x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 36-0848180 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | o |
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | o |
PART I – FINANCIAL INFORMATION | Page | |
PART II – OTHER INFORMATION | ||
BRUNSWICK CORPORATION Condensed Consolidated Statements of Comprehensive Income (unaudited) | |||||||
Three Months Ended | |||||||
(in millions, except per share data) | March 30, 2013 | March 31, 2012 | |||||
Net sales | $ | 995.3 | $ | 959.6 | |||
Cost of sales | 733.4 | 721.4 | |||||
Selling, general and administrative expense | 139.1 | 138.6 | |||||
Research and development expense | 27.3 | 24.1 | |||||
Restructuring, exit and impairment charges | 5.6 | 0.2 | |||||
Operating earnings | 89.9 | 75.3 | |||||
Equity loss | (1.2 | ) | (1.2 | ) | |||
Other income, net | 2.2 | 0.9 | |||||
Earnings before interest, loss on early extinguishment of debt and income taxes | 90.9 | 75.0 | |||||
Interest expense | (14.4 | ) | (18.1 | ) | |||
Interest income | 0.4 | 1.0 | |||||
Loss on early extinguishment of debt | (0.1 | ) | — | ||||
Earnings before income taxes | 76.8 | 57.9 | |||||
Income tax provision | 21.9 | 10.9 | |||||
Net earnings from continuing operations | 54.9 | 47.0 | |||||
Discontinued operations: | |||||||
Loss from discontinued operations, net of tax | (5.1 | ) | (7.3 | ) | |||
Net loss from discontinued operations, net of tax | (5.1 | ) | (7.3 | ) | |||
Net earnings | $ | 49.8 | $ | 39.7 | |||
Earnings (loss) per common share: | |||||||
Basic | |||||||
Earnings from continuing operations | $ | 0.61 | $ | 0.52 | |||
Loss from discontinued operations | (0.06 | ) | (0.08 | ) | |||
Net earnings | $ | 0.55 | $ | 0.44 | |||
Diluted | |||||||
Earnings from continuing operations | $ | 0.59 | $ | 0.51 | |||
Loss from discontinued operations | (0.06 | ) | (0.08 | ) | |||
Net earnings | $ | 0.53 | $ | 0.43 | |||
Weighted average shares used for computation of: | |||||||
Basic earnings (loss) per common share | 90.6 | 89.5 | |||||
Diluted earnings (loss) per common share | 93.5 | 92.3 | |||||
Comprehensive income | $ | 46.7 | $ | 48.0 |
BRUNSWICK CORPORATION Condensed Consolidated Balance Sheets | |||||||||||
(in millions) | March 30, 2013 | December 31, 2012 | March 31, 2012 | ||||||||
(unaudited) | (unaudited) | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents, at cost, which approximates market | $ | 242.0 | $ | 284.3 | $ | 307.1 | |||||
Short-term investments in marketable securities | 34.7 | 92.3 | 63.9 | ||||||||
Total cash, cash equivalents and short-term investments in marketable securities | 276.7 | 376.6 | 371.0 | ||||||||
Restricted cash | 13.0 | 13.0 | 20.0 | ||||||||
Accounts and notes receivable, less allowances of $25.4, $27.1 and $28.3 | 471.7 | 349.2 | 440.8 | ||||||||
Inventories | |||||||||||
Finished goods | 369.2 | 363.3 | 298.0 | ||||||||
Work-in-process | 160.4 | 142.4 | 145.2 | ||||||||
Raw materials | 75.2 | 70.1 | 79.1 | ||||||||
Net inventories | 604.8 | 575.8 | 522.3 | ||||||||
Deferred income taxes | 18.7 | 18.8 | 15.0 | ||||||||
Prepaid expenses and other | 26.5 | 26.7 | 24.0 | ||||||||
Current assets held for sale | — | — | 49.8 | ||||||||
Current assets | 1,411.4 | 1,360.1 | 1,442.9 | ||||||||
Property | |||||||||||
Land | 80.4 | 80.6 | 81.0 | ||||||||
Buildings and improvements | 565.9 | 564.3 | 583.0 | ||||||||
Equipment | 1,008.0 | 997.4 | 1,002.0 | ||||||||
Total land, buildings and improvements and equipment | 1,654.3 | 1,642.3 | 1,666.0 | ||||||||
Accumulated depreciation | (1,141.8 | ) | (1,131.4 | ) | (1,166.3 | ) | |||||
Net land, buildings and improvements and equipment | 512.5 | 510.9 | 499.7 | ||||||||
Unamortized product tooling costs | 65.6 | 70.5 | 60.5 | ||||||||
Net property | 578.1 | 581.4 | 560.2 | ||||||||
Other assets | |||||||||||
Goodwill | 290.5 | 291.7 | 291.2 | ||||||||
Other intangibles, net | 37.4 | 38.1 | 42.5 | ||||||||
Long-term investments in marketable securities | 28.5 | 52.1 | 55.9 | ||||||||
Equity investments | 42.9 | 42.4 | 46.9 | ||||||||
Other long-term assets | 55.3 | 58.4 | 67.4 | ||||||||
Long-term assets held for sale | — | — | 25.0 | ||||||||
Other assets | 454.6 | 482.7 | 528.9 | ||||||||
Total assets | $ | 2,444.1 | $ | 2,424.2 | $ | 2,532.0 | |||||
The Notes to Condensed Consolidated Financial Statements are an integral part of these consolidated statements. |
BRUNSWICK CORPORATION Condensed Consolidated Balance Sheets | |||||||||||
(in millions) | March 30, 2013 | December 31, 2012 | March 31, 2012 | ||||||||
(unaudited) | (unaudited) | ||||||||||
Liabilities and shareholders’ equity | |||||||||||
Current liabilities | |||||||||||
Short-term debt, including current maturities of long-term debt | $ | 6.8 | $ | 8.2 | $ | 7.3 | |||||
Accounts payable | 376.9 | 334.4 | 332.7 | ||||||||
Accrued expenses | 506.6 | 576.2 | 529.7 | ||||||||
Current liabilities held for sale | 10.4 | 18.4 | 21.2 | ||||||||
Current liabilities | 900.7 | 937.2 | 890.9 | ||||||||
Long-term liabilities | |||||||||||
Debt | 562.9 | 563.6 | 688.7 | ||||||||
Deferred income taxes | 96.3 | 92.7 | 84.5 | ||||||||
Postretirement benefits | 549.1 | 552.6 | 590.2 | ||||||||
Other | 201.5 | 197.5 | 192.2 | ||||||||
Long-term liabilities held for sale | 3.0 | 2.9 | 3.1 | ||||||||
Long-term liabilities | 1,412.8 | 1,409.3 | 1,558.7 | ||||||||
Shareholders’ equity | |||||||||||
Common stock; authorized: 200,000,000 shares, $0.75 par value; issued: 102,538,000 shares | 76.9 | 76.9 | 76.9 | ||||||||
Additional paid-in capital | 429.4 | 440.8 | 435.0 | ||||||||
Retained earnings | 553.0 | 503.2 | 497.4 | ||||||||
Treasury stock, at cost: 12,117,000, 12,907,000 and 13,264,000 shares | (370.5 | ) | (388.1 | ) | (394.4 | ) | |||||
Accumulated other comprehensive loss, net of tax | (558.2 | ) | (555.1 | ) | (532.5 | ) | |||||
Shareholders’ equity | 130.6 | 77.7 | 82.4 | ||||||||
Total liabilities and shareholders’ equity | $ | 2,444.1 | $ | 2,424.2 | $ | 2,532.0 |
BRUNSWICK CORPORATION Condensed Consolidated Statements of Cash Flows (unaudited) | |||||||
Three Months Ended | |||||||
(in millions) | March 30, 2013 | March 31, 2012 | |||||
Cash flows from operating activities | |||||||
Net earnings from continuing operations | $ | 54.9 | $ | 47.0 | |||
Depreciation and amortization | 21.6 | 22.7 | |||||
Pension expense, net of funding | 4.0 | 5.3 | |||||
Gains on sale of property, plant and equipment, net | (5.3 | ) | (1.5 | ) | |||
Other long-lived asset impairment charges (gains) | 2.3 | (1.3 | ) | ||||
Deferred income taxes | 2.1 | 2.8 | |||||
Loss on early extinguishment of debt | 0.1 | — | |||||
Changes in certain current assets and current liabilities | (175.9 | ) | (148.4 | ) | |||
Income taxes | 10.8 | 3.4 | |||||
Other, net | (8.4 | ) | 8.3 | ||||
Net cash used for operating activities of continuing operations | (93.8 | ) | (61.7 | ) | |||
Net cash used for operating activities of discontinued operations | (14.4 | ) | (8.0 | ) | |||
Net cash used for operating activities | (108.2 | ) | (69.7 | ) | |||
Cash flows from investing activities | |||||||
Capital expenditures | (21.2 | ) | (16.7 | ) | |||
Purchases of marketable securities | — | (60.5 | ) | ||||
Sales or maturities of marketable securities | 80.6 | 109.5 | |||||
Investments | (2.3 | ) | (0.7 | ) | |||
Proceeds from the sale of property, plant and equipment | 6.1 | 9.0 | |||||
Net cash provided by investing activities of continuing operations | 63.2 | 40.6 | |||||
Net cash used for investing activities of discontinued operations | — | (0.8 | ) | ||||
Net cash provided by investing activities | 63.2 | 39.8 | |||||
Cash flows from financing activities | |||||||
Net (payments) issuances of short-term debt | (0.8 | ) | 0.3 | ||||
Payments of long-term debt including current maturities | (1.4 | ) | (1.7 | ) | |||
Net premium paid on early extinguishment of debt | (0.1 | ) | — | ||||
Net proceeds from stock compensation activity, including excess tax benefits | 5.0 | 0.2 | |||||
Net cash provided by (used for) financing activities of continuing operations | 2.7 | (1.2 | ) | ||||
Net cash provided by financing activities of discontinued operations | — | — | |||||
Net cash provided by (used for) financing activities | 2.7 | (1.2 | ) | ||||
Net decrease in cash and cash equivalents | (42.3 | ) | (31.1 | ) | |||
Cash and cash equivalents at beginning of period | 284.3 | 338.2 | |||||
Cash and cash equivalents at end of period | $ | 242.0 | $ | 307.1 |
(in millions) | March 30, 2013 | March 31, 2012 | |||||
Net sales | $ | 10.7 | $ | 14.6 | |||
Loss from discontinued operations before income taxes | (6.5 | ) | (7.7 | ) | |||
Income tax benefit | (1.4 | ) | (0.4 | ) | |||
Net loss from discontinued operations, net of tax | $ | (5.1 | ) | $ | (7.3 | ) |
(in millions) | March 30, 2013 | December 31, 2012 | |||||
Current assets held for sale | $ | — | $ | — | |||
Long-term assets held for sale | — | — | |||||
Assets held for sale (A) | $ | — | $ | — | |||
Accounts payable | $ | — | $ | 3.8 | |||
Accrued expenses | 10.4 | 14.6 | |||||
Current liabilities held for sale | 10.4 | 18.4 | |||||
Other liabilities | 3.0 | 2.9 | |||||
Long-term liabilities held for sale | 3.0 | 2.9 | |||||
Liabilities held for sale | $ | 13.4 | $ | 21.3 |
• | Employee termination and other benefits |
• | Costs to retain and relocate employees |
• | Consulting costs |
• | Consolidation of manufacturing footprint |
• | Employee termination and other benefits |
• | Lease exit costs |
• | Inventory write-downs |
• | Facility shutdown costs |
• | Fixed assets |
• | Tooling |
• | Patents and proprietary technology |
• | Dealer networks |
• | Trade names |
(in millions) | March 30, 2013 | March 31, 2012 | |||||
Restructuring activities: | |||||||
Employee termination and other benefits | $ | 1.8 | $ | (0.3 | ) | ||
Current asset write-downs | 0.3 | — | |||||
Transformation and other costs: | |||||||
Consolidation of manufacturing footprint | 1.1 | 2.1 | |||||
Retention and relocation costs | 0.1 | — | |||||
Exit activities: | |||||||
Transformation and other costs: | |||||||
Consolidation of manufacturing footprint | — | (0.3 | ) | ||||
Asset disposition actions: | |||||||
Definite-lived asset impairments and (gains) on disposal | 2.3 | (1.3 | ) | ||||
Total restructuring, exit and impairment charges | $ | 5.6 | $ | 0.2 |
(in millions) | March 30, 2013 | ||
Boat | $ | 3.1 | |
Corporate | 0.7 | ||
Total | $ | 3.8 |
(in millions) | March 30, 2013 | ||
Restructuring activities: | |||
Employee termination and other benefits | $ | 1.7 | |
Current asset write-downs | 0.3 | ||
Transformation and other costs: | |||
Consolidation of manufacturing footprint | 0.1 | ||
Retention and relocation costs | 0.1 | ||
Asset disposition actions: | |||
Definite-lived asset impairments | 1.6 | ||
Total restructuring, exit and impairment charges | $ | 3.8 |
(in millions) | Boat | Corporate | Total | ||||||||
Employee termination and other benefits | $ | 1.0 | $ | 0.7 | $ | 1.7 | |||||
Current asset write-downs | 0.3 | — | 0.3 | ||||||||
Transformation and other costs | 0.2 | — | 0.2 | ||||||||
Asset disposition actions | 1.6 | — | 1.6 | ||||||||
Total restructuring, exit and impairment charges | $ | 3.1 | $ | 0.7 | $ | 3.8 |
(in millions) | Costs Recognized in 2013 | Non-cash Charges | Net Cash Payments | Accrued Costs as of Mar. 30, 2013 | |||||||||||
Employee termination and other benefits | $ | 1.7 | $ | — | $ | — | $ | 1.7 | |||||||
Current asset write-downs | 0.3 | (0.3 | ) | — | — | ||||||||||
Transformation and other costs: | |||||||||||||||
Consolidation of manufacturing footprint | 0.1 | — | (0.1 | ) | — | ||||||||||
Retention and relocation costs | 0.1 | — | (0.1 | ) | — | ||||||||||
Asset disposition actions: | |||||||||||||||
Definite-lived asset impairments | 1.6 | (1.6 | ) | — | — | ||||||||||
Total restructuring, exit and impairment charges | $ | 3.8 | $ | (1.9 | ) | $ | (0.2 | ) | $ | 1.7 |
(in millions) | March 30, 2013 | ||
Boat | $ | 1.8 | |
Total | $ | 1.8 |
(in millions) | March 30, 2013 | ||
Restructuring activities: | |||
Employee termination and other benefits | $ | 0.1 | |
Transformation and other costs: | |||
Consolidation of manufacturing footprint | 1.0 | ||
Asset disposition actions: | |||
Definite-lived asset impairments | 0.7 | ||
Total restructuring, exit and impairment charges | $ | 1.8 |
(in millions) | Boat | Total | |||||
Employee termination and other benefits | $ | 0.1 | $ | 0.1 | |||
Transformation and other costs | 1.0 | 1.0 | |||||
Asset disposition actions | 0.7 | 0.7 | |||||
Total restructuring, exit and impairment charges | $ | 1.8 | $ | 1.8 |
(in millions) | Accrued Costs as of Jan. 1, 2013 | Costs Recognized in 2013 | Non-cash Charges | Net Cash Payments | Accrued Costs as of Mar. 30, 2013 | ||||||||||||||
Employee termination and other benefits | $ | 1.9 | $ | 0.1 | $ | — | $ | (0.9 | ) | $ | 1.1 | ||||||||
Transformation and other costs: | |||||||||||||||||||
Consolidation of manufacturing footprint | 5.2 | 1.0 | — | (1.5 | ) | 4.7 | |||||||||||||
Asset disposition actions: | |||||||||||||||||||
Definite-lived asset impairments | — | 0.7 | (0.7 | ) | — | — | |||||||||||||
Total restructuring, exit and impairment charges | $ | 7.1 | $ | 1.8 | $ | (0.7 | ) | $ | (2.4 | ) | $ | 5.8 |
(in millions) | March 31, 2012 | ||
Marine Engine | $ | 1.7 | |
Boat | (1.5 | ) | |
Total | $ | 0.2 |
(in millions) | March 31, 2012 | ||
Restructuring activities: | |||
Employee termination and other benefits | $ | (0.3 | ) |
Transformation and other costs: | |||
Consolidation of manufacturing footprint | 2.1 | ||
Exit activities: | |||
Transformation and other costs: | |||
Consolidation of manufacturing footprint | (0.3 | ) | |
Asset disposition actions: | |||
Definite-lived asset impairments and (gains) on disposal | (1.3 | ) | |
Total restructuring, exit and impairment charges | $ | 0.2 |
(in millions) | Marine Engine | Boat | Total | ||||||||
Employee termination and other benefits | $ | (0.3 | ) | $ | — | $ | (0.3 | ) | |||
Transformation and other costs | 2.0 | (0.2 | ) | 1.8 | |||||||
Asset disposition actions | — | (1.3 | ) | (1.3 | ) | ||||||
Total restructuring, exit and impairment charges | $ | 1.7 | $ | (1.5 | ) | $ | 0.2 |
(in millions) | Accrued Costs as of Jan. 1, 2013 | Costs Recognized in 2013 | Non-cash Charges | Net Cash Payments | Accrued Costs as of Mar. 30, 2013 | ||||||||||||||
Employee termination and other benefits | $ | 1.2 | $ | — | $ | — | $ | (0.5 | ) | $ | 0.7 | ||||||||
Transformation and other costs: | |||||||||||||||||||
Consolidation of manufacturing footprint | 2.2 | — | — | (0.2 | ) | 2.0 | |||||||||||||
Total restructuring, exit and impairment charges | $ | 3.4 | $ | — | $ | — | $ | (0.7 | ) | $ | 2.7 |
(in millions) | ||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||
Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives Designated as Cash Flow Hedges | ||||||||||||
Foreign exchange contracts | Prepaid expenses and other | $ | 2.4 | Accrued expenses | $ | 3.5 | ||||||
Commodity contracts | Prepaid expenses and other | 0.1 | Accrued expenses | 1.8 | ||||||||
Interest rate contracts | Prepaid expenses and other | 0.4 | Accrued expenses | 5.0 | ||||||||
Total | $ | 2.9 | $ | 10.3 | ||||||||
Other Hedging Activity | ||||||||||||
Foreign exchange contracts | Prepaid expenses and other | $ | 0.1 | Accrued expenses | $ | 0.4 | ||||||
Total | $ | 0.1 | $ | 0.4 |
(in millions) | ||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||
Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives Designated as Cash Flow Hedges | ||||||||||||
Foreign exchange contracts | Prepaid expenses and other | $ | 0.8 | Accrued expenses | $ | 3.7 | ||||||
Commodity contracts | Prepaid expenses and other | 0.7 | Accrued expenses | 1.0 | ||||||||
Interest rate contracts | Prepaid expenses and other | 0.1 | Accrued expenses | 5.8 | ||||||||
Total | $ | 1.6 | $ | 10.5 | ||||||||
Other Hedging Activity | ||||||||||||
Foreign exchange contracts | Prepaid expenses and other | $ | — | Accrued expenses | $ | 0.2 | ||||||
Total | $ | — | $ | 0.2 |
(in millions) | ||||||||||
Derivatives Designated as Cash Flow Hedging Instruments | Amount of Gain (Loss) on Derivatives Recognized in Accumulated Other Comprehensive Loss (Effective Portion) | Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings (Effective Portion) | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings (Effective Portion) | |||||||
Interest rate contracts | $ | 1.0 | Interest expense | $ | 0.3 | |||||
Foreign exchange contracts | (0.2 | ) | Cost of sales | (1.3 | ) | |||||
Commodity contracts | (1.7 | ) | Cost of sales | (0.4 | ) | |||||
Total | $ | (0.9 | ) | $ | (1.4 | ) |
Other Hedging Activity | Location of Gain (Loss) on Derivatives Recognized in Earnings | Amount of Gain (Loss) on Derivatives Recognized in Earnings | ||||
Foreign exchange contracts | Cost of sales | $ | 0.9 | |||
Foreign exchange contracts | Other income, net | 0.1 | ||||
Total | $ | 1.0 |
(in millions) | ||||||||||
Derivatives Designated as Cash Flow Hedging Instruments | Amount of Gain (Loss) on Derivatives Recognized in Accumulated Other Comprehensive Loss (Effective Portion) | Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings (Effective Portion) | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings (Effective Portion) | |||||||
Interest rate contracts | $ | (1.4 | ) | Interest expense | $ | 0.2 | ||||
Foreign exchange contracts | (4.6 | ) | Cost of sales | 0.2 | ||||||
Commodity contracts | 1.2 | Cost of sales | (0.8 | ) | ||||||
Total | $ | (4.8 | ) | $ | (0.4 | ) |
Other Hedging Activity | Location of Gain (Loss) on Derivatives Recognized in Earnings | Amount of Gain (Loss) on Derivatives Recognized in Earnings | ||||
Foreign exchange contracts | Cost of sales | $ | (0.6 | ) | ||
Foreign exchange contracts | Other income, net | (0.1 | ) | |||
Total | $ | (0.7 | ) |
• | Level 1 - Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets or liabilities. |
• | Level 2 - Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily available pricing sources for comparable instruments. The Company performs additional procedures to ensure its third party pricing sources are reasonable including: reviewing documentation explaining third parties' pricing methodologies and evaluating whether those methodologies were in compliance with GAAP; performing independent testing of period-end valuations and recent transactions against other available pricing sources; and reviewing available Service Organization Controls Reports, as defined in Statement on Standards for Attestation Engagements Number 16, to understand the internal control environment at the Company's third party pricing providers. |
• | Level 3 - Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. |
(in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 101.7 | $ | — | $ | — | $ | 101.7 | |||||||
Short-term investments in marketable securities | 7.8 | 26.9 | — | 34.7 | |||||||||||
Long-term investments in marketable securities | 28.5 | — | — | 28.5 | |||||||||||
Restricted cash | 13.0 | — | — | 13.0 | |||||||||||
Derivatives | — | 3.0 | — | 3.0 | |||||||||||
Equity investments | 0.8 | — | — | 0.8 | |||||||||||
Total assets | $ | 151.8 | $ | 29.9 | $ | — | $ | 181.7 | |||||||
Liabilities: | |||||||||||||||
Derivatives | $ | — | $ | 10.7 | $ | — | $ | 10.7 | |||||||
Other | 7.4 | 41.6 | — | 49.0 | |||||||||||
Total liabilities | $ | 7.4 | $ | 52.3 | $ | — | $ | 59.7 |
(in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 94.7 | $ | 12.7 | $ | — | $ | 107.4 | |||||||
Short-term investments in marketable securities | 7.9 | 84.4 | — | 92.3 | |||||||||||
Long-term investments in marketable securities | 52.1 | — | — | 52.1 | |||||||||||
Restricted Cash | 13.0 | — | — | 13.0 | |||||||||||
Derivatives | — | 1.6 | — | 1.6 | |||||||||||
Equity investments | 0.8 | — | — | 0.8 | |||||||||||
Total assets | $ | 168.5 | $ | 98.7 | $ | — | $ | 267.2 | |||||||
Liabilities: | |||||||||||||||
Derivatives | $ | — | $ | 10.7 | $ | — | $ | 10.7 | |||||||
Other | 8.7 | 36.0 | — | 44.7 | |||||||||||
Total liabilities | $ | 8.7 | $ | 46.7 | $ | — | $ | 55.4 |
2012 | ||
Risk-free interest rate | 1.1 | % |
Dividend yield | 0.2 | % |
Volatility factor (A) | 58.3 | % |
Weighted average expected life | 5.2 - 6.7 years |
2013 | 2012 | ||||
Risk-free interest rate | 0.4 | % | 0.4 | % | |
Dividend yield | 0.1 | % | 0.2 | % | |
Volatility factor | 53.0 | % | 67.9 | % | |
Expected life of award | 2.9 years | 2.9 years |
Three Months Ended | |||||||
(in millions, except per share data) | March 30, 2013 | March 31, 2012 | |||||
Net earnings from continuing operations | $ | 54.9 | $ | 47.0 | |||
Net loss from discontinued operations, net of tax | (5.1 | ) | (7.3 | ) | |||
Net earnings | $ | 49.8 | $ | 39.7 | |||
Weighted average outstanding shares – basic | 90.6 | 89.5 | |||||
Dilutive effect of common stock equivalents | 2.9 | 2.8 | |||||
Weighted average outstanding shares – diluted | 93.5 | 92.3 | |||||
Basic earnings (loss) per common share: | |||||||
Continuing operations | $ | 0.61 | $ | 0.52 | |||
Discontinued operations | (0.06 | ) | (0.08 | ) | |||
Net earnings | $ | 0.55 | $ | 0.44 | |||
Diluted earnings (loss) per common share: | |||||||
Continuing operations | $ | 0.59 | $ | 0.51 | |||
Discontinued operations | (0.06 | ) | (0.08 | ) | |||
Net earnings | $ | 0.53 | $ | 0.43 |
Single Year Obligation | Maximum Obligation | ||||||||||||||
(in millions) | March 30, 2013 | March 31, 2012 | March 30, 2013 | March 31, 2012 | |||||||||||
Marine Engine | $ | 5.9 | $ | 7.6 | $ | 5.9 | $ | 7.6 | |||||||
Boat | 2.3 | 2.4 | 2.3 | 2.4 | |||||||||||
Fitness | 25.3 | 30.9 | 29.6 | 36.3 | |||||||||||
Bowling & Billiards | 0.8 | 1.9 | 1.4 | 3.0 | |||||||||||
Total | $ | 34.3 | $ | 42.8 | $ | 39.2 | $ | 49.3 |
Single Year Obligation | Maximum Obligation | ||||||||||||||
(in millions) | March 30, 2013 | March 31, 2012 | March 30, 2013 | March 31, 2012 | |||||||||||
Marine Engine | $ | 2.2 | $ | 2.0 | $ | 2.2 | $ | 2.0 | |||||||
Boat | 71.5 | 85.8 | 73.0 | 105.8 | |||||||||||
Bowling & Billiards | 0.2 | 0.2 | 0.2 | 0.2 | |||||||||||
Total | $ | 73.9 | $ | 88.0 | $ | 75.4 | $ | 108.0 |
(in millions) | March 30, 2013 | March 31, 2012 | |||||
Balance at beginning of period | $ | 127.7 | $ | 129.9 | |||
Payments made | (13.3 | ) | (14.4 | ) | |||
Provisions/additions for contracts issued/sold | 13.5 | 16.1 | |||||
Aggregate changes for preexisting warranties | (1.1 | ) | 0.5 | ||||
Balance at end of period | $ | 126.8 | $ | 132.1 |
(in millions) | Marine Engine | Boat | Fitness | Bowling & Billiards | Corporate | Total | |||||||||||||||||
Recourse Receivables: | |||||||||||||||||||||||
Short-term | $ | — | $ | — | $ | 1.2 | $ | 6.8 | $ | — | $ | 8.0 | |||||||||||
Long-term | — | — | 0.5 | 5.2 | — | 5.7 | |||||||||||||||||
Allowance for credit loss | — | — | (0.9 | ) | (5.5 | ) | — | (6.4 | ) | ||||||||||||||
Total | — | — | 0.8 | 6.5 | — | 7.3 | |||||||||||||||||
Third-Party Receivables: | |||||||||||||||||||||||
Short-term | 4.7 | 1.7 | 28.0 | — | — | 34.4 | |||||||||||||||||
Long-term | — | — | 22.1 | — | — | 22.1 | |||||||||||||||||
Allowance for credit loss | — | — | — | — | — | — | |||||||||||||||||
Total | 4.7 | 1.7 | 50.1 | — | — | 56.5 | |||||||||||||||||
Other Receivables: | |||||||||||||||||||||||
Short-term | 12.6 | 1.8 | 1.5 | — | 0.3 | 16.2 | |||||||||||||||||
Long-term | 3.6 | 0.6 | 0.3 | — | — | 4.5 | |||||||||||||||||
Allowance for credit loss | — | (1.3 | ) | (0.2 | ) | — | — | (1.5 | ) | ||||||||||||||
Total | 16.2 | 1.1 | 1.6 | — | 0.3 | 19.2 | |||||||||||||||||
Total Financing Receivables | $ | 20.9 | $ | 2.8 | $ | 52.5 | $ | 6.5 | $ | 0.3 | $ | 83.0 |
(in millions) | Marine Engine | Boat | Fitness | Bowling & Billiards | Corporate | Total | |||||||||||||||||
Recourse Receivables: | |||||||||||||||||||||||
Short-term | $ | — | $ | — | $ | 1.2 | $ | 7.0 | $ | — | $ | 8.2 | |||||||||||
Long-term | — | — | 0.6 | 5.3 | — | 5.9 | |||||||||||||||||
Allowance for credit loss | — | — | (0.9 | ) | (5.4 | ) | — | (6.3 | ) | ||||||||||||||
Total | — | — | 0.9 | 6.9 | — | 7.8 | |||||||||||||||||
Third-Party Receivables: | |||||||||||||||||||||||
Short-term | 4.3 | 3.2 | 29.3 | — | — | 36.8 | |||||||||||||||||
Long-term | — | — | 24.1 | — | — | 24.1 | |||||||||||||||||
Allowance for credit loss | — | — | — | — | — | — | |||||||||||||||||
Total | 4.3 | 3.2 | 53.4 | — | — | 60.9 | |||||||||||||||||
Other Receivables: | |||||||||||||||||||||||
Short-term | 9.2 | 3.1 | 1.3 | — | 0.9 | 14.5 | |||||||||||||||||
Long-term | 3.7 | 0.6 | 0.4 | — | — | 4.7 | |||||||||||||||||
Allowance for credit loss | — | (2.8 | ) | (0.2 | ) | — | — | (3.0 | ) | ||||||||||||||
Total | 12.9 | 0.9 | 1.5 | — | 0.9 | 16.2 | |||||||||||||||||
Total Financing Receivables | $ | 17.2 | $ | 4.1 | $ | 55.8 | $ | 6.9 | $ | 0.9 | $ | 84.9 |
(in millions) | Boat | Fitness | Bowling & Billiards | Total | |||||||||||
Recourse Receivables: | |||||||||||||||
Beginning balance | $ | — | $ | 0.9 | $ | 5.4 | $ | 6.3 | |||||||
Current period provision | — | 0.1 | 0.1 | 0.2 | |||||||||||
Direct write-downs | — | — | — | — | |||||||||||
Recoveries | — | (0.1 | ) | — | (0.1 | ) | |||||||||
Ending balance | $ | — | $ | 0.9 | $ | 5.5 | $ | 6.4 | |||||||
Other Receivables: | |||||||||||||||
Beginning balance | $ | 2.8 | $ | 0.2 | $ | — | $ | 3.0 | |||||||
Current period provision | — | — | — | — | |||||||||||
Direct write-downs | (1.5 | ) | — | — | (1.5 | ) | |||||||||
Recoveries | — | — | — | — | |||||||||||
Ending balance | $ | 1.3 | $ | 0.2 | $ | — | $ | 1.5 |
(in millions) | Boat | Fitness | Bowling & Billiards | Total | |||||||||||
Recourse Receivables: | |||||||||||||||
Beginning balance | $ | — | $ | 1.8 | $ | 6.6 | $ | 8.4 | |||||||
Current period provision | — | 0.8 | — | 0.8 | |||||||||||
Direct write-downs | — | — | (0.2 | ) | (0.2 | ) | |||||||||
Recoveries | — | (1.0 | ) | — | (1.0 | ) | |||||||||
Ending balance | $ | — | $ | 1.6 | $ | 6.4 | $ | 8.0 | |||||||
Other Receivables: | |||||||||||||||
Beginning balance | $ | 2.6 | $ | 0.4 | $ | — | $ | 3.0 | |||||||
Current period provision | — | — | — | — | |||||||||||
Direct write-downs | — | — | — | — | |||||||||||
Recoveries | (0.1 | ) | — | — | (0.1 | ) | |||||||||
Ending balance | $ | 2.5 | $ | 0.4 | $ | — | $ | 2.9 |
Net Sales | Operating Earnings (Loss) | ||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||
(in millions) | March 30, 2013 | March 31, 2012 | March 30, 2013 | March 31, 2012 | |||||||||||
Marine Engine | $ | 521.8 | $ | 489.4 | $ | 71.5 | $ | 47.9 | |||||||
Boat | 289.7 | 291.8 | 2.4 | 10.5 | |||||||||||
Marine eliminations | (67.6 | ) | (68.6 | ) | — | — | |||||||||
Total Marine | 743.9 | 712.6 | 73.9 | 58.4 | |||||||||||
Fitness | 166.2 | 157.1 | 24.5 | 23.7 | |||||||||||
Bowling & Billiards | 85.2 | 89.9 | 14.9 | 14.4 | |||||||||||
Pension - non-service costs | — | — | (4.9 | ) | (5.7 | ) | |||||||||
Corporate/Other | — | — | (18.5 | ) | (15.5 | ) | |||||||||
Total | $ | 995.3 | $ | 959.6 | $ | 89.9 | $ | 75.3 |
Total Assets | |||||||
(in millions) | March 30, 2013 | December 31, 2012 | |||||
Marine Engine | $ | 887.1 | $ | 728.0 | |||
Boat | 345.2 | 333.7 | |||||
Total Marine | 1,232.3 | 1,061.7 | |||||
Fitness | 535.7 | 558.9 | |||||
Bowling & Billiards | 249.4 | 251.7 | |||||
Corporate/Other | 426.7 | 551.9 | |||||
Total | $ | 2,444.1 | $ | 2,424.2 |
(in millions) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value (net carrying amount) | |||||||||||
Agency Bonds | $ | 35.5 | $ | — | $ | — | $ | 35.5 | |||||||
Corporate Bonds | 26.9 | — | — | 26.9 | |||||||||||
U.S. Treasury Bills | 0.8 | — | — | 0.8 | |||||||||||
Total available-for-sale securities | $ | 63.2 | $ | — | $ | — | $ | 63.2 |
(in millions) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value (net carrying amount) | |||||||||||
Agency Bonds | $ | 59.2 | $ | — | $ | — | $ | 59.2 | |||||||
Corporate Bonds | 66.4 | — | — | 66.4 | |||||||||||
Commercial Paper | 16.0 | — | — | 16.0 | |||||||||||
Certificate of Deposit | 2.0 | — | — | 2.0 | |||||||||||
U.S. Treasury Bills | 0.8 | — | — | 0.8 | |||||||||||
Total available-for-sale securities | $ | 144.4 | $ | — | $ | — | $ | 144.4 |
(in millions) | Amortized cost | Fair value (net carrying amount) | |||||
Available-for-sale debt securities: | |||||||
Due in one year or less | $ | 34.7 | $ | 34.7 | |||
Due after one year through two years | 28.5 | 28.5 | |||||
Total available-for-sale debt securities | $ | 63.2 | $ | 63.2 |
(in millions) | Amortized cost | Fair value (net carrying amount) | |||||
Available-for-sale debt securities: | |||||||
Due in one year or less | $ | 92.3 | $ | 92.3 | |||
Due after one year through two years | 52.1 | 52.1 | |||||
Total available-for-sale debt securities | $ | 144.4 | $ | 144.4 |
Three Months Ended | |||||||
(in millions) | March 30, 2013 | March 31, 2012 | |||||
Net earnings | $ | 49.8 | $ | 39.7 | |||
Other comprehensive income (loss): | |||||||
Foreign currency cumulative translation adjustment | (7.0 | ) | 6.2 | ||||
Net change in unamortized prior service cost | (1.7 | ) | (1.7 | ) | |||
Net change in unamortized actuarial loss | 5.9 | 5.8 | |||||
Net change in unrealized derivative losses | (0.3 | ) | (2.0 | ) | |||
Total other comprehensive income (loss) | (3.1 | ) | 8.3 | ||||
Comprehensive income | $ | 46.7 | $ | 48.0 |
(in millions) | Foreign currency translation | Prior service cost | Actuarial loss | Derivatives | Total | ||||||||||||||
Beginning balance | $ | 18.4 | $ | 4.4 | $ | (567.2 | ) | $ | (10.7 | ) | $ | (555.1 | ) | ||||||
Other comprehensive income before reclassifications | (7.0 | ) | — | 0.2 | 0.9 | (5.9 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | (1.7 | ) | 5.7 | (1.2 | ) | 2.8 | ||||||||||||
Net current-period other comprehensive income | (7.0 | ) | (1.7 | ) | 5.9 | (0.3 | ) | (3.1 | ) | ||||||||||
Ending balance | $ | 11.4 | $ | 2.7 | $ | (561.3 | ) | $ | (11.0 | ) | $ | (558.2 | ) |
(in millions) | ||||||
Details about Accumulated other comprehensive income (loss) components | Amount reclassified from Accumulated other comprehensive income (loss) | Affected line item in the statement where net income is presented | ||||
Amortization of defined benefit items: | ||||||
Prior service credits | $ | (1.7 | ) | (A) | ||
Net actuarial losses | 5.7 | (A) | ||||
4.0 | Total before tax | |||||
— | Tax benefit (B) | |||||
$ | 4.0 | Net of tax | ||||
Amount of gain (loss) reclassified into earnings on derivative contracts: | ||||||
Interest rate contracts | $ | 0.3 | Interest expense | |||
Foreign exchange contracts | (1.3 | ) | Cost of sales | |||
Commodity contracts | (0.4 | ) | Cost of sales | |||
(1.4 | ) | Total before tax | ||||
0.2 | Tax benefit | |||||
$ | (1.2 | ) | Net of tax |
(in millions) | March 30, 2013 | December 31, 2012 | |||||
Investment | $ | 12.9 | $ | 10.5 | |||
Repurchase and recourse obligations (A) | 53.3 | 72.3 | |||||
Liabilities (B) | (1.5 | ) | (1.6 | ) | |||
Total maximum loss exposure | $ | 64.7 | $ | 81.2 |
(A) | Repurchase and recourse obligations are off-balance sheet obligations provided by the Company for the Boat and Marine Engine segments, respectively, and are included within the Maximum Potential Obligations disclosed in Note 8 – Commitments and Contingencies. Repurchase and recourse obligations are mainly related to a global repurchase agreement with GECDF and could be reduced by repurchase activity occurring under other similar agreements with GECDF and affiliates. The Company’s risk under these repurchase arrangements is partially mitigated by the value of the products repurchased as part of the transaction. Amounts above exclude any potential recoveries from the value of the repurchased product. |
(B) | Represents accrued amounts for potential losses related to recourse exposure and the Company’s expected losses on obligations to repurchase products, after giving effect to proceeds anticipated to be received from the resale of these products to alternative dealers. |
Pension Benefits | Other Postretirement Benefits | ||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||
(in millions) | March 30, 2013 | March 31, 2012 | March 30, 2013 | March 31, 2012 | |||||||||||
Service cost | $ | — | $ | 0.1 | $ | — | $ | — | |||||||
Interest cost | 13.5 | 14.4 | 0.5 | 0.7 | |||||||||||
Expected return on plan assets | (14.3 | ) | (13.8 | ) | — | — | |||||||||
Amortization of prior service credits | — | — | (1.4 | ) | (1.6 | ) | |||||||||
Amortization of net actuarial losses | 5.4 | 5.5 | 0.3 | 0.6 | |||||||||||
Net pension and other benefit costs | $ | 4.6 | $ | 6.2 | $ | (0.6 | ) | $ | (0.3 | ) |
(in millions) | March 30, 2013 | December 31, 2012 | |||||
Current maturities of long-term debt | $ | 5.9 | $ | 6.5 | |||
Other short-term debt | 0.9 | 1.7 | |||||
Total short-term debt | $ | 6.8 | $ | 8.2 |
(in millions) | March 30, 2013 | December 31, 2012 | |||||
Senior notes, 11.25% due 2016, net of discount of $3.9 and $4.1 | $ | 245.9 | $ | 245.7 | |||
Notes, 7.125% due 2027, net of discount of $0.6 and $0.6 | 165.0 | 166.0 | |||||
Debentures, 7.375% due 2023, net of discount of $0.3 and $0.3 | 108.4 | 108.4 | |||||
Loan with Fond du Lac County Economic Development Corporation, 2.0% due 2021, net of discount of $6.4 and $6.6 | 40.8 | 41.1 | |||||
Notes, various up to 5.892% payable through 2022 | 8.7 | 8.9 | |||||
Total long-term debt | 568.8 | 570.1 | |||||
Current maturities of long-term debt | (5.9 | ) | (6.5 | ) | |||
Long-term debt, net of current maturities | $ | 562.9 | $ | 563.6 |
Three Months Ended | 2013 vs. 2012 Increase/(Decrease) | |||||||||||||
(in millions, except per share data) | March 30, 2013 | March 31, 2012 | $ | % | ||||||||||
Net sales | $ | 995.3 | $ | 959.6 | $ | 35.7 | 3.7 | % | ||||||
Gross margin (A) | 261.9 | 238.2 | 23.7 | 9.9 | % | |||||||||
Restructuring, exit and impairment charges | 5.6 | 0.2 | 5.4 | NM | ||||||||||
Operating earnings | 89.9 | 75.3 | 14.6 | 19.4 | % | |||||||||
Net earnings from continuing operations | 54.9 | 47.0 | 7.9 | 16.8 | % | |||||||||
Diluted earnings per common share from continuing operations | $ | 0.59 | $ | 0.51 | $ | 0.08 | 15.7 | % | ||||||
Expressed as a percentage of Net sales: | ||||||||||||||
Gross margin | 26.3 | % | 24.8 | % | 150 bpts | |||||||||
Selling, general and administrative expense | 14.0 | % | 14.4 | % | (40) bpts | |||||||||
Research and development expense | 2.7 | % | 2.5 | % | 20 bpts | |||||||||
Restructuring, exit and impairment charges | 0.6 | % | 0.0 | % | 60 bpts | |||||||||
Operating margin | 9.0 | % | 7.8 | % | 120 bpts |
(A) | Gross margin is defined as Net sales less Cost of sales as presented in the Condensed Consolidated Statements of Comprehensive Income. |
Three Months Ended | 2013 vs. 2012 Increase/(Decrease) | |||||||||||||
(in millions) | March 30, 2013 | March 31, 2012 | $ | % | ||||||||||
Net sales | $ | 521.8 | $ | 489.4 | $ | 32.4 | 6.6 | % | ||||||
Restructuring, exit and impairment charges | — | 1.7 | (1.7 | ) | (100.0 | )% | ||||||||
Operating earnings | 71.5 | 47.9 | 23.6 | 49.3 | % | |||||||||
Operating margin | 13.7 | % | 9.8 | % | 390 bpts | |||||||||
Capital expenditures | $ | 11.8 | $ | 7.2 | $ | 4.6 | 63.9 | % |
Three Months Ended | 2013 vs. 2012 Increase/(Decrease) | |||||||||||||
(in millions) | March 30, 2013 | March 31, 2012 | $ | % | ||||||||||
Net sales | $ | 289.7 | $ | 291.8 | $ | (2.1 | ) | (0.7 | )% | |||||
Restructuring, exit and impairment charges (gains) | 4.9 | (1.5 | ) | 6.4 | NM | |||||||||
Operating earnings | 2.4 | 10.5 | (8.1 | ) | (77.1 | )% | ||||||||
Operating margin | 0.8 | % | 3.6 | % | (280) bpts | |||||||||
Capital expenditures | $ | 6.0 | $ | 4.3 | $ | 1.7 | 39.5 | % |
Three Months Ended | 2013 vs. 2012 Increase/(Decrease) | |||||||||||||
(in millions) | March 30, 2013 | March 31, 2012 | $ | % | ||||||||||
Net sales | $ | 166.2 | $ | 157.1 | $ | 9.1 | 5.8 | % | ||||||
Operating earnings | 24.5 | 23.7 | 0.8 | 3.4 | % | |||||||||
Operating margin | 14.7 | % | 15.1 | % | (40) bpts | |||||||||
Capital expenditures | $ | 1.0 | $ | 1.4 | $ | (0.4 | ) | (28.6 | )% |
Three Months Ended | 2013 vs. 2012 Increase/(Decrease) | |||||||||||||
(in millions) | March 30, 2013 | March 31, 2012 | $ | % | ||||||||||
Net sales | $ | 85.2 | $ | 89.9 | $ | (4.7 | ) | (5.2 | )% | |||||
Operating earnings | 14.9 | 14.4 | 0.5 | 3.5 | % | |||||||||
Operating margin | 17.5 | % | 16.0 | % | 150 bpts | |||||||||
Capital expenditures | $ | 1.2 | $ | 3.7 | $ | (2.5 | ) | (67.6 | )% |
Three Months Ended | 2013 vs. 2012 Increase/(Decrease) | |||||||||||||
(in millions) | March 30, 2013 | March 31, 2012 | $ | % | ||||||||||
Restructuring, exit and impairment charges | $ | 0.7 | $ | — | $ | 0.7 | NM | |||||||
Operating loss | (18.5 | ) | (15.5 | ) | (3.0 | ) | 19.4 | % |
Three Months Ended | |||||||
(in millions) | March 30, 2013 | March 31, 2012 | |||||
Net cash used for operating activities of continuing operations | $ | (93.8 | ) | $ | (61.7 | ) | |
Net cash provided by (used for): | |||||||
Capital expenditures | (21.2 | ) | (16.7 | ) | |||
Proceeds from the sale of property, plant and equipment | 6.1 | 9.0 | |||||
Free cash flow (A) | $ | (108.9 | ) | $ | (69.4 | ) |
(in millions) | March 30, 2013 | December 31, 2012 | March 31, 2012 | ||||||||
Cash and cash equivalents | $ | 242.0 | $ | 284.3 | $ | 307.1 | |||||
Short-term investments in marketable securities | 34.7 | 92.3 | 63.9 | ||||||||
Long-term investments in marketable securities | 28.5 | 52.1 | 55.9 | ||||||||
Total cash, cash equivalents and marketable securities | $ | 305.2 | $ | 428.7 | $ | 426.9 |
(in millions) | March 30, 2013 | December 31, 2012 | March 31, 2012 | ||||||||
Short-term debt, including current maturities of long-term debt | $ | 6.8 | $ | 8.2 | $ | 7.3 | |||||
Long-term debt | 562.9 | 563.6 | 688.7 | ||||||||
Total debt | 569.7 | 571.8 | 696.0 | ||||||||
Less: Cash, cash equivalents and marketable securities | 305.2 | 428.7 | 426.9 | ||||||||
Net debt (A) | $ | 264.5 | $ | 143.1 | $ | 269.1 |
(in millions) | March 30, 2013 | December 31, 2012 | March 31, 2012 | ||||||||
Cash, cash equivalents and marketable securities | $ | 305.2 | $ | 428.7 | $ | 426.9 | |||||
Amounts available under its asset-based lending facilities | 270.8 | 272.8 | 272.4 | ||||||||
Total liquidity (A) | $ | 576.0 | $ | 701.5 | $ | 699.3 |
Nominee | For | Against | Abstain | Broker Non-votes | ||||
Nolan D. Archibald | 73,239,795 | 4,873,333 | 86,462 | 3,714,073 | ||||
David C. Everitt | 77,733,814 | 378,825 | 86,951 | 3,714,073 | ||||
Roger J. Wood | 77,755,886 | 367,458 | 76,246 | 3,714,073 | ||||
Lawrence A. Zimmerman | 77,706,037 | 414,773 | 78,780 | 3,714,073 |
Number of Shares | |
For | 76,895,092 |
Against | 1,042,607 |
Abstain | 261,891 |
Broker Non-votes | 3,714,073 |
Number of Shares | |
For | 75,204,083 |
Against | 2,796,329 |
Abstain | 199,178 |
Broker Non-votes | 3,714,073 |
Number of Shares | |
For | 80,995,372 |
Against | 865,407 |
Abstain | 52,884 |
Broker Non-votes | - |
10.1* | 2013 Brunswick Performance Plan |
10.2* | 2013 Brunswick Performance Plan - Senior Management Incentive Plan Participants |
10.3* | 2013 Brunswick Performance Plan - Performance Share Plan Participants |
10.4* | 2013 Performance Share Grant Terms and Conditions Pursuant to the Brunswick Corporation 2003 Stock Incentive Plan |
10.5* | 2013 Performance Share Grant Terms and Conditions Pursuant to the Brunswick Corporation 2003 Stock Incentive Plan - TSR Participants |
10.6* | 2013 Stock-Settled Stock Appreciation Right Grant Terms and Conditions Pursuant to the Brunswick Corporation 2003 Stock Incentive Plan |
10.7* | 2013 Cash-Settled Restricted Stock Unit Grant Terms and Conditions Pursuant to the Brunswick Corporation 2003 Stock Incentive Plan |
10.8* | 2013 Stock-Settled Restricted Stock Unit Grant Terms and Conditions Pursuant to the Brunswick Corporation 2003 Stock Incentive Plan |
10.9* | Brunswick Corporation Senior Management Incentive Plan |
31.1 | Certification of CEO Pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of CFO Pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification of CEO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2 | Certification of CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
BRUNSWICK CORPORATION | ||
May 1, 2013 | By: | /s/ ALAN L. LOWE |
Alan L. Lowe | ||
Vice President – Finance and Controller |
Purpose | Reward achievement of annual goals |
Eligibility | Key managers identified on an individual basis. |
Performance Period | 2013 fiscal year. |
Performance Measures | Bonuses based 100% on achievement against the following financial measures as of the end of the performance period. § For Corporate-level employees, ü 25% based on Earnings Per Share (EPS), ü 25% based on overall Brunswick Free Cash Flow (“FCF”), ü 12.5% based on Mercury Marine Earnings Before Interest and Taxes (EBIT), ü 12.5% based on Boat Group EBIT, ü 12.5% based on Life Fitness EBIT, and ü 12.5% based on Bowling & Billiards EBIT § For Division participants, ü 25% based on EPS, ü 25% based on overall Brunswick FCF, and ü 50% based on applicable division EBIT FCF is defined as cash flow from operating and investing activities excluding the impacts related to changes in investment balances and purchases of marketable securities. FCF, EPS and EBIT from continuing operations results for the year will be adjusted for: • Restructuring, exit and impairment costs (including debt extinguishment costs) and associated savings - variance from budget. • Acquisition or sale of “strategic” assets. • Impact of any “extraordinary” accounting charges (GAAP definition) or charges related to changes in accounting principles. The Human Resources and Compensation Committee will determine the applicable performance goals and the bonuses payable upon attainment of such goals. |
Funding Review and Approval | The following steps will be taken to review and approve funding: § CFO will review performance to evaluate required accruals; § CEO will review performance at end of performance period and recommend bonuses to the Human Resources and Compensation Committee as appropriate; and § Human Resources and Compensation Committee will review and approve bonuses as deemed appropriate. |
Individual Awards | Individual awards will be determined on a discretionary basis using overall approved funding, evaluation of individual performance for the performance period, target incentives as a percentage of salary and covered salary (actual paid for year). In no case shall an award exceed 200% of an individual’s target incentive opportunity. Individuals must be employed at the end of the performance period to be eligible for an award, with ultimate payout at the discretion of the Human Resources and Compensation Committee. Those employees whose employment terminates due to death, permanent and total disability, or as a result of restructuring activities or plant shutdown will be eligible to receive individual awards at the discretion of the CEO and Chief Human Resources Officer. Any awards payable in the event of termination due to death, permanent disability, as a result of restructuring activities or plant shutdown shall be subject to the achievement of the applicable performance conditions and shall be paid as specified under “Timing and Form of Award Payments.” |
Timing and Form of Award Payments | In 2014, after financial results are confirmed and appropriate approvals are obtained; provided, however, that any such award shall be paid to U.S.-based employees no later than March 15, 2014. Payment may be made in cash, shares of Brunswick common stock granted under the Brunswick Corporation 2003 Stock Incentive Plan, a combination of cash or stock, or an alternate form of equity, as determined by the Human Resources and Compensation Committee. |
Claw Back | The Human Resources and Compensation Committee will evaluate the facts and circumstances of any restatement of earnings due to fraud or intentional misconduct that results in material noncompliance with any financial reporting requirement and, in its sole discretion, may require the repayment of all or a portion of bonus awards from individual(s) responsible for the restatement and others assigned to salary grade 21 and above, including senior executives, as deemed appropriate by the Human Resources and Compensation Committee. In addition, bonus awards shall be subject to forfeiture, recovery by Brunswick or other action pursuant to any other clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. |
Additional Terms & Conditions | Payment of any bonus is in the sole discretion of the Human Resources and Compensation Committee. The Human Resources and Compensation Committee may modify, revise, discontinue, cancel or terminate this plan or any payments associated with this plan at any time, without notice. |
Purpose | Reward achievement of annual goals |
Eligibility | Key managers designated by the Human Resources and Compensation Committee. |
Performance Period | 2013 fiscal year. |
Plan Funding – 162(m) Performance Measures | A pool will be funded for each participant based on the following: § For the CEO: X% of Brunswick Earnings Before Interest and Taxes (EBIT) § For each additional participant: Y% of Brunswick EBIT For the purpose of plan funding, EBIT from continuing operations will be determined on a GAAP basis and be will be adjusted for: • Restructuring, exit and impairment costs (including debt extinguishment costs). • Acquisition or sale of “strategic” assets. • Impact of any “extraordinary” accounting charges (GAAP definition) or charges related to changes in accounting principles. |
Performance Measures | Without exceeding the pool funded for each participant, actual bonuses will be based on achievement against the following financial measures as of the end of the performance period. § For Corporate-level employees, ü 50% based on Earnings Per Share (EPS), ü 12.5% based on Mercury Marine EBIT, ü 12.5% based on Boat Group EBIT, ü 12.5% based on Life Fitness EBIT, and ü 12.5% based on Bowling & Billiards EBIT § For Division leaders, ü 50% based on EPS, and ü 50% based on applicable division EBIT EPS and EBIT from continuing operations results for the year will be adjusted for: • Restructuring, exit and impairment costs (including debt extinguishment costs) and associated savings - variance from budget. • Acquisition or sale of “strategic” assets. • Impact of any “extraordinary” accounting charges (GAAP definition) or charges related to changes in accounting principles. The Human Resources and Compensation Committee will determine the applicable performance goals and the bonuses payable upon attainment of such goals. |
Funding Review and Approval | The following steps will be taken to review and approve funding: § CFO will review performance to evaluate required accruals; § CEO will review performance at end of performance period and provide funding information to the Human Resource and Compensation Committee as appropriate; and § Human Resources and Compensation Committee will review and certify performance and funding of pools. |
Individual Awards | Without exceeding each participant’s funded pool based on the attainment of the performance goals certified by the Human Resources and Compensation Committee, individual awards will be determined by the Human Resources and Compensation Committee on a discretionary basis using overall performance versus the established performance measures, evaluation of individual performance for the performance period, target incentives as a percentage of salary and covered salary (actual paid for year). In no case shall an award exceed: § 200% of an individual’s target incentive opportunity, § the amount of the pool funded for the individual or § the maximum amount payable under the Brunswick Corporation Senior Management Incentive Plan. Individuals must be employed at the end of the performance period to be eligible for an award, with ultimate payout at the discretion of the Human Resources and Compensation Committee. Those employees whose employment terminates due to death, permanent and total disability, or as a result of restructuring activities or plant shutdown will be eligible to receive individual awards at the recommendation of the CEO and Chief Human Resources Officer and the approval of the Human Resources and Compensation Committee. Any awards payable in the event of termination due to death, permanent disability, as a result of restructuring activities or plant shutdown shall be subject to the achievement of the applicable performance conditions and shall be paid as specified under “Timing and Form of Award Payments.” |
Timing and Form of Award Payments | In 2014, after financial results are confirmed and appropriate approvals are obtained; provided, however, that any such award shall be paid to U.S.-based employees no later than March 15, 2014. Payment may be made in cash, shares of Brunswick common stock granted under the Brunswick 2003 Stock Incentive Plan, or a combination of cash or stock, or an alternate form of equity, as determined by the Human Resources and Compensation Committee. |
Claw Back | The Human Resources and Compensation Committee will evaluate the facts and circumstances of any restatement of earnings due to fraud or intentional misconduct that results in material noncompliance with any financial reporting requirement and, in its sole discretion, may require the repayment of all or a portion of bonus awards from individual(s) responsible for the restatement and others assigned to salary grade 21 and above, including senior executives, as deemed appropriate by the Human Resources and Compensation Committee. In addition, bonus awards shall be subject to forfeiture, recovery by Brunswick or other action pursuant to any other clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. |
Additional Terms & Conditions | This plan is a subplan under the Brunswick Corporation Senior Management Incentive Plan, and shall be subject to all of the terms, conditions and limitations under such plan. Payment of any bonus is in the sole discretion of the Human Resources and Compensation Committee. The Human Resources and Compensation Committee may modify, revise, discontinue, cancel or terminate this plan or any payments associated with this plan at any time, without notice. |
Purpose | Reward achievement of annual goals |
Eligibility | Key managers identified on an individual basis. |
Performance Period | 2013 fiscal year. |
Performance Measures | Bonuses based 100% on achievement against the following financial measures as of the end of the performance period. § For Corporate-level employees, ü 50% based on Earnings Per Share (EPS), ü 12.5% based on Mercury Marine EBIT, ü 12.5% based on Boat Group EBIT, ü 12.5% based on Life Fitness EBIT, and ü 12.5% based on Bowling & Billiards EBIT § For Division leaders, ü 50% based on EPS, and ü 50% based on applicable division EBIT EPS and EBIT from continuing operations results for the year will be adjusted for: • Restructuring, exit and impairment costs (including debt extinguishment costs) and associated savings - variance from budget. • Acquisition or sale of “strategic” assets. • Impact of any “extraordinary” accounting charges (GAAP definition) or charges related to changes in accounting principles. The Human Resources and Compensation Committee will determine the applicable performance goals and the bonuses payable upon attainment of such goals. |
Funding Review and Approval | The following steps will be taken to review and approve funding: § CFO will review performance to evaluate required accruals; § CEO will review performance at end of performance period and recommend bonuses to the Human Resources and Compensation Committee as appropriate; and § Human Resources and Compensation Committee will review and approve bonuses as deemed appropriate. |
Individual Awards | Individual awards will be determined on a discretionary basis using overall approved funding, evaluation of individual performance for the performance period, target incentives as a percentage of salary and covered salary (actual paid for year). In no case shall an award exceed 200% of an individual’s target incentive opportunity. Individuals must be employed at the end of the performance period to be eligible for an award, with ultimate payout at the discretion of the Human Resources and Compensation Committee. Those employees whose employment terminates due to death, permanent and total disability, or as a result of restructuring activities or plant shutdown will be eligible to receive individual awards at the discretion of the CEO and Chief Human Resources Officer. Any awards payable in the event of termination due to death, permanent disability, as a result of restructuring activities or plant shutdown shall be subject to the achievement of the applicable performance conditions and shall be paid as specified under “Timing and Form of Award Payments.” |
Timing and Form of Award Payments | In 2014, after financial results are confirmed and appropriate approvals are obtained; provided, however, that any such award shall be paid to U.S.-based employees no later than March 15, 2014. Payment may be made in cash, shares of Brunswick common stock granted under the Brunswick Corporation 2003 Stock Incentive Plan, a combination of cash or stock, or an alternate form of equity, as determined by the Human Resources and Compensation Committee. |
Claw Back | The Human Resources and Compensation Committee will evaluate the facts and circumstances of any restatement of earnings due to fraud or intentional misconduct that results in material noncompliance with any financial reporting requirement and, in its sole discretion, may require the repayment of all or a portion of bonus awards from individual(s) responsible for the restatement and others assigned to salary grade 21 and above, including senior executives, as deemed appropriate by the Human Resources and Compensation Committee. In addition, bonus awards shall be subject to forfeiture, recovery by Brunswick or other action pursuant to any other clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. |
Additional Terms & Conditions | Payment of any bonus is in the sole discretion of the Human Resources and Compensation Committee. The Human Resources and Compensation Committee may modify, revise, discontinue, cancel or terminate this plan or any payments associated with this plan at any time, without notice. |
Purpose | To provide incentives to (i) support the execution of Brunswick Corporation’s business strategies and (ii) more closely align the interests of the award recipient with those of Brunswick Corporation’s stockholders. |
Grant Date | February 4, 2013 |
Performance Shares | Shares of Brunswick Corporation common stock (“Common Stock”) where the number of shares of Common Stock delivered is based on attainment of Performance Criteria set forth herein. Shares of Common Stock subject to this Grant shall be referred to herein as “Performance Shares.” |
Target Award | ____________ Performance Shares is the target against which Performance Criteria shall apply. |
Performance Period | • Cash Flow Return on Investment (“CFROI”) Performance Criteria: one-year performance period, commencing January 1, 2013 and ending December 31, 2013 (the “CFROI Performance Period”). • For purposes of these Terms and Conditions, “Award Period” shall mean the three-year performance period, commencing January 1, 2013 and ending December 31, 2015. |
Performance Criteria | • CFROI: payout of 50% to 150% of the target Performance Shares based solely on performance against CFROI Performance Criteria over the CFROI Performance Period, as set forth in Appendix A attached hereto. |
Termination of employment | • Forfeiture of Performance Shares in the event employment terminates prior to the end of the Award Period, except if the Grantee terminates due to death or permanent disability (as defined below) or the Grantee’s age and years of service equals 70 or more or age is 62 or more. • In the case of a termination of employment (other than for “cause” (willful misconduct in the performance of duties)) on or after the first anniversary of the beginning of the Award Period (i) due to death or permanent disability (as defined below) or (ii) on or after the date on which age plus years of service equal 70 or more or age is 62 or more, the Grantee or his or her estate or personal representative shall receive the award, calculated as if the Grantee had remained employed throughout the entire Award Period and based on actual CFROI Performance. The Performance Shares shall be distributed to the Grantee in accordance with the terms of this award under “Timing of Distribution.” • In the case of a termination of employment (other than for “cause” (willful misconduct in the performance of duties)) prior to the first anniversary of the beginning of the Award Period (i) due to death or permanent disability (as defined below) or (ii) on or after the date on which age plus years of service equal 70 or more or age is 62 or more, a pro-rata portion of the award will be distributed to the Grantee or his or her estate or personal representative in accordance with the terms of this award under “Timing of Distribution.” For purposes of the foregoing sentence, a “pro-rata portion” will mean the product of (x) the number of Performance Shares that would otherwise be paid out at the end of the Award Period based on actual CFROI Performance and (y) a fraction, the numerator of which is the number of days that have elapsed since the beginning of the CFROI Performance Period through the date of termination of the Grantee’s employment, and the denominator of which is the number of days in the CFROI Performance Period. All remaining Performance Shares shall be forfeited. Fractional shares shall be rounded down to the nearest whole share. |
Change in Control | • On a Change in Control (as defined in the Plan), a pro-rata portion of the award shall vest and the remainder of the award shall be forfeited. For purposes of the foregoing sentence, a “pro-rata portion” shall mean the product of (x) the number of Performance Shares equal to 100% of the target award (or, if the Change in Control occurs after the CFROI Performance Period, the number of Performance Shares actually earned based on CFROI performance) and (y) a fraction, the numerator of which is the number of days that have elapsed since the beginning of the CFROI Performance Period through the Change in Control (not to exceed the number of days in the CFROI Performance Period), and the denominator of which is the number of days in the CFROI Performance Period. • Any vested Performance Shares shall be delivered to the Grantee within thirty (30) days of such Change in Control; provided, however, for those whose age and years of service could equal 70 or more or age will be 62 or more, in either case prior to January 1, 2015, all of the award will be distributed in accordance with the terms of this award under “Timing of Distribution;” provided, further, that if the Change in Control is a “change in control event” within the meaning of Internal Revenue Code Section 409A and applicable regulations issued thereunder (except that in no event shall an acquisition of assets under Treasury Regulation §1.409A-3(i)(5)(vii) constitute a change in control event, unless such event is also a sale or disposition of at least all or substantially all of the Company’s assets), then the vested performance share award shall be delivered to the Grantee within thirty (30) days of such Change in Control. |
Timing of Distribution | • Except as otherwise provided for herein, shares of Common Stock shall be delivered to the Grantee in settlement of the award as soon as administratively practicable after the end of the Award Period, subject to certification in writing of the Company’s attainment of the Performance Criteria. In no event shall the award be settled later than 2 ½ months following the end of the year in which the third anniversary of the Grant Date occurs. • Notwithstanding the foregoing provisions, in the event that (i) the Grantee is a “Covered Employee” (as defined under Internal Revenue Code Section 162(m), as amended) with respect to the taxable year in which the Performance Shares would otherwise be delivered, and (ii) the sum of the value of the Performance Shares deliverable to the Grantee under the award and other compensation payable by Brunswick to the Grantee with respect to such taxable year exceeds $1.5 million, the portion of the Performance Shares that, when added to such other compensation would result in the Grantee receiving total compensation in excess of $1.5 million shall be converted into deferred stock units and be automatically deferred pursuant to Brunswick's Automatic Deferred Compensation Plan. Performance Shares converted into deferred stock units shall be payable to the Grantee in accordance with the terms of the Automatic Deferred Compensation Plan. |
Tax Withholding | Tax withholding liability (to meet required FICA, federal, state, and local withholding) must be paid via share reduction upon distribution. |
Form of Distribution | Shares will be deposited to your existing Dividend Reinvestment Plan account or, if one is not currently on record, deposited into a newly created account. Stock certificates will be issued on request. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan shall govern. The Human Resources and Compensation Committee of the Board administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. Permanent disability means the inability, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition, in the opinion of a physician selected by the Committee, is expected to have a duration of not less than 120 days. This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
Cash Flow Return on Investment (CFROI) CFROI defined as free cash flow divided by operating capital employed (including adjustments noted below). Free cash flow is consistent with the external reporting definition, adjusted by the items noted below. Operating capital employed defined as total assets less total liabilities excluding cash, debt and tax balances, adjusted by the items noted below. Operating capital employed will be calculated on a five point basis. Free cash flow and operating capital employed will be adjusted for the following: • Acquisition/sale of “strategic” assets; • Impact of pension cash contributions and tax payments or refunds; • Impact of any changes in financings; and, • Any differences between cash restructuring activities versus budget. | Payout as a % of Target (1) | 2013 Goal | |
Threshold | 50% | X% | |
Target | 100% | Y% | |
Maximum | 150% | Z% |
Purpose | To provide incentives to (i) support the execution of Brunswick Corporation’s business strategies and (ii) more closely align the interests of the award recipient with those of Brunswick Corporation’s stockholders. |
Grant Date | February 4, 2013 |
Performance Shares | Shares of Brunswick Corporation common stock (“Common Stock”) where the number of shares of Common Stock delivered is based on attainment of Performance Criteria set forth herein. Shares of Common Stock subject to this Grant shall be referred to herein as “Performance Shares.” |
Target Award | ____________ Performance Shares is the target against which Performance Criteria shall apply. |
Performance Period | • Cash Flow Return on Investment (“CFROI”) Performance Criteria: one-year performance period, commencing January 1, 2013, and ending December 31, 2013 (the “CFROI Performance Period”). • Total Stockholder Return (“TSR”) Modifier: three-year performance period, commencing January 1, 2013 and ending December 31, 2015. • For purposes of these Terms and Conditions, “Award Performance Period” shall mean the three-year performance period, commencing January 1, 2013, and ending December 31, 2015. |
Performance Criteria | • CFROI: payout of 50% to 150% of the target Performance Shares based solely on performance against CFROI Performance Criteria over the CFROI Performance Period, as set forth in Appendix A attached hereto. • TSR Modifier: Performance Shares calculated based on CFROI performance (“CFROI Earned Award”) shall be subject to a +/- 20% modifier for Brunswick Corporation’s TSR Performance against TSR Comparator Group. o If Brunswick Corporation’s TSR Performance is equal to or below the 25th percentile of the TSR Performance of the TSR Comparator Group over the Award Performance Period, then the CFROI Earned Award shall be reduced by 20%. o If Brunswick Corporation’s TSR Performance is equal to or greater than the 75th percentile of the TSR Performance of the TSR Comparator Group over the Award Performance Period, then the CFROI Earned Award shall be increased by 20%. o The CFROI Earned Award shall not be modified for Brunswick Corporation’s TSR Performance between the 25th and 75th percentile of the TSR Performance of the TSR Comparator Group over the Award Performance Period. o See Appendix A attached hereto for the definitions of “TSR Performance” and “TSR Comparator Group.” o Notwithstanding the level of performance achieved, the number of shares of Common Stock delivered pursuant to the “Timing of Distribution” discussed below shall not exceed the number of shares having a Fair Market Value, as of the date of distribution, equal to 400% of the target dollar value of the award as of the grant date, as set forth in the award notice given to the Grantee in connection with the award. |
Termination of employment | • Forfeiture of Performance Shares in the event employment terminates prior to the end of the Award Performance Period, except if the Grantee terminates due to death or permanent disability (as defined below) or the Grantee’s age and years of service equals 70 or more or age is 62 or more. • In the case of a termination of employment (other than for “cause” (willful misconduct in the performance of duties)) on or after the first anniversary of the beginning of the Award Performance Period (i) due to death or permanent disability (as defined below) or (ii) on or after the date on which age plus years of service equal 70 or more or age is 62 or more, the Grantee or his or her estate or personal representative shall receive the award, calculated as if the Grantee had remained employed throughout the entire Award Performance Period and based on actual CFROI and TSR Performance. The Performance Shares shall be distributed to the Grantee in accordance with the terms of this award under “Timing of Distribution.” • In the case of a termination of employment (other than for “cause” (willful misconduct in the performance of duties)) prior to the first anniversary of the beginning of the Award Performance Period (i) due to death or permanent disability (as defined below) or (ii) on or after the date on which age plus years of service equal 70 or more or age is 62 or more, a pro-rata portion of the award will be distributed to the Grantee or his or her estate or personal representative in accordance with the terms of this award under “Timing of Distribution.” For purposes of the foregoing sentence, a “pro-rata portion” will mean the product of (x) the number of Performance Shares that would otherwise be paid out at the end of the Award Performance Period based on actual CFROI and TSR Performance and (y) a fraction, the numerator of which is the number of days that have elapsed since the beginning of the CFROI Performance Period through the date of termination of the Grantee’s employment, and the denominator of which is the number of days in the CFROI Performance Period. All remaining Performance Shares shall be forfeited. Fractional shares shall be rounded down to the nearest whole share. |
Change in Control | • On a Change in Control (as defined in the Plan), a pro-rata portion of the award shall vest and the remainder of the award shall be forfeited. For purposes of the foregoing sentence, a “pro-rata portion” shall mean the product of (x) the number of Performance Shares equal to 100% of the target award (or, if the Change in Control occurs after the CFROI Performance Period, the number of Performance Shares actually earned based on CFROI performance) and (y) a fraction, the numerator of which is the number of days that have elapsed since the beginning of the CFROI Performance Period through the Change in Control (not to exceed the number of days in the CFROI Performance Period), and the denominator of which is the number of days in the CFROI Performance Period. • Any vested Performance Shares shall be delivered to the Grantee within thirty (30) days of such Change in Control; provided, however, for those whose age and years of service could equal 70 or more or age will be 62 or more, in either case prior to January 1, 2015, all of the award will be distributed in accordance with the terms of this award under “Timing of Distribution;” provided, further, that if the Change in Control is a “change in control event” within the meaning of Internal Revenue Code Section 409A and applicable regulations issued thereunder (except that in no event shall an acquisition of assets under Treasury Regulation §1.409A-3(i)(5)(vii) constitute a change in control event, unless such event is also a sale or disposition of at least all or substantially all of the Company’s assets), then the vested performance share award shall be delivered to the Grantee within thirty (30) days of such Change in Control. |
Timing of Distribution | • Except as otherwise provided for herein, shares of Common Stock shall be delivered to the Grantee in settlement of the award as soon as administratively practicable after the end of the Award Performance Period, subject to certification in writing of the Company’s attainment of the Performance Criteria. In no event shall the award be settled later than 2 ½ months following the end of the year in which the third anniversary of the Grant Date occurs. • Notwithstanding the foregoing provisions, in the event that (i) the Grantee is a “Covered Employee” (as defined under Internal Revenue Code Section 162(m), as amended) with respect to the taxable year in which the Performance Shares would otherwise be delivered, and (ii) the sum of the value of the Performance Shares deliverable to the Grantee under the award and other compensation payable by Brunswick to the Grantee with respect to such taxable year exceeds $1.5 million, the portion of the Performance Shares that, when added to such other compensation would result in the Grantee receiving total compensation in excess of $1.5 million shall be converted into deferred stock units and be automatically deferred pursuant to Brunswick's Automatic Deferred Compensation Plan. Performance Shares converted into deferred stock units shall be payable to the Grantee in accordance with the terms of the Automatic Deferred Compensation Plan. |
Tax Withholding | Tax withholding liability (to meet required FICA, federal, state, and local withholding) must be paid via share reduction upon distribution. |
Form of Distribution | Shares will be deposited to your existing Dividend Reinvestment Plan account or, if one is not currently on record, deposited into a newly created account. Stock certificates will be issued on request. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan shall govern. The Human Resources and Compensation Committee of the Board administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. Permanent disability means the inability, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition, in the opinion of a physician selected by the Committee, is expected to have a duration of not less than 120 days. This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
Cash Flow Return on Investment (CFROI) CFROI defined as free cash flow divided by operating capital employed (including adjustments noted below). Free cash flow is consistent with the external reporting definition, adjusted by the items noted below. Operating capital employed defined as total assets less total liabilities excluding cash, debt and tax balances, adjusted by the items noted below. Operating capital employed will be calculated on a five point basis. Free cash flow and operating capital employed will be adjusted for the following: • Acquisition/sale of “strategic” assets; • Impact of pension cash contributions and tax payments or refunds; • Impact of any changes in financings; and, • Any differences between cash restructuring activities versus budget. | Payout as a % of Target (1) | 2013 Goal | |
Threshold | 50% | X% | |
Target | 100% | Y% | |
Maximum | 150% | Z% |
Purpose | To promote Brunswick’s long term financial interests and growth. |
Stock-Settled Stock Appreciation Right | The right to receive a payment in Brunswick Stock (as defined in the Plan) equal to the excess of the Stock’s Fair Market Value (as defined in the Plan) at exercise over the exercise price as established on the Grant Date attributable to the number of underlying Stock-Settled Stock Appreciation Rights (“Stock-Settled SARs”) granted. By exercising Stock-Settled SARs, you agree to the terms and conditions of the grant. |
Exercise Price | $ Closing price as reported on the New York Stock Exchange Composite Transactions Tape on the Grant Date. |
Grant Date | ___________, 2013 |
Award | ____________ Stock-Settled SARs |
Vesting | Stock-Settled SARs vest and become exercisable as follows: § One-fourth of the Stock-Settled SARs granted on each of the first, second, third, and fourth anniversaries of the Grant Date, so long as employment by Brunswick or its designated affiliates continues on each such anniversary date; § In the case of a termination of employment (other than for “cause” (willful misconduct in the performance of duties) or due to death or permanent disability (as defined below)) on or after (i) the first anniversary of the Grant Date and (ii) the date on which age plus years of service equals 70 or more or age is 62 or more, vesting will continue on the normal vesting schedule described immediately above; § In the case of a termination of employment (other than for cause or due to death or permanent disability) (i) prior to the first anniversary of the Grant Date and (ii) on or after the date on which age plus years of service equals 70 or more or age is 62 or more, a pro-rata portion of the award will vest on each anniversary of the Grant Date pursuant to the normal vesting schedule described above. For purposes of the foregoing sentence, a “pro-rata portion” will mean the product of (x) the number of shares underlying the Stock-Settled SAR award that would have vested on the applicable anniversary of the Grant Date pursuant to the normal vesting schedule and (y) a fraction, the numerator of which is the number of days that have elapsed since the Grant Date through the date of termination of the recipient’s employment, and the denominator of which is 365. All remaining shares will be forfeited; § Termination due to death or permanent disability; or § A Change in Control (as defined in the Plan). |
Grant Term | Vested Stock-Settled SARs will remain exercisable as follows: § Until the termination of employment, if involuntarily terminated for cause, or § Based on eligibility as of the last day employed, the latest of the following: • 30 days after voluntary termination; • One year after involuntary termination without cause (for example, reductions-in-force or reorganization), or if your employer ceases to be a Subsidiary (as defined in the Plan) of Brunswick, unless the Committee (as defined in the Plan) provides otherwise; • Two years after termination following a Change in Control (as defined in the Plan); • Five years after termination due to death or permanent disability (as defined below); or • Five years after termination of employment (other than for cause or due to death or permanent disability), provided that such termination occurs on or after the date on which your age plus years of service equals 70 or more or your age is 62 or more. § But, in no event may your Stock-Settled SAR be exercised later than ten years from the Grant Date. |
Exercise Settlement-Payment / Tax Withholding | On exercise, the number of shares of Brunswick Stock delivered will be determined as follows: § The difference between the Fair Market Value on date of exercise and the per share exercise price will be determined. § This difference will be multiplied by the number of Stock-Settled SARs being exercised to determine the total dollar gain. § The total dollar gain will be divided by the Fair Market Value on date of exercise. If, upon exercise, you would be entitled to a fractional security, such fractional security shall be disregarded and the cash equivalent of such fractional security shall be applied to your tax withholding liability. Should you elect to have the required tax withholding satisfied by delivery of shares, then the ultimate Stock delivered will be reduced by an amount necessary to accommodate the required tax withholding. Tax withholding liability (to meet required FICA, federal, state, and local withholding) can be paid in any combination of the following: § Reduction in shares delivered to accommodate the required minimum tax withholding, or § Cash or check. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan will govern. The Committee administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. The rule of 70/age 62 provisions do not apply for grants made to residents of the European Union. Permanent disability means the inability, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition, in the opinion of a physician selected by the Committee, is expected to have a duration of not less than 120 days. This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
Purpose | To encourage retention of key managers so as to support the execution of business strategies and achieve future goals. |
Cash-settled Restricted Stock Units | Cash-settled Restricted Stock Units valued on the same basis as Brunswick Corporation common stock (“Stock”) where one unit equals one share. Dividend equivalents will be reinvested in additional cash-settled restricted stock units. There are no voting rights attached to restricted stock units. |
Grant Date | February 4, 2013 |
Award | ____________ Cash-settled Restricted Stock Units. |
Vesting | Cash-settled restricted stock units will vest and be distributed as follows: § Three years from the Grant Date, subject to continued employment; § In the case of a termination of employment (other than for “cause” (willful misconduct in the performance of duties) or due to death or permanent disability (as defined below)) on or after (i) the first anniversary of the Grant Date and (ii) the date on which age plus years of service equal 70 or more or age is 62 or more, all of the award will be vested and distributed three years from the Grant Date; § In the case of a termination of employment (other than for cause or due to death or permanent disability) (i) prior to the first anniversary of the Grant Date and (ii) on or after the date on which age plus years of service equals 70 or more or age is 62 or more, a pro-rata portion of the award will be vested and distributed three years from the Grant Date. For purposes of the foregoing sentence, a “pro-rata portion” will mean the product of (x) the number of restricted stock units awarded that would have vested on the normal vesting date and (y) a fraction, the numerator of which is the number of days that have elapsed since the Grant Date through the date of termination of the recipient’s employment, and the denominator of which is 365. All remaining restricted stock units will be forfeited; § Within thirty (30) days following a Change in Control (as defined in the Plan); provided, however, for those whose age and years of service could equal 70 or more or age will be 62 or more, in either case prior to January 1, 2015, all of the award will be vested and distributed three years from the Grant Date; provided, further, that if the Change in Control is a “change in control event” within the meaning of Internal Revenue Code Section 409A and applicable regulations issued thereunder (except that in no event shall an acquisition of assets under Treasury Regulation §1.409A-3(i)(5)(vii) constitute a change in control event, unless such event is also a sale or disposition of at least all or substantially all of the Company’s assets), then all cash-settled restricted stock units shall be vested and distributed upon such “change in control event;” or § On death or termination due to permanent disability. |
Termination of Employment | Forfeiture of cash-settled restricted stock units in the event employment terminates prior to vesting, except if age and years of service equals 70 or more or age is 62 or more, in which case all or a pro-rata portion of the restricted stock units will vest as described above (the Rule of 70/age 62 provisions do not apply for grants made to residents of the European Union). |
Timing of Distribution | Distributions will occur as soon as practical after the distribution date provided above (but in no event later than March 15, 2016). |
Tax Withholding | For those meeting the Rule of 70 or age 62 prior to the year of scheduled distribution, tax withholding liability to meet required FICA must be paid via payroll or participant check by the end of the year of meeting the Rule of 70 or reaching age 62, except that the FICA taxes on amounts vesting during the first December after grant for those who have met the Rule of 70 or age 62 during the year of grant will be collected during the next calendar quarter. Subsequent Federal, state and local income tax withholding will be deducted from the gross payment upon distribution. For all others, tax withholding liability (to meet required FICA, Federal, state, and local withholding) must be deducted from the gross payment upon distribution. |
Form of Distribution | Distribution will be in the form of a cash payment in an amount equal to the number of units multiplied by the share price at the time of vesting and distribution, less applicable withholding. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan shall govern. The Human Resources and Compensation Committee of the Board administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. Permanent disability means the inability, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition, in the opinion of a physician selected by the Committee, is expected to have a duration of not less than 120 days; provided, however, that for recipients who could meet the Rule of 70 or will reach age 62, in either case prior to January 1, 2015, permanent disability means that the recipient is “disabled” within the meaning of Treasury Regulation §1.409A-3(i)(4). This award and any cash delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
Purpose | To encourage retention of key managers so as to support the execution of business strategies and achieve future goals. |
Restricted Stock Units | Restricted Stock Units valued on the same basis as Brunswick Corporation common stock (“Stock”) where one unit equals one share. Dividend equivalents will be reinvested in additional restricted stock units. There are no voting rights attached to restricted stock units. |
Grant Date | February 4, 2013 |
Award | ____________ Restricted Stock Units. |
Vesting | Restricted stock units will vest and be distributed as follows: § Three years from the Grant Date, subject to continued employment; § In the case of a termination of employment (other than for “cause” (willful misconduct in the performance of duties) or due to death or permanent disability (as defined below)) on or after (i) the first anniversary of the Grant Date and (ii) the date on which age plus years of service equal 70 or more or age is 62 or more, all of the award will be vested and distributed three years from the Grant Date; § In the case of a termination of employment (other than for cause or due to death or permanent disability) (i) prior to the first anniversary of the Grant Date and (ii) on or after the date on which age plus years of service equals 70 or more or age is 62 or more, a pro-rata portion of the award will be vested and distributed three years from the Grant Date. For purposes of the foregoing sentence, a “pro-rata portion” will mean the product of (x) the number of restricted stock units awarded that would have vested on the normal vesting date and (y) a fraction, the numerator of which is the number of days that have elapsed since the Grant Date through the date of termination of the recipient’s employment, and the denominator of which is 365. All remaining restricted stock units will be forfeited; § Within thirty (30) days following a Change in Control (as defined in the Plan); provided, however, for those whose age and years of service could equal 70 or more or age will be 62 or more, in either case prior to January 1, 2015, all of the award will be vested and distributed three years from the Grant Date; provided, further, that if the Change in Control is a “change in control event” within the meaning of Internal Revenue Code Section 409A and applicable regulations issued thereunder (except that in no event shall an acquisition of assets under Treasury Regulation §1.409A-3(i)(5)(vii) constitute a change in control event, unless such event is also a sale or disposition of at least all or substantially all of the Company’s assets), then all stock-settled restricted stock units shall be vested and distributed upon such “change in control event;” or § On death or termination due to permanent disability. |
Termination of Employment | Forfeiture of restricted stock units in the event employment terminates prior to vesting, except if age and years of service equals 70 or more or age is 62 or more, in which case all or a pro-rata portion of the restricted stock units will vest as described above (the Rule of 70/age 62 provisions do not apply for grants made to residents of the European Union). |
Timing of Distribution | Distributions will occur as soon as practical after the distribution date provided above (but in no event later than March 15, 2016). |
Tax Withholding | For those meeting the Rule of 70 or age 62 prior to the year of scheduled distribution, tax withholding liability to meet required FICA must be paid via payroll or participant check by the end of the year of meeting the Rule of 70 or reaching age 62, except that the FICA taxes on amounts vesting during the first December after grant for those who have met the Rule of 70 or age 62 during the year of grant will be collected during the next calendar quarter. Subsequent Federal, state and local income tax withholding must be paid via share reduction upon distribution. For all others, tax withholding liability (to meet required FICA, Federal, state, and local withholding) must be paid via share reduction upon distribution. |
Form of Distribution | Shares will be deposited to your existing Dividend Reinvestment Plan account or, if one is not currently on record, deposited into a newly created account. Stock certificates will be issued on request. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan shall govern. The Human Resources and Compensation Committee of the Board administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. Permanent disability means the inability, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition, in the opinion of a physician selected by the Committee, is expected to have a duration of not less than 120 days; provided, however, that for recipients who could meet the Rule of 70 or will reach age 62, in either case prior to January 1, 2015, permanent disability means that the recipient is “disabled” within the meaning of Treasury Regulation §1.409A-3(i)(4). This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
3.1. | General. The Plan shall be administered by the Committee, which shall have the full power and authority to interpret, construe and administer the Plan and any Individual Award Opportunity granted hereunder (including reconciling any inconsistencies, correcting any defaults and addressing any omissions). The Committee’s interpretation, construction and administration of the Plan and all its determinations hereunder shall be final, conclusive and binding on all persons for all purposes. |
3.2. | Powers and Responsibilities. The Committee shall have the following discretionary powers, rights and responsibilities in addition to those described in Section 3.1: |
(a) | to designate within the Determination Period the Participants for a Performance Period; |
(b) | to establish within the Determination Period the performance goals and other terms and conditions that are to apply to each Participant’s Individual Award Opportunity, including the extent to which any incentive payment shall be made to a Participant in the event of (A) the Participant’s termination of employment with the Company due to disability, retirement, death or any other reason or (B) a change in control of the Company; |
(c) | to determine the form of payment of Individual Award Opportunities, which may include, without limitation, cash, shares of Company common stock or stock-based awards granted under the Company’s equity incentive plan as in effect from time to time, or any other property approved by the Committee; |
(d) | to determine and certify in writing prior to the payment under any Individual Award Opportunity that the performance goals for a Performance Period and other material terms applicable to the Individual Award Opportunity have been satisfied; |
(e) | subject to the requirements of Section 409A of the Code, to decide whether, and under what circumstances and subject to what terms, Individual Award Opportunities are to be paid on a deferred basis, including whether such a deferred payment shall be made solely at the Committee’s discretion or whether a Participant may elect deferred payment; and |
(f) | to adopt, revise, suspend, waive or repeal, when and as appropriate, in its sole and absolute discretion, such administrative rules, guidelines and procedures for the Plan as it deems necessary or advisable to implement the terms and conditions of the Plan. |
3.3. | Delegation of Power. The Committee may delegate some or all of its power and authority hereunder to the Chairman of the Board and Chief Executive Officer or other executive officer of the Company as the Committee deems appropriate; provided, however, that with respect to any person who is a “covered employee” within the meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to be a covered employee at any time during the applicable Performance Period, only the Committee shall be permitted to (i) designate such person to participate in the Plan for such Performance Period, (ii) establish performance goals and Individual Award Opportunities for such person, and (iii) certify the achievement of such performance goals. |
4.1. | Establishing Performance Goals. The Committee shall establish within the Determination Period of each Performance Period one or more objective performance goals for each Participant or for any group of Participants (or both), provided that the outcome of each goal is substantially uncertain at the time the Committee establishes such goal. Performance goals shall be based exclusively on one or more of the following objective corporate-wide or subsidiary, division, operating unit or individual measures, stated in either absolute terms or relative terms, such as rates of growth or improvement or the performance of other companies or indices: the attainment by a share of common stock of a specified fair market value for a specified period of time, earnings per share (determined on a fully diluted basis), total stockholder return, return on assets, return on equity, earnings of the Company before or after taxes and/or interest, sales, revenue, market share, free cash flow, cash flow return on investment, cash on hand, expense reduction, interest expense after taxes, return on investment, return on invested capital, economic value added, operating margin, net income before or after taxes, earnings before interest, taxes, depreciation and amortization, pretax operating earnings after interest expense and before incentives, and/or extraordinary or special items, operating income, net cash provided by operations, total liquidity, net debt, operating working capital and strategic business criteria consisting of one or more objectives based on meeting specified goals relating to market penetration, geographic business expansion, cost targets, customer satisfaction, reductions in errors and omissions, reductions in lost business, management of employment practices and employee benefits, supervision of litigation and information technology, quality and quality audit scores, productivity, efficiency, safety and acquisitions or divestitures, or any |
4.2. | Impact of Extraordinary Items or Changes in Accounting. The measures utilized in establishing performance goals under the Plan for any given Performance Period shall be determined in accordance with generally accepted accounting principles (“GAAP”), where applicable, and in a manner consistent with the methods used in the Company’s audited consolidated financial statements, without regard to (i) extraordinary or other nonrecurring or unusual items, or restructuring or impairment charges, such as restructuring, exit and impairment charges, tax items and loss on debt extinguishment costs, as determined by the Company’s independent public accountants in accordance with GAAP or (ii) changes in accounting, unless, in each case, the Committee decides otherwise within the Determination Period or as otherwise required under Section 162(m) of the Code. |
5.1. | Terms. At the time performance goals are established for a Performance Period, the Committee also shall establish an Individual Award Opportunity for each Participant or group of Participants, which shall be based on the achievement of one or more specified targets of performance goals. The targets shall be expressed in terms of an objective formula or standard which may, at the discretion of the Committee, be based upon the Participant’s annual base salary or a multiple thereof. In all cases the Committee shall have the sole and absolute discretion to reduce the amount of any payment under any Individual Award Opportunity that would otherwise be made to any Participant or to decide that no payment shall be made, and the Committee may in its sole discretion establish secondary performance goals, that need not be specified in Section 4.1 of the Plan, which the Committee may use as guidelines in making the decision whether to reduce any such payment. No Participant shall receive a payment under the Plan with respect to any fiscal year of the Company in excess of $5,000,000, which maximum amount shall be proportionately increased or decreased with respect to Performance Periods that are more or less than one year in duration. |
5.2. | Incentive Payments. Subject to Section 3.2(e), payments under Individual Award Opportunities shall be made within 2½ months after the end of the Performance Period for which the incentive awards are payable, except that no such payment shall be made unless and until the Committee, based to the extent applicable on the Company’s audited consolidated financial statements for such Performance Period (as prepared and reviewed |
6.1. | Effective Date and Term of Plan. The Plan shall be submitted to the stockholders of the Company for approval at the 2013 annual meeting of stockholders and, if approved by the affirmative vote of a majority of the shares of common stock of the Company present in person or represented by proxy at such meeting, shall become effective for Performance Periods beginning on and after January 1, 2013. This Plan may be terminated at any time by the Committee. In the event that this Plan is not approved by the stockholders of the Company, this Plan shall be null and void. |
6.2. | Amendment or Termination of Plan. The Committee may amend or terminate this Plan as it shall deem advisable, subject to any requirement of stockholder approval required by applicable law, rule or regulation, including Section 162(m) of the Code. |
6.3. | Non-Transferability of Awards. No award under the Plan shall be transferable other than by will, the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Company. Except to the extent permitted by the foregoing sentence, no award may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any such award, such award and all rights thereunder shall immediately become null and void. |
6.4. | Tax Withholding. The Company shall have the right to require, prior to the payment of any amount pursuant to an award made hereunder, payment by the Participant of any Federal, state, local or other taxes which may be required to be withheld or paid in connection with such award. |
6.5. | No Right of Participation or Employment. No person shall have any right to participate in this Plan. Neither this Plan nor any award made hereunder shall confer upon any person any right to continued employment by the Company, any subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any subsidiary or any affiliate of the Company to terminate the employment of any person at any time without liability hereunder. |
6.6. | Designation of Beneficiary. If permitted by the Company, a Participant may file with the Company a written designation of one or more persons as such Participant’s beneficiary or beneficiaries (both primary and contingent) in the event of the Participant’s death. Each beneficiary designation shall become effective only when filed in writing with the Company during the Participant’s lifetime on a form prescribed by the Company. The spouse of a married Participant domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse. The filing with the Company of a |
6.7. | Governing Law. This Plan and each award hereunder, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws. |
6.8. | Other Plans. Neither the adoption of the Plan nor the submission of the Plan to the Company’s stockholders for their approval shall be construed as limiting the power of the Board or the Committee to adopt such other incentive arrangements as it may otherwise deem appropriate. |
6.9. | Binding Effect. The Plan shall be binding upon the Company and its successors and assigns and the Participants and their beneficiaries, personal representatives and heirs. If the Company becomes a party to any merger, consolidation or reorganization, then the Plan shall remain in full force and effect as an obligation of the Company or its successors in interest, unless the Plan is amended or terminated pursuant to Section 6.2. |
1. | I have reviewed this Quarterly Report on Form 10-Q of Brunswick Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
BRUNSWICK CORPORATION | ||
May 1, 2013 | By: | /s/ DUSTAN E. MCCOY |
Dustan E. McCoy | ||
Chairman and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Brunswick Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
BRUNSWICK CORPORATION | ||
May 1, 2013 | By: | /s/ WILLIAM L. METZGER |
William L. Metzger | ||
Senior Vice President and Chief Financial Officer |
BRUNSWICK CORPORATION | ||
May 1, 2013 | By: | /s/ DUSTAN E. MCCOY |
Dustan E. McCoy | ||
Chairman and Chief Executive Officer |
BRUNSWICK CORPORATION | ||
May 1, 2013 | By: | /s/ WILLIAM L. METZGER |
William L. Metzger | ||
Senior Vice President and Chief Financial Officer |
Pension and Other Postretirement Benefits (Details) (USD $)
|
3 Months Ended | |
---|---|---|
Mar. 30, 2013
|
Mar. 31, 2012
|
|
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Contributions By Employer For Nonqualified Pension Plan | $ 600,000 | $ 900,000 |
Defined Benefit Plan, Contributions by Employer Qualified | 0 | 0 |
Pension Plans [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 100,000 |
Interest cost | 13,500,000 | 14,400,000 |
Expected return on plan assets | (14,300,000) | (13,800,000) |
Amortization of prior service credits | 0 | 0 |
Amortization of net actuarial losses | 5,400,000 | 5,500,000 |
Net pension and other benefit costs | 4,600,000 | 6,200,000 |
Other Postretirement Benefit Plans [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 0 |
Interest cost | 500,000 | 700,000 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service credits | (1,400,000) | (1,600,000) |
Amortization of net actuarial losses | 300,000 | 600,000 |
Net pension and other benefit costs | $ (600,000) | $ (300,000) |
Debt (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 30, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
|
Mar. 30, 2013
Notes Due 2027 [Member]
|
Mar. 31, 2011
Secured Asset-Based Facility [Member]
|
Mar. 30, 2013
Secured Asset-Based Facility [Member]
|
Mar. 30, 2013
Senior Notes Due 2016 [Member]
|
Dec. 31, 2012
Senior Notes Due 2016 [Member]
|
Mar. 30, 2013
Notes Due 2027 [Member]
|
Dec. 31, 2012
Notes Due 2027 [Member]
|
Mar. 30, 2013
Debentures Due 2023 [Member]
|
Dec. 31, 2012
Debentures Due 2023 [Member]
|
Mar. 30, 2013
Loan With Fond Du Lac County Economic Development Corporation Due 2021 [Member]
|
Dec. 31, 2012
Loan With Fond Du Lac County Economic Development Corporation Due 2021 [Member]
|
Mar. 30, 2013
Notes Payable Through 2022 [Member]
|
Dec. 31, 2012
Notes Payable Through 2022 [Member]
|
Mar. 30, 2013
Minimum [Member]
Secured Asset-Based Facility [Member]
|
Mar. 30, 2013
Maximum [Member]
Secured Asset-Based Facility [Member]
|
|
Short-term debt [Abstract] | ||||||||||||||||||
Current maturities of long-term debt | $ (5.9) | $ (6.5) | ||||||||||||||||
Other short-term debt | 0.9 | 1.7 | ||||||||||||||||
Total short-term debt | 6.8 | 7.3 | 8.2 | |||||||||||||||
Asset-Based Credit Facility [Abstract] | ||||||||||||||||||
Term of credit facility | 5 years | |||||||||||||||||
Maximum borrowing capacity | 300.0 | |||||||||||||||||
Borrowing base | 354.3 | |||||||||||||||||
Available borrowing capacity | 270.8 | |||||||||||||||||
Letters of credit outstanding | 29.2 | |||||||||||||||||
Maximum amount of letters of credit allowed | 125.0 | |||||||||||||||||
Facility fee | 0.25% | 0.25% | 0.625% | |||||||||||||||
LIBOR borrowing spread | 2.25% | 2.25% | 3.00% | |||||||||||||||
Leverage ratio spread | 1.25% | 1.25% | 2.00% | |||||||||||||||
Basis spread on Federal Funds Rate | 0.50% | |||||||||||||||||
Basis spread on one-month LIBOR | 1.00% | |||||||||||||||||
Fixed charge coverage ratio covenant | 1.0 | |||||||||||||||||
Minimum remaining borrowing capacity covenant | 37.5 | 37.5 | ||||||||||||||||
Long-term Debt [Abstract] | ||||||||||||||||||
Long-term debt, gross | 568.8 | 570.1 | 245.9 | 245.7 | 165.0 | 166.0 | 108.4 | 108.4 | 40.8 | 41.1 | 8.7 | 8.9 | ||||||
Current maturities of long-term debt | (5.9) | (6.5) | ||||||||||||||||
Interest rate | 11.25% | 7.125% | 7.375% | 2.00% | ||||||||||||||
Long-term debt, net | 562.9 | 688.7 | 563.6 | |||||||||||||||
Debt Instruments Maturity Date | 2016 | 2027 | 2023 | 2021 | 2022 | |||||||||||||
Interest rate, maximum | 5.892% | |||||||||||||||||
Discount on long-term debt | 3.9 | 4.1 | 0.6 | 0.6 | 0.3 | 0.3 | 6.4 | 6.6 | ||||||||||
Extinguishment of Debt [Abstract] | ||||||||||||||||||
Long-term debt repurchased | 1.0 | |||||||||||||||||
Loss on early extinguishment of debt | $ 0.1 | $ 0 |
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