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

Quarterly report pursuant to Section 13 or 15(d)

Financing Receivables

Financing Receivables

6 Months Ended

Jul. 02, 2011

Note 8 – Financing Receivables

The Company has recorded financing receivables, which are defined as a contractual right to receive money recognized as an asset, on its Condensed Consolidated Balance Sheets as of July 2, 2011, December 31, 2010 and July 3, 2010. Substantially all of the Company's financing receivables are for commercial customers. The Company classifies its receivables into three categories: receivables repurchased from under recourse provisions (Recourse Receivables); receivables sold to third-party finance companies (Third-Party Receivables) and customer notes and other (Other Receivables). Recourse Receivables are the result of the contingent recourse arrangements discussed in Note 7 – Commitments and Contingencies. Third-Party Receivables are accounts that have been sold to third-party finance companies, but do not meet the definition of a true sale, and are therefore recorded as a secured obligation with an offsetting balance recorded in Accrued expenses and Other long-term liabilities as discussed in Note 7 – Commitments and Contingencies. Other Receivables are mostly comprised of notes from customers that were originated by the Company in the normal course of business. Financing receivables are carried at their face amounts less an allowance for doubtful accounts.

The Company sells a broad range of recreation products to a worldwide customer base and extends credit to its customers based upon an ongoing credit evaluation program. The Company's business units maintain credit organizations to manage financial exposure and perform credit risk assessments on an individual account basis. Accounts are not aggregated into categories for credit risk determinations. Due to the composition of the account portfolio, the Company does not believe that the credit risk posed by the Company's financing receivables is significant to its operations or financial position.

The following are the Company's financing receivables, excluding trade accounts receivable contractually due within one year, by segment as of July 2, 2011:

(in millions)	Marine Engine			Boat			Fitness			Bowling & Billiards			Corporate		Total

Recourse Receivables:
Short-term	$	-		$	-		$	3.2		$	9.5		$	-	$	12.7
Long-term		-			-			1.5			5.8			-		7.3
Allowance for credit loss		-			-			(1.8	)		(8.0	)		-		(9.8	)
Total		-			-			2.9			7.3			-		10.2

Third-Party Receivables:
Short-term		11.3			3.9			36.1			0.1			-		51.4
Long-term		-			-			39.5			0.1			-		39.6
Allowance for credit loss		-			-			-			-			-		-
Total		11.3			3.9			75.6			0.2			-		91.0

Other Receivables:
Short-term		12.4			0.9			1.6			-			4.0		18.9
Long-term		4.5			1.1			0.6			-			1.8		8.0
Allowance for credit loss		(0.1	)		(1.1	)		(0.6	)		-			-		(1.8	)
Total		16.8			0.9			1.6			-			5.8		25.1

Total Financing Receivables	$	28.1		$	4.8		$	80.1		$	7.5		$	5.8	$	126.3

The following are the Company's financing receivables, excluding trade accounts receivable contractually due within one year, by segment as of December 31, 2010:

(in millions)	Marine Engine		Boat			Fitness			Bowling & Billiards			Corporate			Total

Recourse Receivables:
Short-term	$	-	$	-		$	2.9		$	11.2		$	-		$	14.1
Long-term		-		-			1.1			6.8			-			7.9
Allowance for credit loss		-		-			(1.4	)		(8.2	)		-			(9.6	)
Total		-		-			2.6			9.8			-			12.4

Third-Party Receivables:
Short-term		8.1		2.9			38.4			0.2			-			49.6
Long-term		-		-			47.0			0.2			-			47.2
Allowance for credit loss		-		-			-			-			-			-
Total		8.1		2.9			85.4			0.4			-			96.8

Other Receivables:
Short-term		5.7		0.9			1.5			-			6.4			14.5
Long-term		5.6		0.8			0.8			-			2.3			9.5
Allowance for credit loss		-		(0.8	)		(0.7	)		-			(2.8	)		(4.3	)
Total		11.3		0.9			1.6			-			5.9			19.7

Total Financing Receivables	$	19.4	$	3.8		$	89.6		$	10.2		$	5.9		$	128.9

The following table sets forth activity related to the allowance for credit loss on financing receivables during the six months ended July 2, 2011:

(in millions)	Marine Engine		Boat		Fitness			Bowling & Billiards			Corporate			Total

Recourse Receivables:
Beginning balance	$	-	$	-	$	1.4		$	8.2		$	-		$	9.6
Current period provision		-		-		0.9			0.3			-			1.2
Direct write-downs		-		-		(0.2	)		(0.4	)		-			(0.6	)
Recoveries		-		-		(0.3	)		(0.1	)		-			(0.4	)

Ending balance	$	-	$	-	$	1.8		$	8.0		$	-		$	9.8

Other Receivables:
Beginning balance	$	-	$	0.8	$	0.7		$	-		$	2.8		$	4.3
Current period provision		0.1		0.3		-			-			1.0			1.4
Direct write-downs		-		-		-			-			(1.0	)		(1.0	)
Recoveries		-		-		(0.1	)		-			(2.8	)		(2.9	)

Ending balance	$	0.1	$	1.1	$	0.6		$	-		$	-		$	1.8