bcorp-20240330

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-01043

____________

Brunswick Corporation

(Exact name of registrant as specified in its charter)


Delaware						36-0848180
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

26125 N. Riverwoods Blvd., Suite 500, Mettawa, IL 60045-3420

(Address of principal executive offices) (Zip code)

(847) 735-4700

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☒	Accelerated Filer	☐

Non-accelerated Filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common stock, par value $0.75 per share

New York Stock Exchange

Chicago Stock Exchange

6.500% Senior Notes due 2048

BC-A

New York Stock Exchange

6.625% Senior Notes due 2049

BC-B

New York Stock Exchange

6.375% Senior Notes due 2049

BC-C

New York Stock Exchange

The number of shares of Common Stock ($0.75 par value) of the registrant outstanding as of April 30, 2024 was 67,567,180.

BRUNSWICK CORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

March 30, 2024

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION		Page

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3













Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32

Item 4.	Controls and Procedures	32


PART II – OTHER INFORMATION



Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 5.	Other Information	34

Item 6.	Exhibits	35

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

BRUNSWICK CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended
(in millions, except per share data)	March 30, 2024		April 1, 2023
Net sales	$	1,365.0	$	1,743.6
Cost of sales	991.4		1,238.0
Selling, general and administrative expense	203.7		211.3
Research and development expense	45.8		48.7
Restructuring, exit and impairment charges	13.5		9.5
Operating earnings	110.6		236.1
Equity earnings	2.5		2.2
Other expense, net	—		(0.9)
Earnings before interest and income taxes	113.1		237.4
Interest expense	(28.6)		(28.2)
Interest income	2.5		2.2


Earnings before income taxes	87.0		211.4
Income tax provision	18.6		99.0
Net earnings from continuing operations	68.4		112.4



Net loss from discontinued operations, net of tax	(0.4)		(0.1)
Net earnings	$	68.0	$	112.3

Earnings per common share:
Basic
Earnings from continuing operations	$	1.00	$	1.57
Loss from discontinued operations	(0.01)		—
Net earnings	$	0.99	$	1.57

Diluted
Earnings from continuing operations	$	1.00	$	1.56
Loss from discontinued operations	(0.01)		—
Net earnings	$	0.99	$	1.56

Weighted average shares used for computation of:
Basic earnings per common share	68.3		71.5
Diluted earnings per common share	68.5		71.8

Comprehensive income	$	57.5	$	115.9



The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

Table of Contents

BRUNSWICK CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	March 30, 2024		December 31, 2023		April 1, 2023
Assets
Current assets
Cash and cash equivalents, at cost, which approximates fair value	$	548.4	$	467.8	$	387.8
Restricted cash	11.1		11.1		11.1
Short-term investments in marketable securities	0.8		0.8		0.8
Total cash and short-term investments in marketable securities	560.3		479.7		399.7
Accounts and notes receivable, less allowances of $11.2, $10.8, $10.6	616.8		493.2		698.0
Inventories
Finished goods	1,028.1		932.0		858.6
Work-in-process	166.0		181.6		218.4
Raw materials	360.9		363.2		429.0
Net inventories	1,555.0		1,476.8		1,506.0
Prepaid expenses and other	75.1		60.0		74.7

Current assets	2,807.2		2,509.7		2,678.4

Property
Land	44.0		44.1		42.8
Buildings and improvements	621.7		619.7		582.7
Equipment	1,560.5		1,551.5		1,506.7

Total land, buildings and improvements and equipment	2,226.2		2,215.3		2,132.2
Accumulated depreciation	(1,153.8)		(1,135.5)		(1,074.2)
Net land, buildings and improvements and equipment	1,072.4		1,079.8		1,058.0
Unamortized product tooling costs	236.6		236.0		235.5
Net property	1,309.0		1,315.8		1,293.5

Other assets
Goodwill	1,026.3		1,030.7		974.0
Other intangibles, net	964.3		978.0		992.4
Deferred income tax asset	185.5		186.8		148.3
Operating lease assets	158.9		152.2		122.6
Equity investments	41.4		38.7		61.5
Other long-term assets	16.1		18.6		17.9

Other assets	2,392.5		2,405.0		2,316.7

Total assets	$	6,508.7	$	6,230.5	$	6,288.6

The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

Table of Contents


(in millions)	March 30, 2024		December 31, 2023		April 1, 2023
Liabilities and shareholders' equity
Current liabilities
Short-term debt and current maturities of long-term debt	$	455.4	$	454.7	$	89.8
Accounts payable	513.8		558.0		594.0
Accrued expenses	704.6		739.4		754.8

Current liabilities	1,673.8		1,752.1		1,438.6

Long-term liabilities
Debt	2,371.9		1,975.7		2,420.5
Operating lease liabilities	140.7		133.9		106.3
Postretirement benefits	49.7		52.5		48.3
Deferred income tax liability	12.1		12.4		12.4
Other	210.9		216.5		200.0

Long-term liabilities	2,785.3		2,391.0		2,787.5

Shareholders' equity
Common stock; authorized: 200,000,000 shares, $0.75 par value; issued: 102,538,000 shares; outstanding: 67,689,000, 68,227,000 and 70,891,000 shares	76.9		76.9		76.9
Additional paid-in capital	383.4		392.0		376.0
Retained earnings	3,636.3		3,596.9		3,372.3
Treasury stock, at cost: 34,849,000, 34,311,000 and 31,647,000 shares	(2,010.8)		(1,952.7)		(1,736.8)







Accumulated other comprehensive loss	(36.2)		(25.7)		(25.9)
Shareholders' equity	2,049.6		2,087.4		2,062.5

Total liabilities and shareholders' equity	$	6,508.7	$	6,230.5	$	6,288.6

The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

Table of Contents

BRUNSWICK CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended
(in millions)	March 30, 2024		April 1, 2023
Cash flows from operating activities
Net earnings	$	68.0	$	112.3
Less: net loss from discontinued operations, net of tax	(0.4)		(0.1)
Net earnings from continuing operations	68.4		112.4
Depreciation and amortization	69.4		64.7
Stock compensation expense	6.1		5.9
Pension funding, net of expense	(0.3)		(0.6)

Asset impairment charges	0.5		1.2

Deferred income taxes	1.9		2.2


Changes in certain current assets and current liabilities	(301.2)		(269.7)
Long-term extended warranty contracts and other deferred revenue	2.1		2.5


Income taxes	0.2		78.4
Other, net	4.8		(11.5)
Net cash used for operating activities of continuing operations	(148.1)		(14.5)
Net cash used for operating activities of discontinued operations	(5.3)		(1.3)
Net cash used for operating activities	(153.4)		(15.8)

Cash flows from investing activities
Capital expenditures	(54.0)		(93.5)

Sales or maturities of marketable securities	—		3.8
Investments	(3.0)		(7.6)
Acquisition of businesses, net of cash acquired	(0.7)		—
Proceeds from the sale of property, plant and equipment	2.3		2.7



Net cash used for investing activities	(55.4)		(94.6)

Cash flows from financing activities
Proceeds from issuances of short-term debt	1.1		1.4
Payments of short-term debt	(0.9)		(0.2)
Net proceeds from issuances of long-term debt	396.9		—
Payments of long-term debt including current maturities	(0.6)		(0.6)

Common stock repurchases	(63.6)		(60.0)
Cash dividends paid	(28.6)		(28.5)

Tax withholding associated with shares issued for share-based compensation	(9.2)		(13.0)
Other, net	(1.0)		—


Net cash provided by (used for) financing activities	294.1		(100.9)

Effect of exchange rate changes on cash and cash equivalents	(4.7)		1.7
Net increase (decrease) in Cash and cash equivalents and Restricted cash	80.6		(209.6)
Cash and cash equivalents and Restricted cash at beginning of period	478.9		608.5

Cash and cash equivalents and Restricted cash at end of period	559.5		398.9
Less: Restricted cash	11.1		11.1
Cash and cash equivalents at end of period	$	548.4	$	387.8

The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

Table of Contents

Brunswick Corporation

Condensed Consolidated Statements of Shareholders' Equity

(Unaudited)


(in millions, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated other comprehensive loss		Total
Balance at December 31, 2023	$	76.9	$	392.0	$	3,596.9	$	(1,952.7)	$	(25.7)	$	2,087.4
Net earnings	—		—		68.0		—		—		68.0
Other comprehensive loss	—		—		—		—		(10.5)		(10.5)
Dividends ($0.42 per common share)	—		—		(28.6)		—		—		(28.6)
Compensation plans and other	—		(8.6)		—		6.0		—		(2.6)
Common stock repurchases	—		—		—		(64.1)		—		(64.1)
Balance at March 30, 2024	$	76.9	$	383.4	$	3,636.3	$	(2,010.8)	$	(36.2)	$	2,049.6


(in millions, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated other comprehensive loss		Total
Balance at December 31, 2022	$	76.9	$	391.3	$	3,288.5	$	(1,684.9)	$	(29.5)	$	2,042.3
Net earnings	—		—		112.3		—		—		112.3
Other comprehensive income	—		—		—		—		3.6		3.6
Dividends ($0.40 per common share)	—		—		(28.5)		—		—		(28.5)
Compensation plans and other	—		(15.3)		—		8.5		—		(6.8)
Common stock repurchases	—		—		—		(60.4)		—		(60.4)
Balance at April 1, 2023	$	76.9	$	376.0	$	3,372.3	$	(1,736.8)	$	(25.9)	$	2,062.5

The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Significant Accounting Policies

Interim Financial Statements. Brunswick's unaudited interim condensed consolidated financial statements have been prepared pursuant to SEC rules and regulations. Therefore, certain information and disclosures normally included in financial statements and related notes prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted.

These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included in Brunswick's 2023 Annual Report on Form 10-K for the year ended December 31, 2023 (the 2023 Form 10-K). These results include, in management's opinion, all normal and recurring adjustments necessary to present fairly Brunswick's financial position, results of operations and cash flows. Due to the seasonality of Brunswick's businesses, the interim results are not necessarily indicative of the results that may be expected for the remainder of the year.

The Company maintains its financial records on the basis of a fiscal year ending on December 31, with the fiscal quarters spanning approximately thirteen weeks. The first quarter ends on the Saturday closest to the end of the first thirteen-week period. The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The first quarter of fiscal year 2024 ended on March 30, 2024 and the first quarter of fiscal year 2023 ended on April 1, 2023.

Recently Issued Accounting Standards

Segment Reporting: In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures, which adds new disclosure requirements related to significant segment expenses regularly provided to the chief operating decision maker (CODM) and included in each reported measure of segment profit or loss, other segment items that constitute the difference between segment revenues less significant segment expenses and the measure of profit or loss, disclosure of the CODMs title and position as well as an explanation of how the CODM uses the reported measures and expanded interim disclosures. ASU 2023-07 is effective for financial statements for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the potential impact of adopting this guidance on the consolidated financial statements.

Income Taxes: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures. Under this ASU, entities must disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires entities to disclose additional information about income taxes paid. ASU 2023-09 is effective for financial statements for annual periods beginning after December 15, 2024. We are currently evaluating the potential impact of adopting this guidance on the consolidated financial statements.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 2 – Revenue Recognition

The following tables present the Company's revenue in categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors:


	Three Months Ended
	March 30, 2024
(in millions)	Propulsion		Engine P&A		Navico Group		Boat		Total
Geographic Markets
United States	$	378.7	$	179.5	$	123.5	$	333.7	$	1,015.4
Europe	87.0		27.4		61.7		40.0		216.1
Asia-Pacific	43.8		25.4		16.0		5.5		90.7
Canada	16.0		15.2		4.2		37.5		72.9
Rest-of-World	52.7		14.9		5.5		9.0		82.1
Segment Eliminations	(82.4)		(1.7)		(28.1)		—		(112.2)
Total	$	495.8	$	260.7	$	182.8	$	425.7	$	1,365.0

	Three Months Ended
	April 1, 2023
(in millions)	Propulsion		Engine P&A		Navico Group		Boat		Total
Geographic Markets
United States	$	495.8	$	202.9	$	182.3	$	440.0	$	1,321.0
Europe	115.5		27.0		65.4		51.1		259.0
Asia-Pacific	58.5		27.9		18.6		7.3		112.3
Canada	28.4		18.8		5.2		65.9		118.3
Rest-of-World	53.4		12.0		5.8		10.9		82.1
Segment Eliminations	(113.7)		(2.0)		(33.1)		(0.3)		(149.1)
Total	$	637.9	$	286.6	$	244.2	$	574.9	$	1,743.6

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)


	Three Months Ended
	March 30, 2024
(in millions)	Propulsion		Engine P&A		Navico Group		Boat		Total
Major Product Lines
Outboard Engines	$	450.5	$	—	$	—	$	—	$	450.5
Controls, Rigging, and Propellers	90.4		—		—		—		90.4
Sterndrive Engines	37.3		—		—		—		37.3
Distribution	—		152.4		—		—		152.4
Products	—		110.0		—		—		110.0
Navico Group	—		—		210.9		—		210.9
Aluminum Freshwater Boats	—		—		—		150.2		150.2
Recreational Fiberglass Boats	—		—		—		135.3		135.3
Saltwater Fishing Boats	—		—		—		107.2		107.2
Business Acceleration	—		—		—		49.2		49.2
Boat Eliminations/Other	—		—		—		(16.2)		(16.2)
Segment Eliminations	(82.4)		(1.7)		(28.1)		—		(112.2)
Total	$	495.8	$	260.7	$	182.8	$	425.7	$	1,365.0

	Three Months Ended
	April 1, 2023
(in millions)	Propulsion		Engine P&A		Navico Group		Boat		Total
Major Product Lines
Outboard Engines	$	593.2	$	—	$	—	$	—	$	593.2
Controls, Rigging, and Propellers	106.0		—		—		—		106.0
Sterndrive Engines	52.4		—		—		—		52.4
Distribution	—		175.3		—		—		175.3
Products	—		113.3		—		—		113.3
Navico Group	—		—		277.3		—		277.3
Aluminum Freshwater Boats	—		—		—		230.4		230.4
Recreational Fiberglass Boats	—		—		—		198.4		198.4
Saltwater Fishing Boats	—		—		—		113.1		113.1
Business Acceleration	—		—		—		39.8		39.8
Boat Eliminations/Other	—		—		—		(6.5)		(6.5)
Segment Eliminations	(113.7)		(2.0)		(33.1)		(0.3)		(149.1)
Total	$	637.9	$	286.6	$	244.2	$	574.9	$	1,743.6

As of December 31, 2023, $187.1 million of contract liabilities associated with extended warranties, deferred revenue and customer deposits were reported in Accrued expenses and Other long-term liabilities, of which $20.5 million were recognized as revenue during the three months ended March 30, 2024. As of March 30, 2024, total contract liabilities were $198.4 million. The total amount of the transaction price allocated to unsatisfied performance obligations as of March 30, 2024 was $189.8 million for contracts greater than one year, which primarily relates to extended warranties. The Company expects to recognize $48.6 million of this amount in 2024, $52.0 million in 2025, and $89.2 million thereafter.

Note 3 – Restructuring, Exit and Impairment Activities

The Company recorded restructuring, exit and impairment charges in the Condensed Consolidated Statements of Comprehensive Income in 2024.

During the three months ended March 30, 2024 and April 1, 2023, the Company recorded restructuring charges related to headcount reductions and related costs associated with streamlining the enterprise-wide cost structure and improving operating efficiencies.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

The following table is a summary of these expenses for the three months ended March 30, 2024:



(in millions)	Propulsion		Engine P&A		Navico Group		Boat		Corporate		Total
Restructuring, exit and impairment activities:
Employee termination and other benefits	$	5.6	$	3.3	$	2.2	$	1.0	$	0.9	$	13.0
Asset-related	—		—		0.5		—		—		0.5


Total restructuring, exit and impairment charges	$	5.6	$	3.3	$	2.7	$	1.0	$	0.9	$	13.5

Total cash payments for restructuring, exit and impairment charges (A)	$	2.7	$	1.6	$	6.2	$	1.0	$	0.9	$	12.4
Accrued charges at end of the period (B)	$	4.1	$	2.4	$	1.1	$	1.7	$	0.6	$	9.9

(A) Cash payments for the three months ended March 30, 2024 may include payments related to prior period charges.

(B) Restructuring, exit and impairment charges accrued as of March 30, 2024 are expected to be paid in the next twelve months.

The following table is a summary of these expenses for the three months ended April 1, 2023:



(in millions)	Engine P&A		Navico Group		Boat		Corporate		Total
Restructuring, exit and impairment activities:
Employee termination and other benefits	$	0.7	$	2.4	$	1.4	$	0.7	$	5.2
Asset-related	—		1.2		—		—		1.2



















Professional fees	—		—		—		3.1		3.1
Total restructuring, exit and impairment charges	$	0.7	$	3.6	$	1.4	$	3.8	$	9.5

Total cash payments for restructuring, exit and impairment charges (A)	$	0.2	$	1.3	$	0.7	$	0.3	$	2.5
Accrued charges at end of the period	$	0.5	$	5.2	$	0.7	$	3.5	$	9.9

(A) Cash payments for the three months ended April 1, 2023 may include payments related to prior period charges.

Note 4 – Acquisitions

2023 Acquisitions

During the fourth quarter of 2023, the Company acquired additional Freedom Boat Club franchise operations and territories in the Southeast United States. These acquisitions should unlock operational efficiencies while providing members with additional boating destinations, as the Company plans for continued expansion across the Southeast Coastal region. These acquisitions are included as part of the Company's Boat segment.

The Company paid net cash consideration of $16.0 million for these acquisitions. The opening balance sheets, which are preliminary and subject to change in the measurement period as the Company finalizes the purchase price allocation and fair value estimates, include $13.9 million of goodwill and $3.3 million of customer relationships. The amount assigned to customer relationships will be amortized over the estimated useful life of 10 years. Transaction costs associated with these acquisitions were not material to the Company's consolidated results of operations.

On September 1, 2023, the Company acquired all of the issued and outstanding shares of Fliteboard Pty Ltd (Fliteboard) for $88.3 million net cash consideration. Fliteboard is a leader in eFoiling technology, which combines advanced hydrofoils and electric propulsion on the water. The acquisition of Fliteboard allows the Company to enter the emerging electric-foiling surfboard market and presents the opportunity for technological, manufacturing, commercial and consumer synergies with our existing portfolio. Fliteboard is included as part of the Company's Propulsion segment.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

The opening balance sheet, which is preliminary and subject to change in the measurement period as the Company finalizes the purchase price allocation and fair value estimates, includes $38.7 million of goodwill, $20.7 million of trade names, $8.4 million of customer relationships, and $7.1 million of developed technology. The amounts assigned to customer relationships and developed technology will be amortized over the estimated useful lives of 15 years and 10 years, respectively. Transaction costs associated with the acquisition of $1.9 million were expensed as incurred within Selling, general and administrative expense in 2023.

These 2023 acquisitions are not material to the Company's net sales, results of operations, or total assets during any period presented. Accordingly, the Company's consolidated results of operations do not differ materially from historical performance as a result of the acquisitions, and pro forma results for prior periods are not presented.

Note 5 – Financial Instruments

The Company operates globally with manufacturing and sales facilities around the world. Due to the Company’s global operations, the Company engages in activities involving both financial and market risks. The Company utilizes normal operating and financing activities, along with derivative financial instruments, to minimize these risks. See Note 12 in the Notes to Consolidated Financial Statements in the 2023 Form 10-K for further details regarding the Company's financial instruments and hedging policies.

Cross-Currency Swaps. The Company enters into cross-currency swaps to hedge Euro currency exposures of the net investment in certain foreign subsidiaries. The cross-currency swaps were designated as net investment hedges, with the amount of gain or loss associated with the change in fair value of these instruments deferred within Accumulated other comprehensive loss and recognized upon termination of the respective investment. During the fourth quarter of 2023, the company entered into $250.0 million of cross-currency swap contracts. As of March 30, 2024 and December 31, 2023, the notional value of cross-currency swap contracts outstanding was $250.0 million. There were no cross-currency swaps outstanding as of April 1, 2023.

Commodity Price. The Company uses commodity swaps to hedge anticipated purchases of aluminum and copper. As of March 30, 2024, December 31, 2023 and April 1, 2023, the notional value of commodity swap contracts outstanding was $27.7 million, $31.8 million and $28.5 million, respectively, and the contracts mature through 2025. The amount of gain or loss associated with the change in fair value of these instruments is deferred in Accumulated other comprehensive loss and recognized in Cost of sales in the same period or periods during which the hedged transaction affects earnings. As of March 30, 2024, the Company estimates that, during the next 12 months, it will reclassify approximately $1.0 million in net losses (based on current prices) from Accumulated other comprehensive loss to Cost of sales.

Foreign Currency Derivatives. The Company enters into forward contracts to manage foreign exchange exposure related to forecasted transactions and assets and liabilities that are subject to risk from foreign currency exchange rate changes. Forward exchange contracts outstanding as of March 30, 2024, December 31, 2023 and April 1, 2023 had notional contract values of $720.2 million, $694.6 million and $690.6 million, respectively. The forward contracts outstanding as of March 30, 2024 mature through 2025 and mainly relate to the Euro, Australian dollar, Norwegian krone and Mexican peso. As of March 30, 2024, the Company estimates that during the next 12 months, it will reclassify approximately $5.3 million of net gains (based on current rates) from Accumulated other comprehensive loss to Cost of sales.

Interest-Rate Derivatives. The Company had net deferred gains associated with previously settled forward-starting interest-rate swaps and treasury-lock swaps of $3.3 million as of March 30, 2024, December 31, 2023, and April 1, 2023, respectively. These instruments were designated as cash flow hedges with gains and losses included in Accumulated other comprehensive loss. As of March 30, 2024, the Company estimates that during the next 12 months, it will reclassify approximately $0.1 million of net gains from Accumulated other comprehensive loss to Interest expense.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

As of March 30, 2024, December 31, 2023 and April 1, 2023, the fair values of the Company’s derivative instruments were:



(in millions)	Fair Value
Asset Derivatives	March 30, 2024		December 31, 2023		April 1, 2023
Derivatives Designated as Cash Flow Hedges
Foreign exchange contracts	$	9.3	$	4.1	$	12.9
Commodity contracts	0.4		0.9		0.3


Total	$	9.7	$	5.0	$	13.2






Other Hedging Activity
Foreign exchange contracts	$	0.7	$	0.2	$	0.7

Liability Derivatives
Derivatives Designated as Cash Flow Hedges
Foreign exchange contracts	$	2.4	$	6.1	$	6.0
Commodity contracts	0.7		0.8		1.0

Total	$	3.1	$	6.9	$	7.0










Derivatives Designated as Net Investment Hedges
Cross-currency swaps	$	1.0	$	5.0	$	—

Other Hedging Activity
Foreign exchange contracts	$	4.3	$	1.8	$	0.9

As of March 30, 2024, December 31, 2023 and April 1, 2023, asset derivatives are included within Prepaid expenses and other, and liability derivatives are included within Accrued expenses and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

The effect of derivative instruments on the Condensed Consolidated Statements of Comprehensive Income for the three months ended March 30, 2024 and April 1, 2023 is shown in the tables below.

The amount of gain (loss) on derivatives recognized in Accumulated other comprehensive loss was as follows:


(in millions)
Derivatives Designated as Cash Flow Hedging Instruments	March 30, 2024		April 1, 2023

Foreign exchange contracts	10.8		3.3
Commodity contracts	(1.1)		(0.2)
Total	$	9.7	$	3.1

Derivatives Designated as Net Investment Hedging Instruments
Cross-currency swaps	$	4.0	$	—

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

The amount of gain (loss) reclassified from Accumulated other comprehensive loss into earnings was as follows:


(in millions)
Derivatives Designated as Cash Flow Hedging Instruments	Location of Gain (Loss)	March 30, 2024		April 1, 2023
Interest-rate contracts	Interest expense	$	—	$	(0.1)
Foreign exchange contracts	Cost of sales	1.9		7.5
Commodity contracts	Cost of sales	(0.8)		(0.6)
Total		$	1.1	$	6.8

The amount of gain (loss) on derivatives recognized directly into earnings was as follows:


(in millions)
Derivatives Designated as Fair Value Hedging Instruments	Location of Gain (Loss)	March 30, 2024		April 1, 2023
Interest-rate contracts	Interest expense	$	—	$	0.2

Other Hedging Activity
Foreign exchange contracts	Cost of sales	$	2.0	$	(0.7)
Foreign exchange contracts	Other expense, net	(2.7)		(0.1)
Total		$	(0.7)	$	(0.8)

Fair Value of Other Financial Instruments. The carrying values of the Company's short-term financial instruments, including cash and cash equivalents and accounts and notes receivable, approximate their fair values because of the short maturity of these instruments. As of March 30, 2024, December 31, 2023 and April 1, 2023, the fair value of the Company’s long-term debt, including current maturities, and short-term debt was approximately $2,659.5 million, $2,228.2 million and $2,257.4 million, respectively, and was determined using Level 1 and Level 2 inputs described in Note 6 to the Notes to Consolidated Financial Statements in the 2023 Form 10-K. The carrying value of long-term debt, including current maturities, and short-term debt was $2,859.1 million, $2,458.7 million and $2,541.2 million as of March 30, 2024, December 31, 2023 and April 1, 2023, respectively.

Note 6 – Fair Value Measurements

The following table summarizes the Company's financial assets and liabilities measured at fair value on a recurring basis:


		Fair Value
(in millions)	Fair Value Level	March 30, 2024		December 31, 2023		April 1, 2023
Cash equivalents	1	$	0.2	$	0.4	$	0.2
Short-term investments in marketable securities	1	0.8		0.8		0.8
Restricted cash	1	11.1		11.1		11.1
Derivative assets	2	10.4		5.2		13.9
Derivative liabilities	2	8.4		13.7		7.9
Deferred compensation	1	1.5		1.5		1.3
Deferred compensation	2	16.2		16.1		15.2

Liabilities measured at net asset value		13.0		12.9		11.6

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 7 – Commitments and Contingencies

Product Warranties

The following activity related to product warranty liabilities was recorded in Accrued expenses during the three months ended March 30, 2024 and April 1, 2023:


(in millions)	March 30, 2024		April 1, 2023
Balance at beginning of period	$	157.6	$	146.7
Payments	(23.5)		(19.4)

Provisions/additions for contracts issued/sold	18.4		25.2
Aggregate changes for preexisting warranties	(0.1)		0.3
Foreign currency translation	(0.8)		0.3


Other	(1.7)		1.3
Balance at end of period	$	149.9	$	154.4

Extended Product Warranties

The following activity related to deferred revenue for extended product warranty contracts was recorded in Accrued expenses and Other long-term liabilities during the three months ended March 30, 2024 and April 1, 2023:


(in millions)	March 30, 2024		April 1, 2023
Balance at beginning of period	$	127.2	$	112.5
Extended warranty contracts sold	9.6		8.9
Revenue recognized on existing extended warranty contracts	(7.3)		(6.3)
Foreign currency translation	(0.2)		—
Other	(0.1)		(0.1)
Balance at end of period	$	129.2	$	115.0

Note 8 – Goodwill and Other Intangibles

Changes in the Company's goodwill during the three months ended March 30, 2024 and April 1, 2023, by segment, are summarized below:


(in millions)	Propulsion		Engine P&A		Navico Group		Boat		Total
December 31, 2023	$	54.1	$	233.0	$	599.7	$	143.9	$	1,030.7

Adjustments	(1.1)		(0.2)		(3.0)		(0.1)		(4.4)
March 30, 2024	$	53.0	$	232.8	$	596.7	$	143.8	$	1,026.3

December 31, 2022	$	14.0	$	232.8	$	595.8	$	125.0	$	967.6

Adjustments	—		—		1.7		4.7		6.4
April 1, 2023	$	14.0	$	232.8	$	597.5	$	129.7	$	974.0

Adjustments in both periods include the effect of foreign currency translation on goodwill denominated in currencies other than the U.S. dollar. Adjustments during the three months ended March 30, 2024 also include immaterial purchase accounting adjustments related to the 2023 Fliteboard and Freedom Boat Club acquisitions. Adjustments during the three months ended April 1, 2023 also include $4.5 million of purchase accounting adjustments from 2022 Freedom Boat Club acquisitions, related to boat fleet fair market value adjustments. There was no accumulated impairment loss on goodwill as of March 30, 2024, December 31, 2023 or April 1, 2023.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company's intangible assets, included within Other intangibles, net on the Condensed Consolidated Balance Sheets as of March 30, 2024, December 31, 2023 and April 1, 2023, are summarized by intangible asset type below:


	March 30, 2024				December 31, 2023				April 1, 2023
(in millions)	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Intangible assets:
Customer relationships	$	905.9	$	(439.6)	$	907.3	$	(428.6)	$	897.7	$	(397.5)
Trade names	310.3		—		311.5		—		305.5		—
Developed technology	167.2		(27.1)		167.5		(24.3)		160.0		(16.0)
Other	98.0		(50.4)		91.2		(46.6)		79.2		(36.5)
Total	$	1,481.4	$	(517.1)	$	1,477.5	$	(499.5)	$	1,442.4	$	(450.0)

Other intangible assets primarily consist of software, patents, and franchise agreements. Gross amounts and related accumulated amortization amounts include adjustments related to the impact of foreign currency translation. Aggregate amortization expense for intangibles was $17.9 million and $16.6 million for three months ended March 30, 2024 and April 1, 2023, respectively.

The Company tests its intangible assets for impairment during the fourth quarter of each year, or whenever a change in events and circumstances (triggering event) occurs that indicates the fair value of intangible assets may be below their carrying values. The Company did not record any impairment charges during the three months ended March 30, 2024 or April 1, 2023.

Note 9 – Segment Information

Information about the operations of Brunswick's reportable segments is set forth below:


	Net Sales				Operating Earnings (Loss)

	Three Months Ended				Three Months Ended
(in millions)	March 30, 2024		April 1, 2023		March 30, 2024		April 1, 2023
Propulsion	$	578.2	$	751.6	$	82.8	$	151.1
Engine P&A	262.4		288.6		33.2		47.8
Navico Group	210.9		277.3		(2.4)		12.8
Boat	425.7		575.2		29.4		57.8
Corporate/Other	—		—		(32.4)		(33.4)
Segment Eliminations	(112.2)		(149.1)		—		—
Total	$	1,365.0	$	1,743.6	$	110.6	$	236.1


	Total Assets
(in millions)	March 30, 2024		December 31, 2023		April 1, 2023
Propulsion	$	1,758.8	$	1,648.7	$	1,634.0
Engine P&A	927.1		855.6		940.6
Navico Group	2,043.0		2,074.3		2,152.7
Boat	922.0