2017 Annual Report

2017 Annual Report
For Those Who
Make The World ™
Since 1843
2017yearinreview.stanleyblackanddecker.com

PURPOSE-DRIVEN
Responsibility
Elevating our commitment to
corporate social responsibility with
the launch of our new 2030 strategy
PURPOSE-DRIVEN
Innovation
Investing in innovation
and digital transformation
to shape our future
PURPOSE-DRIVEN
Performance
Delivering top-quartile,
above-market performance
as we transform
Design: Ideas On Purpose | Printing: DG3 | This book was printed using only recycled paper.
©2018 Stanley Black & Decker. All Rights Reserved.

1Stanley Black & Decker 2017 Annual Report
Dear
Shareholders James M. Loree
President & Chief Executive Officer
This year, Stanley Black & Decker is celebrating its
175th anniversary. Founded in 1843, in the wake
of the First Industrial Revolution, our Company
has prospered through the ebbs and flows and the
triumphs and tragedies of recent world history.
For 175 years we have navigated through the
challenges and opportunities afforded by the
relentless social and technological advances of
the Second and Third Industrial Revolutions and
we are now in the midst of the Fourth. The pace
of technological change that is occurring today is
breathtaking and unprecedented. Moreover, it is
accelerating as the rapidly plummeting cost of data
storage, increases in communications bandwidth
and the impact of Moore’s law on computing power
all combine to drive the digital revolution.
In fact, technological change is now advancing at an exponentially increasing
rate to a point where society’s relatively linear ability to absorb the change is
beginning to become overwhelmed. It is all moving so fast that individuals,
businesses, governments and society are having a difficult time keeping up, and
there are entire institutions and growing numbers of people that are getting left
behind. It’s tough to keep pace — to keep individual skills, business models,
social and economic policies, and regulations and laws current and relevant.
To use corporations as a case in point, the average life span for a Fortune 500
company has declined to 15 years today from 67 in the 1920s. And the vast
majority of companies that comprised the Fortune 500 list in 1955 have
disappeared in one form or another. New, emerging companies are leveraging
the power of technology and their new brands and business models to
completely upend legacy businesses that have been successful for generations.
It’s an exciting time, full of opportunity albeit one that is also fraught with risk.
So, let’s rewind to 1843. When Frederick T. Stanley founded the original Stanley
Bolt Manufactory in New Britain, Connecticut, which was later incorporated
as Stanley Works, I’m sure he could not have anticipated that the Company
would grow to a $13 billion revenue global industrial with a $26 billion market
capitalization and approximately 58,000 employees across the globe. But it
did. It’s a remarkable feat when you think about it, and even more so when you
consider that approximately 80% of the revenue growth and 90% of the market
Visit 2017yearinreview.
stanleyblackanddecker.com
to view stories and pictures that
bring exciting aspects of the
Stanley Black & Decker story to life,
explore our financials, review our
sustainable practices, and
read about our businesses and
our plans for growth.
VISIT THE 2017 YEAR
IN REVIEW WEBSITE

2
value creation has occurred since the year 2000 in just 10% of the Company’s history
as measured in years. The Company has seized the opportunity and enjoyed this
monumental recent growth spurt just as the challenges cited above have increasingly
become more pronounced.
What we discovered when we analyzed the causal factors for our success is that the
foundational attributes that defined our Company’s culture all the way back to
inception, have not only stayed with us but have become amplified over the years.
These four cultural traits are (1) bold breaks the mold, (2) we cut through challenges,
(3) reliable to the core and (4) we join forces. Said another way, we strive to be bold
and agile while at the same time thoughtful, disciplined and collaborative.
This special combination of attributes is a powerful blend for tackling the challenges
of the day, just as it has been effective for 175 years. Last year, we launched a project
to define our Company’s purpose — For Those Who Make The World,™ which was
extracted from a comprehensive review of our history. We empower the makers and
creators, those who are doing the work of creating and shaping the world around us.
We produce the hardest working, most innovative tools, products and services for the
world’s hardest working people. It’s this deep sense of place, building and creation that
underpins our values and operating model, and we have rededicated ourselves to our
Purpose in all that we do. There is a subtle essence of humility embedded in this as we
dedicate ourselves and our Company to support the true heroes of the world, the
makers and creators.
Purpose has begun to transcend our enterprise and our business strategies. In
Engineered Fastening, we are working to penetrate the electric vehicle marketplace,
and our Security business has a renewed and relentless focus on making the world
a safer place and, of course, tools are at the heart of “making the world.” We are
approaching innovation with a new, exponential framework that deploys contemporary
organizational techniques to commercialize innovations that are both sustainable and
provide a societal benefit. We have amplified our efforts to advance diversity and
inclusion and have launched five Employee Resource Groups across the company over
the last two years, including our Women’s Network, our African Ancestry group and our
most recent one, Pride & Allies, in support of the LGBT+ community. We are also
engaging in new dialogues and activities with our employees and communities. And
we have increased our commitment to sustainability with new strategies and goals,
including pledges to become carbon positive by 2030 and to stand up for human
rights and equality.
As our message for our 175th anniversary says, Times Change. Our Purpose Hasn’t.
And we empower our teams to live and drive our purpose for our Company, our
shareholders, our employees and society. It is a fulfilling challenge to meet and one
we are passionate about.
Stanley Black & Decker. For Those Who Make The World. Since 1843.
2017: Strong Financial Performance
The Stanley Black & Decker team delivered above-market organic growth, fueled by
innovation and strong commercial execution, seamless acquisition integrations, and
financial success. This resulted in a strong year of value creation for our shareholders,
where the Company delivered 50% total shareholder return in 2017.
Our 2017 financial results included 12% total revenue growth, with 7% organic
growth and a 7% contribution from acquisitions, record earnings per share* and
operating margin rate,* and strong free cash flow conversion.* In addition, 2017
highlights included:
• Outperforming our peer group and the overall S&P 500, with SWK’s share price up
48% for the year versus 18% for our peers and 19% for the S&P 500
• Reshaping our portfolio by completing the divestiture of our Mechanical Security
business in February, and closing the acquisitions of Newell Tools and the Craftsman
brand in March 2017, adding three iconic brands to our portfolio
• Reaching agreement to purchase the industrial business of Nelson Fastener Systems
in December 2017 for $440 million
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Total revenues were
$12.7 billion
+12% versus prior year
Organic growth of
7% and 7%
growth from acquisitions
Operating margin rate increased to
14.8%*
+40 basis points versus prior year
Earnings per share increased
14%*
to a record $7.45*
Free cash flow conversion was
~100%*
enabling our 50th consecutive
annual dividend increase
Working capital turns were
8.9x
excluding the impact of recent
acquisitions, flat versus last year’s
record levels
Cash flow return on investment was
13.8%
in line with our long-term
financial objective
... ALL POWERED BY SFS 2.0
* Excluding M&A related charges, net gain on divestitures
and one-time tax charge, as applicable | Free cash flow
conversion excludes net gain on divestitures
2017 SUMMARY
OF RESULTS

3Stanley Black & Decker 2017 Annual Report
: OUR OPERATING SYSTEM
Growth was once again the engine behind our operating results, with all businesses
delivering organic growth and most of the portfolio experiencing share gains.
Tools & Storage generated an impressive 9% organic growth rate, with every region
and business unit delivering increases, including 9% growth in North America,
Europe and Emerging Markets. Total revenue growth was 19% including
contributions from the Newell Tools and Craftsman brand acquisitions.
Our organic growth was driven by innovation — both a steady stream of core
innovations and our recently commercialized breakthrough innovation, FLEXVOLT.
In addition, we saw continued success with mid-price-point product launches in
Emerging Markets, strong commercial execution around the globe and benefits from
our aggressive, global efforts in the e-commerce channel.
Turning to Industrial organic growth, Engineered Fastening was up 4%, led by strong
automotive systems sales supporting our customers’ new model launches,
automotive fastener growth that was 430 basis points in excess of light vehicle
production, and industrial vertical growth in all geographies. Oil & Gas (+8%)
experienced higher project and inspection activity within North America, and
Hydraulics (+20%) became the most recent business to demonstrate the power of
applying SFS 2.0 Commercial Excellence principles.
Excluding the impact from the Mechanical Security divestiture, growth within
Security was 4%, which included organic growth of 1%, as continued improvements
in field execution and targeted commercial wins were supplemented by our strategy
to execute small bolt-on acquisitions to bolster the recurring revenue portfolio. The
business remains focused on continuing the growth momentum and returning to
margin expansion in 2018 and beyond.
$22 Billion in Revenues
Build Upon
World Class Franchises
Deliver Top-Quartile
Total Shareholder Return
OUR 22/22 VISION
Breakthrough
Innovation
Go beyond incremental
innovation and
nurture breakthrough
innovation culture
Core SFS /
Industry 4.0
Bring supply chain into
the digital age and
achieve capital-efficient
organic growth
Commercial
Excellence
Implement continuous
process improvements
across all customer-
facing activities
Functional
Transformation
Completely re-think
and re-tool key functions
with “clean sheet”
zero-based
approach
Digital Excellence
Harness and apply the
disruptive power of
digital pervasively
DRIVE COST EFFECTIVENESS
DRIVE OUTSIZED ORGANIC GROWTH
DRIVE ASSET AND COST EFFICIENCY

4
Our overall operating margin rate* rose to a record 14.8%, up
40 basis points versus 2016, supported by record operating margin
levels in Tools & Storage and Industrial. We demonstrated the ability
to deliver meaningful operating leverage through robust productivity
and cost control, while offsetting commodity inflation and continuing
to make targeted investments to support future growth.
Free cash flow conversion was approximately 100%* which
supported our 50th consecutive annual dividend increase and a
series of strategic acquisitions. Our cash flow return on investment
remained strong at 13.8%, which is in line with our long-term targets.
These 2017 results show the power of our strategy, SFS 2.0
operating system and our value creation model — a year where the
teams delivered strong organic growth with margin expansion, and
successful acquisition integrations — which fueled mid-teens
earnings per share* growth.
Continuing to Deliver Top-Quartile Performance
SFS 2.0 differentiates our performance and supports our day-to-
day execution. Digital Excellence, Breakthrough Innovation,
Commercial Excellence, Core SFS and Functional Transformation
work in concert to sustain above-market organic growth, support
margin expansion and deliver strong free cash flow generation.
Our well-established value creation model has produced strong
shareholder returns. It starts with our world class brands, attractive
growth platforms, and scalable and defensible franchises.
Importantly, it leverages the power of SFS 2.0 — enabling the
achievement of the Company’s long-term financial objectives.
We also employ an investor-friendly capital allocation approach.
Our historical practice, which we intend to continue, has been to
return 50% of our capital to shareholders in the form of dividends
and/or opportunistic share repurchases, with the remaining 50%
earmarked for acquisitions to further strengthen our business
portfolio and fuel growth.
Our strategy, value creation model and operating system have
shown a level of consistency through the past decade plus, but
have also grown and evolved as times have changed.
Growth Catalysts: 2018 and Beyond
Leveraging SFS 2.0, we are executing on a series of growth
catalysts that we believe will sustain our above-market growth
potential for the foreseeable future.
FLEXVOLT, our recent breakthrough innovation initiative,
represents the fastest adoption for a new product launch in
DEWALT’s history. It is powered by a flexible battery system that
delivers 60 or 120 volts for high power tools and three times the
runtime when the 60-volt battery is used within our 20-volt power
tool system. This innovative product launch was a high growth
driver in 2017, and is also stimulating incremental demand for our
20-volt cordless offerings. We will continue to expand this system
in the future with the ultimate goal of eliminating the need for cords
on jobsites and thus making a dramatic and positive impact on
worker safety and efficiency.
The Craftsman transaction gives Stanley Black & Decker the rights
to develop, manufacture and sell Craftsman-branded products in
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OUR VALUE CREATION MODEL
World Class Branded Franchises With Sustainable Strategic
Characteristics That Create Exceptional Shareholder Value
STRONG, INNOVATION-DRIVEN BUSINESSES
IN DIVERSE, GLOBAL MARKETS
INVESTOR-FRIENDLY CAPITAL ALLOCATION
~1/2
M&A
~1/2
Return Cash
To Shareholders
Long-Term Financial Objectives
• 4%–6% Organic Growth
• 10%–12% Total Revenue Growth
• 10%–12% EPS Growth**
(Including Acquisitions)
• FCF ≥ Net Income
• 10+ Working Capital Turns
World Class Brands
Attractive Growth Platforms
Scalable, Defensible Franchises
Differentiable Through Innovation
• Outsized, Capital-Efficient Organic Growth
• Attractive, Expandable Operating Margin Rate
• Outstanding Free Cash Flow Conversion
POWERED BY:
**7%–9% excluding acquisitions | Excludes M&A related charges
* Excluding M&A related charges, net gain on divestitures and one-time tax charge, as applicable | Free cash flow conversion excludes net gain on divestitures

5Stanley Black & Decker 2017 Annual Report
non-Sears Holdings channels. In 2017, we successfully pursued retail partnerships
with a major home center, a formidable co-op hardware retailer and the leading
e-commerce player. We focused on developing 2018 commercial plans, designing an
impressive and comprehensive product portfolio, adding capacity and preparing the
supply chain to support our second-half rollout. We are working with passion and
excitement to enable this iconic brand with its proud and beloved history to soon
reclaim its rightful place in American homes, garages, factories and automotive shops.
To support the overall growth in the tools business and the rollout of the Craftsman
brand, we continue to expand our US manufacturing footprint. Stanley Black &
Decker has been a proud US manufacturer for 175 years and in fact has added more
than 1,200 jobs in the US over the past three years. Looking ahead, we expect to
add 1.5 million square feet of new manufacturing and distribution capacity in 2018,
which will support our goal to increase US tools production to 50% of our total US
tools volume over the next three years.
The Newell Tools acquisition integration continues to proceed on or ahead of plan,
which makes us confident that we will achieve our targeted $80–$90 million in cost
synergies. We are now turning our attention to capturing the revenue synergies from
the Lenox and Irwin brands by leveraging these products within our global customer
base and bringing new offerings to enhance organic growth within Tools & Storage.
In December, we reached an agreement to purchase the industrial business of
Nelson Fastener Systems. This bolt-on transaction will enhance Engineered
Fastening’s presence in general industrial end markets, expand its portfolio of highly
engineered fastening solutions, and deliver cost synergies.
We continue to be encouraged by the prospects for value creation within the M&A
pipeline. Our focus remains on strengthening the core through bolt-on transactions
within Tools & Storage, Industrial and Security, as well as pursuing adjacency
opportunities that possess sound industrial logic and fit with our value creation model.
In addition, we continue to invest in additional opportunities aligned with our SFS
2.0 operating system. We are optimistic that we will be able to commercialize these
Breakthrough Innovation, Commercial Excellence and Digital Excellence programs
to generate additional growth prospects in the future.
Becoming Recognized as One of the World’s
Most Innovative Companies
We are building a culture in which we strive to become known as one of the world’s
great innovative companies. Our opportunity is to embrace this environment of rapid
innovation and digital transformation to deliver disruptive innovation to the market.
In 2017, we increased our R&D expenditures by $48 million, a 23% increase versus
2016 and a total two-year increase of 34%.
We now have ten breakthrough innovation teams covering all businesses and
multiple worldwide locations focused on developing innovations that each have the
potential to deliver greater than $100 million in annual revenues. These teams are
separated from the day-to-day organization to remain focused on the pulse of what
our customers want and need, and are working with leading universities and venture
companies to advance breakthrough technologies. We are encouraged by the
prototypes that have been generated by the teams and look forward to successfully
commercializing the most promising opportunities in the coming years. See more at
2017yearinreview.stanleyblackanddecker.com.
Our Digital Accelerator team in Atlanta has now grown to approximately
100 employees. This team of world class technology talent has been successful in
demonstrating the value of their skillsets to the Company’s core operations by
infusing digital capabilities into our products, processes and business models. The
collaboration of our Digital Accelerator team across the Company has been so
successful that approximately half of the original employees in the Digital
Accelerator now report directly into our businesses. We expect to continue to grow
our digital team and will add more experts that specialize in applying emerging
technologies such as artificial intelligence, machine learning, robotics and advanced
data science.
Continue Organic Growth
Momentum
• UTILIZE SFS 2.0 as a catalyst
• MIX into higher growth, higher
margin businesses
• INCREASE relative weighting of
emerging markets (goal = 20%+)
Be Selective and Operate
in Markets Where:
• BRAND is meaningful
• VALUE proposition is definable and
sustainable through innovation
• GLOBAL cost leadership is achievable
Pursue Acquisitive Growth
• BUILD upon global Tools platform
• EXPAND Industrial platform /
diversify Engineered Fastening
and Infrastructure
• CONSOLIDATE Commercial Electronic
Security industry
STRATEGIC
FRAMEWORK

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Our innovation and digital initiatives that impact manufacturing, or Industry 4.0,
are becoming increasingly important in today’s operating environment. We
continue to make good progress in our three “lighthouse” manufacturing
facilities, applying the latest in robotics, manufacturing execution systems (MES),
3-D printing, innovation labs and maker spaces to drive the next wave of
flexibility, cost efficiency and quality improvement. We recently announced the
creation of an Advanced Manufacturing Center of Excellence, or Manufactory
4.0, in Hartford, Connecticut. Our Manufactory 4.0 will be the epicenter for the
latest technologies and processes and accelerate the adoption and scaling of
new technologies across our manufacturing footprint.
Industry 4.0 is a key enabler for our “make where we sell” strategy. This strategy
makes good business sense as it shortens the supply chain, lowers the
environmental impact, mitigates currency exposure, and is a cost effective
alternative after including the improvements in efficiency and advances in
technology. Additionally, recent expansions of tool production in the US and the
UK have shown that our end users generally prefer to buy products made locally.
Certain of our potentially disruptive breakthrough innovations do not have a
natural commercialization pathway within our existing business models or would
be constrained from successfully scaling with the speed required for success if
incubated within our core organization. We have seen this first-hand with some
of our promising innovations and digital products. To address this, we have
created an Exponential Organization, located in Silicon Valley, with a heightened
priority on innovations that have the potential to provide a significant societal
impact. This organization will work closely with our Chief Technology Officer,
Stanley Ventures, the Digital Accelerator, and our core businesses to incubate
and advance these types of innovations.
We are encouraged by the actions taken in 2017 to enhance our growth culture
and work toward becoming recognized as one of the world’s great innovators.
We are making investments to ensure that we stay abreast of the fast-evolving
digital and technology landscape to position the Company to disrupt ourselves
before others do.
Elevating Our Commitment to Corporate Social Responsibility
At Stanley Black & Decker, we have long been committed to improving the
communities in which our employees live and work, with a keen focus on
environmental health and safety. Last year, as part of our 22/22 Vision and
activating on our broader purpose in society, we began elevating our already
strong commitment to corporate social responsibility. We are encouraged by our
progress as the Company has been recognized on a number of notable lists,
including Forbes’ America’s Best Employers for Diversity (#67), Barron’s 100 Most
Sustainable Companies (#30), Fortune’s Most Admired Companies, Dow Jones
Sustainability Index (7th consecutive year) and Mogul’s Top 100 Innovators in
Diversity & Inclusion (#4) and their Top 100 Companies for Millennial Women (#1).
For us, corporate social responsibility describes our organization’s continual
focus on how our business can be a force for good — creating value beyond
profits, including environmental and social value, and generating a positive
impact for shareholders, the environment and greater society.
As part of this effort, we reevaluated our existing sustainability and philanthropic
work with the goal of becoming a leading purpose-driven company. We want
to be recognized for our work to inspire makers and innovators to create
a more sustainable world, in line with the United Nation’s 2030 Sustainable
Development Goals. In this regard, we recently established a specific
Corporate Social Responsibility Strategy, which is focused in three key areas:
Empower Makers: Empower Makers and Creators to Thrive in a Changing World
Industrial and technological innovations are rapidly changing the nature of work
and jobs. Globally 10 million jobs in manufacturing remain unfilled due to gaps in
skills. Stanley Black & Decker is uniquely positioned to help close this gap. We
recognize that our own workers, as well as those in the communities where we
% 2017 Revenues