[X]
Quarterly
report pursuant to Section 13 or 15(d) of the
Securities
|
Exchange
Act of 1934
|
For
the quarterly period ended June 30, 2006
|
or
|
[ ]
Transition
Report Pursuant to Section 13 or 15(d) of the
Securities
|
Exchange
Act of 1934
|
Commission
file number 1-1043
|
Delaware
|
36-0848180
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer Identification No.)
|
1
N. Field Court, 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.
|
Consolidated
Financial Statements
|
|
Consolidated
Statements of Income for the three months and six months ended June
30,
2006 and 2005 (unaudited)
|
1
|
|
Consolidated
Balance Sheets as of June 30, 2006 (unaudited), December 31, 2005
and June
30, 2005 (unaudited)
|
2
|
|
Condensed
Consolidated Statements of Cash Flows for the six months ended June
30,
2006 and 2005 (unaudited)
|
4
|
|
Notes
to Consolidated Financial Statements (unaudited)
|
5
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
21
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
34
|
Item
4.
|
Controls
and Procedures
|
35
|
PART
II -
|
OTHER
INFORMATION
|
|
Item
1.
|
Legal
Proceedings
|
36
|
Item
1A.
|
Risk
Factors
|
36
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
37
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
37
|
Item
5.
|
Other
Information
|
38
|
Item
6.
|
Exhibits
|
38
|
BRUNSWICK
CORPORATION
|
Consolidated
Statements of Income
|
for
the three months and six months ended June 30
|
(in
millions, except per share data)
|
(unaudited)
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30
|
June
30
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Net
sales
|
$
|
1,543.1
|
$
|
1,531.6
|
$
|
2,956.4
|
$
|
2,874.1
|
|||||
Cost
of sales
|
1,188.3
|
1,145.0
|
2,288.2
|
2,166.3
|
|||||||||
Selling,
general and administrative expense
|
182.6
|
187.9
|
367.3
|
380.4
|
|||||||||
Research
and development expense
|
34.0
|
30.5
|
64.5
|
60.4
|
|||||||||
Operating
earnings
|
138.2
|
168.2
|
236.4
|
267.0
|
|||||||||
Equity
earnings
|
6.6
|
5.6
|
11.8
|
10.6
|
|||||||||
Investment
sale gain
|
-
|
-
|
-
|
38.7
|
|||||||||
Other
income (expense), net
|
(2.5
|
)
|
0.1
|
(2.7
|
)
|
(0.8
|
)
|
||||||
Earnings
before interest and income taxes
|
142.3
|
173.9
|
245.5
|
315.5
|
|||||||||
Interest
expense
|
(14.2
|
)
|
(13.1
|
)
|
(27.8
|
)
|
(26.1
|
)
|
|||||
Interest
income
|
2.4
|
3.5
|
5.4
|
6.2
|
|||||||||
Earnings
before income taxes
|
130.5
|
164.3
|
223.1
|
295.6
|
|||||||||
Income
tax provision
|
36.0
|
53.3
|
54.5
|
90.6
|
|||||||||
Net
earnings from continuing operations
|
94.5
|
111.0
|
168.6
|
205.0
|
|||||||||
Net
earnings (loss) from discontinued
operations,
net of tax
|
(11.3
|
)
|
3.1
|
(18.0
|
)
|
3.7
|
|||||||
Net
earnings
|
$
|
83.2
|
$
|
114.1
|
$
|
150.6
|
$
|
208.7
|
|||||
Earnings
per common share:
|
|||||||||||||
Basic
|
|||||||||||||
Earnings
from continuing operations
|
$
|
1.00
|
$
|
1.13
|
$
|
1.77
|
$
|
2.09
|
|||||
Earnings
(loss) from discontinued operations
|
(0.12
|
)
|
0.03
|
(0.19
|
)
|
0.04
|
|||||||
Net
earnings
|
$
|
0.88
|
$
|
1.16
|
$
|
1.58
|
$
|
2.13
|
|||||
Diluted
|
|||||||||||||
Earnings
from continuing operations
|
$
|
0.99
|
$
|
1.12
|
$
|
1.76
|
$
|
2.07
|
|||||
Earnings
(loss) from discontinued operations
|
(0.12
|
)
|
0.03
|
(0.19
|
)
|
0.04
|
|||||||
Net
earnings
|
$
|
0.87
|
$
|
1.15
|
$
|
1.57
|
$
|
2.11
|
|||||
Weighted
average shares used for
computation
of:
|
|||||||||||||
Basic
earnings per share
|
94.7
|
98.0
|
95.2
|
97.8
|
|||||||||
Diluted
earnings per share
|
95.5
|
99.2
|
96.1
|
99.1
|
|||||||||
The
Notes to Consolidated Financial Statements are an integral part of
these
consolidated statements.
|
BRUNSWICK
CORPORATION
|
Consolidated
Balance Sheets
|
as
of June 30, 2006, December 31, 2005, and June 30,
2005
|
(in
millions)
|
June
30,
|
December
31,
|
June
30,
|
||||||||
2006
|
2005
|
2005
|
||||||||
(unaudited)
|
(unaudited)
|
|||||||||
Assets
|
||||||||||
Current
assets
|
||||||||||
Cash
and cash equivalents, at cost, which
|
||||||||||
approximates
market
|
$
|
310.6
|
$
|
487.7
|
$
|
508.6
|
||||
Accounts
and notes receivable, less
|
||||||||||
allowances
of $24.4, $22.1 and $27.3
|
542.5
|
471.6
|
481.2
|
|||||||
Inventories
|
||||||||||
Finished
goods
|
393.4
|
384.3
|
397.3
|
|||||||
Work-in-process
|
338.6
|
298.5
|
305.9
|
|||||||
Raw
materials
|
141.9
|
134.1
|
140.5
|
|||||||
Net
inventories
|
873.9
|
816.9
|
843.7
|
|||||||
Deferred
income taxes
|
266.4
|
274.8
|
298.3
|
|||||||
Prepaid
expenses and other
|
64.4
|
70.3
|
54.5
|
|||||||
Current
assets held for sale
|
113.5
|
113.7
|
80.6
|
|||||||
Current
assets
|
2,171.3
|
2,235.0
|
2,266.9
|
|||||||
Property
|
||||||||||
Land
|
84.6
|
76.7
|
70.4
|
|||||||
Buildings
and improvements
|
606.5
|
603.2
|
562.6
|
|||||||
Equipment
|
1,172.7
|
1,111.2
|
1,071.5
|
|||||||
Total
land, buildings and improvements and equipment
|
1,863.8
|
1,791.1
|
1,704.5
|
|||||||
Accumulated
depreciation
|
(1,022.2
|
)
|
(987.6
|
)
|
(957.1
|
)
|
||||
Net
land, buildings and improvements and equipment
|
841.6
|
803.5
|
747.4
|
|||||||
Unamortized
product tooling costs
|
147.4
|
149.8
|
131.9
|
|||||||
Net
property
|
989.0
|
953.3
|
879.3
|
|||||||
Other
assets
|
||||||||||
Goodwill
|
648.2
|
617.3
|
597.1
|
|||||||
Other
intangibles
|
347.1
|
331.9
|
334.4
|
|||||||
Investments
|
149.9
|
141.4
|
132.1
|
|||||||
Other
long-term assets
|
235.6
|
249.6
|
237.3
|
|||||||
Long-term
assets held for sale
|
92.3
|
93.0
|
89.7
|
|||||||
Other
assets
|
1,473.1
|
1,433.2
|
1,390.6
|
|||||||
Total
assets
|
$
|
4,633.4
|
$
|
4,621.5
|
$
|
4,536.8
|
||||
BRUNSWICK
CORPORATION
|
Consolidated
Balance Sheets
|
as
of June 30, 2006, December 31, 2005, and June 30,
2005
|
(in
millions, except share
data)
|
June
30,
|
December
31,
|
June
30,
|
||||||||
2006
|
2005
|
2005
|
||||||||
(unaudited)
|
(unaudited)
|
|||||||||
Liabilities
and shareholders' equity
|
||||||||||
Current
liabilities
|
||||||||||
Short-term
debt, including
|
||||||||||
current
maturities of long-term debt
|
$
|
1.0
|
$
|
1.1
|
$
|
3.1
|
||||
Accounts
payable
|
406.5
|
431.7
|
408.9
|
|||||||
Accrued
expenses
|
786.7
|
803.8
|
791.8
|
|||||||
Current
liabilities held for sale
|
64.9
|
68.6
|
45.5
|
|||||||
Current
liabilities
|
1,259.1
|
1,305.2
|
1,249.3
|
|||||||
Long-term
liabilities
|
||||||||||
Debt
|
722.6
|
723.7
|
729.4
|
|||||||
Deferred
income taxes
|
142.0
|
147.5
|
154.5
|
|||||||
Postretirement
and postemployment benefits
|
208.2
|
215.6
|
236.2
|
|||||||
Other
|
251.2
|
245.0
|
251.6
|
|||||||
Long-term
liabilities held for sale
|
6.8
|
5.7
|
5.0
|
|||||||
Long-term
liabilities
|
1,330.8
|
1,337.5
|
1,376.7
|
|||||||
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
|
369.7
|
368.3
|
365.7
|
|||||||
Retained
earnings
|
1,892.4
|
1,741.8
|
1,622.4
|
|||||||
Treasury
stock, at cost:
|
|
|||||||||
9,341,000;
6,881,000 and 5,359,000 shares
|
(240.5
|
)
|
(136.0
|
)
|
(68.6
|
)
|
||||
Unearned
compensation and other
|
-
|
|
(6.1
|
)
|
(6.4
|
)
|
||||
Accumulated other comprehensive loss, net of tax |
(55.0
|
)
|
(66.1
|
)
|
(79.2
|
) | ||||
Shareholders'
equity
|
2,043.5
|
1,978.8
|
1,910.8
|
|||||||
Total
liabilities and shareholders' equity
|
$
|
4,633.4
|
$
|
4,621.5
|
$
|
4,536.8
|
||||
BRUNSWICK
CORPORATION
|
Condensed
Consolidated Statements of Cash Flows
|
for
the six months ended June 30
|
(in
millions)
|
(unaudited)
|
2006
|
2005
|
||||||
Cash
flows from operating activities
|
|||||||
Net
earnings
|
$
|
168.6
|
$
|
205.0
|
|||
Depreciation
and amortization
|
81.7
|
75.9
|
|||||
Changes
in noncash current assets and current liabilities
|
(150.9
|
)
|
(153.4
|
)
|
|||
Income
taxes
|
32.4
|
10.5
|
|||||
Other,
net
|
(5.4
|
)
|
(31.5
|
)
|
|||
Net
cash provided by operating activities of continuing
operations
|
126.4
|
106.5
|
|||||
Net
cash (used for) provided by operating activities of discontinued
operations
|
(32.7
|
)
|
4.9
|
||||
Net
cash provided by operating activities
|
93.7
|
111.4
|
|||||
Cash
flows from investing activities
|
|||||||
Capital
expenditures
|
(97.3
|
)
|
(79.9
|
)
|
|||
Acquisitions
of businesses, net of cash acquired
|
(74.0
|
)
|
(86.8
|
)
|
|||
Investments
|
2.7
|
(4.7
|
)
|
||||
Proceeds
from investment sale
|
-
|
57.9
|
|||||
Proceeds
from the sale of property, plant and equipment
|
5.4
|
11.8
|
|||||
Net
cash used for investing activities of continuing
operations
|
(163.2
|
)
|
(101.7
|
)
|
|||
Net
cash used for investing activities of discontinued
operations
|
(3.5
|
)
|
(9.5
|
)
|
|||
Net
cash used for investing activities
|
(166.7
|
)
|
(111.2
|
)
|
|||
Cash
flows from financing activities
|
|||||||
Net
issuances (repayments) of commercial paper and other
short-term
debt
|
0.4
|
1.1
|
|||||
Payments
of long-term debt including current maturities
|
(0.6
|
)
|
(1.9
|
)
|
|||
Stock
repurchases
|
(117.3
|
)
|
-
|
||||
Stock
options exercised
|
13.4
|
9.4
|
|||||
Net
cash (used for) provided by financing activities of continuing
operations
|
(104.1
|
)
|
8.6
|
||||
Net
cash provided by financing activities of discontinued
operations
|
-
|
-
|
|||||
Net
cash (used for) provided by financing activities
|
(104.1
|
)
|
8.6
|
||||
Net
increase (decrease) in cash and cash equivalents
|
(177.1
|
)
|
8.8
|
||||
Cash
and cash equivalents at January 1
|
487.7
|
499.8
|
|||||
Cash
and cash equivalents at June 30
|
$
|
310.6
|
$
|
508.6
|
|||
The
Notes to Consolidated Financial Statements are an integral part
of these
consolidated statements.
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30
|
June
30
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Net
sales
|
$
|
69.9
|
$
|
69.4
|
$
|
117.4
|
$
|
129.8
|
|||||
Pre-tax
earnings (loss)
|
$
|
(23.5
|
)
|
$
|
3.4
|
$
|
(34.5
|
)
|
$
|
3.8
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(In
millions)
|
|||||||
Accounts
receivable
|
$
|
44.5
|
$
|
50.8
|
|||
Inventory
|
67.6
|
57.7
|
|||||
Other
current assets
|
1.4
|
5.2
|
|||||
Total
current assets
|
113.5
|
113.7
|
|||||
Goodwill
and intangible assets
|
73.8
|
74.0
|
|||||
Investments
|
-
|
2.2
|
|||||
Property,
plant and equipment
|
18.5
|
16.8
|
|||||
Total
assets
|
205.8
|
206.7
|
|||||
Accounts
payable
|
35.3
|
40.5
|
|||||
Accrued
expenses
|
29.6
|
28.1
|
|||||
Total
current liabilities
|
64.9
|
68.6
|
|||||
Long-term
liabilities
|
6.8
|
5.7
|
|||||
Total
liabilities
|
71.7
|
74.3
|
|||||
Net
assets
|
$
|
134.1
|
$
|
132.4
|
Three
Months
Ended
June
30
|
Six
Months
Ended
June
30
|
||||||
2005
|
2005
|
||||||
(In
millions, except per share data)
|
|||||||
Net
earnings from continuing operations, as reported
|
$
|
111.0
|
$
|
205.0
|
|||
Add:
Share-based employee compensation
included in reported earnings, net of tax
|
1.1
|
2.1
|
|||||
Less:
Total share-based employee compensation
expense under fair value-based method for
all awards, net of tax
|
2.1
|
7.3
|
|||||
Net
earnings from continuing operations, pro forma
|
$
|
110.0
|
$
|
199.8
|
|||
Basic
earnings from continuing operations per common share:
|
|||||||
As
reported
|
$
|
1.13
|
$
|
2.09
|
|||
Pro
forma
|
$
|
1.12
|
$
|
2.04
|
|||
Diluted
earnings from continuing operations per common share:
|
|||||||
As
reported
|
$
|
1.12
|
$
|
2.07
|
|||
Pro
forma
|
$
|
1.11
|
$
|
2.02
|
Stock
Options
Outstanding
(in
thousands)
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value
(in
thousands)
|
||||||||||
Outstanding
on January 1
|
3,844
|
$
|
29.91
|
||||||||||
Granted
|
899
|
$
|
39.13
|
||||||||||
Exercised
|
(435
|
)
|
$
|
21.57
|
$
|
7,508
|
|||||||
Forfeited
|
(97
|
)
|
$
|
38.20
|
|||||||||
Outstanding
on June 30
|
4,211
|
$
|
32.55
|
6.7 years
|
$
|
21,426
|
|||||||
Exercisable
on June 30
|
2,795
|
$
|
28.81
|
5.6
years
|
$
|
20,695
|
Range
of
Exercise
Price
|
Number
Outstanding
in
thousands)
|
Weighted
Average
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
(in
thousands)
|
Weighted
Average
Exercise
Price
|
|||||||||||
$17.38
to $20.00
|
705
|
4.1
years
|
$
|
19.63
|
698
|
$
|
19.64
|
|||||||||
$20.01
to $30.00
|
1,200
|
5.3
years
|
$
|
23.56
|
1,137
|
$
|
23.57
|
|||||||||
$30.01
to $40.00
|
1,409
|
8.1
years
|
$
|
38.12
|
417
|
$
|
36.09
|
|||||||||
$40.01
to $49.27
|
897
|
8.6
years
|
$
|
45.98
|
543
|
$
|
45.99
|
|
2006
|
2005
|
|||||
Risk-free
interest rate
|
4.4
|
%
|
3.7
|
%
|
|||
Dividend
yield
|
1.5
|
%
|
1.4
|
%
|
|||
Volatility
factor
|
31.2
|
%
|
34.1
|
%
|
|||
Weighted
average expected life
|
4.8 - 6.1 years
|
5.0
years
|
Nonvested
Stock
Outstanding
|
||||
(In
thousands)
|
||||
Outstanding
at January 1
|
519
|
|||
Granted
|
314
|
|||
Released
|
(211
|
)
|
||
Forfeited
|
(42
|
)
|
||
Outstanding
at June 30
|
580
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30
|
June
30
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions, except per share data)
|
|||||||||||||
Net
earnings from continuing operations
|
$
|
94.5
|
$
|
111.0
|
$
|
168.6
|
$
|
205.0
|
|||||
Net
earnings (loss) from discontinued operations,
net
of tax
|
(11.3
|
)
|
3.1
|
(18.0
|
)
|
3.7
|
|||||||
Net
earnings
|
$
|
83.2
|
$
|
114.1
|
$
|
150.6
|
$
|
208.7
|
|||||
Average
outstanding shares -
basic
|
94.7
|
98.0
|
95.2
|
97.8
|
|||||||||
Dilutive
effect of common stock equivalents
|
0.8
|
1.2
|
0.9
|
1.3
|
|||||||||
Average
outstanding shares -
diluted
|
95.5
|
99.2
|
96.1
|
99.1
|
|||||||||
Basic
earnings per share
|
|||||||||||||
Earnings
from continuing operations
|
$
|
1.00
|
$
|
1.13
|
$
|
1.77
|
$
|
2.09
|
|||||
Earnings
(loss) from discontinued operations
|
(0.12
|
)
|
0.03
|
(0.19
|
)
|
0.04
|
|||||||
Net
earnings
|
$
|
0.88
|
$
|
1.16
|
$
|
1.58
|
$
|
2.13
|
|||||
Diluted
earnings per share
|
|||||||||||||
Earnings
from continuing operations
|
$
|
0.99
|
$
|
1.12
|
$
|
1.76
|
$
|
2.07
|
|||||
Earnings
(loss) from discontinued operations
|
(0.12
|
)
|
0.03
|
(0.19
|
)
|
0.04
|
|||||||
Net
earnings
|
$
|
0.87
|
$
|
1.15
|
$
|
1.57
|
$
|
2.11
|
2006
|
||||
(In
millions)
|
||||
Balance
at January 1
|
$
|
155.3
|
||
Payments
made
|
(54.2
|
)
|
||
Provisions/additions
for contracts issued/sold
|
57.8
|
|||
Aggregate
changes for preexisting warranties
|
(0.6
|
)
|
||
Balance
at June 30
|
$
|
158.3
|
Net
Sales
|
Operating
Earnings
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Boat
|
$
|
769.7
|
$
|
745.5
|
$
|
53.1
|
$
|
74.9
|
|||||
Marine
Engine
|
668.5
|
683.5
|
94.7
|
103.5
|
|||||||||
Marine
eliminations
|
(134.9
|
)
|
(132.3
|
)
|
-
|
-
|
|||||||
Total
Marine
|
1,303.3
|
1,296.7
|
147.8
|
178.4
|
|||||||||
Fitness
|
129.7
|
120.4
|
7.4
|
5.1
|
|||||||||
Bowling
& Billiards
|
110.1
|
114.9
|
0.6
|
5.2
|
|||||||||
Eliminations
|
-
|
(0.4
|
)
|
-
|
-
|
||||||||
Corporate/Other
|
-
|
-
|
(17.6
|
)
|
(20.5
|
)
|
|||||||
Total
|
$
|
1,543.1
|
$
|
1,531.6
|
$
|
138.2
|
$
|
168.2
|
Net
Sales
|
Operating
Earnings
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Boat
|
$
|
1,520.7
|
$
|
1,426.2
|
$
|
101.5
|
$
|
124.0
|
|||||
Marine
Engine
|
1,223.5
|
1,225.8
|
139.6
|
155.5
|
|||||||||
Marine
eliminations
|
(276.2
|
)
|
(250.9
|
)
|
-
|
-
|
|||||||
Total
Marine
|
2,468.0
|
2,401.1
|
241.1
|
279.5
|
|||||||||
Fitness
|
263.7
|
247.9
|
16.3
|
11.5
|
|||||||||
Bowling
& Billiards
|
224.8
|
226.4
|
13.4
|
16.3
|
|||||||||
Eliminations
|
(0.1
|
)
|
(1.3
|
)
|
-
|
-
|
|||||||
Corporate/Other
|
-
|
-
|
(34.4
|
)
|
(40.3
|
)
|
|||||||
Total
|
$
|
2,956.4
|
$
|
2,874.1
|
$
|
236.4
|
$
|
267.0
|
(in
millions)
|
|||||||
Date
|
Description
|
Net
Cash
Consideration
(A)
|
|||||
2/16/06
|
Cabo
Yachts, Inc.
|
$
|
60.6
|
||||
3/24/06
|
Marine
Innovations Warranty Corporation
|
2.3
|
|||||
4/26/06
|
Diversified
Marine Products, L.P.
|
11.1
|
|||||
|
|
$
|
74.0
|
(in
millions)
|
|||||||||||||
Date
|
Description
|
Net
Cash
Consideration
(A)
|
Other
Consideration
|
Total
Consideration
|
|||||||||
2/7/05
|
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
|
|||||||||
5/27/05
|
Triton
Boat Company
|
61.8
|
4.4
|
66.2
|
|||||||||
6/20/05
|
Supra-Industria
Textil, Lda. (51 percent)
|
|
8.3
|
-
|
8.3
|
||||||||
6/27/05
|
Marine
Innovations Warranty Corporation
|
2.3
|
-
|
2.3
|
|||||||||
$
|
86.8
|
$
|
4.4
|
$
|
91.2
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30
|
June
30
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Net
earnings
|
$
|
83.2
|
$
|
114.1
|
$
|
150.6
|
$
|
208.7
|
|||||
Other
comprehensive income:
|
|||||||||||||
Foreign
currency cumulative translation
adjustment
|
7.9
|
(9.8
|
)
|
7.9
|
(14.0
|
)
|
|||||||
Net
change in unrealized gains (losses) on
investments
|
(0.4
|
)
|
0.1
|
1.2
|
(22.8
|
)
|
|||||||
Net
change in accumulated unrealized
derivative
gains (losses)
|
1.8
|
5.3
|
2.0
|
11.9
|
|||||||||
Total
other comprehensive income (loss)
|
9.3
|
(4.4
|
)
|
11.1
|
(24.9
|
)
|
|||||||
Comprehensive
income
|
$
|
92.5
|
$
|
109.7
|
$
|
161.7
|
$
|
183.8
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30
|
June
30
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Receivables
sold
|
$
|
273.3
|
$
|
286.8
|
$
|
473.0
|
$
|
489.0
|
|||||
Discounts
|
2.4
|
2.1
|
4.2
|
3.7
|
|||||||||
Cash
received
|
$
|
270.9
|
$
|
284.7
|
$
|
468.8
|
$
|
485.3
|
Pension
Benefits
|
Other
Postretirement
Benefits
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Service
cost
|
$
|
4.7
|
$
|
4.7
|
$
|
0.7
|
$
|
0.6
|
|||||
Interest
cost
|
14.7
|
14.6
|
1.5
|
1.5
|
|||||||||
Expected
return on plan assets
|
(19.5
|
)
|
(18.1
|
)
|
-
|
-
|
|||||||
Amortization
of prior service costs
|
1.7
|
1.8
|
(0.5
|
)
|
(0.5
|
)
|
|||||||
Amortization
of net actuarial loss
|
2.6
|
3.3
|
0.3
|
0.2
|
|||||||||
Curtailment
loss
|
-
|
0.8
|
-
|
-
|
|||||||||
Net
pension and other benefit costs
|
$
|
4.2
|
$
|
7.1
|
$
|
2.0
|
$
|
1.8
|
Pension
Benefits
|
Other
Postretirement
Benefits
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Service
cost
|
$
|
9.3
|
$
|
9.4
|
$ | 1.4 |
$
|
1.3
|
|||||
Interest
cost
|
29.4
|
29.2
|
3.0 |
2.9
|
|||||||||
Expected
return on plan assets
|
(39.2
|
)
|
(36.3
|
)
|
- |
-
|
|||||||
Amortization
of prior service costs
|
3.4
|
3.7
|
(1.0 | ) |
(1.0
|
)
|
|||||||
Amortization
of net actuarial loss
|
5.2
|
6.6
|
0.6 |
0.4
|
|||||||||
Curtailment
loss
|
-
|
0.8
|
- |
-
|
|||||||||
Net
pension and other benefit costs
|
$
|
8.1
|
$
|
13.4
|
$ | 4.0 |
$
|
3.6
|
Date
|
Description
|
Segment
|
||
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) - 51 percent
|
Marine
Engine
|
||
7/07/05
|
Kellogg
Marine, Inc. (Kellogg)
|
Boat
|
||
9/16/05
|
Harris
Kayot Marine, LLC (Harris Kayot)
|
Boat
|
||
2/16/06
|
Cabo
Yachts, Inc. (Cabo)
|
Boat
|
||
4/26/06
|
Diversified
Marine Products, L.P. (Diversified)
|
Boat
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30
|
June
30
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Net
earnings from continuing operations
per
diluted share - as reported
|
$
|
0.99
|
$
|
1.12
|
$
|
1.76
|
$
|
2.07
|
|||||
Investment
sale gain
|
-
|
-
|
-
|
(0.32
|
)
|
||||||||
Tax
items
|
(0.06
|
)
|
-
|
(0.19
|
)
|
-
|
|||||||
Net
earnings from continuing operations
per
diluted share - as adjusted
|
$
|
0.93
|
$
|
1.12
|
$
|
1.57
|
$
|
1.75
|
•
|
Investment
Sale Gain:
On
February 23, 2005, the Company sold its investment of 1,861,200 shares
in
MarineMax, Inc. (MarineMax), its largest boat dealer, for $56.8 million,
net of $4.1 million of selling costs, which included $1.1 million
of
accrued expenses. The sale was made pursuant to a registered public
offering by MarineMax. As a result of this sale, the Company recorded
an
after-tax gain of $31.5 million ($0.32 per diluted share) after utilizing
previously unrecognized capital loss carryforwards.
|
•
|
Tax
Items:
During 2006, the Company reduced its tax provision due primarily
to tax
benefits from an $18.2 million tax reserve reassessment of underlying
exposures. Refer to Note
5 - Commitments and Contingencies
in
the Notes to Consolidated Financial Statements for further
detail.
|
Increase/(Decrease)
|
|||||||||||||
vs.
2005
|
|||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(In
millions)
|
|||||||||||||
Net
sales
|
$
|
1,543.1
|
$
|
1,531.6
|
$
|
11.5
|
0.8
|
%
|
|||||
Gross
margin (A)
|
$
|
354.8
|
$
|
386.6
|
$
|
(31.8
|
)
|
(8.2)
|
%
|
||||
Operating
earnings
|
$
|
138.2
|
$
|
168.2
|
$
|
(30.0
|
)
|
(17.8)
|
%
|
||||
Net
earnings
|
$
|
94.5
|
$
|
111.0
|
$
|
(16.5
|
)
|
(14.9)
|
%
|
||||
Diluted
earnings per share
|
$
|
0.99
|
$
|
1.12
|
$
|
(0.13
|
)
|
(11.6)
|
%
|
||||
Expressed
as a percentage of net sales (B):
|
|||||||||||||
Gross
margin
|
23.0
|
%
|
25.2
|
%
|
(220)
bpts
|
||||||||
Selling,
general and administrative expense
|
11.8
|
%
|
12.3
|
%
|
(50)
bpts
|
||||||||
Operating
margin
|
9.0
|
%
|
11.0
|
%
|
(200)
bpts
|
Increase/(Decrease)
|
|||||||||||||
vs.
2005
|
|||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(In
millions)
|
|||||||||||||
Net
sales
|
$
|
2,956.4
|
$
|
2,874.1
|
$
|
82.3
|
2.9
|
%
|
|||||
Gross
margin (A)
|
$
|
668.2
|
$
|
707.8
|
$
|
(39.6
|
)
|
(5.6)
|
%
|
||||
Operating
earnings
|
$
|
236.4
|
$
|
267.0
|
$
|
(30.6
|
)
|
(11.4)
|
%
|
||||
Net
earnings
|
$
|
168.6
|
$
|
205.0
|
$
|
(36.4
|
)
|
(17.8)
|
%
|
||||
Diluted
earnings per share
|
$
|
1.76
|
$
|
2.07
|
$
|
(0.31
|
)
|
(15.0)
|
%
|
||||
Expressed
as a percentage of net sales (B):
|
|||||||||||||
Gross
margin
|
22.6
|
%
|
24.6
|
%
|
(200)
bpts
|
||||||||
Selling,
general and administrative expense
|
12.4
|
%
|
13.2
|
%
|
(
80) bpts
|
||||||||
Operating
margin
|
8.0
|
%
|
9.3
|
%
|
(130)
bpts
|
Increase/(Decrease)
|
|||||||||||||
vs.
2005
|
|||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(In
millions)
|
|||||||||||||
Net
sales
|
$
|
769.7
|
$
|
745.5
|
$
|
24.2
|
3.2
|
%
|
|||||
Operating
earnings
|
$
|
53.1
|
$
|
74.9
|
$
|
(21.8
|
)
|
(29.1)
|
%
|
||||
Operating
margin
|
6.9
|
%
|
10.0
|
%
|
(310)
bpts
|
||||||||
Capital
expenditures
|
$
|
11.8
|
$
|
14.3
|
$
|
(2.5
|
)
|
(17.5)
|
%
|
Increase/(Decrease)
|
|||||||||||||
vs.
2005
|
|||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(In
millions)
|
|||||||||||||
Net
sales
|
$
|
1,520.7
|
$
|
1,426.2
|
$
|
94.5
|
6.6
|
%
|
|||||
Operating
earnings
|
$
|
101.5
|
124.0
|
$
|
(22.5
|
)
|
(18.1)
|
%
|
|||||
Operating
margin
|
6.7
|
%
|
8.7
|
%
|
(200)
bpts
|
||||||||
Capital
expenditures
|
$
|
36.4
|
$
|
26.7
|
$
|
9.7
|
36.3
|
%
|
Increase/(Decrease)
|
|||||||||||||
vs.
2005
|
|||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(In
millions)
|
|||||||||||||
Net
sales
|
$
|
668.5
|
$
|
683.5
|
$
|
(15.0
|
)
|
(2.2)
|
%
|
||||
Operating
earnings
|
$
|
94.7
|
$
|
103.5
|
$
|
(8.8
|
)
|
(8.5)
|
%
|
||||
Operating
margin
|
14.2
|
%
|
15.1
|
%
|
(90)
bpts
|
||||||||
Capital
expenditures
|
$
|
17.8
|
$
|
19.5
|
$
|
(1.7
|
)
|
(8.7)
|
%
|
Increase/(Decrease)
|
|||||||||||||
vs.
2005
|
|||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(In
millions)
|
|||||||||||||
Net
sales
|
$
|
1,223.5
|
$
|
1,225.8
|
$
|
(2.3
|
)
|
(0.2)
|
%
|
||||
Operating
earnings
|
$
|
139.6
|
$
|
155.5
|
$
|
(15.9
|
)
|
(10.2)
|
%
|
||||
Operating
margin
|
11.4
|
%
|
12.7
|
%
|
(130)
bpts
|
||||||||
Capital
expenditures
|
$
|
38.0
|
$
|
30.8
|
$
|
7.2
|
23.4
|
%
|
Increase/(Decrease)
|
|||||||||||||
vs.
2005
|
|||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(In
millions)
|
|||||||||||||
Net
sales
|
$
|
129.7
|
$
|
120.4
|
$
|
9.3
|
7.7
|
%
|
|||||
Operating
earnings
|
$
|
7.4
|
$
|
5.1
|
$
|
2.3
|
45.1
|
%
|
|||||
Operating
margin
|
5.7
|
%
|
4.2
|
%
|
150
bpts
|
||||||||
Capital
expenditures
|
$
|
1.3
|
$
|
2.2
|
$
|
(0.9
|
)
|
(40.9)
|
%
|
Increase/(Decrease)
|
|||||||||||||
vs.
2005
|
|||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(In
millions)
|
|||||||||||||
Net
sales
|
$
|
263.7
|
$
|
247.9
|
$
|
15.8
|
6.4
|
%
|
|||||
Operating
earnings
|
$
|
16.3
|
$
|
11.5
|
$
|
4.8
|
41.7
|
%
|
|||||
Operating
margin
|
6.2
|
%
|
4.6
|
%
|
160
bpts
|
||||||||
Capital
expenditures
|
$
|
5.0
|
$
|
5.6
|
$
|
(0.6
|
)
|
(10.7)
|
%
|
Increase/(Decrease)
|
|||||||||||||
vs.
2005
|
|||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(In
millions)
|
|||||||||||||
Net
sales
|
$
|
110.1
|
$
|
114.9
|
$
|
(4.8
|
)
|
(4.2)
|
%
|
||||
Operating
earnings
|
$
|
0.6
|
$
|
5.2
|
$
|
(4.6
|
)
|
(88.5)
|
%
|
||||
Operating
margin
|
0.5
|
%
|
4.5
|
%
|
(400)
bpts
|
||||||||
Capital
expenditures
|
$
|
11.0
|
$
|
12.3
|
$
|
(1.3
|
)
|
(10.6)
|
%
|
Increase/(Decrease)
|
|||||||||||||
vs.
2005
|
|||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(In
millions)
|
|||||||||||||
Net
sales
|
$
|
224.8
|
$
|
226.4
|
$
|
(1.6
|
)
|
(0.7)
|
%
|
||||
Operating
earnings
|
$
|
13.4
|
$
|
16.3
|
$
|
(2.9
|
)
|
(17.8)
|
%
|
||||
Operating
margin
|
6.0
|
%
|
7.2
|
%
|
(120)
bpts
|
||||||||
Capital
expenditures
|
$
|
16.7
|
$
|
13.9
|
$
|
2.8
|
20.1
|
%
|
(in
millions)
|
2006
|
2005
|
|||||
Net
cash provided by operating activities of continuing
operations
|
$
|
126.4
|
$
|
106.5
|
|||
Net
cash provided by (used for):
|
|||||||
Capital
expenditures
|
(97.3
|
)
|
(79.9
|
)
|
|||
Proceeds
from investment sale
|
-
|
57.9
|
|||||
Proceeds
from the sale of property, plant and equipment
|
5.4
|
11.8
|
|||||
Free
cash flow from continuing operations *
|
$
|
34.5
|
$
|
96.3
|
Issuer
Purchases of Equity Securities
|
|||||||||||||
Period
|
Total
Number
of
Shares
(or
Units)
Purchased
|
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 (A)
(amounts
in thousands)
|
|||||||||
4/1/06
- 4/30/06
|
-
|
$
|
-
|
-
|
$
|
500,000
|
|||||||
5/1/06
- 5/31/06
|
1,150,000
|
$
|
37.32
|
1,150,000
|
$
|
457,081
|
|||||||
6/1/06
- 6/30/06
|
350,000
|
$
|
35.93
|
350,000
|
$
|
444,505
|
|||||||
Total
Stock Repurchases
|
1,500,000
|
$
|
37.00
|
1,500,000
|
$
|
444,505
|
|||||||
(A)
|
On
May 4, 2005, the Company’s Board of Directors authorized a $200 million
share repurchase program, to be funded with available cash. On April
27,
2006, the Board of Directors increased the Company’s remaining share
repurchase authorization of $62.2 million to $500.0 million. The
Company
expects to repurchase shares on the open market or in private transactions
from time to time, depending on market conditions. The Company repurchased
1.5 million shares under this program during the second quarter of
2006
for $55.5 million. Refer to Note 13 - Share Repurchase
Program in the Notes to Consolidated Financial Statements for
further details. The Company also repurchased an additional 0.5 million
shares for $16.3 million in July 2006.
|
NOMINEE
|
FOR
|
WITHHELD
|
||
Michael
J. Callahan
|
83,061,556
|
1,822,394
|
||
Manuel
A. Fernandez
|
82,082,406
|
2,801,544
|
||
Peter
B. Hamilton
|
83,112,266
|
1,771,684
|
||
Roger
W. Schipke
|
83,074,657
|
1,809,293
|
NUMBER
OF SHARES
|
|
For
|
71,219,425
|
Against
|
5,561,679
|
Abstain
|
716,152
|
NUMBER
OF SHARES
|
|
For
|
84,025,190
|
Against
|
282,059
|
Abstain
|
576,700
|
(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) | |
Date: August 2, 2006 | By: | /s/ ALAN.L. LOWE |
Alan L. Lowe | ||
Vice President and Controller |