Brunswick Corporation 1 N. Field Court Lake Forest, IL 60045
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Telephone 847.735.4700 Facsimile 847.735.4750
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Release:
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IMMEDIATE RELEASE
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Contact:
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Bruce Byots
Vice President – Corporate and Investor Relations
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Phone:
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847-735-4612
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Contact:
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Daniel Kubera
Director – Media Relations and Corporate Communications
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Phone:
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847-735-4617
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Email:
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daniel.kubera@brunswick.com
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·
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Net sales of $1,096.3 million, up 8 percent versus second quarter 2010.
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·
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Operating earnings improved by $52.2 million from second quarter 2010.
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·
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Net earnings of $0.75 per diluted share versus net earnings of $0.15 per diluted share in the prior year.
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·
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Cash and marketable securities totaled $676.8 million.
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Brunswick Corporation
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|||||||||||||
Comparative Consolidated Statements of Operations
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|||||||||||||
(in millions, except per share data)
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|||||||||||||
(unaudited)
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|||||||||||||
Three Months Ended
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|||||||||||||
July 2,
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July 3,
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||||||||||||
2011
|
2010
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% Change
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|||||||||||
Net sales
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$ | 1,096.3 | $ | 1,014.7 | 8% | ||||||||
Cost of sales
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821.5 | 772.4 | 6% | ||||||||||
Selling, general and administrative expense
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142.8 | 140.0 | 2% | ||||||||||
Research and development expense
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24.4 | 22.4 | 9% | ||||||||||
Restructuring, exit and impairment charges
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(0.3 | ) | 24.2 |
NM
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|||||||||
Operating earnings
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107.9 | 55.7 | 94% | ||||||||||
Equity earnings (loss)
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(0.7 | ) | 0.9 |
NM
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|||||||||
Other income (expense), net
|
0.9 | (0.4 | ) |
NM
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|||||||||
Earnings before interest, loss on early extinguishment of debt
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108.1 | 56.2 | 92% | ||||||||||
and income taxes
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|||||||||||||
Interest expense
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(21.2 | ) | (23.9 | ) | -11% | ||||||||
Interest income
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0.9 | 0.7 | 29% | ||||||||||
Loss on early extinguishment of debt
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(0.9 | ) | (4.1 | ) | -78% | ||||||||
Earnings before income taxes
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86.9 | 28.9 |
NM
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||||||||||
Income tax provision
|
17.6 | 15.2 | |||||||||||
Net earnings
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$ | 69.3 | $ | 13.7 |
NM
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||||||||
Earnings per common share:
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|||||||||||||
Basic
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$ | 0.78 | $ | 0.15 | |||||||||
Diluted
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$ | 0.75 | $ | 0.15 | |||||||||
Weighted average shares used for computation of:
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|||||||||||||
Basic earnings per common share
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89.3 | 88.7 | |||||||||||
Diluted earnings per common share
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92.6 | 91.8 | |||||||||||
Effective tax rate
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20.3 | % | 52.6 | % | |||||||||
Supplemental Information
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|||||||||||||
Diluted earnings per common share
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$ | 0.75 | $ | 0.15 | |||||||||
Restructuring, exit and impairment charges (1)
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- | 0.26 | |||||||||||
Special tax items
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(0.02 | ) | 0.02 | ||||||||||
Diluted earnings per common share, as adjusted
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$ | 0.73 | $ | 0.43 | |||||||||
(1) The 2011 and 2010 Restructuring, exit and impairment charges assume no tax benefit.
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Brunswick Corporation
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||||||||||||
Comparative Consolidated Statements of Operations
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||||||||||||
(in millions, except per share data)
|
||||||||||||
(unaudited)
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||||||||||||
Six Months Ended
|
||||||||||||
July 2,
|
July 3,
|
|||||||||||
2011
|
2010
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% Change
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||||||||||
Net sales
|
$ | 2,082.2 | $ | 1,859.1 | 12% | |||||||
Cost of sales
|
1,571.1 | 1,438.2 | 9% | |||||||||
Selling, general and administrative expense
|
283.4 | 278.8 | 2% | |||||||||
Research and development expense
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47.8 | 44.7 | 7% | |||||||||
Restructuring, exit and impairment charges
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5.0 | 31.6 | -84% | |||||||||
Operating earnings
|
174.9 | 65.8 |
NM
|
|||||||||
Equity earnings (loss)
|
(0.2 | ) | 0.8 |
NM
|
||||||||
Other income, net
|
0.9 | 0.6 | 50% | |||||||||
Earnings before interest, loss on early extinguishment of debt
|
175.6 | 67.2 |
NM
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|||||||||
and income taxes
|
||||||||||||
Interest expense
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(44.5 | ) | (48.2 | ) | -8% | |||||||
Interest income
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1.7 | 1.6 | 6% | |||||||||
Loss on early extinguishment of debt
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(5.2 | ) | (4.4 | ) | 18% | |||||||
Earnings before income taxes
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127.6 | 16.2 |
NM
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|||||||||
Income tax provision
|
30.8 | 15.5 | ||||||||||
Net earnings
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$ | 96.8 | $ | 0.7 |
NM
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|||||||
Earnings per common share:
|
||||||||||||
Basic
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$ | 1.08 | $ | 0.01 | ||||||||
Diluted
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$ | 1.05 | $ | 0.01 | ||||||||
Weighted average shares used for computation of:
|
||||||||||||
Basic earnings per common share
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89.3 | 88.6 | ||||||||||
Diluted earnings per common share
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92.5 | 91.3 | ||||||||||
Effective tax rate
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24.1 | % | 95.7 | % | ||||||||
Supplemental Information
|
||||||||||||
Diluted earnings per common share
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$ | 1.05 | $ | 0.01 | ||||||||
Restructuring, exit and impairment charges (1)
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0.05 | 0.35 | ||||||||||
Special tax items
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(0.02 | ) | (0.01 | ) | ||||||||
Diluted earnings per common share, as adjusted
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$ | 1.08 | $ | 0.35 | ||||||||
(1) The 2011 and 2010 Restructuring, exit and impairment charges assume no tax benefit.
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Brunswick Corporation
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|||||||||||||||||||||||
Selected Financial Information
|
|||||||||||||||||||||||
(in millions)
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|||||||||||||||||||||||
(unaudited)
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|||||||||||||||||||||||
Segment Information
|
|||||||||||||||||||||||
Three Months Ended
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|||||||||||||||||||||||
Net Sales
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Operating Earnings (Loss) (1)
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Operating Margin
|
|||||||||||||||||||||
July 2,
|
July 3,
|
July 2,
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July 3,
|
July 2,
|
July 3,
|
||||||||||||||||||
2011
|
2010
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% Change
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2011
|
2010
|
% Change
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2011
|
2010
|
||||||||||||||||
Marine Engine
|
$ |
618.5
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$ |
579.2
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7%
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$ |
95.5
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$ |
89.2
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7%
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15.4%
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15.4%
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|||||||||||
Boat
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326.7
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296.6
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10%
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9.4
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(23.6)
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NM
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2.9%
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-8.0%
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|||||||||||||||
Marine eliminations
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(68.0)
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(61.6)
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-
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-
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|||||||||||||||||||
Total Marine |
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877.2
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814.2
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8%
|
104.9
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65.6
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60%
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12.0%
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8.1%
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||||||||||||||
Fitness
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141.6
|
123.2
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15%
|
19.1
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8.7
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NM
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13.5%
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7.1%
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|||||||||||||||
Bowling & Billiards
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77.5
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77.3
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0%
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1.5
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(2.6)
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NM
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1.9%
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-3.4%
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|||||||||||||||
Corp/Other
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-
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-
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(17.6)
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(16.0)
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10%
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||||||||||||||||||
Total | $ |
1,096.3
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$ |
1,014.7
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8%
|
$ |
107.9
|
$ |
55.7
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94%
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9.8%
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5.5%
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|||||||||||
Six Months Ended
|
|||||||||||||||||||||||
Net Sales
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Operating Earnings (Loss) (2)
|
Operating Margin
|
|||||||||||||||||||||
July 2,
|
July 3,
|
July 2,
|
July 3,
|
July 2,
|
July 3,
|
||||||||||||||||||
2011
|
2010
|
% Change
|
2011
|
2010
|
% Change
|
2011
|
2010
|
||||||||||||||||
Marine Engine
|
$ |
1,139.0
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$ |
1,024.9
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11%
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$ |
147.1
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$ |
115.7
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27%
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12.9%
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11.3%
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|||||||||||
Boat
|
610.3
|
540.2
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13%
|
5.6
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(50.3)
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NM
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0.9%
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-9.3%
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|||||||||||||||
Marine eliminations
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(129.9)
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(117.4)
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-
|
-
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|||||||||||||||||||
Total Marine |
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1,619.4
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1,447.7
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12%
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152.7
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65.4
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NM
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9.4%
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4.5%
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||||||||||||||
Fitness
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298.0
|
242.2
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23%
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42.5
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18.2
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NM
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14.3%
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7.5%
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|||||||||||||||
Bowling & Billiards
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164.8
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169.2
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-3%
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14.7
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12.3
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20%
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8.9%
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7.3%
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|||||||||||||||
Corp/Other
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-
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-
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(35.0)
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(30.1)
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16%
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||||||||||||||||||
Total |
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$ |
2,082.2
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$ |
1,859.1
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12%
|
$ |
174.9
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$ |
65.8
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NM
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8.4%
|
3.5%
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||||||||||
(1) Operating earnings (loss) in the second quarter of 2011 includes $(0.3) million of pretax restructuring, exit and impairment charges (gains). The $(0.3) million charge (gain) consists of $(0.3) million in the Marine Engine segment, $(0.1) million in the Boat segment and $0.1 million in the Fitness segment. Operating earnings (loss) in the second quarter of 2010 includes $24.2 million of pretax restructuring and impairment charges. The $24.2 million charge consists of $2.1 million in the Marine Engine segment, $21.7 million in the Boat segment, $0.1 million in the Fitness segment, $0.2 million in the Bowling & Billiards segment and $0.1 million in Corp/Other.
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|||||||||||||||||||||||
(2) Operating earnings (loss) in the first six months of 2011 includes $5.0 million of pretax restructuring, exit and impairment charges. The $5.0 million charge consists of $4.0 million in the Marine Engine segment, $0.9 million in the Boat segment and $0.1 million in the Fitness segment. Operating earnings (loss) in the first six months of 2010 includes $31.6 million of pretax restructuring, exit and impairment charges. The $31.6 million charge consists of $4.5 million in the Marine Engine segment, $25.8 million in the Boat segment, $0.1 million in the Fitness segment, $0.4 million in the Bowling & Billiards segment and $0.8 million in Corp/Other.
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Brunswick Corporation
|
||||||||||||
Comparative Condensed Consolidated Balance Sheets
|
||||||||||||
(in millions)
|
||||||||||||
July 2,
|
December 31,
|
July 3,
|
||||||||||
2011
|
2010
|
2010
|
||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||
Assets
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
$ | 527.0 | $ | 551.4 | $ | 619.6 | ||||||
Short-term investments in marketable securities
|
78.8 | 84.7 | 0.8 | |||||||||
Total cash, cash equivalents and short-term investments in
|
605.8 | 636.1 | 620.4 | |||||||||
marketable securities
|
||||||||||||
Accounts and notes receivable, net
|
447.2 | 327.3 | 447.8 | |||||||||
Inventories
|
||||||||||||
Finished goods
|
373.3 | 276.9 | 203.6 | |||||||||
Work-in-process
|
63.0 | 164.0 | 180.8 | |||||||||
Raw materials
|
91.0 | 86.6 | 91.2 | |||||||||
Net inventories
|
527.3 | 527.5 | 475.6 | |||||||||
Deferred income taxes
|
20.8 | 17.0 | 16.1 | |||||||||
Prepaid expenses and other
|
29.1 | 27.9 | 29.7 | |||||||||
Current assets
|
1,630.2 | 1,535.8 | 1,589.6 | |||||||||
Net property
|
603.9 | 630.2 | 653.7 | |||||||||
Other assets
|
||||||||||||
Goodwill, net
|
293.1 | 290.9 | 288.9 | |||||||||
Other intangibles, net
|
52.9 | 56.7 | 61.5 | |||||||||
Long-term investments in marketable securities
|
71.0 | 21.0 | - | |||||||||
Equity investments
|
55.8 | 53.7 | 59.3 | |||||||||
Other long-term assets
|
85.1 | 89.7 | 90.4 | |||||||||
Other assets
|
557.9 | 512.0 | 500.1 | |||||||||
Total assets
|
$ | 2,792.0 | $ | 2,678.0 | $ | 2,743.4 | ||||||
Liabilities and shareholders' equity
|
||||||||||||
Current liabilities
|
||||||||||||
Short-term debt
|
$ | 1.7 | $ | 2.2 | $ | 4.8 | ||||||
Accounts payable
|
324.7 | 288.2 | 313.6 | |||||||||
Accrued expenses
|
641.5 | 661.2 | 613.2 | |||||||||
Current liabilities
|
967.9 | 951.6 | 931.6 | |||||||||
Long-term debt
|
785.2 | 828.4 | 819.2 | |||||||||
Other long-term liabilities
|
828.5 | 827.6 | 791.7 | |||||||||
Shareholders' equity
|
210.4 | 70.4 | 200.9 | |||||||||
Total liabilities and shareholders' equity
|
$ | 2,792.0 | $ | 2,678.0 | $ | 2,743.4 | ||||||
Supplemental Information
|
||||||||||||
Debt-to-capitalization rate
|
78.9 | % | 92.2 | % | 80.4 | % | ||||||
Cash and cash equivalents
|
$ | 527.0 | $ | 551.4 | $ | 619.6 | ||||||
Short-term investments in marketable securities
|
78.8 | 84.7 | 0.8 | |||||||||
Long-term investments in marketable securities
|
71.0 | 21.0 | - | |||||||||
Total cash and marketable securities
|
$ | 676.8 | $ | 657.1 | $ | 620.4 | ||||||
Brunswick Corporation
|
||||||||
Comparative Condensed Consolidated Statements of Cash Flows
|
||||||||
(in millions)
|
||||||||
(unaudited)
|
||||||||
Six Months Ended
|
||||||||
July 2,
|
July 3,
|
|||||||
2011
|
2010
|
|||||||
Cash flows from operating activities
|
||||||||
Net earnings
|
$ | 96.8 | $ | 0.7 | ||||
Depreciation and amortization
|
53.9 | 67.7 | ||||||
Pension expense, net of contributions
|
(5.0 | ) | 10.6 | |||||
(Gains) losses on sale of property, plant and equipment, net
|
(10.0 | ) | 0.7 | |||||
Deferred income taxes
|
14.7 | 2.6 | ||||||
Other long-lived asset impairment charges
|
0.4 | 19.9 | ||||||
Loss on early extinguishment of debt
|
5.2 | 4.4 | ||||||
Changes in certain current assets and current liabilities
|
(109.4 | ) | (74.0 | ) | ||||
Income taxes
|
7.3 | 114.8 | ||||||
Other, net
|
27.3 | (9.3 | ) | |||||
Net cash provided by operating activities
|
81.2 | 138.1 | ||||||
Cash flows from investing activities
|
||||||||
Capital expenditures
|
(31.8 | ) | (18.8 | ) | ||||
Purchase of marketable securities
|
(125.3 | ) | - | |||||
Sales of maturities of marketable securities
|
79.3 | - | ||||||
Investments
|
(0.4 | ) | (8.6 | ) | ||||
Proceeds from sale of property, plant and equipment
|
16.2 | 2.5 | ||||||
Other, net
|
7.0 | 7.3 | ||||||
Net cash used for investing activities
|
(55.0 | ) | (17.6 | ) | ||||
Cash flows from financing activities
|
||||||||
Net payments of short-term debt
|
(0.3 | ) | (5.7 | ) | ||||
Net proceeds from issuances of long-term debt
|
- | 10.0 | ||||||
Payments of long-term debt including current maturities
|
(44.7 | ) | (28.9 | ) | ||||
Net premium paid on early extinguishment of debt
|
(5.2 | ) | (4.3 | ) | ||||
Net proceeds from stock compensation activity
|
4.2 | 1.4 | ||||||
Other, net
|
(4.6 | ) | - | |||||
Net cash used for financing activities
|
(50.6 | ) | (27.5 | ) | ||||
Net increase (decrease) in cash and cash equivalents
|
(24.4 | ) | 93.0 | |||||
Cash and cash equivalents at beginning of period
|
551.4 | 526.6 | ||||||
Cash and cash equivalents at end of period
|
$ | 527.0 | $ | 619.6 | ||||
Free Cash Flow
|
||||||||
Net cash provided by operating activities
|
$ | 81.2 | $ | 138.1 | ||||
Net cash provided by (used for):
|
||||||||
Capital expenditures
|
(31.8 | ) | (18.8 | ) | ||||
Proceeds from sale of property, plant and equipment
|
16.2 | 2.5 | ||||||
Other, net
|
7.0 | 7.3 | ||||||
Total free cash flow
|
$ | 72.6 | $ | 129.1 | ||||