Brunswick Corporation 26125 N. Riverwoods Blvd., Suite 500, Mettawa, IL 60045 | |
Telephone 847.735.4700 Facsimile 847.735.4750 |
Release: | IMMEDIATE | |
Contact: | Al Marchetti | |
Senior Director - Investor Relations | ||
Phone: | 847-735-4023 | |
Contact: | Lee Gordon | |
Director - Marine Communications and Public Relations | ||
Phone: | 847-735-4003 | |
Email: | lee.gordon@brunswick.com |
FY 2019 | ||||||||||||
$ millions (except per share data) | GAAP | Incr (Decr) | As Adjusted | Incr (Decr) | ||||||||
Net Sales | $ | 4,108.4 | (0.3) | % | $ | 4,109.1 | 0.9 | % | ||||
Operating Earnings | $ | 471.0 | 32.5 | % | $ | 531.9 | 5.6 | % | ||||
Operating Margin | 11.5 | % | 290 bps | 12.9 | % | 50 bps | ||||||
Diluted EPS1 | $ | 0.36 | $ | 4.33 | ||||||||
bps = basis points |
Q4 2019 | ||||||||||||
$ millions (except per share data) | GAAP | Incr (Decr) | As Adjusted | Incr (Decr) | ||||||||
Net Sales | $ | 917.6 | (4.5) | % | $ | 917.6 | (4.0 | )% | ||||
Operating Earnings | $ | 74.5 | 6.9 | % | $ | 91.5 | (10.2 | )% | ||||
Operating Margin | 8.1 | % | 80 bps | 10.0 | % | (70) bps | ||||||
Diluted EPS | $ | 0.92 | $ | 0.82 | ||||||||
bps = basis points |
Operating Earnings | Diluted Earnings (Loss) Per Share | |||||||||||||||
$ millions (except per share data) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
GAAP | $ | 471.0 | $ | 355.5 | $ | 0.36 | $ | 2.87 | ||||||||
Restructuring, exit, impairment, and other charges | 21.0 | 54.8 | 0.23 | 0.47 | ||||||||||||
Purchase accounting amortization | 29.5 | 21.2 | 0.22 | 0.19 | ||||||||||||
Acquisition related costs | 2.6 | 13.8 | 0.02 | 0.17 | ||||||||||||
Sport yacht & yacht | 7.8 | 58.4 | 0.07 | 0.51 | ||||||||||||
Pension settlement charge | — | — | 3.62 | — | ||||||||||||
Loss on early extinguishment of debt | — | — | 0.01 | — | ||||||||||||
Gain on sale of equity investment | — | — | — | (0.02 | ) | |||||||||||
Special tax items | — | — | (0.20 | ) | (0.06 | ) | ||||||||||
As Adjusted | $ | 531.9 | $ | 503.7 | $ | 4.33 | $ | 4.13 | ||||||||
Percent Increase | 5.6 | % | 4.8 | % | ||||||||||||
GAAP Operating Margin | 11.5 | % | 8.6 | % | 290 bps | |||||||||||
Adjusted Operating Margin | 12.9 | % | 12.4 | % | 50 bps | |||||||||||
bps = basis points |
Operating Earnings | Diluted Earnings (Loss) Per Share | |||||||||||||||
$ millions (except per share data) | Q4 2019 | Q4 2018 | Q4 2019 | Q4 2018 | ||||||||||||
GAAP | $ | 74.5 | $ | 69.7 | $ | 0.92 | $ | 0.53 | ||||||||
Restructuring, exit, impairment, and other charges | 3.8 | 8.6 | 0.02 | 0.07 | ||||||||||||
Purchase accounting amortization | 7.5 | 11.8 | 0.03 | 0.10 | ||||||||||||
Acquisition related costs | 0.8 | 0.8 | 0.01 | 0.01 | ||||||||||||
Sport yacht & yachts | 4.9 | 11.0 | 0.03 | 0.08 | ||||||||||||
Pension settlement charge | — | — | (0.01 | ) | — | |||||||||||
Gain on sale of equity investment | — | — | — | (0.02 | ) | |||||||||||
Special tax items | — | — | (0.18 | ) | 0.00 | |||||||||||
As Adjusted | $ | 91.5 | $ | 101.9 | $ | 0.82 | $ | 0.77 | ||||||||
Percent Decrease | (10.2 | )% | 6.5 | % | ||||||||||||
GAAP Operating Margin | 8.1 | % | 7.3 | % | 80 bps | |||||||||||
Adjusted Operating Margin | 10.0 | % | 10.7 | % | (70) bps | |||||||||||
bps = basis points |
$ millions | Q4 2019 | Q4 2018 | Incr (Decr) | |||||
Net Sales | $665.8 | $669.5 | (0.6 | )% | ||||
Operating Earnings GAAP | $83.8 | $81.5 | 2.8 | % | ||||
Restructuring, exit, & impairment charges | 0.5 | — | NM | |||||
Purchase accounting amortization | 7.2 | 11.8 | (39.0 | )% | ||||
Acquisition related costs | — | 0.8 | NM | |||||
Operating Earnings, as adjusted | $91.5 | $94.1 | (2.8 | )% | ||||
NM = not meaningful |
$ millions | Q4 2019 | Q4 2018 | Incr (Decr) | |||||
Net Sales GAAP | $316.8 | $377.3 | (16.0 | )% | ||||
Sport Yacht & Yacht | — | (5.4 | ) | NM | ||||
Net Sales, as adjusted | $316.8 | $371.9 | (14.8 | )% | ||||
Operating Earnings GAAP | $11.5 | $10.3 | 11.7 | % | ||||
Restructuring, exit, & impairment charges | 1.7 | 8.6 | (80.2 | )% | ||||
Acquisition related costs | 0.8 | — | NM | |||||
Purchase accounting amortization | 0.3 | — | NM | |||||
Sport yacht and yachts | 4.9 | 11.0 | NM | |||||
Operating Earnings, as adjusted | $19.2 | $29.9 | (35.8 | )% | ||||
NM = not meaningful |
2020 Consolidated Guidance | |
Net Sales Growth | 6% to 8% |
Operating Margin Growth | 40 to 60 bps |
Operating Expenses | Decline as % of sales |
Operating Earnings Growth | Low-double digit percent |
Free Cash Flow | In excess of $325 million |
2020 Segment Guidance | ||
Net Sales Growth | Operating Margin Improvement1 | |
Propulsion | 6% to 8% | 0 to 20 bps |
Parts & Accessories | 4% to 6% | 30 to 50 bps |
Boat | 6% to 8% | 120+ bps |
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) | ||||||||||
Three Months Ended | ||||||||||
December 31, 2019 | December 31, 2018 | % Change | ||||||||
Net sales | $ | 917.6 | $ | 961.1 | -5 | % | ||||
Cost of sales | 681.0 | 716.7 | -5 | % | ||||||
Selling, general and administrative expense | 129.6 | 136.3 | -5 | % | ||||||
Research and development expense | 29.7 | 29.8 | 0 | % | ||||||
Restructuring, exit and impairment charges | 2.8 | 8.6 | -67 | % | ||||||
Operating earnings | 74.5 | 69.7 | 7 | % | ||||||
Equity earnings | 1.9 | 3.7 | -49 | % | ||||||
Pension settlement charge | 1.3 | — | NM | |||||||
Other expense, net | (0.5 | ) | (0.8 | ) | -38 | % | ||||
Earnings before interest and income taxes | 77.2 | 72.6 | 6 | % | ||||||
Interest expense | (16.6 | ) | (18.0 | ) | -8 | % | ||||
Interest income | 0.9 | 0.6 | 50 | % | ||||||
Earnings before income taxes | 61.5 | 55.2 | 11 | % | ||||||
Income tax (benefit) provision | (13.5 | ) | 8.9 | NM | ||||||
Net earnings from continuing operations | $ | 75.0 | $ | 46.3 | 62 | % | ||||
Discontinued operations: | ||||||||||
Loss from discontinued operations, net of tax | $ | (9.0 | ) | $ | (2.9 | ) | NM | |||
Gain on disposal of discontinued operations, net of tax | 1.1 | — | NM | |||||||
Net loss from discontinued operations, net of tax | (7.9 | ) | (2.9 | ) | NM | |||||
Net earnings | $ | 67.1 | $ | 43.4 | 55 | % | ||||
Earnings (loss) per common share: | ||||||||||
Basic | ||||||||||
Earnings from continuing operations | $ | 0.92 | $ | 0.53 | 74 | % | ||||
Loss from discontinued operations | (0.10 | ) | (0.03 | ) | NM | |||||
Net earnings | $ | 0.82 | $ | 0.50 | 64 | % | ||||
Diluted | ||||||||||
Earnings from continuing operations | $ | 0.92 | $ | 0.53 | 74 | % | ||||
Loss from discontinued operations | (0.10 | ) | (0.04 | ) | NM | |||||
Net earnings | $ | 0.82 | $ | 0.49 | 67 | % | ||||
Weighted average shares used for computation of: | ||||||||||
Basic earnings per common share | 81.5 | 87.4 | ||||||||
Diluted earnings per common share | 81.9 | 88.0 | ||||||||
Effective tax rate | (22.0 | )% | 16.1 | % | ||||||
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 | ||||||||||
December 31, 2019 | December 31, 2018 | % Change | ||||||||
Reconciliations | ||||||||||
Net sales | $ | 917.6 | $ | 961.1 | -5 | % | ||||
Sport yacht & yachts (1) | — | (5.4 | ) | |||||||
Adjusted net sales | $ | 917.6 | $ | 955.7 | -4 | % | ||||
Gross margin | $ | 236.6 | $ | 244.4 | -3 | % | ||||
Sport yacht & yachts (1) | 3.9 | 4.6 | ||||||||
Purchase accounting amortization (2) | — | 4.6 | ||||||||
Adjusted gross margin | $ | 240.5 | $ | 253.6 | -5 | % | ||||
Operating earnings | $ | 74.5 | $ | 69.7 | 7 | % | ||||
Restructuring, exit, impairment and other charges (3) | 3.8 | 8.6 | ||||||||
Purchase accounting amortization (2) | 7.5 | 11.8 | ||||||||
Acquisition-related costs (2) | 0.8 | 0.8 | ||||||||
Sport yacht & yachts (1) | 4.9 | 11.0 | ||||||||
Adjusted operating earnings | $ | 91.5 | $ | 101.9 | -10 | % | ||||
Earnings before income taxes | $ | 61.5 | $ | 55.2 | 11 | % | ||||
Restructuring, exit, impairment and other charges (3) | 3.8 | 8.6 | ||||||||
Pension settlement charge (4) | (1.3 | ) | — | |||||||
Purchase accounting amortization (2) | 7.5 | 11.8 | ||||||||
Acquisition related costs (2) | 0.8 | 0.8 | ||||||||
Sport yacht & yachts (1) | 4.9 | 11.0 | ||||||||
Gain on sale of equity investment (5) | — | (2.3 | ) | |||||||
Adjusted pretax earnings | $ | 77.2 | $ | 85.1 | -9 | % | ||||
Diluted earnings per common share from continuing operations | $ | 0.92 | $ | 0.53 | 74 | % | ||||
Restructuring, exit, impairment and other charges (3) | 0.02 | 0.07 | ||||||||
Pension settlement charge (4) | (0.01 | ) | — | |||||||
Purchase accounting amortization (2) | 0.03 | 0.10 | ||||||||
Acquisition related costs (2) | 0.01 | 0.01 | ||||||||
Sport yacht & yachts (1) | 0.03 | 0.08 | ||||||||
Special tax items | (0.18 | ) | — | |||||||
Gain on sale of equity investment (5) | — | (0.02 | ) | |||||||
Adjusted diluted earnings per common share from continuing operations | $ | 0.82 | $ | 0.77 | 6 | % | ||||
(1) In the second quarter of 2018, the Company announced its intention to wind down Sport yacht & yacht operations. Sport yacht & yachts had operating losses of $4.9 million for the three months ended December 31, 2019, consisting of $3.9 million of Cost of sales (COS) and $1.0 million of Selling, general and administrative expense (SG&A). Sport yacht & yacht operating losses for the three months ended December 31, 2018 were $11.0 million, consisting of $4.6 million of COS and $6.4 million of SG&A. | ||||||||||
(2) The Company recorded certain charges in connection with recent acquisitions. In the fourth quarter of 2019, the Company recorded $7.5 million of purchase accounting amortization within SG&A, consisting of $7.2 million in the Marine Engine segment and $0.3 million in the Boat segment. In the fourth quarter of 2018, the Company recorded $11.8 million of purchase accounting amortization in the Marine Engine segment, consisting of $7.2 million within SG&A and $4.6 million within COS. The Company recorded $0.8 million of acquisition-related costs during the both the fourth quarter of 2019 and 2018, respectively, within its Boat segment and Marine Engine segment, respectively. | ||||||||||
(3) The Company recorded $2.8 million and $8.6 million of restructuring, exit and impairment charges in the fourth quarter of 2019 and 2018, respectively. Additionally, the Company recorded $1.0 million of IT transformation charges in SG&A within Corporate/Other in the fourth quarter of 2019, resulting from the Fitness separation. | ||||||||||
(4) The Company recorded $1.3 million of pension settlement charge adjustments in the fourth quarter of 2019 in connection with the exit of its defined benefit plans. | ||||||||||
(5) In the fourth quarter of 2018, the Company sold its non-controlling interest in a marine joint venture and recorded a gain of $2.3 million within Equity earnings. |
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) | |||||||||||
Twelve Months Ended | |||||||||||
December 31, 2019 | December 31, 2018 | % Change | |||||||||
Net sales | $ | 4,108.4 | $ | 4,120.9 | 0 | % | |||||
Cost of sales | 2,987.4 | 3,073.9 | -3 | % | |||||||
Selling, general and administrative expense | 509.6 | 515.2 | -1 | % | |||||||
Research and development expense | 121.6 | 121.5 | 0 | % | |||||||
Restructuring, exit and impairment charges | 18.8 | 54.8 | -66 | % | |||||||
Operating earnings | 471.0 | 355.5 | 32 | % | |||||||
Equity earnings | 7.3 | 7.7 | -5 | % | |||||||
Pension settlement charge | (292.8 | ) | — | NM | |||||||
Other expense, net | (2.1 | ) | (4.3 | ) | -51 | % | |||||
Earnings before interest and income taxes | 183.4 | 358.9 | -49 | % | |||||||
Interest expense | (76.0 | ) | (46.0 | ) | 65 | % | |||||
Interest income | 3.3 | 2.9 | 14 | % | |||||||
Transaction financing charges | — | (5.1 | ) | -100 | % | ||||||
Earnings before income taxes | 110.7 | 310.7 | -64 | % | |||||||
Income tax provision | 80.3 | 57.3 | 40 | % | |||||||
Net earnings from continuing operations | $ | 30.4 | $ | 253.4 | -88 | % | |||||
Discontinued operations: | |||||||||||
(Loss) earnings from discontinued operations, net of tax | $ | (117.5 | ) | $ | 11.9 | NM | |||||
Loss on disposal of discontinued operations, net of tax | (43.9 | ) | — | NM | |||||||
(Loss) earnings from discontinued operations, net of tax | (161.4 | ) | 11.9 | NM | |||||||
Net (loss) earnings | $ | (131.0 | ) | $ | 265.3 | NM | |||||
Earnings (loss) per common share: | |||||||||||
Basic | |||||||||||
Earnings from continuing operations | $ | 0.36 | $ | 2.89 | -88 | % | |||||
(Loss) earnings from discontinued operations | (1.90 | ) | 0.14 | NM | |||||||
Net (loss) earnings | $ | (1.54 | ) | $ | 3.03 | NM | |||||
Diluted | |||||||||||
Earnings from continuing operations | $ | 0.36 | $ | 2.87 | -87 | % | |||||
(Loss) earnings from discontinued operations | (1.89 | ) | 0.14 | NM | |||||||
Net (loss) earnings | $ | (1.53 | ) | $ | 3.01 | NM | |||||
Weighted average shares used for computation of: | |||||||||||
Basic earnings (loss) per common share | 85.2 | 87.6 | |||||||||
Diluted earnings (loss) per common share | 85.6 | 88.2 | |||||||||
Effective tax rate | 72.5 | % | 18.4 | % | |||||||
NM = not meaningful |
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations - Reconciliations to Adjusted Metrics (in millions, except per share data) (unaudited) | |||||||||||
Twelve Months Ended | |||||||||||
December 31, 2019 | December 31, 2018 | % Change | |||||||||
Reconciliations | |||||||||||
Net sales | $ | 4,108.4 | $ | 4,120.9 | 0 | % | |||||
Sport yacht & yachts (1) | 0.7 | (49.4 | ) | ||||||||
Adjusted net sales | $ | 4,109.1 | $ | 4,071.5 | 1 | % | |||||
Gross margin | $ | 1,121.0 | $ | 1,047.0 | 7 | % | |||||
Sport yacht & yachts (1) | 6.4 | 39.7 | |||||||||
Purchase accounting amortization (2) | — | 9.2 | |||||||||
Adjusted gross margin | $ | 1,127.4 | $ | 1,095.9 | 3 | % | |||||
Operating earnings | $ | 471.0 | $ | 355.5 | 32 | % | |||||
Restructuring, exit, impairment and other charges (3) | 21.0 | 54.8 | |||||||||
Purchase accounting amortization (2) | 29.5 | 21.2 | |||||||||
Sport yacht & yachts (1) | 7.8 | 58.4 | |||||||||
Acquisition-related costs (2) | 2.6 | — | 13.8 | ||||||||
Adjusted operating earnings | $ | 531.9 | $ | 503.7 | 6 | % | |||||
Earnings before income taxes | $ | 110.7 | $ | 310.7 | -64 | % | |||||
Restructuring, exit, impairment and other charges (3) | 21.0 | 54.8 | |||||||||
Pension settlement charges (4) | 292.8 | — | |||||||||
Purchase accounting amortization (2) | 29.5 | 21.2 | |||||||||
Sport yacht & yachts (1) | 7.8 | 58.4 | |||||||||
Acquisition-related costs (2) | 2.6 | 18.9 | |||||||||
Loss on early extinguishment of debt (5) | 0.8 | — | |||||||||
Gain on sale of equity investment (6) | — | (2.3 | ) | ||||||||
Adjusted pretax earnings | $ | 465.2 | $ | 461.7 | 1 | % | |||||
Diluted earnings per common share | $ | 0.36 | $ | 2.87 | -87 | % | |||||
Restructuring, exit, impairment and other charges (3) | 0.23 | 0.47 | |||||||||
Pension settlement charge (4) | 3.62 | — | |||||||||
Purchase accounting amortization (2) | 0.22 | 0.19 | |||||||||
Sport yacht & yachts (1) | 0.07 | 0.51 | |||||||||
Acquisition-related costs (2) | 0.02 | 0.17 | |||||||||
Gain on sale of equity investment (6) | — | (0.02 | ) | ||||||||
Loss on early extinguishment of debt (5) | 0.01 | — | |||||||||
Special tax items | (0.20 | ) | (0.06 | ) | |||||||
Adjusted diluted earnings per common share | $ | 4.33 | $ | 4.13 | 5 | % | |||||
(1) In the second quarter of 2018, the Company announced its intention to wind down Sport yacht & yacht operations. In the twelve months ended December 31, 2019, the Company recorded charges of $7.8 million related to Sport yacht & yachts, consisting of (0.7) million of net sales, $7.1 million of Cost of sales (COS) and $1.4 million of Selling, general and administrative (SG&A). Sport yacht & yachts had operating losses of $58.4 million for the twelve months ended December 31, 2018, consisting of $49.4 million of Net sales, $89.1 million of COS and $18.7 million of SG&A. | |||||||||||
(2) The Company recorded certain charges in connection with recent acquisitions. In 2019, the Company recorded $29.5 million of purchase accounting amortization within SG&A, consisting of $28.7 million in the Marine Engine segment and $0.8 million in the Boat segment. In 2018, the Company recorded $21.2 million of purchase accounting amortization in the Marine Engine segment, consisting of $12.0 million within SG&A and $9.2 million within COS. The Company recorded $2.6 million of acquisition-related costs during 2019 within its Boat segment and recorded $13.8 million of acquisition-related costs during 2018 within its Marine engine segment. | |||||||||||
(3) The Company recorded $18.8 million and $54.8 million of restructuring, exit and impairment charges in the twelve months ended December 31, 2019 and December 31, 2018, respectively. Additionally, the Company recorded $2.2 million of IT transformation charges in SG&A within Corporate/Other in the twelve months ended December 31, 2019, resulting from the Fitness separation. | |||||||||||
(4) The Company recorded $292.8 million of pension settlement charges during 2019 in connection with the exit of its defined benefit plans. | |||||||||||
(5) In the third quarter of 2019, the Company called its 2021 Senior Notes, resulting in $0.8 million of charges. | |||||||||||
(6) In the fourth quarter of 2018, the Company sold its non-controlling interest in a marine joint venture and recorded a gain of $2.3 million within Equity earnings. |
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Segment Information - GAAP | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
Net Sales | Operating Earnings (Loss) | Operating Margin | |||||||||||||||||||||||||
Dec 31, 2019 | Dec 31, 2018 | % Change | Dec 31, 2019 | Dec 31, 2018 | % Change | Dec 31, 2019 | Dec 31, 2018 | ||||||||||||||||||||
Marine Engine | $ | 665.8 | $ | 669.5 | -1 | % | $ | 83.8 | $ | 81.5 | 3 | % | 12.6 | % | 12.2 | % | |||||||||||
Boat | 316.8 | 377.3 | -16 | % | 11.5 | 10.3 | 12 | % | 3.6 | % | 2.7 | % | |||||||||||||||
Marine eliminations | (65.0 | ) | (85.7 | ) | -24 | % | — | — | |||||||||||||||||||
Total Marine | 917.6 | 961.1 | -5 | % | 95.3 | 91.8 | 4 | % | 10.4 | % | 9.6 | % | |||||||||||||||
Corporate/Other | — | — | (20.8 | ) | (22.1 | ) | -6 | % | |||||||||||||||||||
Total | $ | 917.6 | $ | 961.1 | -5 | % | $ | 74.5 | $ | 69.7 | 7 | % | 8.1 | % | 7.3 | % | |||||||||||
Twelve Months Ended | |||||||||||||||||||||||||||
Net Sales | Operating Earnings (Loss) | Operating Margin | |||||||||||||||||||||||||
Dec 31, 2019 | Dec 31, 2018 | % Change | Dec 31, 2019 | Dec 31, 2018 | % Change | Dec 31, 2019 | Dec 31, 2018 | ||||||||||||||||||||
Marine Engine | $ | 3,073.5 | $ | 2,993.6 | 3 | % | $ | 497.1 | $ | 454.4 | 9 | % | 16.2 | % | 15.2 | % | |||||||||||
Boat | 1,333.8 | 1,471.3 | -9 | % | 58.0 | (12.5 | ) | NM | 4.3 | % | -0.8 | % | |||||||||||||||
Marine eliminations | (298.9 | ) | (344.0 | ) | -13 | % | — | — | |||||||||||||||||||
Total Marine | 4,108.4 | 4,120.9 | 0 | % | 555.1 | 441.9 | 26 | % | 13.5 | % | 10.7 | % | |||||||||||||||
Corporate/Other | — | — | (84.1 | ) | (86.4 | ) | -3 | % | |||||||||||||||||||
Total | $ | 4,108.4 | $ | 4,120.9 | -0 | % | $ | 471.0 | $ | 355.5 | 32 | % | 11.5 | % | 8.6 | % | |||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Net Sales (1) | Operating Earnings (Loss) (2) | Operating Margin | |||||||||||||||||||||||||||
Dec 31, 2019 | Dec 31, 2018 | % Change | Dec 31, 2019 | Dec 31, 2018 | % Change | Dec 31, 2019 | Dec 31, 2018 | ||||||||||||||||||||||
Marine Engine | $ | 665.8 | $ | 669.5 | -1 | % | $ | 91.5 | $ | 94.1 | -3 | % | 13.7 | % | 14.1 | % | |||||||||||||
Boat | 316.8 | 371.9 | -15 | % | — | 19.2 | — | 29.9 | -36 | % | 6.1 | % | 8.0 | % | |||||||||||||||
Marine eliminations | (65.0 | ) | (85.7 | ) | 24 | % | — | — | |||||||||||||||||||||
Total Marine | 917.6 | 955.7 | -4 | % | 110.7 | 124.0 | -11 | % | 12.1 | % | 13.0 | % | |||||||||||||||||
Corporate/Other | — | — | (19.2 | ) | — | (22.1 | ) | -13 | % | ||||||||||||||||||||
Total | $ | 917.6 | $ | 955.7 | -4 | % | $ | 91.5 | $ | 101.9 | -10 | % | 10.0 | % | 10.7 | % | |||||||||||||
Twelve Months Ended | |||||||||||||||||||||||||||
Net Sales (3) | Operating Earnings (Loss) (4) | Operating Margin | |||||||||||||||||||||||||
Dec 31, 2019 | Dec 31, 2018 | % Change | Dec 31, 2019 | Dec 31, 2018 | % Change | Dec 31, 2019 | Dec 31, 2018 | ||||||||||||||||||||
Marine Engine | $ | 3,073.5 | $ | 2,993.6 | 3 | % | $ | 530.4 | $ | 489.4 | 8 | % | 17.3 | % | 16.3 | % | |||||||||||
Boat | 1,334.5 | 1,421.9 | -6 | % | 78.9 | 100.0 | -21 | % | 5.9 | % | 7.0 | % | |||||||||||||||
Marine eliminations | (298.9 | ) | (344.0 | ) | 13 | % | — | — | |||||||||||||||||||
Total Marine | 4,109.1 | 4,071.5 | 1 | % | 609.3 | 589.4 | 3 | % | 14.8 | % | 14.5 | % | |||||||||||||||
Corporate/Other | — | — | (77.4 | ) | (85.7 | ) | 10 | % | |||||||||||||||||||
Total | $ | 4,109.1 | $ | 4,071.5 | 1 | % | $ | 531.9 | $ | 503.7 | 6 | % | 12.9 | % | 12.4 | % | |||||||||||
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Disaggregated Revenue | |||||||||||
Three Months Ended | |||||||||||
December 31, 2019 | |||||||||||
Marine Engine | Boat | Total | |||||||||
Geographic Markets | |||||||||||
United States | $ | 454.3 | $ | 246.8 | $ | 701.1 | |||||
Europe | 76.8 | 23.5 | 100.3 | ||||||||
Asia-Pacific | 71.6 | 9.8 | 81.4 | ||||||||
Canada | 27.3 | 32.5 | 59.8 | ||||||||
Rest-of-World | 35.8 | 4.2 | 40.0 | ||||||||
Marine eliminations | (65.0 | ) | — | (65.0 | ) | ||||||
Total | $ | 600.8 | $ | 316.8 | $ | 917.6 | |||||
Major Product Lines | |||||||||||
Parts & Accessories | $ | 330.6 | $ | — | $ | 330.6 | |||||
Propulsion | 335.2 | — | 335.2 | ||||||||
Aluminum Freshwater Boats | — | 124.4 | 124.4 | ||||||||
Recreational Fiberglass Boats | — | 107.3 | 107.3 | ||||||||
Saltwater Fishing Boats | — | 76.9 | 76.9 | ||||||||
Business Acceleration | — | 8.2 | 8.2 | ||||||||
Marine eliminations | (65.0 | ) | — | (65.0 | ) | ||||||
Total | $ | 600.8 | $ | 316.8 | $ | 917.6 |
Twelve Months Ended | |||||||||||
December 31, 2019 | |||||||||||
Marine Engine | Boat (1) | Total | |||||||||
Geographic Markets | |||||||||||
United States | $ | 2,131.1 | $ | 1,008.5 | $ | 3,139.6 | |||||
Europe | 410.9 | 115.6 | 526.5 | ||||||||
Asia-Pacific | 246.6 | 31.2 | 277.8 | ||||||||
Canada | 142.8 | 154.8 | 297.6 | ||||||||
Rest-of-World | 142.1 | 23.7 | 165.8 | ||||||||
Marine eliminations | (298.9 | ) | — | (298.9 | ) | ||||||
Total | $ | 2,774.6 | $ | 1,333.8 | $ | 4,108.4 | |||||
Major Product Lines | |||||||||||
Parts & Accessories | $ | 1,594.2 | $ | — | $ | 1,594.2 | |||||
Propulsion | 1,479.3 | — | 1,479.3 | ||||||||
Aluminum Freshwater Boats | — | 556.6 | 556.6 | ||||||||
Recreational Fiberglass Boats | — | 438.8 | 438.8 | ||||||||
Saltwater Fishing Boats | — | 316.6 | 316.6 | ||||||||
Business Acceleration | — | 21.8 | 21.8 | ||||||||
Marine eliminations | (298.9 | ) | — | (298.9 | ) | ||||||
Total | $ | 2,774.6 | $ | 1,333.8 | $ | 4,108.4 |
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Disaggregated Revenue | |||||||||||
Three Months Ended | |||||||||||
December 31, 2018 | |||||||||||
Marine Engine | Boat (1) | Total | |||||||||
Geographic Markets | |||||||||||
United States | $ | 461.9 | $ | 301.1 | $ | 763.0 | |||||
Europe | 75.6 | 25.4 | 101.0 | ||||||||
Asia-Pacific | 67.2 | 12.7 | 79.9 | ||||||||
Canada | 30.9 | 32.9 | 63.8 | ||||||||
Rest-of-World | 33.9 | 5.2 | 39.1 | ||||||||
Marine eliminations | (85.7 | ) | — | (85.7 | ) | ||||||
Total | $ | 583.8 | $ | 377.3 | $ | 961.1 | |||||
Major Product Lines | |||||||||||
Parts & Accessories | $ | 317.8 | $ | — | $ | 317.8 | |||||
Propulsion | 351.7 | — | 351.7 | ||||||||
Aluminum Freshwater Boats | — | 157.4 | 157.4 | ||||||||
Recreational Fiberglass Boats | — | 113.4 | 113.4 | ||||||||
Saltwater Fishing Boats | — | 105.6 | 105.6 | ||||||||
Business Acceleration | — | 0.9 | 0.9 | ||||||||
Marine eliminations | (85.7 | ) | — | (85.7 | ) | ||||||
Total | $ | 583.8 | $ | 377.3 | $ | 961.1 |
Twelve Months Ended | |||||||||||
December 31, 2018 | |||||||||||
Marine Engine | Boat (1) | Total | |||||||||
Geographic Markets | |||||||||||
United States | $ | 2,106.6 | $ | 1,119.9 | $ | 3,226.5 | |||||
Europe | 373.7 | 132.9 | 506.6 | ||||||||
Asia-Pacific | 228.8 | 35.7 | 264.5 | ||||||||
Canada | 150.5 | 157.5 | 308.0 | ||||||||
Rest-of-World | 134.0 | 25.3 | 159.3 | ||||||||
Marine eliminations | (344.0 | ) | — | (344.0 | ) | ||||||
Total | $ | 2,649.6 | $ | 1,471.3 | $ | 4,120.9 | |||||
Major Product Lines | |||||||||||
Parts & Accessories | $ | 1,442.0 | $ | — | $ | 1,442.0 | |||||
Propulsion | 1,551.6 | — | 1,551.6 | ||||||||
Aluminum Freshwater Boats | — | 619.0 | 619.0 | ||||||||
Recreational Fiberglass Boats | — | 485.9 | 485.9 | ||||||||
Saltwater Fishing Boats | — | 362.1 | 362.1 | ||||||||
Business Acceleration | — | 4.3 | 4.3 | ||||||||
Marine eliminations | (344.0 | ) | — | (344.0 | ) | ||||||
Total | $ | 2,649.6 | $ | 1,471.3 | $ | 4,120.9 |
Brunswick Corporation Comparative Condensed Consolidated Balance Sheets (in millions) (unaudited) | |||||||
December 31, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents, at cost, which approximates fair value | $ | 320.3 | $ | 294.4 | |||
Restricted cash | 11.6 | 9.0 | |||||
Short-term investments in marketable securities | 0.8 | 0.8 | |||||
Total cash and short-term investments in marketable securities | 332.7 | 304.2 | |||||
Accounts and notes receivable, net | 331.8 | 351.8 | |||||
Inventories | |||||||
Finished goods | 554.3 | 490.8 | |||||
Work-in-process | 101.3 | 94.1 | |||||
Raw materials | 168.9 | 189.1 | |||||
Net inventories | 824.5 | 774.0 | |||||
Prepaid expenses and other | 36.8 | 72.9 | |||||
Current assets held for sale | — | 377.2 | |||||
Current assets | 1,525.8 | 1,880.1 | |||||
Net property | 796.4 | 694.5 | |||||
Other assets | |||||||
Goodwill | 415.0 | 377.3 | |||||
Other intangibles, net | 583.5 | 585.8 | |||||
Deferred income tax asset | 118.7 | 97.8 | |||||
Operating lease assets | 83.2 | — | |||||
Equity investments | 29.5 | 32.6 | |||||
Other long-term assets | 12.3 | 13.1 | |||||
Long-term assets held for sale | — | 610.3 | |||||
Other assets | 1,242.2 | 1,716.9 | |||||
Total assets | $ | 3,564.4 | $ | 4,291.5 | |||
Liabilities and shareholders’ equity | |||||||
Current liabilities | |||||||
Short-term debt and current maturities of long-term debt | $ | 41.3 | $ | 41.3 | |||
Accounts payable | 393.5 | 458.2 | |||||
Accrued expenses | 509.6 | 502.1 | |||||
Current liabilities held for sale | — | 255.0 | |||||
Current liabilities | 944.4 | 1,256.6 | |||||
Debt | 1,068.0 | 1,179.5 | |||||
Other long-term liabilities | 251.1 | 173.2 | |||||
Long-term liabilities held for sale | — | 99.6 | |||||
Shareholders’ equity | 1,300.9 | 1,582.6 | |||||
Total liabilities and shareholders’ equity | $ | 3,564.4 | $ | 4,291.5 | |||
Supplemental Information | |||||||
Debt-to-capitalization rate | 46.0 | % | 43.5 | % |
Brunswick Corporation Comparative Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) | |||||||
Twelve Months Ended | |||||||
December 31, 2019 | December 31, 2018 | ||||||
Cash flows from operating activities | |||||||
Net earnings (loss) | $ | (131.0 | ) | $ | 265.3 | ||
Less: net earnings (loss) from discontinued operations, net of tax | (161.4 | ) | 11.9 | ||||
Net earnings from continuing operations | 30.4 | 253.4 | |||||
Stock compensation expense | 17.3 | 16.7 | |||||
Depreciation and amortization | 138.7 | 124.0 | |||||
Pension expense, net of (funding) | 293.3 | (156.1 | ) | ||||
Asset impairment charges | 3.0 | 32.1 | |||||
Deferred income taxes | (49.8 | ) | 31.0 | ||||
Changes in certain current assets and current liabilities | (80.8 | ) | (42.5 | ) | |||
Long-term extended warranty contracts and other deferred revenue | 4.0 | 7.9 | |||||
Income taxes | 114.4 | 4.9 | |||||
Other, net | 4.8 | 3.1 | |||||
Net cash provided by operating activities of continuing operations | 475.3 | 274.5 | |||||
Net cash (used for) provided by operating activities of discontinued operations | (41.1 | ) | 62.5 | ||||
Net cash provided by operating activities | 434.2 | 337.0 | |||||
Cash flows from investing activities | |||||||
Capital expenditures | (232.6 | ) | (180.2 | ) | |||
Investments | 2.4 | (8.8 | ) | ||||
Acquisition of businesses, net of cash acquired | (64.1 | ) | (909.6 | ) | |||
Proceeds from the sale of property, plant and equipment | 7.3 | 0.4 | |||||
Other, net | — | (0.2 | ) | ||||
Net cash used for investing activities of continuing operations | (287.0 | ) | (1,098.4 | ) | |||
Net cash provided by (used for) investing activities of discontinued operations | 481.7 | (8.9 | ) | ||||
Net cash provided by (used for) investing activities | 194.7 | (1,107.3 | ) | ||||
Cash flows from financing activities | |||||||
Proceeds from issuances of short-term debt | 655.0 | 298.9 | |||||
Payments of short-term debt | (655.0 | ) | (300.0 | ) | |||
Net proceeds from issuances of long-term debt | 223.6 | 794.6 | |||||
Payments of long-term debt including current maturities | (341.0 | ) | (12.6 | ) | |||
Common stock repurchases | (400.0 | ) | (75.0 | ) | |||
Cash dividends paid | (73.4 | ) | (67.8 | ) | |||
Proceeds from share-based compensation activity | 2.8 | 1.4 | |||||
Tax withholding associated with shares issued for share-based compensation | (12.1 | ) | (12.5 | ) | |||
Other, net | (0.7 | ) | (6.5 | ) | |||
Net cash (used for) provided by financing activities | (600.8 | ) | 620.5 | ||||
Effect of exchange rate changes | 0.4 | (5.0 | ) | ||||
Net increase (decrease) in Cash and cash equivalents and Restricted cash | 28.5 | (154.8 | ) | ||||
Cash and cash equivalents and Restricted cash at beginning of period | 303.4 | 458.2 | |||||
Cash and cash equivalents and Restricted cash at end of period | 331.9 | 303.4 | |||||
Less: Restricted cash | 11.6 | 9.0 | |||||
Cash and cash equivalents at end of period | $ | 320.3 | $ | 294.4 | |||
Reconciliation | |||||||
Free cash flow | |||||||
Net cash provided by operating activities | $ | 475.3 | $ | 274.5 | |||
Net cash provided by (used for): | |||||||
Plus: Capital expenditures | (232.6 | ) | (180.2 | ) | |||
Plus: Proceeds from the sale of property, plant and equipment | 7.3 | 0.4 | |||||
Plus: Effect of exchange rate changes | 0.4 | (5.0 | ) | ||||
Less: Cash impact of Sport yachts & yachts, net of tax | — | (53.7 | ) | ||||
Free cash flow | $ | 250.4 | $ | 143.4 |