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swk-20220702_g1.jpg
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

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

For the quarterly period ended July 2, 2022
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 Number 001-05224
STANLEY BLACK & DECKER, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CT 06-0548860
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
 (I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
1000 STANLEY DRIVE
NEW BRITAIN, CT 06053
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE 860 225-5111
Securities registered pursuant to Section 12(b) of the Act:
Title Of Each ClassTrading SymbolName Of Each Exchange On Which Registered
Common Stock$2.50 Par Value per ShareSWKNew York Stock Exchange
Corporate UnitsSWTNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filerþ  Accelerated Filer¨
Non-Accelerated Filer¨  Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes No
147,815,805 shares of the registrant’s common stock were outstanding as of July 22, 2022.



TABLE OF CONTENTS
 


PART I — FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
THREE AND SIX MONTHS ENDED JULY 2, 2022 AND JULY 3, 2021
(Unaudited, Millions of Dollars, Except Per Share Amounts)
 
 Second QuarterYear-to-Date
 2022202120222021
Net Sales$4,393.0 $3,798.9 $8,841.0 $7,519.7 
Costs and Expenses
Cost of sales$3,185.9 $2,437.1 $6,328.5 $4,770.1 
Selling, general and administrative849.4 772.0 1,798.6 1,488.9 
Provision for credit losses3.3 (4.9)14.4 (2.7)
Other, net79.1 42.5 141.1 90.5 
(Gain) loss on sales of businesses(0.2)2.6 (0.2)3.6 
Asset impairment charge168.4  168.4  
Restructuring charges19.5 10.4 72.2 12.2 
Interest income(6.5)(2.7)(9.3)(5.6)
Interest expense78.2 46.5 132.9 94.0 
$4,377.1 $3,303.5 $8,646.6 $6,451.0 
Earnings from continuing operations before income taxes and equity interest15.9 495.4 194.4 1,068.7 
Income taxes on continuing operations(62.8)67.3 (39.9)182.8 
Net earnings from continuing operations before equity interest78.7 428.1 234.3 885.9 
Share of net earnings of equity method investment 4.4  6.2 
Net earnings from continuing operations78.7 432.5 234.3 892.1 
Less: Net earnings (losses) attributable to non-controlling interests0.1 (1.0)0.2 (1.6)
Net earnings from continuing operations attributable to Stanley Black & Decker, Inc.$78.6 $433.5 $234.1 $893.7 
Less: Preferred stock dividends and beneficial conversion feature 4.8  14.2 
Net Earnings from Continuing Operations Attributable to Common Shareowners$78.6 $428.7 $234.1 $879.5 
Add: Contract adjustment payments accretion0.4 0.3 0.7 0.5 
Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted$79.0 $429.0 $234.8 $880.0 
Earnings from discontinued operations before income taxes6.4 32.4 28.6 63.5 
Income taxes on discontinued operations(2.6)6.4 (0.2)10.3 
Net earnings from discontinued operations$9.0 $26.0 $28.8 $53.2 
Net Earnings Attributable to Common Shareowners - Diluted$88.0 $455.0 $263.6 $933.2 
Net Earnings Attributable to Stanley Black & Decker, Inc.$87.6 $459.5 $262.9 $946.9 
Total Comprehensive (Loss) Income Attributable to Common Shareowners$(190.1)$479.1 $(42.5)$859.4 
Basic earnings per share of common stock:
Continuing operations$0.54 $2.70 $1.56 $5.56 
Discontinued operations$0.06 $0.16 $0.19 $0.34 
Total basic earnings per share of common stock$0.60 $2.87 $1.75 $5.90 
Diluted earnings per share of common stock:
Continuing operations$0.51 $2.60 $1.47 $5.34 
Discontinued operations$0.06 $0.16 $0.18 $0.32 
Total diluted earnings per share of common stock$0.57 $2.75 $1.65 $5.67 
See Notes to Unaudited Condensed Consolidated Financial Statements.

3

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JULY 2, 2022 AND JANUARY 1, 2022
(Unaudited, Millions of Dollars, Except Share and Per Share Amounts) 
July 2,
2022
January 1,
2022
ASSETS
Current Assets
Cash and cash equivalents$282.3 $142.1 
Accounts and notes receivable, net1,592.1 1,481.7 
Inventories, net6,635.5 5,419.9 
Current assets held for sale851.0 869.6 
Prepaid expenses506.8 507.0 
Other current assets105.1 106.1 
Total Current Assets9,972.8 8,526.4 
Property, plant and equipment, net2,310.6 2,336.8 
Goodwill8,459.1 8,590.7 
Customer Relationships, net1,909.1 2,000.0 
Trade Names, net2,653.1 2,681.8 
Other intangible Assets, net10.5 13.2 
Long-term assets held for sale2,564.2 2,635.8 
Other assets1,482.0 1,395.3 
Total Assets$29,361.4 $28,180.0 
LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities
Short-term borrowings$5,833.0 $2,241.1 
Current maturities of long-term debt1.2 1.3 
Accounts payable3,138.8 3,423.6 
Accrued expenses2,304.2 2,641.0 
Liabilities held for sale483.5 460.4 
Total Current Liabilities11,760.7 8,767.4 
Long-term debt5,351.8 4,353.6 
Deferred taxes625.9 711.2 
Post-retirement benefits432.5 474.1 
Long-term liabilities held for sale137.1 137.4 
Other liabilities1,971.5 2,143.9 
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 2022 and 2021
Issued and outstanding 750,000 shares in 2022 and 2021
620.3 620.3 
Common stock, par value $2.50 per share:
Authorized 300,000,000 shares in 2022 and 2021
Issued 176,902,738 shares in 2022 and 2021
442.3 442.3 
Retained earnings8,775.0 8,742.4 
Additional paid in capital5,027.3 4,999.2 
Accumulated other comprehensive loss(2,151.0)(1,845.6)
12,713.9 12,958.6 
Less: cost of common stock in treasury (29,101,258 shares in 2022 and 13,964,054 shares in 2021)
(3,634.1)(1,368.1)
Stanley Black & Decker, Inc. Shareowners’ Equity9,079.8 11,590.5 
Non-controlling interests2.1 1.9 
Total Shareowners’ Equity9,081.9 11,592.4 
Total Liabilities and Shareowners’ Equity$29,361.4 $28,180.0 
See Notes to Unaudited Condensed Consolidated Financial Statements.
4

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE AND SIX MONTHS ENDED JULY 2, 2022 AND JULY 3, 2021
(Unaudited, Millions of Dollars)
 
Second QuarterYear-to-Date
 2022202120222021
OPERATING ACTIVITIES
Net earnings from continuing operations$78.7 $432.5 $234.3 $892.1 
Net earnings from discontinued operations9.0 26.0 28.8 53.2 
Adjustments to reconcile net earnings to cash (used in) provided by operating activities:
Depreciation and amortization of property, plant and equipment91.9 91.9 183.9 185.4 
Amortization of intangibles51.5 50.5 103.2 101.0 
(Gain) loss on sales of businesses(0.2)2.6 (0.2)3.6 
Asset impairment charge168.4  168.4  
Share of net earnings of equity method investment (4.4) (6.2)
Changes in working capital(568.0)(196.4)(1,904.1)(916.8)
Changes in other assets and liabilities(275.2)41.7 (499.3)(25.7)
Cash (used in) provided by operating activities(443.9)444.4 (1,685.0)286.6 
INVESTING ACTIVITIES
Capital and software expenditures(145.7)(105.1)(285.5)(193.4)
Proceeds from sales of assets6.2 4.1 15.2 5.4 
Business acquisitions, net of cash acquired(9.1)(1.3)(45.6)(1.5)
Purchases of investments(9.2)(4.0)(9.3)(11.0)
   Net investment hedge settlements4.2  8.9 (52.6)
Other(0.7)(2.5)(1.4)(3.6)
Cash used in investing activities(154.3)(108.8)(317.7)(256.7)
FINANCING ACTIVITIES
Proceeds from debt issuances, net of fees(2.2) 992.6  
Stock purchase contract fees(9.8)(9.8)(19.6)(19.6)
Net short-term borrowings746.6 1.8 3,591.4 1.1 
Proceeds from issuances of common stock5.9 36.3 19.6 100.4 
Purchases of common stock for treasury(1.1)(2.4)(2,314.1)(17.3)
Redemption of preferred stock for treasury (750.0) (750.0)
Craftsman contingent consideration(11.3)(6.9)(21.1)(13.9)
Termination of interest rate swaps  22.7  
Cash dividends on common stock(114.0)(111.6)(230.3)(221.7)
Cash dividends on preferred stock (9.5) (18.9)
Other(5.9)(1.2)(7.6)(8.4)
Cash provided by (used in) financing activities608.2 (853.3)2,033.6 (948.3)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(22.4)8.5 (17.6)(30.4)
Change in cash, cash equivalents and restricted cash(12.4)(509.2)13.3 (948.8)
Cash, cash equivalents and restricted cash, beginning of period320.5 958.7 294.8 1,398.3 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD$308.1 $449.5 $308.1 $449.5 
5

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances as of July 2, 2022 and January 1, 2022, as shown above:
July 2, 2022January 1, 2022
Cash and cash equivalents$282.3 $142.1 
Restricted cash included in Other current assets6.1 7.6 
Cash and cash equivalents included in Current assets held for sale19.7 145.1 
Cash, cash equivalents and restricted cash$308.1 $294.8 
See Notes to Unaudited Condensed Consolidated Financial Statements.
6

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY
THREE AND SIX MONTHS ENDED JULY 2, 2022 AND JULY 3, 2021
(Unaudited, Millions of Dollars, Except Share and Per Share Amounts)


Preferred
Stock
Common
Stock
Additional
Paid In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Non-
Controlling
Interests
Shareowners’
Equity
Balance January 1, 2022$620.3 $442.3 $4,999.2 $8,742.4 $(1,845.6)$(1,368.1)$1.9 $11,592.4 
Net earnings— — — 175.3 — — 0.1 175.4 
Other comprehensive loss— — — — (27.7)— — (27.7)
Cash dividends declared — $0.79 per common share
— — — (116.3)— — — (116.3)
Issuance of common stock (338,897 shares)
— — (24.0)— — 37.7 — 13.7 
Repurchase of common stock (12,729,825 shares)
— — (300.0)— — (2,013.0)— (2,313.0)
Stock-based compensation related— — 30.3 — — — — 30.3 
Balance April 2, 2022$620.3 $442.3 $4,705.5 $8,801.4 $(1,873.3)$(3,343.4)$2.0 $9,354.8 
Net earnings— — — 87.6 — — 0.1 87.7 
Other comprehensive loss— — — — (277.7)— — (277.7)
Cash dividends declared — $0.79 per common share
— — — (114.0)— — — (114.0)
Issuance of common stock (83,264 shares)
— — (4.4)— — 10.3 — 5.9 
Repurchase of common stock (3,219,632 shares)
— — 299.9 — — (301.0)— (1.1)
Stock-based compensation related— — 26.3 — — — — 26.3 
Balance July 2, 2022$620.3 $442.3 $5,027.3 $8,775.0 $(2,151.0)$(3,634.1)$2.1 $9,081.9 
Preferred
Stock
Common
Stock
Additional
Paid In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Non-
Controlling
Interests
Shareowners’
Equity
Balance January 2, 2021$1,370.3 $442.3 $4,967.8 $7,542.2 $(1,713.7)$(1,549.3)$6.8 $11,066.4 
Net earnings (loss)— — — 487.4 — — (0.6)486.8 
Other comprehensive loss— — — — (97.7)— — (97.7)
Cash dividends declared — $0.70 per share
— — — (110.1)— — — (110.1)
Cash dividends declared - $50.00 per annum per preferred share
— — — (9.4)— — — (9.4)
Issuance of common stock (848,275 shares)
— — (12.7)— — 76.8 — 64.1 
Repurchase of common stock (80,310 shares)
— —  — — (14.9)— (14.9)
Non-controlling interest buyout— — (2.8)— — — (3.2)(6.0)
Stock-based compensation related— — 25.6 — — — — 25.6 
Balance April 3, 2021$1,370.3 $442.3 $4,977.9 $7,910.1 $(1,811.4)$(1,487.4)$3.0 $11,404.8 
Net earnings (loss)— — — 459.5 — — (1.0)458.5 
Other comprehensive income— — — — 24.4 — — 24.4 
Cash dividends declared — $0.70 per share
— — — (111.6)— — — (111.6)
Cash dividends declared - $50.00 per annum per preferred share
— — — (4.8)— — — (4.8)
Issuance of common stock (305,153 shares)
— — 8.1 — — 28.2 — 36.3 
Repurchase of common stock (355,751 shares)
— — 72.2 — — (74.6)— (2.4)
Redemption and conversion of preferred stock (1,469,055 shares)
(750.0)— (137.3)— — 137.3 — (750.0)
Stock-based compensation related— — 30.8 — — — — 30.8 
Balance July 3, 2021$620.3 $442.3 $4,951.7 $8,253.2 $(1,787.0)$(1,396.5)$2.0 $11,086.0 
See Notes to Unaudited Condensed Consolidated Financial Statements.

7

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JULY 2, 2022

A.    SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

In December 2021, the Company acquired the remaining 80 percent ownership stake in MTD Holdings Inc. ("MTD"), a privately held global manufacturer of outdoor power equipment. The Company previously acquired a 20 percent interest in MTD in January 2019. Prior to closing on the remaining 80 percent ownership stake, the Company applied the equity method of accounting to the 20% investment in MTD. In November 2021, the Company acquired Excel Industries ("Excel"), a leading designer and manufacturer of premium commercial and residential turf-care equipment. These acquisitions are being accounted for as business combinations using the acquisition method of accounting and the results subsequent to the dates of acquisition are included in the Company's Tools & Outdoor segment.

On July 5, 2022, the Company completed the previously announced sale of its Mechanical Access Solutions ("MAS") business, the automatic doors business. On July 22, 2022, the Company completed the previously announced sale of its Convergent Security Solutions ("CSS") business comprising of the commercial electronic security and healthcare businesses. Based on management's commitment to sell these businesses, the assets and liabilities related to MAS and CSS were classified as held for sale on the Company's Condensed Consolidated Balance Sheets as of July 2, 2022 and January 1, 2022.

The MAS and CSS divestitures represent a single plan to exit the Security segment and are considered a strategic shift that will have a major effect on the Company’s operations and financial results. The operating results of MAS and CSS have been reported as discontinued operations in the consolidated financial statements. Amounts previously reported have been reclassified to conform to this presentation in accordance with Accounting Standard Codification ("ASC") 205, Presentation of Financial Statements ("ASC 205"), to allow for meaningful comparison of continuing operations.

In June 2022, the Company announced that it had reached a definitive agreement for the sale of its Oil & Gas business as part of the Company's strategic commitment to simplify and streamline its portfolio to focus on the core Tools & Outdoor and Industrial businesses. Based on management's commitment to sell this business, the assets and liabilities related to Oil & Gas were classified as held for sale on the Company's Condensed Consolidated Balance Sheet as of July 2, 2022. There were no assets or liabilities held for sale relating to the Oil & Gas business as of January 1, 2022. This pending divestiture does not qualify for discontinued operations and therefore, its results are included in the Company's continuing operations for all periods presented.

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

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

B.    NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS ADOPTED — In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new standard improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency. The new standard requires an entity to recognize and measure contract assets and
8

contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The standard should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company elected to early adopt this standard in the first quarter of 2022 and it did not have a material impact on its consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings per share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Equity (Subtopic 815-40). The new standard clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The standard should be applied prospectively. The Company adopted this standard in the first quarter of 2022 and it did not have a material impact on its consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). The new standard reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and amends the guidance for the derivatives scope exception for contracts in an entity's own equity. The standard also amends and makes targeted improvements to the related earnings per share guidance. The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted this standard in the first quarter of 2022, using the modified retrospective method, which has no impact to prior periods. In accordance with the standard, the Company increased weighted-average shares outstanding used to calculate diluted earnings per share for both the three and six months ended July 2, 2022 by 4.1 million shares, as required by the use of the if-converted method for convertible instruments that may be settled in cash or shares. See Note C, Earnings Per Share for further discussion.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The new standard provides optional expedients and exceptions that companies can apply during a limited time period to account for contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. Companies may elect to apply these optional expedients and exceptions beginning March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), to clarify the scope of Topic 848 and provide explicit guidance to help companies applying optional expedients and exceptions. This ASU is effective immediately for all entities that have applied optional expedients and exceptions. The Company applied certain optional expedients and exceptions as needed to comply with regulatory and tax authorities for the transition to alternative reference rates. The Company's adoption of this standard did not have a material impact on its consolidated financial statements.

RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED — In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The new standard clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring the fair value of the security. The new standard also requires certain disclosures related to equity securities with contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The standard should be applied prospectively. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.
In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The new standard eliminates the recognition and measurement guidance for troubled debt restructurings (TDRs) for creditors that have adopted ASC 326 and requires public entities to present gross write-offs by year of origination in their vintage disclosures. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The standard should be applied prospectively, and it allows for a modified retrospective transition method resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method. The new standard expands and clarifies the use of the portfolio layer method for fair value hedges of interest rate risk. The new standard allows non-prepayable financial assets to also be included in a closed portfolio hedged using the portfolio layer method. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The new guidance on hedging multiple layers in a closed portfolio should be applied prospectively and the guidance on the accounting for fair value basis adjustments should
9

be applied on a modified retrospective basis. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

C.    EARNINGS PER SHARE
The following table reconciles net earnings attributable to common shareowners and the weighted-average shares outstanding used to calculate basic and diluted earnings per share for the three and six months ended July 2, 2022 and July 3, 2021:
Second QuarterYear-to-Date
2022202120222021
Numerator (in millions):
Net Earnings from Continuing Operations Attributable to Common Shareowners$78.6 $428.7 $234.1 $879.5 
Add: Contract adjustment payments accretion0.4 0.3 0.7 0.5 
Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted$79.0 $