Brunswick Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Leases

Leases

12 Months Ended

Dec. 31, 2015

Operating Leases. The Company has various lease agreements for offices, branches, factories, distribution and service facilities and certain personal property. The longest of these obligations extends through 2032. Most leases contain renewal options and escalation clauses, and some contain purchase options or contingent rentals.

No leases contain restrictions on the Company's activities concerning dividends or incurring additional debt. Rent expense consisted of the following:



(in millions)	2015			2014			2013
Basic expense	$	31.6		$	27.8		$	30.5
Contingent expense	2.8			1.9			2.1
Sublease income	(0.3		)	(0.2		)	(0.3		)
Rent expense, net	$	34.1		$	29.5		$	32.3

Future minimum rental payments at December 31, 2015, under agreements classified as operating leases with non-cancelable terms in excess of one year, were as follows:



(in millions)
2016	$	33.4
2017	29.8
2018	22.7
2019	13.0
2020	9.8
Thereafter	25.2
Total (not reduced by minimum sublease income of $0.3)	$	133.9

Capital Leases. In October 2011, the Company entered into a construction contract and lease agreement for a boat manufacturing and distribution facility in Brazil. The Company was deemed to be the owner of the project as the Company funded a portion of the construction costs during the construction period. As a result, the Company is accounting for the facility lease as a capital lease. The facility was completed in 2012 and the Company began amortizing the asset through depreciation expense. In 2015, an impairment was recognized on the capital lease asset. Refer to Note 3 –Restructuring Activities for more information. The amounts recorded in the Consolidated Balance Sheets as of December 31, 2015 and 2014, were as follows:



(in millions)	2015			2014
Assets:
Buildings and improvements	$	5.3		$	8.0
Accumulated depreciation and impairment	(5.3		)	(1.9		)
Total assets	$	—		$	6.1

Liabilities:
Short-term debt	$	0.9		$	0.4
Debt	1.9			4.1
Total liabilities	$	2.8		$	4.5

The future minimum rental payments at December 31, 2015, under agreements classified as capital leases with non-cancelable terms in excess of one year, were as follows:



(in millions)
2016	$	0.5
2017	0.6
2018	0.6
2019	0.7
2020	0.7
Thereafter	1.2
Total	$	4.3