Financial
Highlights
Financial Highlights
|
(Millions of dollars, except per-share amounts) |
2018(1) | 2017(1)(2) | 2016(2) | 2015 | 2014(1)(3) |
| SWK | |||||
| Revenue | 13,982.4 | 12,966.6 | 11,593.5 | 11,171.8 | 11,338.6 |
| Gross Margin – $ | 4,916.8 | 4,825.1 | 4,268.0 | 4,072.0 | 4,104.5 |
| Gross Margin – % | 35.2% | 37.2% | 36.8% | 36.4% | 36.2% |
| Working Capital Turns | 8.8 | 9.1 | 10.8 | 9.2 | 9.2 |
| Free Cash Flow* | 769 | 976 | 1,138 | 871 | 1,005 |
| Diluted EPS from Continuing Operations | 8.15 | 7.46 | 6.53 | 5.92 | 5.67 |
| Tools & Storage | |||||
| Revenue | 9,814.0 | 9,045.0 | 7,619.2 | 7,140.7 | 7,033.0 |
| Segment Profit – $ | 1,535.7 | 1,520.7 | 1,258.4 | 1,170.1 | 1,078.5 |
| Segment Profit – % | 15.6% | 16.8% | 16.5% | 16.4% | 15.3% |
| Industrial | |||||
| Revenue | 2,187.8 | 1,974.3 | 1,864.0 | 1,938.2 | 2,044.4 |
| Segment Profit – $ | 345.8 | 345.9 | 300.1 | 339.9 | 354.3 |
| Segment Profit – % | 15.8% | 17.5% | 16.1% | 17.5% | 17.3% |
| Security | |||||
| Revenue | 1,980.6 | 1,947.3 | 2,110.3 | 2,092.9 | 2,261.2 |
| Segment Profit – $ | 211.5 | 213.7 | 267.9 | 239.6 | 266.1 |
| Segment Profit – % | 10.7% | 11.0% | 12.7% | 11.4% | 11.8% |
| (1) | With the exception of Free Cash Flow, results exclude acquisition-related charges, a non-cash fair value adjustment, gain or loss on sales of businesses, an environmental remediation settlement, a cost reduction program, an incremental freight charge related to a service provider's bankruptcy, and tax charges related to recently enacted U.S. tax legislation, as applicable. |
| (2) | 2017 and 2016 results have been recast to reflect the 2018 adoption of Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers" and ASU 2017-07, "Compensation-Retirement Benefits." Free Cash Flow is shown as previously reported, which excludes the impacts from the 2018 adoption of ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments" and ASU 2016-18, "Restricted Cash." |
| (3) | In the first quarter of 2015, the Company combined the legacy CDIY business with certain complementary elements of the legacy IAR and Healthcare businesses (formerly part of the Industrial and Security segments, respectively) to form one Tools & Storage business. As a result of this change, the former CDIY segment was renamed Tools & Storage. The results from 2014 were recast to align with this change in organizational structure. There is no impact to the consolidated financial statements of the Company as a result of this change. |
| * | Free Cash Flow = Net cash flow from operating activities less capital and software expenditures. |
2018 Scorecard*
| (Millions of dollars, except per-share amounts) | 2018 | 2017 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|
| Net earnings from continuing operations | 605 | 1,227 | 968 | 904 | 857 |
| Interest income | (69) | (40) | (23) | (15) | (14) |
| Interest expense | 278 | 223 | 194 | 180 | 177 |
| Income taxes | 416 | 301 | 262 | 249 | 227 |
| Depreciation and amortization | 507 | 461 | 408 | 414 | 444 |
| EBITDA from continuing operations | 1,737 | 2,172 | 1,809 | 1,732 | 1,691 |
| Pre-tax acquisition-related charges and other | 450 | (108) | – | – | 54 |
| Adjusted EBITDA | 2,187 | 2,064 | 1,809 | 1,732 | 1,745 |
| (a) | “EBITDA” (earnings before interest, taxes, depreciation, and amortization) is a non-GAAP measurement. Management believes it is important for the ability to determine the earnings power of the Company. The Company’s 2018 results exclude $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. The Company’s 2017 results exclude $156 million of (pre-tax) charges related to acquisition-related charges and a $264 million (pre-tax) gain on sales of businesses. The Company’s 2014 results exclude $54 million (pre-tax) of charges related to acquisition-related charges. |
| (b) | The Company has excluded $631 million of after-tax charges ($4.16 of diluted EPS) 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, a loss related to a previously divested business, and tax charges primarily related to recently enacted U.S. tax legislation, in the 2018 calculation of diluted EPS. The Company has excluded $91 million of after-tax income ($0.59 of diluted EPS) related to the gain on sales of businesses, partially offset by merger and acquisition-related charges and a one-time net tax charge related to recently enacted U.S. tax legislation, in the 2017 calculation of diluted EPS. The Company has excluded the 2014 after-tax merger and acquisition-related charges of $49 million ($0.30 of diluted EPS) in the calculation of diluted EPS. These amounts were excluded because the Company believes doing so provides a better indicator of operating trends when analyzing diluted EPS, due to the unusually large magnitude of these amounts and the fact that they are non-recurring. Therefore, the Company has provided these measures both including and excluding such amounts. |
| (c) | Free Cash Flow = Net cash flow from operating activities less capital and software expenditures. |
| (d) | Working Capital Turns are computed as annualized fourth quarter sales divided by year-end working capital (accounts receivable, inventory, accounts payable and deferred revenue). |
| (e) | Average Capital Employed is computed as the 2-point average of debt and equity. |
| (f) | Cash Flow Return on Investment is computed as cash from operations plus after-tax interest expense, divided by the 2-point average of debt and equity. |
| * | 2017 and 2016 results have been recast to reflect the 2018 adoption of ASU 2014-09. Free Cash Flow and Cash Flow Return on Investment are shown as previously reported, which excludes the impacts from the 2018 adoption of ASU 2016-15 and ASU 2016-18. |