Brunswick Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Leases (Notes)

Leases (Notes)

3 Months Ended

Mar. 30, 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 condensed 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 (CPI) 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 March 30, 2019 is as follows:



(in millions)	Classification	March 30, 2019
Lease Assets
Operating lease assets	Operating lease assets	$	99.2

Lease Liabilities
Current operating lease liabilities	Accrued expenses	23.2
Non-current operating lease liabilities	Operating lease liabilities	83.8
Total lease liabilities		$	107.0

A summary of the Company's total lease cost for the three months ended March 30, 2019 is as follows:



(in millions)	Classification	March 30, 2019
Operating lease cost	Selling, general, and administrative expense	$	5.0
	Cost of sales	8.7
Variable lease cost	Selling, general, and administrative expense	1.2
	Cost of sales	2.0
Total lease cost ^(A)		$	16.9

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

The Company's maturity analysis of its operating lease liabilities as of March 30, 2019 is as follows:



(in millions)
2019	$	21.9
2020	24.7
2021	20.6
2022	17.6
2023	14.8
Thereafter	23.0
Total lease payments	$	122.6
Less: Interest	(15.6		)
Present value of lease liabilities	$	107.0

The total weighted-average discount rate and remaining lease term for the Company's operating leases was 4.92 percent and 5.15 years, respectively, as of March 30, 2019. Total operating cash flows from operating leases were $7.3 million for the three months ended March 30, 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	$	40.3
2020	32.3
2021	26.5
2022	17.7
2023	13.7
Thereafter	22.9
Total (not reduced by minimum sublease income of $0.1)	$	153.4