Delaware
|
36-0848180
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
|
1
N. Field Ct., Lake Forest,
Illinois
|
60045-4811
|
(Address
of principal executive
offices)
|
(Zip
Code)
|
(847)
735-4700
|
(Registrant’s
telephone number, including
area code)
|
Page
|
||
Part
I.
|
Financial
Information
|
|
Item
1.
|
Financial
Statements
|
|
Consolidated
Statements of Income for the Three Month and
Nine
Month periods Ended September 30, 2005 and 2004
(unaudited)
|
3
|
|
Consolidated
Balance Sheets as of September 30, 2005 (unaudited), December 31,
2004 and
September 30, 2004 (unaudited)
|
4
|
|
Condensed
Consolidated Statements of Cash Flows as of the
Nine
Months Ended September 30, 2005 and 2004 (unaudited)
|
6
|
|
Notes
to Consolidated Financial Statements (unaudited)
|
7
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Result of
Operations
|
20
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
32
|
Item
4.
|
Controls
and Procedures
|
33
|
Part
II.
|
Other
Information
|
|
Item
1.
|
Legal
Proceedings
|
34
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
35
|
Item
6.
|
Exhibits
|
37
|
Part
I. Financial Information
|
|||||||||||||
Item
1 - Financial Statements
|
|||||||||||||
Brunswick
Corporation
|
|||||||||||||
Consolidated
Statements of Income
|
|||||||||||||
for
the periods ended September 30
|
|||||||||||||
(in
millions, except per share data)
|
|||||||||||||
(unaudited)
|
|||||||||||||
Three
Months ended
|
Nine
Months ended
|
||||||||||||
September
30
|
September
30
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Net
sales
|
$
|
1,434.6
|
$
|
1,273.2
|
$
|
4,434.3
|
$
|
3,895.5
|
|||||
Cost
of sales
|
1,101.6
|
956.2
|
3,346.8
|
2,913.4
|
|||||||||
Selling,
general and administrative expense
|
191.3
|
186.5
|
604.7
|
571.5
|
|||||||||
Research
and development expense
|
35.8
|
31.2
|
106.1
|
93.3
|
|||||||||
Operating
earnings
|
105.9
|
99.3
|
376.7
|
317.3
|
|||||||||
Interest
expense
|
(13.5
|
)
|
(12.1
|
)
|
(39.6
|
)
|
(32.6
|
)
|
|||||
Investment
sale gain
|
-
|
-
|
38.7
|
-
|
|||||||||
Other
income
|
7.0
|
4.4
|
23.0
|
13.0
|
|||||||||
Earnings
before income taxes
|
99.4
|
91.6
|
398.8
|
297.7
|
|||||||||
Income
tax provision
|
11.0
|
18.7
|
101.7
|
86.7
|
|||||||||
Net
earnings
|
$
|
88.4
|
$
|
72.9
|
$
|
297.1
|
$
|
211.0
|
|||||
Earnings
per common share:
|
|||||||||||||
Basic
|
$
|
0.90
|
$
|
0.76
|
$
|
3.03
|
$
|
2.22
|
|||||
Diluted
|
0.89
|
0.75
|
$
|
3.00
|
$
|
2.18
|
|||||||
Weighted
average number of shares used for computation of:
|
|||||||||||||
Basic
earnings per share
|
98.1
|
96.2
|
97.9
|
95.1
|
|||||||||
Diluted
earnings per share
|
99.3
|
97.7
|
99.2
|
96.8
|
|||||||||
.
|
|||||||||||||
The
notes are an integral part of these consolidated
statements.
|
Brunswick
Corporation
|
||||||||||
Consolidated
Balance Sheets
|
||||||||||
as
of September 30, 2005, December 31, 2004, and September 30,
2004
|
||||||||||
(in
millions)
|
||||||||||
September
30,
|
December
31,
|
September
30,
|
||||||||
2005
|
2004
|
2004
|
||||||||
(unaudited)
|
(unaudited)
|
|||||||||
Assets
|
||||||||||
Current
assets
|
||||||||||
Cash
and cash equivalents, at cost,
|
||||||||||
which
approximates market
|
$
|
535.9
|
$
|
499.8
|
$
|
493.1
|
||||
Accounts
and notes receivable,
|
||||||||||
less
allowances of $25.8, $29.0 and $30.2
|
488.1
|
463.2
|
432.0
|
|||||||
Inventories
|
||||||||||
Finished
goods
|
443.3
|
389.9
|
386.5
|
|||||||
Work-in-process
|
314.6
|
260.5
|
260.3
|
|||||||
Raw
materials
|
168.3
|
136.4
|
130.0
|
|||||||
Net
inventories
|
926.2
|
786.8
|
776.8
|
|||||||
Deferred
income taxes
|
293.7
|
292.7
|
314.9
|
|||||||
Prepaid
expenses and other
|
54.6
|
56.2
|
55.9
|
|||||||
Current
assets
|
2,298.5
|
2,098.7
|
2,072.7
|
|||||||
Property
|
||||||||||
Land
|
74.9
|
68.8
|
70.2
|
|||||||
Buildings
and improvements
|
587.4
|
548.5
|
534.2
|
|||||||
Equipment
|
1,106.9
|
1,071.8
|
1,068.2
|
|||||||
Total
land, buildings and improvements and equipment
|
1,769.2
|
1,689.1
|
1,672.6
|
|||||||
Accumulated
depreciation
|
(979.1
|
)
|
(942.8
|
)
|
(946.9
|
)
|
||||
Net
land, buildings and improvements and equipment
|
790.1
|
746.3
|
725.7
|
|||||||
Unamortized
product tooling costs
|
144.1
|
130.1
|
126.7
|
|||||||
Net
property
|
934.2
|
876.4
|
852.4
|
|||||||
Other
assets
|
||||||||||
Goodwill
|
648.9
|
624.8
|
601.2
|
|||||||
Other
intangibles
|
377.2
|
328.0
|
293.6
|
|||||||
Investments
|
123.4
|
182.9
|
157.4
|
|||||||
Other
long-term assets
|
236.3
|
235.6
|
224.7
|
|||||||
Other
assets
|
1,385.8
|
1,371.3
|
1,276.9
|
|||||||
Total
assets
|
$
|
4,618.5
|
$
|
4,346.4
|
$
|
4,202.0
|
||||
The
notes are an integral part of these consolidated
statements.
|
Brunswick
Corporation
|
||||||||||
Consolidated
Balance Sheets
|
||||||||||
as
of September 30, 2005, December 31, 2004, and September 30,
2004
|
||||||||||
(in
millions, except share data)
|
||||||||||
September
30,
|
December
31,
|
September
30,
|
||||||||
2005
|
2004
|
2004
|
||||||||
(unaudited)
|
(unaudited)
|
|||||||||
Liabilities
and shareholders' equity
|
||||||||||
Current
liabilities
|
||||||||||
Short-term
debt, including
|
||||||||||
current
maturities of long-term debt
|
$
|
5.8
|
$
|
10.7
|
$
|
13.5
|
||||
Accounts
payable
|
447.5
|
387.9
|
341.1
|
|||||||
Accrued
expenses
|
803.0
|
855.2
|
838.3
|
|||||||
Current
liabilities
|
1,256.3
|
1,253.8
|
1,192.9
|
|||||||
Long-term
liabilities
|
||||||||||
Debt
|
726.8
|
728.4
|
729.8
|
|||||||
Deferred
income taxes
|
153.0
|
180.3
|
162.8
|
|||||||
Postretirement
and postemployment benefits
|
233.8
|
236.3
|
220.8
|
|||||||
Other
|
254.8
|
235.3
|
220.5
|
|||||||
Long-term
liabilities
|
1,368.4
|
1,380.3
|
1,333.9
|
|||||||
Shareholders'
equity
|
||||||||||
Common
stock; authorized: 200,000,000 shares,
|
||||||||||
$0.75
par value; issued: 102,538,000 shares
|
76.9
|
76.9
|
76.9
|
|||||||
Additional
paid-in capital
|
369.8
|
358.8
|
345.6
|
|||||||
Retained
earnings
|
1,710.8
|
1,413.7
|
1,413.0
|
|||||||
Treasury
stock, at cost:
|
||||||||||
5,485,000,
5,709,000 and 6,414,000 shares
|
(78.7
|
)
|
(76.5
|
)
|
(91.9
|
)
|
||||
Unamortized
compensation and other
|
(6.4
|
)
|
(6.3
|
)
|
(5.7
|
)
|
||||
Accumulated
other comprehensive loss
|
(78.6
|
)
|
(54.3
|
)
|
(62.7
|
)
|
||||
Shareholders'
equity
|
1,993.8
|
1,712.3
|
1,675.2
|
|||||||
Total
liabilities and shareholders' equity
|
$
|
4,618.5
|
$
|
4,346.4
|
$
|
4,202.0
|
||||
The
notes are an integral part of these consolidated
statements.
|
Brunswick
Corporation
|
||||||||||
Condensed
Consolidated Statement of Cash Flows
|
||||||||||
For
the nine months ended September 30,
|
||||||||||
(in
millions)
|
||||||||||
(unaudited)
|
||||||||||
2005
|
2004
|
|||||||||
Cash
flows from operating activities
|
||||||||||
Net
earnings
|
$
|
297.1
|
$
|
211.0
|
||||||
Depreciation
and amortization
|
118.4
|
117.5
|
||||||||
Changes
in noncash current assets and current liabilities
|
(135.6
|
)
|
(122.2
|
)
|
||||||
Income
taxes
|
4.5
|
35.9
|
||||||||
Other,
net
|
(31.7
|
)
|
7.9
|
|||||||
Net
cash provided by operating activities
|
252.7
|
250.1
|
||||||||
Cash
flows from investing activities
|
||||||||||
Capital
expenditures
|
(157.8
|
)
|
(114.0
|
)
|
||||||
Acquisitions
of businesses, net of cash and debt acquired
|
(130.2
|
)
|
(213.9
|
)
|
||||||
Investments
|
2.5
|
(2.6
|
)
|
|||||||
Proceeds
from investment sale
|
57.9
|
-
|
||||||||
Proceeds
on the sale of property, plant and equipment
|
13.4
|
6.8
|
||||||||
Other,
net
|
(1.7
|
)
|
(2.1
|
)
|
||||||
Net
cash used for investing activities
|
(215.9
|
)
|
(325.8
|
)
|
||||||
Cash
flows from financing activities
|
||||||||||
Net
issuances (repayments) of commercial paper and other
|
||||||||||
short-term
debt
|
4.4
|
(5.1
|
)
|
|||||||
Net
proceeds from issuances of long-term debt
|
-
|
150.1
|
||||||||
Payments
of long-term debt including current maturities
|
(3.8
|
)
|
(6.0
|
)
|
||||||
Stock
repurchases
|
(15.7
|
)
|
-
|
|||||||
Stock
options exercised
|
14.4
|
83.9
|
||||||||
Net
cash provided by (used for) financing activities
|
(0.7
|
)
|
222.9
|
|||||||
Net
increase in cash and cash equivalents
|
36.1
|
147.2
|
||||||||
Cash
and cash equivalents at January 1
|
499.8
|
345.9
|
||||||||
Cash
and cash equivalents at September 30
|
$
|
535.9
|
$
|
493.1
|
||||||
Three
Months ended
September
30
|
Nine
Months ended
September
30
|
||||||||||||
(in
millions, except per share data)
|
2005
|
2004
|
2005
|
2004
|
|||||||||
Net
Earnings:
|
|||||||||||||
As
reported
|
$
|
88.4
|
$
|
72.9
|
$
|
297.1
|
$
|
211.0
|
|||||
Add:
Stock-based employee compensation included in
reported
earnings, net of tax
|
1.0
|
1.9
|
3.2
|
4.7
|
|||||||||
Less:
Total stock-based employee compensation expense determined
under fair value-based method for all
awards,
net of tax
|
1.7
|
3.2
|
9.0
|
8.9
|
|||||||||
Pro
forma
|
$
|
87.7
|
$
|
71.6
|
$
|
291.3
|
$
|
206.8
|
|||||
Basic
earnings per common share:
|
|||||||||||||
As
reported
|
$
|
0.90
|
$
|
0.76
|
$
|
3.03
|
$
|
2.22
|
|||||
Pro
forma
|
0.89
|
0.75
|
2.98
|
2.18
|
|||||||||
Diluted
earnings per common share:
|
|||||||||||||
As
reported
|
$
|
0.89
|
$
|
0.75
|
$
|
3.00
|
$
|
2.18
|
|||||
Pro
forma
|
0.88
|
0.74
|
2.94
|
2.14
|
Three
Months ended
September
30
|
Nine
Months ended
September
30
|
||||||||||||
(in
millions, except per share data)
|
2005
|
2004
|
2005
|
2004
|
|||||||||
Net
earnings
|
$
|
88.4
|
$
|
72.9
|
$
|
297.1
|
$
|
211.0
|
|||||
Average
outstanding shares -
basic
|
98.1
|
96.2
|
97.9
|
95.1
|
|||||||||
Common
stock equivalents
|
1.2
|
1.5
|
1.3
|
1.7
|
|||||||||
Average
outstanding shares - diluted
|
99.3
|
97.7
|
99.2
|
96.8
|
|||||||||
Basic
earnings per share
|
$
|
0.90
|
$
|
0.76
|
$
|
3.03
|
$
|
2.22
|
|||||
Diluted
earnings per share
|
$
|
0.89
|
$
|
0.75
|
$
|
3.00
|
$
|
2.18
|
(in
millions)
|
|||||||
|
2005
|
2004
|
|||||
Balance
at January 1
|
$
|
190.5
|
$
|
177.9
|
|||
Provisions
for contracts issued
|
85.4
|
91.1
|
|||||
Payments
made
|
(88.8
|
)
|
(73.4
|
)
|
|||
Aggregate
changes for pre-existing warranties
|
0.7
|
(0.7
|
)
|
||||
Balance
at September 30
|
$
|
187.8
|
$
|
194.9
|
Net
Sales
|
Operating
Earnings
|
||||||||||||
(in
millions)
|
|||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Marine
Engine
|
$
|
643.4
|
$
|
575.5
|
$
|
64.9
|
$
|
70.7
|
|||||
Boat
|
682.7
|
567.3
|
38.0
|
36.1
|
|||||||||
Marine
eliminations
|
(130.1
|
)
|
(107.1
|
)
|
--
|
--
|
|||||||
Total
Marine
|
1,196.0
|
1,035.7
|
102.9
|
106.8
|
|||||||||
Fitness
|
127.4
|
132.2
|
14.2
|
8.4
|
|||||||||
Bowling
& Billiards
|
111.9
|
106.6
|
5.7
|
4.0
|
|||||||||
Eliminations
|
(0.7
|
)
|
(1.3
|
)
|
--
|
--
|
|||||||
Corporate/Other
|
--
|
--
|
(16.9
|
)
|
(19.9
|
)
|
|||||||
Total
|
$
|
1,434.6
|
$
|
1,273.2
|
$
|
105.9
|
$
|
99.3
|
Net
Sales
|
Operating
Earnings
|
||||||||||||
(in
millions)
|
|||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Marine
Engine
|
$
|
2,004.5
|
$
|
1,768.6
|
$
|
223.9
|
$
|
208.9
|
|||||
Boat
|
2,102.4
|
1,709.2
|
162.3
|
125.1
|
|||||||||
Marine
eliminations
|
(383.0
|
)
|
(287.2
|
)
|
--
|
--
|
|||||||
Total
Marine
|
3,723.9
|
3,190.6
|
386.2
|
334.0
|
|||||||||
Fitness
|
375.3
|
385.1
|
25.7
|
20.5
|
|||||||||
Bowling
& Billiards
|
338.3
|
322.6
|
22.0
|
21.7
|
|||||||||
Eliminations
|
(3.2
|
)
|
(2.8
|
)
|
--
|
--
|
|||||||
Corporate/Other
|
--
|
--
|
(57.2
|
)
|
(58.9
|
)
|
|||||||
Total
|
$
|
4,434.3
|
$
|
3,895.5
|
$
|
376.7
|
$
|
317.3
|
(in
millions)
|
|||||||||||||
Date
|
Description
|
Net
Cash
Consideration
|
Other
Consideration
|
Total
Consideration
|
|||||||||
2/07/05
|
Benrock,
Inc.
|
$
|
4.2
|
$
|
--
|
$
|
4.2
|
||||||
2/28/05
|
Albemarle
Boats, Inc.
|
9.2
|
--
|
9.2
|
|||||||||
4/21/05
|
Sea
Pro, Sea Boss and Palmetto boats
|
1.0
|
--
|
1.0
|
|||||||||
4/29/05
|
MX
Marine, Inc.
|
2.4
|
--
|
2.4
|
|||||||||
5/27/05
|
Triton
Boat Company, L.P.
|
58.4
|
4.4
|
62.8
|
|||||||||
6/20/05
|
Supra-Industria
Textil, Lda. (51 percent)
|
|
7.8
|
0.9
|
8.7
|
||||||||
6/27/05
|
Marine
Innovations Warranty Corporation
|
2.3
|
--
|
2.3
|
|||||||||
7/7/05
|
Kellogg
Marine, Inc.
|
39.7
|
--
|
39.7
|
|||||||||
9/16/05
|
Harris
Kayot Marine, LLC
|
4.8
|
--
|
4.8
|
|||||||||
|
Other
|
0.4
|
--
|
0.4
|
|||||||||
$
|
130.2
|
$
|
5.3
|
$
|
135.5
|
(in
millions)
|
|||||||||||||
Date
|
Description
|
Net
Cash
Consideration
|
Other
Consideration
|
Total
Consideration
|
|||||||||
3/19/04
|
Vulcan-Bowling
Pin Company and
Vulcan-Brunswick
Bowling Pin Company
|
$
|
1.1
|
$
|
--
|
$
|
1.1
|
||||||
4/01/04
|
Lowe,
Lund, Crestliner
|
191.0
|
--
|
191.0
|
|||||||||
4/01/04
|
Marine
Innovations Warranty Corporation
|
5.3
|
--
|
5.3
|
|||||||||
4/30/04
|
Mainstar
Computer Systems Ltd.
|
0.1
|
--
|
0.1
|
|||||||||
6/01/04
|
Navman
NZ Limited (30 percent)
|
|
16.4
|
16.6
|
33.0
|
||||||||
$
|
213.9
|
$
|
16.6
|
$
|
230.5
|
Three
Months ended
September
30
|
Nine
Months ended
September
30
|
||||||||||||
(in
millions)
|
2005
|
2004
|
2005
|
2004
|
|||||||||
Net
earnings
|
$
|
88.4
|
$
|
72.9
|
$
|
297.1
|
$
|
211.0
|
|||||
Other
comprehensive income:
|
|||||||||||||
Foreign
currency cumulative translation
adjustment
|
(1.1
|
)
|
2.9
|
(15.1
|
)
|
2.7
|
|||||||
Net
change in unrealized gains and losses
on
investments
|
(0.3
|
)
|
(2.4
|
)
|
(23.2
|
)
|
5.0
|
||||||
Net
change in accumulated unrealized
derivative
gains and losses
|
2.0
|
(2.4
|
)
|
14.0
|
1.8
|
||||||||
Total
other comprehensive income (loss)
|
0.6
|
(1.9
|
)
|
(24.3
|
)
|
9.5
|
|||||||
Comprehensive
income
|
$
|
89.0
|
$
|
71.0
|
$
|
272.8
|
$
|
220.5
|
Three
Months ended
September
30
|
Nine
Months ended
September
30
|
||||||||||||
(in
millions)
|
2005
|
2004
|
2005
|
2004
|
|||||||||
Receivables
sold
|
$
|
221.6
|
$
|
218.8
|
$
|
710.6
|
$
|
724.5
|
|||||
Discounts
|
1.6
|
1.9
|
5.3
|
5.0
|
|||||||||
Cash
received
|
$
|
220.0
|
$
|
216.9
|
$
|
705.3
|
$
|
719.5
|
Other
|
|||||||||||||
Pension
Benefits
|
Postretirement
Benefits
|
||||||||||||
(in
millions)
|
2005
|
2004
|
2005
|
2004
|
|||||||||
Service
cost
|
$
|
4.6
|
$
|
4.3
|
$
|
0.7
|
$
|
0.6
|
|||||
Interest
cost
|
14.6
|
14.3
|
1.4
|
1.4
|
|||||||||
Expected
return on plan assets
|
(18.2
|
)
|
(16.5
|
)
|
--
|
--
|
|||||||
Amortization
of prior service costs
|
1.8
|
1.5
|
(0.5
|
)
|
(0.5
|
)
|
|||||||
Amortization
of net actuarial loss
|
3.5
|
3.4
|
0.2
|
0.1
|
|||||||||
Net
pension and other benefit cost
|
$
|
6.3
|
$
|
7.0
|
$
|
1.8
|
$
|
1.6
|
Other
|
|||||||||||||
Pension
Benefits
|
Postretirement
Benefits
|
||||||||||||
(in
millions)
|
2005
|
2004
|
2005
|
2004
|
|||||||||
Service
cost
|
$
|
14.0
|
$
|
13.0
|
$
|
2.0
|
$
|
1.8
|
|||||
Interest
cost
|
43.8
|
42.7
|
4.3
|
4.3
|
|||||||||
Expected
return on plan assets
|
(54.5
|
)
|
(49.5
|
)
|
--
|
--
|
|||||||
Amortization
of prior service costs
|
5.5
|
4.5
|
(1.5
|
)
|
(1.6
|
)
|
|||||||
Amortization
of net actuarial loss
|
10.1
|
10.1
|
0.6
|
0.5
|
|||||||||
Curtailment
loss
|
0.8
|
--
|
--
|
--
|
|||||||||
Net
pension and other benefit cost
|
$
|
19.7
|
$
|
20.8
|
$
|
5.4
|
$
|
5.0
|
Date
|
Description
|
Segment
|
||
4/01/04
|
Lowe,
Lund, Crestliner
|
Boat
|
||
12/31/04
|
Sea
Pro, Sea Boss and Palmetto
|
Boat
|
||
2/28/05
|
Albemarle
Boats, Inc. (Albemarle)
|
Boat
|
||
5/27/05
|
Triton
Boat Company, L.P. (Triton)
|
Boat
|
||
6/20/05
|
Supra-Industria
Textil, Lda. (Valiant)
|
Marine
Engine
|
||
7/7/05
|
Kellogg
Marine, Inc. (Kellogg)
|
Boat
|
Increase/(Decrease)
|
|||||||||||||
vs.
2004
|
|||||||||||||
(in
millions)
|
2005
|
2004
|
$
|
%
|
|||||||||
Net
sales
|
$
|
1,434.6
|
$
|
1,273.2
|
$
|
161.4
|
12.7
|
%
|
|||||
Gross
margin (A)
|
$
|
333.0
|
$
|
317.0
|
$
|
16.0
|
5.0
|
%
|
|||||
Operating
earnings
|
$
|
105.9
|
$
|
99.3
|
$
|
6.6
|
6.6
|
%
|
|||||
Net
earnings
|
$
|
88.4
|
$
|
72.9
|
$
|
15.5
|
21.3
|
%
|
|||||
Diluted
earnings per share
|
$
|
0.89
|
$
|
0.75
|
$
|
0.14
|
18.7
|
%
|
|||||
Expressed
as a percentage of net sales (B):
|
|||||||||||||
Gross
margin
|
23.2
|
%
|
24.9
|
%
|
(170)
bpts
|
||||||||
Selling,
general and administrative expense
|
13.3
|
%
|
14.6
|
%
|
(130)
bpts
|
||||||||
Operating
margin
|
7.4
|
%
|
7.8
|
%
|
(40)
bpts
|
||||||||
bpts=basis
points
|
|||||||||||||
(A)
|
Gross margin is defined as Net sales less Cost of sales as presented in the Consolidated Statements of Income. |
(B)
|
Percentages are determined by using the following numerators expressed as a percentage of Net sales: Gross margin as defined in (A), Selling, general and administrative expense and Operating earnings as presented in the Consolidated Statements of Income. |
Increase/(Decrease)
|
|||||||||||||
vs.
2004
|
|||||||||||||
(in
millions)
|
2005
|
2004
|
$
|
%
|
|||||||||
Net
sales
|
$
|
4,434.3
|
$
|
3,895.5
|
$
|
538.8
|
13.8
|
%
|
|||||
Gross
margin (A)
|
$
|
1,087.5
|
$
|
982.1
|
$
|
105.4
|
10.7
|
%
|
|||||
Operating
earnings
|
$
|
376.7
|
$
|
317.3
|
$
|
59.4
|
18.7
|
%
|
|||||
Net
earnings
|
$
|
297.1
|
$
|
211.0
|
$
|
86.1
|
40.8
|
%
|
|||||
Diluted
earnings per share
|
$
|
3.00
|
$
|
2.18
|
$
|
0.82
|
37.6
|
%
|
|||||
Expressed
as a percentage of net sales (B):
|
|||||||||||||
Gross
margin
|
24.5
|
%
|
25.2
|
%
|
(70)
bpts
|
||||||||
Selling,
general and administrative expense
|
13.6
|
%
|
14.7
|
%
|
(110)
bpts
|
||||||||
Operating
margin
|
8.5
|
%
|
8.1
|
%
|
40
bpts
|
||||||||
bpts=basis
points
|
|||||||||||||
(A)
|
Gross margin is defined as Net sales less Cost of sales as presented in the Consolidated Statements of Income. |
(B)
|
Percentages are determined by using the following numerators expressed as a percentage of Net sales: Gross margin as defined in (A), Selling, general and administrative expense and Operating earnings as presented in the Consolidated Statements of Income. |
Increase/(Decrease)
vs.
2004
|
|||||||||||||
(in
millions)
|
2005
|
2004
|
$
|
%
|
|||||||||
Net
sales
|
$
|
643.4
|
$
|
575.5
|
$
|
67.9
|
11.8
|
%
|
|||||
Operating
earnings
|
$
|
64.9
|
$
|
70.7
|
$
|
(5.8
|
)
|
(8.2
|
)%
|
||||
Operating
margin
|
10.1
|
%
|
12.3
|
%
|
(220)
bpts
|
||||||||
Capital
expenditures
|
$
|
31.2
|
$
|
19.6
|
$
|
11.6
|
59.2
|
%
|
|||||
bpts=basis
points
|
Increase/(Decrease)
vs.
2004
|
|||||||||||||
(in
millions)
|
2005
|
2004
|
$
|
%
|
|||||||||
Net
sales
|
$
|
2,004.5
|
$
|
1,768.6
|
$
|
235.9
|
13.3
|
%
|
|||||
Operating
earnings
|
$
|
223.9
|
$
|
208.9
|
$
|
15.0
|
7.2
|
%
|
|||||
Operating
margin
|
11.2
|
%
|
11.8
|
%
|
(60)
bpts
|
||||||||
Capital
expenditures
|
$
|
66.6
|
$
|
48.5
|
$
|
18.1
|
37.3
|
%
|
|||||
bpts=basis
points
|
Increase/(Decrease)
vs.
2004
|
|||||||||||||
(in
millions)
|
2005
|
2004
|
$
|
%
|
|||||||||
Net
sales
|
$
|
682.7
|
$
|
567.3
|
$
|
115.4
|
20.3
|
%
|
|||||
Operating
earnings
|
$
|
38.0
|
$
|
36.1
|
$
|
1.9
|
5.3
|
%
|
|||||
Operating
margin
|
5.6
|
%
|
6.4
|
%
|
(80)
bpts
|
||||||||
Capital
expenditures
|
$
|
26.5
|
$
|
13.3
|
$
|
13.2
|
99.3
|
%
|
|||||
bpts=basis
points
|
Increase
vs. 2004
|
|||||||||||||
(in
millions)
|
2005
|
2004
|
$
|
%
|
|||||||||
Net
sales
|
$
|
2,102.4
|
$
|
1,709.2
|
$
|
393.2
|
23.0
|
%
|
|||||
Operating
earnings
|
$
|
162.3
|
$
|
125.1
|
$
|
37.2
|
29.7
|
%
|
|||||
Operating
margin
|
7.7
|
%
|
7.3
|
%
|
40
bpts
|
||||||||
Capital
expenditures
|
$
|
53.2
|
$
|
36.8
|
$
|
16.4
|
44.6
|
%
|
|||||
bpts=basis
points
|
Increase/(Decrease)
vs.
2004
|
|||||||||||||
(in
millions)
|
2005
|
2004
|
$
|
%
|
|||||||||
Net
sales
|
$
|
127.4
|
$
|
132.2
|
$
|
(4.8
|
)
|
(3.6
|
)%
|
||||
Operating
earnings
|
$
|
14.2
|
$
|
8.4
|
$
|
5.8
|
69.0
|
%
|
|||||
Operating
margin
|
11.1
|
%
|
6.4
|
%
|
470
bpts
|
||||||||
Capital
expenditures
|
$
|
2.7
|
$
|
2.7
|
$
|
--
|
--
|
||||||
bpts=basis
points
|
Increase/(Decrease)
vs.
2004
|
|||||||||||||
(in
millions)
|
2005
|
2004
|
$
|
%
|
|||||||||
Net
sales
|
$
|
375.3
|
$
|
385.1
|
$
|
(9.8
|
)
|
(2.5
|
)%
|
||||
Operating
earnings
|
$
|
25.7
|
$
|
20.5
|
$
|
5.2
|
25.4
|
%
|
|||||
Operating
margin
|
6.8
|
%
|
5.3
|
%
|
150
bpts
|
||||||||
Capital
expenditures
|
$
|
8.3
|
$
|
6.3
|
$
|
2.0
|
31.7
|
%
|
|||||
bpts=basis
points
|
Increase
vs. 2004
|
|||||||||||||
(in
millions)
|
2005
|
2004
|
$
|
%
|
|||||||||
Net
sales
|
$
|
111.9
|
$
|
106.6
|
$
|
5.3
|
5.0
|
%
|
|||||
Operating
earnings
|
$
|
5.7
|
$
|
4.0
|
$
|
1.7
|
42.5
|
%
|
|||||
Operating
margin
|
5.1
|
%
|
3.8
|
%
|
130
bpts
|
||||||||
Capital
expenditures
|
$
|
10.1
|
$
|
5.9
|
$
|
4.2
|
71.2
|
%
|
|||||
bpts=basis
points
|
Increase/(Decrease)
vs.
2004
|
|||||||||||||
(in
millions)
|
2005
|
2004
|
$
|
%
|
|||||||||
Net
sales
|
$
|
338.3
|
$
|
322.6
|
$
|
15.7
|
4.9
|
%
|
|||||
Operating
earnings
|
$
|
22.0
|
$
|
21.7
|
$
|
0.3
|
1.4
|
%
|
|||||
Operating
margin
|
6.5
|
%
|
6.7
|
%
|
(20)
bpts
|
||||||||
Capital
expenditures
|
$
|
24.0
|
$
|
21.4
|
$
|
2.6
|
12.1
|
%
|
|||||
bpts=basis
points
|
(in
millions)
|
2005
|
2004
|
|||||
Net
cash provided by operating activities
|
$
|
252.7
|
$
|
250.1
|
|||
Net
cash provided by (used for):
|
|||||||
Capital
expenditures
|
(157.8
|
)
|
(114.0
|
)
|
|||
Pretax
proceeds from investment sale
|
57.9
|
--
|
|||||
Other,
net
|
11.7
|
4.7
|
|||||
Free
cash flow *
|
$
|
164.5
|
$
|
140.8
|
*
|
The Company defines Free cash flow as cash flow from operating and investing activities (excluding cash used for acquisitions and investments) excluding financing activities. Free cash flow is not intended as an alternative measure of cash flow from operations, as determined in accordance with generally accepted accounting principles (GAAP) in the United States. The Company uses this financial measure, both in presenting its results to shareholders and the investment community, and in its internal evaluation and management of its businesses. Management believes that this financial measure, and the information it provides, is useful to investors because it permits investors to view the Company’s performance using the same tool that management uses to gauge progress in achieving its goals. Management believes that the non-GAAP financial measure “Free cash flow” is also useful to investors because it is an indication of cash flow that may be available to fund further investments in future growth initiatives. |
Issuer
Purchases of Equity Securities
|
||||||||
Total
Number
of
Shares
(or
Units)
Purchased(A)
|
Average
Price
Paid
per
share
(or
unit)
|
Total
Number of
Shares
(or Units)
Purchased
as Part
of
Publicly
Announced
Plans
or
Programs
|
Maximum
Number (or
Approximate
Dollar
Value)
that May Yet
Be
Purchased Under
the
Plans or Programs
(amounts
in thousands)
|
|||||
Period
|
||||||||
7/1/05
- 7/31/05
|
3,048
|
$
46.47
|
--
|
$
200,000
|
||||
8/1/05
- 8/31/05
|
219,800
|
44.07
|
219,800
|
190,308
|
||||
9/1/05
- 9/30/05 (B)
|
156,500
|
38.86
|
155,200
|
184,275
|
||||
(A)
|
In addition to shares owned by employees and delivered to the Company by those employees in payment for the exercise price of stock options, on May 4, 2005, the Company adopted a program pursuant to which the Company may make such purchases, as described in Part I. Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
(B)
|
The amounts presented for the September 2005 period above do not include 600,000 shares that the Company committed to purchase under its program that settled in October 2005, for a total of cost of $22.5 million, at an average price of $37.53 per share. |
(a) | Exhibits |
31.1 | Certification of CEO Pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of CFO Pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification of CEO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2 |
Certification
of CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section
906 of the Sarbanes-Oxley Act of
2002
|
BRUNSWICK
CORPORATION
(Registrant)
|
||
November 4, 2005 | By: | /s/ ALAN L. LOWE |
Alan L. Lowe | ||
Vice President and Controller |