[X] QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)
|
OF
THE SECURITIES EXCHANGE ACT OF 1934
|
For
the quarterly period ended September 29, 2007
|
or
|
[ ] TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
|
OF
THE SECURITIES EXCHANGE ACT OF 1934
|
Commission
file number 1-1043
|
Delaware
|
36-0848180
|
|
(State
or other jurisdiction of incorporation or
organization)
|
(I.R.S.
Employer Identification No.)
|
|
|
||
1
N. Field Court, Lake Forest, Illinois
|
60045-4811
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
(847)
735-4700
|
||
(Registrant’s
telephone number, including area
code)
|
Page
|
||
PART
I – FINANCIAL INFORMATION
|
||
Item
1.
|
Consolidated
Financial Statements
|
|
Consolidated
Statements of Income for the three months and nine months ended September
29, 2007, and September 30, 2006 (unaudited)
|
1
|
|
Condensed
Consolidated Balance Sheets as of September 29, 2007
(unaudited), December 31, 2006, and September 30, 2006
(unaudited)
|
2
|
|
Condensed
Consolidated Statements of Cash Flows for the nine months ended September
29, 2007, and September 30, 2006 (unaudited)
|
4
|
|
Notes
to Consolidated Financial Statements (unaudited)
|
5
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
21
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
39
|
Item
4.
|
Controls
and Procedures
|
39
|
PART
II – OTHER INFORMATION
|
||
Item
1.
|
Legal
Proceedings
|
40
|
Item
1A.
|
Risk
Factors
|
40
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
41
|
Item
6.
|
Exhibits
|
41
|
BRUNSWICK
CORPORATION
|
Consolidated
Statements of Income
|
(in
millions, except per share data)
|
(unaudited)
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
29,
2007
|
September
30,
2006
|
September
29,
2007
|
September
30,
2006
|
|||||||||||||
Net
sales
|
$ |
1,326.2
|
$ |
1,337.8
|
$ |
4,235.2
|
$ |
4,294.2
|
||||||||
Cost
of sales
|
1,067.8
|
1,048.9
|
3,348.1
|
3,337.1
|
||||||||||||
Selling,
general and administrative expense
|
207.3
|
182.5
|
627.5
|
549.8
|
||||||||||||
Research
and development expense
|
31.0
|
32.1
|
100.2
|
96.6
|
||||||||||||
Impairment
charges
|
66.4
|
–
|
66.4
|
–
|
||||||||||||
Operating
earnings (loss)
|
(46.3 | ) |
74.3
|
93.0
|
310.7
|
|||||||||||
Equity
earnings
|
3.0
|
2.9
|
16.4
|
14.7
|
||||||||||||
Other
income (expense), net
|
7.5
|
0.5
|
7.3
|
(2.2 | ) | |||||||||||
Earnings
(loss) before interest and income taxes
|
(35.8 | ) |
77.7
|
116.7
|
323.2
|
|||||||||||
Interest
expense
|
(12.8 | ) | (15.7 | ) | (39.7 | ) | (43.5 | ) | ||||||||
Interest
income
|
1.9
|
5.0
|
5.6
|
10.4
|
||||||||||||
Earnings
(loss) before income taxes
|
(46.7 | ) |
67.0
|
82.6
|
290.1
|
|||||||||||
Income
tax (benefit) provision
|
(23.0 | ) |
16.6
|
15.1
|
71.1
|
|||||||||||
Net
earnings (loss) from continuing operations
|
(23.7 | ) |
50.4
|
67.5
|
219.0
|
|||||||||||
Discontinued
operations:
|
||||||||||||||||
Earnings
(loss) from discontinued operations, net of tax
|
4.6
|
(13.9 | ) |
8.6
|
(31.9 | ) | ||||||||||
Gain
on disposal of discontinued operations, net of tax
|
21.0
|
–
|
28.7
|
–
|
||||||||||||
Net
earnings (loss) from discontinued operations
|
25.6
|
(13.9 | ) |
37.3
|
(31.9 | ) | ||||||||||
Net
earnings
|
$ |
1.9
|
$ |
36.5
|
$ |
104.8
|
$ |
187.1
|
||||||||
Earnings
per common share:
|
||||||||||||||||
Basic
|
||||||||||||||||
Net
earnings (loss) from continuing operations
|
$ | (0.27 | ) | $ |
0.54
|
$ |
0.75
|
$ |
2.32
|
|||||||
Earnings
(loss) from discontinued operations, net of tax
|
0.05
|
(0.15 | ) |
0.09
|
(0.34 | ) | ||||||||||
Gain
on disposal of discontinued operations, net of tax
|
0.24
|
–
|
0.32
|
–
|
||||||||||||
Net
earnings
|
$ |
0.02
|
$ |
0.39
|
$ |
1.16
|
$ |
1.98
|
||||||||
Diluted
|
||||||||||||||||
Net
earnings (loss) from continuing operations
|
$ | (0.27 | ) | $ |
0.54
|
$ |
0.75
|
$ |
2.30
|
|||||||
Earnings
(loss) from discontinued operations, net of tax
|
0.05
|
(0.15 | ) |
0.09
|
(0.34 | ) | ||||||||||
Gain
on disposal of discontinued operations, net of tax
|
0.24
|
–
|
0.32
|
–
|
||||||||||||
Net
earnings
|
$ |
0.02
|
$ |
0.39
|
$ |
1.16
|
$ |
1.96
|
||||||||
Weighted
average shares used for computation of:
|
||||||||||||||||
Basic
earnings per share
|
89.0
|
93.2
|
90.3
|
94.5
|
||||||||||||
Diluted
earnings per share
|
89.0
|
93.7
|
90.7
|
95.3
|
||||||||||||
The
Notes to Consolidated Financial Statements are an integral part of
these
consolidated statements.
|
BRUNSWICK
CORPORATION
|
Condensed
Consolidated Balance Sheets
|
(in
millions)
|
September
29,
|
December
31,
|
September
30,
|
||||||||||
2007
|
2006
|
2006
|
||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||
Assets
|
||||||||||||
Current
assets
|
||||||||||||
Cash
and cash equivalents, at cost, which approximates
market
|
$ |
327.8
|
$ |
283.4
|
$ |
559.5
|
||||||
Accounts
and notes receivable, less allowances
of $36.8, $29.7, and $26.0
|
510.9
|
492.3
|
473.3
|
|||||||||
Inventories
|
||||||||||||
Finished
goods
|
510.7
|
410.4
|
398.5
|
|||||||||
Work-in-process
|
348.0
|
308.4
|
330.6
|
|||||||||
Raw
materials
|
148.4
|
143.1
|
152.6
|
|||||||||
Net
inventories
|
1,007.1
|
861.9
|
881.7
|
|||||||||
Deferred
income taxes
|
250.3
|
249.9
|
282.8
|
|||||||||
Prepaid
expenses and other
|
75.6
|
85.4
|
65.0
|
|||||||||
Current
assets held for sale
|
–
|
105.5
|
111.3
|
|||||||||
Current
assets
|
2,171.7
|
2,078.4
|
2,373.6
|
|||||||||
Property
|
||||||||||||
Land
|
101.4
|
91.7
|
87.8
|
|||||||||
Buildings
and improvements
|
678.9
|
631.6
|
618.9
|
|||||||||
Equipment
|
1,212.9
|
1,181.7
|
1,177.9
|
|||||||||
Total
land, buildings and improvements and equipment
|
1,993.2
|
1,905.0
|
1,884.6
|
|||||||||
Accumulated
depreciation
|
(1,097.2 | ) | (1,046.3 | ) | (1,045.4 | ) | ||||||
Net
land, buildings and improvements and equipment
|
896.0
|
858.7
|
839.2
|
|||||||||
Unamortized
product tooling costs
|
153.5
|
156.2
|
154.0
|
|||||||||
Net
property
|
1,049.5
|
1,014.9
|
993.2
|
|||||||||
Other
assets
|
||||||||||||
Goodwill
|
679.2
|
663.6
|
659.4
|
|||||||||
Other
intangibles, net
|
249.7
|
322.6
|
345.8
|
|||||||||
Investments
|
139.5
|
142.9
|
140.0
|
|||||||||
Other
long-term assets
|
181.9
|
195.1
|
228.5
|
|||||||||
Long-term
assets held for sale
|
–
|
32.8
|
94.2
|
|||||||||
Other
assets
|
1,250.3
|
1,357.0
|
1,467.9
|
|||||||||
Total
assets
|
$ |
4,471.5
|
$ |
4,450.3
|
$ |
4,834.7
|
||||||
The
Notes to Consolidated Financial Statements are an integral part of
these
consolidated statements.
|
BRUNSWICK
CORPORATION
|
Condensed
Consolidated Balance Sheets
|
(in
millions, except share
data)
|
September
29,
|
December
31,
|
September
30,
|
||||||||||
2007
|
2006
|
2006
|
||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||
Liabilities
and shareholders’ equity
|
||||||||||||
Current
liabilities
|
||||||||||||
Short-term
debt, including current maturities of
long-term debt
|
$ |
0.2
|
$ |
0.7
|
$ |
249.7
|
||||||
Accounts
payable
|
461.7
|
448.6
|
403.3
|
|||||||||
Accrued
expenses
|
857.8
|
748.9
|
742.5
|
|||||||||
Current
liabilities held for sale
|
–
|
95.0
|
69.7
|
|||||||||
Current
liabilities
|
1,319.7
|
1,293.2
|
1,465.2
|
|||||||||
Long-term
liabilities
|
||||||||||||
Debt
|
726.1
|
725.7
|
726.0
|
|||||||||
Deferred
income taxes
|
19.6
|
86.3
|
138.4
|
|||||||||
Postretirement
and postemployment benefits
|
225.6
|
224.2
|
212.4
|
|||||||||
Other
|
277.1
|
240.4
|
246.0
|
|||||||||
Long-term
liabilities held for sale
|
–
|
8.7
|
8.1
|
|||||||||
Long-term
liabilities
|
1,248.4
|
1,285.3
|
1,330.9
|
|||||||||
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
|
386.2
|
378.7
|
373.0
|
|||||||||
Retained
earnings
|
1,934.2
|
1,820.7
|
1,928.9
|
|||||||||
Treasury
stock, at cost:
|
||||||||||||
14,605,000;
11,671,000 and 10,746,000 shares
|
(418.6 | ) | (315.5 | ) | (284.5 | ) | ||||||
Accumulated
other comprehensive loss, net of tax
|
(75.3 | ) | (89.0 | ) | (55.7 | ) | ||||||
Shareholders’
equity
|
1,903.4
|
1,871.8
|
2,038.6
|
|||||||||
Total
liabilities and shareholders’ equity
|
$ |
4,471.5
|
$ |
4,450.3
|
$ |
4,834.7
|
||||||
The
Notes to Consolidated Financial Statements are an integral part of
these
consolidated statements.
|
BRUNSWICK
CORPORATION
|
Condensed
Consolidated Statements of Cash Flows
|
(in
millions)
|
(unaudited)
|
Nine
Months Ended
|
||||||||
September
29,
2007
|
September
30,
2006
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
earnings from continuing operations
|
$ |
67.5
|
$ |
219.0
|
||||
Depreciation
and amortization
|
130.2
|
123.1
|
||||||
Impairment
charges
|
66.4
|
–
|
||||||
Income
taxes
|
9.4
|
3.7
|
||||||
Changes
in non-cash current assets and current liabilities
|
(50.0 | ) | (143.7 | ) | ||||
Other,
net
|
16.4
|
13.9
|
||||||
Net
cash provided by operating activities of continuing
operations
|
239.9
|
216.0
|
||||||
Net
cash used for operating activities of discontinued
operations
|
(19.3 | ) | (38.2 | ) | ||||
Net
cash provided by operating activities
|
220.6
|
177.8
|
||||||
Cash
flows from investing activities
|
||||||||
Capital
expenditures
|
(156.3 | ) | (139.7 | ) | ||||
Acquisitions
of businesses, net of cash acquired
|
(6.2 | ) | (82.7 | ) | ||||
Investments
|
9.1
|
14.5
|
||||||
Proceeds
from the sale of property, plant and equipment
|
5.3
|
6.8
|
||||||
Other,
net
|
12.1
|
(0.4 | ) | |||||
Net
cash used for investing activities of continuing
operations
|
(136.0 | ) | (201.5 | ) | ||||
Net
cash provided by (used for) investing activities
of discontinued
operations
|
65.2
|
(4.8 | ) | |||||
Net
cash used for investing activities
|
(70.8 | ) | (206.3 | ) | ||||
Cash
flows from financing activities
|
||||||||
Net
issuances (repayments) of commercial paper and other
short-term debt
|
–
|
(0.2 | ) | |||||
Net
proceeds from issuance of long-term debt
|
–
|
250.0
|
||||||
Payments
of long-term debt including current maturities
|
(0.7 | ) | (0.8 | ) | ||||
Stock
repurchases
|
(115.5 | ) | (163.1 | ) | ||||
Stock
options exercised
|
10.8
|
14.4
|
||||||
Net
cash provided by (used for) financing activities of
continuing operations
|
(105.4 | ) |
100.3
|
|||||
Net
cash used for financing activities of discontinued
operations
|
–
|
–
|
||||||
Net
cash provided by (used for) financing activities
|
(105.4 | ) |
100.3
|
|||||
Net
increase in cash and cash equivalents
|
44.4
|
71.8
|
||||||
Cash
and cash equivalents at beginning of period
|
283.4
|
487.7
|
||||||
Cash
and cash equivalents at end of period
|
$ |
327.8
|
$ |
559.5
|
||||
The
Notes to Consolidated Financial Statements are an integral part of
these
consolidated statements.
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
September
29, 2007
|
September
30, 2006
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
sales
|
$ |
2.2
|
$ |
75.6
|
$ |
99.7
|
$ |
193.0
|
||||||||
Pre-tax
earnings (loss)
|
$ |
21.9
|
$ | (13.2 | ) | $ |
24.0
|
$ | (47.7 | ) |
December
31, 2006
|
September
30,
2006
|
|||||||
(in
millions)
|
||||||||
Accounts
receivable
|
$ |
51.5
|
$ |
51.8
|
||||
Inventory,
net
|
52.5
|
57.5
|
||||||
Other
current assets
|
1.5
|
2.0
|
||||||
Total
current assets
|
105.5
|
111.3
|
||||||
Goodwill
and intangible assets
|
19.8
|
74.3
|
||||||
Investments
|
6.1
|
–
|
||||||
Property,
plant and equipment
|
6.9
|
19.9
|
||||||
Total
long-term assets
|
32.8
|
94.2
|
||||||
Total
assets
|
138.3
|
205.5
|
||||||
Accounts
payable
|
46.4
|
35.7
|
||||||
Accrued
expenses
|
48.6
|
34.0
|
||||||
Total
current liabilities
|
95.0
|
69.7
|
||||||
Long-term
liabilities
|
8.7
|
8.1
|
||||||
Total
liabilities
|
103.7
|
77.8
|
||||||
Net
assets
|
$ |
34.6
|
$ |
127.7
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
2007
|
2006
|
|||||||
Risk-free
interest rate
|
4.6 | % | 4.4 | % | ||||
Dividend
yield
|
1.8 | % | 1.5 | % | ||||
Volatility
factor
|
29.9 | % | 31.2 | % | ||||
Weighted
average expected life
|
5.1
- 6.2 years
|
4.8
- 6.1 years
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
29,
2007
|
September
30,
2006
|
September
29,
2007
|
September
30,
2006
|
|||||||||||||
(in
millions, except per share data)
|
||||||||||||||||
Net
earnings (loss) from continuing operations
|
$ | (23.7 | ) | $ |
50.4
|
$ |
67.5
|
$ |
219.0
|
|||||||
Earnings
(loss) from discontinued operations, net of tax
|
4.6
|
(13.9 | ) |
8.6
|
(31.9 | ) | ||||||||||
Gain
on disposal of discontinued operations, net of tax
|
21.0
|
–
|
28.7
|
–
|
||||||||||||
Net
earnings
|
$ |
1.9
|
$ |
36.5
|
$ |
104.8
|
$ |
187.1
|
||||||||
Weighted
average outstanding shares – basic
|
89.0
|
93.2
|
90.3
|
94.5
|
||||||||||||
Dilutive
effect of common stock equivalents
|
–
|
0.5
|
0.4
|
0.8
|
||||||||||||
Weighted
average outstanding shares – diluted
|
89.0
|
93.7
|
90.7
|
95.3
|
||||||||||||
Basic
earnings per share
|
||||||||||||||||
Net
earnings (loss) from continuing operations
|
$ | (0.27 | ) | $ |
0.54
|
$ |
0.75
|
$ |
2.32
|
|||||||
Earnings
(loss) from discontinued operations, net of tax
|
0.05
|
(0.15 | ) |
0.09
|
(0.34 | ) | ||||||||||
Gain on
disposal of discontinued operations, net of tax
|
0.24
|
–
|
0.32
|
–
|
||||||||||||
Net
earnings
|
$ |
0.02
|
$ |
0.39
|
$ |
1.16
|
$ |
1.98
|
||||||||
Diluted
earnings per share
|
||||||||||||||||
Net
earnings (loss) from continuing operations
|
$ | (0.27 | ) | $ |
0.54
|
$ |
0.75
|
$ |
2.30
|
|||||||
Earnings
(loss) from discontinued operations, net of tax
|
0.05
|
(0.15 | ) |
0.09
|
(0.34 | ) | ||||||||||
Gain
on disposal of discontinued operations, net of tax
|
0.24
|
–
|
0.32
|
–
|
||||||||||||
Net
earnings
|
$ |
0.02
|
$ |
0.39
|
$ |
1.16
|
$ |
1.96
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
2007
|
||||
(in
millions)
|
||||
Balance
at beginning of period
|
$ |
161.0
|
||
Payments
made
|
(90.1 | ) | ||
Provisions/additions
for contracts issued/sold
|
85.5
|
|||
Aggregate
changes for preexisting warranties
|
(1.0
|
) | ||
Balance
at end of period
|
$ |
155.4
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
Net
Sales
|
Operating
Earnings
|
|||||||||||||||
Three
Months Ended
|
Three
Months Ended
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
September
29, 2007
|
September
30, 2006
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Boat
|
$ |
613.9
|
$ |
679.2
|
$ | (90.3 | ) | $ |
24.8
|
|||||||
Marine
Engine
|
566.7
|
536.5
|
47.5
|
50.4
|
||||||||||||
Marine
eliminations
|
(119.1 | ) | (127.8 | ) |
–
|
–
|
||||||||||
Total
Marine
|
1,061.5
|
1,087.9
|
(42.8 | ) |
75.2
|
|||||||||||
Fitness
|
150.2
|
136.6
|
11.8
|
12.6
|
||||||||||||
Bowling
& Billiards
|
114.6
|
113.4
|
(0.2 | ) |
3.1
|
|||||||||||
Eliminations
|
(0.1 | ) | (0.1 | ) |
–
|
–
|
||||||||||
Corporate/Other
|
–
|
–
|
(15.1 | ) | (16.6 | ) | ||||||||||
Total
|
$ |
1,326.2
|
$ |
1,337.8
|
$ | (46.3 | ) | $ |
74.3
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
Net
Sales
|
Operating
Earnings
|
|||||||||||||||
Nine
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
September
29, 2007
|
September
30, 2006
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Boat
|
$ |
2,045.7
|
$ |
2,199.9
|
$ | (51.5 | ) | $ |
126.3
|
|||||||
Marine
Engine
|
1,808.9
|
1,760.0
|
162.5
|
190.0
|
||||||||||||
Marine
eliminations
|
(382.0 | ) | (404.0 | ) |
–
|
–
|
||||||||||
Total
Marine
|
3,472.6
|
3,555.9
|
111.0
|
316.3
|
||||||||||||
Fitness
|
439.2
|
400.3
|
27.3
|
28.9
|
||||||||||||
Bowling
& Billiards
|
323.6
|
338.2
|
5.4
|
16.5
|
||||||||||||
Eliminations
|
(0.2 | ) | (0.2 | ) |
–
|
–
|
||||||||||
Corporate/Other
|
–
|
–
|
(50.7 | ) | (51.0 | ) | ||||||||||
Total
|
$ |
4,235.2
|
$ |
4,294.2
|
$ |
93.0
|
$ |
310.7
|
Date
|
Name/Description
|
Net
Cash
Consideration(A)
|
Other
Consideration
|
Total
Consideration
|
||||||||||
(in
millions)
|
||||||||||||||
4/04/07
|
Marine
Innovations Warranty Corporation
|
$ |
1.5
|
$ |
–
|
$ |
1.5
|
|||||||
8/24/07
|
Rayglass
Sales & Marketing Limited
|
4.6
|
–
|
4.6
|
||||||||||
Various
|
Miscellaneous
|
0.1
|
0.5
|
0.6
|
||||||||||
$ |
6.2
|
$ |
0.5
|
$ |
6.7
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
Date
|
Name/Description
|
Net
Cash
Consideration
(A)
|
||||
(in
millions)
|
||||||
2/16/06
|
Cabo
Yachts, Inc.
|
$ |
60.6
|
|||
3/24/06
|
Marine
Innovations Warranty Corporation
|
2.3
|
||||
4/26/06
|
Diversified
Marine Products, L.P.
|
14.2
|
||||
9/20/06
|
Protokon
LLC (13.3 percent)
|
5.6
|
||||
$ |
82.7
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
29,
2007
|
September
30,
2006
|
September
29,
2007
|
September
30,
2006
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
earnings
|
$ |
1.9
|
$ |
36.5
|
$ |
104.8
|
$ |
187.1
|
||||||||
Other
comprehensive income (loss)
|
||||||||||||||||
Foreign
currency cumulative translation adjustment
|
10.6
|
4.7
|
13.2
|
12.6
|
||||||||||||
Net
change in unrealized gains (losses) on investments
|
0.2
|
(0.7 | ) |
0.3
|
0.5
|
|||||||||||
Net
change in prior service cost
|
0.5
|
–
|
1.6
|
–
|
||||||||||||
Net
change in actuarial loss
|
1.2
|
–
|
3.8
|
–
|
||||||||||||
Net
change in accumulated unrealized derivative gains (losses)
|
(5.1 | ) | (4.7 | ) | (5.2 | ) | (2.7 | ) | ||||||||
Total
other comprehensive income (loss)
|
7.4
|
(0.7 | ) |
13.7
|
10.4
|
|||||||||||
Comprehensive
income
|
$ |
9.3
|
$ |
35.8
|
$ |
118.5
|
$ |
197.5
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
Pension
Benefits
|
Other
Postretirement
Benefits
|
|||||||||||||||
Three
Months Ended
|
Three
Months Ended
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
September
29, 2007
|
September
30, 2006
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Service
cost
|
$ |
4.3
|
$ |
4.6
|
$ |
0.8
|
$ |
0.8
|
||||||||
Interest
cost
|
15.7
|
14.7
|
1.6
|
1.4
|
||||||||||||
Expected
return on plan assets
|
(20.5 | ) | (19.5 | ) |
–
|
–
|
||||||||||
Amortization
of prior service costs
|
1.7
|
1.7
|
(0.4 | ) | (0.6 | ) | ||||||||||
Amortization
of net actuarial loss
|
1.8
|
2.6
|
0.2
|
0.3
|
||||||||||||
Net
pension and other benefit costs
|
$ |
3.0
|
$ |
4.1
|
$ |
2.2
|
$ |
1.9
|
Pension
Benefits
|
Other
Postretirement
Benefits
|
|||||||||||||||
Nine
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
September
29, 2007
|
September
30, 2006
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Service
cost
|
$ |
13.0
|
$ |
13.9
|
$ |
2.3
|
$ |
2.2
|
||||||||
Interest
cost
|
47.1
|
44.1
|
4.9
|
4.4
|
||||||||||||
Expected
return on plan assets
|
(61.4 | ) | (58.7 | ) |
–
|
–
|
||||||||||
Amortization
of prior service costs
|
4.9
|
5.1
|
(1.3 | ) | (1.6 | ) | ||||||||||
Amortization
of net actuarial loss
|
5.4
|
7.8
|
0.7
|
0.9
|
||||||||||||
Net
pension and other benefit costs
|
$ |
9.0
|
$ |
12.2
|
$ |
6.6
|
$ |
5.9
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statemewnts
|
(unaudited)
|
Three
Months
Ended
|
Nine
Months
Ended
|
|||||||
September
29,
2007
|
September
29,
2007
|
|||||||
(in
millions)
|
||||||||
Cost
of sales:
|
||||||||
Severance
|
$
|
0.2
|
$
|
2.1
|
||||
Other
|
3.7
|
6.6
|
||||||
Impairments
|
0.4
|
0.4
|
||||||
Total
|
4.3
|
9.1
|
||||||
Selling,
general and administrative expense:
|
||||||||
Severance
|
–
|
3.0
|
||||||
Other
|
0.4
|
1.3
|
||||||
Impairments
|
–
|
–
|
||||||
Total
|
0.4
|
4.3
|
||||||
Total
restructuring charges
|
$
|
4.7
|
$
|
13.4
|
BRUNSWICK
CORPORATION
|
Notes
to Consolidated Financial Statements
|
(unaudited)
|
Three
Months
Ended
|
Nine
Months
Ended
|
|||||||
September
29,
2007
|
September
29,
2007
|
|||||||
(in
millions)
|
||||||||
Boat
|
$ |
4.1
|
$ |
9.8
|
||||
Marine
Engine
|
0.6
|
3.3
|
||||||
Corporate
|
–
|
0.3
|
||||||
Total
|
$ |
4.7
|
$ |
13.4
|
Date
|
Description
|
Segment
|
||
2/16/06
|
Cabo
Yachts, Inc.
|
Boat
|
||
4/26/06
|
Diversified
Marine Products, L.P.
|
Boat
|
||
10/18/06
|
Blue
Water Dealer Services, Inc.
|
Boat
|
||
8/24/07
|
Rayglass
Sales & Marketing Limited
|
Engine
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
September
29, 2007
|
September
30, 2006
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
earnings from continuing operations per
diluted share – as reported
|
$ | (0.27 | ) | $ |
0.54
|
$ |
0.75
|
$ |
2.30
|
|||||||
Impairment
charges
|
0.47
|
–
|
0.46
|
–
|
||||||||||||
Tax
items
|
(0.04 | ) | (0.06 | ) | (0.06 | ) | (0.25 | ) | ||||||||
Net
earnings from continuing operations per
diluted share – as adjusted
|
$ |
0.16
|
$ |
0.48
|
$ |
1.15
|
$ |
2.05
|
2007
vs. 2006
|
||||||||||||||||
Three
Months Ended
|
Increase/(Decrease)
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
$
|
%
|
|||||||||||||
(in
millions, except per share data)
|
||||||||||||||||
Net
sales
|
$ |
1,326.2
|
$ |
1,337.8
|
$ | (11.6 | ) | (0.9)% | ||||||||
Gross
margin (A)
|
$ |
258.4
|
$ |
288.9
|
$ | (30.5 | ) | (10.6)% | ||||||||
Impairment
charges
|
$ |
66.4
|
$ |
–
|
$ |
66.4
|
NM
|
|||||||||
Operating
earnings
|
$ | (46.3 | ) | $ |
74.3
|
$ | (120.6 | ) |
NM
|
|||||||
Net
earnings from continuing operations
|
$ | (23.7 | ) | $ |
50.4
|
$ | (74.1 | ) |
NM
|
|||||||
Diluted
earnings per share from continuing
operations
|
$ | (0.27 | ) | $ |
0.54
|
$ | (0.81 | ) |
NM
|
|||||||
Expressed
as a percentage of Net sales (B):
|
||||||||||||||||
Gross
margin
|
19.5% | 21.6% |
(210)
bpts
|
|||||||||||||
Selling,
general and administrative expense
|
15.6% | 13.6% |
200 bpts
|
|||||||||||||
Impairment
charges
|
5.0% |
–
|
500 bpts
|
|||||||||||||
Operating
margin
|
(3.5)% | 5.6% |
(910)
bpts
|
(A)
|
Gross margin is defined as Net sales less Cost of sales as presented in th Consolidated Statements of Income. |
(B)
|
Percentages are determined by using the following numerators expressed as a percentage of Net sales: Gross margin as defined in (A), Selling, general and administrative expense and Operating earnings as presented in the Consolidated Statements of Income. |
2007
vs. 2006
|
|||||||||||||||||
Nine
Months Ended
|
Increase/(Decrease)
|
||||||||||||||||
September
29, 2007
|
September
30, 2006
|
$
|
%
|
||||||||||||||
(in
millions, except per share data)
|
|||||||||||||||||
Net
sales
|
$ |
4,235.2
|
$ |
4,294.2
|
$ | (59.0 | ) | (1.4)% | |||||||||
Gross
margin (A)
|
$ |
887.1
|
$ |
957.1
|
$ | (70.0 | ) | (7.3)% | |||||||||
Impairment
charges
|
$ |
66.4
|
$
|
–
|
$ |
66.4
|
NM
|
||||||||||
Operating
earnings
|
$ |
93.0
|
$ |
310.7
|
$ | (217.7 | ) | (70.1)% | |||||||||
Net
earnings from continuing operations
|
$ |
67.5
|
$ |
219.0
|
$ | (151.5 | ) | (69.2)% | |||||||||
Diluted
earnings per share from continuing operations
|
$ |
0.75
|
$ |
2.30
|
$ | (1.55 | ) | (67.4)% | |||||||||
Expressed
as a percentage of Net sales (B):
|
|||||||||||||||||
Gross
margin
|
20.9% | 22.3% |
(140)
bpts
|
||||||||||||||
Selling,
general and administrative expense
|
14.8% | 12.8% |
200 bpts
|
||||||||||||||
Impairment
charges
|
1.6% |
–
|
160 bpts
|
||||||||||||||
Operating
margin
|
2.2% | 7.2% |
(500)
bpts
|
2007
vs. 2006
|
||||||||||||||||
Three
Months Ended
|
Increase/(Decrease)
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
$
|
%
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
sales
|
$ |
613.9
|
$ |
679.2
|
$ | (65.3 | ) | (9.6)% | ||||||||
Impairment
charges
|
$ |
66.4
|
–
|
$ |
66.4
|
NM
|
||||||||||
Operating
earnings
|
$ | (90.3 | ) | $ |
24.8
|
$ | (115.1 | ) |
NM
|
|||||||
Operating
margin
|
(14.7)% | 3.7% |
(1,840)
bpts
|
|||||||||||||
Capital
expenditures
|
$ |
44.9
|
$ |
15.8
|
$ |
29.1
|
NM
|
2007
vs. 2006
|
||||||||||||||||
Nine
Months Ended
|
Increase/(Decrease)
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
$
|
%
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
sales
|
$ |
2,045.7
|
$ |
2,199.9
|
$ | (154.2 | ) | (7.0)% | ||||||||
Impairment
charges
|
$ |
66.4
|
$ |
–
|
$ |
66.4
|
NM
|
|||||||||
Operating
earnings
|
$ | (51.5) | $ |
126.3
|
$ | (177.8 | ) |
NM
|
||||||||
Operating
margin
|
(2.5)% | 5.7% |
(820)
bpts
|
|||||||||||||
Capital
expenditures
|
$ |
76.3
|
$ |
52.2
|
$ |
24.1
|
46.2% |
2007
vs. 2006
|
||||||||||||||||
Three
Months Ended
|
Increase/(Decrease)
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
$
|
%
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
sales
|
$ |
566.7
|
$ |
536.5
|
$ |
30.2
|
5.6% | |||||||||
Operating
earnings
|
$ |
47.5
|
$ |
50.4
|
$ | (2.9) | (5.8)% | |||||||||
Operating
margin
|
8.4% | 9.4% |
(100)
bpts
|
|||||||||||||
Capital
expenditures
|
$ |
13.8
|
$ |
11.7
|
$ |
2.1
|
17.9 % |
2007
vs. 2006
|
||||||||||||||||
Nine
Months Ended
|
Increase/(Decrease)
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
$
|
%
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
sales
|
$ |
1,808.9
|
$ |
1,760.0
|
$ |
48.9
|
2.8% | |||||||||
Operating
earnings
|
$ |
162.5
|
$ |
190.0
|
$ | (27.5 | ) | (14.5)% | ||||||||
Operating
margin
|
9.0% | 10.8% |
(180)
bpts
|
|||||||||||||
Capital
expenditures
|
$ |
39.1
|
$ |
49.7
|
$ | (10.6 | ) | (21.3)% |
2007
vs. 2006
|
||||||||||||||||
Three
Months Ended
|
Increase/(Decrease)
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
$
|
%
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
sales
|
$ |
150.2
|
$ |
136.6
|
$ |
13.6
|
10.0% | |||||||||
Operating
earnings
|
$ |
11.8
|
$ |
12.6
|
$ | (0.8 | ) | (6.3)% | ||||||||
Operating
margin
|
7.9% | 9.2% |
(130)
bpts
|
|||||||||||||
Capital
expenditures
|
$ |
3.5
|
$ |
2.6
|
$ |
0.9
|
34.6% |
2007
vs. 2006
|
||||||||||||||||
Nine
Months Ended
|
Increase/(Decrease)
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
$
|
%
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
sales
|
$ |
439.2
|
$ |
400.3
|
$ |
38.9
|
9.7% | |||||||||
Operating
earnings
|
$ |
27.3
|
$ |
28.9
|
$ | (1.6 | ) | (5.5)% | ||||||||
Operating
margin
|
6.2% | 7.2% |
(100)
bpts
|
|||||||||||||
Capital
expenditures
|
$ |
8.0
|
$ |
7.6
|
$ |
0.4
|
5.3% |
2007
vs. 2006
|
||||||||||||||||
Three
Months Ended
|
Increase/(Decrease)
|
|||||||||||||||
September
29, 2007
|
September
30, 2006
|
$
|
%
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
sales
|
$ |
114.6
|
$ |
113.4
|
$ |
1.2
|
1.1% | |||||||||
Operating
earnings
|
$ | (0.2) | $ |
3.1
|
$ | (3.3 | ) |
NM
|
||||||||
Operating
margin
|
(0.2)% | 2.7% |
(290)
bpts
|
|||||||||||||
Capital
expenditures
|
$ |
11.2
|
$ |
11.9
|
$ | (0.7 | ) | (5.9)% |
2007
vs. 2006
|
|||||||||||||||
Nine
Months Ended
|
Increase/(Decrease)
|
||||||||||||||
September
29, 2007
|
September
30, 2006
|
$
|
%
|
||||||||||||
(in
millions)
|
|||||||||||||||
Net
sales
|
$ |
323.6
|
$ |
338.2
|
$ | (14.6 | ) | (4.3)% | |||||||
Operating
earnings
|
$ |
5.4
|
$ |
16.5
|
$ | (11.1 | ) | (67.3)% | |||||||
Operating
margin
|
1.7% | 4.9% |
(320)
bpts
|
||||||||||||
Capital
expenditures
|
$ |
30.7
|
$ |
28.6
|
$ |
2.1
|
7.3% |
Nine
Months Ended
|
||||||||
September
29, 2007
|
September
30, 2006
|
|||||||
(in
millions)
|
||||||||
Net
cash provided by operating activities of continuing
operations
|
$ |
239.9
|
$ |
216.0
|
||||
Net
cash provided by (used for):
|
||||||||
Capital
expenditures
|
(156.3 | ) | (139.7 | ) | ||||
Proceeds
from the sale of property, plant and equipment
|
5.3
|
6.8
|
||||||
Other,
net
|
12.1
|
(0.4 | ) | |||||
Free
cash flow from continuing operations *
|
$ |
101.0
|
$ |
82.7
|
*
|
The
Company defines “Free cash flow from continuing operations” as cash flow
from operating and investing activities of continuing operations
(excluding acquisitions and investments), and excluding financing
activities. Free cash flow from continuing operations is not
intended as an alternative measure of cash flow from operations,
as
determined in accordance with generally accepted accounting principles
(GAAP) in the United States. The Company uses this non-GAAP
financial measure both in presenting its results to shareholders
and the
investment community and in its internal evaluation and management
of its
businesses. Management believes that this financial measure and
the
information it provides are useful to investors because it permits
investors to view Brunswick’s performance using the same tool that
management uses to gauge progress in achieving its goals. Management
believes that Free cash flow from continuing operations is also
useful to
investors because it is an indication of cash flow that may be
available
to fund further investments in future growth
initiatives.
|
Issuer
Purchases of Equity Securities
|
||||||||||||||||
Period
|
Total
Number of Shares (or Units) Purchased
|
Average
Price Paid per Share
(or
Unit)
|
Total
Number of
Shares
(or Units)
Purchased
as Part of
Publicly
Announced
Plans
or Programs
|
Maximum
Number (or
Approximate
Dollar
Value)
of Shares
(or
Units)
that May Yet Be
Purchased
Under the
Plans
or Programs
(in
thousands)
|
||||||||||||
7/1/07
– 7/28/07
|
400,000
|
$ |
32.87
|
400,000
|
$
|
265,918
|
||||||||||
7/29/07
– 8/25/07
|
300,000
|
$ |
25.87
|
300,000
|
$
|
258,158
|
||||||||||
8/26/07
– 9/29/07
|
300,000
|
$ |
24.75
|
300,000
|
$
|
250,733
|
||||||||||
Total
Share Repurchases
|
1,000,000
|
$ |
28.33
|
1,000,000
|
$
|
250,733
|
||||||||||
Item 6. | Exhibits |
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
|
BRUNSWICK CORPORATION | |||
November
1,
2007
|
By:
|
/s/ ALAN L. LOWE | |
Alan L. Lowe | |||
Vice President and Controller | |||
* Mr. Lowe is signing this report both as a duly authorized officer and as the principal accounting officer. |