Delaware | 001-01043 | 36-0848180 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
26125 N. Riverwoods Blvd., Suite 500 Mettawa, Illinois | 60045-3420 | |
(Address of Principal Executive Offices) | (Zip Code) |
Exhibit No. | Description of Exhibit |
BRUNSWICK CORPORATION | |||
Dated: October 25, 2018 | By: | /S/ DANIEL J. TANNER | |
Daniel J. Tanner | |||
Vice President and Controller |
![]() | ![]() |
Brunswick Corporation 26125 N. Riverwoods Blvd., Suite 500, Mettawa, IL 60045 | |
Telephone 847.735.4700 Facsimile 847.735.4750 |
Release: | IMMEDIATE | |
Contact: | Ryan Gwillim | |
Vice President - Investor Relations | ||
Phone: | 847-735-4926 | |
Contact: | Daniel Kubera | |
Director - Media Relations and Corporate Communications | ||
Phone: | 847-735-4617 | |
Email: | daniel.kubera@brunswick.com |
• | On a GAAP basis, as compared to the third quarter of 2017: |
– | Consolidated net sales increased 13.7 percent, and were up 16.2 percent for the combined marine business. |
– | Marine business operating margin was 11.8 percent, a decrease of 100 basis points. |
– | Operating earnings were down 20.1 percent, but were up 6.8 percent for the combined marine business. |
– | Operating leverage of 5.4 percent for the marine business. |
– | Diluted EPS of $0.80, a decrease of 9.1 percent. |
• | On an adjusted basis, as compared to the third quarter of 2017: |
– | Consolidated net sales increased 15.1 percent, and were up 18.0 percent for the combined marine business. |
– | Marine business operating margin was 15.9 percent, an increase of 160 basis points. |
– | Operating earnings were up 17.2 percent, and were up 31.3 percent for the combined marine business. |
– | Operating leverage of 24.9 percent for the marine business. |
– | Diluted EPS of $1.28, an increase of 30.6 percent. |
• | Year-to-date free cash flow of $149 million vs. $139 million year-to-date 2017. |
Quarter Ended | ||||||||||||||||
Operating Earnings | Diluted Earnings (Loss) Per Share | |||||||||||||||
$ millions (except per share data) | Q3 2018 | Q3 2017 | Q3 2018 | Q3 2017 | ||||||||||||
GAAP | $ | 91.3 | $ | 114.2 | $ | 0.80 | $ | 0.88 | ||||||||
Restructuring, exit, integration and impairment charges | 17.7 | 6.8 | 0.15 | 0.04 | ||||||||||||
Sport Yacht & Yacht operations | 11.9 | 9.8 | 0.11 | 0.07 | ||||||||||||
Acquisition-related costs | 10.5 | — | 0.14 | — | ||||||||||||
Purchase accounting amortization | 9.4 | — | 0.08 | — | ||||||||||||
Separation costs | 8.7 | — | 0.09 | — | ||||||||||||
Other non-recurring charges - Fitness | 3.8 | — | 0.03 | — | ||||||||||||
Special Tax Items | — | — | (0.12 | ) | (0.01 | ) | ||||||||||
As Adjusted | $ | 153.3 | $ | 130.8 | $ | 1.28 | $ | 0.98 | ||||||||
Percent Increase | 17 | % | 31 | % | ||||||||||||
GAAP Operating Margin | 7.0 | % | 10.0 | % | (300) bps | |||||||||||
Adjusted Operating Margin | 11.9 | % | 11.7 | % | 20 bps | |||||||||||
bps = basis points |
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) | ||||||||||
Three Months Ended | ||||||||||
September 29, 2018 | September 30, 2017 | % Change | ||||||||
Net sales | $ | 1,298.0 | $ | 1,141.5 | 14 | % | ||||
Cost of sales | 953.1 | 827.1 | 15 | % | ||||||
Selling, general and administrative expense | 199.6 | 157.9 | 26 | % | ||||||
Research and development expense | 36.3 | 35.5 | 2 | % | ||||||
Restructuring, exit, integration and impairment charges | 17.7 | 6.8 | NM | |||||||
Operating earnings | 91.3 | 114.2 | -20 | % | ||||||
Equity earnings | 1.6 | 1.5 | NM | |||||||
Other expense, net | (0.8 | ) | (1.0 | ) | -20 | % | ||||
Earnings before interest and income taxes | 92.1 | 114.7 | -20 | % | ||||||
Interest expense | (13.1 | ) | (6.6 | ) | 98 | % | ||||
Interest income | 1.0 | 0.9 | 11 | % | ||||||
Transaction financing charges | (5.1 | ) | — | NM | ||||||
Earnings before income taxes | 74.9 | 109.0 | -31 | % | ||||||
Income tax provision | 4.9 | 30.0 | -84 | % | ||||||
Net earnings | $ | 70.0 | $ | 79.0 | -11 | % | ||||
Earnings per common share: | ||||||||||
Basic | $ | 0.80 | $ | 0.89 | -10 | % | ||||
Diluted | $ | 0.80 | $ | 0.88 | -9 | % | ||||
Weighted average shares used for computation of: | ||||||||||
Basic earnings per common share | 87.3 | 89.1 | ||||||||
Diluted earnings per common share | 87.9 | 89.8 | ||||||||
Effective tax rate | 6.5 | % | 27.5 | % | ||||||
NM = not meaningful |
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations - Reconciliations to Adjusted Metrics (in millions, except per share data) (unaudited) | ||||||||||
Three Months Ended | ||||||||||
September 29, 2018 | September 30, 2017 | % Change | ||||||||
Reconciliations | ||||||||||
Continuing Operations: | ||||||||||
Net sales | $ | 1,298.0 | $ | 1,141.5 | 14 | % | ||||
Sport Yacht & Yacht operations (1) | (9.0 | ) | (21.3 | ) | ||||||
Adjusted net sales | $ | 1,289.0 | $ | 1,120.2 | 15 | % | ||||
Gross margin | $ | 344.9 | $ | 314.4 | 10 | % | ||||
Sport Yacht & Yacht operations (1) | 8.2 | 5.0 | ||||||||
Purchase accounting amortization (2) | 4.6 | — | ||||||||
Adjusted gross margin | $ | 357.7 | $ | 319.4 | 12 | % | ||||
Operating earnings | $ | 91.3 | $ | 114.2 | -20 | % | ||||
Restructuring, exit, integration and impairment charges | 17.7 | 6.8 | ||||||||
Sport Yacht & Yacht operations (1) | 11.9 | 9.8 | ||||||||
Acquisition-related costs (2) | 10.5 | — | ||||||||
Purchase accounting amortization (2) | 9.4 | — | ||||||||
Separation costs (3) | 8.7 | — | ||||||||
Other non-recurring charges - Fitness (4) | 3.8 | — | ||||||||
Adjusted operating earnings | $ | 153.3 | $ | 130.8 | 17 | % | ||||
Earnings before income taxes | $ | 74.9 | $ | 109.0 | -31 | % | ||||
Restructuring, exit, integration and impairment charges | 17.7 | 6.8 | ||||||||
Acquisition-related costs (2) | 15.6 | — | ||||||||
Sport Yacht & Yacht operations (1) | 11.9 | 9.8 | ||||||||
Purchase accounting amortization (2) | 9.4 | — | ||||||||
Separation costs (3) | 8.7 | — | ||||||||
Other non-recurring charges - Fitness (4) | 3.8 | — | ||||||||
Adjusted pretax earnings | $ | 142.0 | $ | 125.6 | 13 | % | ||||
Earnings per common share | $ | 0.80 | $ | 0.88 | -9 | % | ||||
Restructuring, exit, integration and impairment charges | 0.15 | 0.04 | ||||||||
Acquisition-related costs (2) | 0.14 | — | ||||||||
Sport Yacht & Yacht operations (1) | 0.11 | 0.07 | ||||||||
Separation costs (3) | 0.09 | — | ||||||||
Purchase accounting amortization (2) | 0.08 | — | ||||||||
Other non-recurring charges - Fitness (4) | 0.03 | — | ||||||||
Special tax items | (0.12 | ) | (0.01 | ) | ||||||
Adjusted diluted earnings per common share | $ | 1.28 | $ | 0.98 | 31 | % | ||||
(1) In the second quarter of 2018, the Company announced its intention to wind down Sport Yacht & Yacht operations. Sport Yacht & Yacht operations had operating losses of $11.9 million in the third quarter of 2018, consisting of $9.0 million of Net sales, $17.2 million of Cost of sales and $3.7 million of Selling, general and administrative expense. In the third quarter of 2017, Sport Yacht & Yacht operations had operating losses of $9.8 million, consisting of $21.3 million of Net sales, $26.3 million of Cost of sales and $4.8 million of Selling, general and administrative expense. | ||||||||||
(2) In the third quarter of 2018, the Company acquired Power Products – Global Marine & Mobile, resulting in acquisition-related costs from transaction costs of $10.5 million within Selling, general and administrative expense, $9.4 million of purchase accounting amortization and $5.1 million of Transaction financing charges. The purchase accounting amortization reflected $4.8 million within Selling, general and administrative expense and $4.6 million within Cost of sales. All charges were recorded within the Marine Engine segment. | ||||||||||
(3) In the third quarter of 2018, the Company recorded $8.7 million of charges within Selling, general and administrative expense related to the planned Fitness business separation. Charges were reflected within Corporate/Other. | ||||||||||
(4) In the third quarter of 2018, the Company's Fitness segment recorded a $3.8 million charge within Selling, general and administrative expense related to a customer dispute. |
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) | ||||||||||
Nine Months Ended | ||||||||||
September 29, 2018 | September 30, 2017 | % Change | ||||||||
Net sales | $ | 3,910.3 | $ | 3,653.8 | 7 | % | ||||
Cost of sales | 2,905.7 | 2,668.3 | 9 | % | ||||||
Selling, general and administrative expense | 531.9 | 472.5 | 13 | % | ||||||
Research and development expense | 113.3 | 108.6 | 4 | % | ||||||
Restructuring, exit, integration and impairment charges | 56.3 | 27.7 | NM | |||||||
Operating earnings | 303.1 | 376.7 | -20 | % | ||||||
Equity earnings | 4.0 | 5.2 | NM | |||||||
Other expense, net | (3.3 | ) | (1.4 | ) | NM | |||||
Earnings before interest and income taxes | 303.8 | 380.5 | -20 | % | ||||||
Interest expense | (28.0 | ) | (19.9 | ) | 41 | % | ||||
Interest income | 2.3 | 1.8 | 28 | % | ||||||
Transaction financing charges | (5.1 | ) | — | |||||||
Earnings before income taxes | 273.0 | 362.4 | -25 | % | ||||||
Income tax provision | 51.1 | 99.1 | -48 | % | ||||||
Net earnings | $ | 221.9 | $ | 263.3 | -16 | % | ||||
Earnings per common share: | ||||||||||
Basic | $ | 2.53 | $ | 2.94 | -14 | % | ||||
Diluted | $ | 2.51 | $ | 2.91 | -14 | % | ||||
Weighted average shares used for computation of: | ||||||||||
Basic earnings per common share | 87.7 | 89.7 | ||||||||
Diluted earnings per common share | 88.3 | 90.5 | ||||||||
Effective tax rate | 18.7 | % | 27.3 | % | ||||||
NM = not meaningful |
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations - Reconciliations to Adjusted Metrics (in millions, except per share data) (unaudited) | ||||||||||
Nine Months Ended | ||||||||||
September 29, 2018 | September 30, 2017 | % Change | ||||||||
Reconciliations | ||||||||||
Net sales | $ | 3,910.3 | $ | 3,653.8 | 7 | % | ||||
Sport Yacht & Yacht operations (1) | (44.0 | ) | (113.3 | ) | ||||||
Adjusted net sales | $ | 3,866.3 | $ | 3,540.5 | 9 | % | ||||
Gross margin | $ | 1,004.6 | $ | 985.5 | 2 | % | ||||
Sport Yacht & Yacht operations (1) | 35.1 | 6.5 | ||||||||
Purchase accounting amortization (2) | 4.6 | — | ||||||||
Other non-recurring charges - Fitness (3) | 1.6 | — | ||||||||
Adjusted gross margin | $ | 1,045.9 | $ | 992.0 | 5 | % | ||||
Operating earnings | $ | 303.1 | $ | 376.7 | -20 | % | ||||
Restructuring, exit, integration and impairment charges | 56.3 | 27.7 | ||||||||
Sport Yacht & Yacht operations (1) | 47.4 | 21.2 | ||||||||
Acquisition-related costs (2) | 13.0 | — | ||||||||
Separation costs (4) | 12.9 | — | ||||||||
Purchase accounting amortization (2) | 9.4 | — | ||||||||
Other non-recurring charges - Fitness (3) | 5.4 | — | ||||||||
Adjusted operating earnings | $ | 447.5 | $ | 425.6 | 5 | % | ||||
Earnings before income taxes | $ | 273.0 | $ | 362.4 | -25 | % | ||||
Restructuring, exit, integration and impairment charges | 56.3 | 27.7 | ||||||||
Sport Yacht & Yacht operations (1) | 47.4 | 21.2 | ||||||||
Acquisition-related costs (2) | 18.1 | — | ||||||||
Separation costs (4) | 12.9 | — | ||||||||
Purchase accounting amortization (2) | 9.4 | — | ||||||||
Other non-recurring charges - Fitness (3) | 5.4 | — | ||||||||
Adjusted pretax earnings | $ | 422.5 | $ | 411.3 | 3 | % | ||||
Earnings per common share | $ | 2.51 | $ | 2.91 | -14 | % | ||||
Restructuring, exit, integration and impairment charges | 0.51 | 0.22 | ||||||||
Sport Yacht & Yacht operations (1) | 0.42 | 0.15 | ||||||||
Acquisition-related costs (2) | 0.16 | — | ||||||||
Separation costs (4) | 0.12 | — | ||||||||
Purchase accounting amortization (2) | 0.08 | — | ||||||||
Other non-recurring charges - Fitness (3) | 0.04 | — | ||||||||
Special tax items | (0.05 | ) | (0.01 | ) | ||||||
Adjusted diluted earnings per common share | $ | 3.79 | $ | 3.27 | 16 | % | ||||
(1) In the second quarter of 2018, the Company announced its intention to wind down Sport Yacht & Yacht operations. Sport Yacht & Yacht operations had operating losses of $47.4 million in the first nine months of 2018, consisting of $44.0 million of Net sales, $79.1 million of Cost of sales and $12.3 million of Selling, general and administrative expense. In the first nine months of 2017, Sport Yacht & Yacht operations had operating losses of $21.2 million, consisting of $113.3 million of Net sales, $119.8 million of Cost of sales and $14.7 million of Selling, general and administrative expense. | ||||||||||
(2) In the third quarter of 2018, the Company acquired Power Products – Global Marine & Mobile, resulting in acquisition-related costs from transaction costs of $13.0 million within Selling, general and administrative expense, $9.4 million of purchase accounting amortization and $5.1 million of Transaction financing charges. The purchase accounting amortization reflected $4.8 million within Selling, general and administrative expense and $4.6 million within Cost of sales. All charges were recorded within the Marine Engine segment. | ||||||||||
(3) In the second quarter of 2018, the Company recorded $1.6 million of charges within Cost of sales related to an additional product field campaign within the Fitness segment. In the third quarter of 2018, the Company's Fitness segment recorded a $3.8 million charge within Selling, general and administrative expense related to a customer dispute. | ||||||||||
(4) In the first nine months of 2018, the Company recorded $12.9 million of charges within Selling, general and administrative expense related to the planned Fitness business separation. Charges were reflected within Corporate/Other. |
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Segment Information - GAAP | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
Net Sales | Operating Earnings (Loss) | Operating Margin | |||||||||||||||||||||||||
Sep 29, 2018 | Sep 30, 2017 | % Change | Sep 29, 2018 | Sep 30, 2017 | % Change | Sep 29, 2018 | Sep 30, 2017 | ||||||||||||||||||||
Marine Engine | $ | 802.7 | $ | 669.2 | 20 | % | $ | 128.1 | $ | 115.2 | 11 | % | 16.0 | % | 17.2 | % | |||||||||||
Boat | 322.6 | 309.3 | 4 | % | (5.0 | ) | 0.1 | NM | -1.5 | % | — | % | |||||||||||||||
Marine eliminations | (81.3 | ) | (79.8 | ) | 2 | % | — | — | |||||||||||||||||||
Total Marine | 1,044.0 | 898.7 | 16 | % | 123.1 | 115.3 | 7 | % | 11.8 | % | 12.8 | % | |||||||||||||||
Fitness | 254.0 | 242.8 | 5 | % | (0.2 | ) | 19.4 | NM | -0.1 | % | 8.0 | % | |||||||||||||||
Corporate/Other | — | — | (31.6 | ) | (20.5 | ) | 54 | % | |||||||||||||||||||
Total | $ | 1,298.0 | $ | 1,141.5 | 14 | % | $ | 91.3 | $ | 114.2 | -20 | % | 7.0 | % | 10.0 | % | |||||||||||
Nine Months Ended | |||||||||||||||||||||||||||
Net Sales | Operating Earnings (Loss) | Operating Margin | |||||||||||||||||||||||||
Sep 29, 2018 | Sep 30, 2017 | % Change | Sep 29, 2018 | Sep 30, 2017 | % Change | Sep 29, 2018 | Sep 30, 2017 | ||||||||||||||||||||
Marine Engine | $ | 2,324.1 | $ | 2,067.2 | 12 | % | $ | 372.9 | $ | 352.1 | 6 | % | 16.0 | % | 17.0 | % | |||||||||||
Boat | 1,094.0 | 1,104.1 | -1 | % | (22.8 | ) | 28.0 | NM | -2.1 | % | 2.5 | % | |||||||||||||||
Marine eliminations | (258.4 | ) | (246.4 | ) | 5 | % | — | — | |||||||||||||||||||
Total Marine | 3,159.7 | 2,924.9 | 8 | % | 350.1 | 380.1 | -8 | % | 11.1 | % | 13.0 | % | |||||||||||||||
Fitness | 750.6 | 728.9 | 3 | % | 25.1 | 56.2 | -55 | % | 3.3 | % | 7.7 | % | |||||||||||||||
Corporate/Other | — | — | (72.1 | ) | (59.6 | ) | 21 | % | |||||||||||||||||||
Total | $ | 3,910.3 | $ | 3,653.8 | 7 | % | $ | 303.1 | $ | 376.7 | -20 | % | 7.8 | % | 10.3 | % | |||||||||||
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Segment Information - As Adjusted | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
Net Sales (1) | Operating Earnings (Loss) (2) | Operating Margin | |||||||||||||||||||||||||
Sep 29, 2018 | Sep 30, 2017 | % Change | Sep 29, 2018 | Sep 30, 2017 | % Change | Sep 29, 2018 | Sep 30, 2017 | ||||||||||||||||||||
Marine Engine | $ | 802.7 | $ | 669.2 | 20 | % | $ | 148.0 | $ | 115.2 | 28 | % | 18.4 | % | 17.2 | % | |||||||||||
Boat | 313.6 | 288.0 | 9 | % | 16.3 | 9.9 | 65 | % | 5.2 | % | 3.4 | % | |||||||||||||||
Marine eliminations | (81.3 | ) | (79.8 | ) | 2 | % | — | — | |||||||||||||||||||
Total Marine | 1,035.0 | 877.4 | 18 | % | 164.3 | 125.1 | 31 | % | 15.9 | % | 14.3 | % | |||||||||||||||
Fitness | 254.0 | 242.8 | 5 | % | 11.9 | 26.2 | -55 | % | 4.7 | % | 10.8 | % | |||||||||||||||
Corporate/Other | — | — | (22.9 | ) | (20.5 | ) | 12 | % | |||||||||||||||||||
Total | $ | 1,289.0 | $ | 1,120.2 | 15 | % | $ | 153.3 | $ | 130.8 | 17 | % | 11.9 | % | 11.7 | % | |||||||||||
Nine Months Ended | |||||||||||||||||||||||||||
Net Sales (3) | Operating Earnings (Loss) (4) | Operating Margin | |||||||||||||||||||||||||
Sep 29, 2018 | Sep 30, 2017 | % Change | Sep 29, 2018 | Sep 30, 2017 | % Change | Sep 29, 2018 | Sep 30, 2017 | ||||||||||||||||||||
Marine Engine | $ | 2,324.1 | $ | 2,067.2 | 12 | % | $ | 395.3 | $ | 352.1 | 12 | % | 17.0 | % | 17.0 | % | |||||||||||
Boat | 1,050.0 | 990.8 | 6 | % | 70.1 | 60.8 | 15 | % | 6.7 | % | 6.1 | % | |||||||||||||||
Marine eliminations | (258.4 | ) | (246.4 | ) | 5 | % | — | — | |||||||||||||||||||
Total Marine | 3,115.7 | 2,811.6 | 11 | % | 465.4 | 412.9 | 13 | % | 14.9 | % | 14.7 | % | |||||||||||||||
Fitness | 750.6 | 728.9 | 3 | % | 40.6 | 69.9 | -42 | % | 5.4 | % | 9.6 | % | |||||||||||||||
Corporate/Other | — | — | (58.5 | ) | (57.2 | ) | 2 | % | |||||||||||||||||||
Total | $ | 3,866.3 | $ | 3,540.5 | 9 | % | $ | 447.5 | $ | 425.6 | 5 | % | 11.6 | % | 12.0 | % | |||||||||||
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Disaggregated Revenue | |||||||||||||||
Three Months Ended | |||||||||||||||
September 29, 2018 | |||||||||||||||
Marine Engine | Boat (1) | Fitness | Total | ||||||||||||
Geographic Markets | |||||||||||||||
United States | $ | 573.8 | $ | 264.2 | $ | 131.9 | $ | 969.9 | |||||||
Europe | 87.1 | 22.4 | 46.4 | 155.9 | |||||||||||
Asia-Pacific | 60.7 | 9.1 | 45.2 | 115.0 | |||||||||||
Canada | 51.3 | 19.7 | 7.2 | 78.2 | |||||||||||
Rest-of-World | 29.8 | 7.2 | 23.3 | 60.3 | |||||||||||
Marine eliminations | (81.3 | ) | — | — | (81.3 | ) | |||||||||
Total | $ | 721.4 | $ | 322.6 | $ | 254.0 | $ | 1,298.0 | |||||||
Major Product Lines | |||||||||||||||
Propulsion | $ | 394.6 | $ | — | $ | — | $ | 394.6 | |||||||
Parts & Accessories | 408.1 | — | — | 408.1 | |||||||||||
Aluminum Freshwater Boats | — | 131.5 | — | 131.5 | |||||||||||
Recreational Fiberglass Boats | — | 104.3 | — | 104.3 | |||||||||||
Saltwater Fishing Boats | — | 86.8 | — | 86.8 | |||||||||||
Commercial Cardio Fitness Equipment | — | — | 145.8 | 145.8 | |||||||||||
Commercial Strength Fitness Equipment | — | — | 92.4 | 92.4 | |||||||||||
Consumer Fitness Equipment | — | — | 15.8 | 15.8 | |||||||||||
Marine eliminations | (81.3 | ) | — | — | (81.3 | ) | |||||||||
Total | $ | 721.4 | $ | 322.6 | $ | 254.0 | $ | 1,298.0 |
Nine Months Ended | |||||||||||||||
September 29, 2018 | |||||||||||||||
Marine Engine | Boat (1) | Fitness | Total | ||||||||||||
Geographic Markets | |||||||||||||||
United States | $ | 1,644.7 | $ | 818.8 | $ | 385.9 | $ | 2,849.4 | |||||||
Europe | 298.1 | 107.5 | 145.7 | 551.3 | |||||||||||
Asia-Pacific | 161.6 | 23.0 | 126.2 | 310.8 | |||||||||||
Canada | 119.6 | 124.6 | 21.4 | 265.6 | |||||||||||
Rest-of-World | 100.1 | 20.1 | 71.4 | 191.6 | |||||||||||
Marine eliminations | (258.4 | ) | — | — | (258.4 | ) | |||||||||
Total | $ | 2,065.7 | $ | 1,094.0 | $ | 750.6 | $ | 3,910.3 | |||||||
Major Product Lines | |||||||||||||||
Propulsion | $ | 1,199.9 | $ | — | $ | — | $ | 1,199.9 | |||||||
Parts & Accessories | 1,124.2 | — | — | 1,124.2 | |||||||||||
Aluminum Freshwater Boats | — | 465.0 | — | 465.0 | |||||||||||
Recreational Fiberglass Boats | — | 372.5 | — | 372.5 | |||||||||||
Saltwater Fishing Boats | — | 256.5 | — | 256.5 | |||||||||||
Commercial Cardio Fitness Equipment | — | — | 421.3 | 421.3 | |||||||||||
Commercial Strength Fitness Equipment | — | — | 273.2 | 273.2 | |||||||||||
Consumer Fitness Equipment | — | — | 56.1 | 56.1 | |||||||||||
Marine eliminations | (258.4 | ) | — | — | (258.4 | ) | |||||||||
Total | $ | 2,065.7 | $ | 1,094.0 | $ | 750.6 | $ | 3,910.3 |
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Disaggregated Revenue | |||||||||||||||
Three Months Ended | |||||||||||||||
September 30, 2017 | |||||||||||||||
Marine Engine | Boat (1) | Fitness | Total | ||||||||||||
Geographic Markets | |||||||||||||||
United States | $ | 468.5 | $ | 240.5 | $ | 129.1 | $ | 838.1 | |||||||
Europe | 66.1 | 24.9 | 45.4 | 136.4 | |||||||||||
Asia Pacific | 59.0 | 6.9 | 36.3 | 102.2 | |||||||||||
Canada | 43.9 | 30.6 | 7.7 | 82.2 | |||||||||||
Rest-of-World | 31.7 | 6.4 | 24.3 | 62.4 | |||||||||||
Marine eliminations | (79.8 | ) | — | — | (79.8 | ) | |||||||||
Total | $ | 589.4 | $ | 309.3 | $ | 242.8 | $ | 1,141.5 | |||||||
Major Product Lines | |||||||||||||||
Propulsion | $ | 318.7 | $ | — | $ | — | $ | 318.7 | |||||||
Parts & Accessories | 350.5 | — | — | 350.5 | |||||||||||
Aluminum Freshwater Boats | — | 129.4 | — | 129.4 | |||||||||||
Recreational Fiberglass Boats | — | 114.3 | — | 114.3 | |||||||||||
Saltwater Fishing Boats | — | 65.6 | — | 65.6 | |||||||||||
Commercial Cardio Fitness Equipment | — | — | 142.7 | 142.7 | |||||||||||
Commercial Strength Fitness Equipment | — | — | 81.1 | 81.1 | |||||||||||
Consumer Fitness Equipment | — | — | 19.0 | 19.0 | |||||||||||
Marine eliminations | (79.8 | ) | — | — | (79.8 | ) | |||||||||
Total | $ | 589.4 | $ | 309.3 | $ | 242.8 | $ | 1,141.5 |
Nine Months Ended | |||||||||||||||
September 30, 2017 | |||||||||||||||
Marine Engine | Boat (1) | Fitness | Total | ||||||||||||
Geographic Markets | |||||||||||||||
United States | $ | 1,456.5 | $ | 831.4 | $ | 388.5 | $ | 2,676.4 | |||||||
Europe | 244.0 | 101.9 | 130.0 | 475.9 | |||||||||||
Asia-Pacific | 160.1 | 20.0 | 116.6 | 296.7 | |||||||||||
Canada | 110.0 | 124.4 | 21.7 | 256.1 | |||||||||||
Rest-of-World | 96.6 | 26.4 | 72.1 | 195.1 | |||||||||||
Marine eliminations | (246.4 | ) | — | — | (246.4 | ) | |||||||||
Total | $ | 1,820.8 | $ | 1,104.1 | $ | 728.9 | $ | 3,653.8 | |||||||
Major Product Lines | |||||||||||||||
Propulsion | $ | 1,051.5 | $ | — | $ | — | $ | 1,051.5 | |||||||
Parts & Accessories | 1,015.7 | — | — | 1,015.7 | |||||||||||
Aluminum Freshwater Boats | — | 442.1 | — | 442.1 | |||||||||||
Recreational Fiberglass Boats | — | 426.7 | — | 426.7 | |||||||||||
Saltwater Fishing Boats | — | 235.3 | — | 235.3 | |||||||||||
Commercial Cardio Fitness Equipment | — | — | 426.9 | 426.9 | |||||||||||
Commercial Strength Fitness Equipment | — | — | 243.3 | 243.3 | |||||||||||
Consumer Fitness Equipment | — | — | 58.7 | 58.7 | |||||||||||
Marine eliminations | (246.4 | ) | — | — | (246.4 | ) | |||||||||
Total | $ | 1,820.8 | $ | 1,104.1 | $ | 728.9 | $ | 3,653.8 |
Brunswick Corporation Comparative Condensed Consolidated Balance Sheets (in millions) (unaudited) | |||||||||||
September 29, 2018 | December 31, 2017 | September 30, 2017 | |||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents, at cost, which approximates fair value | $ | 302.4 | $ | 448.8 | $ | 391.1 | |||||
Restricted cash | 9.5 | 9.4 | 10.7 | ||||||||
Short-term investments in marketable securities | 0.8 | 0.8 | 0.8 | ||||||||
Total cash and short-term investments in marketable securities | 312.7 | 459.0 | 402.6 | ||||||||
Accounts and notes receivable, net | 577.8 | 485.3 | 476.4 | ||||||||
Inventories | |||||||||||
Finished goods | 579.2 | 521.3 | 530.5 | ||||||||
Work-in-process | 106.9 | 119.3 | 126.7 | ||||||||
Raw materials | 212.7 | 187.1 | 191.4 | ||||||||
Net inventories | 898.8 | 827.7 | 848.6 | ||||||||
Prepaid expenses and other | 76.9 | 74.7 | 49.1 | ||||||||
Current assets | 1,866.2 | 1,846.7 | 1,776.7 | ||||||||
Net property | 730.6 | 706.0 | 706.4 | ||||||||
Other assets | |||||||||||
Goodwill | 768.4 | 425.3 | 426.3 | ||||||||
Other intangibles, net | 670.3 | 149.1 | 165.5 | ||||||||
Equity investments | 26.4 | 25.1 | 21.7 | ||||||||
Deferred income tax asset | 99.9 | 165.6 | 256.1 | ||||||||
Other long-term assets | 49.1 | 40.4 | 46.5 | ||||||||
Other assets | 1,614.1 | 805.5 | 916.1 | ||||||||
Total assets | $ | 4,210.9 | $ | 3,358.2 | $ | 3,399.2 | |||||
Liabilities and shareholders’ equity | |||||||||||
Current liabilities | |||||||||||
Short-term debt and current maturities of long-term debt | $ | 303.8 | $ | 5.6 | $ | 4.2 | |||||
Accounts payable | 477.2 | 420.5 | 397.3 | ||||||||
Accrued expenses | 668.6 | 609.0 | 578.6 | ||||||||
Current liabilities | 1,449.6 | 1,035.1 | 980.1 | ||||||||
Debt | 926.0 | 431.8 | 437.6 | ||||||||
Other long-term liabilities | 277.2 | 408.4 | 411.4 | ||||||||
Shareholders’ equity | 1,558.1 | 1,482.9 | 1,570.1 | ||||||||
Total liabilities and shareholders’ equity | $ | 4,210.9 | $ | 3,358.2 | $ | 3,399.2 | |||||
Supplemental Information | |||||||||||
Debt-to-capitalization rate | 44.1 | % | 22.8 | % | 22.0 | % |
Brunswick Corporation Comparative Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) | |||||||
Nine Months Ended | |||||||
September 29, 2018 | September 30, 2017 | ||||||
Cash flows from operating activities | |||||||
Net earnings | $ | 221.9 | $ | 263.3 | |||
Stock compensation expense | 13.2 | 14.4 | |||||
Depreciation and amortization | 104.8 | 83.2 | |||||
Pension (funding), net of expense | (157.0 | ) | (51.0 | ) | |||
Asset impairment charges | 41.2 | 9.8 | |||||
Deferred income taxes | 28.4 | 50.0 | |||||
Changes in certain current assets and current liabilities | (56.6 | ) | (100.6 | ) | |||
Long-term extended warranty contracts and other deferred revenue | 12.2 | 12.8 | |||||
Fitness business separation costs | 12.9 | — | |||||
Cash paid for Fitness business separation costs | (6.8 | ) | — | ||||
Income taxes | 17.1 | (16.5 | ) | ||||
Other, net | 2.7 | (10.3 | ) | ||||
Net cash provided by operating activities of continuing operations | 234.0 | 255.1 | |||||
Net cash used for operating activities of discontinued operations | — | (0.3 | ) | ||||
Net cash provided by operating activities | 234.0 | 254.8 | |||||
Cash flows from investing activities | |||||||
Capital expenditures | (124.8 | ) | (153.4 | ) | |||
Sales or maturities of marketable securities | — | 35.0 | |||||
Investments | (2.2 | ) | 4.5 | ||||
Acquisition of businesses, net of cash acquired | (910.0 | ) | (15.5 | ) | |||
Proceeds from the sale of property, plant and equipment | 6.5 | 8.0 | |||||
Other, net | (0.2 | ) | (0.5 | ) | |||
Net cash used for investing activities | (1,030.7 | ) | (121.9 | ) | |||
Cash flows from financing activities | |||||||
Net proceeds from issuances of short-term debt | 298.9 | — | |||||
Net proceeds from issuances of long-term debt | 497.7 | — | |||||
Payments of long-term debt including current maturities | (0.7 | ) | (1.3 | ) | |||
Common stock repurchases | (75.0 | ) | (120.0 | ) | |||
Cash dividends paid | (49.6 | ) | (44.0 | ) | |||
Proceeds from share-based compensation activity | 1.4 | 6.1 | |||||
Tax withholding associated with shares issued for share-based compensation | (12.5 | ) | (14.5 | ) | |||
Other, net | (6.2 | ) | — | ||||
Net cash provided by (used for) financing activities | 654.0 | (173.7 | ) | ||||
Effect of exchange rate changes | (3.6 | ) | 9.0 | ||||
Net decrease in Cash and cash equivalents and Restricted cash | (146.3 | ) | (31.8 | ) | |||
Cash and cash equivalents and Restricted cash at beginning of period | 458.2 | 433.6 | |||||
Cash and cash equivalents and Restricted cash at end of period | 311.9 | 401.8 | |||||
Less: Restricted cash | 9.5 | 10.7 | |||||
Cash and cash equivalents at end of period | $ | 302.4 | $ | 391.1 | |||
Reconciliation | |||||||
Free cash flow | |||||||
Net cash provided by operating activities of continuing operations | $ | 234.0 | $ | 255.1 | |||
Net cash provided by (used for): | |||||||
Plus: Capital expenditures | (124.8 | ) | (153.4 | ) | |||
Plus: Proceeds from the sale of property, plant and equipment | 6.5 | 8.0 | |||||
Plus: Effect of exchange rate changes | (3.6 | ) | 9.0 | ||||
Less: Cash paid for Fitness business separation costs, net of tax | (4.7 | ) | — | ||||
Less: Cash impact of Sport Yacht & Yacht operations, net of tax | (32.3 | ) | (19.9 | ) | |||
Free cash flow | $ | 149.1 | $ | 138.6 |
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