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2018yearinreview.stanleyblackanddecker.com
2018 Annual Report
WE THRIVE.
WHERE INNOVATION,
SOCIAL RESPONSIBILITY,
AND PERFORMANCE MEET

WE JOIN FORCES
FOR SUSTAINABILITY
INCLUSIVITY & COLLABORATION
WE ARE BOLD AND AGILE, YET THOUGHTFUL AND DISCIPLINED
OUR VALUES AND BEHAVIORS ALIGNED WITH PURPOSE
WE ARE BOLD TO
BREAK THE MOLD
COURAGE & INNOVATION
FOR THOSE WHO MAKE THE WORLD™
WE ARE RELIABLE
TO THE CORE
INTEGRITY & ACCOUNTABILITY
WE CUT THROUGH
CHALLENGES
AGILITY & PERFORMANCE

DEAR
SHAREHOLDERS,
James M. Loree
President & Chief Executive Officer
In 2018, we celebrated our 175th anniversary
with a nod to the durability and sustainability of
our enterprise, which has successfully navigated
through three industrial revolutions and is now
positioned to do the same as we take on the
challenges and opportunities of the fourth.
As it turned out, our Company needed to bring to bear all of the foundational
attributes that have defined our culture over the years to deliver a successful
financial performance in 2018. As the year unfolded, we encountered a series
of abnormally large, unfavorable exogenous forces that threatened to upend
our financial performance, most notably material cost inflation, currency and
tariffs. At $370 million or 2.6% of sales, the magnitude and suddenness of
these external operating margin headwinds was highly unusual, a “long tail”
probability event. In the end, we offset all but $50 million of the incremental
headwinds with timely price increases, intensive cost management and other
actions. This enabled us to produce a respectable 2018 financial result with
$1.0 billion of revenue growth (+8%, including 5% organic) as well as 9%* EPS
growth. In doing so we set new company records for both revenue and EPS.
Financial Highlights
Tools & Storage led the way with a 7% organic growth rate. Every region and
business unit delivered increases, including growth in North America (+8%),
Europe (+5%) and emerging markets (+11%).
A powerful set of strategic catalysts, complemented by outstanding
commercial execution enabled us to deliver impressive above-market growth,
even against difficult comparables. These catalysts include the Craftsman
initiative, e-commerce, emerging markets, FLEXVOLT® and revenue synergies
from the Irwin/Lenox acquisition. SFS 2.0 and its combination of breakthrough
innovation, commercial excellence and digital excellence also helped propel
the Tools & Storage growth performance.
In Industrial, we drove 11% total revenue growth, much of that derived from our
acquisition of Nelson Fasteners in 2018. Nelson expands our set of product
offerings in Engineered Fastening as well as provides us with additional
end-market diversification. Amidst a slowing automotive market, Engineered
Fastening continued its strong penetration gains, growing the fastener
business 630 basis points in excess of global light vehicle production.
Hydraulic Tools revenue was up 8% on strong commercial execution and the
team also signed an agreement to acquire IES Attachments. IES, when closed,
is expected to almost triple Hydraulics in size while adding meaningful scale to
this business and opening up a plethora of future growth avenues. * Excluding M&A related charges, and other
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STANLEY BLACK AND DECKER 2018 ANNUAL REPORT 1

In Security, we have been leading a business transformation to deliver
more consistent organic growth and generate margin expansion. The
approach utilizes technology to lower the cost to serve and provide
differentiated offerings to our small-to-medium enterprise and large
customers. Along this line, the business generated operating margin rate
and dollar improvements in the second half of the year,
and we are looking forward to seeing those trends continue into 2019
and beyond.
Our overall operating margin rate* was 13.6%, an impressive result
considering the $370 million of commodity inflation, currency and tariff
headwinds we experienced during the year. We continue to leverage
productivity, cost control and pricing actions, and are undertaking an
extensive array of new margin-focused initiatives to ensure rate
expansion in 2019 and beyond.
Free cash flow conversion was approximately 90%* which supported our
51st annual dividend increase, $500 million in share repurchases and a
series of strategic acquisitions. Cash flow return on investment remained
strong at 12%, which is in line with our long-term targets.
A Leader for the New Age
of Industrial Disruption
The inexorable forces of the accelerating pace of technological change
have been wreaking havoc with the status quo across all aspects of
society for some time now as the decreasing cost of data storage,
increasing computing power/cost ratio, and communications technology
advances combine to create once unthinkable capabilities and
applications. As these synergistic forces have gained speed and
momentum, the combination has begun to challenge the ability of
individuals, institutions and society in general to absorb the massive
changes that are impacting all walks of life. What once seemed like a
relatively orderly world is now characterized by chaotic new unforeseen
threats, disruption, growing inequality and divisiveness. In addition, the
well-documented impact from climate change is becoming increasingly
apparent. The ever-increasing rate of change and the sheer complexity
of it all can be overwhelming to individuals and institutions. However,
amidst all the turbulence there is opportunity. We believe that a new
form of leadership and corporate citizenship is necessary to successfully
navigate through these times.
At Stanley Black & Decker, we’ve been preparing for this day for quite
some time, you could say for 175 years. We believe that institutions that
thrive in this era will have a transformational purpose with social impact,
one that acts as a North Star, a bright light from up high that guides their
people in times of uncertainty and connects the company to its broader
role in society. Our purpose is “For Those Who Make The World,” and we
have thrived for 175 years through all sorts of external disruption,
dislocation and volatility. It takes a special company, with a unique
culture, to do that. In particular, we have shown a propensity for almost
two centuries to (1) act boldly but responsibly, (2) cut through challenges,
(3) join forces and (4) be reliable to the core. Having those reflexive
attributes embedded in our culture is a big advantage when facing
today’s realities; however, that alone is not enough.
We are shaping our leaders to embrace high performance, innovation
and social responsibility with passion and zeal. We acknowledge the fact
that no one individual or institution can any longer possess the
information to have all the answers and that the universe of knowledge
2018 SUMMARY OF RESULTS
TOTAL REVENUES WERE
+8% VERSUS PRIOR YEAR
$14 BILLION
ORGANIC GROWTH OF
5%
FREE CASH FLOW
CONVERSION WAS
~90%*
EARNINGS PER SHARE
INCREASED
9%*
OPERATING MARGIN
OVERCOMING $370 MILLION IN
EXTERNAL HEADWINDS
13.6%*
* Excluding M&A related charges, and other |
Free Cash Flow conversion excludes tax
charges related to the implementation of
U.S. tax reform
2

is evolving so rapidly that the ability to learn and re-learn over a
lifetime is increasingly more important than the base level of an
individual’s knowledge. We expect our leaders to be authentic and
humble enough to put the best interests of the Company and
society before their own, while possessing the confidence and self
assurance to be bold and agile, and, at the same time, thoughtful
and disciplined.
We think we have positioned the Company for sustainability and
superior value creation over the long term, and we recognize the
importance of performing in the short term as well.
Delivering Top-Quartile
Performance Over the Long Term
SFS 2.0 differentiates our performance and supports our day-to-day
execution. Digital Excellence, Breakthrough Innovation, Commercial
Excellence, Core SFS / Industry 4.0 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
long-term 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 a balanced capital allocation approach under
which we commit to returning 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 stimulate growth.
Our strategy, value creation model and operating system have
been consistent for more than a decade, but have also evolved and
improved as times have changed.
Growth Catalysts: Positioned
for Future Share Gains
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.
Innovation
New core and breakthrough innovations continue to support
growth across our businesses. Two and a half years into launch,
FLEXVOLT represents the fastest new product adoption in
DEWALT’s history, and continues to deliver outsized, mid-teens
: OUR OPERATING SYSTEM
Digital Excellence
Breakthrough
Innovation
Commercial
Excellence
Core SFS /
Industry 4.0
Functional
Transformation
DRIVE COST
EFFECTIVENESS
DRIVE ASSET AND
COST EFFICIENCY
DRIVE OUTSIZED
ORGANIC GROWTH
STANLEY BLACK AND DECKER 2018 ANNUAL REPORT 3

growth. We will continue to expand the FLEXVOLT system in the
future with the ultimate goal of eliminating the need for cords on
jobsites, improving worker safety and efficiency. In 2019, we are
introducing a technological breakthrough in power tools, a new
power technique that dramatically improves the power-to-size ratio
of DC brushless tools.
Craftsman
The Craftsman transaction gave Stanley Black & Decker the right
to develop, manufacture and sell Craftsman-branded products
in non-Sears Holdings channels. In 2018, we rolled out over 1,200
new products, with a tremendous positive response from customers
and end users. The revitalization of this iconic American brand is
well underway. New manufacturing capacity is being added in the
United States to support the brand’s growth, as “Made in the USA”
is a key attribute desired by Craftsman users. We could not be
more excited about the prospects and believe Craftsman will
achieve $1 billion of revenue growth by 2021, six years ahead of
our original expectations.
M&A
Acquisitions can create both organic and inorganic growth
opportunities. In the case of Lenox and Irwin, we moved
aggressively to capture the revenue synergies from these
transactions. We are focused on leveraging these products within
our global customer base and bringing new offerings to market,
particularly in emerging markets. We have already made significant
progress in capturing the total three-year growth opportunity of
$100–$150 million within Tools & Storage.
During 2018, we reached an agreement to purchase the IES
Attachments business, a leading provider of off-highway
attachments for the heavy equipment industry. IES will be
integrated into our Hydraulic Tools business, which elevates this
business to a meaningful platform for growth.
Additionally, we recently closed on the acquisition of a minority
stake in MTD Products, a leading outdoor power equipment
manufacturer. This is an exciting opportunity to increase our
presence in the $20 billion lawn and garden market in a financially
and operationally prudent way. Currently, our respective teams are
working on multiple opportunities to generate operational
efficiency and growth. Beginning in 2021, we have the option to
acquire the remaining 80% of the business and consolidate it into
the portfolio. This has the potential to add approximately $3 billion
in revenue which would be an important step driving us towards
our 22/22 vision.
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
• CFROI in 12%–15% Range
• Outsized, Capital-Efficient Organic Growth
• Attractive, Expandable Operating Margin Rate
• Outstanding Free Cash Flow Conversion
Powered By:World Class Brands
Attractive Growth Platforms
Scalable, Defensible Franchises
Differentiable Through Innovation
**7%–9% excluding acquisitions | Excludes M&A related charges
OUR VALUE CREATION MODEL
4

E-commerce
Globally, e-commerce remains a key growth driver, with our 2018 online
revenue approximately $1 billion and growing briskly. With a strong
complement of both omnichannel and pure online global retailers, we
are well positioned as the online industry leader and believe the
opportunities for continued growth through this important channel in
both emerging and developed markets will continue.
Emerging Markets
In emerging markets, we continue to deliver outsized growth and share
gains, growing at two to three times market rates. We are leveraging our
unique business model and the strength of our brands, including
STANLEY branded mid-price-point corded and cordless power tools and
hand tool products.
Innovation Ecosystem
Core to our culture is our pursuit of becoming known as one of the
world’s great innovative companies, leaning into the environment of
rapid innovation and digital transformation. We know the future belongs
to the disruptors, which is why we increased our R&D expenditures again
in 2018 to $276 million, a 47% increase versus 2015, the year we
embarked upon this journey.
To foster rapid, pervasive innovation, we are building a vast ecosystem
to ensure we remain aware of and open to new technologies and
advances. The ecosystem includes internal resources and external
partnerships that are coordinated and aligned through the office of our
Chief Technology Officer, who is also charged with overseeing the
creation of our Innovation Roadmap. We believe that this ecosystem
approach is fundamental to achieving high leverage innovation in the
age of disruption.
As we apply innovation and digital disruption, we look to three key ways
to harness these advances. First, there are innovations that we can apply
to our core processes in manufacturing and the back office, lowering the
cost to serve for our operations. Next, there is product innovation, which
we continue to aggressively pursue through our focus on core and
breakthrough innovation within each business unit. We have several
platforms that support this work, including engineering teams and 10
breakthrough innovation teams around the organization, as well as
enterprise-wide innovation development platforms such as our “Drawing
Board” which encourages all employees across the Company to
contribute new ideas.
Finally, we are pursuing new, disruptive approaches, either to push into a
new market or to disrupt our existing business models before our
competitors or new entrants. We do this in numerous ways. One is our
Silicon Valley-based team, which is building its own set of disruptive
companies and exploring new business models. Another is STANLEY
Ventures which invests capital in new and emerging startups with
innovative concepts that offer potential advantages to our enterprise. We
also expand our innovation reach through our ongoing relationships with
industry and business groups, universities and non-government and
government organizations. In addition, this year we launched our
first-ever technology accelerator focused on additive manufacturing
where 10 startups came together at our Manufactory 4.0 in Hartford,
Connecticut, where we provided mentoring and coaching in conjunction
with our partner Techstars. These incubated companies are also
integrated in some cases with our Industry 4.0 initiative, which is rapidly
accelerating across the Company.
STRATEGIC FRAMEWORK
CONTINUE ORGANIC
GROWTH MOMENTUM
BE SELECTIVE AND OPERATE
IN MARKETS WHERE:
PURSUE ACQUISITIVE GROWTH
• UTILIZE SFS 2.0 as a catalyst
• MIX into higher growth, higher
margin businesses
• INCREASE relative weighting of
emerging markets (goal = 20%+)
• BRAND is meaningful
• VALUE proposition is definable and
sustainable through innovation
• GLOBAL cost leadership is
achievable
• BUILD upon global Tools platform
• EXPAND Industrial platform /
diversify Engineered Fastening and
Infrastructure
• CONSOLIDATE Commercial
Electronic Security industry
STANLEY BLACK AND DECKER 2018 ANNUAL REPORT 5

OUR INNOVATION ECOSYSTEM
We are early in the journey but seeing tangible progress in areas
such as Industry 4.0, advanced analytics, digital products, digital
marketing capabilities, the pipeline for commercialization within our
breakthrough teams, and through our STANLEY Ventures
investments. Pervasive innovation will continue to enable our
businesses to build capability to achieve our vision, which will
deliver sustained growth and margin expansion into the future.
A Culture of Social Responsibility
The average tenure for S&P 500 companies has experienced a
precipitous drop, from 33 years in 1964 to 24 years in 2016. Looking
ahead, the expectation is for a 12-year survival rate by 2027, which
is less than eight years away. For a company that has not only
survived but thrived and revitalized itself decade after decade for
175 years, these numbers are sobering.
We believe two factors are key to Stanley Black & Decker’s
long-term sustainability and will propel us forward in the future:
continued focus on the Company’s long-term success through
high performance, innovation and an equally weighted focus on
our environmental, social and governance impact on society.
Both factors are underscored by our purpose: “For Those Who
Make The World.”
Last year, we launched our social responsibility strategy in alignment
with our 22/22 vision and purpose. Our 2030 program is built upon
the Sustainable Development Goals, the United Nations’ blueprint to
achieve a better and more sustainable future for all. Our strategy is
based on three key pillars, each with its own bold and
transformative 2030 goals:
• Empower Makers: Enable 10 million creators and makers to
thrive in a changing world
• Innovate with Purpose: Innovate our products to enhance the
lives of 500 million people and improve environmental impacts
• Create a More Sustainable World: Positively impact the
environment through our operations with a goal of being
carbon positive by 2030
At Stanley Black & Decker, social responsibility extends to our
efforts to develop and create a diverse and inclusive culture that
welcomes and supports all employees, and one that is aligned
with our purpose. Our goal is to be the place where those with the
mindset and skills to propel us into the future want to work.
Powered by our purpose, values and 22/22 vision, we aim to
enhance our culture in both evolutionary and disruptive ways, to
attract and retain the most innovative, purpose-driven, high
performing and socially responsible talent.
INNOVATION
ACCELERATORS
CORE INNOVATION
BREAKTHROUGH
INNOVATION
External
Partners
Advanced
Analytics
Ventures
Visit 2018yearinreview.stanleyblackanddecker.com/innovation
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