Change in Control, a lump sum payment
shall be made, in cash, with respect to each Participant’s then-undistributed Account balance. For purposes of calculating the amount of such payment, any
Shares credited to any Participant’s Account as of immediately prior to the Change in Control shall be valued at the closing price of such Share as reported on
the New York Stock Exchange Composite Transactions on the trading date immediately preceding the effective date of the Change in Control.

(d) Distribution in connection with an Unforeseeable Emergency Event. In the event the Participant has suffered an Unforeseeable
Emergency Event, the Plan Administrator may, at the request of the Participant, accelerate distribution of the Participant’s Account (a “Hardship
Distribution”), subject to the following conditions:

(i) The request to take a Hardship Distribution shall be made by filing a form provided by and filed with the Plan Administrator prior to the
end of any calendar month.

(ii) Upon a finding that the Participant has suffered an Unforeseeable Emergency Event, the Plan Administrator may, at the request of the
Participant, accelerate distribution of the Participant’s Account and/or approve cancellation of current deferral elections under the Plan in the amount
reasonably necessary to alleviate such Unforeseeable Emergency Event. The amount distributed shall not exceed the amount necessary to satisfy such
Unforeseeable Emergency Event, plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s
assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

(iii) The amount (if any) determined by the Plan Administrator as a Hardship Distribution shall be settled in Shares as soon as practicable,
and no later than the end of the calendar month in which the Hardship Distribution determination is made by the Plan Administrator.

6. Miscellaneous.

(a) The right of a Participant to receive any amount in the Participant’s Account shall not be transferable or assignable by the Participant,
except by will or by the laws of descent and distribution, and no part of such amount shall be subject to attachment or other legal process.

11.1.2018
 (b) The Company shall not be required to reserve or otherwise set aside funds, Shares or other amounts for the payment of its obligations
hereunder. Any benefits paid under the Plan shall be paid from the general assets of the Company, and the Participant and any beneficiary or their heirs or
successors shall be no more than unsecured general creditors of the Company with no special or prior right to any assets of the Company for payment of any
obligations hereunder. It is the intention of the Company that the Plan is unfunded for purposes of ERISA and the Code.

(c) To the extent that registration of the Shares under the Securities Act of 1933 shall be required prior to their distribution, the Company
will undertake to either file a registration statement relating to such Shares or include such Shares in another registration statement to be filed within a
reasonable time.

(d) The Plan Administrator shall administer and interpret the Plan and make all determinations deemed necessary or desirable for the
Plan’s implementation. Notwithstanding anything in the Plan to the contrary, unless and until the Committee determines otherwise, the Company’s Chief
Human Resources Officer shall have the authority to identify which of the Company’s employees are Eligible Employees under the Plan.

(e) The Committee may at any time amend or modify the Plan. Notwithstanding the foregoing, no amendment or modification (other than
an amendment or modification as necessary to comply with Section 409A) shall impair the rights of a Participant with respect to the Participant’s Account
balance without the Participant’s prior written consent. The Committee reserves the right to terminate the Plan with respect to all applicable Participants at
any time. In the event of a Plan termination, no new deferral elections shall be permitted for the affected Participants; however, after the Plan termination, the
balance of Participants’ Accounts shall continue to be credited with deferrals attributable to any valid deferral election that was in effect prior to such Plan
termination to the extent deemed necessary to comply with Section 409A. In addition, following a Plan termination, Participants’ Account balances shall
remain in the Plan and shall not be distributed until such amounts become eligible for distribution in accordance with the other applicable provisions of the
Plan and the applicable election forms. Notwithstanding the immediately preceding sentence, to the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix) or as
otherwise permitted under Section 409A, the Committee may provide that, upon termination of the Plan, all Participants’ Accounts shall be distributed,
subject to and in accordance with any rules established by the Plan Administrator deemed necessary to comply with the applicable requirements and
limitations of Section 409A.
(f) Each Participant will receive an annual statement indicating the number of Shares credited to the Participant’s Account as of the end of
the preceding calendar year.

(g) If adjustments are made to outstanding Shares or to the capital structure of the Company as a result of stock dividends, stock splits or
combinations, recapitalizations, mergers, consolidations, exchange offers, issuer tender offers, extraordinary cash dividends, or similar event or transaction,
the Committee shall make an appropriate adjustment to the balance of the Participant’s Account in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan. Any such action taken by the Committee shall be final and binding on the Participant.

7. Withholding. The Participant shall make appropriate arrangements with the Company for satisfaction of any federal, state and/or local income
tax withholding requirements, Social Security and other employee tax or other requirements applicable to the granting, crediting, vesting or payment of
benefits under the Plan. Shares credited to the Participant’s Account shall be net of any Shares withheld by the Company to cover any applicable payroll tax
withholding obligations incurred upon the vesting of the Performance Award to which such Shares relate. In addition, there shall be deducted from each
distribution made under the Plan or any other compensation payable to the Participant (or beneficiary) all taxes that are required to be withheld by the
Company in respect to such payment. The Company shall satisfy all applicable payroll tax withholding obligations associated with the vesting of any
Performance Award, and any applicable income tax withholding obligations associated with the distribution of Shares from the Participant’s Account, by
withholding a number of Shares having a fair market value equal to the amount of the applicable tax withholding obligation determined by the Company
under applicable tax law, with such fair market value being determined as of the date such tax withholding obligation(s) are incurred.

11.1.2018
 8. Claims Procedure. If a claim for benefits under the Plan has been denied, any Participant, former Participant or beneficiary may file a written
claim with the Plan Administrator setting forth the nature of the benefit claimed, the amount thereof, and the basis for claiming entitlement to such benefit.
The Plan Administrator shall respond in writing to such a request within 60 days (or within 45 days in the case of claims related to disability benefits)
following his or her receipt of the request. The Plan Administrator may, however, extend the reply period for up to an additional 60 days (or an additional 45
days in the case of claims related to disability benefits) following the termination of the initial reply period for reasonable cause. In the event the claim is
wholly or partially denied, the Plan Administrator’s response shall be written in a manner calculated to be understood by the Participant or beneficiary, as
applicable, and shall set forth:

(i) the specific reason or reasons for any denial of benefits;

(ii) specific references to the provision or provisions of the Plan on which the denial is based;

(iii) a description of any additional information or material necessary for the Participant or beneficiary to improve his or her claim, and an
explanation of why such information or material is necessary; and

(iv) an explanation of the Plan’s claims review procedure and other appropriate information as to the steps to be taken if the Participant or
beneficiary wishes to appeal the Plan Administrator’s denial of the claim.

In the event a Participant or its beneficiary wishes to appeal the denial of the Participant’s claim, he or she may file a written appeal with the Committee
within 60 days after receiving the Plan Administrator’s denial. Such Participant (or his duly authorized legal representative) may, upon written request to the
Committee, review any documents pertinent to his claim, and submit in writing issues and comments in support of his position. The Committee shall respond
in writing to such an appeal and notify the Participant of its final decision within 60 days of its receipt of the appeal. The Committee may, however, extend
its decision period for up to an additional 60 days for reasonable cause. The Committee’s response shall be written in a manner calculated to be understood
by the Participant or beneficiary, and shall both set forth the specific reasons for its decision and refer to the specific provision or provisions of the Plan on
which its decision is based. The decision of the Committee on the appeal will be final, binding and conclusive upon all parties thereto.

9. Section 409A. The Plan is intended to provide for the deferral of compensation in full compliance with Section 409A. The Plan shall be
construed in a manner to give effect to such intention. Each payment made under the Plan shall be considered a “separate payment” for purposes of Section
409A. Notwithstanding any other provision of the Plan, if payment of benefits under the Plan to a Participant who is a Specified Employee would be deemed
to be on account of his separation from service under Section 409A, no payments shall be made to such Specified Employee within six months after such
Specified Employee’s separation from service. Notwithstanding the foregoing, the Company makes no commitment or guarantee to any Participant that any
federal, state and/or local tax treatment will apply or be available to any person eligible for benefits under the Plan and assume no liability whatsoever for the
tax consequences to any Participant.

10. Definitions.

(a) “2018 Omnibus Plan” means the Company’s 2018 Omnibus Award Plan, as amended from time to time, or any successor plan.

11.1.2018
 (b) “Change in Control” means a “change in the ownership” or a “change in the effective control” of the Company, or a “change in the
ownership of a substantial portion of the Company’s assets” (each within the meaning of Section 409A).

(c) “Code” means the Internal Revenue Code of 1986, as amended.

(d) “Committee” means the Compensation & Talent Development Committee of the Company’s Board of Directors.

(e) “Company” means Stanley Black & Decker, Inc. and its successors.

(f) “Disabled” means the Plan Administrator’s determination that the Participant has incurred a disability within the meaning of Treas.
Reg. Section 1.409A-3(i)(4). The determination as to whether the Participant has become Disabled shall be made by the Plan Administrator in its sole
discretion, and any such determination shall be final and binding on the Participant.

(g) “Eligible Employee” means any employee of the Company who (i) receives a Performance Award under the 2018 Omnibus Plan
pursuant to which Shares may be issued, (ii) is determined by the Plan Administrator to be a “management or highly compensated employee” within the
meaning of ERISA, (iii) is subject to U.S. tax, and (iv) is (A) an Executive Officer or (B) selected by the Company’s Chief Human Resources Officer to
participate in the Plan.

(h) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(i) “Executive Officers” means those individuals who have been designated by the Board of Directors as “executive officers” of the
Company, as such term is defined in Rule 3b-7 of the Securities Exchange Act of 1934.

(j) “Measurement Period” means the period during which the performance criteria applicable to a Performance Award is measured, as such
period is defined or described in the Award Agreement (as defined in the 2018 Omnibus Plan) applicable to such Performance Award.

(k) “Participant” means each Eligible Employee who elects to participate in the Plan.

(l) “Participant’s Account” means the deferred compensation bookkeeping account established under the Plan with respect to each
Participant.

(m) “Performance Award” means a Share-settled long-term performance award granted under the 2018 Omnibus Plan.

(n) “Plan Administrator” means the Committee, or any subcommittee or individual to whom the Committee has delegated its authority
and responsibilities with respect to administration of the Plan.

(o) “Plan” means the Stanley Black & Decker, Inc. Deferred Compensation Plan Relating to Long-Term Performance Awards, as amended
from time to time.

(p) “Section 409A” means section 409A of the Code, and any proposed, temporary or final regulations, or any other guidance,
promulgated with respect to section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

(q) “Separation from Service” means a “separation from service” defined in Treas. Reg. Section 1.409A-1(h)(1) or such other regulation or
guidance issued under Section 409A.

(r) “Share” means a share of the Company’s common stock, par value $2.50 per share.

(s) “Specified Employee” means a “specified employee” of the Company or any affiliate, as defined in Treas. Reg. Section 1.409A-1(i).

11.1.2018
 (t) “Unforeseeable Emergency Event” means an “unforeseeable emergency” (as defined in Treas. Reg. Section 1.409A-3(i)(3)), as
determined by the Plan Administrator in its sole discretion in accordance with such Section.

11.1.2018
 EXHIBIT 21

SUBSIDIARIES OF STANLEY BLACK & DECKER, INC.

The following is a list of all active subsidiaries of Stanley Black & Decker, Inc. as of December 29, 2018.

Corporate Name Jurisdiction of Incorporation/ Organization

Domestic Subsidiaries United States
3xLogic, Inc. Delaware
3xLogic Indiana, LLC Delaware
3xLogic Florida, LLC Delaware
AeroScout (US) LLC Delaware
AeroScout LLC Delaware
ASIA FASTENING (US), INC. Delaware
B&D Holdings, Inc. Maryland
BDK FAUCET HOLDINGS INC. Delaware
BLACK & DECKER (IRELAND) INC. Delaware
BLACK & DECKER (U.S.) INC. Maryland
BLACK & DECKER DE PANAMA LLC Maryland
BLACK & DECKER FUNDING CORPORATION Delaware
BLACK & DECKER GROUP, LLC Delaware
BLACK & DECKER HEALTHCARE MANAGEMENT INC. Maryland
BLACK & DECKER HOLDINGS, LLC Delaware
BLACK & DECKER INC. Delaware
BLACK & DECKER INDIA INC. Maryland
BLACK & DECKER INVESTMENT COMPANY, LLC Delaware
BLACK & DECKER INVESTMENTS (AUSTRALIA) LIMITED Maryland
BLACK & DECKER INVESTMENTS LLC Maryland
BLACK & DECKER MEXFIN LLC Delaware
BLACK & DECKER PUERTO RICO INC. Delaware
BLACK & DECKER SHELBYVILLE, LLC Kentucky
Bostitch-Holding, L.L.C. Delaware
Bulldog Barrels, LLC Pennsylvania
CRC-EVANS INTERNATIONAL HOLDINGS, INC. Delaware
CRC-Evans International, Inc. Delaware
CRC-Evans Pipeline International, Inc. Delaware
CRC-EVANS WELDING SERVICES, INC. Delaware
DEVILBISS AIR POWER COMPANY Delaware
DIYZ, LLC Delaware
Doncasters US Holdings Inc. Delaware
EMHART HARTTUNG INC. Delaware
EMHART TEKNOLOGIES LLC Delaware
Hardware City Associates Limited Partnership Connecticut
I.D.L. Techni-Edge, LLC Delaware
INFASTECH DECORAH, LLC Delaware
Infologix - DDMS, Inc. Delaware
InfoLogix Systems Corporation Delaware
Infologix, Inc. Delaware
JAFFORD LLC Maryland
JennCo1, Inc. Delaware
Microalloying International, Inc. Delaware
Corporate Name Jurisdiction of Incorporation/ Organization
Domestic Subsidiaries (continued) United States
Nelson Stud Welding International, LLC Delaware
Nelson Stud Welding Inc. Delaware
NEWFREY LLC Delaware
Pacom Systems (North America) Inc. Delaware
PIH U.S., Inc. Delaware
PORTER-CABLE ARGENTINA, LLC Minnesota
RIGHTCO II, LLC Delaware
Sargent & Greenleaf, Inc. Indiana
SBD Aura, Inc. Delaware
SBD CAYMAN LLC Delaware
SBD Insurance, Inc. Connecticut
SBD LinQ, Inc. Delaware
SBD MDGP Partnership Holdings LLC Delaware
SBD Property Holdings, LLC Delaware
SBD Scala, Inc. Delaware
SecurityCo Solutions, Inc. Delaware
Specialty Bar Products Company Pennsylvania
Spiegelberg Manufacturing Inc. Ohio
SPIRALOCK CORPORATION Michigan
Stanley Access Technologies LLC Delaware
Stanley Atlantic Inc. Delaware
Stanley Black & Decker Cayman Holdings, Inc. Delaware
Stanley Black & Decker Chile, L.L.C. Delaware
Stanley Canada Holdings, L.L.C. Delaware
Stanley Convergent Security Solutions, Inc. Delaware
Stanley Fastening Systems, L.P. Delaware
Stanley Housing Fund, Inc. Delaware
Stanley Industrial & Automotive, LLC Delaware
Stanley Inspection US, L.L.C. Alabama
Stanley Inspection, L.L.C. Delaware
Stanley International Holdings, Inc. Delaware
Stanley Logistics, L.L.C. Delaware
Stanley Pipeline Inspection, L.L.C. Delaware
Stanley Safety Corporation, LLC Delaware
Stanley Security Solutions, Inc. Indiana
THE BLACK & DECKER CORPORATION Maryland
The Farmington River Power Company Connecticut
The Ferry Cap & Set Screw Company Ohio
TOG Holdings Inc. Delaware
TOG Manufacturing Company Inc. Massachusetts
TSI MONITORING LLC Nevada
TSI SALES & INSTALLATION LLC Nevada
Waterloo Holdings, Inc. Delaware
Waterloo Industries, Inc. Delaware
Zag USA, Inc. Delaware
Corporate Name Jurisdiction of Incorporation/ Organization
International Subsidiaries
PIPELINE EQUIPMENT AND SERVICES SARL Algeria
BLACK & DECKER ARGENTINA S.A. Argentina
Stanley Black & Decker Australia Pty Ltd. Australia
BLACK & DECKER FINANCE (AUSTRALIA) LTD. Australia
BLACK & DECKER HOLDINGS (AUSTRALIA) PTY. LTD. Australia
BLACK & DECKER NO. 4 PTY. LTD. Australia
Pacom Systems Pty Limited Australia
Powers Fasteners Australasia Pty Limited Australia
Powers Rawl Pty. Ltd. Australia
Rawl Australasia Pty. Ltd. Australia
Rawlplug Unit Trust Australia
Stanley Security Solutions Australia Pty Ltd Australia
Stanley Black & Decker Holdings Australia Pty Ltd Australia
The Stanley Works Pty. Ltd. Australia
Black & Decker Distribution Pty. Ltd Australia
Stanley Black & Decker Austria GmbH Austria
Stanley Black & Decker (Barbados) SRL Barbados
A & E SECURITY NV Belgium
ARGOS-SIGNALSON SECURITY SA Belgium
Black & Decker Limited BVBA Belgium
CONNEXCENTER SA Belgium
Connex Group SA Belgium
ETAC ALARME SERVICES SECURITY SA Belgium
ETAC GENT NV Belgium
Facom Belgie BVBA Belgium
JMD SECURITE SA Belgium
Stanley Black & Decker Belgium BVBA Belgium
Stanley Black & Decker Latin American Holding BVBA Belgium
Stanley Black & Decker Logistics BVBA Belgium
Stanley Europe BVBA Belgium
Stanley Security Belgium BVBA Belgium
Stanley Security Europe BVBA Belgium
VAG SECURITY SYSTEMS SPRL Belgium
BLACK & DECKER DO BRASIL LTDA. Brazil
CRC-Evans PIH Servios De Tubulao do Brasil Ltda Brazil
Irwin Industrial Tool Ferramentas do Brasil Ltda. Brazil
M. HART DO BRASIL LTDA. Brazil
BDB Ferramentas do Brasil Ltda Brazil
REFAL INDUSTRIA E COMERCIO DE REBITES E REBITADEIRAS LTDA. Brazil
SPIRALOCK DO BRASIL, LTDA. Brazil
3xLogic Holdings, Inc. Canada
3xLogic Systems Inc. Canada
CAMACC Systems Inc. Canada
Microtec Enterprises Inc. Canada
Mont-Hard (Canada) Inc. Canada
Mac Tools Canada Inc. Canada
Nelson Stud Welding Canada, Inc. Canada
First National AlarmCap. Trust Canada
First National AlarmCap LP/Premiere Societe en Commandite Nationale Alarmcap Canada
CRC-EVANS CANADA LTD. Canada
Corporate Name Jurisdiction of Incorporation/ Organization
International Subsidiaries (continued)
Stanley CLP3 Canada
Stanley Inspection Canada Ltd. Canada
STANLEY BLACK & DECKER CANADA CORPORATION Canada
Stanley Technical Services Ltd. Canada
XMARK Corporation Canada
WINTECH CORPORATION LIMITED Cayman Islands
BLACK & DECKER MANUFACTURING, DISTRIBUTION & GLOBAL PURCHASING HOLDINGS LP Cayman Islands
Chiro (Cayman) Holdings Ltd. Cayman Islands
Besco Investment Group Co. Ltd. Cayman Islands
JOINTECH CORPORATION, LTD. Cayman Islands
SBD Manufacturing, Distribution & Global Purchasing Holdings L.P. Cayman Islands
SBD HOLDINGS CAYMAN, LP Cayman Islands
MAQUINAS y HERRAMIENTAS BLACK & DECKER de CHILE S.A. Chile
DISTRIBUIDORA PORTER CABLE LIMITADA Chile
3xLOGIC Dalian Technology Company Limited China
BLACK & DECKER (SUZHOU) PRECISION MANUFACTURING CO., LTD. China
BLACK & DECKER (SUZHOU) POWER TOOLS CO., LTD. China
BLACK & DECKER SSC CO., LTD. China
BLACK & DECKER (SUZHOU) CO., LTD. China
Newell Rubbermaid Products (Shenzhen) Co. Ltd. China
GUANGZHOU EMHART FASTENING SYSTEM CO., LTD. China
INFASTECH FASTENING SYSTEMS (WUXI) LIMITED China
Hefei INTACA Science & Technology Development Co., Ltd. China
Jiangsu Guoqiang Tools Co., Ltd. China
INFASTECH (SHENZHEN) LIMITED China
Powers Shanghai Trading Ltd. China
Nelson Stud Welding (Tianjin) Company Ltd. China
Shanghai Emhart Fastening System Co., Ltd. China
Stanley Black & Decker Precision Manufacturing (Shenzhen) Co., Ltd. China
The Stanley Works (Shanghai) Co., Ltd. China
The Stanley Works (Shanghai) Management Co., Ltd. China
Stanley Works (Wendeng) Tools Co., Ltd. China
The Stanley Works (Zhongshan) Tool Co., Ltd. China
The Stanley Works (Langfang) Fastening Systems Co., Ltd. China
Stanley Black & Decker Colombia Services S.A.S. Colombia
Black & Decker de Colombia S.A.S. Colombia
BLACK AND DECKER DE COSTA RICA LIMITADA Costa Rica
Stanley Black & Decker Czech Republic s.r.o. Czech Republic
Black & Decker (Czech) s.r.o. Czech Republic
TUCKER S.R.O. Czech Republic
EMHART HARTTUNG A/S Denmark
Stanley Security Denmark ApS Denmark
BLACK & DECKER DEL ECUADOR S.A. Ecuador
Stanley Black & Decker Finland Oy Finland
Stanley Security Oy Finland
Stanley Engineered Fastening France SAS France
BGI Distribution SAS France
BLACK & DECKER FINANCE SAS France
Dubuis et Cie SAS France
Corporate Name Jurisdiction of Incorporation/ Organization
International Subsidiaries (continued)
Facom Holding SAS France
Novia SWK SAS France
Nelson Soudage de Goujons SAS France
Pro One Finance SAS France
SOCIETE MINIERE ET COMMERCIALE SAS France
STANLEY BLACK & DECKER FRANCE SAS France
Stanley Black & Decker France Services SAS France
Stanley Black & Decker Manufacturing SAS France
Stanley Healthcare Solutions France Sàrl France
Stanley Security France SAS France
Stanley Tools SAS France
Stanley Engineered Fastening Industrial Deutschland GmbH Germany
B.B.W. BAYRISCHE BOHRERWERKE GmbH Germany
Black & Decker Holdings GmbH Germany
BLACK & DECKER INTERNATIONAL HOLDINGS B.V. & CO. KG Germany
Horst Sprenger GmbH recycling-tools Germany
Nelson Bolzenschweiß-Technik GmbH & Co. KG Germany
Nelson Bolzenschweiß-Technik Verwaltungs GmbH Germany
Stanley Black & Decker Deutschland GmbH Germany
Stanley Grundstuecksverwaltungs GmbH Germany
Stanley Security Deutschland GmbH Germany
Stanley Security Deutschland Holding GmbH Germany
TUCKER GmbH Germany
STANLEY BLACK & DECKER (HELLAS) EPE Greece
BLACK & DECKER HONG KONG LIMITED Hong Kong
AVDEL HOLDINGS (HONG KONG) LIMITED Hong Kong
BDC INTERNATIONAL LIMITED Hong Kong
BD Precision (Hong Kong) Limited Hong Kong
BD Suzhou (Hong Kong) Limited Hong Kong
BD Suzhou Power Tools (Hong Kong) Limited Hong Kong
BD Xiamen (Hong Kong) Limited Hong Kong
Stanley Black & Decker Limited Hong Kong
Niscayah Investments Limited Hong Kong
Niscayah Asia Limited Hong Kong
INFASTECH COMPANY LIMITED Hong Kong
INFASTECH (CHINA) LIMITED Hong Kong
HANGTECH LIMITED Hong Kong
EMHART GUANGZHOU (HONG KONG) LIMITED Hong Kong
STANLEY BLACK & DECKER HUNGARY KORALTOLT FELELOSSEGU TARSASAG Hungary
Nelson Stud Welding India Private Limited India
Stanley Works (India) Private Limited India
Stanley Black & Decker India Private Limited India
Stanley Engineered Fastening India Private Limited India
STANLEY SECURITY SOLUTIONS INDIA PRIVATE LIMITED India
Lenox India Private Limited India
PT STANLEY BLACK & DECKER Indonesia
Stanley Black & Decker International Finance 3 Unlimited Company Ireland
Stanley Security Limited Ireland
SBD European Investment Unlimited Company Ireland
Corporate Name Jurisdiction of Incorporation/ Organization
International Subsidiaries (continued)
SBD European Security Investment Unlimited Company Ireland
SBD European Security International Unlimited Company Ireland
Gamrie Designated Activity Company Ireland
Baltimore Financial Services Company Unlimited Company Ireland
Baltimore Insurance Designated Activity Company Ireland
Belco Investments Company Unlimited Company Ireland
Black & Decker International Finance 1 Unlimited Company Ireland
Black & Decker International Finance 3 Designated Activity Company Ireland
Chesapeake Falls Holdings Company Unlimited Company Ireland
Stanley Black & Decker International Finance 2 Unlimited Company Ireland
Stanley Black & Decker International Finance 4 Unlimited Company Ireland
Stanley Black & Decker International Finance 5 Unlimited Company Ireland
Stanley Black & Decker Latin American Investment Unlimited Company Ireland
Stanley Black & Decker Finance Unlimited Company Ireland
SBD Infastech 1 Unlimited Company Ireland
SBD Infastech 2 Unlimited Company Ireland
Stanley Black & Decker Ireland Unlimited Company Ireland
The Stanley Works Israel Ltd. Israel
AeroScout Ltd. Israel
Stanley Engineered Fastening Italy S.r.l. Italy
DeWALT INDUSTRIAL TOOLS S.p.A. Italy
Nelson Saldatura Perni S.r.l. Italy
Stanley Black & Decker Italia S.r.l. Italy
SWK Utensilerie S.r.l. Italy
Stanley Black & Decker Italy Production S.r.l. Italy
NIPPON POP RIVETS & FASTENERS, LTD. Japan
INFASTECH (KOREA) LIMITED Korea, Republic of
BLACK & DECKER (OVERSEAS) GmbH Liechtenstein
BLACK & DECKER LUXEMBOURG FINANCE S.C.A. Luxembourg
Asia Fastening (Cayman) S.à r.l. Luxembourg
BLACK & DECKER ASIA MANUFACTURING HOLDINGS 1 S.à.r.l. Luxembourg
BLACK & DECKER ASIA MANUFACTURING HOLDINGS 2 S.à.r.l. Luxembourg
BLACK & DECKER GLOBAL HOLDINGS S.à.r.l. Luxembourg
BLACK & DECKER INTERNATIONAL HOLDINGS S.A.R.L. Luxembourg
BLACK & DECKER LUXEMBOURG S.A.R.L. Luxembourg
BLACK & DECKER TRANSASIA S.à.r.l. Luxembourg
CHESAPEAKE INVESTMENTS COMPANY S.A.R.L. Luxembourg
Infastech S.à r.l. Luxembourg
SBD European Security Holdings S.à r.l. Luxembourg
SBD MDGP Partnership Holdings S.à r.l. Luxembourg
SBD Niscayah S.à r.l. Luxembourg
Stanley Black & Decker Holdings S.à r.l. Luxembourg
Stanley Black & Decker Partnership Japan Luxembourg
Stanley Black & Decker Partnership Japan Holdings S.à r.l. Luxembourg
Black & Decker International Finance 3 Designated Activity Company Luxembourg
BLACK & DECKER MACAO COMMERCIAL OFFSHORE LIMITED Macao
Infastech Holdings (Malaysia) Sdn Bhd Malaysia
BLACK & DECKER ASIA PACIFIC (MALAYSIA) SDN. BHD. Malaysia
Infastech (Malaysia) Sdn Bhd Malaysia
Stanley Security Malaysia Sdn. Bhd. Malaysia
Corporate Name Jurisdiction of Incorporation/ Organization
International Subsidiaries (continued)
INFASTECH CAMCAR MALAYSIA SDN BHD Malaysia
Stanley Works (Malaysia) SDN BHD Malaysia
Infastech (Mauritius) Limited Mauritius
Herramientas Stanley S.A. de C.V. Mexico
GRUPO BLACK & DECKER MEXICO, S. DE R.L. DE C.V. Mexico
DEWALT INDUSTRIAL TOOLS, S.A. DE C.V. Mexico
Nelson Fastener Systems de Mexico SA de CV Mexico
BLACK & DECKER DE REYNOSA, S. DE R.L. DE C.V. Mexico
BLACK AND DECKER, S.A. de C.V. Mexico
Stanley-Bostitch Servicios S. de R.L. de C.V. Mexico
Stanley-Bostitch, S.A. de C.V. Mexico
STANLEY BLACK & DECKER MOROCCO SARL Morocco
BLACK & DECKER FAR EAST HOLDINGS B.V. Netherlands
Black & Decker Hardware Holdings B.V. Netherlands
BLACK & DECKER HOLDINGS B.V. Netherlands
Chiro Tools Holdings B.V. Netherlands
CRC-Evans B.V. Netherlands
ELU B.V. Netherlands
NSW Fabristeel Netherlands B.V. Netherlands
Stanley European Holdings B.V. Netherlands
Stanley European Holdings II B.V. Netherlands
Stanley Israel Investments B.V. Netherlands
Stanley Works Holdings B.V. Netherlands
Stichting Beheer Intellectuele Eigendomsrechten Blick Benelux B.V. Netherlands
Stanley Engineered Fastening Benelux B.V. Netherlands
INTERFAST B.V. Netherlands
Stanley Black & Decker Asian Holdings B.V. Netherlands
Stanley Black & Decker Netherlands B.V. Netherlands
Stanley Security Alarmcentrale B.V. Netherlands
Stanley Security Nederland B.V. Netherlands
Stanley Security B.V. Netherlands
Stanley Black & Decker NZ Limited New Zealand
Stanley Black & Decker Norway AS Norway
Stanley Security Holding AS Norway
Stanley Security AS Norway
PIH Services ME LLC Oman
POWERS FASTENERS INC.(Panama) Panama
Stanley Black & Decker CCA, S. de R.L. Panama
BLACK & DECKER DEL PERU S.A. Peru
Stanley Black & Decker Polska Sp. z o.o. Poland
STANLEY ENGINEERED FASTENING EASTERN EUROPE SP.Z O.O. Poland
Stanley Fastening Systems Poland Sp. z o.o. Poland
Stanley Security Portugal, Unipessoal, Lda Portugal
PIH Services ME Ltd. Qatar
Stanley Black & Decker Romania SRL Romania
Stanley Black & Decker Limited Liability Company Russian Federation
Onglin International Limited Samoa
Infastech (Singapore) Pte. Ltd Singapore
Stanley Security Singapore Pte. Ltd. Singapore
INFASTECH INTELLECTUAL PROPERTIES PTE. LTD. Singapore
Corporate Name Jurisdiction of Incorporation/ Organization
International Subsidiaries (continued)
INFASTECH RECEIVABLES COMPANY PTE. LTD. Singapore
BLACK & DECKER ASIA PACIFIC PTE. LTD. Singapore
Aeroscout (Singapore) Pte. Ltd. Singapore
Stanley Works Asia Pacific Pte. Ltd. Singapore
VISIOCOM INTERNATIONAL PTE LTD Singapore
Stanley Black & Decker Slovakia s.r.o. Slovakia
COOPERHEAT OF AFRICA (PTY) LTD South Africa
DE-TECT UNIT INSPECTION (PTY) LTD South Africa
UNIT INSPECTION PROPERTY (PTY) LTD South Africa
Stanley Unit Inspection (Pty) Limited South Africa
Pacom Systems España, S.L. Spain
STANLEY BLACK & DECKER IBERICA, S.L. Spain
Stanley Engineered Fastening Spain, S.L.U. Spain
Stanley Black & Decker Sweden AB Sweden
Pacom Group AB Sweden
Niscayah Teknik AB Sweden
Niscayah Group AB Sweden
SBD Holding AB Sweden
Stanley Security Sverige AB Sweden
Stanley Security Switzerland Sàrl Switzerland
EMHART GmbH Switzerland
Sargent & Greenleaf S.A. Switzerland
Stanley Black & Decker Sales GmbH Switzerland
Stanley Black & Decker Holding GmbH Switzerland
Stanley Works (Europe) GmbH Switzerland
Stanley Chiro International Ltd Taiwan
Stanley Fastening Systems Investment (Taiwan) Co. Taiwan
Fastener Jamher Taiwan Inc. Taiwan
Besco Pneumatic Corporation Taiwan
EMHART TEKNOLOGIES (THAILAND) LTD. Thailand
Stanley Works Limited Thailand
Stanley Black & Decker Turkey Alet Uretim, Sanayi ve Ticaret Limited Sirketi Turkey
Stanley Black & Decker Middle East Trading FZE United Arab Emirates
Stanley Black & Decker MEA FZE United Arab Emirates
Alkhaja Pimex LLC United Arab Emirates
Aven Tools Limited United Kingdom
Avdel Holding Limited United Kingdom
Avdel UK Limited United Kingdom
Bandhart United Kingdom
Bandhart Overseas United Kingdom
Black & Decker International Finance (UK) Limited United Kingdom
Black & Decker Europe United Kingdom
Black & Decker International United Kingdom
Black & Decker Finance United Kingdom
Stanley Black & Decker UK Limited United Kingdom
Black & Decker International Finance Holdings (UK) Limited United Kingdom
Black & Decker United Kingdom
Dewalt Industrial Power Tool Company Ltd. United Kingdom
ELU Power Tools Ltd United Kingdom
CRC-Evans Offshore Limited United Kingdom
Corporate Name Jurisdiction of Incorporation/ Organization
International Subsidiaries (continued)
Contract Fire Systems Ltd United Kingdom
PIH Holdings Limited United Kingdom
PIH Services Limited United Kingdom
Pipeline Induction Heat Limited United Kingdom
Niscayah Holdings Limited United Kingdom
Emhart International Limited United Kingdom
Emhart International Holding Limited United Kingdom
Stanley Security Solutions - Europe Limited United Kingdom
Stanley Security Solutions Limited United Kingdom
SWK (UK) Limited United Kingdom
SWK (U.K.) Holding Limited United Kingdom
Universal Inspection Systems Limited United Kingdom
Tucker Fasteners Limited United Kingdom
The Stanley Works Limited United Kingdom
Stanley Security Solutions (NI) Limited United Kingdom
Stanley UK Acquisition Company Limited United Kingdom
Stanley U.K. Holding Ltd. United Kingdom
Stanley UK Services Limited United Kingdom
Stanley Black & Decker Finance Limited United Kingdom
Stanley Black & Decker UK Group Limited United Kingdom
Christie Intruder Alarms Limited United Kingdom
Southern Monitoring Services Limited United Kingdom
INFASTECH/TRI-STAR LIMITED Virgin Islands, British
Stanley Works China Investments Limited Virgin Islands, British
 EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following registration statements and related prospectuses of Stanley Black & Decker, Inc. and
subsidiaries (the “Company”) of our reports dated February 26, 2019 with respect to the consolidated financial statements and schedule of the
Company, and the effectiveness of internal control over financial reporting of the Company, included in this Annual Report (Form 10-K) for the fiscal
year ended December 29, 2018:

• Registration Statement (Form S-8 No. 2-93025)

• Registration Statement (Form S-8 No. 2-96778)
• Registration Statement (Form S-8 No. 2-97283)
• Registration Statement (Form S-8 No. 33-16669)
• Registration Statement (Form S-8 No. 33-55663)
• Registration Statement (Form S-8 No. 33-62565)
• Registration Statement (Form S-8 No. 33-62575)
• Registration Statement (Form S-8 No. 333-42346)
• Registration Statement (Form S-8 No. 333-42582)
• Registration Statement (Form S-8 No. 333-64326)
• Registration Statement (Form S-8 No. 333-162956)
• Registration Statement (Form S-4 No. 333-163509)
• Registration Statement (Form S-8 No. 333-165454)
• Registration Statement (Form S-8 No. 333-179699)
• Registration Statement (Form S-8 No. 333-190267)
• Registration Statement (Form S-8 No. 333-219984)
• Registration Statement (Form S-3 No. 333-221127)

/s/ Ernst & Young LLP

Hartford, Connecticut
February 26, 2019
 EXHIBIT 24

POWER OF ATTORNEY

We, the undersigned officers and directors of Stanley Black & Decker, Inc., a Connecticut corporation (the "Corporation"), hereby severally
constitute Janet M. Link and Donald J. Riccitelli our true and lawful attorneys with full power of substitution, to sign for us and in our names in the capacities
indicated below, the Annual Report on Form 10-K for the year ended December 29, 2018 of the Corporation filed herewith (the "Form 10-K"), and any and all
amendments thereof, and generally to do all such things in our name and on our behalf in our capacities as officers and directors to enable the Corporation to
comply with the annual filing requirements under the Securities Act of 1934, as amended, including, all requirements of the Securities and Exchange
Commission, and all requirements of any other applicable law or regulation, hereby ratifying and confirming our signatures as they may be signed by our said
attorneys, or any of them, to such Form 10-K and any and all amendments thereto.

Signature Title Date

/s/ James M. Loree President and Chief Executive Officer, Director February 26, 2019
James M. Loree

/s/ Andrea J. Ayers Director February 26, 2019

Andrea J. Ayers

/s/ George W. Buckley Director February 26, 2019

George W. Buckley

/s/ Patrick D. Campbell Director February 26, 2019

Patrick D. Campbell

/s/ Carlos M. Cardoso Director February 26, 2019

Carlos M. Cardoso

/s/ Robert B. Coutts Director February 26, 2019

Robert B. Coutts

/s/ Debra A. Crew Director February 26, 2019

Debra A. Crew

/s/ Michael D. Hankin Director February 26, 2019

Michael D. Hankin

/s/ Marianne M. Parrs Director February 26, 2019

Marianne M. Parrs

/s/ Robert L. Ryan Director February 26, 2019

Robert L. Ryan

/s/ James H. Scholefield Director February 26, 2019

James H. Scholefield

/s/ Dmitri L. Stockton Director February 26, 2019

Dmitri L. Stockton
 EXHIBIT 31.1(a)

CERTIFICATIONS

I, James M. Loree, certify that:

1. I have reviewed this Annual Report on Form 10-K of Stanley Black & Decker, Inc. and subsidiaries;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during
the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal
quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over
financial reporting.

/s/ James M. Loree

Date: February 26, 2019 James M. Loree
President and Chief Executive Officer
 EXHIBIT 31.1(b)

CERTIFICATIONS

I, Donald Allan Jr., certify that:

1. I have reviewed this Annual Report on Form 10-K of Stanley Black & Decker, Inc. and subsidiaries;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during
the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal
quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over
financial reporting.

/s/ Donald Allan Jr.

Date: February 26, 2019 Donald Allan Jr.
Executive Vice President and Chief Financial Officer
 EXHIBIT 32.1

STANLEY BLACK & DECKER, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Stanley Black & Decker, Inc. (the “Company”) on Form 10-K for the period ending December 29, 2018 as filed with
the Securities and Exchange Commission on the date hereof (the “Report”), I, James M. Loree, President and Chief Executive Officer, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.

/s/ James M. Loree

James M. Loree
President and Chief Executive Officer
February 26, 2019
 EXHIBIT 32.2

STANLEY BLACK & DECKER, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Stanley Black & Decker, Inc. (the “Company”) on Form 10-K for the period ending December 29, 2018 as filed with
the Securities and Exchange Commission on the date hereof (the “Report”), I, Donald Allan Jr., Executive Vice President and Chief Financial Officer, certify,
pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.

/s/ Donald Allan Jr.

Donald Allan Jr.
Executive Vice President and Chief Financial Officer
February 26, 2019