Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

THREE MONTHS ENDED APRIL 4, 2026 AND MARCH 29, 2025

(Unaudited, Millions of Dollars, Except Per Share Amounts)


	Year-to-Date
		2026		2025
Net Sales		$	3,846.4	$	3,744.6
Costs and Expenses
Cost of sales		$	2,689.1	$	2,623.8
Selling, general and administrative		877.7		852.5
Provision for credit losses		6.3		14.5
Other, net		41.9		47.5
Loss on sale of business		3.1		0.3
Asset impairment charges		22.7		—
Restructuring charges		44.9		1.2
Interest income		(37.2)		(49.2)
Interest expense		113.1		126.4
		$	3,761.6	$	3,617.0
Earnings before income taxes		84.8		127.6
Income taxes		25.2		37.2
Net Earnings		$	59.6	$	90.4
Total Comprehensive Income		$	30.6	$	218.8
Earnings per share of common stock:
Basic		$	0.39	$	0.60
Diluted		$	0.39	$	0.60

See Notes to Unaudited Condensed Consolidated Financial Statements.

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

APRIL 4, 2026 AND JANUARY 3, 2026

(Unaudited, Millions of Dollars, Except Share and Per Share Amounts)


	April 4, 2026		January 3, 2026
ASSETS
Current Assets
Cash and cash equivalents	$	333.7	$	280.1
Accounts and notes receivable, net	1,438.4		919.7
Inventories, net	4,059.0		4,157.1
Current assets held for sale	271.5		262.4
Prepaid expenses	361.5		328.6
Other current assets	42.7		31.1
Total Current Assets	6,506.8		5,979.0
Property, plant and equipment, net	1,763.1		1,831.8
Goodwill	7,272.0		7,287.9
Intangibles, net	3,053.3		3,086.9
Long-term assets held for sale	1,279.5		1,273.9
Other assets	1,725.1		1,784.2
Total Assets	$	21,599.8	$	21,243.7
LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities
Short-term borrowings	$	1,743.0	$	605.6
Current maturities of long-term debt	54.2		554.8
Accounts payable	2,220.1		2,163.0
Accrued expenses	1,642.5		1,878.1
Current liabilities held for sale	56.8		44.2
Total Current Liabilities	5,716.6		5,245.7
Long-term debt	4,704.0		4,703.3
Deferred taxes	44.2		66.2
Post-retirement benefits	325.6		330.2
Long-term liabilities held for sale	9.7		9.4
Other liabilities	1,823.0		1,834.3
Commitments and Contingencies (Notes P and O)
Shareowners’ Equity
Common stock, par value $2.50 per share: Authorized 300,000,000 shares in 2026 and 2025 Issued 176,902,738 shares in 2026 and 2025	442.3		442.3
Retained earnings	8,178.2		8,244.6
Additional paid in capital	5,026.0		5,063.0
Accumulated other comprehensive loss	(1,999.4)		(1,970.4)
	11,647.1		11,779.5
Less: cost of common stock in treasury (21,462,814 shares in 2026 and 21,866,327 shares in 2025)	(2,670.4)		(2,724.9)
Total Shareowners’ Equity	8,976.7		9,054.6
Total Liabilities and Shareowners’ Equity	$	21,599.8	$	21,243.7

See Notes to Unaudited Condensed Consolidated Financial Statements.

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED APRIL 4, 2026 AND MARCH 29, 2025

(Unaudited, Millions of Dollars)


	Year-to-Date
		2026		2025
OPERATING ACTIVITIES
Net earnings		$	59.6	$	90.4
Adjustments to reconcile net earnings to cash used in operating activities:
Depreciation and amortization of property, plant and equipment		84.4		91.1
Amortization of intangibles		28.6		37.3
Loss on sale of business		3.1		0.3

Asset impairment charges		22.7		—
Stock-based compensation expense		28.2		36.4
Changes in working capital		(388.8)		(469.0)
Changes in other assets and liabilities		(226.6)		(206.5)
Cash used in operating activities		(388.8)		(420.0)
INVESTING ACTIVITIES
Capital and software expenditures		(58.5)		(65.0)

Other		3.0		7.3
Cash used in investing activities		(55.5)		(57.7)
FINANCING ACTIVITIES
Payments on long-term debt		(500.1)		(500.0)



Net short-term commercial paper borrowings		1,145.4		1,136.2
Proceeds from issuances of common stock		4.6		2.7
Purchases of common stock for treasury		(15.3)		(11.7)
Cash dividends on common stock		(126.0)		(124.5)
Other		(0.4)		(0.7)
Cash provided by financing activities		508.2		502.0
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(6.9)		31.5
Change in cash, cash equivalents and restricted cash		57.0		55.8
Cash, cash equivalents and restricted cash, beginning of period		287.4		292.8
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD		$	344.4	$	348.6

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances as of April 4, 2026 and January 3, 2026:


	April 4, 2026		January 3, 2026
Cash and cash equivalents	$	333.7	$	280.1
Restricted cash included in Other current assets	9.2		7.3
Cash and cash equivalents included in Current assets held for sale	1.5		$	—
Cash, cash equivalents and restricted cash	$	344.4	$	287.4

See Notes to Unaudited Condensed Consolidated Financial Statements.

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY

THREE MONTHS ENDED APRIL 4, 2026 AND MARCH 29, 2025

(Unaudited, Millions of Dollars, Except Share and Per Share Amounts)


	Common Stock		Additional Paid In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Shareowners’ Equity
Balance January 3, 2026	$	442.3	$	5,063.0	$	8,244.6	$	(1,970.4)	$	(2,724.9)	$	9,054.6
Net earnings	—		—		59.6		—		—		59.6
Other comprehensive loss	—		—		—		(29.0)		—		(29.0)
Cash dividends declared — $0.83 per common share	—		—		(126.0)		—		—		(126.0)
Issuance of common stock (577,461 shares)	—		(65.2)		—		—		69.8		4.6
Repurchase of common stock (173,948 shares)	—		—		—		—		(15.3)		(15.3)
Stock-based compensation	—		28.2		—		—		—		28.2
Balance April 4, 2026	$	442.3	$	5,026.0	$	8,178.2	$	(1,999.4)	$	(2,670.4)	$	8,976.7


	Common Stock		Additional Paid In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Shareowners’ Equity
Balance December 28, 2024	$	442.3	$	5,071.3	$	8,343.3	$	(2,320.9)	$	(2,816.1)	$	8,719.9
Net earnings	—		—		90.4		—		—		90.4
Other comprehensive income	—		—		—		128.4		—		128.4
Cash dividends declared — $0.82 per common share	—		—		(124.5)		—		—		(124.5)
Issuance of common stock (452,443 shares)	—		(52.0)		—		—		54.7		2.7
Repurchase of common stock (137,371 shares)	—		—		—		—		(11.7)		(11.7)
Stock-based compensation	—		36.4		—		—		—		36.4
Balance March 29, 2025	$	442.3	$	5,055.7	$	8,309.2	$	(2,192.5)	$	(2,773.1)	$	8,841.6

See Notes to Unaudited Condensed Consolidated Financial Statements.

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

APRIL 4, 2026

A. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (hereinafter referred to as “generally accepted accounting principles" or "GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations for the interim periods have been included and are of a normal, recurring nature. Operating results for the three months ended April 4, 2026 are not necessarily indicative of the results that may be expected for a full fiscal year. For further information, refer to the consolidated financial statements and footnotes included in Stanley Black & Decker, Inc.’s (the “Company”) Annual Report on Form 10-K for the year ended January 3, 2026, and subsequent related filings with the Securities and Exchange Commission ("SEC").

On April 6, 2026, the Company completed the previously announced sale of its Consolidated Aerospace Manufacturing ("CAM") business. Based on management's commitment to sell this business, the assets and liabilities related to CAM were classified as held for sale on the Company's Condensed Consolidated Balance Sheets as of April 4, 2026 and January 3, 2026. This divestiture does not qualify for discontinued operations and therefore, its results are included in the Company's continuing operations for all periods presented. The divestiture is a part of the Company's strategic commitment to simplify and streamline its portfolio to focus on the core businesses. Refer to Note Q, Divestitures, for further discussion.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. Certain amounts reported in previous years have been reclassified to conform to the 2026 presentation.

B. NEW ACCOUNTING STANDARDS

RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED — In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update require disclosure and further disaggregation, in the notes to financial statements, of specified information about certain costs and expenses. The required disclosures include the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization recognized as part of oil and gas producing activities included in each relevant expense caption. Additionally, further disclosures are required for certain amounts already required to be disclosed under current GAAP, a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and the total amount of selling expenses, and on an annual basis, the definition of selling expenses. The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted. The standard can be applied prospectively or retrospectively. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

C. EARNINGS PER SHARE

The following table reconciles net earnings and the weighted-average shares outstanding used to calculate basic and diluted earnings per share of common stock for the three months ended April 4, 2026 and March 29, 2025:


	Year-to-Date
		2026		2025
Numerator (in millions):


Net Earnings		$	59.6	$	90.4





Denominator (in thousands):
Basic weighted-average shares outstanding	151,759	151,028
Dilutive effect of stock contracts and awards	630	671
Diluted weighted-average shares outstanding	152,389	151,699


Earnings per share of common stock:



Basic	$	0.39	$	0.60




Diluted	$	0.39	$	0.60

The following weighted-average stock options were not included in the computation of weighted-average diluted shares outstanding because the effect would be anti-dilutive (in thousands):


	Year-to-Date
		2026	2025
Number of stock options		5,702	5,753

In March 2015, the Company entered into a forward share purchase contract with a financial institution counterparty for 3,645,510 shares of common stock. The contract obligates the Company to pay $350.0 million, plus an additional amount related to the forward component of the contract. In September 2025, the Company amended the forward share purchase contract and updated the final settlement date to June 2028, or earlier at the Company's option. The reduction of common shares outstanding was recorded at the inception of the forward share purchase contract in March 2015 and factored into the calculation of weighted-average shares outstanding at that time.

D. ACCOUNTS AND NOTES RECEIVABLE, NET


(Millions of Dollars)	April 4, 2026		January 3, 2026
Trade accounts receivable	$	1,284.0	$	775.0
Notes receivable	73.6		68.0
Other accounts receivable	155.7		145.3
Accounts and notes receivable	$	1,513.3	$	988.3
Allowance for credit losses	(74.9)		(68.6)
Accounts and notes receivable, net	$	1,438.4	$	919.7

Trade receivables are dispersed among a large number of retailers, distributors and industrial accounts in many countries. The Company actively manages its accounts receivable to maximize liquidity and mitigate credit risk through customer payment terms, accounts receivable sale programs, and ongoing customer credit monitoring and evaluations. Adequate reserves have been established to cover anticipated credit losses.

The changes in the allowance for credit losses for the three months ended April 4, 2026 and March 29, 2025 are as follows:


	Year-to-Date
(Millions of Dollars)		2026		2025
Beginning balance		$	68.6	$	84.7
Charged to costs and expenses		6.3		14.5
Other, including recoveries and deductions (a)		—		(8.1)
Balance end of period		$	74.9	$	91.1

(a) Amounts represent charge-offs less recoveries, the impacts of foreign currency translation, divestitures and net transfers to/from other accounts.

The Company's payment terms are generally consistent with the industries in which their businesses operate and typically range from 30-90 days globally. The Company does not adjust the promised amount of consideration for the effects of a significant financing component when the period between transfer of the product and receipt of payment is less than one year. Any significant financing components for contracts greater than one year are included in revenue over time.

The Company has an accounts receivable sale program in which the Company sells certain of its trade accounts receivables at fair value to a wholly owned, consolidated, bankruptcy-remote special purpose subsidiary (“BRS"). The BRS, in turn, can sell such receivables to a third-party financial institution (“Purchaser”) for cash. The Purchaser’s maximum cash investment in the receivables at any time is $110.0 million. At April 4, 2026 and January 3, 2026, net receivables of $77.1 million and $110.0 million, respectively, were derecognized. For the three months ended April 4, 2026 and March 29, 2025, proceeds from transfers of receivables to the Purchaser totaled $76.2 million and $50.0 million, respectively, and payments to the Purchaser totaled $109.1 million and $84.2 million, respectively. The Company has no retained interests in the transferred receivables, other than collection and administrative responsibilities. At April 4, 2026, the Company did not record a servicing asset or liability related to its retained responsibility based on its assessment of the servicing fee, market values for similar transactions and its cost of servicing the receivables sold. Transfers qualify as sales under ASC 860, Transfers and Servicing, and receivables are derecognized from the Company’s Condensed Consolidated Balance Sheets upon the sale of the receivables to the Purchaser. All cash flows are reported as a component of changes in working capital within operating activities in the Condensed Consolidated Statements of Cash Flows since all the cash from the Purchaser is received upon the initial sale of the receivable.

As of April 4, 2026 and January 3, 2026, the Company's deferred revenue totaled $86.4 million and $86.5 million, respectively, of which $29.5 million and $27.3 million, respectively, was classified as current. Revenue recognized for the three months ended April 4, 2026 and March 29, 2025 that was previously deferred as of January 3, 2026 and December 28, 2024 totaled $6.9 million and $6.4 million, respectively.

E. INVENTORIES, NET


(Millions of Dollars)	April 4, 2026		January 3, 2026
Finished products	$	2,849.9	$	2,919.8
Work in process	202.5		174.3
Raw materials	1,006.6		1,063.0
Total	$	4,059.0	$	4,157.1

F. GOODWILL

Changes in the carrying amount of goodwill by segment are as follows:


(Millions of Dollars)	Tools & Outdoor		Engineered Fastening		Total
Balance January 3, 2026	$	6,025.3	$	1,262.6	$	7,287.9
Foreign currency translation & other	(13.9)		(2.0)		(15.9)
Balance April 4, 2026	$	6,011.4	$	1,260.6	$	7,272.0

On April 6, 2026, the Company completed the previously announced sale of its CAM business. Goodwill totaling $737.1 million and $739.4 million allocated to the CAM business was reclassified to assets held for sale as of April 4, 2026 and January 3, 2026, respectively. Refer to Note Q, Divestitures, for further discussion of the CAM divestiture.

G. LONG-TERM DEBT AND FINANCING ARRANGEMENTS


		April 4, 2026				January 3, 2026
(Millions of Dollars)	Interest Rate	Notional Value		Carrying Value1		Carrying Value
Notes payable due 2026	3.40%	—		—		499.9
Notes payable due 2026	3.42%	25.0		25.1		25.2
Notes payable due 2026	1.84%	28.8		29.0		29.5
Notes payable due 2028	6.00%	400.0		398.9		398.7
Notes payable due 2028	7.05%	150.0		154.8		155.3
Notes payable due 2028	4.25%	500.0		498.8		498.6
Notes payable due 2028	3.52%	50.0		51.6		51.7
Notes payable due 2030	2.30%	750.0		747.0		746.8
Notes payable due 2032	3.00%	500.0		497.4		497.2
Notes payable due 2040	5.20%	400.0		376.7		376.3
Notes payable due 2048	4.85%	500.0		495.4		495.4
Notes payable due 2050	2.75%	750.0		741.5		741.4
Notes payable due 2060 (junior subordinated)	6.71%	750.0		741.9		741.9
Other, payable due 2026	4.31%	0.1		0.1		0.2
Total Long-term debt, including current maturities		$	4,803.9	$	4,758.2	$	5,258.1
Less: Current maturities of long-term debt				(54.2)		(554.8)
Long-term debt				$	4,704.0	$	4,703.3

1Carrying values are net of unamortized discounts of $(3.9) million, deferred issuance costs of $(27.3) million, unamortized terminated swaps of $(18.8) million, and purchase accounting fair value adjustments of $4.3 million. Unamortized gain/(loss) associated with interest rate swaps are more fully discussed in Note H, Financial Instruments.

In March 2026, the Company redeemed its $500 million 3.40% notes, at maturity. In August 2025, the Company redeemed its $350 million 6.272% notes at par prior to maturity. The redemption was funded through the issuance of commercial paper. The Company recognized a pre-tax loss of $0.3 million from the redemption related to the write-off of unamortized deferred financing fees.

The Company has a $3.5 billion commercial paper program which includes Euro denominated borrowings in addition to U.S. Dollars. As of April 4, 2026, the Company had commercial paper borrowings outstanding of $1.7 billion, of which $547.6 million in Euro denominated commercial paper was designated as a net investment hedge. In the second quarter of 2026, the Company utilized the vast majority of the net proceeds from the CAM divestiture to repay commercial paper borrowings. As of January 3, 2026, the Company had $605.6 million commercial paper borrowings outstanding, of which $555.6 million in Euro denominated commercial paper was designated as a net investment hedge. Refer to Note H, Financial Instruments, for further discussion.

In June 2024, the Company amended and restated its existing five-year $2.5 billion committed credit facility with the concurrent execution of a new five-year $2.25 billion committed credit facility (the “5-Year Credit Agreement”). Borrowings under the 5-Year Credit Agreement may be made in U.S. Dollars, Euros or Pounds Sterling. A sub-limit of an amount equal to the Euro equivalent of $800.0 million is designated for swing line advances. Borrowings bear interest at a floating rate plus an applicable margin dependent upon the denomination of the borrowing and specific terms of the 5-Year Credit Agreement. The Company must repay all advances under the 5-Year Credit Agreement by the earlier of June 28, 2029 or upon termination. The 5-Year Credit Agreement is designated to be a liquidity back-stop for the Company's $3.5 billion U.S. Dollar and Euro commercial paper program. As of April 4, 2026 and January 3, 2026, the Company had not drawn on its five-year committed credit facility.

In June 2025, the Company terminated its 364-Day $1.25 billion committed credit facility ("the 2024 Syndicated 364-Day Credit Agreement") dated June 2024. There were no outstanding borrowings under the 2024 Syndicated 364-Day Credit Agreement upon termination and as of December 28, 2024. Contemporaneously, the Company entered into a new $1.25 billion syndicated 364-Day Credit Agreement (the "2025 Syndicated 364-Day Credit Agreement") which is a revolving credit loan. The borrowings under the 2025 Syndicated 364-Day Credit Agreement may be made in U.S. Dollars or Euros and bear interest at a floating rate plus an applicable margin dependent upon the denomination of the borrowing and pursuant to the terms of the 2025 Syndicated 364-Day Credit Agreement. The Company must repay all advances under the 2025 Syndicated 364-Day Credit Agreement by the earlier of June 22, 2026 or upon termination. The Company may, however, convert all advances outstanding upon termination into a term loan that shall be repaid in full no later than the first anniversary of the termination date provided that the Company, among other things, pays a fee to the administrative agent for the account of each lender. The 2025 Syndicated 364-Day Credit Agreement serves as part of the liquidity back-stop for the Company’s $3.5 billion U.S. Dollar and Euro commercial paper program. As of April 4, 2026 and January 3, 2026, the Company had not drawn on its 2025 Syndicated 364-Day Credit Agreement.

The 5-Year Credit Agreement and the 2025 Syndicated 364-Day Credit Agreement, as described above, contain customary affirmative and negative covenants, including but not limited to, maintenance of an interest coverage ratio. The interest coverage ratio tested for covenant compliance compares adjusted Earnings Before Interest, Taxes, Depreciation and Amortization to adjusted net Interest Expense ("Adjusted EBITDA"/"Adjusted Net Interest Expense"). The Company must maintain, for each period of four consecutive fiscal quarters of the Company, an interest coverage ratio of not less than 3.50 to 1.00, provided that the Company is only required to maintain an interest coverage ratio of not less than 2.50 to 1.00 for any four fiscal quarter period ending on or before the end of the Company’s second fiscal quarter of 2026. For purposes of calculating the Company’s compliance with the interest coverage ratio, the Company is permitted to increase EBITDA by an amount equal to the Applicable Adjustment Addbacks (as defined in the 2025 Syndicated 364-Day Credit Agreement), provided that the sum of the Applicable Adjustment Addbacks incurred in any four consecutive fiscal quarter periods ending on or before the end of the Company’s second fiscal quarter of 2026 shall not exceed $250,000,000 in the aggregate.

H. FINANCIAL INSTRUMENTS

The Company is exposed to market risk from changes in foreign currency exchange rates, interest rates, stock prices and commodity prices. As part of the Company’s risk management program, a variety of financial instruments such as interest rate swaps, currency swaps, purchased currency options, foreign exchange contracts and commodity contracts may be used to mitigate interest rate exposure, foreign currency exposure and commodity price exposure.

If the Company elects to do so and if the instrument meets the criteria specified in ASC 815, Derivatives and Hedging, management designates its derivative instruments as cash flow hedges, fair value hedges or net investment hedges. Generally, commodity price exposures are not hedged with derivative financial instruments and instead are actively managed through customer pricing initiatives, procurement-driven cost reduction initiatives and other productivity improvement projects. Financial instruments are not utilized for speculative purposes.

A summary of the fair values of the Company’s derivatives recorded in the Condensed Consolidated Balance Sheets at April 4, 2026 and January 3, 2026 is as follows:


(Millions of Dollars)	Balance Sheet Classification	April 4, 2026		January 3, 2026		Balance Sheet Classification	April 4, 2026		January 3, 2026
Derivatives designated as hedging instruments:

Foreign Exchange Contracts Cash Flow	Other current assets	$	6.7	$	1.4	Accrued expenses	$	4.6	$	10.0
	LT other assets	1.7		—		LT other liabilities	—		—
Net Investment Hedge	Other current assets	2.9		2.9		Accrued expenses	1.0		9.3

Non-derivative designated as hedging instrument:
Net Investment Hedge		$	—	$	—	Short-term borrowings	$	547.6	$	555.6
Total designated as hedging instruments		$	11.3	$	4.3		$	553.2	$	574.9
Derivatives not designated as hedging instruments:
Foreign Exchange Contracts	Other current assets	$	10.6	$	5.0	Accrued expenses	$	6.8	$	9.2
Total		$	21.9	$	9.3		$	560.0	$	584.1

The counterparties to all of the above mentioned financial instruments are major international financial institutions. The Company is exposed to credit risk for net exchanges under these agreements, but not for the notional amounts. The credit risk is limited to the asset amounts noted above. The Company limits its exposure and concentration of risk by contracting with diverse financial institutions and does not anticipate non-performance by any of its counterparties. The Company considers non-performance risk of its counterparties at each reporting period and adjusts the carrying value of these assets accordingly. The risk of default is considered remote. As of April 4, 2026 and January 3, 2026, there were no assets that had been posted as collateral related to the above mentioned financial instruments.

During the three months ended April 4, 2026 and March 29, 2025, cash flows related to derivatives, including those that are separately discussed below, resulted in net cash paid of $18.5 million and net cash received of $1.3 million, respectively.

CASH FLOW HEDGES

There were after-tax mark-to-market losses of $29.7 million and $43.2 million as of April 4, 2026 and January 3, 2026, respectively, reported for cash flow hedge effectiveness in Accumulated other comprehensive loss. An after-tax loss of $2.4 million is expected to be reclassified to earnings as the hedged transactions occur or as amounts are amortized within the next twelve months. The ultimate amount recognized will vary based on fluctuations of the hedged currencies and interest rates through the maturity dates.

The tables below detail pre-tax amounts of derivatives designated as cash flow hedges in Accumulated other comprehensive loss during the periods in which the underlying hedged transactions affected earnings for the three months ended April 4, 2026 and March 29, 2025:


	Year-to-Date 2026
(Millions of Dollars)	Gain (Loss) Recorded in OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income		Gain (Loss) Recognized in Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts	$	—	Interest expense	$	(1.4)	$	—
Foreign Exchange Contracts	$	12.2	Cost of sales	$	(4.3)	$	—


	Year-to-Date 2025
(Millions of Dollars)	Gain (Loss) Recorded in OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income		Gain (Loss) Recognized in Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts	$	—	Interest expense	$	(1.7)	$	—
Foreign Exchange Contracts	$	(10.3)	Cost of sales	$	3.6	$	—

A summary of the pre-tax effect of cash flow hedge accounting on the Consolidated Statements of Operations and Comprehensive Income for the three months ended April 4, 2026 and March 29, 2025 is as follows:


	Year-to-Date 2026
(Millions of Dollars)		Cost of Sales		Interest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive Income in which the effects of the cash flow hedges are recorded		$	2,689.1	$	113.1
Gain (loss) on cash flow hedging relationships:
Foreign Exchange Contracts:
Hedged Items		$	4.3	$	—
Gain (loss) reclassified from OCI into Income		$	(4.3)	$	—
Interest Rate Swap Agreements:
Gain (loss) reclassified from OCI into Income 1		$	—	$	(1.4)


	Year-to-Date 2025
(Millions of Dollars)		Cost of Sales		Interest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive Income in which the effects of the cash flow hedges are recorded		$	2,623.8	$	126.4
Gain (loss) on cash flow hedging relationships:
Foreign Exchange Contracts:
Hedged Items		$	(3.6)	$	—
Gain (loss) reclassified from OCI into Income		$	3.6	$	—
Interest Rate Swap Agreements:
Gain (loss) reclassified from OCI into Income 1		$	—	$	(1.7)

1 Inclusive of the gain/loss amortization on terminated derivative financial instruments.

After-tax losses of $2.7 million and after-tax gains of $0.9 million were reclassified from Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative instruments) during the periods in which the underlying hedged transactions affected earnings for the three months ended April 4, 2026 and March 29, 2025, respectively.

Interest Rate Contracts: In prior years, the Company entered into interest rate swap agreements in order to obtain the lowest cost source of funds within a targeted range of variable to fixed-debt proportions. These swap agreements, which were designated as cash flow hedges, subsequently matured or were terminated and the gain/loss was recorded in Accumulated other comprehensive loss and is being amortized to interest expense. The cash flows stemming from the maturity or termination of the swaps were previously presented within financing activities in the Condensed Consolidated Statements of Cash Flows.

As of April 4, 2026 and January 3, 2026, the Company did not have any outstanding forward starting swaps designated as cash flow hedges.

Forward Contracts: Through its global businesses, the Company enters into transactions and makes investments denominated in multiple currencies that give rise to foreign currency risk. The Company and its subsidiaries regularly purchase inventory from subsidiaries with functional currencies different than their own, which creates currency-related volatility in the Company’s results of operations. The Company utilizes forward contracts to hedge these forecasted purchases and sales of inventory. Gains and losses reclassified from Accumulated other comprehensive loss are recorded in Cost of sales as the hedged item affects earnings. There are no components excluded from the assessment of effectiveness for these contracts. At April 4, 2026 and

January 3, 2026, the notional value of forward currency contracts outstanding is $614.6 million and $598.3 million, respectively, maturing on various dates through 2027 and 2026, respectively. In April 2026, the Company entered into forward currency contracts with notional values totaling $85.0 million, maturing in 2027.

FAIR VALUE HEDGES

Interest Rate Risk: In an effort to optimize the mix of fixed versus floating rate debt in the Company’s capital structure, the Company enters into interest rate swaps. In prior years, the Company entered into interest rate swaps related to certain of its notes payable which were subsequently terminated. Amortization of the gain/loss on previously terminated swaps is reported in interest expense. Prior to termination, the changes in the fair value of the swaps and the offsetting changes in fair value related to the underlying notes were recognized in earnings. As of April 4, 2026 and January 3, 2026, the Company did not have any active fair value interest rate swaps.

A summary of the pre-tax effect of fair value hedge accounting on the Consolidated Statements of Operations and Comprehensive Income for the three months ended April 4, 2026 and March 29, 2025 is as follows:


(Millions of Dollars)	Year-to-Date 2026 Interest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive Income in which the effects of the fair value hedges are recorded	$	113.1
Amortization of gain on terminated swaps	$	(0.1)


(Millions of Dollars)	Year-to-Date 2025 Interest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive Income in which the effects of the fair value hedges are recorded	$	126.4
Amortization of gain on terminated swaps	$	(0.1)

A summary of the amounts recorded in the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of April 4, 2026 and January 3, 2026 is as follows:


	April 4, 2026
(Millions of Dollars)	Carrying Amount of Hedged Liability (1)		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability

Current Maturities of Long-Term Debt	$	54.2	Terminated Swaps	$	—
Long-Term Debt	$	531.5	Terminated Swaps	$	(18.8)


	January 3, 2026
(Millions of Dollars)	Carrying Amount of Hedged Liability (1)		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
Current Maturities of Long-Term Debt	$	554.8	Terminated Swaps	$	—

Long-Term Debt	$	531.8	Terminated Swaps	$	(18.9)

(1) Represents hedged items no longer designated in qualifying fair value hedging relationships.

NET INVESTMENT HEDGES

The Company utilizes net investment hedges to offset the translation adjustment arising from re-measurement of its investment in the assets and liabilities of its foreign subsidiaries. The total after-tax amounts in Accumulated other comprehensive loss were gains of $54.0 million and $48.9 million at April 4, 2026 and January 3, 2026, respectively.

As of April 4, 2026, the Company had cross currency swaps with notional values totaling $220.0 million maturing in 2027, hedging a portion of its Chinese Renminbi and Taiwan Dollar denominated investments. As of January 3, 2026, the Company had cross currency swaps with notional value totaling $220.0 million maturing in 2026, hedging a portion of its Chinese Renminbi and Taiwan Dollar denominated investments.

As of April 4, 2026, the Company had Euro denominated commercial paper with a value of $547.6 million, hedging a portion of the Company's Euro denominated investments. As of January 3, 2026, the Company had $556.6 million in Euro denominated commercial paper hedging a portion of the Company's Euro denominated investments.

Maturing foreign exchange contracts resulted in $7.1 million cash paid for the three months ended April 4, 2026 and no cash was received or paid for the three months ended March 29, 2025.

Gains and losses on net investment hedges remain in Accumulated other comprehensive loss until disposal of the underlying assets. Gains and losses representing components excluded from the assessment of effectiveness are recognized in earnings in Other, net on a straight-line basis over the term of the hedge. Gains and losses after a hedge has been de-designated are recorded directly to the Consolidated Statements of Operations and Comprehensive Income in Other, net.

The pre-tax gain or loss from fair value changes for the three months ended April 4, 2026 and March 29, 2025 is as follows:


	Year-to-Date 2026
(Millions of Dollars)	Total Gain (Loss) Recorded in OCI		Excluded Component Recorded in OCI		Income Statement Classification	Total Gain (Loss) Reclassified from OCI to Income		Excluded Component Amortized from OCI to Income
Forward Contracts	$	(0.1)	$	—	Other, net	$	—	$	—
Cross Currency Swap	$	(0.9)	$	1.1	Other, net	$	1.1	$	1.1
Non-derivative designated as Net Investment Hedge	$	8.9	$	—	Other, net	$	—	$	—


	Year-to-Date 2025
(Millions of Dollars)	Total Gain (Loss) Recorded in OCI		Excluded Component Recorded in OCI		Income Statement Classification	Total Gain (Loss) Reclassified from OCI to Income		Excluded Component Amortized from OCI to Income
Forward Contracts	$	0.3	$	—	Other, net	$	—	$	—
Cross Currency Swap	$	1.0	$	—	Other, net	$	—	$	—
Non-derivative designated as Net Investment Hedge	$	1.3	$	—	Other, net	$	—	$	—

UNDESIGNATED HEDGES

Foreign Exchange Contracts: Foreign exchange forward contracts are used to reduce risks arising from the change in fair value of certain foreign currency denominated assets and liabilities (such as affiliate loans, payables and receivables). The objective is to minimize the impact of foreign currency fluctuations on operating results. The total notional amount of the forward contracts outstanding is $1.5 billion as of April 4, 2026 and $1.4 billion as of January 3, 2026, maturing on various dates through 2026. The gain (loss) recorded in the Consolidated Statements of Operations and Comprehensive Income from changes in the fair value related to derivatives not designated as hedging instruments under ASC 815 for the three months ended April 4, 2026 and March 29, 2025 is as follows:


(Millions of Dollars)			Income Statement Classification												Year-to-Date 2026												Year-to-Date 2025
Foreign Exchange Contracts			Other, net												$	(4.2)											$	(8.0)

I. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following tables summarize the changes in the balances for each component of Accumulated other comprehensive loss:


(Millions of Dollars)	Currency translation adjustment and other		Cash flow hedges, net of tax		Net investment hedges, net of tax		Pension and other postretirement benefits, net of tax		Total
Balance - January 3, 2026	$	(1,761.6)	$	(43.2)	$	48.9	$	(214.5)	$	(1,970.4)
Other comprehensive (loss) income before reclassifications	(46.8)		10.8		5.9		(3.6)		(33.7)

Reclassification adjustments to earnings	—		2.7		(0.8)		2.8		4.7
Net other comprehensive (loss) income	(46.8)		13.5		5.1		(0.8)		(29.0)
Balance - April 4, 2026	$	(1,808.4)	$	(29.7)	$	54.0	$	(215.3)	$	(1,999.4)


(Millions of Dollars)	Currency translation adjustment and other		Cash flow hedges, net of tax		Net investment hedges, net of tax		Pension and other postretirement benefits, net of tax		Total
Balance - December 28, 2024	$	(2,170.2)	$	(16.7)	$	78.4	$	(212.4)	$	(2,320.9)
Other comprehensive income (loss) before reclassifications	136.5		(8.1)		2.0		(2.7)		127.7

Reclassification adjustments to earnings	—		(0.9)		—		1.6		0.7
Net other comprehensive income (loss)	136.5		(9.0)		2.0		(1.1)		128.4
Balance - March 29, 2025	$	(2,033.7)	$	(25.7)	$	80.4	$	(213.5)	$	(2,192.5)

The Company uses the portfolio method for releasing the stranded tax effects from Accumulated other comprehensive loss. The reclassifications out of Accumulated other comprehensive loss for the three months ended April 4, 2026 and March 29, 2025 were as follows:


(Millions of Dollars)	2026		2025		Affected line item in Consolidated Statements of Operations And Comprehensive Income
Realized (losses) gains on cash flow hedges	$	(4.3)	$	3.6	Cost of sales
Realized losses on cash flow hedges	(1.4)		(1.7)		Interest expense
Total before taxes	$	(5.7)	$	1.9
Tax effect	3.0		(1.0)		Income taxes
Realized (losses) gains on cash flow hedges, net of tax	$	(2.7)	$	0.9

Realized gains on net investment hedges	$	1.1	$	—	Other, net
Tax effect	(0.3)		—		Income taxes
Realized gains on net investment hedges, net of tax	$	0.8	$	—

Amortization of defined benefit pension items:
Actuarial losses and prior service costs/credits	$	(2.2)	$	(2.1)	Other, net
Settlement/curtailment loss	(1.5)		—		Other, net and Restructuring Charges
Total before taxes	$	(3.7)	$	(2.1)
Tax effect	0.9		0.5		Income taxes
Amortization of defined benefit pension items, net of tax	$	(2.8)	$	(1.6)

J. NET PERIODIC BENEFIT COST — DEFINED BENEFIT PLANS

Following are the components of net periodic pension expense for the three months ended April 4, 2026 and March 29, 2025:


	Year-to-Date
	Pension Benefits								Other Benefits
	U.S. Plans				Non-U.S. Plans				All Plans
(Millions of Dollars)	2026		2025		2026		2025		2026		2025
Service cost	$	1.2	$	1.9	$	3.0	$	2.8	$	0.1	$	0.1
Interest cost	11.1		12.5		10.6		10.1		0.3		0.3
Expected return on plan assets	(14.8)		(14.8)		(12.4)		(11.7)		—		—
Amortization of prior service cost (credit)	0.1		0.1		(0.2)		(0.2)		—		—
Amortization of net loss (gain)	2.1		2.0		0.5		0.6		(0.3)		(0.4)
Settlement loss/curtailment (gain)	1.7		—		(0.2)		—		—		—
Special termination benefit	0.2		—		—		—		—		—
Net periodic pension expense	$	1.6	$	1.7	$	1.3	$	1.6	$	0.1	$	—

The components of net periodic benefit expense other than the service cost component are typically included in Other, net in the Consolidated Statements of Operations and Comprehensive Income.

K. FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurement, defines, establishes a consistent framework for measuring, and expands disclosure requirements about fair value. ASC 820 requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1 — Quoted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs and significant value drivers are observable.

Level 3 — Instruments that are valued using unobservable inputs.

The Company is exposed to market risk from changes in foreign currency exchange rates, interest rates, stock prices and commodity prices. The Company holds various financial instruments to manage these risks. These financial instruments are carried at fair value and are included within the scope of ASC 820. The Company determines the fair value of these financial instruments through the use of matrix or model pricing, which utilizes observable inputs such as market interest and currency rates. When determining fair value for which Level 1 evidence does not exist, the Company considers various factors including the following: exchange or market price quotations of similar instruments, time value and volatility factors, the Company’s own credit rating and the credit rating of the counterparty.

Recurring Fair Value Measurements

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis for each of the hierarchy levels:



(Millions of Dollars)	Total Carrying Value		Level 1		Level 2		Level 3
April 4, 2026
Money market fund	$	16.7	$	16.7	$	—	$	—
Deferred compensation plan investments	$	11.3	$	11.3	$	—	$	—
Derivative assets	$	21.9	$	—	$	21.9	$	—
Derivative liabilities	$	12.4	$	—	$	12.4	$	—
Non-derivative hedging instrument	$	547.6	$	—	$	547.6	$	—
Contingent consideration liability	$	105.2	$	—	$	—	$	105.2
January 3, 2026
Money market fund	$	16.9	$	16.9	$	—	$	—
Deferred compensation plan investments	$	15.0	$	15.0	$	—	$	—
Derivative assets	$	9.3	$	—	$	9.3	$	—
Derivative liabilities	$	28.5	$	—	$	28.5	$	—
Non-derivative hedging instrument	$	555.6	$	—	$	555.6	$	—
Contingent consideration liability	$	109.5	$	—	$	—	$	109.5

The following table provides information about the Company's financial assets and liabilities not carried at fair value:


	April 4, 2026				January 3, 2026
(Millions of Dollars)	Carrying Value		Fair Value		Carrying Value		Fair Value
Other investments	$	—	$	—	$	2.0	$	1.9
Long-term debt, including current portion	$	4,758.2	$	4,270.4	$	5,258.1	$	4,844.4

The money market fund and other investments related to the West Coast Loading Corporation ("WCLC") trust are considered Level 1 instruments within the fair value hierarchy. The deferred compensation plan investments are considered Level 1 instruments and are recorded at their quoted market price. The fair values of the derivative financial instruments in the table above are based on current settlement values.

The long-term debt instruments are considered Level 2 instruments and are measured using a discounted cash flow analysis based on the Company’s marginal borrowing rates. The differences between the carrying values and fair values of long-term debt are attributable to the stated interest rates differing from the Company's marginal borrowing rates. The fair values of the Company's variable rate short-term borrowings approximate their carrying values at April 4, 2026 and January 3, 2026.

As part of the Craftsman® brand acquisition in March 2017, the Company recorded a contingent consideration liability representing the Company's obligation to make future payments to Transform Holdco, LLC, which operates Sears and Kmart retail locations, of between 2.5% and 3.5% on sales of Craftsman products in new Stanley Black & Decker channels through March 2032. During the three months ended April 4, 2026, the Company paid $7.2 million for royalties owed. The Company will continue making future payments quarterly through the second quarter of 2032. The estimated fair value of the contingent consideration liability is determined using a discounted cash flow analysis taking into consideration future sales projections, forecasted payments to Transform Holdco, LLC, based on contractual royalty rates, and the related tax impacts. The estimated fair value of the contingent consideration liability was $105.2 million and $109.5 million as of April 4, 2026 and January 3, 2026, respectively. Adjustments to the contingent consideration liability, with the exception of cash payments, are recorded in selling, general, and administrative ("SG&A") expense in the Consolidated Statements of Operations and Comprehensive Income. A 100 basis point reduction in the discount rate would result in an increase to the liability of approximately $2.2 million as of April 4, 2026.

A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The Company's judgments used to determine the estimated contingent consideration liability discussed above, including estimated future sales projections, can materially impact the Company’s results of operations.

Refer to Note H, Financial Instruments, for more details regarding derivative financial instruments, Note O, Contingencies, for more details regarding the other investments related to the WCLC trust, and Note G, Long-Term Debt and Financing Arrangements, for more information regarding the carrying values of the long-term debt.

Non-Recurring Fair Value Measurements

During the first quarter of 2026, the Company recognized a $22.7 million pre-tax, non-cash impairment charge related to a write-down of assets associated with the exit of a Tools and Outdoor product line and related plant closure.

The Company had no other significant non-recurring fair value measurements, nor any other financial assets or liabilities measured using Level 3 inputs, during the first three months of 2026 or 2025.

L. RESTRUCTURING CHARGES AND OTHER, NET

A summary of the restructuring reserve activity from January 3, 2026 to April 4, 2026 is as follows:


(Millions of Dollars)	January 3, 2026		Net Additions		Usage		Currency		April 4, 2026
Severance and related costs	$	45.7	$	40.2	$	(18.2)	$	0.2	$	67.9
Facility closures and other	2.1		4.7		(4.7)		—		2.1
Total	$	47.8	$	44.9	$	(22.9)	$	0.2	$	70.0

For the three months ended April 4, 2026, the Company recognized net restructuring charges of $44.9 million related to severance costs primarily associated with reorganizations of the Company’s supply chain resources and a plant closure, as well as facility exit costs. The majority of the $70.0 million of reserves remaining as of April 4, 2026 is expected to be utilized within the next twelve months.

Segments: The $44.9 million of net restructuring charges for the three months ended April 4, 2026 includes: $35.6 million in the Tools & Outdoor segment; $7.5 million in the Engineered Fastening segment; and $1.8 million in Corporate.

Other, net amounted to $41.9 million and $47.5 million for the three months ended April 4, 2026 and March 29, 2025, respectively, which included intangible asset amortization expense of $28.6 million and $37.3 million, respectively. Other, net is also comprised of several other items, none of which were individually significant during the three months ended April 4, 2026 and March 29, 2025, primarily related to currency-related gains or losses, environmental remediation expenses, deal costs and related consulting costs, certain pension gains or losses, gains or losses on sales of assets, and income related to providing transition services to previously divested businesses.

M. INCOME TAXES

In accordance with ASC 740, Income Taxes, the Company estimates its annual effective tax rate each quarterly reporting period. Tax expense or benefit in interim periods is computed by applying the estimated annual effective tax rate to income or loss, and is adjusted for the tax effect of items of income and expense discretely reported in the period. The estimated annual effective tax rate used in determining income taxes on a year-to-date basis may change in subsequent interim periods. When changes to the estimated annual effective tax rate occur, the prior interim year-to-date tax expense or tax benefit is adjusted to reflect the revised estimated annual effective tax rate. Any adjustment is recorded in the period in which the change occurs.

For the three months ended April 4, 2026, the Company recognized income tax expense of $25.2 million, resulting in an effective tax rate of 29.7%. The effective tax rate for the three months ended April 4, 2026 differs from the U.S. statutory tax rate of 21% primarily due to non-deductible expenses, U.S. tax on foreign earnings, and losses for which a tax benefit is not recognized, partially offset by tax credits.

For the three months ended March 29, 2025, the Company recognized income tax expense of $37.2 million, resulting in an effective tax rate of 29.2%. The effective tax rate for the three months ended March 29, 2025 differs from the U.S. statutory tax rate of 21% primarily due to non-deductible expenses, losses for which a tax benefit is not recognized, and U.S. tax on foreign earnings, partially offset by remeasurement of uncertain tax position reserves and tax credits.

The Company considers many factors when evaluating and estimating its tax positions and the impact on income tax expense, which may require periodic adjustments, and which may not accurately anticipate actual outcomes. It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company's unrecognized tax positions will significantly increase or decrease within the next twelve months. However, based on the uncertainties associated with finalizing audits with the relevant tax authorities including formal legal proceedings, it is not possible to reasonably estimate the impact of any such change.

N. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

The Company’s operations are classified into two reportable business segments: Tools & Outdoor and Engineered Fastening.

The Tools & Outdoor segment is comprised of the Power Tools Group ("PTG"), Hand Tools, Accessories & Storage ("HTAS") and Outdoor Power Equipment ("Outdoor") product lines. The PTG product line includes both professional and consumer products. Professional products, primarily under the DEWALT® brand, include professional grade corded and cordless electric power tools and equipment including drills, impact wrenches and drivers, grinders, saws, routers, sanders, and concrete prep and placement tools as well as pneumatic tools and fasteners including nail guns, nails, staplers and staples, and concrete and masonry anchors. DIY and tradesperson focused products include corded and cordless electric power tools sold primarily under the CRAFTSMAN® and STANLEY® brands, and consumer home products such as household power tools, hand-held vacuums, and small appliances primarily under the BLACK+DECKER® brand. The HTAS product line sells hand tools, power tool accessories and storage products primarily under the DEWALT®, CRAFTSMAN®, and STANLEY® brands. Hand tools include measuring, leveling and layout tools, planes, hammers, demolition tools, clamps, vises, knives, saws, chisels, material handling, and industrial and automotive tools. Power tool accessories include drill bits, screwdriver bits, router bits, abrasives, saw blades and threading products. Storage products include tool boxes, sawhorses, cabinets and engineered storage solution products. The Outdoor product line primarily sells corded and cordless electric lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, pressure washers and related accessories, and gas powered lawn and garden products, including lawn tractors, zero turn ride on mowers, walk behind mowers, snow blowers, residential robotic mowers, hand-held outdoor power equipment, garden tools, and parts and accessories to professionals and consumers primarily under the DEWALT®, CRAFTSMAN®, CUB CADET®, BLACK+DECKER®, and HUSTLER® brand names.

The Engineered Fastening segment is comprised of the Engineered Fastening business. The Engineered Fastening business primarily sells highly engineered components such as fasteners, fittings and various engineered products, which are designed for specific applications across multiple verticals. The product categories include externally threaded fasteners, blind rivets and tools, blind inserts and tools, drawn arc weld studs and systems, engineered plastic and mechanical fasteners, self-piercing riveting systems, precision nut running systems, micro fasteners, high-strength structural fasteners, axel swage, latches, heat shields, pins, and couplings.

The Company utilizes segment profit, which is defined as net sales minus cost of sales and SG&A inclusive of the provision for credit losses (aside from corporate overhead expense), and segment profit as a percentage of net sales to assess the profitability of each segment. Transactions between segments are not material. Segment assets primarily include cash, accounts receivable, inventory, other current assets, property, plant and equipment, right-of-use lease assets and intangible assets. Net sales and long-lived assets are attributed to the geographic regions based on the geographic locations of the end customer and the Company subsidiary, respectively.

The corporate overhead element of SG&A, which is not allocated to the business segments for purposes of determining segment profit, consists of the costs associated with the executive management team and expenses related to centralized functions that benefit the entire Company but are not directly attributable to the business segments, such as legal and corporate finance functions, as well as expenses for the world headquarters facility.

The Company’s chief operating decision maker ("CODM") is the President and Chief Executive Officer. The CODM uses segment profit for each segment as part of the Company's annual operating plan and forecasting process. The CODM monitors actual segment profit results relative to operating plan and forecast to assess the performance of the business and allocate resources.


(Millions of Dollars)	First Quarter 2026
	Tools & Outdoor		Engineered Fastening		Total
Net Sales	$	3,335.6	$	510.8	$	3,846.4

Cost of sales	2,325.4		363.7
Selling, general and administrative	734.2		86.2
Segment Profit	$	276.0	$	60.9	$	336.9

Corporate overhead					(63.6)
Other, net					(41.9)
Loss on sale of business					(3.1)
Asset impairment charges					(22.7)
Restructuring charges					(44.9)
Interest income					37.2
Interest expense					(113.1)
Earnings before income taxes					$	84.8


(Millions of Dollars)	First Quarter 2025
	Tools & Outdoor		Engineered Fastening		Total
Net Sales	$	3,280.9	$	463.7	$	3,744.6

Cost of sales	2,290.5		333.4
Selling, general and administrative	701.2		91.3
Segment Profit	$	289.2	$	39.0	$	328.2

Corporate overhead					(74.4)
Other, net					(47.5)

Loss on sale of business					(0.3)
Restructuring charges					(1.2)
Interest income					49.2
Interest expense					(126.4)
Earnings before income taxes					$	127.6

The Company recognizes revenue at a point in time from the sale of tangible products or over time depending on when the performance obligation is satisfied. For the three months ended April 4, 2026 and March 29, 2025, the majority of the Company’s revenue was recognized at the time of sale. The percent of total segment revenue recognized over time for the Engineered Fastening segment for the three months ended April 4, 2026 and March 29, 2025 was 2.4% in both periods.


(Millions of Dollars)	First Quarter
		2026		2025
Capital and Software Expenditures
Tools & Outdoor		$	47.4	$	56.1
Engineered Fastening		11.1		8.9
Consolidated		$	58.5	$	65.0
Depreciation and Amortization
Tools & Outdoor		$	95.6	$	98.8
Engineered Fastening		17.4		29.6
Consolidated		$	113.0	$	128.4


(Millions of Dollars)	April 4, 2026		January 3, 2026
Segment Assets
Tools & Outdoor	$	18,006.5	$	17,705.5
Engineered Fastening	2,381.4		2,402.0
	20,387.9		20,107.5
Assets held for sale	1,551.0		1,536.3
Corporate assets	(339.1)		(400.1)
Consolidated	$	21,599.8	$	21,243.7

Corporate assets primarily consist of cash, deferred taxes, property, plant and equipment, and right-of-use lease assets. Based on the nature of the Company's cash pooling arrangements, at times the corporate-related cash accounts will be in a net liability position.

GEOGRAPHIC AREAS

The following table is a summary of net sales by geographic area for the three months ended April 4, 2026 and March 29, 2025:


(Millions of Dollars)	Year-to-Date
		2026		2025
United States		$	2,334.8	$	2,327.3
Canada		194.3		198.1
Other Americas		211.0		179.2
Europe		820.9		752.0
Asia		285.4		288.0
Consolidated		$	3,846.4	$	3,744.6

O. CONTINGENCIES

The Company is involved in various legal proceedings relating to environmental issues, employment, product liability, workers’ compensation claims and other matters. The Company periodically reviews the status of these proceedings with both inside and outside counsel, as well as an actuary for risk insurance. Management believes that the ultimate disposition of these matters will not have a material adverse effect on operations or financial condition taken as a whole.

Government Litigation

As previously disclosed, on January 19, 2024, the Company was notified by the Compliance and Field Operations Division (the “Division”) of the Consumer Product Safety Commission (“CPSC”) that the Division intended to recommend the imposition of a civil penalty of approximately $32 million for alleged untimely reporting in relation to certain utility bars and miter saws that were subject to voluntary recalls in September 2019 and March 2022, respectively. The Company believes there are defenses to

the Division’s claims, and has presented its defenses in a meeting with the Division on February 29, 2024 and in a written submission dated March 29, 2024. On April 1, 2024, the Division informed the Company's counsel that the Division intended to recommend that the CPSC refer the matter to the U.S. Department of Justice (the “DOJ”). On May 1, 2024, the Company was informed that the CPSC voted to refer the matter to the DOJ. In December 2024, the CPSC requested that the Company reproduce documents previously provided to the CPSC following changes to the agency’s electronic file sharing system and the Company reproduced the requested documents to the CPSC. Counsel for the Company and DOJ met to discuss the parties' positions. On December 22, 2025, DOJ filed suit in the U.S. District Court for the District of Maryland related to the matter, naming Black & Decker (U.S.) Inc. as a defendant. The Company believes that it took timely and appropriate action and intends to vigorously defend itself against the claims brought by DOJ. The Company does not expect that any sum it may have to pay in connection with this matter, including any reserved amount, will have a materially adverse effect on its financial position, results of operations or liquidity.

The Company is committed to upholding the highest standards of corporate governance and is continuously focused on ensuring the effectiveness of its policies, procedures, and controls.

Class Action Litigation

As previously disclosed, on March 24, 2023, a putative class action lawsuit titled Naresh Vissa Rammohan v. Stanley Black & Decker, Inc., et al., Case No. 3:23-cv-00369-KAD (the “Rammohan Class Action”), was filed in the United States District Court for the District of Connecticut against the Company and certain of the Company’s current and former officers and directors (together, "Defendants"). The complaint was filed on behalf of a purported class consisting of all purchasers of Stanley Black & Decker common stock between October 28, 2021 and July 28, 2022, inclusive. The complaint asserted violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 based on allegedly false and misleading statements related to consumer demand for the Company’s products amid changing COVID-19 trends and macroeconomic conditions. The complaint sought unspecified damages and an award of costs and expenses. On October 13, 2023, Lead Plaintiff General Retirement System of the City of Detroit filed an Amended Complaint that asserted the same claims and seeks the same forms of relief as the original complaint. On December 14, 2023, Defendants filed a motion to dismiss the Amended Complaint in its entirety. Briefing on that motion concluded on April 5, 2024. Following the recent decision of the United States Court of Appeals for the Second Circuit in City of Hialeah Employees’ Retirement System v. Peloton Interactive, Inc., No. 24-2803 (2d Cir. 2025), Lead Plaintiff informed Defendants that it wished to further amend its complaint. Pursuant to a stipulation between the parties, so ordered by the District Court on September 30, 2025, Lead Plaintiff provided Defendants with a proposed second amended complaint on October 30, 2025, and Defendants consented to its filing. Lead Plaintiff subsequently filed its Second Amended Complaint on November 14, 2025, asserting the same claims on behalf of the same putative class and seeking the same forms of relief as the prior complaints. Defendants filed a renewed motion to dismiss on December 18, 2025. Lead Plaintiff filed its opposition to Defendants’ renewed motion to dismiss on January 29, 2026, and Defendants filed a reply in support of their renewed motion to dismiss on February 19, 2026. The Company intends to vigorously defend this action in all respects. Given the early stage of this litigation, at this time, the Company is not in a position to assess the likelihood of any potential loss or adverse effect on its financial condition or to estimate the amount or range of potential losses, if any, from this action.

Derivative Actions

As previously disclosed, on August 2, 2023 and September 20, 2023, derivative complaints were filed in the United States District Court for the District of Connecticut, titled Callahan v. Allan, et al., Case No. 3:23-cv-01028-OAW (the “Callahan Derivative Action”) and Applebaum v. Allan, et al., Case No. 3:23-cv-01234-OAW (the “Applebaum Derivative Action”), respectively, by putative stockholders against certain current and former directors and officers of the Company premised on the same allegations as the Rammohan Class Action. The Callahan and Applebaum Derivative Actions were consolidated by Court order on November 6, 2023, and defendants’ responses to both complaints have been stayed pending the disposition of any motions to dismiss in the Rammohan Class Action. The individual defendants intend to vigorously defend the Callahan and Applebaum Derivative Actions in all respects. However, given the early stage of this litigation, at this time, the Company is not in a position to assess the likelihood of any potential loss or adverse effect on its financial condition or to estimate the amount or range of potential losses, if any, from these actions.

As previously disclosed, on October 19, 2023, a derivative complaint was filed in Connecticut Superior Court, titled Vladimir Gusinsky Revocable Trust v. Allan, et al., Docket Number HHBCV236082260S, by a putative stockholder against certain current and former directors and officers of the Company. Plaintiff seeks to recover for alleged breach of fiduciary duties and unjust enrichment under Connecticut state law premised on the same allegations as the Rammohan Class Action. By Court order on November 11, 2023, the Connecticut Superior Court granted the parties’ motion to stay defendants’ response to the complaint pending the disposition of any motions to dismiss in the Rammohan Class Action. The individual defendants intend to vigorously defend this action in all respects. However, given the early stage of this litigation, at this time, the Company is not

in a position to assess the likelihood of any potential loss or adverse effect on its financial condition or to estimate the amount or range of potential losses, if any, from this action.

Environmental

In the normal course of business, the Company is a party to administrative proceedings and litigation, before federal and state regulatory agencies, relating to environmental remediation with respect to claims involving the discharge of hazardous substances into the environment, generally at current and former manufacturing facilities. In addition, some of these claims assert that the Company is responsible for damages and liability, for remedial investigation and clean-up costs, with respect to sites that have never been owned or operated by the Company, but the Company has been identified as a potentially responsible party ("PRP").

In connection with the 2010 merger with Black & Decker, the Company assumed certain commitments and contingent liabilities. Black & Decker is a party to litigation and administrative proceedings with respect to claims involving the discharge of hazardous substances into the environment at current and former manufacturing facilities and has also been named as a PRP in certain administrative proceedings.

The Company, along with many other companies, has been named as a PRP in numerous administrative proceedings for the remediation of various waste sites, including 23 active Superfund sites. Current laws potentially impose joint and several liabilities upon each PRP. In assessing its potential liability at these sites, the Company has considered the following: whether responsibility is being disputed, the terms of existing agreements, experience at similar sites, and the Company’s volumetric contribution at these sites.

The Company’s policy is to accrue environmental investigatory and remediation costs for identified sites when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If no amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. The amount of liability recorded is based on an evaluation of currently available facts with respect to each individual site and includes such factors as existing technology, presently enacted laws and regulations, and prior experience in remediation of contaminated sites. The liabilities recorded do not take into account any claims for recoveries from insurance or third parties. As assessments and remediation progress at individual sites, the amounts recorded are reviewed periodically and adjusted to reflect additional technical and legal information that becomes available. As of April 4, 2026 and January 3, 2026, the Company had reserves of $252.9 million and $259.2 million, respectively, for remediation activities associated with Company-owned properties, as well as for Superfund sites, for losses that are probable and estimable. Of the April 4, 2026 amount, $49.9 million is classified as current within Accrued expenses and $203.0 million as long-term within Other liabilities which is expected to be paid over the estimated remediation period. As of April 4, 2026, the Company's net cash obligations, including the WCLC assets discussed below, is $237.3 million. As of April 4, 2026, the range of environmental remediation costs that is reasonably possible is $172.9 million to $389.5 million which is subject to change in the near term. The Company may be liable for environmental remediation of sites it no longer owns. Liabilities have been recorded on those sites in accordance with the Company's policy.

West Coast Loading Corporation

As of April 4, 2026, the Company has recorded $15.6 million in Other assets related to funding received by the Environmental Protection Agency (“EPA”) and placed in a trust in accordance with the final settlement with the EPA, embodied in a Consent Decree approved by the United States District Court for the Central District of California on July 3, 2013. Per the Consent Decree, Emhart Industries, Inc. (a dissolved and liquidated former indirectly wholly-owned subsidiary of The Black & Decker Corporation) (“Emhart”) has agreed to be responsible for an interim remedy at a site located in Rialto, California and formerly operated by WCLC, a defunct company for which Emhart was alleged to be liable as a successor. The remedy will be funded by (i) the amounts received from the EPA as gathered from multiple parties, and, to the extent necessary, (ii) Emhart's affiliate. The interim remedy required the construction of a water treatment facility and the treatment of ground water at or around the site for a period of approximately 30 years or more. The construction of the water treatment facility was completed in September 2023, and the treatment of ground water is ongoing. As of April 4, 2026, the Company's net cash obligation associated with these remediation activities, including WCLC assets, is $7.4 million.

Centredale Site

On April 8, 2019, the United States District Court approved a Consent Decree documenting the terms of a settlement between the Company and the United States for reimbursement of EPA's past costs and remediation of environmental contamination found at the Centredale Manor Restoration Project Superfund Site ("Centredale site"), located in North Providence, Rhode Island. Black & Decker and Emhart are liable for site clean-up costs under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") as successors to the liability of Metro-Atlantic, Inc., a former operator at the Centredale site. The Company is complying with the terms of the settlement and has fully reimbursed the EPA for its past costs. Remediation work at the Centredale site remains ongoing. After the EPA and the Rhode Island Department of Environmental Management (“RIDEM”) implemented regulatory changes that allows for the disposal of contaminated soil and sediment from the Centredale Site at the offsite Central Landfill located in Johnson, Rhode Island, the Company and the Rhode Island Resource Recovery Corporation (“RIRRC”) recently reached an agreement in principle to govern such disposal. The Company and the RIRRC are in the process of finalizing the documentation for that arrangement. Emhart’s contractor’s assessment of this offsite landfill disposal alternative involves soil and sediment volume estimates that could also change or increase as additional design investigations are performed at the site, which may further impact the remediation process. Emhart has entered into a cooperative agreement with the Federal and State Natural Resource Trustees to collectively conduct an assessment of what, if any, Natural Resource Damages may be associated with the contamination at the Centredale Site. That process remains in its very preliminary stages. Litigation continues in the District Court concerning Phase 3 of the case, which is addressing the potential allocation of liability to other PRPs who may have contributed to contamination of the Centredale site with dioxins, polychlorinated biphenyls and other contaminants of concern. Following a six-week bench trial in Phase 3 on the issue of CERCLA liability against 4 PRPs in October 2024, the Court issued a decision on September 8, 2025, finding all four PRPs liable for contamination at the Site. The litigation will now move to a final allocation phase, Phase 3(B), which will determine each PRP's equitable share of responsibility for the Centredale site investigation, cleanup costs, and other damages caused by the contamination. As of April 4, 2026, the Company has reserved $155.6 million for this site.

Lower Passaic River

The Company, along with over 100 other parties, has been identified as a PRP at Operable Units (“OUs”) 2 and 4 of the Diamond Alkali Superfund Site (the “Site”) pursuant to CERCLA. OU-4 encompasses the 17-mile Lower Passaic River (“LPR”) and OU-2 (which is subsumed within OU-4) consists of the lower 8.3 miles of the LPR. On March 4, 2016, the EPA issued a Record of Decision ("ROD") selecting the remedy for the lower 8.3 miles of the River, which according to the EPA, will cost approximately $1.4 billion. On September 28, 2021, the EPA issued an Interim Remedy ROD for the upper 9 miles of the LPR that the EPA estimates will cost $441 million (net present value).

In March 2017, the EPA announced a plan to commence an allocation process to identify PRPs that may be eligible for a cash out settlement for the remediation costs. As a result of the allocation process, the EPA and certain parties (including the Company) reached an agreement for a cash-out settlement for remediation of the entire 17-mile LPR. On December 16, 2022, the United States lodged a Consent Decree with the United States District Court for the District of New Jersey in United States v. Alden Leeds, Inc. et al. (No. 2:22-cv-07326) (“Alden Leeds”) that addressed the liability of 85 parties (including the Company) for an aggregate amount of $150 million. On December 18, 2024, the Court granted the United States’ motion to enter the Consent Decree. The Court’s order entering the Consent Decree has been appealed by two parties (Occidental Chemical Company (“OCC”) and Nokia of America Corporation (“Nokia”)) which were not offered to participate in the settlement. While briefing was ongoing, OCC filed documents with the Court indicating that OCC is now known as Environmental Resource Holdings LCC due to internal reorganization. Nearly a month before OCC’s filing, OCC merged into a new Texas limited liability company named Snowcone, LLC, which then changed its name to Occidental Chemical Company, LLC. Occidental Chemical Company, LLC then executed a divisive merger under Texas law pursuant to which it split into two entities (1) Occidental Chemical Corporation, a Texas corporation (“OCC-Texas”), which retained OCC’s assets and (2) Occidental Chemical Company, LLC, which was stripped of its assets and changed its name to Environmental Resource Holdings LLC. In October 2025, OCC’s then-parent, Occidental Petroleum Corporation agreed to sell 100% of the equity in OCC-Texas to Berkshire Hathaway, Inc. (“Berkshire Hathaway”) for $9.7 billion. The sale of OCC-Texas to Berkshire Hathaway closed on January 2, 2026. The Company’s joint defense group called the Small Parties Group (or “SPG”) is seeking information to determine whether Environmental Resource Holdings LLC, the purported amended appellant as a result of OCC’s internal reorganization, is the proper party to the appeal and is evaluating its options to ensure that the corporate successor (which may include OCC-Texas as well as Environmental Resource Holdings LLC) has the financial resources to satisfy OCC’s liabilities at the LPR. On February 6, 2026, certain members of the SPG (including the Company) filed a complaint in the United States District Court for the District of New Jersey (BASF Catalysts LLC, et al. v. Occidental Chemical Corp., No. 2:26-cv-01226 (“BASF”)) against OCC-Texas requesting that the Court enter a declaratory judgment that OCC-Texas is jointly and severally liable for OCC’s CERCLA liabilities. Nokia and certain public entities, including the Passaic Valley Sewerage Commissioners (“PVSC”), filed motions to intervene in the lawsuit, which have been opposed by OCC-Texas. On March 24, 2026, OCC-Texas filed a motion to dismiss the complaint citing various grounds for dismissal. On April

20, 2026, the SPG plaintiffs and public entities filed briefs in opposition to OCC-Texas’s motion to dismiss. The appeal of the Court’s opinion in Alden Leeds granting the United States’ motion to enter the Consent Decree has been fully briefed by the parties. The Company has paid its share of the settlement amount, which currently is held in escrow by the EPA pending the outcome of the appeal.

On June 30, 2018, OCC filed a complaint in the United States District Court for the District of New Jersey (Occidental Chemical Corp. v. 21st Century Fox, et al. (No. 2:18-cv-11273) (“21st Century Fox”)) against over 100 companies, including the Company, seeking CERCLA cost recovery or contribution for past costs relating to various investigations and cleanups OCC has conducted or is conducting in connection with OU-2 and OU-4 and seeking a declaratory judgment to hold the defendants liable for their proper shares of future response costs for OCC's ongoing activities in connection with the Site, which would include OCC’s Remedial Investigation/Feasibility Study ("RI/FS") in Newark Bay (OU-3 of the Site). The litigation was stayed while the Court considered the Consent Decree and during the appeal discussed above. On April 21, 2026, Environmental Resource Holdings, LLC, as successor to OCC, filed a letter with the Court requesting leave to file a motion to consolidate the litigation in BASF into 21st Century Fox. The SPG parties will oppose the motion to consolidate the two actions.

The U.S. Army Corps of Engineers and other federal agencies have been conducting a natural resources damage assessment of the LPR. The results of this assessment may be used in the future to support a claim by the federal agencies for natural resource damages against the Company and other PRPs.

At this time, the Company cannot reasonably estimate its liability related to the litigation, remediation efforts and natural resource damages as discussed above, as the OCC litigation is pending, the Court’s opinion granting the United States’ motion to enter the Consent Decree has been appealed, and Newark Bay RI/FS and the natural resource damage assessment are ongoing.

Kerr McGee

Per the terms of a Final Order and Judgment approved by the United States District Court for the Middle District of Florida on January 22, 1991, Emhart is responsible for a percentage of remedial costs arising out of the Kerr McGee Chemical Corporation Superfund Site located in Jacksonville, Florida. On March 15, 2017, the Company received formal notification from the EPA that the EPA had issued a ROD selecting the preferred alternative identified in the Proposed Cleanup Plan. The Multistate Trust managing the remediation provides quarterly projections for the remediation costs for work to be performed, and the Company adjusts the reserve for its percentage share of such costs accordingly. As of April 4, 2026, the Company has reserved $14.0 million for this site.

The amounts recorded for the aforementioned identified contingent liabilities are based on estimates. Amounts recorded are reviewed periodically and adjusted to reflect additional technical and legal information that becomes available. Actual costs to be incurred in future periods may vary from the estimates, given the inherent uncertainties in evaluating certain exposures. Subject to the imprecision in estimating future contingent liability costs, the Company does not expect that any sum it may have to pay in connection with these environmental matters in excess of the amounts recorded will have a materially adverse effect on its financial position, results of operations or liquidity.

P. COMMITMENTS AND GUARANTEES

COMMITMENTS — The Company has numerous assets, predominantly real estate, vehicles and equipment, under various lease arrangements. The following is a summary of the Company's right-of-use assets and lease liabilities:


(Millions of Dollars)	April 4, 2026	January 3, 2026
Right-of-use assets	$454.9	$464.3
Lease liabilities	$465.3	$476.7
Weighted-average incremental borrowing rate	4.7%	4.7%
Weighted-average remaining term	6 years	6 years

Right-of-use assets are included within Other assets in the Condensed Consolidated Balance Sheets, while lease liabilities are included within Accrued expenses and Other liabilities, as appropriate. The Company determines its incremental borrowing rate based on interest rates from its debt issuances, taking into consideration adjustments for collateral, lease terms and foreign currency. As of April 4, 2026 and January 3, 2026, $7.8 million and $7.2 million of right-of-use assets, respectively, and $7.7 million and $7.0 million of lease liabilities, respectively, were reclassified to held for sale due to the divestiture of the CAM business.

The Company has arrangements with third-party financial institutions that offer voluntary supply chain finance ("SCF") programs. These arrangements enable certain of the Company’s suppliers, at the supplier’s sole discretion, to sell receivables due from the Company to the financial institutions on terms directly negotiated with the financial institutions. The Company negotiates commercial terms with its suppliers, including prices, quantities, and payment terms, regardless of suppliers’ decisions to finance the receivables due from the Company under these SCF programs. The Company has no economic interest in a supplier’s decision to participate in these SCF programs, and no direct financial relationship with the financial institutions, as it relates to these SCF programs. The amounts due to the financial institutions for suppliers that voluntarily participate in these SCF programs were presented within Accounts payable on the Company’s Condensed Consolidated Balance Sheets and totaled $387.5 million and $349.3 million as of April 4, 2026 and January 3, 2026, respectively.

As of April 4, 2026, the Company had unrecognized commitments that require the future purchase of goods or services (unconditional purchase obligations) to provide it with access to products and services at competitive prices. These obligations consist of supplier agreements with long-term minimum material purchase requirements and freight forwarding arrangements with minimum quantity commitments. As of April 4, 2026, the Company had unconditional purchase obligations of $89.2 million, consisting of $43.9 million in 2026 and $45.3 million in 2027. The decrease in unconditional purchase obligations from January 3, 2026 is primarily attributable to an amendment executed with a supplier in the first quarter of 2026.

GUARANTEES — The Company’s financial guarantees at April 4, 2026 are as follows:


(Millions of Dollars)	Term	Maximum Potential Payment		Carrying Amount of Liability
Guarantees on the residual values of leased assets	Four years to nine years	$	45.5	$	—
Standby letters of credit	Up to twenty years	177.2		—
Commercial customer financing arrangements	Up to ten years	105.1		16.2
Total		$	327.8	$	16.2

The Company has guaranteed a portion of the residual values associated with certain of its variable rate leases. The lease guarantees are for an amount up to $45.5 million while the fair value of the underlying assets is estimated at $56.2 million. The related assets would be available to satisfy the guarantee obligations.

The Company has issued $177.2 million in standby letters of credit that guarantee future payments which may be required under certain insurance programs and in relation to certain environmental remediation activities described more fully in Note O, Contingencies.

The Company provides various limited and full recourse guarantees to financial institutions that provide financing to U.S. and Canadian Mac Tool distributors and franchisees for their initial purchase of the inventory and trucks necessary to function as a distributor and franchisee. In addition, the Company provides limited and full recourse guarantees to financial institutions that extend credit to certain end retail customers of its U.S. Mac Tool distributors and franchisees. The gross amount guaranteed in these arrangements is $105.1 million and the $16.2 million carrying value of the guarantees issued is recorded in Other liabilities in the Condensed Consolidated Balance Sheets.

The Company provides warranties on certain products across its businesses. The types of product warranties offered generally range from one year to limited lifetime. There are also certain products with no warranty. Further, the Company sometimes incurs discretionary costs to service its products in connection with product performance issues. Historical warranty and service claim experience forms the basis for warranty obligations recognized. Adjustments are recorded to the warranty liability as new information becomes available.

The changes in the carrying amount of product warranties for the three months ended April 4, 2026 and March 29, 2025 are as follows:


(Millions of Dollars)	2026		2025
Balance beginning of period	$	157.8	$	140.1
Warranties and guarantees issued	40.2		39.5
Warranty payments and currency	(36.3)		(34.5)
Balance end of period	$	161.7	$	145.1

Q. DIVESTITURES

Consolidated Aerospace Manufacturing

On April 6, 2026, the Company completed the previously announced sale of its CAM business and received proceeds of approximately $1.8 billion in cash. The divestiture is part of the Company's strategic commitment to simplify and streamline its portfolio to focus on its core Tools & Outdoor and Engineered Fastening businesses. As of April 4, 2026 and January 3, 2026, the assets and liabilities related to the CAM business were classified as held for sale on the Company's Condensed Consolidated Balance Sheets. This divestiture does not qualify for discontinued operations and therefore, its results are included in the Company's continuing operations within the Engineered Fastening segment for all periods presented. The estimated pre-tax gain on sale to be recognized during the second quarter of 2026 is approximately $260 million to $280 million. As part of the purchase and sale agreement, the Company will perform transition services relating to certain administrative functions for the purchaser primarily for a period of six months or less, pending integration of these functions into their pre-existing business processes.

Following is the pre-tax income for this business for the three months ended April 4, 2026, and March 29, 2025:


(Millions of Dollars)			2026						2025
Pre-tax income			$	22.8					$	3.3

The carrying amounts of the assets and liabilities that were aggregated in assets held for sale and liabilities held for sale as of April 4, 2026 and January 3, 2026 are presented in the following table:


(Millions of Dollars)	April 4, 2026		January 3, 2026
Cash and cash equivalents	$	1.5	$	—
Accounts and notes receivable, net	96.0		94.2
Inventories, net	173.6		168.0
Other current assets	0.4		0.2
Property, plant and equipment, net	121.9		117.1
Goodwill	737.1		739.4
Intangibles, net	412.7		410.1
Other assets	7.8		7.3
Total assets	$	1,551.0	$	1,536.3

Accounts payable and accrued expenses	$	56.8	$	44.2
Other long-term liabilities	9.7		9.4
Total liabilities	$	66.5	$	53.6

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