2025 Annual Report

2025 ANNUAL REPORT

1 STANLEY BLACK & DECKER

Tools & Outdoor

A Global Leader of Tools and Outdoor Solutions

$13.2B

2025 Annual Revenue

KEY MARKETS

• Residential Construction

• Non-Residential Construction

• Outdoor & DIY

  $6.5B

  Power Tools Group

  $3.7B

  Hand Tools, Accessories & Storage

  $3.0B

  Outdoor Power Equipment

  Engineered Fastening

  A Global Leader of Highly Engineered, Application-Based Solutions

  $2.0B

  2025 Annual Revenue1

  KEY MARKETS

• Automotive

• General Industrial

• Aerospace1

1 The Company announced in December 2025 that it has entered into a definitive agreement to sell its Consolidated Aerospace Manufacturing ("CAM") business. The transaction is expected to close in the first half of 2026 and is subject to regulatory approval and other customary closing conditions. 2025 Annual Revenue for Engineered Fastening included $414 million related to the CAM business.

2025 ANNUAL REPORT 1

Our ambition is anchored by three core strategic imperatives: activating our brands with purpose, driving operational excellence, and accelerating innovation. Relentlessly pursuing these three initiatives will enable us to deliver long-term value and push the boundaries for our industry. Our iconic brands, led by DEWALT, STANLEY, and CRAFTSMAN compete in strong and growing markets, and carry weight and connote value.

We have what it takes to win. Our dedication to fulfilling the needs of our customers and end users ensures we create an enduring impact and propels us toward achieving our mission.

What We Accomplished in 2025

Faced with a volatile macroeconomic backdrop, evolving customer needs, and dynamic geopolitics, our organization demonstrated resilience and agility, adapting quickly

to execute our strategy and deliver on our commitments.

We performed and persevered through the operating headwinds, to achieve adjusted earnings per share2 growth of 7% and adjusted gross margin2 expansion of 70 basis points year over year. We posted low single-digit organic revenue2 growth in our DEWALT brand and in the Engineered Fastening segment. At the same time, we preserved our ability to make long-term investments critical to accelerating future growth.

These results were realized despite challenges introduced by tariff policy changes and resulting trade uncertainty. We took proactive steps early in the year and followed with decisive actions after the April trade policy changes, implementing prudent, strategic pricing strategies and expediting supply chain and footprint initiatives. These measures enabled us to more effectively address the fluid trade policy environment and global supply chain disruptions.

As we implemented operational strategies to adapt to tariffs, we also completed our Global Cost Reduction Program, achieving our original cost savings target and delivering

$2.1 billion of pre-tax run-rate savings. Going forward, building on the foundation established, we expect to deliver annual gross productivity savings of approximately 3% of net spend by leveraging a lean-based operating system and our redesigned distribution network.

Our operating performance and earnings growth, supported by disciplined working capital management, generated free cash flow2 of nearly $700 million. This cash flow2 enabled us to increase our dividend, repay $240 million of debt,

and reinvest in growth.

Finally, consistent with our commitment to streamline

our portfolio and concentrate on our core Tools & Outdoor and Engineered Fastening businesses, in December 2025 we announced an agreement to sell Consolidated Aerospace

Manufacturing, our aerospace fasteners business, for $1.8 billion. Once closed, this deal will further simplify our business and generate cash proceeds that will meaningfully contribute

to debt reduction and to reaching our target leverage ratio of 2.5x net debt to adjusted EBITDA2 by the end of 2026.

STANLEY BLACK & DECKER

Dear

This year was marked by progress, but we strive for more. Each day,

we are operating with discipline and urgency, guided by an unwavering commitment to our mission: to build a world-class branded industrial company. This requires a deep focus on quality, agility, and innovation-helping end users solve their

most complex challenges. With a strengthened foundation and a more streamlined, focused organization, we are poised to drive performance towards our long-term targets.

2

Where We Are Going

The work ahead is significant, and we approach it with urgency and clarity of purpose-harnessing the power of AI and other transformative technologies to redefine operational excellence and further amplify our innovation pipeline with the goal of setting new benchmarks for our industry.

Our forward-looking strategy is anchored in the three imperatives that will drive performance and distinguish us in the market:

• Activating Brands with Purpose

  Our brands must stand for quality, safety and productivity, and we must invest to continue to deepen our connection with end users. Our aim is to ensure every product, solution and service aligns with the end users' evolving needs and helps to solve their challenges.

• Driving Operational Excellence

  Operational excellence is a mindset: continuous improvement to deliver stronger results, and more effective resource allocation with higher return on investment. We focus on net productivity achievement to support continued margin expansion, thereby unlocking the ability to further reinvest in the business to build our brands and fuel innovation.

• Accelerating Innovation

Our end users demand the best products. To lead

this market, our speed of innovation must exceed the pace at which end users' expectations increase. Our platforming method enables speed to market by leveraging modularity combined with purposeful differentiation to deliver uncompromised productivity and value.

To execute these strategic imperatives, we have built comprehensive, actionable and measurable plans that are woven into our operating systems. Teams across the globe are embracing a culture of ownership, where the results we achieve are the product of focused effort and a relentless drive to fulfill our commitments.

What That Will Achieve

We strive to build a resilient enterprise that can continue to thrive in any environment, deliver consistent value

to our stakeholders, and outperform the competition.

By executing on our strategic imperatives, we will achieve the outcomes that matter most: sustainable growth, expanded margins, and strong free cash flow generation. It is also our responsibility to allocate capital efficiently and return value to you, our shareholders.

Looking Ahead

I was honored to assume the CEO role late last year at this pivotal moment for our Company. I am deeply

grateful for the trust and support of our Board of Directors, the dedication of our employees, and the partnership

of our customers, suppliers, and communities.

We look ahead with both humility and confidence. Humility, because the market will not wait, and we understand the hard work that success will require.

Confidence, because each person at this Company

is aligned behind our strategy, and feels a responsibility to deliver on our commitments. I am energized by the talent, innovation, and drive across our organization.

I am confident that together, we can realize our vision, create lasting value for all stakeholders, and set a new standard of excellence for our industry.

Thank you for your support and investment. Sincerely,

CHRIS NELSON

President &

Chief Executive Officer

$15.1B

Total Revenues

2025 Summary of Results

2 Non-GAAP financial measure. Refer to page 7 for additional information.

2025 ANNUAL REPORT 3

We Have What It Takes To Win

Iconic Brands

Rapid Innovation Focused on End-User Needs

Broad Channel and Geographical Coverage

Operational Excellence Funds Growth

Framing for the Future

With the momentum we have built through our transformation, my confidence in Stanley Black & Decker's leadership and direction has never been stronger. Since mid-2022, we have delivered on ambitious cost reduction commitments, achieving

$2.1 billion in savings, through improvements across our supply chain and operating model. These structural changes are not just milestones limited to our transformation-they are the foundation for sustained profitability and long-term growth.

Our executive team, under Chris Nelson's leadership, exemplifies energy, discipline, and operational excellence, and they are positioning us to capture greater market share and reach new heights. Their commitment to transparency and execution has been clear throughout our transformation, and I trust their ability to deliver exceptional value for

our shareholders.

As Executive Chair, I remain committed to supporting Chris and the leadership team, and will continue focusing on strategic oversight and governance until my planned retirement in October 2026. I am confident this Board has

the expertise, composition and skills to support the business moving forward, especially thanks to recent additions:

Mary A. Laschinger in 2025, and Shane M. O'Kelly in early 2026.

In January 2026, we also announced that Debra Crew assumed the role of Lead Independent Director, and that she will transition to Chair, effective upon my retirement, reinforcing our dedication to best-in-class governance and forward-looking leadership. Debra Crew succeeded Andrea Ayers, who will continue to serve on the Board as an independent director until her retirement, following

more than 11 years of distinguished service. I would like to thank Andrea for her wise counsel and exemplary leadership during her tenure, particularly her significant contributions during her time as Chair leading the Board through the Company's transformation.

Our recent achievements are just the beginning.

The true strength of Stanley Black & Decker lies in our people, our world-class brands, and our relentless drive for innovation. Together, these pillars will underpin our resilience and growth outpacing the market for years to come.

DONALD ALLAN, JR.

Executive Chair

4 STANLEY BLACK & DECKER

Activating Brands with Purpose

Driving Operational Excellence

Accelerating Innovation

Long-Term Financial Goals

Expect to reflect in 2028 financials3

Mid-Single Digit in a Low-Single Digit Market

Organic Revenue Growth²

~100% of GAAP

Net Income Over a Multi-Year Period

Free Cash Flow Conversion²

35% to 37%

Adjusted Gross Margin²

Low-to-Mid Teens

by 2028; ≥ Mid Teens Beyond 2028

CFROI²

Mid-to-High Teens

% of Sales

Adjusted EBITDA²

Solid Investment Grade

Credit Rating

2 Non-GAAP financial measure. Refer to page 7 for additional information.

3 These goals assume the tariff landscape as of January 2026, low-single digit market growth, and inflation around 2% per year.

‌Financial

2 Non-GAAP financial measure. Refer to page 7 for additional information.

4 The 2023 amounts in the table above for Adjusted Gross Profit, Adjusted Gross Margin, and Adjusted Diluted EPS for total SWK, and the 2023 amounts for Adjusted Segment Profit and Adjusted Segment Margin for Tools & Outdoor, have been updated as compared to amounts previously disclosed to remove a $26 million inventory write-off related to the closure of the Company's Fort Worth site from its Non-GAAP adjustments. There have been no changes to any other amounts or the Company's consolidated and segment financial measures prepared in accordance with U.S. GAAP.

‌

2 Non-GAAP Financial Measures: Organic revenue is defined as the difference between total current and prior year sales less the impact of companies acquired and divested in the past twelve months, foreign currency fluctuations, and transfers of product lines between segments. Organic revenue growth or organic growth is organic revenue divided by prior year sales. Gross profit is defined as sales less cost of sales. Gross margin is gross profit as a percentage of sales. Segment profit is defined as sales less cost of sales and selling, general and administrative ("SG&A") expenses (aside from corporate overhead expense). Segment margin is segment profit as a percentage of sales. EBITDA is earnings before interest, taxes, depreciation and amortization. EBITDA margin is EBITDA as a percentage of sales. Gross profit, gross margin, segment profit, segment margin, earnings, EBITDA and EBITDA margin are adjusted for certain gains and charges, such as supply chain transformation costs, asset impairments, voluntary retirement program costs, environmental charges, acquisition and divestiture-related items, restructuring, and other adjusting items. Management uses these metrics as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Adjusted earnings per share or adjusted EPS, is diluted GAAP EPS excluding certain gains and charges. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well

as its ability to fund future growth and to provide a return to the shareowners and is useful information for investors. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items.

Free cash flow conversion is defined as free cash flow divided by net income. Cash flow return on investment ("CFROI") is computed as cash from operations plus after-tax interest expense, divided by the two-point average of debt and equity. Net debt to adjusted EBITDA is total debt less cash on hand divided by adjusted EBITDA. The Company considers the use of the Non-GAAP financial measures above relevant to aid analysis and understanding of the Company's results, business trends and outlook measures aside from the material impact of certain gains and charges and ensures appropriate comparability to operating results of prior periods. Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of the attached Form 10-K for a summary of the pre-tax Non-GAAP adjustments and Non-GAAP reconciliations.

The Company provides long-term financial goals for the Non-GAAP financial measures of adjusted gross margin and adjusted EBITDA presented on a basis excluding certain gains and charges, as well as organic revenue growth, free cash flow conversion and CFROI. A reconciliation for these Non-GAAP measures is not available without unreasonable effort due to the inherent difficulty of forecasting the timing and/or amount of various items that have not yet occurred, including the high variability and low visibility with respect to certain gains or charges that would generally be excluded from Non-GAAP financial measures and which could be material to the Company's results in accordance with U.S. GAAP. Additionally, estimating such GAAP measures and providing a meaningful reconciliation consistent with the Company's accounting policies for future periods requires a level of precision that is unavailable for these future multi-year periods and cannot be accomplished without unreasonable effort. The Company believes such a reconciliation would also imply a degree of precision that

is inappropriate for these forward-looking measures.

5 The 2023 amounts in the table above for Non-GAAP adjustments before income taxes and Adjusted EBITDA (and Adjusted EBITDA % of Net Sales)

have been updated as compared to amounts previously disclosed to remove the inventory write-off related to the Fort Worth closure, as further discussed in footnote 4 on page 6.

Our

Board of Directors

DONALD ALLAN, JR.6

Executive Chair,

Stanley Black & Decker, Inc.

DEBRA A. CREW6

Lead Independent Director of Stanley Black & Decker, Inc; Former Chief Executive, Diageo plc

CHRISTOPHER J. NELSON

President &

Chief Executive Officer, Stanley Black & Decker, Inc.

ANDREA J. AYERS7

Retired President & Chief Executive Officer, Convergys Corporation

SUSAN K. CARTER

Retired Senior Vice President & Chief Financial Officer, Ingersoll Rand plc (now Trane Technologies plc)

JOHN L. GARRISON, JR.

Former Chairman, President & Chief Executive Officer, Terex Corporation

MICHAEL D. HANKIN

Co-President &

Co-Chief Executive Officer, Brown Advisory Incorporated

MARY A. LASCHINGER

Retired Chief Executive Officer & Chair of the Board, Veritiv Corporation

ROBERT J. MANNING

Retired Chairman & Chief Executive Officer,

MFS Investment Management

ADRIAN V. MITCHELL

Chief Financial Officer, Warby Parker Inc.

SHANE M. O'KELLY

President &

Chief Executive Officer, Advance Auto Parts, Inc.

JANE M. PALMIERI

Former President, Industrial Intermediates & Infrastructure, Dow Inc.

6 The Board has elected Ms. Crew to serve as independent Chair of the Board, effective upon the retirement of Mr. Allan on October 1, 2026.

7 Not standing for reelection at the 2026 Annual Shareholder Meeting.

Management Team

CHRISTOPHER J. NELSON

President &

Chief Executive Officer

PATRICK D. HALLINAN

Executive Vice President, Chief Financial Officer & Chief Administrative Officer

BILL BECK

Senior Vice President & President, Tools & Outdoor

THOMAS EHRHARDT

President, Engineered Fastening

AGUSTIN LOPEZ DIAZ

Senior Vice President, Chief Supply Chain Officer

FRANCESCA CAMPBELL

Senior Vice President, General Counsel & Corporate Secretary

MICHAEL WHERLEY

Vice President, Investor Relations

DEBORAH K. WINTNER

Senior Vice President & Chief Human Resources Officer

As of March 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 3, 2026 or

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-05224

STANLEY BLACK & DECKER, INC.

(Exact Name Of Registrant As Specified In Its Charter)

Connecticut 06-0548860

(State or Other Jurisdiction of Incorporation or Organization)

1000 STANLEY DRIVE NEW BRITAIN, CT 06053

(Address of Principal Executive Offices)

(I.R.S. Employer Identification Number)

Registrant's Telephone Number, Including Area Code 860 225-5111 Securities Registered Pursuant to Section 12(b) of the Act:

Title Of Each Class Trading Symbol(s) Name Of Each Exchange on Which Registered

Common Stock $2.50 Par Value per Share SWK New York Stock Exchange

Securities Registered Pursuant To Section 12(g) Of The Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No

As of June 27, 2025, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $10.5 billion based on the New York Stock Exchange closing price for such shares on that date. On February 16, 2026, the registrant had 155,079,468 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement relating to its 2026 annual meeting of shareholders (the "2026 Proxy Statement") are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2026 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

TABLE OF CONTENTS PART I

‌FORM 10-K

PART I

ITEM 1. BUSINESS

Stanley Black & Decker, Inc. ("the Company") was founded in 1843 by Frederick T. Stanley and incorporated in Connecticut in 1852. In March 2010, the Company completed a merger with The Black & Decker Corporation ("Black & Decker"), a company founded by S. Duncan Black and Alonzo G. Decker and incorporated in Maryland in 1910. At that time, the Company changed its name from The Stanley Works to Stanley Black & Decker, Inc. The Company's principal executive office is located at 1000 Stanley Drive, New Britain, Connecticut 06053 and its telephone number is (860) 225-5111.

The Company is a global provider of hand tools, power tools, outdoor products and related accessories, as well as a leading provider of engineered fastening solutions, with 2025 consolidated annual revenues of $15.1 billion. Approximately 62% of the Company's 2025 revenues were generated in the United States, with the remainder largely from Europe (16%), emerging markets (13%) and Canada (4%).

In recent years, the Company has re-shaped its portfolio through a series of divestitures. In July 2022, the Company sold its Convergent Security Solutions ("CSS") business comprised of the commercial electronic security and healthcare businesses for net proceeds of $3.1 billion and its Mechanical Access Solutions ("MAS") business comprised of the automatic doors business for net proceeds of $916 million. In August 2022, the Company sold its Oil & Gas business comprised of the pipeline services and equipment businesses. In April 2024, the Company sold its Infrastructure business, comprised of the attachment and handheld hydraulic tools business, for net proceeds of $729 million. Most recently, the Company announced in December 2025 that it had entered into a definitive agreement to sell its Consolidated Aerospace Manufacturing ("CAM") business for $1.8 billion in cash. These divestitures reflect the Company's ongoing strategic commitment to simplify and streamline its portfolio to focus on its leading market positions in tools and outdoor, as well as engineered fastening systems.

Refer to Note S, Divestitures, of the Notes to Consolidated Financial Statements in Item 8 for further discussion.

In mid-2022, the Company initiated a business transformation that included reinvestment for faster growth as well as a Global Cost Reduction Program designed to achieve $2.0 billion of pre-tax run-rate cost savings by optimizing its cost base across its supply chain and selling, general, and administrative ("SG&A") functions. The Company completed this program as of the end of 2025 and generated approximately $2.1 billion of pre-tax run-rate savings, exceeding the original program target.

The Company is guided by its mission to build a world-class branded industrial company, by solving end users' most pressing and complex challenges. The strategy to achieve this mission is anchored by three core imperatives: activating our brands with purpose, driving operational excellence, and accelerating innovation.

Activating our brands with purpose is rooted by the Company's brands standing for quality, safety and productivity. The Company is investing resources to continue to deepen connections with end users, with every product, solution and service aligned with their evolving needs.

Driving operational excellence is centered on continuous improvement to deliver stronger results, including more effective resource allocation with higher return on investment. The focus on driving annual net productivity will contribute to continued margin expansion and reinvestment into brand health and innovation.

Accelerating innovation is required to advance and expand the end-to-end workflow solutions that end users demand. The Company's platforming method enables faster speed to market and leverages modularity combined with specialization to deliver uncompromised productivity and value.

With a strengthened foundation and a more streamlined organization, focused on its core imperatives, the Company is well-positioned to drive performance towards its long-term financial targets as further discussed in "Strategic Objectives" in Item 7.

In terms of capital allocation, the Company's top priority is funding organic growth investments that drive long-term value. The Company also remains committed, over time, to maintaining a strong and growing dividend and has a preference toward opportunistic share repurchases. In the near-term, the Company intends to utilize the net proceeds from the pending CAM divestiture to reduce debt.

The Company continues to focus on sustainability efforts that align with its business strategy. The Company's sustainability approach is comprised of three impact pillars of People, Product, and Planet-which guide the Company's focus and initiatives for sustainable performance. The Company's most recent Impact Report provides an overview of the Company's priority impact goals and progress. To learn more about the Company's sustainability strategy and sustainability efforts, please view the

most recent Impact Report on the Company's website. As explained in the most recent Impact Report, these goals make a number of assumptions and measurements of progress against such goals are based on certain methodologies and there are no assurances that those assumptions or methodologies will be correct or that such goals will be achieved or retained. The Impact Report is not, and is not intended to be, part of this Annual Report on Form 10-K and is not incorporated into this report by reference.

Description of the Business

The Company's operations are classified into two reportable business segments: Tools & Outdoor and Engineered Fastening. In the first quarter of 2025, the Industrial segment was renamed "Engineered Fastening" as a result of a more focused portfolio following recent divestitures. The Engineered Fastening segment name change is to the name only and had no impact on the Company's consolidated financial statements or segment results. Both reportable segments have significant international operations and are exposed to translational and transactional impacts from fluctuations in foreign currency exchange rates.

Additional information regarding the Company's business segments and geographic areas is incorporated herein by reference to the material captioned "Business Segment Results" in Item 7 and Note O, Business Segments and Geographic Areas, of the Notes to Consolidated Financial Statements in Item 8.

Tools & Outdoor

The Tools & Outdoor segment is comprised of the Power Tools Group ("PTG"), Hand Tools, Accessories & Storage ("HTAS"), and Outdoor Power Equipment ("Outdoor") product lines. Annual revenues in the Tools & Outdoor segment were $13.2 billion in 2025, representing 87% of the Company's total revenues. The segment is a worldwide leader in the tools and outdoor markets and carries iconic brands in the industry, including DEWALT®, CRAFTSMAN®, STANLEY®, BLACK+DECKER® and CUB CADET®.

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 segment sells its products to professional end users, distributors, independent dealers, retail consumers and industrial customers in a wide variety of industries and geographies. The majority of sales are distributed through retailers, including home centers, mass merchants, hardware stores, and retail lumber yards, as well as third-party distributors, independent dealers, and a direct sales force.

Engineered Fastening

The Engineered Fastening segment is comprised of the Engineered Fastening business and included the Infrastructure business prior to its sale in April 2024. Annual revenues in the Engineered Fastening segment were $2.0 billion in 2025, representing 13% of the Company's total revenues.

The Engineered Fastening business is a global leader of highly engineered, application-based solutions. The 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 business sells to customers in the automotive, manufacturing, electronics, construction, and aerospace industries, amongst others, and its products are distributed through a direct sales force and, to a lesser extent, third-party distributors.

Other Information

Competition

The Company competes on the basis of its reputation for innovation and product quality, its well-known brands, its commitment to customer service, its strong customer relationships, the breadth of its product lines focused on core end-user segments, and customer value propositions.

The Company encounters active competition in the Tools & Outdoor and Engineered Fastening segments from both larger and smaller companies that offer the same or similar products and services or that produce different products appropriate for the same uses. Certain large customers offer private label brands ("house brands") that compete across a wide spectrum of the Company's Tools & Outdoor segment product offerings.

Major Customers

A significant portion of the Company's Tools & Outdoor products are sold to home centers and mass merchants in the U.S. and Europe. A consolidation of retailers both in North America and abroad has occurred over time. While this consolidation and the domestic and international expansion of these large retailers have provided the Company with opportunities for growth, the increasing size and importance of individual customers create a certain degree of exposure to potential sales volume loss. The Home Depot accounted for approximately 15% and 14% of the Company's consolidated net sales in 2025 and 2024, respectively, while Lowe's accounted for approximately 12% and 14% of the Company's consolidated net sales in 2025 and 2024, respectively. No other customer exceeded 10% of the Company's consolidated net sales in 2025 or 2024.

Working Capital

Operational Excellence, one of the Company's core imperatives, leverages the principles of sales and operations planning, operational lean, global supply management, order-to-cash excellence, and upskilling the Company's workforce. The Company aims to develop standardized business processes and system platforms to reduce costs and provide scalability. The Company plans to continue leveraging Operational Excellence to drive ongoing improvements in working capital and cash flow generation by focusing on strategic inventory management, reducing cycle times, and improving customer service levels.

Raw Materials

The Company's products are manufactured using resins, ferrous and non-ferrous metals including, but not limited to, steel, zinc, copper, brass, aluminum and nickel. The Company also purchases components such as batteries, motors, engines, transmissions, and electronic components to use in manufacturing and assembly operations along with resin-based molded parts. The raw materials required are procured globally and generally available from multiple sources at competitive prices. As part of the Company's Enterprise Risk Management, the Company has implemented a supplier risk mitigation strategy in order to identify and address any potential supply disruption or material scarcity issues associated with commodities, components, finished goods and critical services. The Company does not anticipate difficulties in obtaining supplies for any raw materials used in its production processes and has maintained the proactive measures to secure global energy supply insulating the Company's production from supply constraints.

Patents and Trademarks

No business segment is solely dependent, to any significant degree, on patents, licenses, franchises or concessions, and the loss of one or several of these patents, licenses, franchises or concessions would not have a material adverse effect on any of the Company's businesses. The Company owns numerous patents, none of which individually are material to the Company's operations as a whole. These patents expire at various times over the next 20 years. The Company holds licenses, franchises and concessions, none of which individually or in the aggregate are material to the Company's operations as a whole. These licenses, franchises and concessions vary in duration, but generally run from one to 40 years.

The Company has numerous trademarks that are used in its businesses worldwide. In the Tools & Outdoor segment, significant trademarks include DEWALT®, CRAFTSMAN®, STANLEY®, BLACK+DECKER®, DEWALT FLEXVOLT®, DEWALT POWERSTACK®, DEWALT POWERSHIFT™, IRWIN®, LENOX®, PORTER-CABLE®, BOSTITCH®, FATMAX®,

Powers®, Guaranteed Tough®, MAC TOOLS®, PROTO®, Vidmar®, FACOM®, Expert®, CribMaster®, LISTA®, MTD®, CUB CADET®, TROY-BILT®, HUSTLER®, and the yellow & black color scheme for power tools and accessories.

Significant trademarks in the Engineered Fastening segment include STANLEY®, NELSON®, POP®, Avdel®, Tucker®, NPR®, Spiralock®, Integra®, and Optia®. Significant trademarks related to the CAM business, within the Engineered

Fastening segment, include CAM®, Bristol Industries®, Voss™, Aerofit™, and EA Patten™. The terms of these trademarks typically vary from 10 to 20 years, with most trademarks being renewable indefinitely for like terms.

Research and Development Costs

Research and development costs, which are classified in Selling, general and administrative ("SG&A"), were $321.4 million and $328.8 million for fiscal years 2025 and 2024, respectively, or 2.1% of net sales in both years. The Company continues to invest in its innovation model targeting key end-user segments with products designed to deliver against the attributes of productivity, quality and safety, and places an emphasis on electrification. During 2025, the Company achieved 20% faster product development by leveraging a rigorous implementation of the platforming method, which utilizes modularity combined with specialization to deliver uncompromised productivity and value.

Governmental Regulations

The Company's operations are subject to numerous federal, state and local laws and regulations, both within and outside the U.S., in areas such as environmental protection, international trade, anti-corruption, data privacy, tax, consumer protection, government contracts, climate change and others. The Company is subject to import and export controls, tariffs, and other trade-related regulations and restrictions in the countries in which it has operations or otherwise does business. These controls, tariffs, regulations, and restrictions have had, and may continue to have, a material impact on the Company's business, including its ability to sell products and to manufacture or source components. Refer to Item 1A. Risk Factors in Part I of this Annual Report on Form 10-K for additional information regarding various laws and regulations that affect the Company's business operations.

The Company is also subject to various environmental laws and regulations in the U.S. and foreign countries where it has operations. In the normal course of business, the Company is involved in various legal proceedings relating to environmental issues. 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. In the event that 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 January 3, 2026 and December 28, 2024, the Company had reserves of $259.2 million and $275.4 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 2025 amount, $69.5 million is classified as current within Accrued expenses and $189.7 million as long-term within Other liabilities, which is expected to be paid over the estimated remediation period. As of January 3, 2026, the Company has recorded $15.6 million in Other assets related to funding by the Environmental Protection Agency ("EPA") and monies received have been placed in trust in accordance with the Consent Decree associated with the West Coast Loading Corporation ("WCLC") proceedings, as further discussed in Note R, Contingencies, of the Notes to Consolidated Financial Statements in Item 8. Accordingly, the Company's net cash obligation as of January 3, 2026 associated with the aforementioned remediation activities is $243.6 million. As of January 3, 2026, the range of environmental remediation costs that is reasonably possible is $179.1 million to $395.7 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.

The amount recorded for identified contingent liabilities is 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 matters in excess of the amounts recorded will have a materially adverse effect on its financial position, results of operations or liquidity. Additional information regarding environmental matters is available in Note R, Contingencies, of the Notes to Consolidated Financial Statements in Item 8.

Compliance with government regulations, including environmental and climate change regulations, has not had, and based on current information and the applicable laws and regulations currently in effect, is not expected to have a material effect on the Company's capital expenditures, results of operations or competitive position. However, laws and regulations may be changed, accelerated or adopted that impose significant operational restrictions and compliance requirements upon the Company and which could negatively impact its operating results and financial condition.

Human Capital Management

To achieve its mission of building a world-class branded industrial company and solving end users' most pressing and complex challenges, the Company continues its focus on human capital management to grow as an employer of choice with leading market positions in each of its major categories. The Company's human capital management approach is guided by its purpose (why we do what we do), values (intrinsically what we prioritize), leadership capabilities (how we lead to drive growth), core imperatives (what we focus on), operating model (how we work), and key performance indicators (how we measure success).

The focus areas that will guide this journey forward include a strong foundation of attracting, developing and retaining talent, building organizational capabilities, evolving the Company's culture in line with the business strategy and values and enabling Human Resources functional excellence.

To drive this focus and build a workforce that can execute its strategy, the Company prioritizes attracting, developing, and retaining top talent across the Company, so that it can serve its customers and end users with best-in-class brands and innovation. To achieve this, the Company is committed to cultivating an environment where employees feel connected to its mission and to one another. In addition, the Company has developed a new Stanley Black & Decker Leader Profile, which lays out a distinct set of capabilities and behaviors meant not only for executives but all employees.

As of January 3, 2026, the Company had approximately 43,500 employees in 59 countries. Approximately 35% of total employees were employed in the U.S. In addition, the Company had approximately 6,300 temporary contractors globally, primarily in operations. The employee workforce is comprised of approximately 66% hourly-paid employees, principally in manufacturing and distribution centers, and 34% salaried employees.

As of January 3, 2026, there were approximately 840 U.S. employees represented by 9 different local labor unions, and a majority of European employees are represented by Works Councils. One U.S. collective bargaining agreement is scheduled for renegotiation in the next 12 months. The Company strives to maintain a positive relationship with all its employees, as well as the unions and Works Councils representing them, where applicable.

Talent Attraction, Development, and Retention

Attraction

In 2025, the Company continued to expand its global talent acquisition center of excellence, building on the work started in 2022 within the regions to better focus on acquiring top talent and addressing skill shortages locally, while providing a consistent, candidate experience. Additionally, the Company continues to work with a dedicated focus on improving the candidate journey and increasing manager capabilities to facilitate a more effective approach to the recruitment process. This improved approach includes everything from attraction through onboarding with a more efficient application process and streamlined interviews and communication for job seekers. The Company also continued work to develop an Employee Value Proposition and Employer Brand to help articulate Company values and culture to potential candidates in the attraction process, which it expects to begin launching in the first quarter of 2026.

Development

Talent development continues to be a key enabler of the Company's strategy. The Company's annual performance enablement process encourages self-reflection and leader feedback on goals, supporting a continuous cycle of development. Building on its foundation of clearly defined goals and performance feedback, the Company expanded its process in 2025 to include a dedicated mid-year performance and development conversation. This enhancement facilitated meaningful conversations between eligible employees and their managers focused on strengths, growth opportunities and development goals, reflecting its commitment to ongoing growth. By continuing to evolve the process introduced in late 2023, the Company is further enhancing the achievement of personal and business goals through a regular cycle of feedback and employee development.

The Company believes a skilled workforce is central to meeting customer and end-user needs, both in the Company's professional roles and in its manufacturing and distribution facilities. In 2025, salaried employees completed more than 89,500 courses and programs, resulting in over 67,000 hours of training, through a combination of in-person and online learning. The Company continues to invest in its hourly operations workforce with dedicated enablement programs focused on upskilling initiatives and future career opportunities, as well as job-specific training. Through digital learning, the Company delivers on-demand visual training to empower employees with flexible, accessible, and relevant learning opportunities that support personal growth, compliance, and organizational success while ensuring the Company remains competitive and innovative.

This powerful efficiency tool has expanded from the factory floor and is integrated into onboarding and safety training, helping the Company's operations employees learn outside of the classroom and increasing uptake for on-the-job training.

The Company's leadership development is anchored in its core values and newly-introduced strategic capabilities aligned to drive the business strategy. These capabilities, Customer Centricity, Enterprise Mindset, Change Leadership and People Focus, are the foundation of how the Company's leaders can drive growth in their daily work interactions. Throughout 2025, the Company cultivated understanding and embedded these leadership capabilities across performance and development processes. In addition, the Company has invested in deploying development programs to build skill and capability in these areas, including feedback, coaching skills, and inclusive leadership. The Company has continued its robust leadership talent review process and remains invested in dedicated coaching for many of its leaders.

In 2026, the Company plans to continue to evolve its Leadership and Development portfolio through enterprise-wide and role-specific training and development experiences at all levels.

Retention

The Company monitors organizational health through a variety of channels including employee engagement surveys, town halls, roundtables, listening sessions, and an updated internal communications platform. The Company maintained its track record of a strong participation rate with its 2025 employee engagement survey. The recent implementation of robust leader dashboards enables the Human Resources data team to regularly deliver new metrics, reports and dashboards related to headcount, hiring and retention. These enhanced tools empower leaders with timely, value-driven insights from people data, supporting informed decision-making and ongoing organizational improvement.

Total Rewards and Employee Well-being

Total Rewards programs consist of compensation, benefits, recognition, and well-being programs. Program designs incorporate both global and market-specific considerations that are externally competitive and internally equitable for employees, reflecting the Company's commitment to attract, engage and retain a high caliber workforce. For a sizable portion of the Company's workforce, its programs also differentiate talent impact and drive/reinforce positive business outcomes through incentive awards, promote an ownership mindset and enable mobility across our workforce.

The Company is committed to fostering a culture of holistic well-being, recognizing that employees who thrive individually are best equipped to achieve sustainable high performance and contribute positively to the Company culture. The Company's comprehensive approach incorporates multiple dimensions of well-being, including mental and emotional health, physical health, occupational satisfaction, financial stability, and social connections.

Environmental, Health and Safety

The Company maintains an Environmental, Health and Safety ("EHS") management system that establishes its standard of care and the framework for consistent EHS program implementation across global sites, in alignment with the Company's Code of Business Ethics, applicable laws and site-specific needs. The framework developed by the Corporate EHS team includes risk assessment processes, compliance management, policies and standards, all enabled by an integrated data management platform that improves line of sight into EHS performance, tracking capabilities and drives proactive leading indicator performance, including risk mitigation. In 2025, the Company continued to prioritize EHS as a non-negotiable that applies to employees and operating locations and subsidiaries worldwide, including manufacturing facilities, distribution centers, warehouses, laboratories, field service centers, retail locations and office locations and mobile units. While legal requirements may vary by country and jurisdiction, the Company remains committed to continuous improvement in EHS performance, capabilities and compliance. In 2025, the Safety Business Impact Group ("Safety BIG") was launched to amplify and advance the Company's culture of safety & well-being. Activation areas included the reinforcement of the Company's Safety Cardinal Rules as a core expectation for all employees and of the need to identify risks associated with non-routine tasks performed by commercial and field-based employees.

Grow the Trades

In 2025, the Company doubled down on its initial "Grow the Trades" commitment to invest $30 million into initiatives that educate tradespeople, by announcing an increased $60 million commitment to those initiatives by 2030. Through the program, the Company invests in initiatives that educate tradespeople such as plumbers, electricians, carpenters, HVAC techs and others. Since the original goal was set in 2023, the Company has invested nearly $30 million in these initiatives.

Despite recent improvements in enrollment and demand trends, a large and growing skills gap persists due to an aging workforce, legacy underinvestment in vocational education, and a long-standing emphasis on four-year degrees over trades pathways. Rapid enrollment growth, continued limited resources and long waitlists, and emerging technologies in the trades all call for increased private sector involvement in addressing the skilled trades gap. The Company is also providing resources to improve accessibility of the trades to underserved populations, and in 2025, provided scholarships to students pursuing secondary education aligned with its business priorities. Through the Stanley Black & Decker Leadership Scholarship, the

‌Company awarded scholarships to high school and college scholars, affording them with access to expanded experiential learning beyond their classrooms and enabling them to pursue their education while working to achieve their leadership and academic aspirations in business, technology, and STEM fields. Through the DEWALT® Trades Scholarship program, the Company provided scholarships to individuals attending a two-year college or vocational-technical school who are pursuing a trade degree/certificate in fields aligned with the Company's end markets.

The Company is committed to addressing the trade skills gap and investing in education and training programs for local tradespeople and the communities that support them.

Governance and Oversight

The Chief Executive Officer ("CEO") and the management Executive Committee are entrusted with developing and advancing the Company's human capital strategy, which is reviewed annually with periodic updates on progress with the Compensation & Talent Development Committee and the entire Board. The Chief Human Resources Officer ("CHRO"), who reports directly to the CEO, is charged with the development and stewardship of this strategy on an enterprise-wide basis. This incorporates a broad range of dimensions, including culture, values, labor and employee relations, leadership expectations and capabilities, talent development, performance management, and total rewards. Each year, the Company conducts an extensive talent review with its CEO in which the leadership team, key talent, and succession plans are reviewed. Afterward, the CEO or CHRO leads a talent review with the Compensation & Talent Development Committee, which provides strategic oversight and direction regarding the talent development process, as well as with the entire membership of the Board, at least annually.

Refer to the caption "Information About Our Executive Officers" in Part 1 of this Annual Report on Form 10-K and Item 10. Directors, Executive Officers and Corporate Governance of the Registrant in Part III of this Annual Report on Form 10-K for additional information regarding the Company's Executive Officers.

Code of Business Ethics and Workplace Harassment Prevention training, among others, are provided to employees and the content is regularly reviewed and updated. Employees have access to the Integrity Helpline where support, guidance and resources are available. Employees are encouraged to raise any concerns through multiple channels, including through the confidential Integrity Helpline, without fear of retaliation or retribution.

Available Information

The Company's website is located at https://www.stanleyblackanddecker.com. This URL is intended to be an inactive textual reference only. It is not intended to be an active hyperlink to the Company's website. Additionally, this Annual Report on Form 10-K includes several website addresses and references to additional materials found on those websites. These websites and materials, including the information on the Company's website that may be referenced in this Annual Report on Form 10-K, is provided for convenience only and is not intended to be part of this Annual Report on Form 10-K and is not incorporated into this report by reference. The Company makes its Forms 10-K, 10-Q, 8-K and amendments to each available free of charge on its website as soon as reasonably practicable after filing them with, or furnishing them to, the U.S. Securities and Exchange Commission ("SEC").

ITEM 1A. RISK FACTORS

The following describes management's beliefs and opinions regarding the material factors that make an investment in our securities speculative or risky, as the Company's business, operations and financial condition are subject to various risks and uncertainties. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including those risks set forth under the heading entitled "Cautionary Statement Concerning Forward-Looking Statements" in Item 7, and in other documents that the Company files with, or furnishes to, the SEC, before making any investment decision with respect to its securities. Some of the risks and uncertainties discussed below may have occurred in the past. The disclosures below are provided by way of example only and are not representations as to whether or not the risks or uncertainties have occurred in the past, but are provided because if any of the risks or uncertainties actually occur or develop, the Company's business, financial condition, results of operations and future growth prospects could change. Under these circumstances, the trading prices of the Company's securities could decline, and you could lose all or part of your investment in the Company's securities.

Business and Operational Risks

The Company's business is subject to risks associated with sourcing, manufacturing and maintaining appropriate inventory levels.

The Company imports large quantities of finished goods, component parts and raw materials. Lead times for these items vary significantly and may be further impacted by global shortages of critical components. Global trade, inflation, deflation, and supply chain constraints in the wake of geopolitical tensions and conflicts have adversely impacted, and could adversely impact again, the availability, pricing and lead times for products, component parts and raw materials and thus negatively impact the Company's results of operations. Specifically, the Company sources materials from South Korea, China, Taiwan and Israel, among other countries, and any future tensions or conflicts in such regions could cause material disruptions in the Company's supply chain which could, in turn, cause product shortages, delays in delivery and/or increases in the Company's cost incurred to produce and deliver products to its customers. Other potential consequences arising from the further escalation of conflicts and global geopolitical tensions cannot be predicted. Generally, raw materials and components are available from several different suppliers, however, for certain products, such as components requiring rare earth minerals sourced from China and components requiring cobalt, the Company and its suppliers may rely on one or very few suppliers or suppliers concentrated in certain regions. For example, in April 2025, China restricted export of certain rare earth minerals and may in the future continue to restrict, expand restrictions, or stop exporting these or other materials. Any such restrictions or delays on the export of rare earth minerals from China have caused, and may in the future cause, increased costs and/or production disruptions which could materially and adversely impact the Company's results of operations, cash flow and financial condition.

In addition, the Company's ability to import these items in a timely and cost-effective manner may be affected by conditions at ports or issues that otherwise affect transportation and warehousing providers, such as fluctuations in freight costs, port and shipping capacity, personnel security, labor disputes and shortages, severe weather, or increased homeland security requirements in the U.S. and other countries. These issues have delayed, and could delay in the future, importation of products or require the Company to locate alternative ports or warehousing providers to avoid disruption to customers. These alternatives may not be available on short notice or could result in higher transit costs, which could have an adverse impact on the Company's business, results of operations, and financial condition.

The Company also relies on its ability to maintain inventory levels appropriate to meet consumer and customer demand. The Company is focused on optimizing inventory levels via improved supply chain conditions and strategic inventory management. Any failure to optimize inventory levels or otherwise maintain appropriate inventory levels to meet consumer and customer demand, may expose the Company to risks of excess inventory and less marketable or obsolete inventory and could require the Company to sell excess or obsolete inventory at a discount, which could result in inventory write-offs that would negatively impact the Company's results of operations.

The Company also relies on its suppliers to provide high quality products and to comply with applicable laws. The Company's ability to find qualified suppliers who meet its standards, and supply products in a timely, cost-effective and efficient manner is a significant challenge with the increasing demand from customers, especially with respect to goods sourced from non-U.S. suppliers. A supplier's failure to meet the Company's standards, provide products in a timely, cost-effective and efficient manner, or comply with applicable laws is beyond the Company's control. These issues could have a material negative impact on the Company's business and profitability. Poor quality or an insecure supply chain may also adversely affect the reliability and reputation of the Company. Further, as a result of inflationary or deflationary economic conditions, changes in tariffs or trade policies or otherwise, the Company believes it is possible that a limited number of suppliers may either cease operations or require additional financial assistance from the Company in order to fulfill their obligations. In a limited number of circumstances, the magnitude of the Company's purchases of certain items is of such significance that a change in established relationships with suppliers or increase in the costs of purchased raw materials, component parts or finished goods could result in manufacturing interruptions, delays, inefficiencies or an inability to market products. Changes in value-added tax rebates, currently available to the Company or to its suppliers, could also increase the costs of the Company's manufactured products, as well as purchased products and components, and could adversely affect the Company's results.

The Company's business is subject to risks associated with the global trade environment, including customs and trade regulations, tariffs, quotas, import taxes and international trade agreements.

Substantially all of the Company's import operations are subject to customs requirements, trade restrictions and protection measures, and to tariffs, quotas and taxes on imports set by governments through mutual agreements, bilateral actions or, in some cases unilateral action, such as tariffs implemented by the U.S. government under Section 301 of the Trade Act of 1974. In addition, the countries in which the Company's products and materials are manufactured or imported from (including importation into the U.S. of the Company's products manufactured overseas) may from time to time impose additional quotas, duties, tariffs or other restrictions on its imports (including restrictions on manufacturing operations) or adversely modify existing restrictions. Adverse changes in the Company's import costs and restrictions, or failure by the Company's suppliers to comply with customs regulations or similar laws, could harm the Company's business.

Changes in governmental policy regarding international trade, including import and export regulation, sanctions, and international trade agreements, have negatively impacted the Company's business. In 2025, the U.S. government announced a series of tariffs on imported goods into the U.S., which prompted retaliatory actions from some of its trading partners, and in response, the Company introduced strategies to mitigate the impacts of these changes on its results of operations, including price increases and supply chain adjustments. However, there is no assurance that the Company will be able to mitigate the full impact of all such tariffs, retaliatory actions or other changes in trade policies that have or may develop. Similar U.S. actions involving China, Mexico or other countries, and any corresponding retaliatory efforts, could be adopted or modified with little or no advanced notice, and result in disruption to the Company's supply chain and an increase in supply chain costs that the Company may not be able to accurately assess and offset, which could in turn require the Company to increase its prices and, in the event customer demand declines as a result, adversely impact the Company's results of operations. Moreover, decisions made as part of the Company's tariff mitigation strategy concerning the rationalization, restructuring or relocation of facilities, production or component sources and any similar actions could also subject the Company to additional or new tariffs or trade regulations and interpretations of those regulations, reputational risks, and other issues relating to the importation of products. For example, in 2025 the Company began shifting production of certain power tools to Mexico. As a result, these products became subject to additional tariffs on imports from Mexico in 2025. Even though the Company is taking actions to qualify for an exemption under the United States-Mexico-Canada Agreement to mitigate the additional tariff costs, there is no guarantee that the Company will be able to obtain such qualification.

There is a possibility of further escalation of trade tensions, tariffs or additional trade restrictions. For example, in April 2025, China imposed export restrictions on certain rare earth minerals that are used in certain components of the Company's products, which resulted in delays and shortages of certain components. If China were to further restrict exporting, or implement burdensome and lengthy licensing processes for the export of, these materials or components, or pressure other countries to do so, the Company's and its suppliers' ability to obtain such materials or components may be disrupted and the Company may not be able to obtain sufficient quantities, or obtain supply in a timely manner, or at a commercially reasonable cost.

Certain of the Company's competitors may be better positioned than the Company to withstand or react to these kinds of changes and other restrictions on global trade and as a result the Company could lose market share to such competitors. While the Company may be able to expand or shift sourcing options and has been focused, and continues to focus, on implementing other supply chain adjustments, such efforts are time-consuming and are, or could be, difficult or impracticable for many products and may result in an increase in its manufacturing costs, or otherwise materially and adversely impact the Company's results of operations, cash flow and financial condition.

The Company's operations are also subject to the effects of international trade agreements and regulations such as the United States-Mexico-Canada Agreement, and the activities and regulations of the World Trade Organization. Although these trade agreements generally have, and the Company has benefited from, positive effects on trade liberalization, sourcing flexibility and cost of goods by reducing or eliminating the duties and/or quotas assessed on products manufactured in a particular country, trade agreements, however, can also impose requirements that adversely affect the Company's business, such as setting quotas on products that may be imported from a particular country into key markets including the U.S. or the European Union ("EU"), or making it easier for other companies to compete, by eliminating restrictions on products from countries where the Company's competitors source products.

The Company cannot predict if, and to what extent, other countries in which its products are currently manufactured or will be manufactured in the future, or countries into which its products are imported, will be subject to, or implement, additional or increased tariffs, new trade restrictions or other changes to existing international trade agreements, the impact of which the Company may not be able to accurately assess or effectively mitigate and any of which could have a material adverse impact on its business. In addition, efforts to withdraw from, or substantially modify, such agreements or arrangements, in addition to the implementation of more restrictive trade policies, such as more detailed inspections, import or export licensing requirements (e.g. China's limitations on exports of rare earth minerals) and exchange controls or new barriers to entry, could limit the Company's ability to capitalize on current and future growth opportunities in international markets, impair its ability to expand the business by offering new products, and could adversely impact its production costs, customer demand and relationships with customers and suppliers. Any of these consequences could have a material adverse effect on the Company's results of operations, financial condition and cash flows.

Changes in customer or end-user preferences, the inability to maintain mutually beneficial relationships with large customers, inventory reductions by customers, and the inability to penetrate new channels of distribution could adversely affect the Company's business.

The Company has certain significant customers, particularly home centers and major retailers. In 2025, the two largest customers comprised approximately 27% of consolidated net sales, with U.S. and international mass merchants and home centers collectively comprising approximately 42% of consolidated net sales. The loss or material reduction of business, the lack of success of sales initiatives, changes in customer business strategies or the Company's inability to support those

strategies, customers' inability to execute on business strategies, or changes in customer or end-user preferences or loyalties for the Company's products, related to any such significant customer could have a material adverse impact on the Company's results of operations and cash flows. In addition, the Company's major customers are volume purchasers, a few of which are much larger than the Company, and have strong bargaining power with suppliers. This factor limits the Company's ability to recover cost increases through higher selling prices. Furthermore, unanticipated inventory adjustments by these customers, whether due to external factors or changes in the price of the Company's products, could have a negative impact on the Company's net sales.

In times of tough economic conditions, the Company has experienced significant distributor inventory corrections reflecting de-stocking of the supply chain associated with difficult credit markets. Such distributor de-stocking exacerbated sales volume declines pertaining to weak end-user demand and the broader economic recession. The Company's results may be adversely impacted in future periods by such customer inventory adjustments. Further, the inability to continue to penetrate new channels of distribution may have a negative impact on the Company's future results.

The Company faces active global competition and if it does not compete effectively, its business may suffer.

The Company faces active competition and resulting pricing pressures. The Company's products compete on the basis of, among other things, its reputation for product quality, its well-known brands, price, performance, innovation and customer service capabilities. The Company competes with both larger and smaller companies that offer the same or similar products and services or that produce different products appropriate for the same uses. These companies, especially those with global footprints and low-cost sources of supply, vertically integrated business models and/or highly protected home countries outside the United States, may have lower labor and other production costs than the Company. Also, certain large customers offer house brands that compete with some of the Company's product offerings as a lower-cost alternative. To remain profitable and maintain or grow market share, the Company must maintain a competitive cost structure, develop new products and services, lead product innovation, successfully execute its platform design innovation and brand prioritization efforts, respond to competitor innovations and enhance its existing products in a timely manner. The Company also competes for labor, particularly in its manufacturing facilities, which can drive higher labor costs and adversely impact its ability to efficiently operate. Any failure to attract and retain employees at the Company's manufacturing facilities or in other parts of the Company's operations may adversely affect its business and ability to meet customer demand, which in turn could adversely affect the Company's liquidity and results of operations. The Company may not be able to compete effectively on all of these fronts and with all of its competitors, and the failure to do so could have a material adverse effect on its sales and profits.

Operational Excellence, one of the Company's core imperatives, is a continuous operational improvement process applied to many aspects of the Company's business such as procurement, quality in manufacturing, maximizing customer fill rates, driving annual net productivity, and other key business processes. In the event the Company is not successful in effectively applying the various aspects of Operational Excellence to its key business processes, its ability to compete and future earnings could be adversely affected.

In addition, the Company may have to reduce prices on its products and services, or make other concessions, to stay competitive. Price reductions taken by the Company in response to customer and competitive pressures, as well as price reductions and marketing and promotional actions taken to drive demand that may not result in anticipated sales levels, could also negatively impact its business. The Company engages in restructuring actions, sometimes entailing shifts of production to low-cost countries or consolidation of manufacturing sites, as part of its efforts to maintain a competitive cost structure. If the Company does not execute restructuring actions effectively, its ability to meet customer demand may decline, or earnings may otherwise be adversely impacted. Similarly, if such efforts to reform the cost structure are delayed relative to competitors or other market factors, the Company may lose market share and profits.

Customer consolidation could have a material adverse effect on the Company's business.

A significant portion of the Company's products are sold through home centers and mass merchant distribution channels in the

U.S. and Europe. A consolidation of retailers in both North America and abroad has occurred over time and the increasing size and importance of individual customers creates risk of exposure to potential volume loss or reduced leverage in price negotiations, which could have an adverse effect on net sales and profitability. Furthermore, the loss of certain larger home centers as customers would have a material adverse effect on the Company's business.

Low demand for new products and the inability to develop and introduce new products at favorable margins and on target timelines could adversely impact the Company's performance and prospects for future growth.

The Company's competitive advantage is due in part to its ability to develop and introduce new products in a timely manner at favorable margins. The uncertainties associated with developing and introducing new products, such as market demand, the

unavailability of raw materials necessary for production of the Company's products and costs of development and production, may impede the successful development and introduction of new products on a consistent or timely basis. Introduction of new technology may result in higher costs to the Company than that of the technology replaced. That increase in costs, which may continue indefinitely or until increased demand and greater availability in the sources of the new technology drive down its cost, could adversely affect the Company's results of operations. Market acceptance of the new products introduced in recent years and scheduled for introduction in future years may not meet sales expectations due to various factors, such as the failure to accurately predict market demand, end-user preferences, evolving industry standards, or the emergence of new or disruptive technologies. Moreover, the ultimate success and profitability of the new products may depend on the Company's ability to resolve technical and technological challenges in a timely and cost-effective manner, and to achieve manufacturing efficiencies. The Company's focus on innovation could result in additional investments to accelerate product development, productive capacity and advertising and product promotions in connection with the new innovative products. If expectations of the return on these investments are not met, future earnings could be adversely affected.

The pace of technological change continues to accelerate and the Company's ability to react effectively to such change may present significant competitive risks.

The Company's future growth rate depends upon a number of factors, including its ability to (i) identify and evolve with emerging technological and broader industry trends in its target end-markets, including, but not limited to, artificial intelligence machine learning and robotics; (ii) defend its market share against an ever-expanding number of competitors, including many new and non-traditional competitors; (iii) monitor disruptive technologies and business models; and (iv) attract, develop, and retain individuals with the requisite technical expertise and understanding of customers' needs to develop new technologies and introduce new products.

To remain competitive, the Company will need to stay abreast of new technologies, require its employees to continue to learn and adapt to new technologies and be able to integrate them into current and future business models, products, services and processes, comply with evolving regulatory and operational requirements concerning the use of emerging technologies, and also guard against existing and new competitors disrupting the marketplace using such technologies. For example, changing market trends, such as increased consumer demand for energy efficient products and technologies in response, in part, to environmental concerns, require the Company to develop and adopt new innovations focused on electrification. The Company may not adequately meet these demands or develop and adapt to the applicable new technologies focused on electrification, which could adversely affect the Company's reputation and the consumer and customer demand for the Company's products. The failure of the Company's technologies or products to gain market acceptance due to more attractive offerings by its competitors or the failure to address any of the above factors could negatively impact revenues and adversely affect its competitive standing and prospects.

The Company has significant operations outside of the U.S., which are subject to political, legal, economic and other risks arising from international operations.

The Company has significant operations outside of the U.S., including manufacturing, sales and distribution facilities. Such business operations are subject to political, legal, economic and other risks inherent in operating internationally, such as:

• the difficulty of enforcing agreements and protecting assets through legal systems outside the U.S. including intellectual property rights, which may not be recognized, and which the Company may not be able to protect outside the U.S. to the same extent as under U.S. law;

• managing widespread operations and enforcing internal controls, policies and procedures designed to deter prohibited practices under U.S. and foreign anti-bribery, anti-corruption, and anti-money laundering regulations and sanctions, such as the U.S. Foreign Corrupt Practices Act of 1977 and the UK Bribery Act of 2010;

• import or export licensing requirements and controls and economic and trade sanctions administered by the Office of Foreign Assets Control;

• the application of certain labor regulations outside of the U.S.;

• compliance with a wide variety of complex and evolving non-U.S. laws and regulations, which may conflict with U.S. laws and regulations or those of other countries;

• instability or changes in the general political and economic conditions in the countries where the Company operates (such as the conflicts between Russia and Ukraine, and in the Middle East and tensions in South Korea, China and Taiwan);

• the threat of nationalization and expropriation;

• increased costs and risks of doing business and managing a workforce in a wide variety of jurisdictions;

• the increased possibility of cyber threats in certain jurisdictions;

• government controls limiting importation of goods;

• government controls limiting payments to suppliers for imported goods;

• limitations on, or impacts from, the repatriation of foreign earnings; and

• exposure to wage, price and capital controls.

  Changes in the political or economic environments in the countries in which the Company operates or violations or perceived violations of the laws and regulations of such countries could have a material adverse effect on its financial condition, results of operations or cash flows. Additionally, compliance with international and U.S. laws and regulations that apply to the Company's international operations increases the cost of doing business in foreign jurisdictions. Violations of such laws and regulations may result in severe fines and penalties, criminal sanctions, administrative remedies or restrictions on business conduct, and any such violations, or perceived violations, could have a material adverse effect on the Company's reputation, its ability to attract and retain employees, and its business, operating results and financial condition.

  The Company's success depends on its ability to improve productivity and streamline operations to control or reduce costs.

  The Company is committed to continuous productivity improvement and evaluating opportunities to reduce fixed costs, simplify or improve processes, and eliminate excess capacity. The Company has undertaken restructuring and cost-reduction actions, such as restructuring of manufacturing and distribution facilities, including relocating production or component sources or closing facilities, workforce reductions and centralization of certain business support functions, the savings of which may be, and have been, mitigated by many factors, including economic weakness, inflation, competitive pressures, higher labor costs, production volume decline and decisions to increase costs in areas such as sales promotion or research and development above levels that were otherwise assumed.

  In mid-2022, the Company initiated a Global Cost Reduction Program designed to achieve significant pre-tax run rate cost savings to, in part, help return adjusted gross margins to historical 35%+ levels. While the Company completed this program as of the end of 2025, it plans to continue making significant investments in additional productivity improvements and supply chain footprint actions, and the success and anticipated cost savings from such efforts are not assured. Failure to achieve, or delays in achieving, projected levels of efficiencies and cost savings from productivity investments and footprint actions, as well as other restructuring or cost reduction actions introduced by the Company, significant increases in the costs related to such actions, or unanticipated inefficiencies resulting from such investments (such as delays in ability to fulfil orders as a result of temporary constraints on production and storage of products) and other manufacturing and administrative reorganization actions in progress or contemplated, could adversely affect any anticipated cost savings as well as the Company's reputation and financial position.

  A material disruption of the Company's operations, particularly at its manufacturing facilities or within its information technology infrastructure, or its supply chain could adversely affect business.

  The Company's facilities, supply chains, distribution systems, and information technology systems are subject to catastrophic loss due to natural disasters or other disruptions, including hurricanes, floods, fires, droughts, water scarcity, and other adverse weather or environmental conditions (each of which may be worsened by climate change), power outages, energy shortages, explosions, terrorism or other geopolitical tensions, equipment failures, sabotage, cybersecurity incidents, labor disputes or shortages, critical supply failure, inaccurate downtime forecast, political disruption, public health crises, like a regional or global pandemic such as COVID-19, and other reasons, which have and could again result in undesirable consequences, including financial losses and damaged relationships with customers.

  The Company employs information technology systems and networks to support the business and relies on them to process, transmit and store electronic information, and to manage or support a variety of business processes and activities. Disruptions to the Company's information technology infrastructure from system failures, shutdowns, power outages, telecommunication or utility failures, cybersecurity incidents, and other events, including disruptions at its cloud computing server, systems and other third party IT service providers, could interfere with its operations, interrupt production and shipments, damage customer and business partner relationships, and negatively impact its reputation.

  The effects of extreme weather conditions could also place capacity constraints on the Company's supply chain. For example, rare earth minerals are critical to the design of the Company's products and some countries from which these materials are sourced have experienced severe weather. A severe weather event in these countries could cause disruptions in the Company's supply chain which could, in turn, cause product shortages, delays in delivery and/or increases in the Company's cost to produce and deliver products to its customers.

  If the Company were required to write-down all or part of its goodwill, indefinite-lived trade names, or other definite-lived intangible assets, its net income and net worth could be materially adversely affected.

  As of January 3, 2026, the Company has approximately $7.3 billion of goodwill, approximately $2.3 billion of indefinite-lived trade names and approximately $0.8 billion of net definite-lived intangible assets. The Company is required to periodically, at least annually, determine if its goodwill or indefinite-lived trade names have become impaired, in which case it would write down the impaired portion of the asset. The definite-lived intangible assets, including customer relationships, are amortized

  over their estimated useful lives and are evaluated for impairment when appropriate. Impairment of intangible assets may be triggered by developments outside of the Company's control, such as worsening economic conditions, technological change, intensified competition or other factors, which could have an adverse effect on the Company's financial condition and results of operations. During 2025, the Company recognized a $108.4 million pre-tax, non-cash impairment charge driven by updates to the Company's brand prioritization strategy impacting the Lenox, Troy-Bilt, and Irwin trade names. During 2024, the Company recorded a pre-tax impairment charge of $41.0 million related to the Lenox trade name and $25.5 million related to the Infrastructure business. During 2023, the Company recorded pre-tax impairment charges of $274.8 million, comprised of

  $124.0 million related to the Irwin and Troy-Bilt trade names and $150.8 million related to the Infrastructure business. Refer to Note E, Goodwill and Intangible Assets, for additional information on the trade name impairments. Refer to Note S, Divestitures, for additional information on the 2024 divestiture of the Infrastructure business.

  Strategic Risks

  The successful execution of the Company's business strategy depends on its ability to recruit, retain, train, motivate, and develop employees and execute effective succession planning.

  The Company's business success depends, in part, on the contributions and abilities of key executives and management personnel, its sales force and other personnel, including the ability of its sales force to adapt to any changes made in the sales organization and achieve adequate customer coverage. The failure to recruit, retain, develop, engage, and motivate qualified management, sales and other personnel and successfully execute organizational change and management transitions at leadership levels could adversely impact the Company's reputation, business, results of operations and financial condition.

  A shortage of key employees, whether as a result of difficulty in recruiting, insufficient training or employee turnover, might jeopardize the Company's ability to implement its business strategy, and changes in the key management team can result in loss of continuity, loss of accumulated knowledge, decreased morale, departure of other key employees, disruptions to the Company's operations and inefficiency during transitional periods.

  The Company's exiting of businesses, divestitures, acquisitions, strategic investments and alliances and joint ventures, as well as general business reorganizations, may result in financial results that are different than expected and certain risks for its business and operations.

  As part of the Company's strategy, it may divest businesses or assets, acquire businesses or assets, enter into strategic alliances and joint ventures, and make similar investments to further its business.

  Risks associated with such transactions include the following, any of which could adversely affect the Company's financial results, including its effective tax rate:

• difficulty in finding buyers or alternative exit strategies in connection with divestitures in a timely manner, and on price and terms that are acceptable to the Company;

• the failure to identify the most suitable target candidates for acquisitions and to close on such acquisitions within desired time frames, at a reasonable cost and on desirable terms;

• the ability to conduct and evaluate the results of due diligence with respect to acquisitions and investment transactions, including the failure to identify significant issues with a target company's product quality, financial disclosures, accounting practices or internal control deficiencies; or the failure to identify, or accurately assess the risks of, historical practices of target companies that would create liability or other exposures for the Company if they continue post-completion or as a result of successor liability;

• the difficulties and cost in obtaining any necessary regulatory or government approvals on acceptable terms and any delay from the inability to satisfy pre-closing conditions;

• the anticipated additional revenues from the acquired companies do not materialize, despite extensive due diligence;

• the acquired businesses may lose market acceptance or profitability;

• difficulties in retaining existing or attracting new business and operational relationships, including with customers, suppliers and other counterparties;

• the impact of divestitures on the Company's revenue growth and profitability may be larger than projected, as the Company may experience greater dis-synergies than expected;

• the diversion of Company management's attention and other resources;

• incurring significant restructuring charges and amortization expense, assuming liabilities, ongoing or new lawsuits related to the transaction or otherwise or pre-closing regulatory violations of the acquired business, potential impairment of acquired goodwill and other intangible assets, and increasing the Company's expenses and working capital requirements;

• continued post-closing involvement in a divested business, such as through continuing equity ownership, guarantees, indemnities and other financial obligations, or transition services arrangements; and

• the loss of key personnel, distributors, clients or customers of acquired companies and difficulty in maintaining employee morale.

  The Company has taken steps to streamline its portfolio and focus on its core Tools & Outdoor and Engineering Fastening businesses. As a result of recent divestitures, the Company may be subject to increased volatility and vulnerability to market conditions due to its more focused portfolio. In addition, the current and proposed changes to the U.S. and foreign regulatory approval process and requirements in connection with an acquisition or divestiture may jeopardize, delay or reduce the anticipated benefits of the transaction to the Company. Failure to effectively integrate acquired companies, strategic investments and alliances, consummate or manage any future acquisitions, divestitures, or general business reorganizations, may adversely affect the Company's existing businesses and harm its operational results due to large write-offs, significant restructuring costs, contingent liabilities, substantial depreciation, and/or adverse tax or other consequences. The Company cannot ensure that such integrations and reorganizations will be successfully completed or that all of the planned synergies and other benefits will be realized.

  Industry and Economic Risks

  Uncertainty about the financial stability of economies outside the U.S. could have a significant adverse effect on the Company's business, results of operations and financial condition.

  The Company generates approximately 38% of its revenues outside the U.S., including 16% from Europe and 13% from various emerging market countries. Each of the Company's segments generates sales in these marketplaces. While the Company believes any volatility in the European or emerging marketplaces might be offset to some degree by the relative stability in North America, the Company's future growth, profitability and financial liquidity could be affected, in several ways, including, but not limited to, the following:

• depressed consumer and business confidence may decrease demand for products and services;

• customers may implement cost reduction initiatives or delay purchases to address inventory levels;

• significant declines in foreign currency values in countries where the Company operates could impact both the revenue growth and overall profitability in those geographies;

• a devaluation of foreign currencies could have an effect on the creditworthiness (as well as the availability of funds) of customers in those regions impacting the collectability of receivables;

• a devaluation of foreign currencies could have an adverse effect on the value of financial assets of the Company in the effected countries; and

• the impact of an event or changes to political and economic conditions (individual country default, or break up of the Euro) could have an adverse impact on the global credit markets and global liquidity potentially impacting the Company's ability to access these credit markets and to raise capital or disrupting global energy supply or supply chains.

  Negative economic conditions and outlooks in the markets the Company serves may weaken demand for the Company's products.

  Demand for the Company's products depends, in part, on the general economic conditions affecting the industries and markets in which it does business, including, but not limited to, construction and housing, general industrial, automotive, aerospace and outdoor, and can be significantly reduced in an economic environment characterized by high unemployment, high interest rates, cautious consumer spending, inflation, lower corporate earnings, and lower business investment. From time to time, the Company has been adversely impacted by negative economic conditions within the markets it serves, including labor and raw material shortages, inflation, high interest rates and declines in consumer confidence and housing demand. Any decrease in demand for the Company's products as a result of these and other negative economic factors may have a material adverse effect on the Company's business, financial condition, cash flows and results of operations and its ability to execute capital allocation plans, fund capital expenditures and investments, pay dividends and meet debt obligations and other liabilities.

  The Company is exposed to market risk from changes in foreign currency exchange rates which could negatively impact profitability.

  The Company manufactures and sells its products in many countries throughout the world. As a result, there is exposure to foreign currency risk as the Company enters into transactions and makes investments denominated in multiple currencies. The Company's predominant currency exposures are related to the Euro, Canadian Dollar, British Pound, Australian Dollar, Brazilian Real, Chinese Renminbi ("RMB") and the Taiwan Dollar. In preparing its financial statements, for foreign operations with functional currencies other than the U.S. dollar, asset and liability accounts are translated at current exchange rates, while income and expenses are translated using average exchange rates. With respect to the effects on translated earnings, if the U.S.

  dollar strengthens relative to local currencies, the Company's earnings could be negatively impacted. Although the Company utilizes risk management tools, including hedging, as it deems appropriate, to mitigate a portion of potential market fluctuations in foreign currencies, there can be no assurance that such measures will result in all market fluctuation exposure being eliminated. The Company generally does not hedge the translation of its non-U.S. dollar earnings in foreign subsidiaries but may choose to do so in certain instances.

  The Company sources many products from China and other low-cost countries for resale in other regions. The Company may experience cost increases on such purchases and increases to its costs of goods sold to the extent the RMB or other currencies appreciate, or other foreign currency changes occur. The Company may not be successful at implementing customer pricing or other actions in an effort to mitigate the related cost increases and thus its profitability may be adversely impacted.

  Financing Risks

  The Company has incurred, and may incur in the future, significant indebtedness, and may in the future issue additional equity or debt securities, including in connection with mergers or acquisitions, which may impact the manner in which it conducts business or the Company's access to external sources of liquidity. The potential issuance of such securities may limit the Company's ability to implement elements of its business strategy and may have a dilutive effect on earnings.

  As described in Note G, Long-Term Debt and Financing Arrangements, of the Notes to Consolidated Financial Statements in Item 8, the Company has a five-year $2.25 billion committed credit facility and a $1.25 billion syndicated 364-day credit agreement. No amounts were outstanding against any of these facilities on January 3, 2026. As of January 3, 2026, the Company had $5.3 billion principal amount of indebtedness.

  The instruments and agreements governing certain of the Company's current indebtedness contain requirements or restrictive covenants that include, among other things:

• a limitation on creating liens on certain property of the Company and its subsidiaries;

• a restriction on entering into certain sale-leaseback transactions;

• customary events of default, including repayment of all amounts outstanding in the event of the occurrence and continuance of an event of default; and

• maintenance of a specified financial ratio.

The Company has an interest coverage covenant in each of its 364-day credit agreement and five-year credit agreement that must be maintained to permit continued access to its committed credit facilities. 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 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, as defined in each credit agreement, the Company is permitted to increase EBITDA to allow for applicable adjustment addbacks, as defined in the 364-day credit agreement, incurred in any four consecutive fiscal quarter periods, provided that the sum of the applicable adjustment addbacks incurred on or before the Company's second fiscal quarter of 2026 may not exceed $250 million in the aggregate.

The Company was compliant with its debt covenant requirements during its 2025 fiscal year. Management does not believe it is reasonably likely the Company will breach this covenant. Failure to maintain these ratios could adversely affect further access to liquidity.

Future instruments and agreements governing indebtedness may impose other restrictive conditions or covenants. Such covenants could restrict the Company in the manner in which it conducts business and operations as well as in the pursuit of its business strategy.

The Company is exposed to counterparty risk in its hedging arrangements.

From time to time, the Company enters into arrangements with financial institutions to hedge exposure to fluctuations in currency and interest rates, including forward contracts, options and swap agreements. The Company may incur significant losses from hedging activities due to factors such as demand volatility. The failure of one or more counterparties to the Company's hedging arrangements to fulfill their obligations could adversely affect the Company's results of operations.

Tight capital and credit markets or the failure to maintain credit ratings could adversely affect the Company by limiting the Company's ability to borrow or otherwise access liquidity.

The Company's long-term growth plans are dependent on, among other things, the availability of funding to support corporate initiatives and the ability to increase sales of existing product lines. While the Company has not encountered financing difficulties to date, the capital and credit markets have experienced extreme volatility and disruption in the past and may again in the future. Market conditions could make it more difficult for the Company to borrow or otherwise obtain the cash required for significant new corporate initiatives. Additionally, the Company's business could be adversely affected if its customers, suppliers or financial institutions experience difficulty accessing capital markets in order to fulfill their commitments to the Company.

Furthermore, there could be a number of follow-on effects from a credit crisis on the Company's businesses, including insolvency of key suppliers resulting in product delays, inability of customers to obtain credit to finance purchases of the Company's products and services and/or customer insolvencies.

In addition, the major rating agencies regularly evaluate the Company for purposes of assigning credit ratings. The Company's ability to access the credit markets, and the cost of these borrowings, is affected by the strength of its credit ratings and current market conditions. Failure to maintain credit ratings that are acceptable to investors may adversely affect the cost and other terms upon which the Company is able to obtain financing, as well as its access to the capital markets.

The Company is exposed to credit risk on its accounts receivable.

The Company's outstanding trade receivables are not generally covered by collateral or credit insurance. While the Company has procedures to monitor and limit exposure to credit risk on its trade and non-trade receivables, there can be no assurance such procedures will effectively limit its credit risk and avoid losses, which could have an adverse effect on the Company's financial condition and operating results.

If the investments in employee benefit plans do not perform as expected, the Company may have to contribute additional amounts to these plans, which would otherwise be available to cover operating expenses or other business purposes.

The Company sponsors pension and other post-retirement defined benefit plans. The Company's defined benefit plan assets are currently invested in equity securities, government and corporate bonds and other fixed income securities, money market instruments and insurance contracts. The Company's funding policy is generally to contribute amounts determined annually on an actuarial basis to provide for current and future benefits in accordance with applicable law which require, among other things, that the Company make cash contributions to under-funded pension plans. During 2025, the Company made cash contributions to its defined benefit plans of approximately $34 million and expects to contribute approximately $29 million to its pension and other post-retirement benefit plans in 2026.

There can be no assurance that the value of the defined benefit plan assets, or the investment returns on those plan assets, will be sufficient in the future. It is therefore possible that the Company may be required to make higher cash contributions to the plans in future years which would reduce the cash available for other business purposes, and that the Company will have to recognize a significant pension liability adjustment which would decrease the net assets of the Company and result in higher expense in future years. The fair value of the defined benefit plan assets on January 3, 2026 was approximately $1.7 billion.

Legal, Tax, Regulatory and Compliance Risks

The Company's brands are important assets of its businesses and violation of its trademark rights by imitators, or the failure of its licensees or vendors to comply with the Company's product quality, manufacturing requirements, marketing standards, and other requirements could negatively impact revenues and brand reputation. Any inability to protect the Company's other intellectual property rights could also reduce the value of its products and services or diminish its competitiveness.

The Company considers its intellectual property rights, including patents, trademarks, copyrights and trade secrets, and licenses held, to be a significant part and valuable aspect of its business. The Company attempts to protect its intellectual property rights through a combination of patent, trademark, copyright and trade secret laws, as well as licensing agreements and third-party nondisclosure and assignment agreements; however, there can be no assurances that these resources will adequately protect the Company's intellectual property rights and deter misappropriation or improper use of its technology.

The Company's trademarks have a reputation for quality and value and are important to the Company's success and competitive position. Unauthorized use of the Company's trademark rights may not only erode sales of the Company's products but may also cause significant damage to its brand name and reputation, interfere with its ability to effectively represent the Company to its customers, contractors, suppliers, and/or licensees, and increase litigation costs. Similarly, failure by licensees or vendors to adhere to the Company's standards of quality and other contractual requirements could result in loss of revenue, increased litigation, and/or damage to the Company's reputation and business. There can be no assurance that the Company's ongoing efforts to protect its brand and trademark rights and ensure compliance with its licensing and vendor agreements will prevent all violations.

In addition, the Company's ability to compete could be negatively impacted by its failure to obtain and adequately protect its intellectual property and preserve its associated intellectual property rights, including patents, copyrights, trade secrets, and licenses, as well as its products and any new features of its products or processes. The Company's patent applications may not be approved and any patents owned could be challenged, invalidated or designed around by third parties. In addition, the Company's patents may not be of sufficient scope or strength to provide meaningful protection or commercial advantage. The use of artificial intelligence in the development of the Company's products and services could also impact its intellectual property protections.

The Company may be unaware of intellectual property rights of others that may cover some of its technology, brands, or products. Any dispute or litigation regarding patents or other intellectual property could be costly and time-consuming and could divert the attention of the Company's management and key personnel from its business operations. Allegations of intellectual property infringement may also require the Company to enter into costly license agreements or necessitate redesigns of its products at substantial cost. The Company also may be subject to significant damages or injunctions against development and sale of certain products.

Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact the Company's reputation, operating results, and financial condition.

The Company's information systems and data may be vulnerable to cybersecurity threats and incidents which can include uncoordinated individual attempts to gain unauthorized access to information technology ("IT") systems, sophisticated and targeted measures known as advanced persistent threats, breaches due to human error, malfeasance, or other cybersecurity incidents directed at the Company, its products, services and technologies, including those leveraging "Internet of Things," robotics or generative artificial intelligence capabilities, its customers and/or its third-party service providers, including cloud providers. New vulnerabilities may be introduced as cybersecurity threats continue to evolve and if the Company or its third-party vendors increase their use of, or reliance on, emerging technologies, such as generative artificial intelligence and machine learning. The Company deploys measures which it believes leverage industry accepted frameworks to deter, prevent, detect, respond to, and mitigate cybersecurity threats. The Company has invested and continues to invest in risk management and information security and data protection measures it believes are appropriate to protect its systems and data, including employee and critical service provider training, organizational investments, incident response plans, tabletop exercises, technical defenses and defensive product software designs. The cost and operational consequences of implementing, maintaining and enhancing these measures could increase significantly to overcome increasingly intense, complex, and sophisticated cybersecurity threats.

Despite these efforts, cybersecurity incidents (against the Company or parties with whom the Company contracts), depending on their nature and scope, could potentially result in the misappropriation, disclosure, destruction, corruption or unavailability of critical data and confidential or proprietary information (the Company's or that of third parties) and the disruption of business operations. Additionally, it is possible for security vulnerabilities or a cybersecurity threat to remain undetected for an extended time period, and the prioritization of decisions with respect to security measures and remediation of known vulnerabilities undertaken by the Company, and the vendors and other third parties upon which it relies, may be inadequate to protect against or fully mitigate cybersecurity threats. The potential consequences of a material cybersecurity incident and its effects include financial loss, reputational damage, litigation with third parties, theft of intellectual property, disclosure of confidential or personal customer, supplier and employee information, fines levied by both U.S. and international government agencies, diminution in the value of the Company's investment in research, development and engineering, and increased cybersecurity protection and remediation costs due to the increasing sophistication and proliferation of threats, which in turn could adversely affect the Company's competitiveness and results of operations. Any of the foregoing can be exacerbated by a delay or failure to detect a cybersecurity incident or the full extent of such incident.

In addition, cybersecurity laws and regulations continue to evolve, and are increasingly demanding, both in the U.S. and globally, which adds compliance complexity and may increase costs of compliance and expose the Company to reputational damage or litigation, monetary damages, regulatory enforcement actions, penalties, or fines in one or more jurisdictions. While the Company carries cyber insurance, it cannot be certain that coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to the Company on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.