Corporate and Financial
Brunswick Reports Fourth Quarter Results
Weak Market Conditions Result in Lower Revenues and Earnings; Focus on Cash Flow and Cost ReductionsLAKE FOREST, Ill., Jan 29, 2009 /PRNewswire-FirstCall via COMTEX/ -- Brunswick Corporation
(NYSE: BC) reported today results for the fourth quarter of 2008, which
included the following:
- Total sales for the fourth quarter of $837.7 million were down 42
percent versus a year ago, primarily the result of marine sales that
had dropped 50 percent, as weakness in the global marine marketplace
accelerated during the quarter.
- A net loss from continuing operations of $66.3 million, or $0.75 per
diluted share, for the fourth quarter of 2008, which includes $0.34 per
diluted share of restructuring charges, $0.59 per diluted share of non-
cash tax charges and a benefit of $0.56 per diluted share from the
reversal of variable compensation accruals.
- Cash on hand at year's end was $317.5 million, down slightly from the
2007 year-end balance of $331.4 million.
"The continued decline in global recreational marine markets experienced
throughout the first nine months of the year increased during the fourth
quarter of 2008, driven by the accelerating decline in global economic
conditions. We also began to see the weakening global economy affect our
Fitness and Bowling & Billiards segments in the quarter," said Brunswick's
Chairman and Chief Executive Officer Dustan E. McCoy.
"In this difficult economic climate we remain focused on three principles:
- "Maintain strong liquidity, without increasing debt. We ended the year
with $317.5 million of cash without any borrowings under our revolving
credit agreement, compared with $331.4 million of cash at year-end
2007. We also enhanced our liquidity and financial flexibility by
completing an amendment to our revolving credit facility in the fourth
quarter of 2008;
- "Take actions necessary to maintain dealer health. During 2008 we
reduced the dealer pipeline by 6,700 units, a 22 percent reduction, and
ended the year with 34.5 weeks of product in the pipeline on a trailing
12 months retail basis, compared with 34 weeks at the end of 2007. Our
weeks-on-hand and the decline in the absolute number of boats in the
pipeline are remarkable in the current retail environment, but burdened
our earnings as we exited 2008 with the percentage decline in our
fiberglass boat manufacturing volumes more than double the percentage
of decline we saw in retail demand; and,
- "Position our businesses to emerge from the global economic crisis
stronger than before. Brunswick continues to execute a comprehensive
set of plans to reduce our manufacturing footprint, reduce brands and
models, reduce headcount, consolidate functional activities across
businesses, reduce fixed costs, improve our sourcing and logistics
effectiveness, reduce layers of management, consolidate businesses, and
a myriad of other actions to improve our costs, productivity and
effectiveness in the future. The results of our work to date are
demonstrated by significant reductions in operating expenses and
improving the operating leverage decline as our sales weaken. These
actions position Brunswick to exit this global economic crisis with a
significantly improved cost structure, a more agile operating model and
an increased focus on the most profitable segments of our business."
Fourth Quarter Results
For the quarter ended Dec. 31, 2008, the company reported net sales of
$837.7 million, down from $1,436.0 million a year earlier. For the quarter,
the company reported an operating loss of $38.4 million, which included $48.9
million of restructuring charges and an $81.2 million benefit from the
reversal of variable compensation accruals which benefited each of our
operating segments. In the fourth quarter of 2007, the company had operating
earnings of $14.2 million, which included $8.8 million of restructuring
charges.
For the fourth quarter of 2008, Brunswick reported a net loss from
continuing operations of $66.3 million, or $0.75 per diluted share, as
compared with net earnings from continuing operations of $12.1 million, or
$0.14 per diluted share for the fourth quarter of 2007. Diluted earnings per
share for the fourth quarter of 2008 included restructuring charges of $0.34
per diluted share, non-cash tax charges of $0.59 per diluted share and a
benefit from the reversal of variable compensation accruals of $0.56 per
diluted share. Diluted earnings per share for the fourth quarter of 2007
included $0.07 per diluted share of restructuring charges and $0.05 per
diluted share of tax-related benefits.
2008 Results
For the year ended Dec. 31, 2008, the company had net sales of $4,708.7
million, compared with $5,671.2 million in 2007. For the year, Brunswick
reported an operating loss of $611.6 million, including $511.1 million of non-
cash goodwill and trade name impairment charges and $177.3 million of
restructuring charges. This compares with operating earnings of $107.2
million in 2007, which included $66.4 million of trade name impairment charges
and $22.2 million of restructuring charges.
For 2008, the company had a net loss from continuing operations of $788.1
million, or $8.93 per diluted share, which included $4.43 per diluted share of
goodwill and trade name impairment charges, $1.25 per diluted share of
restructuring charges, $0.11 per diluted share gain on investment sales and
$3.90 per diluted share of non-cash tax charges, primarily related to amounts
prescribed by SFAS No. 109, "Accounting for Income Taxes" and FIN 48,
"Accounting for Uncertainty in Income Taxes." This compares with net earnings
from continuing operations of $79.6 million, or $0.88 per diluted share in
2007, which included $0.46 per diluted share of trade name impairment charges,
$0.17 per diluted share of restructuring charges, and $0.11 per diluted share
benefit from special tax items.
Boat Segment
The Brunswick Boat Group comprises the Boat segment and includes 17 boat
brands, as well as a marine parts and accessories business. The Boat segment
reported net sales for the fourth quarter of 2008 of $293.7 million, down 54
percent compared with $645.2 million in the fourth quarter of 2007.
International sales, which represented 57 percent of total segment sales in
the quarter, increased by 6 percent during the period. For the fourth quarter
of 2008, the Boat segment reported an operating loss of $63.9 million,
including restructuring charges of $40.6 million. This compares with an
operating loss of $29.9 million, including restructuring charges of $6.0
million in the fourth quarter of 2007.
For 2008, Boat segment sales were down approximately 25 percent to
$2,011.9 million from $2,690.9 million in 2007. International sales, which
represented 38 percent of total segment sales in 2008, increased by 13 percent
on a year-to-year basis. For the year, the Boat segment reported an operating
loss of $653.7 million for 2008, including goodwill and trade name impairment
charges of $483.7 million and restructuring charges of $101.7 million. This
compares with an operating loss of $81.4 million for 2007, including $66.4
million of trade name impairment charges and $15.9 million in restructuring
charges.
"In 2008, we continued to take a number of significant steps to both
address the deepening drop in demand in global marine markets, as well as
position our boat businesses to move forward aggressively when markets
stabilize," McCoy explained. "We reduced production, brands, models, the
manufacturing footprint, employees, functions, non-manufacturing facilities
and other costs, while taking steps to improve productivity and effectiveness
by such actions as moving multiple brands into single production facilities."
Marine Engine Segment
The Marine Engine segment, consisting of the Mercury Marine Group,
reported net sales of $297.5 million in the fourth quarter of 2008, down 46
percent from $548.6 million in the year-ago fourth quarter. International
sales, which represented 55 percent of total segment sales in the quarter,
declined by 42 percent on a year-to-year basis. For the fourth quarter, the
Marine Engine segment reported an operating loss of $8.4 million, which
benefited from a $2.0 million gain related to restructuring activities. This
compares with operating earnings of $21.2 million in the year-ago quarter.
For the full year, Marine Engine segment net sales were down 17 percent to
$1,955.9 million from $2,357.5 million. International sales, which represented
53 percent of total segment sales in 2008, declined by 8 percent on a year-to-
year basis. Operating earnings for the full year in 2008 were $68.3 million
versus $183.7 million in 2007. In 2008, the segment recorded $4.5 million of
trade name impairments and $29.4 million of restructuring charges, compared
with $3.4 million of restructuring charges during the same period in 2007.
For the quarter, sales were off across all Marine Engine operations,
including a double-digit, year-over-year drop in markets outside the United
States, reflecting the breadth and rapid decline in the global marine
marketplace. In the United States, declines in outboard and sterndrive sales
tracked those of boat results, reflecting the difficult market conditions in
the final three months of 2008.
Consistent with actions taken in the Boat Group, Mercury also cut
production rates and instituted plant furloughs during the quarter to address
pipeline levels. Reduced fixed-cost absorption on lower sales had an adverse
effect on operating earnings.
Fitness Segment
The Fitness segment is comprised of the Life Fitness Division, which
manufactures and sells Life Fitness and Hammer Strength fitness equipment.
Fitness segment sales in the fourth quarter of 2008 totaled $171.8 million,
down 20 percent from $214.5 million in the year-ago quarter. International
sales, which represented 49 percent of total segment sales in the quarter,
declined by 18 percent on a year-to-year basis. Operating earnings declined
21 percent to $25.6 million from $32.4 million. The segment recorded $1.2
million in restructuring charges during the fourth quarter of 2008.
For 2008, the Fitness segment reported net sales of $639.5 million, down 2
percent from $653.7 million in 2007. International sales, which represented
49 percent of total segment sales in 2008, increased by 3 percent on a year-
to-year basis. Operating earnings in 2008 declined 13 percent to $52.2
million from $59.7 million. The segment recorded $3.3 million in
restructuring charges for the full year during 2008.
Commercial equipment sales, which account for the largest percentage of
Fitness segment sales, declined by double digits in the quarter as gym and
fitness club operators were cautious about ordering equipment in the final
months of the year. Consumer sales also were down double digits year-over-
year, reflecting the effects of the weakening economy. Likewise, international
sales were off, particularly in Europe, due to increasing economic pressures
during the quarter. Operating earnings reflected the favorable effects of
continued efforts to reduce operating costs, but were offset by reduced sales
levels and higher steel and fuel costs, which did not begin to subside until
late in the quarter.
Bowling & Billiards Segment
The Bowling & Billiards segment is comprised of the Brunswick retail
bowling centers; bowling equipment and products; and billiards, Air Hockey and
foosball tables. Segment sales in the fourth quarter of 2008 totaled $113.2
million, down 8 percent compared with $123.3 million in the year-ago quarter.
Operating earnings in the quarter were $16.6 million versus $11.1 million in
the comparable quarter in 2007, which included $3.8 million and $2.8 million
of restructuring costs in 2008 and 2007, respectively.
For 2008, the segment reported net sales of $448.3 million, slightly
higher than $446.9 million recorded for 2007. For the year, the segment had
an operating loss of $12.7 million, which included $22.9 million of goodwill
and trade name impairments, and $21.7 million of restructuring charges. The
segment's 2007 operating earnings of $16.5 million included $2.8 million in
restructuring charges.
For the quarter, a mid-single digit increase in bowling product sales
partially offset lower sales in billiards and retail bowling. Although
historically recession resistant, economic pressures drove revenues lower by
mid-single digits at retail bowling centers. Operating earnings benefited
from cost reductions throughout the segment, partially offset by lower levels
of revenue.
Company Outlook
"As we had anticipated, 2008 proved to be a very challenging year for our
businesses and we expect 2009 to also be difficult. We will continue to focus
on maintaining our strong liquidity, taking actions necessary to maintain
dealer health and positioning ourselves to exit this global downturn as a
better business," McCoy said.
"Although we have limited visibility to a very volatile marketplace
entering the year, we expect our revenues to be lower in 2009 with higher
relative percentage declines occurring in the first half of the year. Our
expectation of lower revenues reflects our view that retail demand will
continue to decline, at least through the first six months of the year, and we
are planning for production at rates well below the retail rate of decline.
"Our overall profitability versus 2008 will be affected by the expected
lower production and sales levels, restructuring charges that will decline to
approximately $50 million pretax and incremental pension-related expenses of
$75 million pretax. Partially offsetting these factors will be nearly $200
million of net cost reductions resulting from the full-year effect of actions
taken in 2008, as well as further cost reduction activities implemented and
planned in 2009.
"Liquidity remains important, and although our earnings will be down
significantly, we believe we can exit 2009 with cash at or above the amount
that we reported on our balance sheet at year-end 2008, without increased
borrowings. This net result will be reflective of our continued focus on
managing our businesses for cash, which includes vigorous working capital
management plans, primarily centered on reducing our overall inventory levels.
"We will continue to carefully and periodically evaluate our re-sizing
efforts, including manufacturing footprint, production levels and work force
requirements, as the market continues to evolve, while weighing capital
spending needs and pursuing continued cost savings efforts. We believe when
this economic downturn subsides, we will be well positioned to compete and
prosper," McCoy said.
Conference Call Scheduled
Brunswick will host a conference call today at 10 a.m. CST, hosted by
Dustan E. McCoy, chairman and chief executive officer, Peter B. Hamilton,
senior vice president and chief financial officer, and Bruce J. Byots, vice
president -- corporate and investor relations.
The call will be broadcast over the Internet at http://www.brunswick.com.
To listen to the call, go to the Web site at least 15 minutes before the call
to register, download and install any needed audio software.
Security analysts and investors wishing to participate via telephone
should call (800) 857-1754 (passcode: Brunswick Q4). Callers outside of North
America should call +1 (517) 308-9227 to be connected. These numbers can be
accessed 15 minutes before the call begins, as well as during the call. A
replay of the conference call will be available through midnight CST Thursday,
Feb. 5, 2009, by calling (888) 568-0334 or (402) 530-7881. The replay will
also be available at http://www.brunswick.com.
Forward-Looking Statements
Certain statements in this news release are forward looking as defined in
the Private Securities Litigation Reform Act of 1995. These statements
involve certain risks and uncertainties that may cause actual results to
differ materially from expectations as of the date of this news release.
These risks include, but are not limited to: the effect of (i) the amount of
disposable income available to consumers for discretionary purchases, and (ii)
the level of consumer confidence on the demand for marine, fitness, billiards
and bowling equipment, products and services; the ability to successfully
complete restructuring efforts in the timeframe and cost anticipated; the
ability to successfully complete the disposition of non-core assets; the
effect of higher product prices due to technology changes and added product
features and components on consumer demand; the effect of competition from
other leisure pursuits on the level of participation in boating, fitness,
bowling and billiards activities; the effect of interest rates and fuel prices
on demand for marine products; the ability to successfully manage pipeline
inventories; the financial strength of dealers, distributors and independent
boat builders; the ability to maintain mutually beneficial relationships with
dealers, distributors and independent boat builders; the ability to maintain
effective distribution and to develop alternative distribution channels
without disrupting incumbent distribution partners; the ability to maintain
market share, particularly in high-margin products; the success of new product
introductions; the ability to maintain product quality and service standards
expected by customers; competitive pricing pressures; the ability to develop
cost-effective product technologies that comply with regulatory requirements;
the ability to transition and ramp up certain manufacturing operations within
time and budgets allowed; the ability to successfully develop and distribute
products differentiated for the global marketplace; shifts in currency
exchange rates; adverse foreign economic conditions; the success of global
sourcing and supply chain initiatives; the ability to obtain components and
raw materials from suppliers; increased competition from Asian competitors;
competition from new technologies; the ability to complete environmental
remediation efforts and resolve claims and litigation at the cost estimated;
and the effect of weather conditions on demand for marine products and retail
bowling center revenues. Additional factors are included in the company's
Annual Report on Form 10-K for 2007 and Quarterly Report on Form 10-Q/A for
the quarter ended Sept. 27, 2008.
About Brunswick
Headquartered in Lake Forest, Ill., Brunswick Corporation endeavors to
instill "Genuine Ingenuity"(TM) in all its leading consumer brands, including
Mercury and Mariner outboard engines; Mercury MerCruiser sterndrives and
inboard engines; MotorGuide trolling motors; Teignbridge propellers; Arvor,
Bayliner, Bermuda, Boston Whaler, Cabo Yachts, Crestliner, Cypress Cay,
Harris, Hatteras, Kayot, Lowe, Lund, Maxum, Meridian, Ornvik, Princecraft,
Quicksilver, Rayglass, Sea Ray, Sealine, Triton, Trophy, Uttern and Valiant
boats; Attwood marine parts and accessories; Land 'N' Sea, Kellogg Marine,
Diversified Marine and Benrock parts and accessories distributors; IDS dealer
management systems; Life Fitness and Hammer Strength fitness equipment;
Brunswick bowling centers, equipment and consumer products; Brunswick
billiards tables; and Dynamo, Tornado and Valley pool tables, Air Hockey and
foosball tables. For more information, visit http://www.brunswick.com.
Brunswick Corporation
Comparative Consolidated Statements of Operation
(in millions, except per share data)
Three Months Ended December 31
2008 2007 % Change
(unaudited)
Net sales $837.7 $1,436.0 -42%
Cost of sales 719.8 1,174.5 -39%
Selling, general and administrative
expense 82.3 204.2 -60%
Research and development expense 25.1 34.3 -27%
Goodwill impairment charges - - NM
Trade name impairment charges - - NM
Restructuring, exit and other
impairment charges 48.9 8.8 NM
Operating earnings (loss) (38.4) 14.2 NM
Equity earnings (loss) (3.6) 4.9 NM
Investment sale gain - - NM
Other income (expense), net (4.2) 0.5 NM
Earnings (loss) before interest and
income taxes (46.2) 19.6 NM
Interest expense (18.6) (12.6) -48%
Interest income 1.3 3.1 -58%
Earnings (loss) before income taxes (63.5) 10.1 NM
Income tax provision (benefit) 2.8 (2.0)
Net earnings (loss) from continuing
operations (66.3) 12.1 NM
Discontinued operations:
Loss from discontinued operations,
net of tax - (6.4) NM
Gain on disposal of discontinued
operations, net of tax - 1.1 NM
Net loss from discontinued
operations - (5.3) NM
Net earnings (loss) $(66.3) $6.8 NM
Earnings per common share:
Basic
Net earnings (loss) from
continuing operations $(0.75) $0.14 NM
Loss from discontinued
operations, net of tax - (0.07) NM
Gain on disposal of discontinued
operations, net of tax - 0.01 NM
Net earnings (loss) $(0.75) $0.08 NM
Diluted
Net earnings (loss) from
continuing operations $(0.75) $0.14 NM
Loss from discontinued
operations, net of tax - (0.07) NM
Gain on disposal of discontinued
operations, net of tax - 0.01 NM
Net earnings (loss) $(0.75) $0.08 NM
Weighted average shares used for
computation of:
Basic earnings per share 88.3 88.5 0%
Diluted earnings per share 88.3 88.6 0%
Effective tax rate -4.4% -19.8%
Supplemental Information
Diluted net earnings (loss) from
continuing operations $(0.75) $0.14 NM
Restructuring, exit and other
impairment charges, net of tax 0.34 0.07 NM
Special tax items 0.59 (0.05) NM
Diluted net earnings from continuing
operations, as adjusted $0.18 $0.16 13%
Brunswick Corporation
Comparative Consolidated Statements of Operation
(in millions, except per share data)
Years Ended December 31
2008 2007 % Change
(unaudited)
Net sales $4,708.7 $5,671.2 -17%
Cost of sales 3,841.3 4,513.4 -15%
Selling, general and administrative
expense 668.4 827.5 -19%
Research and development expense 122.2 134.5 -9%
Goodwill impairment charges 377.2 - NM
Trade name impairment charges 133.9 66.4 NM
Restructuring, exit and other
impairment charges 177.3 22.2 NM
Operating earnings (loss) (611.6) 107.2 NM
Equity earnings 6.5 21.3 -69%
Investment sale gains 23.0 - NM
Other income (expense), net (2.6) 7.8 NM
Earnings (loss) before interest and
income taxes (584.7) 136.3 NM
Interest expense (54.2) (52.3) -4%
Interest income 6.7 8.7 -23%
Earnings (loss) before income taxes (632.2) 92.7 NM
Income tax provision 155.9 13.1
Net earnings (loss) from continuing
operations (788.1) 79.6 NM
Discontinued operations:
Earnings from discontinued
operations, net of tax - 2.2 NM
Gain on disposal of discontinued
operations, net of tax - 29.8 NM
Net earnings from discontinued
operations - 32.0 NM
Net earnings (loss) $(788.1) $111.6 NM
Earnings per common share:
Basic
Net earnings (loss) from
continuing operations $(8.93) $0.88 NM
Earnings from discontinued
operations, net of tax - 0.02 NM
Gain on disposal of discontinued
operations, net of tax - 0.34 NM
Net earnings (loss) $(8.93) $1.24 NM
Diluted
Net earnings (loss) from
continuing operations $(8.93) $0.88 NM
Earnings from discontinued
operations, net of tax - 0.02 NM
Gain on disposal of discontinued
operations, net of tax - 0.34 NM
Net earnings (loss) $(8.93) $1.24 NM
Weighted average shares used for
computation of:
Basic earnings per share 88.3 89.8 -2%
Diluted earnings per share 88.3 90.2 -2%
Effective tax rate -24.7% 14.1%
Supplemental Information
Diluted net earnings (loss) from
continuing operations $(8.93) $0.88 NM
Goodwill impairment charges, net of
tax 3.40 - NM
Trade name impairment charges, net of
tax 1.03 0.46 NM
Restructuring, exit and other
impairment charges, net of tax 1.25 0.17 NM
NBK investment sale gain, net of tax (0.11) - NM
Special tax items 3.90 (0.11) NM
Diluted net earnings from continuing
operations, as adjusted $0.54 $1.40 -61%
Brunswick Corporation
Selected Financial Information
(in millions)
(unaudited)
Segment Information
Three Months Ended December 31
Operating
Net Sales Operating Earnings(1) Margin
2008 2007 Change 2008 2007 Change 2008 2007
Boat $293.7 $645.2 -54% $(63.9) $(29.9) NM -21.8% -4.6%
Marine
Engine 297.5 548.6 -46% (8.4) 21.2 NM -2.8% 3.9%
Marine
eliminations(38.4) (95.6) - -
Total Marine 552.8 1,098.2 -50% (72.3) (8.7) NM -13.1% -0.8%
Fitness 171.8 214.5 -20% 25.6 32.4 -21% 14.9% 15.1%
Bowling &
Billiards 113.2 123.3 -8% 16.6 11.1 50% 14.7% 9.0%
Eliminations (0.1) - - -
Corp/Other - - (8.3) (20.6) 60%
Total $837.7 $1,436.0 -42% $(38.4) $14.2 NM -4.6% 1.0%
Years Ended December 31
Operating
Net Sales Operating Earnings(2) Margin
2008 2007 Change 2008 2007 Change 2008 2007
Boat $2,011.9 $2,690.9 -25% $(653.7) $(81.4) NM -32.5% -3.0%
Marine
Engine 1,955.9 2,357.5 -17% 68.3 183.7 -63% 3.5% 7.8%
Marine
elimin-
ations (346.7) (477.6) - -
Total
Marine 3,621.1 4,570.8 -21% (585.4) 102.3 NM -16.2% 2.2%
Fitness 639.5 653.7 -2% 52.2 59.7 -13% 8.2% 9.1%
Bowling &
Billiards 448.3 446.9 0% (12.7) 16.5 NM -2.8% 3.7%
Elimin-
ations (0.2) (0.2) - -
Corp/
Other - - (65.7) (71.3) 8%
Total $4,708.7 $5,671.2 -17% $(611.6) $107.2 NM -13.0% 1.9%
(1) Operating earnings in the fourth quarter of 2008 include $48.9
million of pretax restructuring, exit and other impairment charges. The $48.9
million charge consists of $40.6 million in the Boat segment, ($2.0) million
in the Marine Engine segment, $3.8 million in the Bowling & Billiards segment,
$1.2 million in the Fitness segment and $5.3 million in Corp/Other. Operating
earnings in the fourth quarter of 2007 include $8.8 million of pretax
restructuring, exit and other impairment charges. The $8.8 million consists of
$6.0 million in the Boat segment and $2.8 million in the Bowling & Billiards
segment.
(2) Operating earnings in 2008 include $688.4 million of pretax goodwill
impairment charges, trade name impairment charges and restructuring, exit and
other impairment charges. The $688.4 million consists of $585.4 million in the
Boat segment, $33.9 million in the Marine Engine segment, $44.6 million in the
Bowling & Billiards segment, $3.3 million in the Fitness segment and $21.2
million in Corp/Other. Operating earnings in 2007 include $88.6 million of
pretax trade name impairment charges and restructuring, exit and other
impairment charges. The $88.6 million consists of $82.3 million in the Boat
segment, $3.4 million in the Marine Engine segment, $2.8 million in the
Bowling & Billiards segment and $0.1 million in Corp/Other.
Brunswick Corporation
Comparative Condensed Consolidated Balance Sheets
(in millions)
December 31, December 31,
2008 2007
(unaudited)
Assets
Current assets
Cash and cash equivalents $317.5 $331.4
Accounts and notes receivables, net 444.8 572.4
Inventories
Finished goods 457.7 446.7
Work-in-process 248.2 323.4
Raw materials 105.8 136.6
Net inventories 811.7 906.7
Deferred income taxes 103.2 249.9
Prepaid expenses and other 59.7 53.9
Current assets 1,736.9 2,114.3
Net property 917.6 1,052.8
Other assets
Goodwill, net 290.9 678.9
Other intangibles, net 86.6 245.6
Investments 75.4 132.1
Other long-term assets 116.5 141.9
Other assets 569.4 1,198.5
Total assets $3,223.9 $4,365.6
Liabilities and shareholders' equity
Current liabilities
Short-term debt $3.2 $0.8
Accounts payable 301.3 437.3
Accrued expenses 696.7 858.1
Current liabilities 1,001.2 1,296.2
Long-term debt 728.5 727.4
Other long-term liabilities 764.3 449.1
Common shareholders' equity 729.9 1,892.9
Total liabilities and shareholders'
equity $3,223.9 $4,365.6
Supplemental Information
Debt-to-capitalization rate 50.1% 27.8%
Brunswick Corporation
Comparative Condensed Consolidated Statements of Cash Flows
(in millions)
Year Ended December 31
2008 2007
(unaudited)
Cash flows from operating activities
Net earnings (loss) $(788.1) $111.6
Less: net earnings from discontinued
operations - 32.0
Net earnings (loss) from continuing
operations (788.1) 79.6
Depreciation and amortization 177.2 180.1
Changes in non-cash current assets
and current liabilities (100.0) 3.5
Goodwill impairment charges 377.2 -
Trade name impairment charges 133.9 66.4
Other impairment charges 53.2 0.4
Income taxes and other, net 134.5 14.1
Net cash provided by (used for) operating
activities of continuing operations (12.1) 344.1
Net cash used for operating activities of
discontinued operations - (29.8)
Net cash provided by (used for) operating
activities (12.1) 314.3
Cash flows from investing activities
Capital expenditures (102.0) (207.7)
Acquisitions of businesses, net of cash
acquired - (6.2)
Investments 20.0 4.1
Proceeds from investment sales 45.5 -
Proceeds from sale of property, plant and
equipment 28.3 10.1
Other, net 17.2 25.6
Net cash provided by (used for) investing
activities of continuing operations 9.0 (174.1)
Net cash provided by investing activities of
discontinued operations - 75.6
Net cash provided by (used for) investing
activities 9.0 (98.5)
Cash flows from financing activities
Net issuances of short-term debt (7.4) -
Net proceeds from issuance of long-term debt 252.0 0.7
Payments of long-term debt including current
maturities (251.0) (0.9)
Cash dividends paid (4.4) (52.6)
Stock repurchases - (125.8)
Stock options exercised - 10.8
Net cash used for financing activities of
continuing operations (10.8) (167.8)
Net cash used for financing activities of
discontinued operations - -
Net cash used for financing activities (10.8) (167.8)
Net increase (decrease) in cash and cash
equivalents (13.9) 48.0
Cash and cash equivalents at beginning of period 331.4 283.4
Cash and cash equivalents at end of period $317.5 $331.4
Free Cash Flow from Continuing
Operations
Net cash provided by (used for) operating
activities of continuing operations $(12.1) $344.1
Net cash provided by (used for):
Capital expenditures (102.0) (207.7)
Proceeds from investment sales 45.5 -
Proceeds from sale of property, plant and
equipment 28.3 10.1
Other, net 17.2 25.6
Total free cash flow from continuing operations $(23.1) $172.1
SOURCE: Brunswick Corporation
http://www.brunswick.com
