UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________

FORM 10-Q

_____________________________________

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December 28, 2014~~September 27, 2015



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 1-1370

BRIGGS & STRATTON CORPORATION

(Exact name of registrant as specified in its charter)

_____________________________________



Wisconsin		39-0182330
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

12301 West Wirth Street, Wauwatosa, Wisconsin 53222

(Address of Principal Executive Offices) (Zip Code)

(414) 259-5333

(Registrant’s telephone number, including area code)

____________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.



Class		Outstanding at ~~January~~October 30, 2015
COMMON STOCK, par value $0.01 per share		~~45,001,563~~44,225,022 Shares

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

INDEX



		Page No.

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets – ~~December 28, 2014~~September 27, 2015 and June ~~29, 2014~~28, 2015	3

	Condensed Consolidated Statements of Operations – Three ~~and Six~~ Months Ended ~~December~~September 27, 2015 and September 28, 2014 ~~and December 29, 2013~~	5

	Condensed Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss – Three ~~and Six~~ Months Ended ~~December~~September 27, 2015 and September 28, 2014 ~~and December 29, 2013~~	6

	Condensed Consolidated Statements of Cash Flows – ~~Six~~Three Months Ended ~~December~~September 27, 2015 and September 28, 2014 ~~and December 29, 2013~~	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3027

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3733

Item 4.	Controls and Procedures	3733

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	3733

Item 1A.	Risk Factors	3733

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3733

Item 6.	Exhibits	3834

Signatures		3935

Exhibit Index		4036

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

ASSETS



	December 28, 2014		June 29, 2014		September 27, 2015		June 28, 2015
CURRENT ASSETS:
Cash and Cash Equivalents	$	51,690	$	194,668	$	53,995	$	118,390
Accounts Receivable, Net	207,883		220,590		168,964		215,841
Inventories -
Finished Products and Parts	401,354		268,116
Finished Products					337,638		266,726
Work in Process	126,934		102,431		126,337		101,285
Raw Materials	11,829		5,556		9,798		10,677
Total Inventories	540,117		376,103		473,773		378,688
Deferred Income Tax Asset	49,263		48,958		46,096		45,871
Prepaid Expenses and Other Current Assets	46,022		30,016		47,006		36,453
Total Current Assets	894,975		870,335		789,834		795,243
OTHER ASSETS:
Goodwill	159,680		144,522		167,859		165,522
Investments	27,967		27,137		31,432		30,779
Debt Issuance Costs	4,188		4,671		3,481		3,714
Other Intangible Assets, Net	98,762		80,317		107,237		111,280
Long-Term Deferred Income Tax Asset	382		15,178		17,571		22,452
Other Long-Term Assets, Net	11,358		10,539		15,731		15,134
Total Other Assets	302,337		282,364		343,311		348,881
PLANT AND EQUIPMENT:
Cost	1,040,489		1,035,848		1,039,144		1,035,326
Less - Accumulated Depreciation	744,711		738,841		727,601		720,488
Total Plant and Equipment, Net	295,778		297,007		311,543		314,838
TOTAL ASSETS	$	1,493,090	$	1,449,706	$	1,444,688	$	1,458,962

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(In thousands, except per share data)

(Unaudited)

LIABILITIES & SHAREHOLDERS’ INVESTMENT



	December 28, 2014			June 29, 2014			September 27, 2015			June 28, 2015
CURRENT LIABILITIES:
Accounts Payable	$	181,909		$	169,271		$	184,264		$	182,676
Short-Term Debt	87,000			—			38,410			—
Accrued Liabilities	143,365			133,916			143,332			152,440
Total Current Liabilities	412,274			303,187			366,006			335,116
OTHER LIABILITIES:
Accrued Pension Cost	114,406			126,529			203,931			208,623
Accrued Employee Benefits	24,575			24,491			23,233			23,298
Accrued Postretirement Health Care Obligation	53,626			59,290			45,382			47,545
Deferred Income Tax Liability	10,179			—			366			223
Other Long-Term Liabilities	36,247			38,775			47,627			44,907
Long-Term Debt	225,000			225,000			225,000			225,000
Total Other Liabilities	464,033			474,085			545,539			549,596
SHAREHOLDERS’ INVESTMENT:
Common Stock - Authorized 120,000 shares, $.01 par value, issued 57,854 shares	579			579			579			579
Additional Paid-In Capital	74,775			78,466			71,040			77,272
Retained Earnings	1,028,722			1,048,466			1,047,338			1,071,493
Accumulated Other Comprehensive Loss	(208,119		)	(195,257		)	(289,741		)	(279,110		)
Treasury Stock at cost, 12,605 and 11,536 shares, respectively	(279,174		)	(259,820		)
Treasury Stock at cost, 13,575 and 13,480 shares, respectively							(296,073		)	(295,984		)
Total Shareholders’ Investment	616,783			672,434			533,143			574,250
TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT	$	1,493,090		$	1,449,706		$	1,444,688		$	1,458,962

The accompanying notes are an integral part of these statements.

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended						Six Months Ended						Three Months Ended
	December 28, 2014			December 29, 2013			December 28, 2014			December 29, 2013			September 27, 2015			September 28, 2014
NET SALES	$	444,287		$	416,592		$	736,916		$	733,896		$	289,458		$	292,629
COST OF GOODS SOLD	349,573			337,333			588,035			607,221			237,287			238,462
RESTRUCTURING CHARGES	6,846			1,893			13,692			5,478			2,459			6,846
Gross Profit	87,868			77,366			135,189			121,197			49,712			47,321
ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	73,970			71,777			144,053			140,539			72,134			70,084
RESTRUCTURING CHARGES	583			425			1,538			425			914			955
Income (Loss) from Operations	13,315			5,164			(10,402		)	(19,767		)
Loss from Operations													(23,336		)	(23,718		)
INTEREST EXPENSE	(4,890		)	(4,594		)	(9,408		)	(9,103		)	(4,536		)	(4,518		)
OTHER INCOME, Net	2,052			1,751			4,425			3,843			1,455			2,373
Income (Loss) Before Income Taxes	10,477			2,321			(15,385		)	(25,027		)
PROVISION (CREDIT) FOR INCOME TAXES	3,534			1,619			(7,049		)	(6,380		)
NET INCOME (LOSS)	$	6,943		$	702		$	(8,336	)	$	(18,647	)
Loss Before Income Taxes													(26,417		)	(25,863		)
CREDIT FOR INCOME TAXES													(8,246		)	(10,584		)
NET LOSS													$	(18,171	)	$	(15,279	)

EARNINGS (LOSS) PER SHARE
Basic	$	0.15		$	0.01		$	(0.19	)	$	(0.41	)	$	(0.42	)	$	(0.34	)
Diluted	0.15			0.01			(0.19		)	(0.41		)	(0.42		)	(0.34		)

WEIGHTED AVERAGE SHARES OUTSTANDING
Basic	44,579			46,825			44,827			46,760			43,478			45,113
Diluted	44,629			47,987			44,827			46,760			43,478			45,113

DIVIDENDS PER SHARE	$	0.125		$	0.12		$	0.25		$	0.24		$	0.135		$	0.125

The accompanying notes are an integral part of these statements.

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME (LOSS)~~LOSS

(In thousands)

(Unaudited)


	Three Months Ended						Six Months Ended						Three Months Ended
	December 28, 2014			December 29, 2013			December 28, 2014			December 29, 2013			September 27, 2015			September 28, 2014
Net Income (Loss)	$	6,943		$	702		$	(8,336	)	$	(18,647	)
Net Loss													$	(18,171	)	$	(15,279	)
Other Comprehensive Income (Loss):
Cumulative Translation Adjustments	(11,213		)	(3,625		)	(21,120		)	(3,372		)	(12,473		)	(9,907		)
Unrealized Gain (Loss) on Derivative Instruments, Net of Tax	(161		)	1,468			3,506			1,187			(351		)	3,667
Unrecognized Pension & Postretirement Obligation, Net of Tax	2,397			4,437			4,752			8,787			2,193			2,355
Other Comprehensive Income (Loss)	(8,977		)	2,280			(12,862		)	6,602
Total Comprehensive Income (Loss)	$	(2,034	)	$	2,982		$	(21,198	)	$	(12,045	)
Other Comprehensive Loss													(10,631		)	(3,885		)
Total Comprehensive Loss													$	(28,802	)	$	(19,164	)

The accompanying notes are an integral part of these statements.

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six Months Ended						Three Months Ended
	December 28, 2014			December 29, 2013			September 27, 2015				September 28, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(8,336	)	$	(18,647	)	$	(18,171	)		$	(15,279	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Depreciation and Amortization	26,026			27,757			13,397				12,939
Stock Compensation Expense	3,382			4,537			1,627				1,605
Loss on Disposition of Plant and Equipment	132			92			46				75
Provision (Credit) for Deferred Income Taxes	8,420			(5,200		)
Provision for Deferred Income Taxes							3,844				4,558
Equity in Earnings of Unconsolidated Affiliates	(3,341		)	(2,551		)	(1,436		)		(1,887		)
Dividends Received from Unconsolidated Affiliates	4,381			4,069			728				1,750
Non-Cash Restructuring Charges	9,190			2,208			229				5,165
Change in Operating Assets and Liabilities:
Accounts Receivable	24,305			(1,839		)	45,558				70,347
Inventories	(151,170		)	(68,101		)	(95,342		)		(117,735		)
Other Current Assets	7,659			(3,031		)	2,408				8,628
Accounts Payable, Accrued Liabilities and Income Taxes	(26,912		)	21,194			(30,337		)		(13,596		)
Other, Net	(7,768		)	(5,736		)	(5,240		)		(5,448		)
Net Cash Used in Operating Activities	(114,032		)	(45,248		)	(82,689		)		(48,878		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Plant and Equipment	(23,289		)	(18,063		)	(12,428		)		(7,390		)
Proceeds Received on Disposition of Plant and Equipment	289			61			515				172
Cash Paid for Acquisition, Net of Cash Acquired	(62,056		)	—			(2,174		)		(62,056		)
Net Cash Used in Investing Activities	(85,056		)	(18,002		)	(14,087		)		(69,274		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on Short-Term Debt	—			(300		)
Net Borrowings on Revolver	87,000			—			38,410				—
Debt Issuance Costs	—			(942		)
Treasury Stock Purchases	(27,598		)	(21,086		)	(11,178		)		(17,761		)
Stock Option Exercise Proceeds and Tax Benefits	3,652			994			6,433				3,151
Cash Dividends Paid	(5,718		)	(5,730		)
Net Cash Provided by (Used in) Financing Activities	57,336			(27,064		)	33,665				(14,610		)
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(1,226		)	31			(1,284		)		(8		)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(142,978		)	(90,283		)	(64,395		)		(132,770		)
CASH AND CASH EQUIVALENTS, Beginning	194,668			188,445			118,390			��	194,668
CASH AND CASH EQUIVALENTS, Ending	$	51,690		$	98,162		$	53,995			$	61,898

The accompanying notes are an integral part of these statements.

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. General Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and therefore do not include all information and footnotes necessary for a fair statement of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but also does not include all disclosures required by accounting principles generally accepted in the United States. However, in the opinion of Briggs & Stratton Corporation (the Company), adequate disclosures have been presented to prevent the information from being misleading, and all adjustments necessary to fairly present the results of operations and financial position have been included. All of these adjustments are of a normal recurring nature, except as otherwise noted.

Interim results are not necessarily indicative of results for a full year. The information included in these condensed consolidated financial statements should be read in conjunction with the financial statements and the notes thereto that were included in the Company's latest Annual Report on Form 10-K.

2. New Accounting Pronouncements

In May 2014, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for annual reporting periods beginning after December 15, ~~2016,~~2017, including interim periods within that reporting period, under either full or modified retrospective adoption. Early application is ~~not permitted. Management~~only permitted for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently assessing the potential impact of this new accounting pronouncement on the Company's results of operations, financial position, and cash ~~flow.~~flows.

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

3. Accumulated Other Comprehensive Income (Loss)

The following tables set forth the changes in accumulated other comprehensive income (loss) (in thousands):


	Three Months Ended December 28, 2014												Three Months Ended September 27, 2015
	Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Total			Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Total
Beginning Balance	$	3,146		$	2,583		$	(204,871	)	$	(199,142	)	$	(19,117	)	$	1,212		$	(261,205	)	$	(279,110	)
Other Comprehensive Income (Loss) Before Reclassification	(11,213		)	987			—			(10,226		)	(12,473		)	2,176			—			(10,297		)
Income Tax Benefit (Expense)	—			(375		)	—			(375		)	—			(816		)	—			(816		)
Net Other Comprehensive Income (Loss) Before Reclassifications	(11,213		)	612			—			(10,601		)	(12,473		)	1,360			—			(11,113		)
Reclassifications:
Realized (Gains) Losses - Foreign Currency Contracts (1)	—			(1,904		)	—			(1,904		)	—			(3,171		)	—			(3,171		)
Realized (Gains) Losses - Commodity Contracts (1)	—			343			—			343			—			132			—			132
Realized (Gains) Losses - Interest Rate Swaps (1)	—			314			—			314			—			302			—			302
Amortization of Prior Service Costs (Credits) (2)	—			—			(644		)	(644		)	—			—			(620		)	(620		)
Amortization of Actuarial Losses (2)	—			—			4,510			4,510			—						4,129			4,129
Total Reclassifications Before Tax	—			(1,247		)	3,866			2,619			—			(2,737		)	3,509			772
Income Tax Expense (Benefit)	—			474			(1,469		)	(995		)	—			1,026			(1,316		)	(290		)
Net Reclassifications	—			(773		)	2,397			1,624			—			(1,711		)	2,193			482
Other Comprehensive Income (Loss)	(11,213		)	(161		)	2,397			(8,977		)	(12,473		)	(351		)	2,193			(10,631		)
Ending Balance	$	(8,067	)	$	2,422		$	(202,474	)	$	(208,119	)	$	(31,590	)	$	861		$	(259,012	)	$	(289,741	)

(1) Amounts reclassified to net income (loss) are included in net sales or cost of goods sold. See Note 10 for information related to derivative financial instruments.

(2) Amounts reclassified to net income (loss) are included in the computation of net periodic expense, which is presented in cost of goods sold or engineering, selling, general and administrative expenses. See Note 8 for information related to pension and postretirement benefit plans.

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Three Months Ended December 29, 2013
Cumulative Translation Adjustments Derivative Financial Instruments Pension and Postretirement Benefit Plans Total
Beginning Balance $ 12,139
$ (3,954 ) $ (228,791 ) $ (220,606 )
Other Comprehensive Income (Loss) Before Reclassification (3,625 ) (369 ) —
(3,994 )
Income Tax Benefit (Expense) —
141
—
141
Net Other Comprehensive Income (Loss) Before Reclassifications (3,625 ) (228 ) —
(3,853 )
Reclassifications:
Realized (Gains) Losses - Foreign Currency Contracts (1) —
287
—
287
Realized (Gains) Losses - Commodity Contracts (1) —
2,160
—
2,160
Realized (Gains) Losses - Interest Rate Swaps (1) —
301
—
301
Amortization of Prior Service Costs (Credits) (2) —
—
(679 ) (679 )
Amortization of Actuarial Losses (2) —
—
7,824
7,824
Total Reclassifications Before Tax —
2,748
7,145
9,893
Income Tax Expense (Benefit) —
(1,052 ) (2,708 ) (3,760 )
Net Reclassifications —
1,696
4,437
6,133
Other Comprehensive Income (Loss) (3,625 ) 1,468
4,437
2,280
Ending Balance $ 8,514
$ (2,486 ) $ (224,354 ) $ (218,326 )

~~(1) Amounts reclassified to net income (loss) are included in net sales or cost of goods sold. See Note 10 for information related to derivative financial instruments.~~

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~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~

Six Months Ended December 28, 2014
Cumulative Translation Adjustments Derivative Financial Instruments Pension and Postretirement Benefit Plans Total
Beginning Balance $ 13,053
$ (1,084 ) $ (207,226 ) $ (195,257 )
Other Comprehensive Income (Loss) Before Reclassification (21,120 ) 6,805
—
(14,315 )
Income Tax Benefit (Expense) —
(2,586 ) —
(2,586 )
Net Other Comprehensive Income (Loss) Before Reclassifications (21,120 ) 4,219
—
(16,901 )
Reclassifications:

Realized (Gains) Losses - Foreign Currency Contracts (1) —
(2,297 ) —
(2,297 )
Realized (Gains) Losses - Commodity Contracts (1) —
522
—
522
Realized (Gains) Losses - Interest Rate Swaps (1) —
625
—
625
Amortization of Prior Service Costs (Credits) (2) —
—
(1,289 ) (1,289 )
Amortization of Actuarial Losses (2) —
—
8,955
8,955
Total Reclassifications Before Tax —
(1,150 ) 7,666
6,516
Income Tax Expense (Benefit) —
437
(2,914 ) (2,477 )
Net Reclassifications —
(713 ) 4,752
4,039
Other Comprehensive Income (Loss) (21,120 ) 3,506
4,752
(12,862 )
Ending Balance $ (8,067 ) $ 2,422
$ (202,474 ) $ (208,119 )

~~(1) Amounts reclassified to net income (loss) are included in net sales or cost of goods sold. See Note 10 for information related to derivative financial instruments.~~

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~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~


	Six Months Ended December 29, 2013												Three Months Ended September 28, 2014
	Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Total			Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Total
Beginning Balance	$	11,886		$	(3,673	)	$	(233,141	)	$	(224,928	)	$	13,053		$	(1,084	)	$	(207,226	)	$	(195,257	)
Other Comprehensive Income (Loss) Before Reclassification	(3,372		)	(3,080		)	—			(6,452		)	(9,907		)	5,818			—			(4,089		)
Income Tax Benefit (Expense)	—			1,180			—			1,180			—			(2,211		)	—			(2,211		)
Net Other Comprehensive Income (Loss) Before Reclassifications	(3,372		)	(1,900		)	—			(5,272		)	(9,907		)	3,607			—			(6,300		)
Reclassifications:
Realized (Gains) Losses - Foreign Currency Contracts (1)	—			749			—			749			—			(393		)	—			(393		)
Realized (Gains) Losses - Commodity Contracts (1)	—			3,658			—			3,658			—			179			—			179
Realized (Gains) Losses - Interest Rate Swaps (1)	—			597			—			597			—			311			—			311
Amortization of Prior Service Costs (Credits) (2)	—			—			(1,358		)	(1,358		)	—			—			(645		)	(645		)
Amortization of Actuarial Losses (2)	—			—			15,553			15,553			—			—			4,444			4,444
Total Reclassifications Before Tax	—			5,004			14,195			19,199			—			97			3,799			3,896
Income Tax Expense (Benefit)	—			(1,917		)	(5,408		)	(7,325		)	—			(37		)	(1,444		)	(1,481		)
Net Reclassifications	—			3,087			8,787			11,874			—			60			2,355			2,415
Other Comprehensive Income (Loss)	(3,372		)	1,187			8,787			6,602			(9,907		)	3,667			2,355			(3,885		)
Ending Balance	$	8,514		$	(2,486	)	$	(224,354	)	$	(218,326	)	$	3,146		$	2,583		$	(204,871	)	$	(199,142	)

(1) Amounts reclassified to net income (loss) are included in net sales or cost of goods sold. See Note 10 for information related to derivative financial instruments.

4. Acquisitions

On August 29, 2014, the Company acquired all of the outstanding shares of Allmand Bros., Inc. ("Allmand") of Holdrege, Nebraska for total cash consideration of ~~$62.1~~$59.9 million, net of cash acquired. Allmand is a leading designer and manufacturer of high quality towable light towers, industrial heaters, and solar LED arrow boards. Its products are used in a variety of industries, including construction, roadway, oil and gas, mining, and sporting and special events. Allmand's products are generally powered by diesel engines, and distributed through national and regional equipment rental companies, equipment dealers and distributors. Allmand sells its products and service parts in approximately 40 countries. During ~~the first quarter of~~ fiscal 2015, the Company recorded a ~~preliminary~~ purchase price allocation based on its ~~initial~~ estimates of fair value. The ~~preliminary~~ purchase price allocation resulted in the recognition of ~~$17.7~~$15.6 million of goodwill, which was allocated to the Products Segment, and $24.1 million of intangible assets, including $15.7 million of customer relationships, $8.1 million of tradenames, and $0.3 million of other intangible assets.

On May 20, 2015, the Company acquired all of the outstanding shares of Billy Goat Industries, Inc. ("Billy Goat") of Lee's Summit, Missouri for total cash consideration of $28.3 million, net of cash acquired. Billy Goat is a leading manufacturer of specialty turf equipment, which includes aerators, sod cutters, overseeders, power rakes, brush cutters, walk behind blowers, lawn vacuums, and debris loaders. During fiscal 2015, the Company recorded a purchase price allocation based on its estimates of fair value. The purchase price allocation resulted in the recognition of $9.2 million of goodwill, which was allocated to the Products Segment, and $16.4 million of intangible assets, including $12.0 million of customer relationships, $4.0 million of tradenames, and $0.4 million of other intangible assets.

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The results of operations of ~~Allmand~~the acquisitions have been included in the Consolidated Condensed ~~Consolidated~~ Statements of Operations since the date of acquisition. Pro forma financial information and allocation of the ~~preliminary~~ purchase price are not presented as the effects of the ~~acquisition~~acquisitions are not material to the Company's consolidated results of operations or financial position.

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5. Restructuring Actions

~~The restructuring actions announced in 2012 were concluded as planned during the fourth quarter of fiscal 2014.~~

~~During the first quarter of~~In fiscal 2015, the Company announced and began implementing restructuring actions to narrow its assortment of lower-priced Snapper consumer lawn and garden equipment and consolidate its Products Segment manufacturing facilities in order to further reduce costs. The Company ~~expects~~continues to ~~close~~focus on premium residential products to customers through its Snapper and Simplicity brands and commercial products through its Snapper Pro and Ferris brands. The Company closed its McDonough, Georgia ~~plant~~location in the fourth quarter of fiscal 2015 and ~~consolidate~~consolidated production into existing ~~facilities~~facilities. Production of pressure washers, riding mowers, and snow throwers have been moved to the Company's Wauwatosa, Wisconsin facility. At September 27, 2015, the Company had $3.8 million classified as assets held for sale, which is included in ~~Wisconsin~~Prepaid Expenses and ~~New York.~~ Other Current Assets within the Condensed Consolidated Balance Sheets, related to the McDonough, Georgia location.

During the first quarter of fiscal 2016, the Company implemented restructuring actions within the Engines Segment. These actions, which were completed in the first quarter of fiscal 2016, included a headcount reduction at its plant in Chongqing, China to offset lower production of engines used on snow throwers as well as changes in salaried personnel in the United States.

The Company reports restructuring charges associated with manufacturing and related initiatives as costs of goods sold within the Condensed Consolidated Statements of Operations. Restructuring charges reflected as costs of goods sold include, but are not limited to, termination and related costs associated with manufacturing employees, asset impairments and accelerated depreciation relating to manufacturing initiatives, and other costs directly related to the restructuring initiatives implemented. The Company reports all other non-manufacturing related restructuring charges as engineering, selling, general and administrative expenses onwithin the Condensed Consolidated Statements of Operations.

The restructuring actions discussed above resulted in pre-tax charges of ~~$7.4~~$3.4 million ($~~4.8~~2.2 million after tax or ~~$0.11~~$0.05 per diluted share) for the first quarter of fiscal 2016. The Engines Segment recorded pre-tax charges of $1.4 million during the first quarter of fiscal 2016, which represents the cumulative pre-tax restructuring costs and ~~$15.2~~the total costs expected to be incurred under these restructuring actions. The Products Segment recorded pre-tax charges of $2.0 million ~~($9.9 million after tax or $0.22 per diluted share) recorded within~~during the first quarter of fiscal 2016. As of September 27, 2015, the Products Segment cumulative pre-tax restructuring costs associated with the restructuring actions announced in fiscal 2015 are $29.3 million. Total cumulative estimated pre-tax restructuring cost estimates for the ~~second quarter and first six months~~Product Segment restructuring actions are $31 million to $35 million.

The following is a rollforward of ~~fiscal~~the restructuring reserve (included in Accrued Liabilities within the Condensed Consolidated Balance Sheets) attributable to Engines Segment restructuring activities for the three month period ended September 27, 2015 ~~respectively.~~(in thousands):



	Termination Benefits			Other Costs		Total
Reserve Balance at June 28, 2015	$	—		$	—	$	—
Provisions	1,354			—		1,354
Cash Expenditures	(535		)	—		(535		)
Other Adjustments	(182		)	—		(182		)
Reserve Balance at September 27, 2015	$	637		$	—	$	637

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The following is a rollforward of the restructuring reserve (included in Accrued Liabilities within the Condensed Consolidated Balance Sheets) attributable to Products Segment restructuring activities for the ~~six~~three month period ended ~~December 28, 2014~~September 27, 2015 (in thousands):

Termination Benefits Other Costs Total
Reserve Balance at June 29, 2014 $ —
$ 105
$ 105
Provisions 3,999
11,231
15,230
Cash Expenditures (332 ) (2,146 ) (2,478 )
Other Adjustments⁽¹⁾
—
(9,190 ) (9,190 )
Reserve Balance at December 28, 2014 $ 3,667
$ —
$ 3,667

~~(1) Other adjustments includes $1.2 million of asset impairments and $7.9 million of accelerated depreciation.~~



	Termination Benefits			Other Costs			Total
Reserve Balance at June 28, 2015	$	2,107		$	—		$	2,107
Provisions	—			2,019			2,019
Cash Expenditures	(1,280		)	(1,972		)	(3,252		)
Other Adjustments	—			(47		)	(47		)
Reserve Balance at September 27, 2015	$	827		$	—		$	827

6. Earnings (Loss) Per Share

The Company computes earnings (loss) per share using the two-class method, an earnings allocation formula that determines earnings (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company’s unvested grants of restricted stock, restricted stock units, and deferred stock awards contain non-forfeitable rights to dividends (whether paid or unpaid), which are required to be treated as participating securities and included in the computation of basic earnings (loss) per share.

Information on earnings (loss) per share is as follows (in thousands, except per share data):


	Three Months Ended						Six Months Ended						Three Months Ended
	December 28, 2014			December 29, 2013			December 28, 2014			December 29, 2013			September 27, 2015			September 28, 2014
Net Income (Loss)	$	6,943		$	702		$	(8,336	)	$	(18,647	)
Net Loss													$	(18,171	)	$	(15,279	)
Less: Allocation to Participating Securities	(168		)	(151		)	(266		)	(302		)	(109		)	(132		)
Net Income (Loss) Available to Common Shareholders	$	6,775		$	551		$	(8,602	)	$	(18,949	)
Net Loss Available to Common Shareholders													$	(18,280	)	$	(15,411	)
Average Shares of Common Stock Outstanding	44,579			46,825			44,827			46,760			43,478			45,113
Diluted Average Shares Outstanding	44,629			47,987			44,827			46,760			43,478			45,113
Basic Earnings (Loss) Per Share	$	0.15		$	0.01		$	(0.19	)	$	(0.41	)	$	(0.42	)	$	(0.34	)
Diluted Earnings (Loss) Per Share	$	0.15		$	0.01		$	(0.19	)	$	(0.41	)	$	(0.42	)	$	(0.34	)

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The dilutive effect of the potential exercise of outstanding stock-based awards to acquire common shares is calculated using the treasury stock method. The following options to purchase shares of common stock were excluded from the calculation of diluted earnings (loss) per share as the exercise prices were greater than the average market price of the common shares:


	Three Months Ended				Six Months Ended				Three Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013		September 27, 2015		September 28, 2014
Options to Purchase Shares of Common Stock (in thousands)	858		1,845		858		1,348		910		876
Weighted Average Exercise Price of Options Excluded	$	20.32	$	28.64	$	20.32	$	31.88	$	20.31	$	20.31

As a result of the Company incurring a net loss for the ~~six~~three months ended ~~December~~September 27, 2015 and September 28, 2014, ~~and December 29, 2013,~~ potential incremental common shares of ~~1,002,000~~882,464 and ~~1,142,000,~~928,601, respectively, were excluded from the calculation of diluted earnings (loss) per share because the effect would have been anti-dilutive.

On ~~January 22, 2014, the Board of Directors of the Company authorized up to~~ ~~$50 million~~ ~~in funds for use in the Company’s common share repurchase program. On~~ August 13, 2014, the Board of Directors of the Company authorized up to ~~an additional~~ $50 million in funds associated with the common share repurchase program. As of ~~December 28, 2014,~~September 27, 2015, the total remaining authorization was approximately ~~$59.7~~$29.1 million with an expiration date of June 30, 2016. The common share repurchase program authorizes the purchase of shares of the Company's common stock on the open market or in private transactions from time to time, depending on market conditions and certain governing loan covenants. During the ~~six~~three months ended ~~December 28, 2014~~September 27, 2015, the Company repurchased ~~1,428,588~~589,882 shares on the open market at an average price of

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$~~19.33~~18.95 per share, as compared to ~~1,066,447~~905,164 shares purchased on the open market at an average price of $~~19.77~~19.62 per share during the ~~six~~three months ended ~~December 29, 2013~~September 28, 2014.

7. Investments

This caption represents the Company’s investments in unconsolidated affiliated companies.

During the third quarter of fiscal 2014, the Company joined with one of its independent distributors to form a venture to distribute service parts. The Company contributed non-cash assets in exchange for receiving an ownership interest in the venture. As a result of the transaction, the Company recorded an investment of $6.5 million. In the first quarter of fiscal 2015, a second independent distributor joined the venture and, as a result, the Company recorded an additional investment of $2.8 million. During the second quarter of fiscal 2015 and the first quarter of fiscal 2016, the venture acquired a third and fourth independent ~~distributor.~~distributor, respectively. The Company uses the equity method to account for this investment, and the earnings of the unconsolidated affiliate are recorded within the Products Segment. ~~As of December~~At September 27, 2015 and June 28, ~~2014,~~2015, the Company's total investment in the venture was ~~$10.2~~$11.7 million and $10.0 million, respectively, and its ownership percentage was 15.2% and 11.9%., respectively.

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8. Pension and Postretirement Benefits

The Company has noncontributory defined benefit retirement plans and postretirement plans covering certain employees. The following tables summarize the plans’ income and expense for the periods indicated (in thousands):

Pension Benefits Other Postretirement Benefits
Three Months Ended Three Months Ended
December 28,
2014 December 29,
2013 December 28,
2014 December 29,
2013
Components of Net Periodic Expense (Income):
Service Cost $ 886
$ 1,885
$ 63
$ 78
Interest Cost on Projected Benefit Obligation 12,430
13,419
907
1,151
Expected Return on Plan Assets (18,631 ) (18,510 ) —
—
Amortization of:
Prior Service Cost (Credit) 45
45
(689 ) (724 )
Actuarial Loss 3,333
6,275
1,177
1,549
Net Periodic Expense (Income) $ (1,937 ) $ 3,114
$ 1,458
$ 2,054

Pension Benefits Other Postretirement Benefits
Six Months Ended Six Months Ended
December 28,
2014 December 29,
2013 December 28,
2014 December 29,
2013
Components of Net Periodic Expense (Income):
Service Cost $ 1,716
$ 3,823
$ 148
$ 167
Interest Cost on Projected Benefit Obligation 24,891
26,872
1,804
2,300
Expected Return on Plan Assets (37,319 ) (37,076 ) —
—
Amortization of:
Prior Service Cost (Credit) 90
90
(1,379 ) (1,448 )
Actuarial Loss 6,631
12,545
2,324
3,008
Net Periodic Expense (Income) $ (3,991 ) $ 6,254
$ 2,897
$ 4,027

On January 1, 2014, an amendment to the Company's defined benefit retirement plans became effective that froze accruals for all U.S. non-bargaining employees. Also, on January 1, 2014, amendments became effective that increased benefits under the defined contribution plans.



	Pension Benefits						Other Postretirement Benefits
	Three Months Ended						Three Months Ended
	September 27, 2015			September 28, 2014			September 27, 2015			September 28, 2014
Components of Net Periodic Expense (Income):
Service Cost	$	857		$	830		$	76		$	85
Interest Cost on Projected Benefit Obligation	13,042			12,461			809			897
Expected Return on Plan Assets	(17,827		)	(18,687		)	—			—
Amortization of:
Prior Service Cost (Credit)	45			45			(665		)	(690		)
Actuarial Loss	3,172			3,297			957			1,147
Net Periodic Expense (Income)	$	(711	)	$	(2,054	)	$	1,177		$	1,439

The Company expects to make benefit payments of $3.2 million attributable to its non-qualified pension plans during fiscal ~~2015.~~2016. During the first ~~six~~three months of fiscal ~~2015,~~2016, the Company made payments of approximately $~~1.3~~0.8 million for its non-qualified pension plans. The Company anticipates making benefit payments of approximately $~~12.7~~12.2 million for its other postretirement benefit plans during fiscal ~~2015.~~2016. During the first ~~six~~three months of fiscal ~~2015,~~2016, the Company made payments of ~~$8.3~~$3.5 million for its other postretirement benefit plans.

During the first ~~six~~three months of fiscal ~~2015,~~2016, the Company made no cash contributions to the qualified pension plan. Based upon current regulations and actuarial studies, the Company is not required to makeno ~~minimum~~ contributions to the qualified pension plan ~~during the remainder of~~in fiscal ~~2015.~~2016 through fiscal 2019. The Company may be required to make further contributions in future years depending upon the actual return on plan assets and the funded status of the plan in future periods.

9. Stock Incentives

Stock based compensation expense is calculated by estimating the fair value of incentive stock awards granted and amortizing the estimated value over the awards' vesting period. Stock based compensation expense was ~~$1.8 million and $3.4~~$1.6 million for the three ~~and six~~ months ended ~~December 28, 2014~~September 27, 2015~~, respectively.~~. For the three ~~and six~~ months ended ~~December 29, 2013~~September 28, 2014, stock based compensation expense was ~~$1.5 million and $4.5 million, respectively.~~$1.6 million.

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10. Derivative Instruments & Hedging Activities

The Company enters into derivative contracts designated as cash flow hedges to manage certain interest rate, foreign currency and commodity exposures. Company policy allows derivatives to be used only for identifiable exposures and, therefore, the Company does not enter into hedges for trading purposes where the sole objective is to generate profits.

The Company formally designates the financial instrument as a hedge of a specific underlying exposure and documents both the risk management objectives and strategies for undertaking the hedge. The Company formally assesses, both at the inception and at least quarterly thereafter, whether the financial instruments that are used in hedging transactions are effective at offsetting changes in the forecasted cash flows of the related underlying exposure. Because of the high degree of effectiveness between the hedging instrument and the underlying exposure being hedged, fluctuations in the value of the derivative instruments are generally offset by changes in the forecasted cash flows of the underlying exposures being hedged. Derivative financial instruments are recorded onwithin the Condensed Consolidated Balance Sheets as assets or liabilities, measured at fair value. The effective portion of gains or losses on ~~the derivative~~derivatives designated as cash flow hedges are reported as a component of Accumulated Other Comprehensive Income (Loss) (AOCI) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Any ineffective portion of a financial instrument's change in fair value is immediately recognized in earnings.

The Company discontinues hedge accounting prospectively when it determines that the derivative is no longer effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, the cash flow hedge is dedesignated because a forecasted transaction is not probable of occurring, or management determines to remove the designation of the cash flow hedge.

In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company continues to carry the derivative at its fair value on the balance sheet and recognizes any subsequent changes in its fair value in earnings. When it is probable that a forecasted transaction will not occur, the Company discontinues hedge accounting and recognizes immediately in earnings gains and losses that were accumulated in other comprehensive income related to the hedging relationship.

The Company enters into interest rate swaps to manage a portion of its interest rate risk from financing certain dealer and distributor inventories through a third party financing source. The swaps are designated as cash flow hedges and are used to effectively fix the interest payments to a third party financing source, exclusive of lender spreads, ranging from 1.17% to 1.60% for a notional principal amount of $95 million with expiration dates ranging from July 2017 through May 2019.

The Company enters into forward foreign currency contracts to hedge the risk from forecasted third party and intercompany sales or payments denominated in foreign currencies. These obligations generally require the Company to exchange foreign currencies for U.S. Dollars, Australian Dollars, Brazilian Real, Canadian Dollars, Chinese Renminbi, Euros, or Japanese ~~Yen or Mexican Pesos.~~Yen. These contracts generally do not have a maturity of more than twenty-four months.

The Company uses raw materials that are subject to price volatility. The Company hedges a portion of its exposure to the variability of cash flows associated with commodities used in the manufacturing process by entering into forward purchase contracts or commodity swaps. Derivative contracts designated as cash flow hedges are used by the Company to reduce exposure to variability in cash flows associated with future purchases of natural gas. These contracts generally do not have a maturity of more than ~~twenty-four~~thirty-six months.

The Company has considered the counterparty credit risk related to all of its interest rate, foreign currency and commodity derivative contracts and deems any risk of counterparty default to be minimal.

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As of ~~December 28, 2014~~September 27, 2015 and June ~~29, 2014~~28, 2015, the Company had the following outstanding derivative contracts (in thousands):


Contract	Contract		Notional Amount		Contract		Notional Amount
			December 28, 2014	June 29, 2014			September 27, 2015	June 28, 2015
Interest Rate:
LIBOR Interest Rate (U.S. Dollars)		Fixed	95,000	95,000		Fixed	95,000	95,000
Foreign Currency:
Australian Dollar		Sell	9,764	19,904		Sell	24,238	29,473
Brazilian Real		Sell	18,452	—		Sell	9,140	22,443
Canadian Dollar		Sell	6,450	3,100		Sell	9,726	9,326
Chinese Renminbi		Buy	151,075	—		Buy	269,525	259,350
Euro		Sell	45,200	49,300		Sell	70,600	62,740
Euro		Buy	6,000	—
Japanese Yen		Buy	1,030,000	530,000		Buy	813,000	711,000
Mexican Peso		Sell	—	3,000
Commodity:
Natural Gas (Therms)		Buy	10,041	5,686		Buy	11,850	11,324

The location and fair value of derivative instruments reported in the Condensed Consolidated Balance Sheets are as follows (in thousands):


Balance Sheet Location	Asset (Liability) Fair Value						Asset (Liability) Fair Value
	December 28, 2014			June 29, 2014			September 27, 2015			June 28, 2015
Interest rate contracts
Other Long-Term Assets	$	56		$	43
Other Long-Term Liabilities	(795		)	(1,209		)	$	(1,468	)	$	(1,034	)
Foreign currency contracts
Other Current Assets	8,245			337			4,538			4,417
Other Long-Term Assets	438			12			159			276
Accrued Liabilities	(1,168		)	(665		)	(1,326		)	(1,041		)
Other Long-Term Liabilities	—			(9		)	(143		)	(43		)
Commodity contracts
Other Current Assets	—			39
Accrued Liabilities	(630		)	(35		)	(530		)	(493		)
Other Long-Term Liabilities	(143		)	(14		)	(262		)	(134		)
	$	6,003		$	(1,501	)	$	968		$	1,948

The effect of derivative instruments on the Condensed Consolidated Statements of Operations and Comprehensive Loss is as follows (in thousands):



	Three months ended September 27, 2015
	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives, Net of Taxes (Effective Portion)			Classification of Gain (Loss)	Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Recognized in Earnings (Ineffective Portion)
Interest rate contracts	$	(269	)	Net Sales	$	(302	)	$	—
Foreign currency contracts - sell	390			Net Sales	3,307			—
Foreign currency contracts - buy	(366		)	Cost of Goods Sold	(136		)	—
Commodity contracts	(106		)	Cost of Goods Sold	(132		)	—
	$	(351	)		$	2,737		$	—

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~~The effect of derivative instruments on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) is as follows (in thousands):~~


	Three months ended December 28, 2014									Three months ended September 28, 2014
	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives, Net of Taxes (Effective Portion)			Classification of Gain (Loss)	Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Recognized in Earnings (Ineffective Portion)		Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives, Net of Taxes (Effective Portion)			Classification of Gain (Loss)	Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Recognized in Earnings (Ineffective Portion)
Interest rate contracts	$	(89	)	Net Sales	$	(314	)	$	—	$	351		Net Sales	$	(311	)	$	—
Foreign currency contracts - sell	394			Net Sales	2,079			—		3,445			Net Sales	464			—
Foreign currency contracts - buy	(251		)	Cost of Goods Sold	(175		)	—		(157		)	Cost of Goods Sold	(71		)	—
Commodity contracts	(215		)	Cost of Goods Sold	(343		)	—		28			Cost of Goods Sold	(179		)	—
	$	(161	)		$	1,247		$	—	$	3,667			$	(97	)	$	—

Three months ended December 29, 2013

Amount of Gain (Loss)
Recognized in Other
Comprehensive Income
(Loss) on Derivatives, Net of
Taxes (Effective
Portion)

Classification of
Gain (Loss)

Amount of Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)

Recognized in
Earnings
(Ineffective Portion)
Interest rate contracts $ 255
Net Sales $ (301 ) $ —
Foreign currency contracts - sell (151 ) Net Sales (115 ) —
Foreign currency contracts - buy (67 ) Cost of Goods Sold (172 ) —
Commodity contracts 1,431
Cost of Goods Sold (2,160 ) —
$ 1,468
$ (2,748 ) $ —

Six months ended December 28, 2014

Amount of Gain (Loss)
Recognized in Other
Comprehensive Income
(Loss) on Derivatives, Net of
Taxes (Effective
Portion)

Classification of
Gain (Loss)

Amount of Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)

Recognized in
Earnings
(Ineffective Portion)
Interest rate contracts $ 261
Net Sales $ (625 ) $ —
Foreign currency contracts - sell 3,840
Net Sales 2,543
—
Foreign currency contracts - buy (408 ) Cost of Goods Sold (246 ) —
Commodity contracts (187 ) Cost of Goods Sold (522 ) —
$ 3,506
$ 1,150
$ —

Six months ended December 29, 2013

Amount of Gain (Loss)
Recognized in Other
Comprehensive Income
(Loss) on Derivatives, Net of
Taxes (Effective
Portion)

Classification of
Gain (Loss)

Amount of Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)

Recognized in
Earnings
(Ineffective Portion)
Interest rate contracts $ 5
Net Sales $ (597 ) $ —
Foreign currency contracts - sell (1,099 ) Net Sales (110 ) —
Foreign currency contracts - buy (28 ) Cost of Goods Sold (639 ) —
Commodity contracts 2,309
Cost of Goods Sold (3,658 ) —
$ 1,187
$ (5,004 ) $ —

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During the next twelve months, the estimated net amount of income on cash flow hedges as of ~~December 28, 2014~~September 27, 2015 expected to be reclassified out of AOCI into earnings is $~~3.2~~1.9 million.

11. Fair Value Measurements

The following guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:

Level 1: Quoted prices for identical instruments in active markets.

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are observable.

Level 3: Significant inputs to the valuation model are unobservable.

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of ~~December 28, 2014~~September 27, 2015 and June ~~29, 2014~~28, 2015 (in thousands):


			Fair Value Measurements Using								Fair Value Measurements Using
	December 28, 2014		Level 1		Level 2		Level 3		September 27, 2015		Level 1		Level 2		Level 3
Assets:
Derivatives	$	8,739	$	—	$	8,739	$	—	$	4,697	$	—	$	4,697	$	—
Liabilities:
Derivatives	$	2,736	$	—	$	2,736	$	—	$	3,729	$	—	$	3,729	$	—
	June 29, 2014		Level 1		Level 2		Level 3		June 28, 2015		Level 1		Level 2		Level 3
Assets:
Derivatives	$	431	$	—	$	431	$	—	$	4,693	$	—	$	4,693	$	—
Liabilities:
Derivatives	$	1,932	$	—	$	1,932	$	—	$	2,745	$	—	$	2,745	$	—

The fair value for Level 2 measurements are based upon the respective quoted market prices for comparable instruments in active markets, which include current market pricing for forward purchases of commodities, foreign currency forwards, and current interest rates.

The Company has currently chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with accounting principles generally accepted in the United States.

The estimated fair value of the Company's Senior Notes (as defined in Note 16) at ~~December 28, 2014~~September 27, 2015 and June ~~29, 2014~~28, 2015 was $~~247.9~~244.4 million and $~~251.4~~248.3 million, respectively, compared to the carrying value of $225.0 million on each date. The estimated fair value of the Senior Notes is based on quoted market prices for similar instruments

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and is, therefore, classified as Level 2 within the valuation hierarchy. The carrying value of the Revolver (as defined in Note 16) approximates fair value since the underlying rate of interest is variable based upon LIBOR rates.

The Company believes that the carrying values of cash and cash equivalents, trade receivables, and accounts payable are reasonable estimates of their fair values at ~~December 28, 2014~~September 27, 2015 and June ~~29, 2014~~28, 2015 due to the short-term nature of these instruments.

~~Table of Contents~~

12. Warranty

The Company recognizes the cost associated with its standard warranty on Engines and Products at the time of sale. The general warranty period begins at the time of sale and typically covers two years, but may vary due to product type and geographic location. The amount recognized is based on historical failure rates and current claim cost experience. The following is a reconciliation of the changes in accrued warranty costs for the reporting period (in thousands):


	Six Months Ended						Three Months Ended
	December 28, 2014			December 29, 2013			September 27, 2015			September 28, 2014
Beginning Balance	$	44,744		$	45,037		$	48,006		$	44,744
Payments	(15,201		)	(15,108		)	(8,635		)	(8,178		)
Provision for Current Year Warranties	13,235			12,083			5,834			6,251
Changes in Estimates	(39		)	(438		)	(38		)	(14		)
Ending Balance	$	42,739		$	41,574		$	45,167		$	42,803

13. Income Taxes

The effective tax ~~rates~~rate for the ~~second~~first quarter ~~and first six months~~ of fiscal ~~2015 were~~ ~~33.7%~~ ~~and~~ ~~45.8%~~2016 was 31.2%, compared to ~~69.8%~~ ~~and~~ ~~25.5%~~40.9% for the same respective ~~periods~~period last year. The tax rates for the ~~second quarter and~~ first ~~six months~~quarters of fiscal 2016 and 2015 were primarily driven by losses incurred at certain foreign subsidiaries for which the Company does not receive tax benefits and ~~the re-enactment of~~foreign earnings in jurisdictions with tax rates that vary from the U.S. ~~research and development tax credit. In addition, the~~statutory rate. The tax rate for the first ~~six months~~quarter of fiscal 2015 ~~was impacted by~~also included the reversal of previously recorded reserves as a result of the effective settlement of the Company’s IRS ~~audit. The~~audit for its 2009-2010 consolidated income tax ~~rates for the second quarter and first six months of fiscal 2014 were primarily driven by losses incurred at certain foreign subsidiaries for which the Company did not receive tax benefits.~~returns.

For the ~~six~~three months ended ~~December 28, 2014~~,September 27, 2015, the Company's unrecognized tax benefits ~~decreased~~increased by ~~$2.0~~$0.2 million,, all of which impacted the current effective tax rate. ~~This amount substantially consists of the aforementioned reversal of reserves.~~

Income tax returns are filed in the U.S., state, and foreign jurisdictions and related audits occur on a regular basis. ~~The~~In the U.S., the Company is currently under audit for the fiscal years 2010 and 2013, and is no longer subject to U.S. federal income tax examinations for years before fiscal ~~2012 and~~2010. The Company is also currently under audit by various state and foreign jurisdictions. With respect to the Company's major foreign jurisdictions, they are no longer subject to tax examinations for years before fiscal ~~2004.~~

2005.

14. Commitments and Contingencies

~~Briggs & Stratton~~The Company is subject to various unresolved legal actions that arise in the normal course of its business. These actions typically relate to product liability (including asbestos-related liability), patent and trademark matters, and disputes with customers, suppliers, distributors and dealers, competitors and employees.

On May 14, 2010, the Company notified retirees and certain retirement eligible employees of various amendments to the Company-sponsored retiree medical plans intended to better align the plans offered to both hourly and salaried retirees. On August 16, 2010, a putative class of retirees who retired prior to August 1, 2006 and the United Steel Workers filed a complaint in the U.S. District Court for the Eastern District of Wisconsin (Merrill, Weber, Carpenter, et al.; United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO/CLC v. Briggs & Stratton Corporation; Group Insurance Plan of Briggs & Stratton Corporation; and Does 1 through 20, Docket No. 10-C-0700), contesting the Company's right to make these changes. The complaint seeks an injunction preventing the alleged unilateral termination or reduction in insurance coverage to the class of retirees, a permanent injunction preventing defendants from ever making

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changes to the retirees' insurance coverage, restitution with interest (if applicable) and attorneys' fees and costs. A class has been certified, and discovery has concluded. Both parties moved for summary judgment, which was fully briefed on December 23, 2014. ~~Summary~~The court denied both sides’ motions on September 3, 2015, concluding that factual issues were present which preclude summary judgment and should be determined by the jury at trial. The Company filed a motion requesting permission to appeal the court’s decision on an interlocutory basis. The plaintiffs have also moved the court to clarify its decision. Upon the request of all parties, the Court has stayed any further decisions in the matter pending mediation. Mediation is currently ~~pending before~~scheduled for mid-December 2015.

On May 12, 2010, Exmark Manufacturing Company, Inc. filed suit against Briggs & Stratton Power Products Group, LLC (“BSPPG”), a wholly owned subsidiary of the Company (Case No. 8:10CV187, U.S. District Court for the District of Nebraska), alleging that certain Ferris® and Snapper Pro® mower decks infringed an Exmark mower deck patent. Exmark sought damages relating to sales since May 2004, attorneys’ fees, and enhanced damages. As a result of a reexamination proceeding in 2012, the United States Patent and Trademark Office (“USPTO”) initially rejected the asserted Exmark claims as invalid. However, in 2014, that decision was reversed by the USPTO on appeal by Exmark. Following discovery, each of BSPPG and Exmark filed several motions for summary judgment in the Nebraska district court, which were decided on July 28, 2015. The court concluded that older mower deck designs infringed Exmark’s patent, leaving for trial the issues of whether current designs infringed, the amount of damages, and whether any infringement was willful.

The trial began on September 8, 2015, and on September 18, 2015, the jury returned its verdict, finding that BSPPG’s current mower deck designs do not infringe the Exmark patent. As to the older designs, the jury awarded Exmark $24.3 million in damages and found that the infringement was willful, which would allow the judge to enhance the jury’s damages award post-trial by up to three times. Also on September 18, 2015, the U.S. Court of Appeals for the Federal Circuit issued its decision in an unrelated case, SCA Hygiene Products Aktiebolag SCA Personal Care, Inc. v. First Quality Baby Products, LLC, et al. (Case No. 2013-1564) (“SCA”), confirming the availability of laches as a defense to patent infringement claims. Laches is an equitable doctrine that may bar a patent owner from obtaining damages prior to commencing suit, in circumstances in which the owner knows or should have known its patent was being infringed for more than six years. Although the court in the Exmark case ruled before trial that BSPPG could not rely on the defense of laches, as a result of the subsequent SCA decision, the court held a bench trial on that defense on October 21 and ~~no hearing date has been set.~~

~~Table of Contents~~22, 2015 and ordered briefing from the parties, which is anticipated to be completed by mid-November 2015.

~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~BSPPG and the Company strongly disagree with the verdict and certain rulings made in connection with the trial, and BSPPG intends to vigorously pursue its rights through post-trial motions and, if necessary, on appeal. In assessing whether the Company should accrue a liability in its financial statements as a result of the jury verdict, the Company considered various factors, including the legal and factual circumstances of the case, the trial record, the current status of the proceedings, applicable law (including without limitation the precedence of the SCA decision), the views of legal counsel, and the likelihood of successful post-trial motions and appeals. As a result of this review, the Company has concluded that a loss from this case is not probable and reasonably estimable at this time and, therefore, a liability has not been recorded with respect to this case as of September 27, 2015.

Although it is not possible to predict with certainty the outcome of these and other unresolved legal actions or the range of possible loss, the Company believes the unresolved legal actions will not have a material adverse effect on its results of operations, financial position or cash flows.

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15. Segment Information

The Company ~~maintains~~aggregates operating segments that have similar economic characteristics, products, production processes, types or classes of customers and distribution methods into reportable segments. The Company concluded that it operates two reportable ~~business segments that are managed separately based on fundamental differences in their operations. Beginning in fiscal 2015, the~~segments: Engines and Products. The Company ~~is using~~uses “segment income (loss)” as the primary measure to evaluate operating performance and allocate capital resources for the Engines and Products Segments. ~~Previously, the Company used income (loss) from operations.~~ Segment income (loss) is defined as income (loss) from operations plus equity in earnings of unconsolidated affiliates. ~~The Company has recast prior year amounts for comparability.~~ Summarized segment data is as follows (in thousands):


	Three Months Ended						Six Months Ended						Three Months Ended
	December 28, 2014			December 29, 2013			December 28, 2014			December 29, 2013			September 27, 2015			September 28, 2014
NET SALES:
Engines	$	271,704		$	265,712		$	424,820		$	449,499		$	150,083		$	153,116
Products	199,050			171,528			365,178			324,564			162,541			166,128
Inter-Segment Eliminations	(26,467		)	(20,648		)	(53,082		)	(40,167		)	(23,166		)	(26,615		)
Total	$	444,287		$	416,592		$	736,916		$	733,896
Total*													$	289,458		$	292,629
* International sales included in net sales based on product shipment destination													$	91,541		$	106,053
GROSS PROFIT:
Engines	$	62,896		$	54,257		$	90,696		$	79,493		$	23,777		$	27,800
Products	25,213			21,959			44,597			39,784			27,143			19,384
Inter-Segment Eliminations	(241		)	1,150			(104		)	1,920			(1,208		)	137
Total	$	87,868		$	77,366		$	135,189		$	121,197		$	49,712		$	47,321
SEGMENT INCOME (LOSS):
Engines	$	18,894		$	9,292		$	5,040		$	(7,266	)	$	(20,754	)	$	(13,677	)
Products	(3,884		)	(4,256		)	(11,997		)	(11,870		)	62			(8,291		)
Inter-Segment Eliminations	(241		)	1,150			(104		)	1,920			(1,208		)	137
Total	$	14,769		$	6,186		$	(7,061	)	$	(17,216	)	$	(21,900	)	$	(21,831	)

Reconciliation from Segment Income (Loss) to Income (Loss) Before Income Taxes:
Equity in Earnings from Unconsolidated Affiliates	1,454			1,022			3,341			2,551
Income (Loss) from Operations	$	13,315		$	5,164		$	(10,402	)	$	(19,767	)
Reconciliation from Segment Income (Loss) to Loss Before Income Taxes:
Equity in Earnings of Unconsolidated Affiliates													1,436			1,887
Loss from Operations													$	(23,336	)	$	(23,718	)
INTEREST EXPENSE	(4,890		)	(4,594		)	(9,408		)	(9,103		)	(4,536		)	(4,518		)
OTHER INCOME, Net	2,052			1,751			4,425			3,843			1,455			2,373
Income (Loss) Before Income Taxes	10,477			2,321			(15,385		)	(25,027		)
PROVISION (CREDIT) FOR INCOME TAXES	3,534			1,619			(7,049		)	(6,380		)
Net Income (Loss)	$	6,943		$	702		$	(8,336	)	$	(18,647	)
Loss Before Income Taxes													(26,417		)	(25,863		)
CREDIT FOR INCOME TAXES													(8,246		)	(10,584		)
Net Loss													$	(18,171	)	$	(15,279	)

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~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~

Pre-tax restructuring charges and acquisition-related charges included in gross profit were as follows (in thousands):


	Three Months Ended				Six Months Ended				Three Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013		September 27, 2015		September 28, 2014
PRE-TAX RESTRUCTURING CHARGES AND ACQUISITION-RELATED CHARGES INCLUDED IN GROSS PROFIT:
Engines	$	—	$	1,631	$	—	$	3,396	$	464	$	—
Products	6,846		262		14,864		2,082		2,245		8,018
Total	$	6,846	$	1,893	$	14,864	$	5,478	$	2,709	$	8,018

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Pre-tax restructuring charges, acquisition-related charges, and ~~acquisition-related~~litigation charges included in segment income (loss) were as follows (in thousands):


	Three Months Ended				Six Months Ended				Three Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013		September 27, 2015		September 28, 2014
PRE-TAX RESTRUCTURING CHARGES AND ACQUISITION-RELATED CHARGES INCLUDED IN SEGMENT INCOME (LOSS):
Engines	$	—	$	2,056	$	—	$	3,821	$	2,204	$	—
Products	7,610		262		16,761		2,082		2,295		9,151
Total	$	7,610	$	2,318	$	16,761	$	5,903	$	4,499	$	9,151

16. Debt

The following is a summary of the Company’s indebtedness (in thousands):


	December 28, 2014		June 29, 2014		September 27, 2015		June 28, 2015
Senior Notes	$	225,000	$	225,000	$	225,000	$	225,000
Multicurrency Credit Agreement	87,000		—		38,410		—
	$	312,000	$	225,000	$	263,410	$	225,000

On December 20, 2010, the Company issued $225 million of 6.875% Senior Notes ("Senior Notes") due December 15, 2020.

On October 21, 2013, the Company entered into an amendment to its $500 million multicurrency credit agreement (the “Revolver”), which, among other things, extended the maturity of the Revolver ~~from October 13, 2016~~ to October 21, 2018. The initial maximum availability under the revolving credit facility is $500 million. Availability under the revolving credit facility is reduced by outstanding letters of credit. The Company may from time to time increase the maximum availability under the revolving credit facility by up to $250 million if certain conditions are satisfied. In connection with the amendment to the Revolver in the second quarter of fiscal 2014, the Company incurred approximately $0.9 million in new debt issuance costs, which are being amortized over the life of the Revolver using the straight-line method. As of ~~December 28, 2014, $87.0~~September 27, 2015, $38.4 million was outstanding under the Revolver. There were no borrowings under the Revolver as of June 28, 2015.

The Senior Notes and Revolver contain restrictive covenants. These covenants include restrictions on the Company’s ability to: pay dividends; repurchase shares; incur indebtedness; create liens; enter into sale and leaseback transactions; consolidate or merge with other entities; sell or lease all or substantially all of its assets; and dispose of assets or use proceeds from sales of its assets. The Revolver contains financial covenants that require the Company to maintain a minimum interest coverage ratio and impose a maximum average leverage ratio.

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17. Separate Financial Information of Subsidiary Guarantor of Indebtedness

Under the terms of the Company’s Senior Notes and the Revolver (collectively, the “Domestic Indebtedness”), Briggs & Stratton Power Products Group, LLC, a 100% owned subsidiary of the Company, was the sole joint and several guarantor of the Domestic Indebtedness (the “Guarantor”) as of ~~December 28, 2014~~September 27, 2015 and June ~~29, 2014.~~28, 2015. The Guarantor provides a full and unconditional guarantee of the Domestic Indebtedness, except for certain customary limitations. These customary limitations, which are described in detail in the First Supplemental Indenture (Indenture) dated December 20, 2010, include (i) the sale of the guarantor or substantially all of the guarantor’s assets, (ii) the designation of the guarantor as an unrestricted subsidiary for covenant purposes, (iii) the guarantor ceasing to guarantee certain other indebtedness, if the guarantor is also not a significant subsidiary within the meaning of Article 1, Rule 1-02 of Regulation S-X, and (iv) achieving the Indenture’s requirements for legal defeasance, covenant defeasance or discharge. Additionally, if at any time a domestic subsidiary of the Company constitutes a significant domestic subsidiary, then such domestic subsidiary will also become a guarantor of the Domestic Indebtedness. Currently, all of the Domestic Indebtedness is unsecured. If the Company were to fail to make a payment of interest or principal on its due date, the Guarantor is obligated to pay the outstanding Domestic Indebtedness. The Company had the following outstanding amounts related to the guaranteed debt (in thousands):


	December 28, 2014 Carrying Amount		Maximum Guarantee		September 27, 2015 Carrying Amount		Maximum Guarantee
Senior Notes	$	225,000	$	225,000	$	225,000	$	225,000
Multicurrency Credit Agreement	$	87,000	$	500,000	$	38,410	$	500,000

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The following condensed supplemental consolidating financial information reflects the summarized financial information of Briggs & Stratton, its ~~Guarantors~~Guarantor Subsidiary and its Non-Guarantor Subsidiaries (in thousands):

CONSOLIDATING BALANCE SHEET

As of ~~December 28, 2014~~September 27, 2015

(Unaudited)


	Briggs & Stratton Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated		Briggs & Stratton Corporation		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
CURRENT ASSETS:
Cash and Cash Equivalents	$	4,751	$	1,304	$	45,635	$	—		$	51,690	$	2,918	$	132	$	50,945	$	—		$	53,995
Accounts Receivable, Net	108,449		41,313		58,121		—			207,883		57,386		61,292		50,286		—			168,964
Intercompany Accounts Receivable	30,884		6,938		40,247		(78,069		)	—		34,823		8,165		42,280		(85,268		)	—
Inventories, Net	290,002		169,779		80,336		—			540,117		233,991		143,621		96,161		—			473,773
Deferred Income Tax Asset	32,803		14,534		1,926		—			49,263		31,121		12,228		2,747		—			46,096
Prepaid Expenses and Other Current Assets	35,977		1,736		8,309		—			46,022		32,512		5,848		8,646		—			47,006
Total Current Assets	$	502,866	$	235,604	$	234,574	$	(78,069	)	$	894,975	$	392,751	$	231,286	$	251,065	$	(85,268	)	$	789,834
OTHER ASSETS:
Goodwill	$	128,300	$	—	$	31,380	$	—		$	159,680	$	128,300	$	—	$	39,559	$	—		$	167,859
Investments	27,967		—		—		—			27,967		31,432		—		—		—			31,432
Investments in Subsidiaries	507,884		—		—		(507,884		)	—		510,584		—		—		(510,584		)	—
Intercompany Note Receivable	43,460		105,904		22,903		(172,267		)	—		30,391		97,238		44,577		(172,206		)	—
Debt Issuance Costs	4,188		—		—		—			4,188		3,481		—		—		—			3,481
Other Intangible Assets, Net	—		55,308		43,454		—			98,762		—		54,405		52,832		—			107,237
Long-Term Deferred Income Tax Asset	21,232		—		382		(21,232		)	382		49,519		—		315		(32,263		)	17,571
Other Long-Term Assets, Net	8,023		1,918		1,417		—			11,358		9,766		4,803		1,162		—			15,731
Total Other Assets	$	741,054	$	163,130	$	99,536	$	(701,383	)	$	302,337	$	763,473	$	156,446	$	138,445	$	(715,053	)	$	343,311
PLANT AND EQUIPMENT, NET	238,147		31,012		26,619		—			295,778		259,199		24,587		27,757		—			311,543
TOTAL ASSETS	$	1,482,067	$	429,746	$	360,729	$	(779,452	)	$	1,493,090	$	1,415,423	$	412,319	$	417,267	$	(800,321	)	$	1,444,688

CURRENT LIABILITIES:
Accounts Payable	$	110,631	$	39,466	$	31,812	$	—		$	181,909	$	106,958	$	48,414	$	28,892	$	—		$	184,264
Intercompany Accounts Payable	28,364		11,699		38,006		(78,069		)	—		33,542		10,754		40,972		(85,268		)	—
Short-Term Debt	87,000		—		—		—			87,000		38,410		—		—		—			38,410
Accrued Liabilities	89,220		34,775		19,370		—			143,365		76,966		39,844		26,522		—			143,332
Total Current Liabilities	$	315,215	$	85,940	$	89,188	$	(78,069	)	$	412,274	$	255,876	$	99,012	$	96,386	$	(85,268	)	$	366,006
OTHER LIABILITIES:
Accrued Pension Cost	$	113,453	$	394	$	559	$	—		$	114,406	$	203,063	$	354	$	514	$	—		$	203,931
Accrued Employee Benefits	24,575		—		—		—			24,575		23,233		—		—		—			23,233
Accrued Postretirement Health Care Obligation	39,329		14,297		—		—			53,626		30,325		15,057		—		—			45,382
Intercompany Note Payable	119,655		—		52,612		(172,267		)	—		107,053		—		65,153		(172,206		)	—
Deferred Income Tax Liabilities	—		20,638		10,773		(21,232		)	10,179		—		15,632		16,997		(32,263		)	366
Other Long-Term Liabilities	28,057		7,283		907		—			36,247		37,730		8,176		1,721		—			47,627
Long-Term Debt	225,000		—		—		—			225,000		225,000		—		—		—			225,000
Total Other Liabilities	$	550,069	$	42,612	$	64,851	$	(193,499	)	$	464,033	$	626,404	$	39,219	$	84,385	$	(204,469	)	$	545,539
TOTAL SHAREHOLDERS’ INVESTMENT:	616,783		301,194		206,690		(507,884		)	616,783
TOTAL SHAREHOLDERS’ INVESTMENT												533,143		274,088		236,496		(510,584		)	533,143
TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT	$	1,482,067	$	429,746	$	360,729	$	(779,452	)	$	1,493,090	$	1,415,423	$	412,319	$	417,267	$	(800,321	)	$	1,444,688

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CONSOLIDATING BALANCE SHEET

As of June ~~29, 2014~~28, 2015


	Briggs & Stratton Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated		Briggs & Stratton Corporation		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
CURRENT ASSETS:
Cash and Cash Equivalents	$	138,926	$	2,680	$	53,062	$	—		$	194,668	$	45,395	$	17,237	$	55,758	$	—		$	118,390
Accounts Receivable, Net	86,099		100,062		34,429		—			220,590		99,852		72,859		43,130		—			215,841
Intercompany Accounts Receivable	15,987		3,492		32,826		(52,305		)	—		21,697		8,060		40,772		(70,529		)	—
Inventories, Net	165,159		146,749		64,195		—			376,103		161,343		125,698		91,647		—			378,688
Deferred Income Tax Asset	33,343		13,904		1,711		—			48,958		30,692		13,187		1,992		—			45,871
Prepaid Expenses and Other Current Assets	17,436		3,508		9,072		—			30,016		23,580		19,916		7,031		(14,074		)	36,453
Total Current Assets	$	456,950	$	270,395	$	195,295	$	(52,305	)	$	870,335	$	382,559	$	256,957	$	240,330	$	(84,603	)	$	795,243
OTHER ASSETS:
Goodwill	$	128,300	$	—	$	16,222	$	—		$	144,522	$	128,300	$	—	$	37,222	$	—		$	165,522
Investments	27,137		—		—		—			27,137		30,779		—		—		—			30,779
Investments in Subsidiaries	470,391		—		—		(470,391		)	—		537,799		—		—		(537,799		)	—
Intercompany Note Receivable	49,293		84,567		13,876		(147,736		)	—		36,448		89,186		26,722		(152,356		)	—
Debt Issuance Costs	4,671		—		—		—			4,671		3,714		—		—		—			3,714
Other Intangible Assets, Net	—		55,909		24,408		—			80,317		—		54,706		56,574		—			111,280
Long-Term Deferred Income Tax Asset	32,507		—		677		(18,006		)	15,178		54,622		—		133		(32,303		)	22,452
Other Long-Term Assets, Net	7,120		2,088		1,331		—			10,539		8,800		4,999		1,335		—			15,134
Total Other Assets	$	719,419	$	142,564	$	56,514	$	(636,133	)	$	282,364	$	800,462	$	148,891	$	121,986	$	(722,458	)	$	348,881
PLANT AND EQUIPMENT, NET	241,166		39,863		15,978		—			297,007		260,843		24,314		29,681		—			314,838
TOTAL ASSETS	$	1,417,535	$	452,822	$	267,787	$	(688,438	)	$	1,449,706	$	1,443,864	$	430,162	$	391,997	$	(807,061	)	$	1,458,962

CURRENT LIABILITIES:
Accounts Payable	$	105,532	$	45,171	$	18,568	$	—		$	169,271	$	116,972	$	38,672	$	27,032	$	—		$	182,676
Intercompany Accounts Payable	21,859		6,002		24,444		(52,305		)	—		33,898		6,945		29,686		(70,529		)	—
Accrued Liabilities	85,735		31,863		16,318		—			133,916		90,168		51,851		24,495		(14,074		)	152,440
Total Current Liabilities	$	213,126	$	83,036	$	59,330	$	(52,305	)	$	303,187	$	241,038	$	97,468	$	81,213	$	(84,603	)	$	335,116
OTHER LIABILITIES:
Accrued Pension Cost	$	125,481	$	421	$	627	$	—		$	126,529	$	207,745	$	367	$	511	$	—		$	208,623
Accrued Employee Benefits	24,491		—		—		—			24,491		23,298		—		—		—			23,298
Accrued Postretirement Health Care Obligation	44,928		14,362		—		—			59,290		32,405		15,140		—		—			47,545
Intercompany Note Payable	85,343		—		62,393		(147,736		)	—		104,676		—		47,680		(152,356		)	—
Deferred Income Tax Liabilities			18,006		—		(18,006		)	—		—		15,483		17,043		(32,303		)	223
Other Long-Term Liabilities	26,732		11,037		1,006		—			38,775		35,452		8,511		944		—			44,907
Long-Term Debt	225,000		—		—		—			225,000		225,000		—		—		—			225,000
Total Other Liabilities	$	531,975	$	43,826	$	64,026	$	(165,742	)	$	474,085	$	628,576	$	39,501	$	66,178	$	(184,659	)	$	549,596
TOTAL SHAREHOLDERS’ INVESTMENT:	672,434		325,960		144,431		(470,391		)	672,434
TOTAL SHAREHOLDERS’ INVESTMENT												574,250		293,193		244,606		(537,799		)	574,250
TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT	$	1,417,535	$	452,822	$	267,787	$	(688,438	)	$	1,449,706	$	1,443,864	$	430,162	$	391,997	$	(807,061	)	$	1,458,962

2523

Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended ~~December 28, 2014~~September 27, 2015

(Unaudited)


	Briggs & Stratton Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated			Briggs & Stratton Corporation			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	262,278		$	131,030		$	109,095	$	(58,116	)	$	444,287		$	149,500		$	106,506		$	82,492		$	(49,040	)	$	289,458
Cost of Goods Sold	205,012			117,706			84,971		(58,116		)	349,573			128,601			93,485			64,241			(49,040		)	237,287
Restructuring Charges	—			6,846			—		—			6,846			—			1,995			464			—			2,459
Gross Profit	57,266			6,478			24,124		—			87,868			20,899			11,026			17,787			—			49,712
Engineering, Selling, General and Administrative Expenses	40,433			18,087			15,450		—			73,970			37,805			16,954			17,375			—			72,134
Restructuring Charges	—			583			—		—			583			890			24			—			—			914
Equity in Loss from Subsidiaries	1,283			—			—		(1,283		)	—			3,695			—			—			(3,695		)	—
Income (Loss) from Operations	15,550			(12,192		)	8,674		1,283			13,315			(21,491		)	(5,952		)	412			3,695			(23,336		)
Interest Expense	(4,855		)	(35		)	—		—			(4,890		)	(4,472		)	(64		)	—			—			(4,536		)
Other Income, Net	1,389			315			348		—			2,052			703			790			(38		)	—			1,455
Income (Loss) before Income Taxes	12,084			(11,912		)	9,022		1,283			10,477			(25,260		)	(5,226		)	374			3,695			(26,417		)
Provision (Credit) for Income Taxes	5,141			(4,498		)	2,891		—			3,534			(7,089		)	(1,898		)	741			—			(8,246		)
Net Income (Loss)	$	6,943		$	(7,414	)	$	6,131	$	1,283		$	6,943		$	(18,171	)	$	(3,328	)	$	(367	)	$	3,695		$	(18,171	)
Comprehensive Income (Loss)	$	(2,034	)	$	(7,624	)	$	437	$	7,187		$	(2,034	)	$	(28,802	)	$	(3,601	)	$	(6,506	)	$	10,107		$	(28,802	)

CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended ~~December 29, 2013~~September 28, 2014

(Unaudited)


	Briggs & Stratton Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated			Briggs & Stratton Corporation			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	250,564		$	134,785		$	80,288		$	(49,045	)	$	416,592		$	145,579		$	116,938		$	90,816		$	(60,704	)	$	292,629
Cost of Goods Sold	200,716			122,697			62,965			(49,045		)	337,333			123,956			104,031			71,179			(60,704		)	238,462
Restructuring Charges	1,597			—			296			—			1,893			—			6,846			—			—			6,846
Gross Profit	48,251			12,088			17,027			—			77,366			21,623			6,061			19,637			—			47,321
Engineering, Selling, General and Administrative Expenses	42,243			18,094			11,440			—			71,777			36,868			17,657			15,559			—			70,084
Restructuring Charges	77			—			348			—			425			—			955			—			—			955
Equity in Loss from Subsidiaries	(436		)	—			—			436			—			4,721			—			—			(4,721		)	—
Income (Loss) from Operations	6,367			(6,006		)	5,239			(436		)	5,164			(19,966		)	(12,551		)	4,078			4,721			(23,718		)
Interest Expense	(4,582		)	—			(12		)	—			(4,594		)	(4,447		)	(71		)	—			—			(4,518		)
Other Income, Net	1,611			95			45			—			1,751			1,926			460			(13		)	—			2,373
Income (Loss) before Income Taxes	3,396			(5,911		)	5,272			(436		)	2,321			(22,487		)	(12,162		)	4,065			4,721			(25,863		)
Provision (Credit) for Income Taxes	2,694			(2,174		)	1,099			—			1,619			(7,208		)	(4,481		)	1,105			—			(10,584		)
Net Income (Loss)	$	702		$	(3,737	)	$	4,173		$	(436	)	$	702		$	(15,279	)	$	(7,681	)	$	2,960		$	4,721		$	(15,279	)
Comprehensive Income (Loss)	$	2,982		$	(3,590	)	$	2,332		$	1,258		$	2,982		$	(19,164	)	$	(7,407	)	$	(2,500	)	$	9,907		$	(19,164	)

Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF CASH FLOWS

For the Three Months Ended September 27, 2015

(Unaudited)



	Briggs & Stratton Corporation			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Cash Used in Operating Activities	$	(67,715	)	$	(8,420	)	$	(6,311	)	$	(243	)	$	(82,689	)
Cash Flows from Investing Activities:
Additions to Plant and Equipment	(10,916		)	(1,126		)	(386		)	—			(12,428		)
Proceeds Received on Disposition of Plant and Equipment	—			504			11			—			515
Cash Paid for Acquisition, Net of Cash Acquired	—			—			(2,174		)	—			(2,174		)
Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt	2,489			—			—			(2,489		)	—
Net Cash Used in Investing Activities	(8,427		)	(622		)	(2,549		)	(2,489		)	(14,087		)
Cash Flows from Financing Activities:
Net Borrowings (Repayments) on Loans, Revolver, Notes Payable and Long-Term Debt	38,410			(8,063		)	5,574			2,489			38,410
Treasury Stock Purchases	(11,178		)	—			—			—			(11,178		)
Stock Option Exercise Proceeds and Tax Benefits	6,433			—			—			—			6,433
Cash Investment in Subsidiary	—			—			(243		)	243			—
Net Cash Provided by (Used in) Financing Activities	33,665			(8,063		)	5,331			2,732			33,665
Effect of Foreign Currency Exchange Rate Changes on Cash and Cash Equivalents	—			—			(1,284		)	—			(1,284		)
Net Decrease in Cash and Cash Equivalents	(42,477		)	(17,105		)	(4,813		)	—			(64,395		)
Cash and Cash Equivalents, Beginning	45,395			17,237			55,758			—			118,390
Cash and Cash Equivalents, Ending	$	2,918		$	132		$	50,945		$	—		$	53,995

Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF CASH FLOWS

For the Three Months EndedSeptember 28, 2014

(Unaudited)



	Briggs & Stratton Corporation			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Cash Provided by (Used in) Operating Activities	$	(62,214	)	$	11,158		$	2,660		$	(482	)	$	(48,878	)
Cash Flows from Investing Activities:
Additions to Plant and Equipment	(4,623		)	(1,358		)	(1,409		)	—			(7,390		)
Proceeds Received on Disposition of Plant and Equipment	84			57			31			—			172
Cash Investment in Subsidiary	(4,650		)	—			—			4,650			—
Cash Paid for Acquisition, Net of Cash Acquired	(62,056		)	—			—			—			(62,056		)
Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt	14,429			—			—			(14,429		)	—
Net Cash Used in Investing Activities	(56,816		)	(1,301		)	(1,378		)	(9,779		)	(69,274		)
Cash Flows from Financing Activities:
Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt	—			(11,212		)	(3,217		)	14,429			—
Treasury Stock Purchases	(17,761		)	—			—			—			(17,761		)
Stock Option Exercise Proceeds and Tax Benefits	3,151			—			—			—			3,151
Cash Investment in Subsidiary	—			—			4,168			(4,168		)	—
Net Cash Provided by (Used in) Financing Activities	(14,610		)	(11,212		)	951			10,261			(14,610		)
Effect of Foreign Currency Exchange Rate Changes on Cash and Cash Equivalents	—			—			(8		)	—			(8		)
Net Increase (Decrease) in Cash and Cash Equivalents	(133,640		)	(1,355		)	2,225			—			(132,770		)
Cash and Cash Equivalents, Beginning	138,926			2,680			53,062			—			194,668
Cash and Cash Equivalents, Ending	$	5,286		$	1,325		$	55,287		$	—		$	61,898

Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

~~CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~

~~For the Six Months Ended December 28, 2014~~

~~(Unaudited)~~

Briggs & Stratton
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Consolidated
Net Sales $ 407,856
$ 247,968
$ 199,911
$ (118,819 ) $ 736,916
Cost of Goods Sold 328,968
221,737
156,149
(118,819 ) 588,035
Restructuring Charges —
13,692
—
—
13,692
Gross Profit 78,888
12,539
43,762
—
135,189
Engineering, Selling, General and Administrative Expenses 77,300
35,744
31,009
—
144,053
Restructuring Charges —
1,538
—
—
1,538
Equity in Loss from Subsidiaries 6,004
—
—
(6,004 ) —
Income (Loss) from Operations (4,416 ) (24,743 ) 12,753
6,004
(10,402 )
Interest Expense (9,301 ) (106 ) (1 ) —
(9,408 )
Other Income, Net 3,315
775
335
—
4,425
Income (Loss) before Income Taxes (10,402 ) (24,074 ) 13,087
6,004
(15,385 )
Provision (Credit) for Income Taxes (2,066 ) (8,979 ) 3,996
—
(7,049 )
Net Income (Loss) $ (8,336 ) $ (15,095 ) $ 9,091
$ 6,004
$ (8,336 )
Comprehensive Income (Loss) $ (21,198 ) $ (15,031 ) $ (2,063 ) $ 17,094
$ (21,198 )

~~CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~

~~For the Six Months Ended~~ ~~December 29, 2013~~

~~(Unaudited)~~

Briggs & Stratton
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Consolidated
Net Sales $ 425,354
$ 252,549
$ 150,697
$ (94,704 ) $ 733,896
Cost of Goods Sold 354,253
229,391
118,281
(94,704 ) 607,221
Restructuring Charges 3,396
339
1,743
—
5,478
Gross Profit 67,705
22,819
30,673
—
121,197
Engineering, Selling, General and Administrative Expenses 79,751
35,691
25,097
—
140,539
Restructuring Charges 77
—
348
—
425
Equity in Loss from Subsidiaries 5,117
—
—
(5,117 ) —
Income (Loss) from Operations (17,240 ) (12,872 ) 5,228
5,117
(19,767 )
Interest Expense (9,076 ) —
(27 ) —
(9,103 )
Other Income, Net 3,803
185
(145 ) —
3,843
Income (Loss) before Income Taxes (22,513 ) (12,687 ) 5,056
5,117
(25,027 )
Provision (Credit) for Income Taxes (3,866 ) (4,678 ) 2,164
—
(6,380 )
Net Income (Loss) $ (18,647 ) $ (8,009 ) $ 2,892
$ 5,117
$ (18,647 )
Comprehensive Income (Loss) $ (12,045 ) $ (8,205 ) $ 2,509
$ 5,696
$ (12,045 )

~~Table of Contents~~

~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~

~~CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~For the Six Months Ended December 28, 2014~~

~~(Unaudited)~~

Briggs & Stratton
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Consolidated
Net Cash Provided by (Used in) Operating Activities $ (138,405 ) $ 22,575
$ 2,501
$ (703 ) $ (114,032 )
Cash Flows from Investing Activities:
Additions to Plant and Equipment (16,344 ) (2,739 ) (4,206 ) —
(23,289 )
Proceeds Received on Disposition of Plant and Equipment 84
136
69
—
289
Cash Investment in Subsidiary (4,650 ) —
—
4,650
—
Cash Paid for Acquisition, Net of Cash Acquired (62,056 ) —
—
—
(62,056 )
Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt 29,860
—
—
(29,860 ) —
Net Cash Provided by (Used in) Investing Activities (53,106 ) (2,603 ) (4,137 ) (25,210 ) (85,056 )
Cash Flows from Financing Activities:
Net Borrowings (Repayments) on Loans, Revolver, Notes Payable and Long-Term Debt 87,000
(21,348 ) (8,512 ) 29,860
87,000
Treasury Stock Purchases (27,598 ) —
—
—
(27,598 )
Stock Option Exercise Proceeds and Tax Benefits 3,652
—
—
—
3,652
Cash Dividends Paid (5,718 ) —
—
—
(5,718 )
Cash Investment in Subsidiary —
—
3,947
(3,947 ) —
Net Cash Provided by (Used in) Financing Activities 57,336
(21,348 ) (4,565 ) 25,913
57,336
Effect of Foreign Currency Exchange Rate Changes on Cash and Cash Equivalents —
—
(1,226 ) —
(1,226 )
Net Increase (Decrease) in Cash and Cash Equivalents (134,175 ) (1,376 ) (7,427 ) —
(142,978 )
Cash and Cash Equivalents, Beginning 138,926
2,680
53,062
—
194,668
Cash and Cash Equivalents, Ending $ 4,751
$ 1,304
$ 45,635
$ —
$ 51,690

~~Table of Contents~~

~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~

~~CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~For the~~ ~~Six Months EndedDecember 29, 2013~~

~~(Unaudited)~~

Briggs & Stratton
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Consolidated
Net Cash Provided by (Used in) Operating Activities $ (98,437 ) $ 28,940
$ 24,249
$ —
$ (45,248 )
Cash Flows from Investing Activities:
Additions to Plant and Equipment (15,904 ) (1,365 ) (794 ) —
(18,063 )
Proceeds Received on Disposition of Plant and Equipment 28
33
—
—
61
Cash Investment in Subsidiary 8,107
—
(8,107 ) —
—
Net Cash Provided by (Used in) Investing Activities (7,769 ) (1,332 ) (8,901 ) —
(18,002 )
Cash Flows from Financing Activities:
Repayments on Short-Term Debt —
—
(300 ) —
(300 )
Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt 27,300
(27,300 ) —
—
—
Debt Issuance Costs (942 ) —
—
—
(942 )
Treasury Stock Purchases (21,086 ) —
—
—
(21,086 )
Stock Option Exercise Proceeds and Tax Benefits 994
—
—
—
994
Cash Dividends Paid (5,730 ) —
—
—
(5,730 )
Net Cash Provided by (Used in) Financing Activities 536

(27,300 ) (300 ) —
(27,064 )
Effect of Foreign Currency Exchange Rate Changes on Cash and Cash Equivalents —
—
31
—
31
Net Increase (Decrease) in Cash and Cash Equivalents (105,670 ) 308
15,079
—
(90,283 )
Cash and Cash Equivalents, Beginning 162,628
1,275
24,542
—
188,445
Cash and Cash Equivalents, Ending $ 56,958
$ 1,583
$ 39,621
$ —
$ 98,162

~~Table of Contents~~

~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table is a reconciliation of financial results by segment, as reported, to adjusted financial results by segment, excluding restructuring ~~actions~~charges, acquisition-related charges, and ~~acquisition-related~~certain litigation charges, for the three months ended fiscal ~~December~~September 2016 and 2015 ~~and 2014~~ (in thousands, except per share data):


	Three Months Ended Fiscal December																Three Months Ended Fiscal September
	2015 Reported			Adjustments⁽¹⁾		2015 Adjusted ⁽²⁾			2014 Reported			Adjustments⁽¹⁾		2014 Adjusted⁽²⁾			2016 Reported			Adjustments⁽¹⁾		2016 Adjusted ⁽²⁾			2015 Reported			Adjustments⁽¹⁾		2015 Adjusted⁽²⁾
NET SALES:
Engines	$	271,704		$	—	$	271,704		$	265,712		$	—	$	265,712		$	150,083		$	—	$	150,083		$	153,116		$	—	$	153,116
Products	199,050			—		199,050			171,528			—		171,528			162,541			—		162,541			166,128			—		166,128
Inter-Segment Eliminations	(26,467		)	—		(26,467		)	(20,648		)	—		(20,648		)	(23,166		)	—		(23,166		)	(26,615		)	—		(26,615		)
Total	$	444,287		$	—	$	444,287		$	416,592		$	—	$	416,592		$	289,458		$	—	$	289,458		$	292,629		$	—	$	292,629

GROSS PROFIT:
Engines	$	62,896		$	—	$	62,896		$	54,257		$	1,631	$	55,888		$	23,777		$	464	$	24,241		$	27,800		$	—	$	27,800
Products	25,213			6,846		32,059			21,959			262		22,221			27,143			2,245		29,388			19,384			8,018		27,402
Inter-Segment Eliminations	(241		)	—		(241		)	1,150			—		1,150			(1,208		)	—		(1,208		)	137			—		137
Total	$	87,868		$	6,846	$	94,714		$	77,366		$	1,893	$	79,259		$	49,712		$	2,709	$	52,421		$	47,321		$	8,018	$	55,339

ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Engines																	$	44,301		$	850	$	43,451		$	42,929		$	—	$	42,929
Products																	27,833			26		27,807			27,155			178		26,977
Total																	$	72,134		$	876	$	71,258		$	70,084		$	178	$	69,906

RESTRUCTURING CHARGES:
Engines																	$	890		$	890	$	—		$	—		$	—	$	—
Products																	24			24		—			955			955		—
Total																	$	914		$	914	$	—		$	955		$	955	$	—

EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATES
Engines																	$	660		$	—	$	660		$	1,452		$	—	$	1,452
Products																	776			—		776			435			—		435
Total																	$	1,436		$	—	$	1,436		$	1,887		$	—	$	1,887

SEGMENT INCOME (LOSS) (3):
Engines	$	18,894		$	—	$	18,894		$	9,292		$	2,056	$	11,348		$	(20,754	)	$	2,204	$	(18,550	)	$	(13,677	)	$	—	$	(13,677	)
Products	(3,884		)	7,610		3,726			(4,256		)	262		(3,994		)	62			2,295		2,357			(8,291		)	9,151		860
Inter-Segment Eliminations	(241		)	—		(241		)	1,150			—		1,150			(1,208		)	—		(1,208		)	137			—		137
Total	$	14,769		$	7,610	$	22,379		$	6,186		$	2,318	$	8,504		$	(21,900	)	$	4,499	$	(17,401	)	$	(21,831	)	$	9,151	$	(12,680	)

Reconciliation from Segment Income (Loss) to Income from Operations:
Equity in Earnings from Unconsolidated Affiliates	1,454			—		1,454			1,022			—		1,022
Income from Operations	$	13,315		$	7,610	$	20,925		$	5,164		$	2,318	$	7,482

INTEREST EXPENSE	(4,890		)	—		(4,890		)	(4,594		)	—		(4,594		)
OTHER INCOME, Net	2,052			—		2,052			1,751			—		1,751
Income Before Income Taxes	10,477			7,610		18,087			2,321			2,318		4,639
PROVISION FOR INCOME TAXES	3,534			2,664		6,198			1,619			722		2,341
Net Income	$	6,943		$	4,946	$	11,889		$	702		$	1,596	$	2,298

EARNINGS PER SHARE
Basic	$	0.15		$	0.11	$	0.26		$	0.01		$	0.04	$	0.05
Diluted	0.15			0.11		0.26			0.01			0.04		0.05

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES



	Three Months Ended Fiscal September
	2016 Reported			Adjustments⁽¹⁾		2016 Adjusted ⁽²⁾			2015 Reported			Adjustments⁽¹⁾		2015 Adjusted⁽²⁾
SEGMENT INCOME (LOSS) (3):	(21,900		)	4,499		(17,401		)	(21,831		)	9,151		(12,680		)
Reconciliation from Segment Income (Loss) to Income (Loss) Before Income Taxes:
Equity in Earnings of Unconsolidated Affiliates	1,436			—		1,436			1,887			—		1,887
Income (Loss) from Operations	$	(23,336	)	$	4,499	$	(18,837	)	$	(23,718	)	$	9,151	$	(14,567	)

INTEREST EXPENSE	(4,536		)	—		(4,536		)	(4,518		)	—		(4,518		)
OTHER INCOME, Net	1,455			—		1,455			2,373			—		2,373
Income (Loss) Before Income Taxes	(26,417		)	4,499		(21,918		)	(25,863		)	9,151		(16,712		)
PROVISION (CREDIT) FOR INCOME TAXES	(8,246		)	1,528		(6,718		)	(10,584		)	3,203		(7,381		)
Net Income (Loss)	$	(18,171	)	$	2,971	$	(15,200	)	$	(15,279	)	$	5,948	$	(9,331	)

EARNINGS (LOSS) PER SHARE
Basic	$	(0.42	)	$	0.07	$	(0.35	)	$	(0.34	)	$	0.13	$	(0.21	)
Diluted	(0.42		)	0.07		(0.35		)	(0.34		)	0.13		(0.21		)

(1) For the ~~second~~first quarter of fiscal 2016, includes pre-tax restructuring charges of $3,373 ($2,239 after tax), pre-tax acquisition-related charges of $276 ($179 after tax), and certain pre-tax litigation charges of $850 ($553 after tax). For the first quarter of fiscal 2015, includes pre-tax restructuring charges of ~~$7,429 net of $2,600 of taxes~~$7,801 ($5,071 after tax) and pre-tax acquisition-related charges of ~~$181 net of $64 of taxes. For the second quarter of fiscal 2014, includes restructuring charges of $2,318 net of $722 of taxes.~~$1,350 ($877 after tax).

(2) Adjusted financial results are non-GAAP financial measures. The Company believes this information is meaningful to investors as it isolates the impact that restructuring charges, acquisition-related charges, and ~~acquisition related~~certain litigation charges have on reported financial results and facilitates comparisons between peer companies. The Company may utilize non-GAAP financial measures as a guide in the forecasting, budgeting, and long-term planning process. While the Company believes that adjusted financial results are useful supplemental information, such adjusted financial results are not intended to replace ~~our~~its GAAP financial results and should be read in conjunction with those GAAP results.

(3) The Company defines segment income (loss) as income from operations plus equity in earnings ~~from~~of unconsolidated affiliates.

NET SALES

Consolidated net sales for the first quarter of fiscal 2016 were $289 million, a decrease of $3 million or 1.1% from the first quarter of fiscal 2015. Net sales decreased during the quarter primarily due to an unfavorable foreign currency impact, net of price increases, of $10.8 million, predominately related to the weakening of the Euro, Australian Dollar, and Brazilian Real. Excluding currency impacts, net sales increased by $8 million. The increase was driven by the results of acquisitions completed during fiscal 2015, higher shipments of small engines used on walk mowers and increased sales of commercial lawn and garden equipment.

Engines Segment net sales in the first quarter of fiscal 2016 decreased $3 million or 2.0% from the prior year. Unfavorable foreign currency, net of offsetting price increases, negatively impacted net sales by approximately $4.9 million, largely due to the weakening of the Euro. Total engine volumes shipped in the quarter increased by 6.3% or approximately 50,000 engines, mainly attributable to higher shipments of small engines used on walk mowers due to improved lawn and garden markets in North America and Europe this past season. This resulted in more normal channel inventories at the end of the season compared to higher inventory levels last year.

Products Segment net sales in the first quarter of fiscal 2016 decreased $4 million or 2.2% from the prior year. Unfavorable foreign currency, net of offsetting price increases, negatively impacted net sales by approximately $5.9 million, primarily related to the Australian Dollar and Brazilian Real. Excluding currency impacts, net sales increased by $2.3 million due to the results from the prior year acquisitions of Allmand and Billy Goat as well as increased sales of high end residential and commercial lawn and garden equipment through our North America dealer channel. Partially offsetting this increase were lower sales of snow throwers into Europe following two seasons of below normal snowfall and decreased sales in Latin America due to unfavorable economic conditions in

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~~NET SALES~~

~~Consolidated net~~the region. Lower generator sales ~~for the second quarter of fiscal 2015 were $444.3 million, an increase of $27.7 million or 6.6% from the second quarter of fiscal 2014. The increase primarily relates~~due to a ~~favorable mix~~prolonged absence of ~~engines sold, higher sales~~major storms and our planned actions to narrow the assortment of ~~pressure washers, snow throwers and commercial~~lower priced Snapper consumer lawn and garden equipment ~~in North America, and~~also offset the results of the Allmand acquisition, which closed in August of this fiscal year. The increase in net sales was partially offset by reduced shipment volumes of small engines used on walk mowers in North America due to elevated channel inventories following this past season and lower generator sales due to adequate channel inventories and no major storm activity.

Engines Segment net sales of $271.7 million in the second quarter of fiscal 2015 increased $6.0 million or 2.1% from the prior year. Net sales increased due to an improved sales mix of large engines used on lawn and garden equipment for the North American and European markets and higher service parts sales. Total engine volumes shipped in the quarter decreased by 2.2% or approximately 40,000 engines. The decrease in unit shipments was due to reduced shipments of small engines used on walk mowers in North America resulting from elevated inventories following this past lawn and garden season.

Products Segment net sales of $199.1 million in the second quarter of fiscal 2015 increased by $27.5 million or 16.1% from the prior year. This increase was due to higher sales of pressure washers, commercial lawn and garden equipment and snow throwers in North America and the results of the Allmand acquisition. Partially offsetting the increase were lower sales of riding mowers and snow throwers in Europe following last year’s mild winter, lower generator sales due to adequate channel inventories and no major storm activity, and an unfavorable foreign exchange impact of $1.1 million primarily due to the devaluation of the Australian dollar and Brazilian Real.increase.

GROSS PROFIT

The consolidated gross profit percentage was ~~19.8%~~17.2% in the ~~second~~first quarter of fiscal ~~2015,~~2016, an increase from ~~18.6%~~16.2% in the same period last year.

The Engines Segment gross profit percentage, including restructuring charges, was ~~23.1%~~15.8% in the ~~second~~first quarter of fiscal ~~2015, higher~~2016, lower than the ~~20.4%~~18.2% in the ~~second~~first quarter of fiscal ~~2014.~~2015. The ~~Engines Segment~~ adjusted gross profit percentage ~~for the second quarter of 2015~~ was ~~23.1%, which was higher than the 21.0%~~16.2% in the ~~second~~first quarter of fiscal ~~2014. Engines segment~~2016, a decrease of 200 basis points from the prior year. Unfavorable foreign currency, net of offsetting price increases, negatively impacted gross profit percentage by 250 basis points, largely due to the weakening of the Euro. Manufacturing volume decreased by 7%, which reduced the adjusted gross profit ~~margins improved 210 basis points year over year on an improved product sales mix of large engines and lower retirement plan expense. Favorable sales mix, which was driven~~percentage by ~~higher service parts sales and proportionately higher sales of large engines, improved adjusted gross profit margins by 100~~90 basis points. ~~Favorable foreign exchange, primarily~~Engine production was elevated last year in the first quarter to support the pre-build of products related to the ~~Japanese Yen, improved adjusted~~closure of the McDonough plant. Partially offsetting the lower gross profit ~~margins by 50 basis points. The previously announced retirement plan changes, which were implemented in January~~percentage was the benefit of ~~calendar 2014, improved fiscal 2015 adjusted gross profit margins by $2.4 million, or 90 basis points. These~~manufacturing efficiency improvements ~~were partially offset by~~and slightly lower ~~production levels and certain production cost increases.~~material costs.

The Products Segment gross profit percentage, including restructuring and acquisition-related charges, was ~~12.7%~~16.7% for the ~~second~~first quarter of fiscal ~~2015, slightly down~~2016, up from ~~12.8%~~11.7% in the ~~second~~first quarter of fiscal ~~2014.~~2015. The ~~Products Segment~~ adjusted gross profit percentage ~~for~~of 18.1% in the ~~second quarter of 2015 was 16.1%, which was higher than the 13.0% for the second~~first quarter of fiscal ~~2014. Products adjusted gross profit margins~~2016 increased ~~by 310~~160 basis points year over ~~year~~year. Adjusted gross margins improved by 180 basis points due to ~~improved~~increased manufacturing efficiencies, including $2.2 million of incremental savings realized from the previously announced restructuring actions. Favorable sales mix, ~~including the Allmand acquisition, and higher manufacturing throughput. Favorable sales mix~~which improved adjusted gross margins by ~~340~~approximately 70 basis points, ~~due to a~~was driven by our focus on selling higher margin lawn and garden equipment and the ~~benefit of~~results from last year’s acquisitions. Partially offsetting the ~~Allmand acquisition. In addition,~~higher gross profit margins was lower manufacturing ~~throughput increased year over year by 36%, benefitting~~volume, which reduced adjusted gross profit margins by ~~approximately 160~~90 basis points. ~~Throughput is increased due~~Manufacturing throughput decreased 13% during the first quarter of fiscal 2016 as production had been elevated in the first quarter of last year to ~~higher production of snow throwers as well as pressure washers and riding mowers~~pre-build products to ~~facilitate~~support the ~~previously announced upcoming~~ closure of the McDonough ~~Georgia~~ plant. Offsetting the increase in adjusted gross profit margins was an unfavorable foreign exchange impact of approximately 150 basis points primarily due to the devaluation of the Australian dollar and Brazilian Real, and the unfavorable impact of 40 basis points due to slightly higher material costs.

ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Engineering, selling, general and administrative expenses were ~~$74.0 million in the second quarter of fiscal 2015, an increase of $2.2 million or 3.1% from the second quarter of fiscal 2014.~~

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The Engines Segment engineering, selling, general and administrative expenses were $45.2 million in the second quarter of fiscal 2015, a decrease of $0.8 million from the second quarter of fiscal 2014. The decrease was primarily due to the previously announced retirement plan changes, which reduced the expense by $1.9 million, partially offset by higher compensation expense.

The Products Segment fiscal 2015 second quarter engineering, selling, general and administrative expenses were $23.4 million, an increase of $3.2 million from the second quarter of fiscal 2014. The increase was mainly due to $3.2 million from the Allmand acquisition and increased compensation expense, partially offset by $1.7 million in savings related to the restructuring initiative announced in July 2014.

The following table is a reconciliation of financial results by segment, as reported, to adjusted financial results by segment, excluding restructuring actions and acquisition-related charges, for the six months ended fiscal December 2015 and 2014 (in thousands, except per share data):

Six Months Ended Fiscal December
2015 Reported
Adjustments⁽¹⁾

2015 Adjusted ⁽²⁾
2014 Reported
Adjustments⁽¹⁾

2014 Adjusted⁽²⁾
NET SALES:
Engines $ 424,820
$ —
$ 424,820
$ 449,499
$ —
$ 449,499
Products 365,178
—
365,178
324,564
—
324,564
Inter-Segment Eliminations (53,082 ) —
(53,082 ) (40,167 ) —
(40,167 )
Total $ 736,916
$ —
$ 736,916
$ 733,896
$ —
$ 733,896
GROSS PROFIT:
Engines $ 90,696
$ —
$ 90,696
$ 79,493
$ 3,396
$ 82,889
Products 44,597
14,864
59,461
39,784
2,082
41,866
Inter-Segment Eliminations (104 ) —
(104 ) 1,920
—
1,920
Total $ 135,189
$ 14,864
$ 150,053
$ 121,197
$ 5,478
$ 126,675
SEGMENT INCOME (LOSS) (3):
Engines $ 5,040
$ —
$ 5,040
$ (7,266 ) $ 3,821
$ (3,445 )
Products (11,997 ) 16,761
4,764
(11,870 ) 2,082
(9,788 )
Inter-Segment Eliminations (104 ) —
(104 ) 1,920
—
1,920
Total $ (7,061 ) $ 16,761
$ 9,700
$ (17,216 ) $ 5,903
$ (11,313 )

Reconciliation from Segment Income (Loss) to Income (Loss) from Operations:
Equity in Earnings from Unconsolidated Affiliates 3,341
—
3,341
2,551
—
2,551
Income (Loss) from Operations $ (10,402 ) $ 16,761
$ 6,359
$ (19,767 ) $ 5,903
$ (13,864 )

INTEREST EXPENSE (9,408 ) —
(9,408 ) (9,103 ) —
(9,103 )
OTHER INCOME, Net 4,425
—
4,425
3,843
—
3,843
Income (Loss) Before Income Taxes (15,385 ) 16,761
1,376
(25,027 ) 5,903
(19,124 )
PROVISION (CREDIT) FOR INCOME TAXES (7,049 ) 5,866
(1,183 ) (6,380 ) 1,456
(4,924 )
Net Income (Loss) $ (8,336 ) $ 10,895
$ 2,559
$ (18,647 ) $ 4,447
$ (14,200 )

EARNINGS (LOSS) PER SHARE
Basic $ (0.19 ) $ 0.24
$ 0.05
$ (0.41 ) $ 0.10
$ (0.31 )
Diluted (0.19 ) 0.24
0.05
(0.41 ) 0.10
(0.31 )

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~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~

(1) For the first six months of fiscal 2015, includes restructuring charges of $15,230 net of $5,330 of taxes and acquisition-related charges of $1,531 net of $536 of taxes. For the first six months of fiscal 2014, includes restructuring charges of $5,903 net of $1,456 of taxes.

(2) Adjusted financial results are non-GAAP financial measures. The Company believes this information is meaningful to investors as it isolates the impact that restructuring charges and acquisition related charges have on reported financial results and facilitates comparisons between peer companies. The Company may utilize non-GAAP financial measures as a guide in the forecasting, budgeting, and long-term planning process. While the Company believes that adjusted financial results are useful supplemental information, such adjusted financial results are not intended to replace our GAAP financial results and should be read in conjunction with those GAAP results.

~~(3) The Company defines segment income (loss) as income (loss) from operations plus equity in earnings from unconsolidated affiliates.~~

~~NET SALES~~

Consolidated net sales for the first six months of fiscal 2015 were $736.9 million, an increase of $3.0 million or 0.4% from the first six months of fiscal 2014, due to higher sales of pressure washers, commercial lawn and garden equipment and snow throwers in North America as well as the results of the Allmand acquisition. This increase in net sales was partially offset by reduced shipment volumes of small engines used on walk mowers in North America and lower sales of generators.

~~Engines Segment net sales of $424.8~~$72.1 million in the first ~~six months~~quarter of fiscal 2015 decreased $24.7 million or 5.5% from the prior year. Total engine volumes shipped in the first six months of fiscal 2015 decreased by 8.2% or approximately 236,000 engines compared to the same period last year. The decrease in unit shipments was due to reduced shipments of small engines used on walk mowers in North America resulting from elevated inventories following this past lawn and garden season. Partially offsetting the decrease in net sales was an improved sales mix of large engines used on lawn and garden equipment for the North American and European markets.

Products Segment net sales of $365.2 million in the first six months of fiscal 2015 increased by $40.6 million or 12.5% from the prior year. This increase was due to higher sales of pressure washers, commercial lawn and garden equipment and snow throwers in North America and the results of the Allmand acquisition. Partially offsetting the increase were lower sales of riding mowers and snow throwers in Europe following last year’s mild winter, lower generator sales due to adequate channel inventories and no major storm activity, and an unfavorable foreign exchange impact of $3.1 million primarily due to the devaluation of the Australian dollar and Brazilian Real.

~~GROSS PROFIT~~

~~The consolidated gross profit percentage was 18.4% in the first six months of fiscal 2015, an increase from 16.5% in the same period last year.~~

The Engines Segment gross profit percentage was 21.3% in the first six months of fiscal 2015, higher than the 17.7% in the first six months of fiscal 2014. The Engines Segment adjusted gross profit percentage for the first six months of 2015 was 21.3%, which was higher than the 18.4% in the first six months of fiscal 2014. Engines Segment adjusted gross profit margins improved 290 basis points year over year on an improved product sales mix of large engines, higher manufacturing volume, improved efficiencies, and lower retirement plan expense. Plant efficiency improvements, cost reductions and a favorable mix of engines produced benefitted adjusted gross margins by approximately 80 basis points. Engines produced were higher by 5% in the first six months of fiscal 2015 benefitting adjusted gross margins by approximately 30 basis points. Engine production was increased to support higher demand for large engines for riding equipment and to support pre-building of products related to the closure of the McDonough plant. Favorable sales mix, which was driven by proportionately higher sales of large engines, improved adjusted gross profit margins by 40 basis points. Favorable foreign exchange, primarily related to the Japanese Yen, improved adjusted gross profit margins by 30 basis points. The previously announced retirement plan changes, which were implemented in January of calendar 2014, improved fiscal 2015 adjusted gross profit margins by $4.7 million, or 110 basis points.

The Products Segment gross profit percentage was 12.2% for the first six months of fiscal 2015, slightly down from 12.3% in the first six months of fiscal 2014. The Products Segment adjusted gross profit percentage for the first six months of 2015 was 16.3%, which was higher than the 12.9% for the first six months of fiscal 2014. Products Segment adjusted gross profit margins increased by 340 basis points year over year due to improved sales mix, including the Allmand acquisition, and higher manufacturing throughput. Favorable sales mix improved adjusted gross margins by 320 basis points due to a focus on selling higher margin lawn and garden equipment and the benefit of the Allmand acquisition. In addition, manufacturing throughput increased year over year by 45%,

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~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~

benefitting adjusted gross margins by approximately 170 basis points. Throughput is increased due to higher production of snow throwers as well as pressure washers and riding mowers to facilitate the previously announced upcoming closure of the McDonough plant. Offsetting the increase in adjusted gross profit margins was an unfavorable foreign exchange impact of approximately 110 basis points primarily due to the devaluation of the Australian dollar and Brazilian Real, and the unfavorable impact of 40 basis points due to higher material costs.

~~ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES~~

~~Engineering, selling, general and administrative expenses were $144.1 million in the first six months of fiscal 2015,~~2016, an increase of ~~$3.5~~$2.1 million or ~~2.5%~~2.9% from the first ~~six months~~quarter of fiscal ~~2014.~~2015.

The Engines Segment engineering, selling, general and administrative expenses were ~~$88.3~~$44.3 million in the first ~~six months~~quarter of fiscal ~~2015, a decrease of $1.0~~2016, compared to $42.9 million ~~from~~in the ~~first six months of fiscal 2014. The decrease was primarily due to the previously announced retirement plan changes, which reduced~~same period last year. Adjusted engineering, selling, general and administrative expenses ~~by $3.6~~for the first quarter of fiscal 2016 were $43.5 million, an increase of $0.5 million from the first quarter of fiscal 2015, largely due to higher costs related to pension expense and higher compensation expense, partially offset by ~~increased compensation expense and international expenses.~~the benefit of the movement in foreign currency rates.

The Products Segment engineering, selling, general and administrative expenses were $27.8 million for the first ~~six months~~quarter of fiscal ~~2015~~2016, an increase of $0.7 million from the first quarter of fiscal 2015. Adjusted engineering, selling, general and administrative expenses in the first quarter of fiscal 2016 were ~~$57.3~~$27.8 million, an increase of ~~$5.7~~$0.8 million from the ~~first six months of fiscal 2014. The increase was mainly~~prior year largely due ~~to $5.9 million related~~ to the Allmand ~~acquisition, increased compensation expense,~~ and ~~higher international expenses,~~Billy Goat acquisitions, partially offset by ~~$2.8 million~~the benefit of the movement in ~~savings related to the restructuring initiative announced in July 2014.~~

~~ACQUISITION~~

On August 29, 2014, the Company completed the acquisition of Allmand Bros., Inc. for approximately $62 million in cash, net of cash acquired. Allmand is a leading designer and manufacturer of high quality towable light towers, industrial heaters, and solar LED arrow boards. Allmand, which is included within our Products segment, has annual net sales of approximately $80 million.foreign currency rates.

INTEREST EXPENSE

Interest expense for the ~~second~~first quarter ~~and first six months~~ of fiscal ~~2015~~2016 was ~~$0.3~~$4.5 million, ~~higher compared to~~which was consistent with the same ~~periods a year ago.~~period last year.

PROVISION FOR INCOME TAXES

The effective tax ~~rates~~rate for the ~~second~~first quarter ~~and first six months~~ of fiscal ~~2015 were 33.7% and 45.8%~~2016 was 31.2%, compared to ~~69.8% and 25.5%~~40.9% for the same respective ~~periods~~period last year. The tax rates for the ~~second quarter and~~ first ~~six months~~quarters of fiscal 2016 and 2015 were primarily ~~due to~~driven by losses incurred at certain foreign subsidiaries for which the Company does not receive tax benefits and ~~the re-enactment of~~foreign earnings in jurisdictions with tax rates that vary from the U.S. ~~research and development tax credit. In addition, the~~statutory rate. The tax rate for the first ~~six months~~quarter of fiscal 2015 ~~was impacted by~~also included the reversal of previously recorded reserves as a result of the effective settlement of the Company’s IRS ~~audit. The~~audit for its 2009-2010 consolidated income tax ~~rates for the second quarter and first six months~~returns.

Table of ~~fiscal 2014 were primarily due to losses incurred at certain foreign subsidiaries for which the Company did not receive tax benefits.~~Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

RESTRUCTURING ACTIONS

During the ~~second~~first quarter of fiscal ~~2015,~~2016, the Company made progress on implementing the previously announced restructuring actions to narrow its assortment of lower-priced Snapper consumer lawn and garden equipment and consolidate its Products Segment manufacturing facilities in order to reduce costs. ~~The Company expects to close its~~Production of riding mowers, the last part of the manufacturing transition from the McDonough plant, began at the Wauwatosa, Wisconsin plant during the first quarter. In addition to the Products Segment restructuring, the Company implemented restructuring actions within the Engines Segment. These actions, which were completed in the ~~fourth~~first quarter of fiscal ~~2015 and consolidate~~2016, included a headcount reduction at our plant in Chongqing, China to offset lower production ~~into existing facilities~~of engines used on snow throwers as well as changes in ~~Wisconsin and New York.~~salaried personnel in the United States. Pre-tax restructuring costs for the ~~second~~first quarter ~~and first six months~~ of fiscal ~~2015~~2016 were ~~$7.4~~$1.4 million and ~~$15.2~~$2.0 million ~~respectively,~~related to the Engines and ~~pre-tax savings were $1.7 million and $2.8 million,~~Products Segments, respectively. Pre-tax restructuring cost estimates for ~~fiscal 2015~~the Products Segment remain unchanged for fiscal 2016 at ~~$30~~$4 million to ~~$37~~$8 million. ~~Total annual~~There are no additional charges anticipated related to the Engine Segment restructuring actions. Incremental pre-tax savings related to the Products restructuring actions during the first quarter of fiscal 2016 were $1.7 million. Incremental cost savings as a result of these actions are anticipated to be ~~approximately $15 million to $20 million, with approximately~~ $5 million to $7 million ~~expected to be realized in fiscal 2015 and the remainder realized~~ in fiscal 2016.

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~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~

LIQUIDITY AND CAPITAL RESOURCES

Cash flows used in operating activities for the first ~~six~~three months of fiscal ~~2015~~2016 were ~~$114.0~~$82.7 million compared to ~~$45.2~~$48.9 million in the first ~~six~~three months of fiscal ~~2014.~~2015. The ~~increase~~decrease in operating cash flows ~~used~~ was primarily related to changes in working capital, primarily higher accounts receivable and lower accounts payable, partially offset by lower inventory levels. Inventory levels were elevated last year in the first quarter to ~~facilitate the upcoming closure of~~support the McDonough plant ~~and the introduction of a new engine line in fiscal 2015, partially offset by improvements in managing outstanding accounts receivable.~~closure.

Cash flows used in investing activities were ~~$85.1~~$14.1 million and ~~$18.0~~$69.3 million during the first ~~six~~three months of fiscal ~~2015~~2016 and fiscal ~~2014,~~2015, respectively. The ~~$67.1~~$55.2 million ~~increase~~decrease in cash used in investing activities was primarily related to $2.2 million of cash paid for acquisitions in the first quarter of fiscal 2016 compared to $62.1 million of cash paid for the Allmand acquisition ~~and $5.2~~in the first quarter of fiscal 2015, partially offset by a $5.0 million ~~of higher~~increase in additions to plant and equipment during the first ~~six~~three months of fiscal ~~2015.~~2016 compared to the same period last year.

Cash flows provided by financing activities were ~~$57.3~~$33.7 million during the first ~~six~~three months of fiscal ~~2015~~2016 as compared to ~~$27.1~~$14.6 million of cash flows used in financing activities during the first ~~six~~three months of fiscal ~~2014.~~2015. The ~~$84.4~~$48.3 million increase in cash provided by financing activities was ~~primarily~~ attributable to ~~$87.0~~$38.4 million of borrowings on the Revolver in the first quarter of fiscal ~~2015~~2016 compared to no such borrowings in fiscal ~~2014~~2015, a $6.6 million decrease in treasury stock purchases in the first quarter of fiscal 2016 compared to fiscal 2015, and ~~$2.7~~$3.3 million of higher stock option ~~exercise~~ proceeds in the first quarter of fiscal ~~2015~~2016 compared to fiscal ~~2014, partially offset by $6.5 million of higher treasury stock purchases in fiscal 2015 compared to fiscal 2014.~~2015.

FUTURE LIQUIDITY AND CAPITAL RESOURCES

On December 20, 2010, the Company issued $225 million of 6.875% Senior Notes ("Senior Notes") due December 15, 2020.

~~On January 22, 2014~~In August 2015, the Company announced that its Board of Directors declared an increase in the quarterly dividend from $0.125 per share to $0.135 per share on the Company's common stock, payable on September 30, 2015 to shareholders of record at the ~~Company authorized up to $50 million in funds associated with the common share repurchase program.~~ close of business on September 17, 2015

On August 13, 2014, the Board of Directors authorized up to ~~an additional~~ $50 million in funds for use in the Company’s common share repurchase program. As of ~~December 28, 2014,~~September 27, 2015, the total remaining authorization was approximately ~~$59.7~~$29.1 million with an expiration date of June 30, 2016. The common share repurchase program authorizes the purchase of shares of the Company's common stock on the open market or in private transactions from time to time,

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depending on market conditions and certain governing loan covenants. During the ~~six~~three months ended ~~December 28, 2014,~~September 27, 2015, the Company repurchased ~~1,428,588~~589,882 shares on the open market at an average price of ~~$19.33~~$18.95 per share.

The Company expects capital expenditures to be approximately ~~$60~~$65 million to ~~$65~~$70 million in fiscal ~~2015.~~2016. These anticipated expenditures reflect ~~our~~its plans to continue to ~~reinvest~~invest in ~~efficient equipment~~new products, manufacturing efficiencies and ~~innovative new products.~~technology update projects.

During the first ~~six~~three months of fiscal ~~2015,~~2016, the Company made no cash contributions to the qualified pension plan. Based upon current regulations and actuarial studies, the Company estimates that it will not be required to make ~~no required~~ minimum contributions to the qualified pension plan ~~during the remainder of~~in fiscal ~~2015.~~2016 through fiscal 2019. The Company may be required to make further contributions in future years depending upon the actual return on plan assets and the funded status of the plan in future periods.

Management believes that available cash, cash generated from operations, existing lines of credit and access to debt markets will be adequate to fund the Company’s capital requirements and operational needs for the foreseeable future.

The Revolver and the Senior Notes contain restrictive covenants. These covenants include restrictions on the Company’s ability to: pay dividends; repurchase shares; incur indebtedness; create liens; enter into sale and leaseback transactions; consolidate or merge with other entities; sell or lease all or substantially all of its assets;

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and dispose of assets or use proceeds from sales of its assets. The Revolver contains financial covenants that require the Company to maintain a minimum interest coverage ratio and impose a maximum leverage ratio. As of ~~December 28, 2014,~~September 27, 2015, the Company was in compliance with these covenants, and expects to be in compliance with all covenants during the remainder of fiscal ~~2015.~~2016.

OFF-BALANCE SHEET ARRANGEMENTS

There have been no material changes since the August ~~26, 2014~~21, 2015 filing of the Company’s Annual Report on Form 10-K.

CONTRACTUAL OBLIGATIONS

There have been no material changes since the August ~~26, 2014~~21, 2015 filing of the Company’s Annual Report on Form 10-K.

CRITICAL ACCOUNTING POLICIES

There have been no material changes in the Company’s critical accounting policies since the August ~~26, 2014~~21, 2015 filing of its Annual Report on Form 10-K. As discussed in ~~our~~its annual report, the preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.

The most significant accounting estimates inherent in the preparation of ~~our~~the Company's financial statements include a goodwill assessment, estimates as to the realizability of accounts receivable and inventory assets, as well as estimates used in the determination of liabilities related to customer rebates, pension obligations, postretirement benefits, warranty, product liability, group health insurance, litigation and taxation. Various assumptions and other factors underlie the determination of these significant estimates. The process of determining significant estimates is fact specific and takes into account factors such as historical experience, current and expected economic conditions, product mix, and, in some instances, actuarial techniques. The Company re-evaluates these significant factors as facts and circumstances change.

The Company has contingent liabilities related to litigation and claims that arise in the normal course of business. The Company accrues for contingent liabilities when management determines it is probable that a liability has been incurred and the amount can be reasonably estimated. Liabilities are recorded based on management’s current

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judgments as to the probable and reasonably estimable outcome of the contingencies. To the extent that management’s future judgments related to the outcome of the contingencies differ from current expectations or as additional information becomes available, earnings could be impacted in the period such changes occur. See Note 14, “Commitments and Contingencies,” for a description of these matters.

NEW ACCOUNTING PRONOUNCEMENTS

A discussion of new accounting pronouncements is included in the Notes to Condensed Consolidated Financial Statements of this Form 10-Q under the heading "New Accounting Pronouncements" and is incorporated herein by reference.

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. The words "anticipate", “believe”, “estimate”, “expect”, “forecast”, “intend”, “plan”, “project”, and similar expressions are intended to identify forward-looking statements. The forward-looking statements are based on the Company’s current views and assumptions and involve risks and uncertainties that include, among other things, the ability to successfully forecast demand for ~~our~~its products; changes in interest rates and foreign exchange rates; the effects of weather on the purchasing patterns of consumers and original equipment manufacturers (OEMs); actions of engine manufacturers and OEMs with whom we compete; changes in laws and regulations; changes in customer and OEM demand; changes in prices of raw materials and parts that we purchase; changes in domestic and foreign economic conditions; the ability to bring new productive capacity on line efficiently and with good quality; outcomes of legal proceedings and claims; the ability to realize anticipated savings from restructuring actions; and other factors disclosed from time to time in ~~our~~its SEC filings or otherwise, including the factors discussed in Item 1A, Risk Factors, of the Company’s Annual Report on Form 10-K and in its periodic reports on Form 10-Q. We are not undertaking any obligation to update any forward-looking statements or other statements we may make even though these statements may be affected by events or circumstances occurring after the forward-looking statements or other statements were made.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes since the August ~~26, 2014~~21, 2015 filing of the Company’s Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

INTERNAL CONTROL OVER FINANCIAL REPORTING

There has not been any change in the Company’s internal control over financial reporting during the ~~second~~first fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

A discussion of legal proceedings is included in the Notes to Condensed Consolidated Financial Statements of this Form 10-Q under the heading "Commitments and Contingencies" and is incorporated herein by reference.

ITEM 1A. RISK FACTORS

There have been no material changes since the August ~~26, 2014~~21, 2015 filing of the Company’s Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The table below sets forth the information with respect to purchases made by or on behalf of the Company of its common stock during the quarterly period ended ~~December 28, 2014~~September 27, 2015.

2015 Fiscal Month Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of a Publicly Announced Program (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
September 29, 2014 to October 26, 2014 314,702
$ 18.11
314,702
$ 63,840,246
October 27, 2014 to November 23, 2014 208,722
19.87
208,722
59,692,940
November 24, 2014 to December 28, 2014 —
—
—
59,692,940
Total Second Quarter 523,424
$ 18.81
523,424
$ 59,692,940



2015 Fiscal Month	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
June 29, 2015 to July 26, 2015	161,552	$	18.90	161,552	$	37,205,015
July 27, 2015 to August 23, 2015	258,452	18.38		258,452	32,454,667
August 24, 2015 to September 27, 2015	169,878	19.87		169,878	29,079,191
Total First Quarter	589,882	$	18.95	589,882	$	29,079,191


(1)	On January 22, 2014, the Board of Directors of the Company authorized up to $50 million in funds associated with the common share repurchase program. On August 13, 2014, the Board of Directors authorized up to an additional $50 million in funds for use in the Company’s common share repurchase program with an expiration date of June 30, 2016.

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ITEM 6. EXHIBITS



Exhibit Number		Description

31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)

31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)

32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Furnished herewith)


32.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Furnished herewith)

101		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~December 28, 2014~~September 27, 2015 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive ~~Income (Loss),~~Loss, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) related Notes to Condensed Consolidated Financial Statements

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		BRIGGS & STRATTON CORPORATION
		(Registrant)

Date:	~~February~~November 3, 2015	/s/ ~~David J. Rodgers~~Mark A. Schwertfeger
		~~David J. Rodgers~~Mark A. Schwertfeger
		Senior Vice President and Chief Financial Officer and Duly Authorized Officer

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EXHIBIT INDEX



Exhibit Number		Description

31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)

31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)

32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Furnished herewith)

32.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Furnished herewith)

101		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~December 28, 2014~~September 27, 2015 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive ~~Income (Loss),~~Loss, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) related Notes to Condensed Consolidated Financial Statements

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	Three Months Ended December 29, 2013
	Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Total
Beginning Balance	$	12,139		$	(3,954	)	$	(228,791	)	$	(220,606	)
Other Comprehensive Income (Loss) Before Reclassification	(3,625		)	(369		)	—			(3,994		)
Income Tax Benefit (Expense)	—			141			—			141
Net Other Comprehensive Income (Loss) Before Reclassifications	(3,625		)	(228		)	—			(3,853		)
Reclassifications:
Realized (Gains) Losses - Foreign Currency Contracts (1)	—			287			—			287
Realized (Gains) Losses - Commodity Contracts (1)	—			2,160			—			2,160
Realized (Gains) Losses - Interest Rate Swaps (1)	—			301			—			301
Amortization of Prior Service Costs (Credits) (2)	—			—			(679		)	(679		)
Amortization of Actuarial Losses (2)	—			—			7,824			7,824
Total Reclassifications Before Tax	—			2,748			7,145			9,893
Income Tax Expense (Benefit)	—			(1,052		)	(2,708		)	(3,760		)
Net Reclassifications	—			1,696			4,437			6,133
Other Comprehensive Income (Loss)	(3,625		)	1,468			4,437			2,280
Ending Balance	$	8,514		$	(2,486	)	$	(224,354	)	$	(218,326	)



	Six Months Ended December 28, 2014
	Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Total
Beginning Balance	$	13,053		$	(1,084	)	$	(207,226	)	$	(195,257	)
Other Comprehensive Income (Loss) Before Reclassification	(21,120		)	6,805			—			(14,315		)
Income Tax Benefit (Expense)	—			(2,586		)	—			(2,586		)
Net Other Comprehensive Income (Loss) Before Reclassifications	(21,120		)	4,219			—			(16,901		)
Reclassifications:
Realized (Gains) Losses - Foreign Currency Contracts (1)	—			(2,297		)	—			(2,297		)
Realized (Gains) Losses - Commodity Contracts (1)	—			522			—			522
Realized (Gains) Losses - Interest Rate Swaps (1)	—			625			—			625
Amortization of Prior Service Costs (Credits) (2)	—			—			(1,289		)	(1,289		)
Amortization of Actuarial Losses (2)	—			—			8,955			8,955
Total Reclassifications Before Tax	—			(1,150		)	7,666			6,516
Income Tax Expense (Benefit)	—			437			(2,914		)	(2,477		)
Net Reclassifications	—			(713		)	4,752			4,039
Other Comprehensive Income (Loss)	(21,120		)	3,506			4,752			(12,862		)
Ending Balance	$	(8,067	)	$	2,422		$	(202,474	)	$	(208,119	)



	Six Months Ended Fiscal December
	2015 Reported			Adjustments⁽¹⁾		2015 Adjusted ⁽²⁾			2014 Reported			Adjustments⁽¹⁾		2014 Adjusted⁽²⁾
NET SALES:
Engines	$	424,820		$	—	$	424,820		$	449,499		$	—	$	449,499
Products	365,178			—		365,178			324,564			—		324,564
Inter-Segment Eliminations	(53,082		)	—		(53,082		)	(40,167		)	—		(40,167		)
Total	$	736,916		$	—	$	736,916		$	733,896		$	—	$	733,896
GROSS PROFIT:
Engines	$	90,696		$	—	$	90,696		$	79,493		$	3,396	$	82,889
Products	44,597			14,864		59,461			39,784			2,082		41,866
Inter-Segment Eliminations	(104		)	—		(104		)	1,920			—		1,920
Total	$	135,189		$	14,864	$	150,053		$	121,197		$	5,478	$	126,675
SEGMENT INCOME (LOSS) (3):
Engines	$	5,040		$	—	$	5,040		$	(7,266	)	$	3,821	$	(3,445	)
Products	(11,997		)	16,761		4,764			(11,870		)	2,082		(9,788		)
Inter-Segment Eliminations	(104		)	—		(104		)	1,920			—		1,920
Total	$	(7,061	)	$	16,761	$	9,700		$	(17,216	)	$	5,903	$	(11,313	)

Reconciliation from Segment Income (Loss) to Income (Loss) from Operations:
Equity in Earnings from Unconsolidated Affiliates	3,341			—		3,341			2,551			—		2,551
Income (Loss) from Operations	$	(10,402	)	$	16,761	$	6,359		$	(19,767	)	$	5,903	$	(13,864	)

INTEREST EXPENSE	(9,408		)	—		(9,408		)	(9,103		)	—		(9,103		)
OTHER INCOME, Net	4,425			—		4,425			3,843			—		3,843
Income (Loss) Before Income Taxes	(15,385		)	16,761		1,376			(25,027		)	5,903		(19,124		)
PROVISION (CREDIT) FOR INCOME TAXES	(7,049		)	5,866		(1,183		)	(6,380		)	1,456		(4,924		)
Net Income (Loss)	$	(8,336	)	$	10,895	$	2,559		$	(18,647	)	$	4,447	$	(14,200	)

EARNINGS (LOSS) PER SHARE
Basic	$	(0.19	)	$	0.24	$	0.05		$	(0.41	)	$	0.10	$	(0.31	)
Diluted	(0.19		)	0.24		0.05			(0.41		)	0.10		(0.31		)