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HEADLINES<br />
The Stanley Black & Decker Quarterly <strong>Newsletter</strong> l Quarter No. 1 2016<br />
Stanley Black & Decker Announces<br />
Hart Award Winners
STANLEY Names Build Your America Contest Winners / Pg. 7<br />
HEADLINES <strong>Q1</strong>, 2016<br />
1
The William Hart Award / Pg. 3<br />
Global Employee Survey Results / Pg. 4<br />
Updated Travel & Expense Policies / Pg. 5-6<br />
Fourth Quarter & Full Year 2015 Earnings Results / Pg. 7<br />
STANLEY Build Your America / Pg. 7-9<br />
The ECOSMART Office / Pg. 10<br />
An SFS 2.0 Update with Greg Waybright / Pg. 11-12<br />
Top eCentral Stories of 2015 / Pg. 13-14
Stanley Black & Decker<br />
Announces the Inaugural<br />
William Hart Award Winner!<br />
Congratulations to our first-ever winner of the<br />
William Hart Award for Community Involvement:<br />
Theresa Valentine, Director of Global Payroll<br />
Shared Services. Theresa has earned $25,000 for<br />
the charitable organization of her choice – the Sunrise<br />
Foundation for Women.<br />
Theresa is a tireless advocate for women who have<br />
been in abusive relationships. In 2014, Theresa started<br />
the Sunrise Foundation for Women, a non-profit<br />
organization that provides individual grants to women<br />
demonstrating that they have left, or are leaving<br />
an abusive relationship. In addition, Theresa’s book<br />
“Sunrise,” inspired by true events, donates all revenues<br />
back into the Foundation.<br />
“We believe there are many women who live in fear<br />
and embarrassment associated with being in a domestically<br />
abusive relationship without the courage,<br />
strength, emotional, and financial support to make<br />
a change,” says Theresa. “We want to help those<br />
women take the first step to live the life they deserve.”<br />
If you’d like to learn more about this organization,<br />
please visit www.sunrisefoundationforwomen.com.<br />
Theresa Valentine<br />
Director of Global Payroll<br />
Shared Services<br />
Congratulations to our runners-up:<br />
1. Ashok Shinde, EHS Lead, GEM, India<br />
Ashok has run the Aadhar Education Society for<br />
five years. This organization promotes the value<br />
of education through donation of scholarships,<br />
school uniforms, books, computers, and projectors<br />
to needy students. Ashok has organized<br />
multiple education and environmental outreach<br />
programs, serves as a volunteer auditor to a Human<br />
Rights Association, and is a founding member<br />
of the Swami Vivekananda Social Foundation.<br />
2. Peter Hilhorst, Commercial Service<br />
Employee, STANLEY Security, Netherlands<br />
For more than 30 years, Peter has been a volunteer<br />
for disaster recovery relief with the Red<br />
Cross. In his off time, he works more than 40<br />
hours per week to assist the refugee aid program.<br />
He provides these individuals with clothes,<br />
food, and shelter when they first arrive to Holland.<br />
He also volunteers regularly with the Salvation<br />
Army and food bank.<br />
3. Yingfa Chen, Commodity Program<br />
Manager, GTS, Towson, Maryland<br />
Yingfa has been a volunteer with Tzu Chi Foundation<br />
of Washington DC since 1999, and he<br />
now serves as the Regional Executive Director.<br />
The foundation supports six different charitable<br />
initiatives including disaster recovery, healthcare,<br />
and education efforts. For 12 years, he<br />
has served breakfast at homeless shelters every<br />
Saturday morning, visited nursing homes on a<br />
monthly basis, and has traveled to aid in three<br />
major disaster recovery efforts.<br />
Our nomination period will open again soon and we<br />
hope to learn more about the progress that our employees<br />
have made over the year. For more information,<br />
visit eCentral > Resources > Community.<br />
3
As you know, we conducted an employee survey in<br />
March of last year. After careful analysis of the data,<br />
we found that while our results were largely positive<br />
(90% of our responses were highly favorable<br />
or favorable) and our trends were stable (10/14<br />
categories either improved or remained constant),<br />
there is still plenty of room for improvement across<br />
the company.<br />
In that spirit, we have conducted employee focus<br />
groups in almost all of our locations. HR teams<br />
across the company are asking for your input and<br />
feedback as we get to the heart of both our opportunities<br />
and our best practices. We thank you<br />
for taking the time to provide your thorough,<br />
thoughtful and candid in responses.<br />
It is important to see the<br />
survey as a starting point,<br />
and not an end result in itself.<br />
We have developed and are implementing action<br />
plans in every business and location. Our goal is to<br />
focus on key areas that we’ve identified for improvement<br />
in each specific business.<br />
It is important to see the survey as a starting point,<br />
and not an end result in itself. The true significance<br />
of this survey will be in the action items and follow<br />
up plans that we as an organization put into place<br />
to ensure that we are improving upon the baseline<br />
outlined in this year’s results.<br />
TOTAL RESULTS BY CATEGORY<br />
4
In 2015, we had a lot of success in reducing our T&E<br />
spend.<br />
However, there’s room to improve and your diligence<br />
with respect to T&E expenses is required as our challenging<br />
operating environment with continued FX<br />
pressures and volatility persists.<br />
All policies and procedures put into place last year<br />
remain in effect for 2016.<br />
Travel Freeze<br />
We have implemented a non-customer-related<br />
travel ban, and we are asking that employees avoid<br />
non-critical travel through use of alternatives such<br />
as TelePresence and Live or Lync Meetings.<br />
Approval Process<br />
In accordance with the travel freeze, all travel<br />
requires the approval from the following approvers<br />
based on the organization requesting:<br />
• Global IT - Rhonda Gass<br />
• Global Supply Management - Mike Prado<br />
• GTS - Lee McChesney<br />
• Global Audit & Compliance - Joseph Radziewicz<br />
• All Other - Don Allan or Joe Voelker<br />
Per Diem Policy<br />
Our per diem reimbursement policy has been<br />
changed to actual and reasonable expenses not to<br />
exceed $55 / €55 per day, per person (from $75);<br />
this pertains to all three meals, including alcohol.<br />
Itemized receipts are required for reimbursement<br />
of meals over $25 and in accordance with the policy.<br />
Global Shared Services Compliance Team<br />
Our newly dedicated Global Shared Services Compliance<br />
Team will primarily be responsible for<br />
performing pre- and post- audits on Travel and<br />
P-Card related spending. The team will focus on<br />
policy compliance and reporting including - but<br />
not limited to - areas such as the Per Diem Meal<br />
Allowance, expense type validation, and mileage.<br />
Each week, audit exception reports will be<br />
generated based on previous week’s posted<br />
T&E data. The team will review exceptions to<br />
examine violations and identify / track root<br />
causes. All exceptions will roll up to a Monthly<br />
Exception & Trending Report by business unit.<br />
5
FULL YEAR 2015 T&E SUMMARY<br />
Total Company T&E Performance<br />
-$5.2M VPY<br />
0.71%<br />
2015 T&E Sales<br />
0.74%<br />
2014 T&E Sales<br />
Advanced Booking<br />
Air Bookings<br />
64%<br />
December YTD<br />
52%<br />
2014 YTD Avg.<br />
+0.5M (3%)<br />
VPY<br />
-$32 (8%)<br />
YTD<br />
Domestic<br />
Airfare<br />
-$103 (12%)<br />
VPY<br />
International<br />
Airfare<br />
Hotel Bookings<br />
Meals Spend<br />
+$0.2M (2%)<br />
VPY<br />
+$2.1M<br />
(18%)<br />
VPY<br />
+15%<br />
Non-compliance<br />
-$2.2M<br />
YTD<br />
6
We had a strong performance in 2015, in an<br />
exceptionally tough year. We were challenged by<br />
nearly $220 million in currency headwinds, volatility<br />
in the emerging markets, and much more, yet<br />
we as a company pulled together and delivered<br />
record earnings, demonstrated continued profitable<br />
growth, and exceeded our EPS commitments for the<br />
ninth consecutive quarter.<br />
SFS 2.0 and its five pillars—Core SFS, Commercial<br />
Excellence, <strong>Digital</strong> Excellence, Breakthrough Innovation<br />
and Functional Transformation—is designed<br />
specifically to enable the type of performance that<br />
we proved we can deliver this year: strong organic<br />
growth with solid operating leverage. With SFS 2.0,<br />
we are positioning for growth and differentiated<br />
outperformance well into the future, augmenting<br />
the strengths that make our Company great.<br />
Thank you for your contributions to a great 2015,<br />
and thank you for your commitment to ensuring<br />
that our brightest days remain ahead of us.<br />
Last year, STANLEY announced their second annual<br />
Build Your America Campaign, a contest to award<br />
up to $10,000 in home improvement or repair projects<br />
to five winning veterans. In partnership with<br />
House of Heroes, a nonprofit organization that will<br />
complete the projects, this campaign demonstrates<br />
the company’s dedication to community service and<br />
making a difference through veteran support.<br />
Five grand prize winners have been chosen to receive<br />
home repairs valued up to $10,000. STANLEY<br />
and House of Heroes will help perform repairs to the<br />
homes of each contest winner.<br />
7
THE WINNING HEROES<br />
James P. of Carmi, IL<br />
James served in the United States Army during the Vietnam War.<br />
While serving in the 71st Aviation Company in South Vietnam, his<br />
helicopter was struck by hostile gunfire and crashed into a rice field.<br />
James was taken as a prisoner of war. After spending 1,887 days in<br />
captivity he was released in March of 1973. Despite his capture,<br />
James stayed in the Army and served his country until he retired in<br />
1986. As a retired war veteran, James committed his time to helping<br />
other veterans find employment and assists them with obtaining<br />
benefits. In recognition of his service, James was nominated to receive<br />
plumbing repairs and other miscellaneous home repairs.<br />
Zeak W. of El Paso, TX<br />
Zeak served in the United States Army for 20 years and has a reputation<br />
in his community for selflessness. After retiring from the military,<br />
he gave up his secondary career to move back to his hometown to<br />
care for his elderly grandmother. He managed her medical appointments<br />
and all aspects of her care until her passing - all while dealing<br />
with his own injuries he sustained during his military service. Zeak is<br />
very active in his local church and frequently hosts church gatherings<br />
in his home. Zeak was nominated to receive help with a well-deserved<br />
landscaping project at his house.<br />
Timothy S. of Bogalusa, LA<br />
Timothy served as a dedicated police officer for 21 years until 2013<br />
when he had to retire early due to an injury sustained in the line of<br />
duty. Timothy now walks with the aid of a cane and may soon<br />
become dependent on a wheelchair. Despite his disability, Timothy<br />
remains an active member of his community. Most recently, he helped<br />
give Christmas gifts to children in a local group home. Timothy was<br />
nominated to receive wheelchair ramps for the front and back doors<br />
of his home.<br />
8
Philip L. of Columbus, OH<br />
Philip is a Korean War Era veteran. Although his years in as an active<br />
duty member of the military are behind him, Philip still serves his<br />
country by supporting veterans and active duty service members.<br />
Philip provides comfort and transportation to homeless, disabled and<br />
medically fragile service men and women by bringing them to medical<br />
and personal appointments. Philip was nominated to receive repairs<br />
to the roof, bathroom, rainspout gutters and driveway of his home.<br />
Tarah S. of Lillington, NC<br />
Tarah is a United States Army Veteran who served for over six years.<br />
During her time with the Army, she served tours in both Iraq and<br />
Afghanistan. Today, Tarah is a dedicated wife and mother of one. In<br />
recognition for her service, Tarah was nominated to receive plumbing<br />
repairs at her family home.<br />
9
ECOSMART TM is our commitment to embedding<br />
sustainable thinking into everything that we do.<br />
We’re taking this beyond our manufacturing<br />
and distribution facilities and into the office. The<br />
ECOSMART TM Office focuses on the efforts that we<br />
can each make in our own locations. We all have<br />
a part to play in keeping our environment sustainable.<br />
In our offices we can make a huge difference.<br />
Let’s start with three easy changes:<br />
1. Go paperless.<br />
Did you know that it takes 24 trees to produce<br />
1 ton of paper? And that 1 ton of<br />
paper produces 6.3 tons of CO2 emissions?<br />
Or that 2.6 gallons of water are used for<br />
every sheet of paper? Think before you print.<br />
2. If you must print, go black and white.<br />
Each year, over 375 million empty ink and<br />
toner cartridges are thrown away, most<br />
ending up in landfills. If you put 375 million<br />
cartridges end-to-end, they would circle the<br />
earth over three times. What a waste!<br />
3. Reuse your coffee mug.<br />
8 out of 10 people think that they can<br />
put coffee cups in the recycle bins. FYI –<br />
you can’t. 50 billion paper cups end up in<br />
landfills each year because they can’t be<br />
recycled. By using your own coffee mug,<br />
you can reduce 1.25lbs of C02 emissions<br />
each week.<br />
10
First, can you remind us all what SFS 2.0 is?<br />
Sure, SFS 2.0 is a company-wide transformation<br />
initiative to build a culture of organic growth<br />
and also drive expanded margins within Stanley<br />
Black & Decker. SFS 2.0 incorporates five key<br />
pillars: Core SFS, Functional Transformation,<br />
Breakthrough Innovation, <strong>Digital</strong> Excellence, and<br />
Commercial Excellence. As you can see from<br />
our 2015 results, we are already making some<br />
big steps in the right direction. SFS 2.0 will also<br />
modernize and improve many of our systems and<br />
processes, to make us more efficient and to put<br />
us in a position to scale up to a company twice<br />
our size.<br />
OK, so on the organic growth front, how will<br />
SFS 2.0 change what we are already doing?<br />
I’d say the important thing to note is that it’s going<br />
to augment what we are already doing and doing<br />
well in many of our businesses. There is some<br />
tremendous work being done on the ground level<br />
with our customers to drive growth, and what<br />
SFS 2.0 is going to do is add new tools and weapons<br />
for our commercial teams to magnify their<br />
efforts. This will be done primarily through our<br />
Commercial Excellence and our <strong>Digital</strong> Excellence<br />
initiatives.<br />
What about this sense of transforming or modernizing<br />
our processes and systems?<br />
Well, it’s no secret to any of us that we manage<br />
a lot of things through brute force and we don’t<br />
leverage today’s technology to the fullest. So here<br />
is where <strong>Digital</strong> Excellence overlaps with something<br />
like Functional Transformation, improving<br />
processes and putting in systems that accelerate<br />
the way we work and give us accurate and more<br />
timely data. Of course, however, this doesn’t happen<br />
without really thinking about what you’re<br />
doing and how you are doing it.<br />
Can you give us a sense of the progress we’ve<br />
made with SFS 2.0 since its launch?<br />
Yes, it’s been pretty significant actually, particularly<br />
our Commercial Excellence efforts as evidenced<br />
by our above-market organic growth in<br />
2015. Not all of our progress is front page news<br />
right now. Some of that is because of confidentiality<br />
reasons—our Breakthrough Innovation and<br />
our <strong>Digital</strong> Excellence teams are both working<br />
on some groundbreaking new products that we<br />
don’t want to leak to the market just yet.<br />
What can we expect in 2016?<br />
The teams are moving full steam ahead. You’ve<br />
certainly read about some of our recent wins<br />
and you can expect to see many more over the<br />
coming months. A lot of the real heavy lifting will<br />
take place over the next several quarters, and we<br />
will be asking all employees to do their part to<br />
transform Stanley Black & Decker for the future<br />
- positioning us to be an even stronger Industrial<br />
company.<br />
11
At the heart of our transformation is continued and relentless focus on advancing the Stanley Fulfillment<br />
System, which is making tremendous strides across the company. One strong example is the Engineered<br />
Fastening business, which is embedding SFS throughout its operations with demonstrable results in facilities<br />
such as the Warrington, UK, plant and the Marietta, Georgia, facility where Operational Lean and<br />
Complexity Reduction initiatives are driving significant value.<br />
The team has made significant progress establishing a detailed fact-base and examining our functional processes<br />
in preparation for the process redesign phase of this transformation initiative. That redesign phase<br />
begins in earnest this month, and will continue throughout the end of the year. Remember, the goal of this<br />
transformation is to focus only on value-added functional activity and reduce, eliminate, or dramatically<br />
improve the way work gets done in our offices.<br />
Perhaps the single most exciting component of our transformation is the results we’ve seen in a very short<br />
period of time from our Breakthrough Innovation teams. Not only does our GTS team have groundbreaking<br />
products on the horizon for 2016, but our Oil & Gas and Hydraulics teams have wholeheartedly embraced<br />
the “Special Forces” concept and expanded it to their businesses, with significant expected benefits.<br />
In Atlanta, Georgia, we are building a new <strong>Digital</strong> Accelerator team, which is already impacting the way<br />
we think about technology in this organization. The team is focused on everything from search engine<br />
optimization to social media presence to RFID platforms for many of our services. On top of that, this team<br />
has created a breakthrough new digital product that has been piloted toward the end of 2015 and has the<br />
potential to change the landscape of the tools market where we compete.<br />
The Commercial Excellence team has identified nearly three hundred opportunities that have the potential<br />
to create tremendous value over the course of the next three years. These were identified through interviews<br />
with more than 100 sales and business leaders and 12 workshops focused on shifting our sales and<br />
marketing capabilities so that we continue to improve the way we serve our customers.<br />
12
TOP 10 ECENTRAL STORIES OF 2015<br />
1<br />
A Message from John Lundgren & Jim Loree.<br />
Our Construction & DIY (CDIY) and Industrial & Automotive Repair (IAR) business units combined to<br />
create a $7B+ Global Tools & Storage (GTS) business. This strategic move was done to become the<br />
world's largest branded tool company and the only player with (1) major positions in each of power<br />
tools, hand tools, accessories and storage and (2) significant global channel presence in all four<br />
major markets: construction, DIY, industrial and auto repair.<br />
2<br />
Results of the 2015 Global Employee Opinion Survey Announced.<br />
John Lundgren provided a brief synopsis of our employee opinion survey. The high level of favorability<br />
of our questions as well as the consistency that we've seen year-over-year are both encouraging<br />
factors, although our results pointed to room for improvement as well.<br />
3<br />
A Message from Joe Voelker, SVP of HR, Regarding<br />
our Organization & People Review Results.<br />
Our people are our most valuable asset, and we use the global OPR process to ensure that our<br />
people are aligned with our most critical strategic growth initiatives. This announcement shared key<br />
trends that came from our OPR process in 2015. Click here for the full story.<br />
4<br />
The Time is Now… SFS 2.0 is Here!<br />
We officially launched SFS 2.0, our Blueprint for Growth. This initiative has the potential to double<br />
the company's size and triple the company's value over the coming years. We will do this by<br />
continuing the company's transformation and adapting the way we operate to ensure that we<br />
outperform our competition in the decades to come.<br />
5<br />
An SFS 2.0 Update from Jim Loree.<br />
This month, Jim Loree provided an update and progress-to-date on our five initiatives: Core SFS,<br />
<strong>Digital</strong> Excellence, Commercial Excellence, Breakthrough Innovation, and Functional Transformation.<br />
These efforts have lead to a successful 2015.<br />
15<br />
13
6<br />
Introducing the William Hart Award for Community Involvement!<br />
We launched an inaugural William Hart Citizenship Award, named after our Company’s 2nd<br />
President who exemplified the ideal balance of commitment to his family, his work, and his community.<br />
One winner and three runners-up were awarded with a donation to the charity of their choice<br />
based on their commitment to the community.<br />
7<br />
A Video Interview with Steve Brodrick, Vice President<br />
of Financial Planning & Analysis.<br />
Throughout the year, we were able to improve operating margins and operating leverage in the<br />
face of significant currency headwinds. In this video, Steve explains what these FX pressures actually<br />
are and what we, as a Company, can do to overcome them.<br />
8<br />
EMPLOYEE SURVEY FOLLOW UP: Tying eCentral<br />
Communications to Company Strategy.<br />
Stanley Black & Decker issues global communications to all employees every day, usually several<br />
times a day. Our communications align with important goals and objectives for the company. We<br />
are taking steps to make that connection more obvious and straightforward. Remember, we rely on<br />
you to not only be Stanley Black & Decker experts, but also our advocates and ambassadors.<br />
9<br />
Stanley Black & Decker Issues New Company Brochure.<br />
For the first time ever, thanks to a coordinated effort by business leaders across the company, we<br />
have put together a company-wide brochure highlighting all of our brands in action. This brochure<br />
marks the first comprehensive look at the power of Stanley Black & Decker.<br />
10<br />
The Drawing Board” – The Next Big Thing in SFS 2.0<br />
Breakthrough Innovation is Here!<br />
As we further embed a culture of breakthrough innovation, we launched an online innovation<br />
collaboration portal, dubbed The Drawing Board. The Drawing Board is all about our employees,<br />
and getting you directly involved and connected to the innovation practices that are the lifeblood of<br />
this great company.<br />
See these and much more at ecentral.sbdinc.com<br />
16<br />
14
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Farmington River Power Plant - Windsor, CT<br />
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