This document is the annual report (Form 10-K) filed by The Black & Decker Corporation with the SEC for the fiscal year ending December 31, 2007. It provides an overview of Black & Decker's business segments and financial information. The main segments are Power Tools and Accessories, Hardware and Home Improvement, and Fastening and Assembly Systems. Power Tools is the largest segment and includes power tools, lawn and garden equipment, cleaning products, and accessories sold worldwide under major brands like Black & Decker and DeWalt.

1. UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED COMMISSION FILE NUMBER
December 31, 2007 1-1553
THE BLACK & DECKER CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 52-0248090
(State of Incorporation) (I.R.S. Employer Identification Number)
Towson, Maryland 21286
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: 410-716-3900
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, par value $.50 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 X No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. Yes No X
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 twelve months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing require-
ments for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. X
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
(check one): Large accelerated filer X Accelerated filer Non-accelerated filer
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes No X
The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 29, 2007,
was $5.51 billion.
The number of shares of Common Stock outstanding as of January 25, 2008, was 60,923,815.
The exhibit index as required by Item 601(a) of Regulation S-K is included in Item 15 of Part IV of this report.
Documents Incorporated by Reference: Portions of the registrant’s definitive Proxy Statement for the 2008
Annual Meeting of Stockholders are incorporated by reference in Part III of this report.

2. Part I
ITEM 1. BUSINESS (c) Narrative Description
of the Business
(a) General Development
The following is a brief description of each of the
of Business
Corporation’s reportable business segments.
The Black & Decker Corporation (collectively with
its subsidiaries, the Corporation), incorporated in POWER TOOLS AND ACCESSORIES
Maryland in 1910, is a leading global manufac-
The Power Tools and Accessories segment has
turer and marketer of power tools and accessories,
worldwide responsibility for the manufacture and
hardware and home improvement products, and
sale of consumer (home use) and industrial corded
technology-based fastening systems. With products
and cordless electric power tools and equipment,
and services marketed in over 100 countries, the
lawn and garden products, consumer portable
Corporation enjoys worldwide recognition of its
power products, home products, accessories and
strong brand names and a superior reputation for
attachments for power tools, and product service.
quality, design, innovation, and value.
In addition, the Power Tools and Accessories
The Corporation is one of the world’s leading segment has responsibility for the sale of security
producers of power tools, power tool accessories, and hardware to customers in Mexico, Central America,
residential security hardware, and the Corporation’s the Caribbean, and South America; for the sale
product lines hold leading market share positions of plumbing products to customers outside of the
in these industries. The Corporation is also a major United States and Canada; and for sales of household
global supplier of engineered fastening and assem- products, principally in Europe and Brazil.
bly systems. The Corporation is one of the leading
Power tools and equipment include drills, screw-
producers of faucets in North America. These asser-
drivers, impact wrenches and drivers, hammers,
tions are based on total volume of sales of products
wet/dry vacuums, lights, radio/chargers, saws,
compared to the total market for those products and
grinders, band saws, plate joiners, jointers, lathes,
are supported by market research studies sponsored
dust management systems, routers, planers, sand-
by the Corporation as well as independent industry
ers, benchtop and stationary machinery, air tools,
statistics available through various trade organiza-
building instruments, air compressors, generators,
tions and periodicals, internally generated market
laser products, jobsite security systems, and WORK-
data, and other sources.
MATE® project centers and related products. Lawn
During the first quarter of 2006, the Corporation and garden products include hedge trimmers, string
acquired Vector Products, Inc. (Vector). The addition trimmers, lawn mowers, edgers, pruners, shears,
of Vector to the Corporation’s Power Tools and Ac- shrubbers, blower/vacuums, power sprayers, pres-
cessories segment allows the Corporation to offer sure washers, and related accessories. Consumer
customers a broader range of products. portable power products include inverters, jump-
starters, vehicle battery chargers, rechargeable
spotlights, and other related products. Home prod-
(b) Financial Information About
ucts include stick, canister and hand-held vacuums;
Business Segments
flexible flashlights; and wet scrubbers. Power tool
The Corporation operates in three reportable
accessories include drill bits, hammer bits, router
business segments: Power Tools and Accessories,
bits, hacksaws and blades, circular saw blades, jig
including consumer and industrial power tools
and reciprocating saw blades, screwdriver bits and
and accessories, lawn and garden products, electric
quick-change systems, bonded and other abrasives,
cleaning, automotive, lighting, and household prod-
and worksite tool belts and bags. Product service
ucts, and product service; Hardware and Home
provides replacement parts and repair and main-
Improvement, including security hardware and
tenance of power tools, equipment, and lawn and
plumbing products; and Fastening and Assembly
garden products.
Systems. For additional information about these
segments, see Note 16 of Notes to Consolidated Power tools, lawn and garden products, portable
Financial Statements included in Item 8 of Part power products, home products, and accesso-
II, and Management’s Discussion and Analysis ries are marketed around the world under the
of Financial Condition and Results of Operations BLACK & DECKER name as well as other trade-
included in Item 7 of Part II of this report. marks, and trade names, including, without limita-
tion, BLACK & DECKER; ORANGE AND BLACK
COLOR SCHEME; POWERFUL SOLUTIONS;
1
BLACK & DECKER

3. FIRESTORM; GELMAX COMFORT GRIP; MOUSE; reconditioned and then re-sold through numer-
BULLSEYE; PIVOT DRIVER; STORMSTATION; ous company-operated factory outlets and service
WORKMATE; BLACK & DECKER XT; VERSA- centers and various independent distributors.
PAK; VPX; SMART SELECT; AUTO SELECT;
Most of the Corporation’s consumer power tools,
SMARTDRIVER; QUANTUM PRO; CYCLONE;
lawn and garden products, and electric cleaning,
NAVIGAT OR; DRAGSTER; SANDST ORM;
automotive, lighting, and household products
PROJECTMATE; PIVOTPLUS; QUICK CLAMP;
sold in the United States carry a two-year war-
SIGHT LINE; CROSSFIRE; CROSSHAIR; 360°;
ranty, pursuant to which the consumer can return
QUATTRO; DECORMATE; LASERCROSS; AUTO-
defective products during the two years following
WRENCH; SHOPMASTER BY DELTA; DEWALT;
the purchase in exchange for a replacement prod-
YELLOW AND BLACK COLOR SCHEME; GUAR-
uct or repair at no cost to the consumer. Most of
ANTEED TOUGH; XRP; NANO; EHP; SITELOCK;
the Corporation’s industrial power tools sold in
PORTER-CABLE; GRAY AND BLACK COLOR
the United States carry a one-year service war-
SCHEME; TIGER SAW; PORTA-BAND; POWER-
ranty and a three-year warranty for manufacturing
BACK; EASY AIR; JOB BOSS; DELTA; THE DEL-
defects. Products sold outside of the United States
TA TRIANGLE LOGO; UNISAW; BIESEMEYER;
generally have varying warranty arrangements,
BLACK AND WHITE COLOR SCHEME; DAPC;
depending upon local market conditions and laws
EMGLO; AFS AUTOMATIC FEED SPOOL; GROOM
and regulations.
‘N’ EDGE; HEDGE HOG; GRASS HOG; EDGE HOG;
LEAF HOG; LAWN HOG; STRIMMER; REFLEX; The Corporation’s product offerings in the Power
VAC ‘N’ MULCH; EXCELL; ALLIGATOR; TRIM Tools and Accessories segment are sold primarily
‘N’ EDGE; HDL; TOUGH TRUCK; FLEX TUBE; to retailers, wholesalers, distributors, and jobbers,
VECTOR; ELECTROMATE; SIMPLE START; although some discontinued or reconditioned power
DUSTBUSTER; SNAKELIGHT; SCUMBUSTER; tools, lawn and garden products, consumer portable
STEAMBUSTER; CYCLOPRO; SWEEP & COL- power products, and electric cleaning and light-
LECT; CLICK & GO; B&D; BULLET; QUANTUM ing products are sold through company-operated
PRO; PIRANHA; SCORPION; QUICK CONNECT; service centers and factory outlets directly to end
PILOT POINT; RAPID LOAD; ROCK CARBIDE; users. Sales to two of the segment’s customers,
TOUGH CASE; MAX LIFE; RAZOR; OLDHAM; The Home Depot and Lowe’s Home Improvement
DEWALT SERVICENET; DROP BOX EXPRESS; Warehouse, accounted for greater than 10% of the
and GUARANTEED REPAIR COST (GRC). Corporation’s consolidated sales for 2007, 2006,
and 2005. For additional information regarding
The composition of the Corporation’s sales by prod-
sales to The Home Depot and Lowe’s Home
uct groups for 2007, 2006, and 2005 is included in
Improvement Warehouse, see Note 16 of Notes to
Note 16 of Notes to Consolidated Financial State-
Consolidated Financial Statements included in
ments included in Item 8 of Part II of this report.
Item 8 of Part II of this report.
Within each product group shown, there existed
no individual product that accounted for greater The principal materials used in the manufacturing
than 10% of the Corporation’s consolidated sales of products in the Power Tools and Accessories seg-
for 2007, 2006, or 2005. ment are batteries, copper, aluminum, steel, certain
electronic components, engines, and plastics. These
The Corporation’s product service program sup-
materials are used in various forms. For example,
ports its power tools and lawn and garden products.
aluminum or steel may be used in the form of wire,
Replacement parts and product repair services are
sheet, bar, and strip stock.
available through a network of company-operated
service centers, which are identified and listed in The materials used in the various manufacturing
product information material generally included processes are purchased on the open market, and
in product packaging. At December 31, 2007, there the majority are available through multiple sources
were approximately 120 such service centers, of and are in adequate supply. The Corporation has
which roughly three-quarters were located in the experienced no significant work stoppages to date
United States. The remainder was located around as a result of shortages of materials.
the world, primarily in Canada and Asia. These
The Corporation has certain long-term commit-
company-operated service centers are supple-
ments for the purchase of various finished goods,
mented by several hundred authorized service
component parts, and raw materials and believes
centers operated by independent local owners. The
that it is unlikely that any of these agreements
Corporation also operates reconditioning centers
would be terminated prematurely. Alternate sources
in which power tools, lawn and garden products,
of supply at competitive prices are available for
and electric cleaning and lighting products are
most items for which long-term commitments exist.
2 BLACK & DECKER

4. Because the Corporation is a leading producer of The Corporation holds various trademarks that
power tools and accessories, in a limited number are employed in its businesses and operates under
of instances, the magnitude of the Corporation’s various trade names, some of which are stated
purchases of certain items is of such significance previously. The Corporation believes that these
that a change in the Corporation’s established trademarks and trade names are important to the
supply relationship may cause disruption in the marketing and distribution of its products.
marketplace and/or a temporary price imbalance.
A significant portion of the Corporation’s sales in
While the Corporation believes that the termina-
the Power Tools and Accessories segment is derived
tion of any of these commitments would not have a
from the do-it-yourself and home modernization
material adverse effect on the operating results of
markets, which generally are not seasonal in nature.
the Power Tools and Accessories segment over the
However, sales of certain consumer and industrial
long term, the termination of a limited number of
power tools tend to be higher during the period
these commitments would have an adverse effect
immediately preceding the Christmas gift-giving
over the short term. In this regard, the Corpora-
season, while the sales of most lawn and garden
tion defines long term as a period of time in excess
products are at their peak during the late winter
of 12 months and short term as a period of time
and early spring period. Most of the Corporation’s
under 12 months.
other product lines within this segment generally
Principal manufacturing and assembly facilities of are not seasonal in nature, but are influenced by
the power tools, lawn and garden products, electric other general economic trends.
cleaning and lighting products, and accessories
The Corporation is one of the world’s leaders in the
businesses in the United States are located in
manufacturing and marketing of portable power
Jackson, Tennessee; Decatur, Arkansas; Shelbyville,
tools, electric lawn and garden products, and acces-
Kentucky; and Tampa, Florida. The principal dis-
sories. Worldwide, the markets in which the Corpo-
tribution facilities in the United States, other than
ration sells these products are highly competitive
those located at the manufacturing and assembly
on the basis of price, quality, and after-sale service.
facilities listed above, are located in Fort Mill,
A number of competing domestic and foreign com-
South Carolina, and Rialto, California.
panies are strong, well-established manufacturers
Principal manufacturing and assembly facilities of that compete on a global basis. Some of these com-
the power tools, lawn and garden products, electric panies manufacture products that are competitive
cleaning, lighting, and household products, and ac- with a number of the Corporation’s product lines.
cessories businesses outside of the United States Other competitors restrict their operations to fewer
are located in Suzhou, China; Usti nad Labem, categories, and some offer only a narrow range of
Czech Republic; Buchlberg, Germany; Perugia, competitive products. Competition from certain of
Italy; Spennymoor, England; Reynosa, Mexico; these manufacturers has been intense in recent
and Uberaba, Brazil. In addition to the principal years and is expected to continue.
facilities described above, the manufacture and
HARDWARE AND HOME IMPROvEMENT
assembly of products for the Power Tools and
Accessories segment also occurs at the facility of The Hardware and Home Improvement segment
its 50%-owned joint venture located in Shen Zhen, has worldwide responsibility for the manufacture
China. The principal distribution facilities outside and sale of security hardware products (except for
of the United States, other than those located at the sale of security hardware in Mexico, Central
the manufacturing facilities listed above, con- America, the Caribbean, and South America). It also
sist of a central-European distribution center in has responsibility for the manufacture of plumbing
Tongeren, Belgium, and facilities in Aarschot, products and for the sale of plumbing products to
Belgium; Northampton, England; Dubai, United customers in the United States and Canada. Security
Arab Emirates; and Brockville, Canada. hardware products consist of residential and light
commercial door locksets, electronic keyless entry
For additional information with respect to these and
systems, exit devices, keying systems, tubular and
other properties owned or leased by the Corporation,
mortise door locksets, general hardware, decorative
see Item 2, “Properties.”
hardware, lamps, and brass ornaments. General
The Corporation holds various patents and licenses hardware includes door hinges, cabinet hinges, door
on many of its products and processes in the Power stops, kick plates, and house numbers. Decorative
Tools and Accessories segment. Although these hardware includes cabinet hardware, switchplates,
patents and licenses are important, the Corpora- door pulls, and push plates. Plumbing products
tion is not materially dependent on such patents consist of a variety of conventional and decorative
or licenses with respect to its operations. lavatory, kitchen, and tub and shower faucets, bath
and kitchen accessories, and replacement parts.
3
BLACK & DECKER

5. Security hardware products are marketed under a sold outside of the United States for residential use
variety of trademarks and trade names, including, generally have similar warranty arrangements.
without limitation, KWIKSET SECURITY; Such arrangements vary, however, depending upon
KWIKSET MAXIMUM SECURITY; KWIKSET local market conditions and laws and regulations.
ULTRAMAX; SIGNATURES; KWIKSET; BEAUTY Most of the Corporation’s plumbing products sold
OF STRENGTH; BLACK & DECKER; TYLO; in the United States carry a lifetime warranty with
POLO; AVALON; ASHFIELD; ARLINGTON; respect to function and finish, pursuant to which the
SMARTSCAN; SMARTKEY; SMARTCODE; consumer can return defective product in exchange
POWERBOLT; ABBEY; AMHERST; KWIK for a replacement product or repair at no cost to
INSTALL; GEO; SAFELOCK BY BLACK & the consumer.
DECKER; BALDWIN; THE ESTATE COL-
The Corporation’s product offerings in the Hard-
L E C T I O N ; THE IMAGES COLLECTION;
ware and Home Improvement segment are sold
ARCHETYPES; BEDFORD; BEL AIR;
primarily to retailers, wholesalers, distributors,
BROOKLANE; COMMONWEALTH; SONO-
and jobbers. Certain security hardware products
MA; WELLINGTON; CHELSEA; SHERI-
are sold to commercial, institutional, and industrial
DAN; DELTA; CIRCA; LAUREL; HANCOCK;
customers. Sales to two of the segment’s customers,
H AW T H O R N E ; G I B S O N ; FA R M I N G T O N ;
The Home Depot and Lowe’s Home Improvement
CAMERON; LIFETIME FINISH; TIMELESS
Warehouse, accounted for greater than 10% of the
CRAFTSMANSHIP; ROMAN; REGAL; COPA;
Corporation’s consolidated sales for 2007, 2006, and
CORTEZ; DAKOTA; DORIAN; SHELBURNE;
2005. For additional information regarding sales to
L O G A N ; S P R I N G F I E L D ; H A M I LT O N ;
The Home Depot and Lowe’s Home Improvement
BLAKELY; MANCHESTER; CANTERBURY;
Warehouse, see Note 16 of Notes to Consolidated
M A D I S O N ; S T O N E G AT E ; E D I N B U R G H ;
Financial Statements included in Item 8 of Part II
K E N S I N G T O N ; B R I S T O L ; T R E M O N T;
of this report.
PEYTON; PASADENA; RICHLAND; WEISER;
WEISER LOCK; COLLECTIONS BY WEISER The principal materials used in the manufactur-
LOCK; WELCOME HOME SERIES; ELE- ing of products in the Hardware and Home Im-
MENTS SERIES; BASICS BY WEISER LOCK; provement segment are zamak, brass, zinc, steel,
BRILLIANCE LIFETIME ANTI- TARNISH copper, and ceramics. The materials used in the
F I N I S H ; P O W E R B O LT ; P O W E R B O LT various manufacturing processes are purchased
KEYLESS ACCESS SYSTEM; WEISERBOLT; on the open market, and the majority are available
and ENTRYSETS. Plumbing products are marketed through multiple sources and are in adequate sup-
under a variety of trademarks and trade names, ply. The Corporation has experienced no significant
including, without limitation, PRICE PFISTER; work stoppages to date as a result of shortages of
CLASSIC SERIES BY PRICE PFISTER; PRICE materials.
PFISTER PROFESSIONAL SERIES; AMHERST;
The Corporation has certain long-term commit-
AVALON; ASHFIELD; PASADENA; BACH; SOLO
ments for the purchase of various finished goods,
BEDFORD; CARMEL; CATALINA; CONTEMPRA;
component parts, and raw materials and believes
GEORGETOWN; HANOVER; KENZO; MARI-
that it is unlikely that any of these agreements
ELLE; PARISA; PORTLAND; SAVANNAH; SEDO-
would be terminated prematurely. Alternate sources
NA; TREVISO; SOLO; SOLO MINUET; MODERN
of supply at competitive prices are available for
COLLECTION and ASHFIELD VIRTUE.
most items for which long-term commitments ex-
The composition of the Corporation’s sales by ist. Because the Corporation is a leading producer
product groups for 2007, 2006, and 2005 is included of residential security hardware and faucets, in a
in Note 16 of Notes to Consolidated Financial limited number of instances, the magnitude of the
Statements included in Item 8 of Part II of this Corporation’s purchases of certain items is of such
report. Within each product group shown, there
significance that a change in the Corporation’s
existed no individual product that accounted for
established supply relationship may cause disrup-
greater than 10% of the Corporation’s consolidated
tion in the marketplace and/or a temporary price
sales for 2007, 2006, or 2005.
imbalance. While the Corporation believes that the
termination of any of these commitments would
Most of the Corporation’s security hardware
not have a material adverse effect on the operating
products sold in the United States carry a war-
results of the Hardware and Home Improvement
ranty, pursuant to which the consumer can return
segment over the long term, the termination of a
defective product during the warranty term in
limited number of these commitments would have
exchange for a replacement product at no cost to
the consumer. Warranty terms vary by product an adverse effect over the short term. In this regard,
and carry a lifetime warranty with respect to the Corporation defines long term as a period of
mechanical operations and range from a 5-year to time in excess of 12 months and short term as a
a lifetime warranty with respect to finish. Products period of time under 12 months.
4 BLACK & DECKER

6. From time to time, the Corporation enters into Competition from certain of these manufacturers
commodity hedges on certain raw materials used has been intense in recent years and is expected
in the manufacturing process to reduce the risk of to continue.
market price fluctuations. As of December 31, 2007,
FASTENING AND ASSEMBLY SYSTEMS
the amount of commodity hedges outstanding was
not material. The Corporation’s Fastening and Assembly Systems
segment has worldwide responsibility for the develop-
Principal manufacturing and assembly facilities of
ment, manufacture and sale of an extensive line of
the Hardware and Home Improvement segment in
metal and plastic fasteners and engineered fastening
the United States are located in Denison, Texas;
systems for commercial applications, including blind
and Reading, Pennsylvania.
riveting, stud welding, specialty screws, prevailing
Principal manufacturing and assembly facilities torque nuts and assemblies, insert systems, metal
of the Hardware and Home Improvement segment and plastic fasteners, and self-piercing riveting
outside of the United States are located in Mexi- systems. The Fastening and Assembly Systems
cali and Nogales, Mexico; and Xiamen, China. The segment focuses on engineering solutions for end
principal distribution facilities in the United States, users’ fastening requirements. The fastening and
other than those located at the manufacturing and assembly systems products are marketed under a
assembly facilities listed above, are located in Mira variety of trademarks and trade names, including,
Loma, California; and Charlotte, North Carolina. without limitation, EMHART TEKNOLOGIES;
E M H A R T FA S T E N I N G T E K N O L O G I E S ;
For additional information with respect to these and
EMHART; AUTOSET; DODGE; DRIL-KWICK;
other properties owned or leased by the Corporation,
F-SERIES; GRIPCO; GRIPCO ASSEMBLIES;
see Item 2, “Properties.”
HELI-COIL; JACK NUT; KALEI; MASTERFIX;
The Corporation holds various patents and licenses NPR; NUT-FAST; PARKER-KALON; PLASTI-
on many of its products and processes in the Hard- FAST; PLASTI-KWICK; POINT & SET; PRIMER
ware and Home Improvement segment. Although FREE; POP; POP-LOK; POPMATIC; POPNUT;
these patents and licenses are important, the Corpo- POPSET; POP-SERT; POWERLINK; PROSET;
ration is not materially dependent on such patents SMARTSET; SWS; TUCKER; ULTRA-GRIP;
or licenses with respect to its operations. ULTRASERT; WARREN; WELDFAST; and
WELL-NUT.
The Corporation holds various trademarks that
are employed in its businesses and operates under The composition of the Corporation’s sales by
various trade names, some of which are stated above. product groups for 2007, 2006, and 2005 is included
The Corporation believes that these trademarks and in Note 16 of Notes to Consolidated Financial
trade names are important to the marketing and Statements included in Item 8 of Part II of this
distribution of its products. report. Within each product group shown, there
existed no individual product that accounted for
A significant portion of the Corporation’s sales in
greater than 10% of the Corporation’s consolidated
the Hardware and Home Improvement segment is
sales for 2007, 2006, or 2005.
derived from the do-it-yourself and home modern-
ization markets, which generally are not seasonal The principal markets for these products include
in nature, but are influenced by trends in the resi- the automotive, transportation, electronics, aero-
dential and commercial construction markets and space, machine tool, and appliance industries.
other general economic trends. Substantial sales are made to automotive manu-
facturers worldwide.
The Corporation is one of the world’s leading
producers of residential security hardware and Products are marketed directly to customers and
is one of the leading producers of faucets in also through distributors and representatives.
North America. Worldwide, the markets in which These products face competition from many manu-
the Corporation sells these products are highly facturers in several countries. Product quality,
competitive on the basis of price, quality, and performance, reliability, price, delivery, and tech-
after-sale service. A number of competing nical and application engineering services are the
domestic and foreign companies are strong, well- primary competitive factors. There is little seasonal
established manufacturers that compete on a variation in sales.
global basis. Some of these companies manufacture
The Corporation owns a number of United States
products that are competitive with a number of the
and foreign patents, trademarks, and license
Corporation’s product lines. Other competitors re-
rights relating to the fastening and assembly
strict their operations to fewer categories, and some
systems business. While the Corporation considers
offer only a narrow range of competitive products.
5
BLACK & DECKER

7. those patents, trademarks, and license rights to As of December 31, 2007, the Corporation employed
be valuable, it is not materially dependent upon approximately 25,000 persons in its operations
such patents or license rights with respect to worldwide. Approximately 375 employees in the
its operations. United States are covered by collective bargaining
agreements. During 2007, one collective bargaining
Principal manufacturing facilities of the Fastening
agreement in the United States was negotiated
and Assembly Systems segment in the United
without material disruption to operations. One
States are located in Danbury, Connecticut; Mont-
agreement is scheduled for negotiation during 2008.
pelier, Indiana; Campbellsville and Hopkinsville,
Also, the Corporation has government-mandated
Kentucky; and Chesterfield, Michigan. Principal
collective bargaining arrangements or union
manufacturing and assembly facilities outside of the
contracts with employees in other countries. The
United States are located in Birmingham, England;
Corporation’s operations have not been affected
Giessen, Germany; and Toyohashi, Japan. For ad-
significantly by work stoppages and, in the opinion
ditional information with respect to these and other
of management, employee relations are good. As
properties owned or leased by the Corporation, see
more fully described under the caption “Restruc-
Item 2, “Properties.”
turing and Integration Actions” in Management’s
Discussion and Analysis of Financial Condition and
The raw materials used in the fastening and
Results of Operations, the Corporation is commit-
assembly systems business consist primarily
ted to continuous productivity improvement and
of ferrous and nonferrous metals in the form of
continues to evaluate opportunities to reduce fixed
wire, bar stock, and strip and sheet metals; and
costs, simplify or improve processes, and eliminate
plastics. These materials are readily available from
excess capacity. As a consequence, the Corporation
a number of suppliers.
may, from time to time, transfer production from
OTHER INFORMATION one manufacturing facility to another, outsource
certain production, or close certain manufacturing
The Corporation’s product development program
facilities. Such production transfers, outsourcing,
for the Power Tools and Accessories segment is
and/or facility closures may result in a deterioration
coordinated from the Corporation’s headquarters
of employee relations at the impacted locations or
in Towson, Maryland. Additionally, product
elsewhere in the Corporation.
development activities are performed at facili-
ties within the United States in Fort Lauderdale, The Corporation’s operations are subject to foreign,
Florida; Hampstead, Maryland; and Jackson, federal, state, and local environmental laws and
Tennessee; and at facilities in Spennymoor, England; regulations. Many foreign, federal, state, and local
Brockville, Canada; Perugia, Italy; Suzhou, China; governments also have enacted laws and regula-
Buchlberg and Idstein, Germany; Mooroolbark, tions that govern the labeling and packaging of
Australia; Uberaba, Brazil; and Reynosa, Mexico. products and limit the sale of products containing
certain materials deemed to be environmentally
Product development activities for the Hardware
sensitive. These laws and regulations not only limit
and Home Improvement segment are performed at
the acceptable methods for the discharge of pollut-
facilities within the United States in Lake Forest,
ants and the disposal of products and components
California, and Reading, Pennsylvania; and at a
that contain certain substances, but also require
facility in Xiamen, China.
that products be designed in a manner to permit
Product development activities for the Fastening easy recycling or proper disposal of environmen-
and Assembly Systems segment are performed tally sensitive components such as nickel cadmium
at facilities within the United States in Danbury batteries. The Corporation seeks to comply fully
and Shelton, Connecticut; Montpelier, Indiana; with these laws and regulations. Although compli-
Campbellsville, Kentucky; Chesterfield and ance involves continuing costs, the ongoing costs of
Farmington Hills, Michigan; and at facilities in compliance with existing environmental laws and
Birmingham, England; Maastricht, Netherlands; regulations have not had, nor are they expected to
Giessen, Germany; and Toyohashi, Japan. have, a material adverse effect upon the Corpora-
tion’s capital expenditures or financial position.
Costs associated with development of new prod-
ucts and changes to existing products are charged Pursuant to authority granted under the Compre-
to operations as incurred. See Note 1 of Notes to hensive Environmental Response, Compensation
Consolidated Financial Statements included in Item and Liability Act of 1980 (CERCLA), the United
8 of Part II of this report for amounts of expendi- States Environmental Protection Agency (EPA)
tures for product development activities. has issued a National Priority List (NPL) of sites
at which action is to be taken to mitigate the risk
6 BLACK & DECKER

8. of release of hazardous substances into the envi- any particular fiscal quarter or year, in the opinion
ronment. The Corporation is engaged in continuing of management there exists no known potential
activities with regard to various sites on the NPL exposures that would have a material adverse ef-
and other sites covered under analogous state fect on the financial condition or on the financial
environmental laws. As of December 31, 2007, results of the Corporation beyond any such fiscal
the Corporation had been identified as a poten- quarter or year.
tially responsible party (PRP) in connection with
approximately 25 sites being investigated by federal (d) Financial Information
or state agencies under CERCLA or analogous state
About Geographic Areas
environmental laws. The Corporation also is en-
Reference is made to Note 16 of Notes to Consolidated
gaged in site investigations and remedial activities
Financial Statements, entitled “Business Segments
to address environmental contamination from past
and Geographic Information”, included in Item 8 of
operations at current and former manufacturing
Part II of this report.
facilities in the United States and abroad.
To minimize the Corporation’s potential liability
(e) Available Information
with respect to these sites, management has under-
The Corporation files annual, quarterly, and current
taken, when appropriate, active participation in
reports, proxy statements, and other documents
steering committees established at the sites and has
with the Securities and Exchange Commission
agreed to remediation through consent orders with
(SEC) under the Securities Exchange Act of 1934
the appropriate government agencies. Due to uncer-
(the Exchange Act). The public may read and copy
tainty as to the Corporation’s involvement in some
any materials that the Corporation files with
of the sites, uncertainty over the remedial measures
the SEC at the SEC’s Public Reference Room at
to be adopted, and the fact that imposition of joint
100 F Street, NE, Washington, DC 20549. The
and several liability with the right of contribution is
public may obtain information on the operation
possible under CERCLA and other laws and regula-
of the Public Reference Room by calling the SEC
tions, the liability of the Corporation with respect to
at 1-800-SEC-0330. Also, the SEC maintains an
any site at which remedial measures have not been
Internet website that contains reports, proxy and
completed cannot be established with certainty.
information statements, and other information
On the basis of periodic reviews conducted with
regarding issuers, including the Corporation, that
respect to these sites, however, the Corporation has
file electronically with the SEC. The public can
established appropriate liability accruals. The Cor-
obtain any documents that the Corporation files
poration’s estimate of the costs associated with envi-
with the SEC at http://www.sec.gov.
ronmental exposures is accrued if, in management’s
judgment, the likelihood of a loss is probable and the The Corporation also makes available free of charge on
amount of the loss can be reasonably estimated. As or through its Internet website (http://www.bdk.com)
of December 31, 2007, the Corporation’s aggregate the Corporation’s Annual Report on Form 10-K,
probable exposure with respect to environmental Quarterly Reports on Form 10-Q, Current Reports
liabilities, for which accruals have been established on Form 8-K, and, if applicable, amendments to
in the consolidated financial statements, was $107.3 those reports filed or furnished pursuant to Section
million. In the opinion of management, the amount 13(a) of the Exchange Act as soon as reasonably
accrued for probable exposure for aggregate envi- practicable after the Corporation electronically files
ronmental liabilities is adequate and, accordingly, such material with, or furnishes it to, the SEC.
the ultimate resolution of these matters is not
Black & Decker’s Corporate Governance Poli-
expected to have a material adverse effect on the
cies and Procedures Statement is available free
Corporation’s consolidated financial statements.
of charge on or through its Internet website
As of December 31, 2007, the Corporation had no
(http://www.bdk.com) or in print by calling (800)
known probable but inestimable exposures relating
992-3042 or (410) 716-2914. The Statement contains
to environmental matters that are expected to have
charters of the standing committees of the Board
a material adverse effect on the Corporation. There
of Directors, the Code of Ethics and Standards of
can be no assurance, however, that unanticipated
Conduct, and the Code of Ethics for Senior Finan-
events will not require the Corporation to increase
cial Officers.
the amount it has accrued for any environmental
matter or accrue for an environmental matter that In May 2007, the Corporation submitted to the
has not been previously accrued because it was not New York Stock Exchange the CEO certification
considered probable. While it is possible that the required by Section 303A.12(a) of the New York
increase or establishment of an accrual could have Stock Exchange Listed Company Manual.
a material adverse effect on the financial results for
7
BLACK & DECKER

9. (f) Executive Officers and • charles e. FeNtoN – 59
Senior Vice President and General Counsel,
Other Senior Officers
December 1996 – present.
of the Corporation
The current Executive Officers and Other Senior
• les h. irelaND – 43
Officers of the Corporation, their ages, current offices
Vice President of the Corporation and
or positions, and their business experience during
President – Europe/Middle East/Africa,
the past five years are set forth below.
Power Tools and Accessories,
January 2005 – present;
• NolaN D. archibalD – 64
Vice President of the Corporation and
Chairman, President, and
Managing Director – Commercial Operations,
Chief Executive Officer,
Europe, Black & Decker Consumer Group,
January 1990 – present.
Power Tools and Accessories Group,
November 2001 – January 2005.
• bruce w. brooks – 43
Group Vice President of the Corporation and
• michael D. maNgaN – 51
President – Consumer Products Group,
Senior Vice President and Chief Financial Officer,
Power Tools and Accessories,
January 2000 – present.
March 2007 – present;
Vice President of the Corporation and President – • Paul F. mcbriDe – 52
Construction Tools, Industrial Products Group, Senior Vice President – Human Resources
Power Tools and Accessories, and Corporate Initiatives,
May 2005 – March 2007; March 2004 – present;
Executive Vice President of the Corporation
Vice President and General Manager –
and President – Power Tools and
Construction Tools, Industrial Products Group,
Accessories Group,
Power Tools and Accessories,
April 1999 – March 2004.
October 2004 – May 2005;
Vice President Marketing – DeWALT Professional
• christiNa m. mcmulleN – 52
Products, Power Tools and Accessories Group,
Vice President and Controller,
July 2003 – October 2004;
April 2000 – present.
Vice President Marketing –
Black & Decker Consumer Products, • james r. raskiN – 47
Power Tools and Accessories Group, Vice President of the Corporation and
July 2000 – July 2003. Vice President – Business Development,
July 2006 – present;
• james t. cauDill – 40 Vice President – Business Development,
Group Vice President of the Corporation and May 2002 – July 2006.
President – Hardware and Home Improvement,
July 2006 – present; • stePheN F. reeves – 48
Vice President of the Corporation and
Vice President of the Corporation and President –
Vice President – Global Finance,
Hardware and Home Improvement,
Power Tools and Accessories,
May 2005 – July 2006;
March 2004 – present;
Vice President and General Manager –
Vice President of the Corporation and
Accessories, Industrial Products Group,
Vice President – Finance, Power Tools
Power Tools and Accessories Group,
and Accessories Group,
October 2004 – May 2005;
April 2000 – March 2004.
Vice President – Accessories,
DeWALT Professional Products, • mark m. rothleitNer – 49
Power Tools and Accessories Group, Vice President – Investor Relations and Treasurer,
November 2001 – October 2004. January 2000 – present.
8 BLACK & DECKER

10. • robert i. rowaN – 47 • beN s. sihota – 49
Vice President of the Corporation and President – Vice President of the Corporation and President –
Construction & Woodworking, Industrial Asia Pacific, Power Tools and Accessories,
Products Group, Power Tools and Accessories, February 2006 – present;
January 2008 – present; President – Asia, Power Tools and Accessories,
Vice President of the Corporation and President – September 2000 – February 2006.
Construction, Industrial Product Group,
Power Tools and Accessories, • michael a. tyll – 51
March 2007 – January 2008; Group Vice President of the Corporation and
President – Fastening and Assembly Systems,
Vice President of the Corporation and President –
April 2006 – present;
Power Tools and Accessories, Consumer
Products Group, Power Tools and Accessories, President – Automotive Division,
February 2006 – March 2007; Fastening and Assembly Systems,
January 2001 – April 2006.
Vice President and General Manager,
Consumer Power Tools and Accessories,
Power Tools and Accessories,
(g) Forward-Looking Statements
July 2003 – February 2006;
The Private Securities Litigation Reform Act of 1995
Vice President – Outdoor Products,
(the Reform Act) provides a safe harbor for forward-
Consumer Products Group, Power Tools
looking statements made by or on behalf of the
and Accessories Group,
Corporation. The Corporation and its representatives
September 2001 – July 2003.
may, from time to time, make written or verbal
forward-looking statements, including statements
• eDwarD j. scaNloN – 53
contained in the Corporation’s filings with the
Vice President of the Corporation and
Securities and Exchange Commission and in its
President – Commercial Operations –
reports to stockholders. Generally, the inclusion of
North America, Power Tools and Accessories,
the words “believe,” “expect,” “intend,” “estimate,”
January 2008 – present;
“anticipate,” “will,” and similar expressions iden-
Vice President of the Corporation and tify statements that constitute “forward-looking
President – Commercial Operations, North and statements” within the meaning of Section 27A
South America, Power Tools and Accessories, of the Securities Act of 1933 and Section 21E of
March 2004 – January 2008; the Securities Exchange Act of 1934 and that are
intended to come within the safe harbor protection
Vice President of the Corporation and
provided by those sections. All statements addressing
President – Commercial Operations,
operating performance, events, or developments that
North America, Power Tools and
the Corporation expects or anticipates will occur in
Accessories Group,
the future, including statements relating to sales
May 1999 – March 2004.
growth, earnings or earnings per share growth,
and market share, as well as statements express-
• johN w. schiech – 49
ing optimism or pessimism about future operating
Group Vice President of the Corporation
results, are forward-looking statements within the
and President – Industrial Products Group,
meaning of the Reform Act. The forward-looking
Power Tools and Accessories,
statements are and will be based upon management’s
March 2004 – present;
then-current views and assumptions regarding
Vice President of the Corporation and President – future events and operating performance, and are
DeWALT Professional Products, Power Tools applicable only as of the dates of such statements.
and Accessories Group, The Corporation undertakes no obligation to update
January 2001 – March 2004. or revise any forward-looking statements, whether
as a result of new information, future events, or
• Natalie a. shielDs – 51 otherwise.
Vice President and Corporate Secretary,
By their nature, all forward-looking statements
April 2006 – present;
involve risks and uncertainties, including without
International Tax and Trade Counsel, limitations the risks described under the caption
June 1993 – April 2006. “Risk Factors” that could materially harm the
Corporation’s business, financial condition, and
results of operations. You are cautioned not to place
undue reliance on the Corporation’s forward-looking
statements.
9
BLACK & DECKER

11. ITEM 1A. RISK FACTORS inefficiencies or our inability to market products.
An increase in value-added taxes by various foreign
Many of the factors that affect our business and jurisdictions, or a reduction in value-added tax re-
operations involve risk and uncertainty. The factors bates currently available to us or to our suppliers,
described below are some of the risks that could could also increase the costs of our manufactured
materially harm our business, financial condition, products as well as purchased products and com-
and results of operations. ponents and could adversely affect our results of
operations. In addition, our profit margins would
• Our business depends on the strength of the
decrease if prices of purchased raw materials,
economies in various parts of the world, particularly
component parts, or finished goods increase and
in the United States and Europe. We conduct busi-
we are unable to pass on those increases to our
ness in various parts of the world, primarily in the
customers.
United States and Europe and, to a lesser extent,
in Mexico, Central America, the Caribbean, South • We face significant global competition. The
America, Canada, Asia and Australia. As a result markets in which we sell products are highly com-
of this worldwide exposure, our net revenue and petitive on the basis of price, quality, and after-sale
profitability could be harmed as a result of economic service. A number of competing domestic and foreign
conditions in our major markets, including, but not companies are strong, well-established manufactur-
limited to, recession, inflation and deflation, general ers that compete globally with us. Some of our major
weakness in retail, automotive and construction customers sell their own “private label” brands
markets, and changes in consumer purchasing that compete directly with our products. Price re-
power. ductions taken by us in response to customer and
competitive pressures, as well as price reductions
• Changes in customer preferences, the inability to
and promotional actions taken to drive demand that
maintain mutually beneficial relationships with large
may not result in anticipated sales levels, could
customers, and the inability to penetrate new channels
also negatively impact our business. Competition
of distribution could adversely affect our business.
has been intense in recent years and is expected to
We have a number of major customers, including
continue. If we are unable to maintain a competi-
two large customers that, in the aggregate, consti-
tive advantage, loss of market share, revenue, or
tuted approximately 33% of our consolidated sales
profitability may result.
in 2007. The loss of either of these large customers,
a material negative change in our relationship with • Low demand for new products and the inability
these large customers or other major customers, or to develop and introduce new products at favorable
changes in consumer preferences or loyalties could margins could adversely impact our performance
have an adverse effect on our business. Our major and prospects for future growth. Our competitive
customers are volume purchasers, a few of which advantage is due in part to our ability to develop
are much larger than us and have strong bargain- and introduce new products in a timely manner at
ing power with suppliers. This limits our ability to favorable margins. The uncertainties associated
recover cost increases through higher selling prices. with developing and introducing new products, such
Changes in purchasing patterns by major customers as market demand and costs of development and
could negatively impact manufacturing volumes and production, may impede the successful development
inventory levels. Further, our inability to continue and introduction of new products on a consistent
to penetrate new channels of distribution may have basis. Introduction of new technology may result
a negative impact on our future results. in higher costs to us than that of the technology
replaced. That increase in costs, which may con-
• The inability to obtain raw materials, component
tinue indefinitely or until and if increased demand
parts, and/or finished goods in a timely and cost-
and greater availability in the sources of the new
effective manner from suppliers would adversely affect
technology drive down its cost, could adversely affect
our ability to manufacture and market our products.
our results of operations. Market acceptance of the
We purchase raw materials and component parts
new products introduced in 2007 and scheduled for
from suppliers to be used in the manufacturing of
introduction in 2008 may not meet sales expecta-
our products. In addition, we purchase certain fin-
tions due to various factors, such as our failure to
ished goods from suppliers. In a limited number of
accurately predict market demand and evolving
circumstances, the magnitude of our purchases of
industry standards, to resolve technical challenges
certain items is of such significance that a change
in a timely and cost-effective manner, and to achieve
in our established supply relationships may cause
manufacturing efficiencies. Our investments in
disruption in the marketplace, a temporary price
productive capacity and commitments to fund
imbalance, or both. Changes in our relationships
advertising and product promotions in connection
with suppliers or increases in the costs of purchased
with these new products could be excessive if those
raw materials, component parts or finished goods
expectations are not met.
could result in manufacturing interruptions, delays,
10 BLACK & DECKER

12. • Price increases could impact the demand for our • Failures of our infrastructure could have a mate-
products from customers and end-users. We may rial adverse effect on our business. We are heavily
periodically increase the prices of our products. An dependent on our infrastructure. Significant prob-
adverse reaction by our customers or end-users to lems with our infrastructure, such as manufactur-
price increases could negatively impact our antici- ing failures, telephone or information technology
pated sales, profitability, manufacturing volumes, (IT) system failure, computer viruses or other
and/or inventory levels. third-party tampering with IT systems, could halt
or delay manufacturing and hinder our ability to
• The inability to generate sufficient cash flows to
ship in a timely manner or otherwise routinely
support operations and other activities could prevent
conduct business. Any of these events could result
future growth and success. Our inability to generate
in the loss of customers, a decrease in revenue, or
sufficient cash flows to support capital expansion,
the incurrence of significant costs to eliminate the
business acquisition plans, share repurchases and
problem or failure.
general operating activities could negatively affect
our operations and prevent our expansion into exist- • Our products could be subject to product liability
ing and new markets. Our ability to generate cash claims and litigation. We manufacture products
flows is dependent in part upon obtaining necessary that create exposure to product liability claims and
financing at favorable interest rates. Interest rate litigation. If our products are not properly manu-
fluctuations and other capital market conditions factured or designed, personal injuries or property
may prevent us from doing so. damage could result, which could subject us to claims
for damages. The costs associated with defending
• Our success depends on our ability to improve
product liability claims and payment of damages
productivity and streamline operations to control
could be substantial. Our reputation could also be
or reduce costs. We are committed to continuous
adversely affected by such claims, whether or not
productivity improvement and continue to evalu-
successful.
ate opportunities to reduce fixed costs, simplify or
improve processes, and eliminate excess capacity. We • Our products could be recalled. The Consumer
have also undertaken restructuring and integration
Product Safety Commission or other applicable
actions as described in Note 18 of Notes to Consoli-
regulatory bodies may require the recall, repair
dated Financial Statements and in “Management’s
or replacement of our products if those products
Discussion and Analysis of Financial Condition and
are found not to be in compliance with applicable
Results of Operations”. The ultimate savings real-
standards or regulations. A recall could increase
ized from restructuring and integration actions may
costs and adversely impact our reputation.
be mitigated by many factors, including economic
• We may have additional tax liabilities. We are
weakness, competitive pressures, and decisions to
increase costs in areas such as promotion or research subject to income taxes in the United States and
and development above levels that were otherwise numerous foreign jurisdictions. Significant judg-
assumed. Our failure to achieve projected levels ment is required in determining our worldwide
of efficiencies and cost reduction measures and provision for income taxes. In the ordinary course
to avoid delays in or unanticipated inefficiencies of our business, there are many transactions and
resulting from manufacturing and administrative calculations where the ultimate tax determination
reorganization actions in progress or contemplated is uncertain. We are regularly under audit by tax
would adversely affect our results of operations. authorities. Although we believe our tax estimates
are reasonable, the final outcome of tax audits and
• The inability to identify new acquisition oppor-
any related litigation could be materially different
tunities or to successfully integrate the operations
than that which is reflected in historical income tax
of acquired businesses could negatively impact our
provisions and accruals. Based on the status of a
prospect for future growth and profitability. We expend
given tax audit or related litigation, a material ef-
significant resources on identifying opportunities
fect on our income tax provision or net income may
to acquire new lines of business and companies
result in the period or periods from initial recogni-
that could contribute to our success and expan-
tion in our reported financial results to the final
sion into existing and new markets. Our inability
closure of that tax audit or settlement of related
to successfully identify acquisition opportunities,
litigation when the ultimate tax and related cash
integrate the operations of acquired businesses, or
flow is known with certainty.
realize the anticipated cost savings, synergies and
other benefits related to the acquisition of those • We are subject to current environmental and
businesses could have a material adverse effect on other laws and regulations. We are subject to en-
our business, financial condition and future growth. vironmental laws in each jurisdiction in which we
Acquisitions may also have a material adverse ef- conduct business. Some of our products incorporate
fect on our operating results due to large write-offs, substances that are regulated in some jurisdictions
contingent liabilities, substantial depreciation, or in which we conduct manufacturing operations. We
other adverse tax or audit consequences.
11
BLACK & DECKER

13. could be subject to liability if we do not comply with in the manufacturing of our products that include
these regulations. In addition, we are currently and certain components and raw materials that are
may, in the future, be held responsible for remedial subject to commodity price volatility. We believe
investigations and clean-up costs resulting from our most significant commodity-related exposures
the discharge of hazardous substances into the are to nickel, steel, resins, copper, aluminum, and
environment, including sites that have never been zinc. An increase in the market prices of these items
owned or operated by us but at which we have could adversely affect our results of operations. We
been identified as a potentially responsible party have outstanding variable-rate and fixed-rate bor-
under federal and state environmental laws and rowings. To meet our cash requirements, we may
regulations. Changes in environmental and other incur additional borrowings in the future under our
laws and regulations in both domestic and foreign existing or future borrowing facilities. An increase
jurisdictions could adversely affect our operations in interest rates could adversely affect our results
due to increased costs of compliance and potential of operations.
liability for non-compliance. • We operate a global business that exposes
us to additional risks. Our sales outside of the
• If our goodwill or indefinite-lived intangible assets
United States accounted for approximately 40% of
become impaired, we may be required to record a
significant charge to earnings. Under United States our consolidated net revenue in 2007. We continue
generally accepted accounting principles, good- to expand into foreign markets. The future growth
will and indefinite-lived intangible assets are not and profitability of our foreign operations are sub-
amortized but are reviewed for impairment on an ject to a variety of risks and uncertainties, such as
annual basis or more frequently whenever events tariffs, nationalization, exchange controls, interest
or changes in circumstances indicate that their rate fluctuations, civil unrest, governmental changes,
carrying value may not be recoverable. We may be limitations on foreign investment in local business
required to record a significant charge to earnings and other political, economic and regulatory risks
in our financial statements during the period in inherent in conducting business internationally. Over
which any impairment of our goodwill or indefinite- the past several years, such factors have become
lived intangible assets is determined, resulting in increasingly important as a result of our higher
an impact on our results of operations. percentage of manufacturing in China, Mexico and
the Czech Republic and purchases of products and
• Changes in accounting may affect our reported
components from foreign countries.
earnings. For many aspects of our business,
United States generally accepted accounting • Catastrophic events may disrupt our business.
principles, including pronouncements, implemen- Unforeseen events, including war, terrorism and
tation guidelines, and interpretations, are highly other international conflicts, public health issues, and
complex and require subjective judgments. Changes natural disasters such as earthquakes, hurricanes
in these accounting principles, including their or other adverse weather and climate conditions,
interpretation and application, could significantly whether occurring in the United States or abroad,
change our reported earnings, adding significant could disrupt our operations, disrupt the operations
volatility to our reported results without a compa- of our suppliers or customers, or result in political
rable underlying change in our cash flows. or economic instability. These events could reduce
demand for our products and make it difficult or
• We are exposed to adverse changes in currency
impossible for us to manufacture our products, de-
exchange rates, raw material commodity prices or
liver products to customers, or to receive products
interest rates, both in absolute terms and relative
from suppliers.
to competitors’ risk profiles. We have a number of
manufacturing sites throughout the world and sell The foregoing list is not exhaustive. There can be
our products in more than 100 countries. As a result, no assurance that we have correctly identified and
we are exposed to movements in the exchange rates appropriately assessed all factors affecting our busi-
of various currencies against the United States dollar ness or that the publicly available and other infor-
and against the currencies of countries in which we mation with respect to these matters is complete
have manufacturing facilities. We believe our most and correct. Additional risks and uncertainties not
significant foreign currency exposures are the euro, presently known to us or that we currently believe
pound sterling and Chinese renminbi. A decrease in to be immaterial also may adversely impact our
the value of the euro and pound sterling relative to business. Should any risks or uncertainties develop
the U.S. dollar could adversely affect our results of into actual events, these developments could have
operations. An increase in the value of the Chinese material adverse effects on our business, financial
renminbi relative to the U.S. dollar could adversely condition, and results of operations.
affect our results of operations. We utilize materials
12 BLACK & DECKER

14. ITEM 1B. UNRESOLvED disputes. Some of these lawsuits include claims for
punitive as well as compensatory damages.
STAFF COMMENTS
The Corporation, using current product sales data
Not applicable.
and historical trends, actuarially calculates the
ITEM 2. PROPERTIES estimate of its exposure for product liability. The
Corporation is insured for product liability claims
The Corporation operates 46 manufacturing facilities for amounts in excess of established deductibles
around the world, including 30 located outside of and accrues for the estimated liability as described
the United States in 10 foreign countries. The major above up to the limits of the deductibles. All other
properties associated with each business segment claims and lawsuits are handled on a case-by-case
are listed in “Narrative Description of the Business” basis. The Corporation’s estimate of costs associ-
in Item 1(c) of Part I of this report. ated with product liability claims, environmental
matters, and other legal proceedings is accrued if,
The following are the Corporation’s major leased
in management’s judgment, the likelihood of a loss
facilities:
is probable and the amount of the loss can be rea-
In the United States: Lake Forest, Mira Loma, sonably estimated. These accrued liabilities are
and Rialto, California; Charlotte, North Caro- not discounted.
lina; Tampa, Florida; Chesterfield, Michigan; and
As previously noted under Item 1(c) of Part I of this
Towson, Maryland.
report, the Corporation also is party to litigation and
Outside of the United States: Spennymoor, administrative proceedings with respect to claims
England; Tongeren and Aarschot, Belgium; involving the discharge of hazardous substances
Reynosa and Mexicali, Mexico; Brockville, Canada; into the environment. Some of these assert claims
for damages and liability for remedial investigations
Usti nad Labem, Czech Republic; and Xiamen and
and clean-up costs with respect to sites that have
Suzhou, China.
never been owned or operated by the Corporation
Additional property both owned and leased by but at which the Corporation has been identified
the Corporation in Towson, Maryland, is used for as a PRP. Others involve current and former manu-
administrative offices. Subsidiaries of the Corpora- facturing facilities.
tion lease certain locations primarily for smaller
The EPA and the Santa Ana Regional Water Quality
manufacturing and/or assembly operations, service
Control Board (the Water Quality Board) have each
operations, sales and administrative offices, and for
initiated administrative proceedings against the
warehousing and distribution centers. The Corpo-
Corporation and certain of the Corporation’s current
ration also owns a manufacturing plant located on
or former affiliates alleging that the Corporation
leased land in Suzhou, China.
and numerous other defendants are responsible
As more fully described in Item 7 of Part II of this to investigate and remediate alleged groundwa-
report under the caption “Restructuring and Inte- ter contamination in and adjacent to a 160-acre
gration Actions”, the Corporation is committed to property located in Rialto, California. The cities of
continuous productivity improvement and contin- Colton and Rialto, as well as the West Valley Water
ues to evaluate opportunities to reduce fixed costs, District and the Fontana Water Company, a private
simplify or improve processes, and eliminate excess company, also have initiated lawsuits against the
capacity. The Corporation will continue to evaluate Corporation and certain of the Corporation’s former
its worldwide manufacturing cost structure to iden- or current affiliates in the Federal District Court for
tify opportunities to improve capacity utilization California, Central District alleging similar claims
and lower product costs and will take appropriate that the Corporation is liable under CERCLA,
action as deemed necessary. the Resource Conservation and Recovery Act, and
state law for the discharge or release of hazardous
Management believes that its owned and leased
substances into the environment and the contami-
facilities are suitable and adequate to meet the
nation caused by those alleged releases. All defen-
Corporation’s anticipated needs.
dants have crossclaims against one another in the
federal litigation. The administrative proceedings
ITEM 3. LEGAL PROCEEDINGS and the lawsuits generally allege that West Coast
Loading Corporation (WCLC), a defunct company
The Corporation is involved in various lawsuits in the
that operated in Rialto between 1952 and 1957, and
ordinary course of business. These lawsuits primarily
an as yet undefined number of other defendants
involve claims for damages arising out of the use of
are responsible for the release of perchlorate and
the Corporation’s products and allegations of patent
solvents into the groundwater basin that supplies
and trademark infringement. The Corporation also
drinking water to the referenced three municipal
is involved in litigation and administrative proceed-
water suppliers and one private water company in
ings involving employment matters and commercial
13
BLACK & DECKER