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, 2019

Leases

The Company has operating lease agreements for offices, branches, factories, distribution and service facilities and certain personal property. Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. Finance leases are not material to the Company's consolidated financial statements.

Several leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more. The exercise of lease renewal options is at our sole discretion. Certain of our lease agreements include rental payments that vary based on changes in volume activity, storage activity, or changes in the Consumer Price Index or other indices. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

A summary of the Company's lease assets and lease liabilities as of December 31, 2019 is as follows:



(in millions)	Classification	Dec 31, 2019
Lease Assets
Operating lease assets	Operating lease assets	$	83.2

Lease Liabilities
Current operating lease liabilities	Accrued expenses	18.4
Non-current operating lease liabilities	Operating lease liabilities	70.1
Total lease liabilities		$	88.5

A summary of the Company's total lease cost for the year ended December 31, 2019 is as follows:



(in millions)	Classification	Dec 31, 2019
Operating lease cost	Selling, general, and administrative expense	$	13.9
	Cost of sales	25.6
Variable lease cost	Selling, general, and administrative expense	0.5
	Cost of sales	4.4
Total lease cost ^(A)		$	44.4

(A) Includes total short-term lease cost which is immaterial.

Total lease cost was $33.6 million and $30.7 million for the years ended December 31, 2018 and December 31, 2017, respectively.

The Company's maturity analysis of its operating lease liabilities as of December 31, 2019 is as follows:



(in millions)
2020	$	22.5
2021	19.7
2022	17.8
2023	15.1
2024	11.9
Thereafter	14.4
Total lease payments	101.4
Less: Interest	(12.9		)
Present value of lease liabilities	$	88.5

The total weighted-average discount rate and remaining lease term for the Company's operating leases was 4.99 percent and 5.5 years, respectively, as of December 31, 2019. Total operating lease payments reflected in operating cash flows were $21.9 million for the year ended December 31, 2019.

The following represents the Company's future minimum rental payments at December 31, 2018 for agreements classified as operating leases under ASC 840 with non-cancelable terms in excess of one year:



(in millions)
2019	$	31.4
2020	24.5
2021	21.0
2022	14.7
2023	11.4
Thereafter	20.1
Total (not reduced by minimum sublease income of $0.1)	$	123.1