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stanleyimagea04.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 June 29, 2024
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
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 ☑
153,959,484 shares of the registrant’s common stock were outstanding as of July 25, 2024.


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 (LOSS) INCOME
THREE AND SIX MONTHS ENDED JUNE 29, 2024 AND JULY 1, 2023
(Unaudited, Millions of Dollars, Except Per Share Amounts)
 
 Second QuarterYear-to-Date
 2024202320242023
Net Sales$4,024.4 $4,158.9 $7,893.9 $8,090.7 
Costs and Expenses
Cost of sales$2,883.2 $3,226.8 $5,644.2 $6,323.1 
Selling, general and administrative825.8 834.4 1,677.8 1,657.4 
Provision for credit losses2.8 2.9 2.6 5.0 
Other, net226.5 66.6 306.5 130.3 
Loss on sales of businesses— — — 7.6 
Asset impairment charge— — 25.5 — 
Restructuring charges29.8 4.6 44.8 16.7 
Interest income(42.9)(45.2)(86.5)(85.0)
Interest expense121.3 144.6 252.8 275.5 
$4,046.5 $4,234.7 $7,867.7 $8,330.6 
(Loss) earnings from continuing operations before income taxes(22.1)(75.8)26.2 (239.9)
Income taxes on continuing operations(2.9)(253.3)25.9 (229.6)
Net (loss) earnings from continuing operations $(19.2)$177.5 $0.3 $(10.3)
Gain (loss) on Security sale before income taxes10.4 (0.8)10.4 (0.8)
Income taxes on discontinued operations2.4 (0.3)2.4 (0.3)
Net earnings (loss) from discontinued operations$8.0 $(0.5)$8.0 $(0.5)
Net (Loss) Earnings$(11.2)$177.0 $8.3 $(10.8)
Total Comprehensive (Loss) Income$(58.4)$147.9 $(155.1)$12.9 
Basic (loss) earnings per share of common stock:
Continuing operations$(0.13)$1.19 $— $(0.07)
Discontinued operations$0.05 $— $0.05 $— 
Total basic (loss) earnings per share of common stock$(0.07)$1.18 $0.06 $(0.07)
Diluted (loss) earnings per share of common stock:
Continuing operations$(0.13)$1.18 $— $(0.07)
Discontinued operations$0.05 $— $0.05 $— 
Total diluted (loss) earnings per share of common stock$(0.07)$1.18 $0.05 $(0.07)
See Notes to Unaudited Condensed Consolidated Financial Statements.
3
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 29, 2024 AND DECEMBER 30, 2023
(Unaudited, Millions of Dollars, Except Share and Per Share Amounts) 
June 29,
2024		December 30,
2023
ASSETS
Current Assets
Cash and cash equivalents$318.5 $449.4 
Accounts and notes receivable, net1,512.1 1,302.0 
Inventories, net4,562.4 4,738.6 
Current assets held for sale— 140.8 
Prepaid expenses362.5 360.5 
Other current assets29.5 26.0 
Total Current Assets6,785.0 7,017.3 
Property, plant and equipment, net2,078.7 2,169.9 
Goodwill7,942.1 7,995.9 
Intangibles, net3,859.6 3,949.6 
Long-term assets held for sale— 716.8 
Other assets1,788.8 1,814.3 
Total Assets$22,454.2 $23,663.8 
LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities
Short-term borrowings$492.4 $1,074.8 
Current maturities of long-term debt500.1 1.1 
Accounts payable2,450.4 2,298.9 
Accrued expenses1,899.9 2,464.3 
Current liabilities held for sale— 44.1 
Total Current Liabilities5,342.8 5,883.2 
Long-term debt5,602.4 6,101.0 
Deferred taxes240.2 333.2 
Post-retirement benefits357.4 378.4 
Long-term liabilities held for sale— 84.8 
Other liabilities2,189.5 1,827.1 
Commitments and Contingencies (Notes O and P)
Shareowners’ Equity
Common stock, par value $2.50 per share:
Authorized 300,000,000 shares in 2024 and 2023
Issued 176,902,738 shares in 2024 and 2023
442.3 442.3 
Retained earnings8,304.9 8,540.2 
Additional paid in capital5,080.6 5,059.0 
Accumulated other comprehensive loss(2,232.5)(2,069.1)
11,595.3 11,972.4 
Less: cost of common stock in treasury (22,968,980 shares in 2024 and 23,282,650 shares in 2023)
(2,873.4)(2,916.3)
Total Shareowners’ Equity8,721.9 9,056.1 
Total Liabilities and Shareowners’ Equity$22,454.2 $23,663.8 

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 JUNE 29, 2024 AND JULY 1, 2023
(Unaudited, Millions of Dollars)
 
Second QuarterYear-to-Date
 2024202320242023
OPERATING ACTIVITIES
Net (loss) earnings$(11.2)$177.0 $8.3 $(10.8)
Adjustments to reconcile net (loss) earnings to cash provided by (used in) operating activities:
Depreciation and amortization of property, plant and equipment114.3 116.1 213.4 229.0 
Amortization of intangibles40.7 48.3 81.8 96.6 
Loss on sales of businesses— — — 7.6 
(Gain) loss on sale of discontinued operations(10.4)0.8 (10.4)0.8 
Asset impairment charge— — 25.5 — 
Stock-based compensation expense23.4 12.1 64.7 46.8 
Changes in working capital397.8 278.9 38.0 97.7 
Changes in other assets and liabilities18.4 (368.8)(279.3)(489.6)
Cash provided by (used in) operating activities573.0 264.4 142.0 (21.9)
INVESTING ACTIVITIES
Capital and software expenditures(87.2)(68.3)(152.9)(136.5)
Proceeds from sales of businesses, net of cash sold735.6 (6.3)735.6 (5.7)
Other1.0 5.4 3.5 11.8 
Cash provided by (used in) investing activities649.4 (69.2)586.2 (130.4)
FINANCING ACTIVITIES
Proceeds from debt issuances, net of fees— (1.3)— 745.9 
Net short-term commercial paper repayments(1,245.7)(42.0)(570.8)(327.9)
Craftsman contingent consideration payments— (8.9)— (18.0)
Cash dividends on common stock(121.8)(119.7)(243.6)(239.5)
Other(0.6)(3.9)(5.1)(12.1)
Cash (used in) provided by financing activities(1,368.1)(175.8)(819.5)148.4 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(15.0)(14.2)(42.6)(5.1)
Change in cash, cash equivalents and restricted cash(160.7)5.2 (133.9)(9.0)
Cash, cash equivalents and restricted cash, beginning of period481.4 390.7 454.6 404.9 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD$320.7 $395.9 $320.7 $395.9 


The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances as of June 29, 2024 and December 30, 2023, as shown above:
June 29, 2024December 30, 2023
Cash and cash equivalents$318.5 $449.4 
Restricted cash included in Other current assets2.2 4.6 
Cash and cash equivalents included in Current assets held for sale— 0.6 
Cash, cash equivalents and restricted cash$320.7 $454.6 
See Notes to Unaudited Condensed Consolidated Financial Statements.
5
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY
THREE AND SIX MONTHS ENDED JUNE 29, 2024 AND JULY 1, 2023
(Unaudited, Millions of Dollars, Except Share and Per Share Amounts)


Common
Stock		Additional
Paid In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Non-
Controlling
Interests		Shareowners’
Equity
Balance December 30, 2023$442.3 $5,059.0 $8,540.2 $(2,069.1)$(2,916.3)$— $9,056.1 
Net earnings— — 19.5 — — — 19.5 
Other comprehensive loss— — — (116.2)— — (116.2)
Cash dividends declared — $0.81 per common share
— — (121.8)— — — (121.8)
Issuance of common stock (303,005 shares)
— (35.0)— — 38.8 — 3.8 
Repurchase of common stock (70,802 shares)
— — — — (6.3)— (6.3)
Stock-based compensation related— 41.3 — — — — 41.3 
Balance March 30, 2024$442.3 $5,065.3 $8,437.9 $(2,185.3)$(2,883.8)$— $8,876.4 
Net loss— — (11.2)— — — (11.2)
Other comprehensive loss— — — (47.2)— — (47.2)
Cash dividends declared — $0.81 per common share
— — (121.8)— — — (121.8)
Issuance of common stock (102,918 shares)
— (8.1)— — 11.8 — 3.7 
Repurchase of common stock (21,451 shares)
— — — — (1.4)— (1.4)
Stock-based compensation related— 23.4 — — — — 23.4 
Balance June 29, 2024$442.3 $5,080.6 $8,304.9 $(2,232.5)$(2,873.4)$— $8,721.9 
Common
Stock		Additional
Paid In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Non-
Controlling
Interests		Shareowners’
Equity
Balance December 31, 2022$442.3 $5,055.6 $9,333.3 $(2,119.5)$(2,999.6)$2.1 $9,714.2 
Net loss— — (187.8)— — — (187.8)
Other comprehensive income— — — 52.8 — — 52.8 
Cash dividends declared — $0.80 per common share
— — (119.8)— — — (119.8)
Issuance of common stock (202,552 shares)
— (21.5)— — 24.6 — 3.1 
Repurchase of common stock (58,377 shares)
— — — — (4.8)— (4.8)
Stock-based compensation related— 34.7 — — — — 34.7 
Balance April 1, 2023$442.3 $5,068.8 $9,025.7 $(2,066.7)$(2,979.8)$2.1 $9,492.4 
Net earnings— — 177.0 — — — 177.0 
Other comprehensive loss— — — (29.1)— — (29.1)
Cash dividends declared — $0.80 per common share
— — (119.7)— — — (119.7)
Issuance of common stock (99,627 shares)
— (8.1)— — 12.1 — 4.0 
Repurchase of common stock (9,996 shares)
— — — — (0.8)— (0.8)
Stock-based compensation related— 12.1 — — — — 12.1 
Balance July 1, 2023$442.3 $5,072.8 $9,083.0 $(2,095.8)$(2,968.5)$2.1 $9,535.9 
See Notes to Unaudited Condensed Consolidated Financial Statements.

6
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 29, 2024

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 June 29, 2024 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 December 30, 2023, and subsequent related filings with the Securities and Exchange Commission ("SEC").

On April 1, 2024, the Company completed the previously announced sale of its Infrastructure business. Based on management's commitment to sell this business, assets and liabilities related to Infrastructure were classified as held for sale on the Company's Condensed Consolidated Balance Sheets as of December 30, 2023. This divestiture did not qualify for discontinued operations and therefore, its results were included in the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income in continuing operations through the date of sale. The sale of the Infrastructure business is part of the Company's strategic commitment to simplify and streamline its portfolio to focus on the core Tools & Outdoor and Industrial businesses. Refer to Note Q, Divestitures, for further discussion of this transaction.

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 2024 presentation.

B.    NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS ADOPTED — In June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. The Company adopted this standard in the first quarter of 2024 and it did not have a material impact on its consolidated financial statements.

RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED — In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new standard was issued to improve transparency and decision usefulness of income tax disclosures by providing information that helps investors better understand how an entity’s operations, tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The amendments in this update primarily relate to requiring greater disaggregated disclosure of information in the rate reconciliation, income taxes paid, income (loss) from continuing operations before income tax expense (benefit), and income tax expense (benefit) from continuing operations. The ASU is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted. The standard can be applied prospectively or retrospectively. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The new standard provides improvements to reportable segment disclosure requirements through amendments that require disclosure of significant segment expenses and other segment items on an interim and annual basis and requires all annual disclosures about a reportable segment’s profit or loss and assets to be made on an interim basis. The standard also requires the disclosure of the chief operating decision maker’s (“CODM”) title and position and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also clarifies that if the CODM uses more than one measure in assessing segment performance and deciding how to allocate resources, a company may report the additional segment profit or loss measure(s) and that companies
7
with a single reportable segment must provide all disclosures required by this amendment. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The standard should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

C.    EARNINGS PER SHARE

The following table reconciles net (loss) earnings and the weighted-average shares outstanding used to calculate basic and diluted (loss) earnings per share of common stock for the three and six months ended June 29, 2024 and July 1, 2023:
Second QuarterYear-to-Date
2024202320242023
Numerator (in millions):
Net (loss) earnings from continuing operations $(19.2)$177.5 $0.3 $(10.3)
Net earnings (loss) from discontinued operations8.0 (0.5)8.0 (0.5)
Net (Loss) Earnings$(11.2)$177.0 $8.3 $(10.8)

Second QuarterYear-to-Date
2024202320242023
Denominator (in thousands):
Basic weighted-average shares outstanding150,394 149,687 150,311 149,631 
Dilutive effect of stock contracts and awards— 540 701 — 
Diluted weighted-average shares outstanding150,394 150,227 151,012 149,631 

Second QuarterYear-to-Date
2024202320242023
(Loss) earnings per share of common stock:
Basic (loss) earnings per share of common stock:
Continuing operations$(0.13)$1.19 $— $(0.07)
Discontinued operations$0.05 $— $0.05 $— 
Total basic (loss) earnings per share of common stock$(0.07)$1.18 $0.06 $(0.07)
Diluted (loss) earnings per share of common stock:
Continuing operations$(0.13)$1.18 $— $(0.07)
Discontinued operations$0.05 $— $0.05 $— 
Total diluted (loss) earnings per share of common stock$(0.07)$1.18 $0.05 $(0.07)


The following weighted-average stock options were not included in the computation of weighted-average diluted shares outstanding because the effect would be anti-dilutive (in thousands):
Second QuarterYear-to-Date
2024202320242023
Number of stock options5,739 5,857 5,367 5,796 

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 2024, the Company amended the settlement date to June 2026, 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.

8


D.    ACCOUNTS AND NOTES RECEIVABLE, NET
(Millions of Dollars)June 29, 2024December 30, 2023
Trade accounts receivable$1,296.0 $1,057.8 
Notes receivable76.6 66.9 
Other accounts receivable211.5 253.9 
Accounts and notes receivable$1,584.1 $1,378.6 
Allowance for credit losses(72.0)(76.6)
Accounts and notes receivable, net$1,512.1 $1,302.0 
Trade receivables are dispersed among a large number of retailers, distributors and industrial accounts in many countries. Adequate reserves have been established to cover anticipated credit losses.

The changes in the allowance for credit losses for the three and six months ended June 29, 2024 and July 1, 2023 are as follows:
Second QuarterYear-to-Date
(Millions of Dollars)2024202320242023
Beginning balance$74.9 $105.8 $76.6 $106.6 
Charged to costs and expenses2.82.92.65.0
Other, including recoveries and deductions (a)(5.7)(20.7)(7.2)(23.6)
Balance end of period$72.0 $88.0 $72.0 $88.0 
(a) Amounts represent charge-offs less recoveries, the impacts of foreign currency translation, divestitures and net transfers to/from other accounts.
The Company's payment terms are generally consistent with the industries in which their businesses operate and typically range from 30-90 days globally. The Company does not adjust the promised amount of consideration for the effects of a significant financing component when the period between transfer of the product and receipt of payment is less than one year. Any significant financing components for contracts greater than one year are included in revenue over time.

The Company has an accounts receivable sale program. According to the terms, the Company sells certain of its trade accounts receivables at fair value to a wholly owned, consolidated, bankruptcy-remote special purpose subsidiary (“BRS"). The BRS, in turn, can sell such receivables to a third-party financial institution (“Purchaser”) for cash. The Purchaser’s maximum cash investment in the receivables at any time is $110.0 million. The purpose of the program is to provide liquidity to the Company. These transfers qualify as sales under Accounting Standards Codification ("ASC") 860, Transfers and Servicing, and receivables are derecognized from the Company’s consolidated balance sheet when the BRS sells those receivables to the Purchaser. The Company has no retained interests in the transferred receivables, other than collection and administrative responsibilities. At June 29, 2024, 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 June 29, 2024 and December 30, 2023, net receivables of $93.4 million and $110.0 million, respectively, were derecognized. Proceeds from transfers of receivables to the Purchaser totaled $104.7 million and $164.3 million for the three and six months ended June 29, 2024, respectively, and payments to the Purchaser totaled $75.7 million and $180.9 million, respectively. Proceeds from transfers of receivables to the Purchaser totaled $119.9 million and $176.8 million for the three and six months ended July 1, 2023, respectively, and payments to the Purchaser totaled $84.0 million and $190.3 million, respectively. The program resulted in a pre-tax loss of $1.4 million and $2.6 million for the three and six months ended June 29, 2024, respectively. The program resulted in a pre-tax loss of $1.3 million and $2.3 million for the three and six months ended July 1, 2023, respectively. All cash flows under the program are reported as a component of changes in working capital within operating activities in the Condensed Consolidated Statements of Cash Flows since all the cash from the Purchaser is received upon the initial sale of the receivable.

As of June 29, 2024 and December 30, 2023, the Company's deferred revenue totaled $115.5 million and $116.8 million, respectively, of which $32.0 million and $31.7 million, respectively, was classified as current. Revenue recognized for the six months ended June 29, 2024 and July 1, 2023 that was previously deferred as of December 30, 2023 and December 31, 2022 totaled $13.3 million and $12.6 million, respectively.

9

E.    INVENTORIES, NET
(Millions of Dollars)June 29, 2024December 30, 2023
Finished products$2,820.3 $2,912.5 
Work in process333.2 263.4 
Raw materials1,408.9 1,562.7 
Total$4,562.4 $4,738.6 

F.    GOODWILL
Changes in the carrying amount of goodwill by segment are as follows:
(Millions of Dollars)Tools & OutdoorIndustrialTotal
Balance December 30, 2023$5,976.3 $2,019.6 $7,995.9 
Foreign currency translation(39.0)(14.8)(53.8)
Balance June 29, 2024$5,937.3 $2,004.8 $7,942.1 
Goodwill totaling $540.5 million relating to the Infrastructure business was reclassified to assets held for sale as of December 30, 2023. The Infrastructure goodwill amount was included in the determination of the impairment charges recorded in the fourth quarter of 2023 and first quarter of 2024 to adjust the carrying amount of Infrastructure's long-lived assets to its estimated fair value less selling costs prior to the sale of the business in the second quarter of 2024. Refer to Note Q, Divestitures, for further discussion.

G.    LONG-TERM DEBT AND FINANCING ARRANGEMENTS
June 29, 2024December 30, 2023
(Millions of Dollars)Interest RateNotional ValueUnamortized Discount
Unamortized Gain/(Loss) Terminated Swaps 1
Purchase Accounting FV AdjustmentDeferred Financing FeesCarrying Value
Carrying Value
Notes payable due 20252.30%$500.0 $(0.1)$— $— $(0.6)$499.3 $498.7 
Notes payable due 20263.40%500.0 (0.2)— — (0.7)499.1 498.9 
Notes payable due 20266.27%350.0 — — — (1.1)348.9 348.6 
Notes payable due 20263.42%25.0 — — 0.8 — 25.8 26.0 
Notes payable due 20261.84%26.8 — — 0.8 (0.1)27.5 28.5 
Notes payable due 20286.00%400.0 (0.3)— — (1.9)397.8 397.5 
Notes payable due 20287.05%150.0 — 4.4 4.2 — 158.6 159.7 
Notes payable due 20284.25%500.0 (0.1)— — (1.9)498.0 497.7 
Notes payable due 20283.52%50.0 — — 2.9 (0.1)52.8 53.1 
Notes payable due 20302.30%750.0 (1.4)— — (3.0)745.6 745.3 
Notes payable due 20323.00%500.0 (0.7)— — (2.7)496.6 496.3 
Notes payable due 20405.20%400.0 (0.2)(23.9)— (2.2)373.7 372.9 
Notes payable due 20484.85%500.0 (0.4)— — (4.5)495.1 495.0 
Notes payable due 20502.75%750.0 (1.7)— — (7.4)740.9 740.7 
Notes payable due 2060 (junior subordinated)4.00%750.0 — — — (8.5)741.5 741.4 
Other, payable in varying amounts 2024 through 2027
4.10%-4.31%
1.3 — — — — 1.3 1.8 
Total Long-term debt, including current maturities$6,153.1 $(5.1)$(19.5)$8.7 $(34.7)$6,102.5 $6,102.1 
Less: Current maturities of long-term debt(500.1)(1.1)
Long-term debt$5,602.4 $6,101.0 
1Unamortized gain/(loss) associated with interest rate swaps are more fully discussed in Note H, Financial Instruments.
10

The Company has a $3.5 billion commercial paper program which includes Euro denominated borrowings in addition to U.S. Dollars. As of June 29, 2024, the Company had commercial paper borrowings outstanding of $492.3 million, of which $317.4 million in Euro denominated commercial paper was designated as a net investment hedge. As of December 30, 2023, the Company had $1.1 billion of borrowings outstanding, of which $399.7 million in Euro denominated commercial paper was designated as a net investment hedge. Refer to Note H, Financial Instruments, for further discussion.

In June 2024, the Company amended and restated its existing five-year $2.5 billion committed credit facility with the concurrent execution of a new five-year $2.25 billion committed credit facility (the “5-Year Credit Agreement”). Borrowings under the 5-Year Credit Agreement may be made in U.S. Dollars, Euros or Pounds Sterling. A sub-limit of an amount equal to the Euro equivalent of $800.0 million is designated for swing line advances. 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 June 28, 2029 or upon termination. The 5-Year Credit Agreement is designated to be a liquidity back-stop for the Company's $3.5 billion U.S. Dollar and Euro commercial paper program. As of June 29, 2024 and December 30, 2023, the Company had not drawn on its five-year committed credit facility.

In June 2024, the Company terminated its 364-Day $1.5 billion committed credit facility ("the 2023 Syndicated 364-Day Credit Agreement") dated September 2023. There were no outstanding borrowings under the 2023 Syndicated 364-Day Credit Agreement upon termination and as of December 30, 2023. Contemporaneously, the Company entered into a new $1.25 billion syndicated 364-Day Credit Agreement (the "2024 Syndicated 364-Day Credit Agreement") which is a revolving credit loan. The borrowings under the 2024 Syndicated 364-Day Credit Agreement may be made in U.S. Dollars or Euros and bear interest at a floating rate plus an applicable margin dependent upon the denomination of the borrowing and pursuant to the terms of the 2024 Syndicated 364-Day Credit Agreement. The Company must repay all advances under the 2024 Syndicated 364-Day Credit Agreement by the earlier of June 27, 2025 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 2024 Syndicated 364-Day Credit Agreement serves as part of the liquidity back-stop for the Company’s $3.5 billion U.S. Dollar and Euro commercial paper program. As of June 29, 2024, the Company had not drawn on its 2024 Syndicated 364-Day Credit Agreement.

The 5-Year Credit Agreement and the 2024 Syndicated 364-Day Credit Agreement, as described above, contain customary affirmative and negative covenants, including but not limited to, maintenance of an interest coverage ratio. The interest coverage ratio tested for covenant compliance compares adjusted Earnings Before Interest, Taxes, Depreciation and Amortization to adjusted net Interest Expense ("Adjusted EBITDA"/"Adjusted Net Interest Expense"). The Company must maintain, for each period of four consecutive fiscal quarters of the Company, an interest coverage ratio of not less than 3.50 to 1.00, provided that the Company is only required to maintain an interest coverage ratio of not less than (i) 1.50 to 1.00 for any four quarter period ending on or before the end of the Company’s second fiscal quarter of 2024, and (ii) 2.50 to 1.00 for any four quarter period ending after the Company’s second fiscal quarter of 2024 through and including the Company’s second fiscal quarter of 2025. For purposes of calculating the Company’s compliance with the interest coverage ratio, as defined in each credit agreement, the Company is permitted to increase EBITDA to allow for additional adjustment addbacks incurred prior to the end of the Company’s second fiscal quarter of 2025, provided that (A) the sum of the applicable adjustment addbacks incurred through and including the Company’s second fiscal quarter of 2024 may not exceed $500 million in the aggregate, and (B) the sum of the applicable adjustment addbacks incurred from the Company’s third fiscal quarter of 2024 through and including the Company’s second fiscal quarter of 2025 may not exceed $250 million in the aggregate; provided, further, that the sum of the applicable adjustment addbacks for any four quarter period may not exceed $500 million in the aggregate.

H.    FINANCIAL INSTRUMENTS

The Company is exposed to market risk from changes in foreign currency exchange rates, interest rates, stock prices and commodity prices. As part of the Company’s risk management program, a variety of financial instruments such as interest rate swaps, currency swaps, purchased currency options, foreign exchange contracts and commodity contracts may be used to mitigate interest rate exposure, foreign currency exposure and commodity price exposure.

If the Company elects to do so and if the instrument meets the criteria specified in ASC 815, Derivatives and Hedging, management designates its derivative instruments as cash flow hedges, fair value hedges or net investment hedges. Generally, commodity price exposures are not hedged with derivative financial instruments and instead are actively managed through
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customer pricing initiatives, procurement-driven cost reduction initiatives and other productivity improvement projects. Financial instruments are not utilized for speculative purposes.

A summary of the fair values of the Company’s derivatives recorded in the Condensed Consolidated Balance Sheets at June 29, 2024 and December 30, 2023 is as follows: 
(Millions of Dollars)Balance Sheet
Classification		June 29, 2024December 30, 2023Balance Sheet
Classification		June 29, 2024December 30, 2023
Derivatives designated as hedging instruments:
Foreign Exchange Contracts Cash FlowOther current assets$3.5 $0.1 Accrued expenses$0.4 $4.9 
LT other assets0.3 — LT other liabilities— — 
Non-derivative designated as hedging instrument:
Net Investment Hedge$— $— Short-term borrowings$317.4 $399.7 
Total designated as hedging instruments$3.8 $0.1 $317.8 $404.6 
Derivatives not designated as hedging instruments:
Foreign Exchange ContractsOther current assets$10.1 $8.4 Accrued expenses$8.5 $13.0 
Total$13.9 $8.5 $326.3 $417.6 
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. The Company considers non-performance risk of its counterparties at each reporting period and adjusts the carrying value of these assets accordingly. The risk of default is considered remote. As of June 29, 2024 and December 30, 2023, there were no assets that had been posted as collateral related to the above mentioned financial instruments.

During the six months ended June 29, 2024 and July 1, 2023, cash flows related to derivatives, including those that are separately discussed below, resulted in net cash paid of $17.0 million and $17.2 million, respectively.

CASH FLOW HEDGES

There were after-tax mark-to-market losses of $35.3 million and $42.5 million as of June 29, 2024 and December 30, 2023, respectively, reported for cash flow hedge effectiveness in Accumulated other comprehensive loss. An after-tax loss of $1.4 million is expected to be reclassified to earnings as the hedged transactions occur or as amounts are amortized within the next twelve months. The ultimate amount recognized will vary based on fluctuations of the hedged currencies and interest rates through the maturity dates.

The tables below detail pre-tax amounts of derivatives designated as cash flow hedges in Accumulated other comprehensive loss during the periods in which the underlying hedged transactions affected earnings for the three and six months ended June 29, 2024 and July 1, 2023:

Second Quarter 2024
(Millions of Dollars)Gain (Loss)
Recorded in OCI		Classification of
Gain (Loss)
Reclassified from
OCI to Income		Gain (Loss)
Reclassified from
OCI to Income		Gain (Loss)
Recognized in
Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts$— Interest expense$(1.6)$— 
Foreign Exchange Contracts$1.2 Cost of sales$(0.1)$— 

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Year-to-Date 2024
(Millions of Dollars)Gain (Loss)
Recorded in OCI		Classification of
Gain (Loss)
Reclassified from
OCI to Income		Gain (Loss)
Reclassified from
OCI to Income		Gain (Loss)
Recognized in
Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts$— Interest expense$(3.1)$— 
Foreign Exchange Contracts$8.2 Cost of sales$1.6 $— 

Second Quarter 2023
(Millions of Dollars)Gain (Loss)
Recorded in OCI		Classification of
Gain (Loss)
Reclassified from
OCI to Income		Gain (Loss)
Reclassified from
OCI to Income		Gain (Loss)
Recognized in
Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts$— Interest expense$(1.6)$— 
Foreign Exchange Contracts$(1.9)Cost of sales$(1.0)$— 
Year-to-Date 2023
(Millions of Dollars)Gain (Loss)
Recorded in OCI		Classification of
Gain (Loss)
Reclassified from
OCI to Income		Gain (Loss)
Reclassified from
OCI to Income		Gain (Loss)
Recognized in
Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts$— Interest expense$(3.1)$— 
Foreign Exchange Contracts$(4.5)Cost of sales$(0.4)$— 
A summary of the pre-tax effect of cash flow hedge accounting on the Consolidated Statements of Operations and Comprehensive (Loss) Income for the three and six months ended June 29, 2024 and July 1, 2023 is as follows:
Second Quarter 2024Year-to-Date 2024
(Millions of Dollars)Cost of SalesInterest ExpenseCost of SalesInterest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive (Loss) Income in which the effects of the cash flow hedges are recorded$2,883.2 $121.3 $5,644.2 $252.8 
Gain (loss) on cash flow hedging relationships:
Foreign Exchange Contracts:
Hedged Items$0.1 $— $(1.6)$— 
Gain (loss) reclassified from OCI into Income$(0.1)$— $1.6 $— 
Interest Rate Swap Agreements:
Gain (loss) reclassified from OCI into Income 1
$— $(1.6)$— $(3.1)
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Second Quarter 2023Year-to-Date 2023
(Millions of Dollars)Cost of SalesInterest ExpenseCost of SalesInterest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive (Loss) Income in which the effects of the cash flow hedges are recorded$3,226.8 $144.6 $6,323.1 $275.5 
Gain (loss) on cash flow hedging relationships:
Foreign Exchange Contracts:
Hedged Items$1.0 $— $0.4 $— 
Gain (loss) reclassified from OCI into Income$(1.0)$— $(0.4)$— 
Interest Rate Swap Agreements:
Gain (loss) reclassified from OCI into Income 1
$— $(1.6)$— $(3.1)
1 Inclusive of the gain/loss amortization on terminated derivative financial instruments.

An after-tax loss of $0.9 million and $1.4 million were reclassified from Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative instruments) during the periods in which the underlying hedged transactions affected earnings for the three months ended June 29, 2024 and July 1, 2023, respectively. An after-tax loss of $0.8 million and $1.9 million, respectively were reclassified from Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative instruments) during the periods in which the underlying hedged transactions affected earnings for the six months ended June 29, 2024 and July 1, 2023, respectively.

Interest Rate Contracts: In prior years, the Company entered into interest rate swap agreements in order to obtain the lowest cost source of funds within a targeted range of variable to fixed-debt proportions. These swap agreements, which were designated as cash flow hedges, subsequently matured or were terminated and the gain/loss was recorded in Accumulated other comprehensive loss and is being amortized to interest expense. The cash flows stemming from the maturity or termination of the swaps were previously presented within financing activities in the Condensed Consolidated Statements of Cash Flows.

As of June 29, 2024 and December 30, 2023, the Company did not have any outstanding forward starting swaps designated as cash flow hedges.

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 June 29, 2024 and December 30, 2023, the notional value of forward currency contracts outstanding is $319.2 million and $300.0 million, respectively, maturing on various dates through 2025 and 2024, respectively.

During July 2024, the Company executed forward currency contracts with notional values totaling $295.0 million hedging Euro, Canadian dollar, Australian dollar, and British Pound exposure.
FAIR VALUE HEDGES

Interest Rate Risk: In an effort to optimize the mix of fixed versus floating rate debt in the Company’s capital structure, the Company enters into interest rate swaps. In prior years, the Company entered into interest rate swaps related to certain of its notes payable which were subsequently terminated. Amortization of the gain/loss on previously terminated swaps is reported in interest expense. Prior to termination, the changes in the fair value of the swaps and the offsetting changes in fair value related to the underlying notes were recognized in earnings. As of June 29, 2024 and December 30, 2023, the Company did not have any active fair value interest rate swaps.

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A summary of the pre-tax effect of fair value hedge accounting on the Consolidated Statements of Operations and Comprehensive (Loss) Income for the three and six months ended June 29, 2024 and July 1, 2023 is as follows:
(Millions of Dollars)Second Quarter 2024
Interest Expense		Year-to-Date 2024
Interest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive (Loss) Income in which the effects of the fair value hedges are recorded$121.3 $252.8 
Amortization of gain on terminated swaps$(0.1)$(0.2)
(Millions of Dollars)Second Quarter 2023
Interest Expense		Year-to-Date 2023
Interest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive (Loss) Income in which the effects of the fair value hedges are recorded$144.6 $275.5 
Amortization of gain on terminated swaps$(0.1)$(0.2)

A summary of the amounts recorded in the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of June 29, 2024 and December 30, 2023 is as follows:
June 29, 2024
(Millions of Dollars)
Carrying Amount of Hedged Liability (1)
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
Current Maturities of Long-Term Debt$500.1 Terminated Swaps$— 
Long-Term Debt$532.3 Terminated Swaps$(19.5)
December 30, 2023
(Millions of Dollars)
Carrying Amount of Hedged Liability (1)
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
Current Maturities of Long-Term Debt$1.1 Terminated Swaps$— 
Long-Term Debt$532.6 Terminated Swaps$(19.7)
(1) Represents hedged items no longer designated in qualifying fair value hedging relationships.

NET INVESTMENT HEDGES

The Company utilizes net investment hedges to offset the translation adjustment arising from re-measurement of its investment in the assets and liabilities of its foreign subsidiaries. The total after-tax amounts in Accumulated other comprehensive loss were gains of $72.8 million and $64.9 million at June 29, 2024 and December 30, 2023, respectively.

As of June 29, 2024 and December 30, 2023, the Company did not have any net investment hedges with a notional value outstanding. As of June 29, 2024, the Company had Euro denominated commercial paper with a value of $317.4 million, maturing in 2024, hedging a portion of the Company's Euro denominated net investments. As of December 30, 2023, the Company had Euro denominated commercial paper with a value of $399.7 million, maturing in 2024, hedging a portion of the Company's Euro denominated net investments.

Maturing foreign exchange contracts resulted in no cash received or paid for the six months ended June 29, 2024 and July 1, 2023.

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

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The pre-tax gain or loss from fair value changes for the three and six months ended June 29, 2024 and July 1, 2023 is as follows:
Second Quarter 2024
(Millions of Dollars)Total Gain (Loss) Recorded in OCIExcluded Component Recorded in OCIIncome Statement ClassificationTotal Gain (Loss) Reclassified from OCI to IncomeExcluded Component Amortized from OCI to Income
Forward Contracts$(0.1)$— Other, net$— $— 
Non-derivative designated as Net Investment Hedge$2.0 $— Other, net$— $— 

Year-to-Date 2024
(Millions of Dollars)Total Gain (Loss) Recorded in OCIExcluded Component Recorded in OCIIncome Statement ClassificationTotal Gain (Loss) Reclassified from OCI to IncomeExcluded Component Amortized from OCI to Income
Forward Contracts$(0.3)$— Other, net$— $— 
Non-derivative designated as Net Investment Hedge$10.8 $— Other, net$— $— 
Second Quarter 2023
(Millions of Dollars)Total Gain (Loss) Recorded in OCIExcluded Component Recorded in OCIIncome Statement ClassificationTotal Gain (Loss) Reclassified from OCI to IncomeExcluded Component Amortized from OCI to Income
Forward Contracts$— $— Other, net$— $— 
Cross Currency Swap$— $— Other, net$—