UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended ~~July 01, 2023~~March 30, 2024


☐			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 001-01043

____________

Brunswick Corporation

(Exact name of registrant as specified in its charter)


Delaware						36-0848180
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

26125 N. Riverwoods Blvd., Suite 500, Mettawa, IL 60045-3420

(Address of principal executive offices) (Zip code)

(847) 735-4700

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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


Large Accelerated Filer	☒	Accelerated Filer	☐

Non-accelerated Filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common stock, par value $0.75 per share

New York Stock Exchange

Chicago Stock Exchange

6.500% Senior Notes due 2048

BC-A

New York Stock Exchange

6.625% Senior Notes due 2049

BC-B

New York Stock Exchange

6.375% Senior Notes due 2049

BC-C

New York Stock Exchange

The number of shares of Common Stock ($0.75 par value) of the registrant outstanding as o~~f July 31, 2023~~of April 30, 2024 was ~~69,834,130~~67,567,180.

BRUNSWICK CORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

~~July 1, 2023~~March 30, 2024

TABLE OF CONTENTS

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

BRUNSWICK CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)




		Three Months Ended				Six Months Ended
(in millions, except per share data)	(in millions, except per share data)	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
(in millions, except per share data)
(in millions, except per share data)
Net sales
Net sales
Net sales	Net sales	$	1,702.3	$	1,835.6	$	3,445.9	$	3,531.3
Cost of sales	Cost of sales	1,230.0		1,299.2		2,468.0		2,511.3
Cost of sales
Cost of sales
Selling, general and administrative expense
Selling, general and administrative expense
Selling, general and administrative expense	Selling, general and administrative expense	215.1		207.2		426.4		399.9
Research and development expense	Research and development expense	48.9		50.2		97.6		101.6
Research and development expense
Research and development expense
Restructuring, exit and impairment charges
Restructuring, exit and impairment charges
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	13.9		—		23.4		—
Operating earnings	Operating earnings	194.4		279.0		430.5		518.5
Operating earnings
Operating earnings
Equity earnings	Equity earnings	2.2		0.7		4.4		1.5
Other income (expense), net		1.8		0.3		0.9		(1.2)
Equity earnings
Equity earnings
Other expense, net
Other expense, net
Other expense, net
Earnings before interest and income taxes
Earnings before interest and income taxes
Earnings before interest and income taxes	Earnings before interest and income taxes	198.4		280.0		435.8		518.8
Interest expense	Interest expense	(28.8)		(25.9)		(57.0)		(44.3)
Interest expense
Interest expense
Interest income	Interest income	2.0		0.5		4.2		0.6
Loss on early extinguishment of debt		—		—		—		(0.1)
Interest income
Interest income

Earnings before income taxes

Earnings before income taxes

Earnings before income taxes	Earnings before income taxes	171.6		254.6		383.0		475.0
Income tax provision	Income tax provision	36.3		55.8		135.3		102.2
Income tax provision
Income tax provision
Net earnings from continuing operations
Net earnings from continuing operations
Net earnings from continuing operations	Net earnings from continuing operations	135.3		198.8		247.7		372.8

Net loss from discontinued operations, net of tax	Net loss from discontinued operations, net of tax	(0.6)		(1.5)		(0.7)		(1.3)

Net loss from discontinued operations, net of tax

Net loss from discontinued operations, net of tax
Net earnings
Net earnings
Net earnings	Net earnings	$	134.7	$	197.3	$	247.0	$	371.5

Earnings per common share:	Earnings per common share:

Earnings per common share:

Earnings per common share:
Basic
Basic
Basic	Basic
Earnings from continuing operations	Earnings from continuing operations	$	1.91	$	2.63	$	3.48	$	4.89
Earnings from continuing operations
Earnings from continuing operations
Loss from discontinued operations	Loss from discontinued operations	(0.01)		(0.02)		(0.01)		(0.02)
Loss from discontinued operations
Loss from discontinued operations
Net earnings
Net earnings
Net earnings	Net earnings	$	1.90	$	2.61	$	3.47	$	4.87

Diluted	Diluted

Diluted

Diluted
Earnings from continuing operations
Earnings from continuing operations
Earnings from continuing operations	Earnings from continuing operations	$	1.91	$	2.61	$	3.47	$	4.86
Loss from discontinued operations	Loss from discontinued operations	(0.01)		(0.02)		(0.01)		(0.02)
Loss from discontinued operations
Loss from discontinued operations
Net earnings
Net earnings
Net earnings	Net earnings	$	1.90	$	2.59	$	3.46	$	4.84

Weighted average shares used for computation of:	Weighted average shares used for computation of:

Weighted average shares used for computation of:

Weighted average shares used for computation of:
Basic earnings per common share
Basic earnings per common share
Basic earnings per common share	Basic earnings per common share	70.8		75.7		71.1		76.3
Diluted earnings per common share	Diluted earnings per common share	70.9		76.1		71.4		76.7
Diluted earnings per common share
Diluted earnings per common share

Comprehensive income

Comprehensive income

Comprehensive income	Comprehensive income	$	131.8	$	185.0	$	247.7	$	369.1

The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.	The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

Table of Contents

BRUNSWICK CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)

(in millions)

July 1,
2023

December 31,
2022

July 2,
2022

(in millions)

Assets

Current assets

Cash and cash equivalents, at cost, which approximates fair value

477.5

595.6

566.7

Restricted cash

11.0

12.9

11.9

Restricted cash

Short-term investments in marketable securities

0.8

4.5

37.0

Total cash and short-term investments in marketable securities

489.3

613.0

615.6

Accounts and notes receivable, less allowances of $10.5, $10.2, $9.3

614.5

543.0

611.0

Total cash and short-term investments in marketable securities

Accounts and notes receivable, less allowances of $11.2, $10.8, $10.6

Inventories

Finished goods

839.8

836.1

746.0

Finished goods

Work-in-process

208.9

209.1

201.4

Raw materials

435.5

426.2

425.0

Raw materials

Net inventories

1,484.2

1,471.4

1,372.4

Net inventories

Prepaid expenses and other

84.8

67.8

86.4

Current assets

2,672.8

2,695.2

2,685.4

Current assets

Property

Land

42.8

42.4

37.1

Land

Buildings and improvements

596.4

564.4

520.0

Buildings and improvements

Equipment

1,527.3

1,488.1

1,420.8

Total land, buildings and improvements and equipment

2,166.5

2,094.9

1,977.9

Total land, buildings and improvements and equipment

Accumulated depreciation

(1,094.6)

(1,051.4)

(1,016.1)

Net land, buildings and improvements and equipment

1,071.9

1,043.5

961.8

Net land, buildings and improvements and equipment

Unamortized product tooling costs

242.2

227.3

202.6

Unamortized product tooling costs

Net property

1,314.1

1,270.8

1,164.4

Other assets

Goodwill

974.6

967.6

966.7

Other intangibles, net

979.4

997.4

1,038.2

Other intangibles, net

Deferred income tax asset

149.8

203.3

128.6

Operating lease assets

121.1

114.8

103.0

Operating lease assets

Equity investments

60.0

54.0

48.0

Other long-term assets

18.3

18.2

32.2

Other long-term assets

Other assets

2,303.2

2,355.3

2,316.7

Total assets

6,290.1

6,321.3

6,166.5

Total assets

The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

Table of Contents

(in millions)

July 1,
2023

December 31,
2022

July 2,
2022

(in millions)

Liabilities and shareholders' equity

Current liabilities

Short-term debt and current maturities of long-term debt

88.3

89.0

3.0

Accounts payable

549.4

662.6

644.0

Accounts payable

Accrued expenses

756.3

738.3

700.7

Current liabilities

1,394.0

1,489.9

1,347.7

Current liabilities

Long-term liabilities

Debt

2,422.0

2,420.0

2,499.0

Debt

Operating lease liabilities

105.4

97.8

86.1

Postretirement benefits

47.2

49.5

64.0

Postretirement benefits

Deferred income tax liability

12.6

60.7

2.7

Deferred income tax liability

Other

207.5

161.1

162.4

Long-term liabilities

2,794.7

2,789.1

2,814.2

Long-term liabilities

Shareholders' equity

Common stock; authorized: 200,000,000 shares, $0.75 par value; issued: 102,538,000 shares; outstanding: 70,005,000, 71,365,000 and 74,472,000 shares

76.9

Shareholders' equity

Common stock; authorized: 200,000,000 shares, $0.75 par value; issued: 102,538,000 shares; outstanding: 67,689,000, 68,227,000 and 70,891,000 shares

Additional paid-in capital

383.8

391.3

380.8

Retained earnings

3,478.7

3,288.5

3,036.2

Treasury stock, at cost: 32,533,000, 31,173,000 and 28,066,000 shares

(1,809.2)

(1,684.9)

(1,455.4)

Retained earnings

Treasury stock, at cost: 34,849,000, 34,311,000 and 31,647,000 shares

Accumulated other comprehensive loss

(28.8)

(29.5)

(33.9)

Shareholders' equity

2,101.4

2,042.3

2,004.6

Shareholders' equity

Total liabilities and shareholders' equity

6,290.1

6,321.3

6,166.5

The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

Table of Contents

BRUNSWICK CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)


		Six Months Ended					Three Months Ended
(in millions)	(in millions)	July 1, 2023		July 2, 2022		(in millions)	March 30, 2024	April 1, 2023
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net earnings	Net earnings	$	247.0	$	371.5
Less: net loss from discontinued operations, net of tax	Less: net loss from discontinued operations, net of tax	(0.7)		(1.3)
Net earnings from continuing operations, net of tax		247.7		372.8
Net earnings from continuing operations
Depreciation and amortization
Stock compensation expense	Stock compensation expense	13.8		12.0
Depreciation and amortization		132.1		106.1
Pension funding, net of expense	Pension funding, net of expense	(0.9)		(0.3)

Asset impairment charges	Asset impairment charges	1.3		1.5
Asset impairment charges
Asset impairment charges

Deferred income taxes	Deferred income taxes	1.4		10.8
Deferred income taxes
Deferred income taxes

Changes in certain current assets and current liabilities

Changes in certain current assets and current liabilities

Changes in certain current assets and current liabilities	Changes in certain current assets and current liabilities	(162.1)		(338.6)
Long-term extended warranty contracts and other deferred revenue	Long-term extended warranty contracts and other deferred revenue	9.7		8.8

Income taxes	Income taxes	25.2		(5.9)

Income taxes

Income taxes
Other, net	Other, net	(13.8)		(17.8)
Net cash provided by operating activities of continuing operations		254.4		149.4
Net cash used for operating activities of continuing operations
Net cash used for operating activities of discontinued operations	Net cash used for operating activities of discontinued operations	(2.3)		(2.5)
Net cash provided by operating activities		252.1		146.9
Net cash used for operating activities

Cash flows from investing activities	Cash flows from investing activities
Cash flows from investing activities
Cash flows from investing activities
Capital expenditures	Capital expenditures	(173.4)		(196.5)
Purchases of marketable securities		—		(36.2)

Sales or maturities of marketable securities
Sales or maturities of marketable securities
Sales or maturities of marketable securities	Sales or maturities of marketable securities	3.8		—
Investments	Investments	(6.4)		(4.0)
Acquisition of businesses, net of cash acquired	Acquisition of businesses, net of cash acquired	—		(95.7)
Proceeds from the sale of property, plant and equipment	Proceeds from the sale of property, plant and equipment	6.3		3.0
Cross currency swap settlement		—		16.7

Net cash used for investing activities	Net cash used for investing activities	(169.7)		(312.7)

Net cash used for investing activities

Net cash used for investing activities

Cash flows from financing activities
Cash flows from financing activities
Cash flows from financing activities	Cash flows from financing activities
Proceeds from issuances of short-term debt	Proceeds from issuances of short-term debt	1.6		125.9
Payments of short-term debt	Payments of short-term debt	(1.8)		(125.0)
Net proceeds from issuances of long-term debt	Net proceeds from issuances of long-term debt	—		741.8
Payments of long-term debt including current maturities	Payments of long-term debt including current maturities	(1.4)		(58.0)

Common stock repurchases	Common stock repurchases	(132.2)		(220.0)
Common stock repurchases
Common stock repurchases
Cash dividends paid	Cash dividends paid	(56.8)		(55.4)

Tax withholding associated with shares issued for share-based compensation
Tax withholding associated with shares issued for share-based compensation
Tax withholding associated with shares issued for share-based compensation	Tax withholding associated with shares issued for share-based compensation	(13.4)		(16.4)
Other, net	Other, net	—		(4.0)

Net cash (used for) provided by financing activities		(204.0)		388.9
Net cash provided by (used for) financing activities

Effect of exchange rate changes		1.6		(11.2)
Net (decrease) increase in Cash and cash equivalents and Restricted cash		(120.0)		211.9
Net cash provided by (used for) financing activities

Net cash provided by (used for) financing activities

Effect of exchange rate changes on cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in Cash and cash equivalents and Restricted cash
Cash and cash equivalents and Restricted cash at beginning of period	Cash and cash equivalents and Restricted cash at beginning of period	608.5		366.7

Cash and cash equivalents and Restricted cash at end of period
Cash and cash equivalents and Restricted cash at end of period
Cash and cash equivalents and Restricted cash at end of period	Cash and cash equivalents and Restricted cash at end of period	488.5		578.6
Less: Restricted cash	Less: Restricted cash	11.0		11.9
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	477.5	$	566.7
						The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.
The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.
The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

Table of Contents

Brunswick Corporation

Condensed Consolidated Statements of Shareholders' Equity

(Unaudited)


(in millions, except per share data)	(in millions, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total		(in millions, except per share data)	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated other comprehensive loss	Total
Balance at December 31, 2022		$	76.9	$	391.3	$	3,288.5	$	(1,684.9)	$	(29.5)	$	2,042.3
Balance at December 31, 2023
Net earnings	Net earnings	—		—		112.3		—		—		112.3
Other comprehensive income		—		—		—		—		3.6		3.6
Dividends ($0.40 per common share)		—		—		(28.5)		—		—		(28.5)
Other comprehensive loss
Dividends ($0.42 per common share)
Compensation plans and other	Compensation plans and other	—		(15.3)		—		8.5		—		(6.8)
Common stock repurchases	Common stock repurchases	—		—		—		(60.4)		—		(60.4)
Balance at April 1, 2023		76.9		376.0		3,372.3		(1,736.8)		(25.9)		2,062.5
Net earnings		—		—		134.7		—		—		134.7
Other comprehensive income		—		—		—		—		(2.9)		(2.9)
Dividends ($0.40 per common share)		—		—		(28.3)		—		—		(28.3)
Compensation plans and other		—		7.8		—		0.5		—		8.3
Common stock repurchases		—		—		—		(72.9)		—		(72.9)
Balance at July 1, 2023		$	76.9	$	383.8	$	3,478.7	$	(1,809.2)	$	(28.8)	$	2,101.4

Balance at March 30, 2024


(in millions, except per share data)	(in millions, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total		(in millions, except per share data)	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated other comprehensive loss	Total
Balance at December 31, 2021		$	76.9	$	394.5	$	2,720.1	$	(1,245.8)	$	(31.5)	$	1,914.2
Balance at December 31, 2022
Net earnings	Net earnings	—		—		174.2		—		—		174.2
Other comprehensive income	Other comprehensive income	—		—		—		—		9.9		9.9
Dividends ($0.365 per common share)		—		—		(28.0)		—		—		(28.0)
Dividends ($0.40 per common share)
Compensation plans and other	Compensation plans and other	—		(20.0)		—		9.4		—		(10.6)
Common stock repurchases	Common stock repurchases	—		—		—		(79.8)		—		(79.8)
Balance at April 2, 2022		76.9		374.5		2,866.3		(1,316.2)		(21.6)		1,979.9
Net earnings		—		—		197.3		—		—		197.3
Other comprehensive income		—		—		—		—		(12.3)		(12.3)
Dividends ($0.365 per common share)		—		—		(27.4)		—		—		(27.4)
Compensation plans and other		—		6.3		—		1.0		—		7.3
Common stock repurchases		—		—		—		(140.2)		—		(140.2)
Balance at July 2, 2022		$	76.9	$	380.8	$	3,036.2	$	(1,455.4)	$	(33.9)	$	2,004.6

Balance at April 1, 2023

The Notes to Condensed Consolidated Financial Statements are an integral part of these condensed consolidated statements.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Significant Accounting Policies

~~Basis of Presentation.~~ Effective January 1, 2023, Brunswick Corporation ("Brunswick" or "the Company") changed its management reporting and updated its reportable segments to Propulsion, Engine Parts and Accessories ("Engine P&A"), Navico Group and Boat to align with our internal operating structure. As a result of this change, the Company has recast all segment information for all prior periods presented. For further information, refer to ~~Note 9 – Segment Data.~~

Interim Financial Statements. Brunswick's unaudited interim condensed consolidated financial statements have been prepared pursuant to SEC rules and regulations. Therefore, certain information and disclosures normally included in financial statements and related notes prepared in accordance with accounting principles generally accepted in the United States of America ~~("GAAP")~~(GAAP) have been condensed or omitted.

These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included in Brunswick's ~~2022~~2023 Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023 (the ~~"2022~~2023 Form ~~10-K")~~10-K). These results include, in management's opinion, all normal and recurring adjustments necessary to present fairly Brunswick's financial position, results of operations and cash flows. Due to the seasonality of Brunswick's businesses, the interim results are not necessarily indicative of the results that may be expected for the remainder of the year.

The Company maintains its financial records on the basis of a fiscal year ending on December 31, with the fiscal quarters spanning approximately thirteen weeks. The first quarter ends on the Saturday closest to the end of the first thirteen-week period. The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The ~~second~~first quarter of fiscal year 2024 ended on March 30, 2024 and the first quarter of fiscal year 2023 ended on ~~July 1, 2023 and the second quarter of fiscal year 2022 ended on July 2, 2022.~~

~~IT Security Incident~~

As previously announced on June 13, 2023, the Company experienced an IT security incident that impacted some of its systems and global facilities. The Company activated its response protocols, including pausing operations in some locations, engaging leading security experts and coordinating with relevant law enforcement agencies. Normal global business operations resumed over the course of nine days following the incident. While we were able to quickly restore our operations, the incident resulted in disruption to sales as well as non-recurring costs. We will attempt to recover a portion of the lost operating earnings from lost sales and non-recurring costs from our insurance carriers. Non-recurring costs include labor while plants were idle, IT-related costs and costs for legal, consulting and other professional services directly related to this incident. During the three and six months ended July 1, 2023, we incurred non-recurring costs related to the IT security incident of $8.1 million. A portion of the non-recurring costs are included in Cost of sales and a portion in Selling, general and administrative expense in the Condensed Consolidated Statements of Comprehensive Income. We estimate the incident resulted in lost revenue of approximately $80 million to $85 million and operating earnings of $35 million to $40 million in the three and six month periods ended JulyApril 1, 2023.

Recently ~~Adopted~~Issued Accounting Standards

~~Supplier Finance Programs~~Segment Reporting:: In ~~September 2022,~~November 2023, the Financial Accounting Standards Board ~~("FASB")~~(FASB) issued Accounting Standards Update ~~("ASU") 2022-04,~~ (ASU) 2023-07,~~Liabilities~~ Segment Reporting (Topic 280) — ~~Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations~~Improvements to Reportable Segment Disclosures, which adds new disclosure requirements ~~associated with participation~~related to significant segment expenses regularly provided to the chief operating decision maker (CODM) and included in ~~supplier finance programs. ASU 2022-04 requires~~each reported measure of segment profit or loss, other segment items that constitute the ~~buyer in a supplier finance program to disclose qualitative~~difference between segment revenues less significant segment expenses and ~~quantitative information about~~ the ~~program including key terms and obligations outstanding at the end~~measure of profit or loss, disclosure of the ~~reporting period.~~CODMs title and position as well as an explanation of how the CODM uses the reported measures and expanded interim disclosures. ASU ~~2022-04~~2023-07 is effective for financial statements for ~~interim and~~ annual periods beginning after December 15, ~~2022. The Company adopted~~2023 and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the potential impact of adopting this guidance ~~in ASU 2022-04~~ on ~~January 1, 2023.~~the consolidated financial statements.

Income Taxes: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures. Under this ASU, entities must disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires entities to disclose additional information about income taxes paid. ASU 2023-09 is effective for financial statements for annual periods beginning after December 15, 2024. We are currently evaluating the potential impact of adopting this guidance on the consolidated financial statements.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

Under our supplier finance program, the Company agrees to pay Bank of America ("the Bank") the stated amount of confirmed invoices from our suppliers on the original invoice payment due date. Our suppliers may request payment from the Bank at a date earlier than the payment due date stated on the original invoice in exchange for a fee in the form of a discounted invoice amount. Brunswick or the Bank may terminate the agreement upon at least 90 days’ notice. The supplier invoices that have been confirmed as valid under the program require payment ranging from 60 to 120 days from the invoice date, consistent with the terms of the original invoice. The Company does not pay the Bank any service fees or subscription fees under the program. In addition, the Company does not pledge any assets as security or provide other forms of guarantees for the committed payment to the Bank. As of July 1, 2023, December 31, 2022, and July 2, 2022, the Company had $16.8 million, $18.2 million and $18.1 million confirmed invoices under the supplier finance program, respectively, which were included in Accounts payable on the Condensed Consolidated Balance Sheets.

Note 2 – Revenue Recognition

The following tables present the Company's revenue in categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors:


		Three Months Ended
		July 1, 2023
	Three Months Ended																Three Months Ended
	March 30, 2024																March 30, 2024
(in millions)	(in millions)	Propulsion		Engine P&A		Navico Group		Boat		Total		(in millions)	Propulsion	Engine P&A	Navico Group	Boat		Total
Geographic Markets	Geographic Markets
United States
United States
United States	United States	$	496.8	$	242.4	$	139.6	$	418.2	$	1,297.0
Europe	Europe	89.9		28.9		60.5		56.3		235.6
Asia-Pacific	Asia-Pacific	49.8		23.8		18.6		8.3		100.5
Canada	Canada	20.6		22.0		4.4		70.3		117.3
Rest-of-World	Rest-of-World	46.2		11.8		4.7		7.7		70.4
Segment Eliminations	Segment Eliminations	(91.4)		(1.8)		(25.2)		(0.1)		(118.5)
Total	Total	$	611.9	$	327.1	$	202.6	$	560.7	$	1,702.3

		Three Months Ended
		July 2, 2022
		Three Months Ended
		Three Months Ended
		Three Months Ended
	April 1, 2023																April 1, 2023
(in millions)	(in millions)	Propulsion		Engine P&A		Navico Group		Boat		Total		(in millions)	Propulsion	Engine P&A	Navico Group	Boat		Total
Geographic Markets	Geographic Markets
United States
United States
United States	United States	$	483.6	$	276.6	$	183.5	$	423.1	$	1,366.8
Europe	Europe	118.4		33.1		67.2		56.0		274.7
Asia-Pacific	Asia-Pacific	59.5		27.7		24.0		7.5		118.7
Canada	Canada	24.5		28.4		8.9		70.4		132.2
Rest-of-World	Rest-of-World	48.2		13.7		2.5		11.4		75.8
Segment Eliminations	Segment Eliminations	(102.3)		(2.1)		(28.0)		(0.2)		(132.6)
Total	Total	$	631.9	$	377.4	$	258.1	$	568.2	$	1,835.6

Table of Contents

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

Six Months Ended
July 1, 2023
(in millions) Propulsion Engine P&A Navico Group Boat Total
Geographic Markets
United States $ 992.6 $ 445.3 $ 321.9 $ 858.2 $ 2,618.0
Europe 205.4 55.9 125.9 107.4 494.6
Asia-Pacific 108.3 51.7 37.2 15.6 212.8
Canada 49.0 40.8 9.6 136.2 235.6
Rest-of-World 99.6 23.8 10.5 18.6 152.5
Segment Eliminations (205.1) (3.8) (58.3) (0.4) (267.6)
Total $ 1,249.8 $ 613.7 $ 446.8 $ 1,135.6 $ 3,445.9
Six Months Ended
July 2, 2022
(in millions) Propulsion Engine P&A Navico Group Boat Total
Geographic Markets
United States $ 936.3 $ 501.2 $ 386.6 $ 791.5 $ 2,615.6
Europe 231.8 68.6 140.4 101.6 542.4
Asia-Pacific 122.8 59.8 46.2 16.6 245.4
Canada 57.7 52.4 17.2 132.6 259.9
Rest-of-World 91.5 27.8 7.3 18.9 145.5
Segment Eliminations (211.5) (4.2) (61.6) (0.2) (277.5)
Total $ 1,228.6 $ 705.6 $ 536.1 $ 1,061.0 $ 3,531.3

~~Table of Contents~~BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

Three Months Ended
July 1, 2023
(in millions) Propulsion Engine P&A Navico Group Boat Total
Major Product Lines
Outboard Engines $ 552.6 $ — $ — $ — $ 552.6
Controls, Rigging, and Propellers 105.1 — — — 105.1
Sterndrive Engines 45.6 — — — 45.6
Distribution Parts & Accessories — 197.2 — — 197.2
Products — 131.7 — — 131.7
Navico Group — — 227.8 — 227.8
Aluminum Freshwater Boats — — — 210.3 210.3
Recreational Fiberglass Boats — — — 187.1 187.1
Saltwater Fishing Boats — — — 124.9 124.9
Business Acceleration — — — 46.5 46.5
Boat Eliminations/Other — — — (8.0) (8.0)
Segment Eliminations (91.4) (1.8) (25.2) (0.1) (118.5)
Total $ 611.9 $ 327.1 $ 202.6 $ 560.7 $ 1,702.3
Three Months Ended
July 2, 2022
(in millions) Propulsion Engine P&A Navico Group Boat Total
Major Product Lines
Outboard Engines $ 565.8 $ — $ — $ — $ 565.8
Controls, Rigging, and Propellers 106.4 — — — 106.4
Sterndrive Engines 62.0 — — — 62.0
Distribution Parts & Accessories — 231.4 — — 231.4
Products — 148.1 — — 148.1
Navico Group — — 286.1 — 286.1
Aluminum Freshwater Boats — — — 237.4 237.4
Recreational Fiberglass Boats — — — 187.4 187.4
Saltwater Fishing Boats — — — 110.3 110.3
Business Acceleration — — — 35.8 35.8
Boat Eliminations/Other — — — (2.5) (2.5)
Segment Eliminations (102.3) (2.1) (28.0) (0.2) (132.6)
Total $ 631.9 $ 377.4 $ 258.1 $ 568.2 $ 1,835.6

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~


		Six Months Ended
		July 1, 2023
	Three Months Ended																Three Months Ended
	March 30, 2024																March 30, 2024
(in millions)	(in millions)	Propulsion		Engine P&A		Navico Group		Boat		Total		(in millions)	Propulsion	Engine P&A	Navico Group	Boat		Total
Major Product Lines	Major Product Lines
Outboard Engines	Outboard Engines	$	1,145.8	$	—	$	—	$	—	$	1,145.8
Outboard Engines
Outboard Engines
Controls, Rigging, and Propellers	Controls, Rigging, and Propellers	211.1		—		—		—		211.1
Sterndrive Engines	Sterndrive Engines	98.0		—		—		—		98.0
Distribution Parts & Accessories		—		372.5		—		—		372.5
Distribution
Products	Products	—		245.0		—		—		245.0
Navico Group	Navico Group	—		—		505.1		—		505.1
Aluminum Freshwater Boats	Aluminum Freshwater Boats	—		—		—		440.7		440.7
Recreational Fiberglass Boats	Recreational Fiberglass Boats	—		—		—		385.5		385.5
Saltwater Fishing Boats	Saltwater Fishing Boats	—		—		—		238.0		238.0
Business Acceleration	Business Acceleration	—		—		—		86.3		86.3
Boat Eliminations/Other	Boat Eliminations/Other	—		—		—		(14.5)		(14.5)
Segment Eliminations	Segment Eliminations	(205.1)		(3.8)		(58.3)		(0.4)		(267.6)
Total	Total	$	1,249.8	$	613.7	$	446.8	$	1,135.6	$	3,445.9

		Six Months Ended
		July 2, 2022
		Three Months Ended
		Three Months Ended
		Three Months Ended
	April 1, 2023																April 1, 2023
(in millions)	(in millions)	Propulsion		Engine P&A		Navico Group		Boat		Total		(in millions)	Propulsion	Engine P&A	Navico Group	Boat		Total
Major Product Lines	Major Product Lines
Outboard Engines	Outboard Engines	$	1,111.9	$	—	$	—	$	—	$	1,111.9
Outboard Engines
Outboard Engines
Controls, Rigging, and Propellers	Controls, Rigging, and Propellers	204.9		—		—		—		204.9
Sterndrive Engines	Sterndrive Engines	123.3		—		—		—		123.3
Distribution Parts & Accessories		—		434.9		—		—		434.9
Distribution
Products	Products	—		274.9		—		—		274.9
Navico Group	Navico Group	—		—		597.7		—		597.7
Aluminum Freshwater Boats	Aluminum Freshwater Boats	—		—		—		458.0		458.0
Recreational Fiberglass Boats	Recreational Fiberglass Boats	—		—		—		351.8		351.8
Saltwater Fishing Boats	Saltwater Fishing Boats	—		—		—		199.5		199.5
Business Acceleration	Business Acceleration	—		—		—		55.4		55.4
Boat Eliminations/Other	Boat Eliminations/Other	—		—		—		(3.5)		(3.5)
Segment Eliminations	Segment Eliminations	(211.5)		(4.2)		(61.6)		(0.2)		(277.5)
Total	Total	$	1,228.6	$	705.6	$	536.1	$	1,061.0	$	3,531.3

As of December 31, ~~2022,~~2023, $~~178.5~~187.1 million of contract liabilities associated with extended warranties, deferred revenue and customer deposits were reported in Accrued expenses and Other long-term liabilities, ofof which ~~$14.1 million and $33.1~~$20.5 million were recognized as revenue during the three ~~and six~~ months ended ~~July 1, 2023, respectively.~~March 30, 2024. As of ~~July 1, 2023,~~March 30, 2024, total contract liabilities were ~~$194.6~~$198.4 million. The total amount of the transaction price allocated to unsatisfied performance obligations as of ~~July 1, 2023~~March 30, 2024 was ~~$185.6~~$189.8 million for contracts greater than one year, which primarily relates to extended warranties. The Company expects to recognize ~~$36.6~~$48.6 million of this amount in ~~2023, $47.3~~2024, $52.0 million in ~~2024,~~2025, and ~~$101.7~~$89.2 million thereafter.

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

Note 3 – Restructuring, Exit and Impairment Activities

The Company recorded restructuring, exit and impairment charges in the Condensed Consolidated Statements of Comprehensive Income in ~~2023.~~2024.

During the three ~~and six~~ months ended ~~July~~March 30, 2024 and April 1, 2023, the Company recorded restructuring charges ~~within the Engine P&A, Navico Group, Boat and Corporate segments~~ related to headcount reductions and related costs associated with streamlining the enterprise-wide cost structure and improving operating efficiencies. The Company estimates approximately $25 million of charges will be incurred related to these actions during 2023. The Company estimates these actions will result in approximately $30 million to $35 million of annualized cost savings.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

The following table is a summary of these expenses for the three months ended ~~July 1, 2023:~~March 30, 2024:


(in millions)	(in millions)	Engine P&A		Navico Group		Boat		Corporate		Total

(in millions)

(in millions)
Restructuring, exit and impairment activities:
Restructuring, exit and impairment activities:
Restructuring, exit and impairment activities:	Restructuring, exit and impairment activities:
Employee termination and other benefits	Employee termination and other benefits	$	0.3	$	7.1	$	4.5	$	—	$	11.9
Employee termination and other benefits
Employee termination and other benefits
Asset-related	Asset-related	—		0.2		—		—		0.2
Professional fees		—		—		—		1.8		1.8
Asset-related
Asset-related

Total restructuring, exit and impairment charges

Total restructuring, exit and impairment charges

Total restructuring, exit and impairment charges	Total restructuring, exit and impairment charges	$	0.3	$	7.3	$	4.5	$	1.8	$	13.9

Total cash payments for restructuring, exit and impairment charges (A)	Total cash payments for restructuring, exit and impairment charges (A)	$	0.3	$	4.0	$	4.0	$	3.3	$	11.6

Total cash payments for restructuring, exit and impairment charges (A)

Total cash payments for restructuring, exit and impairment charges (A)
Accrued charges at end of the period (B)	Accrued charges at end of the period (B)	$	0.5	$	8.3	$	1.2	$	2.0	$	12.0
Accrued charges at end of the period (B)
Accrued charges at end of the period (B)

(A) Cash payments for the three months ended ~~July 1, 2023~~March 30, 2024 may include payments related to prior period charges.

(B) Restructuring, exit and impairment charges accrued as of ~~July 1, 2023~~March 30, 2024 are expected to be paid in the next twelve months.

The following table is a summary of these expenses for the ~~six~~three months ended ~~July~~April 1, 2023:


(in millions)	(in millions)	Engine P&A		Navico Group		Boat		Corporate		Total

(in millions)

(in millions)
Restructuring, exit and impairment activities:
Restructuring, exit and impairment activities:
Restructuring, exit and impairment activities:	Restructuring, exit and impairment activities:
Employee termination and other benefits	Employee termination and other benefits	$	1.0	$	9.5	$	5.9	$	0.7	$	17.1
Employee termination and other benefits
Employee termination and other benefits
Asset-related	Asset-related	—		1.4		—		—		1.4
Asset-related
Asset-related

Professional fees	Professional fees	—		—		—		4.9		4.9

Professional fees

Professional fees
Total restructuring, exit and impairment charges
Total restructuring, exit and impairment charges
Total restructuring, exit and impairment charges	Total restructuring, exit and impairment charges	$	1.0	$	10.9	$	5.9	$	5.6	$	23.4

Total cash payments for restructuring, exit and impairment charges (A)	Total cash payments for restructuring, exit and impairment charges (A)	$	0.5	$	5.3	$	4.7	$	3.6	$	14.1
Accrued charges at end of the period (B)		$	0.5	$	8.3	$	1.2	$	2.0	$	12.0

Total cash payments for restructuring, exit and impairment charges (A)

Total cash payments for restructuring, exit and impairment charges (A)
Accrued charges at end of the period
Accrued charges at end of the period
Accrued charges at end of the period

(A) Cash payments for the ~~six~~three months ended ~~July~~April 1, 2023 may include payments related to prior period charges.

~~(B) Restructuring, exit and impairment charges accrued as of July 1, 2023 are expected to be paid in the next twelve months.~~

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

Note 4 – Acquisitions

~~2022~~2023 Acquisitions

During the ~~second~~fourth quarter of ~~2022,~~2023, the Company acquired ~~certain~~additional Freedom Boat Club franchise operations and ~~territory rights as well as certain marine assets~~territories in the Southeast United States. These acquisitions ~~enable opportunities~~should unlock operational efficiencies while providing members with additional boating destinations, as the Company plans for continued expansion across ~~a wide spectrum, building upon~~ the ~~growth Brunswick has cultivated throughout the Company's shared access portfolio and new digital platforms.~~Southeast Coastal region. These acquisitions are included as part of the Company's Boat segment.

The Company paid net cash consideration of ~~$93.9~~$16.0 million for these acquisitions. The opening balance sheets, which are preliminary and subject to change in the measurement period as the Company finalizes the purchase price allocation and fair value estimates, include ~~$71.4~~$13.9 million of goodwill and ~~$11.9~~$3.3 million of customer relationships. The amount assigned to customer relationships will be amortized over the estimated useful life of 10 years. Transaction costs associated with these acquisitions were not material to the Company's consolidated results of ~~$1.4~~operations.

On September 1, 2023, the Company acquired all of the issued and outstanding shares of Fliteboard Pty Ltd (Fliteboard) for $88.3 million net cash consideration. Fliteboard is a leader in eFoiling technology, which combines advanced hydrofoils and electric propulsion on the water. The acquisition of Fliteboard allows the Company to enter the emerging electric-foiling surfboard market and presents the opportunity for technological, manufacturing, commercial and consumer synergies with our existing portfolio. Fliteboard is included as part of the Company's Propulsion segment.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

The opening balance sheet, which is preliminary and subject to change in the measurement period as the Company finalizes the purchase price allocation and fair value estimates, includes $38.7 million of goodwill, $20.7 million of trade names, $8.4 million of customer relationships, and $7.1 million of developed technology. The amounts assigned to customer relationships and developed technology will be amortized over the estimated useful lives of 15 years and 10 years, respectively. Transaction costs associated with the acquisition of $1.9 million were expensed as incurred within Selling, general and administrative expense in ~~2022. The~~2023.

These 2023 acquisitions are not material to the Company's net sales, results of operations, or total assets during any period presented. Accordingly, the Company's consolidated results of operations do not differ materially from historical performance as a result of the acquisitions, and pro forma results for prior periods are not presented. ~~Purchase accounting for these acquisitions is final as of July 1, 2023.~~

Note 5 – Financial Instruments

The Company operates globally with manufacturing and sales facilities around the world. Due to the Company’s global operations, the Company engages in activities involving both financial and market risks. The Company utilizes normal operating and financing activities, along with derivative financial instruments, to minimize these risks. See Note 1312 in the Notes to Consolidated Financial Statements in the ~~2022~~2023 Form 10-K for further details regarding the Company's financial instruments and hedging policies.

Cross-Currency Swaps. The Company enters into cross-currency swaps to hedge Euro currency exposures of the net investment in certain foreign subsidiaries. During 2022, the Company settled $450.0 million of cross-currency swap contracts resulting in a deferred gain of $42.5 million within Accumulated other comprehensive loss. As a result, there were no cross-currency swaps outstanding as of ~~July 1, 2023 andDecember 31, 2022, respectively. As of~~ ~~July 2, 2022,~~ ~~the notional value of cross-currency swap contracts outstanding was~~ ~~$250.0 million.~~ The cross-currency swaps were designated as net investment hedges, with the amount of gain or loss associated with the change in fair value of these instruments ~~included~~deferred within Accumulated other comprehensive loss and recognized upon termination of the respective investment. InDuring the ~~first~~fourth quarter of ~~2022,~~2023, the ~~Company settled $200.0~~company entered into $250.0 million of cross-currency swap contracts. As of March 30, 2024 and December 31, 2023, the notional value of cross-currency swap contracts ~~resulting in a deferred gain~~outstanding was $250.0 million. There were no cross-currency swaps outstanding as of ~~$16.7 million within Accumulated other comprehensive loss.~~April 1, 2023.

Commodity Price. The Company uses commodity swaps to hedge anticipated purchases of aluminum and copper. As of ~~July~~March 30, 2024, December 31, 2023 and April 1, 2023, ~~December 31, 2022 and July 2, 2022,~~ the notional value of commodity swap contracts outstanding was ~~$25.2~~was $27.7 million, ~~$24.1~~$31.8 million and ~~$22.6~~$28.5 million, respectively, and the contracts mature through ~~2024.~~ 2025. The amount of gain or loss associated with the change in fair value of these instruments is deferred in Accumulated other comprehensive loss and recognized in Cost of sales in the same period or periods during which the hedged transaction affects ~~earnings.~~earnings. As of ~~July 1, 2023,~~March 30, 2024, the Company estimates that, during the next 12 months, it will reclassify approximately ~~$2.7~~$1.0 million in net losses (based on current prices) from Accumulated other comprehensive loss to Cost of sales.

Foreign Currency Derivatives. The Company enters into forward contracts to manage foreign exchange exposure related to forecasted transactions and assets and liabilities that are subject to risk from foreign currency exchange rate changes. Forward exchange contracts outstanding as of ~~July~~March 30, 2024, December 31, 2023 and April 1, 2023 ~~December 31, 2022 and July 2, 2022~~ had notional contract values of $~~561.1~~720.2 million, ~~$684.8~~$694.6 million and ~~$650.0~~$690.6 million, respectively. The forward contracts outstanding as of ~~July 1, 2023~~March 30, 2024 mature through ~~2024~~ 2025 and mainly relate to theEuro, Australian dollar, ~~Canadian dollar,~~Norwegian krone and Mexican peso. As of ~~July 1, 2023,~~March 30, 2024, the Company estimates that during the next 12 months, it will reclassify ~~approximately~~approximate ~~$4.1~~ly $5.3 million of net gains (based on current rates) from Accumulated other comprehensive loss to Cost of sales.

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

Interest-Rate Derivatives. During the first quarter of 2022, the Company entered into and settled a series of treasury-lock swaps to hedge the interest-rate risk associated with debt issuances, resulting in a net deferred gain of $5.1 million. There were no treasury-lock swaps outstanding as of July 1, 2023, December 31, 2022 or July 2, 2022.

The Company had net deferred gains associated with previously settled forward-starting interest-rate swaps and ~~the~~ treasury-lock swaps ~~discussed above~~ of $~~3.4~~3.3 million~~, $3.2 million, and $3.0 million~~ as of ~~July 1, 2023,~~March 30, 2024, December 31, ~~2022~~2023, and ~~July 2, 2022,~~April 1, 2023, respectively. These instruments were designated as cash flow hedges with gains and losses included in Accumulated other comprehensive loss. As of ~~July 1, 2023,~~March 30, 2024, the Company estimates that during the next 12 months, it will reclassify approximately $0.1 million of net gains from Accumulated other comprehensive loss to Interest expense.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

As of ~~July~~March 30, 2024, December 31, 2023 and April 1, 2023, ~~December 31, 2022 and July 2, 2022,~~ the fair values of the Company’s derivative instruments were:


(in millions)	(in millions)	Fair Value
(in millions)
(in millions)									Fair Value
Asset Derivatives	Asset Derivatives	July 1, 2023		December 31, 2022		July 2, 2022		Asset Derivatives	March 30, 2024	December 31, 2023	April 1, 2023
Derivatives Designated as Cash Flow Hedges	Derivatives Designated as Cash Flow Hedges
Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts	Foreign exchange contracts	$	10.5	$	15.2	$	24.3
Commodity contracts	Commodity contracts	—		0.3		—

Total	Total	$	10.5	$	15.5	$	24.3

Derivatives Designated as Net Investment Hedges
Cross-currency swaps		$	—	$	—	$	14.2
Total

Total

Other Hedging Activity

Other Hedging Activity

Other Hedging Activity	Other Hedging Activity
Foreign exchange contracts	Foreign exchange contracts	$	0.4	$	0.6	$	2.0
Foreign exchange contracts
Foreign exchange contracts

Liability Derivatives	Liability Derivatives
Liability Derivatives
Liability Derivatives
Derivatives Designated as Cash Flow Hedges	Derivatives Designated as Cash Flow Hedges
Derivatives Designated as Cash Flow Hedges
Derivatives Designated as Cash Flow Hedges
Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts	Foreign exchange contracts	$	7.2	$	8.0	$	1.9
Commodity contracts	Commodity contracts	3.0		1.1		2.4

Total
Total
Total	Total	$	10.2	$	9.1	$	4.3

Derivatives Designated as Net Investment Hedges

Derivatives Designated as Net Investment Hedges

Derivatives Designated as Net Investment Hedges
Cross-currency swaps
Cross-currency swaps
Cross-currency swaps

Other Hedging Activity
Other Hedging Activity
Other Hedging Activity	Other Hedging Activity
Foreign exchange contracts	Foreign exchange contracts	$	0.8	$	0.8	$	0.1
Foreign exchange contracts
Foreign exchange contracts

As of ~~July~~March 30, 2024, December 31, 2023 and April 1, 2023, ~~December 31, 2022 and July 2, 2022,~~ asset derivatives are included within Prepaid expenses and other, ~~and Other long-term assets,~~ and liability derivatives are included within Accrued expenses and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

The effect of derivative instruments on the Condensed Consolidated Statements of Comprehensive Income for the three ~~and six~~ months ended ~~July~~March 30, 2024 and April 1, 2023 ~~and July 2, 2022~~ is as shown in the tables below.

The amount of gain (loss) on derivatives recognized in Accumulated other comprehensive loss was as follows:


(in millions)
Derivatives Designated as Cash Flow Hedging Instruments	March 30, 2024		April 1, 2023

Foreign exchange contracts	10.8		3.3
Commodity contracts	(1.1)		(0.2)
Total	$	9.7	$	3.1

Derivatives Designated as Net Investment Hedging Instruments
Cross-currency swaps	$	4.0	$	—

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

The amount of gain (loss) reclassified from o~~n derivatives recognized in~~ Accumulated other comprehensive loss into earnings was as follows:


(in millions)	(in millions)	Three Months Ended				Six Months Ended
(in millions)
(in millions)
Derivatives Designated as Cash Flow Hedging Instruments
Derivatives Designated as Cash Flow Hedging Instruments
Derivatives Designated as Cash Flow Hedging Instruments	Derivatives Designated as Cash Flow Hedging Instruments	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
Interest-rate contracts	Interest-rate contracts	$	—	$	—	$	—	$	5.3
Interest-rate contracts
Interest-rate contracts
Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts	Foreign exchange contracts	(0.2)		25.3		3.1		27.9
Commodity contracts	Commodity contracts	(3.0)		(5.7)		(3.2)		(0.7)
Commodity contracts
Commodity contracts
Total	Total	$	(3.2)	$	19.6	$	(0.1)	$	32.5

Derivatives Designated as Net Investment Hedging Instruments
Cross-currency swaps		$	—	$	15.2	$	—	$	16.6
Total
Total

The amount of gain (loss) ~~reclassified from Accumulated other comprehensive loss~~on derivatives recognized directly into earnings was as follows:

(in millions) Three Months Ended Six Months Ended
Derivatives Designated as Cash Flow Hedging Instruments Location of Gain (Loss) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022
Interest-rate contracts Interest expense $ — $ (0.1) $ (0.1) $ (0.1)
Foreign exchange contracts Cost of sales 4.1 5.3 11.6 8.0
Commodity contracts Cost of sales (0.5) 2.3 (1.1) 3.9
Total $ 3.6 $ 7.5 $ 10.4 $ 11.8
Derivatives Designated as Fair Value Hedging Instruments
Interest-rate contracts Interest expense $ 0.1 $ 0.1 $ 0.3 $ 0.3
Other Hedging Activity
Foreign exchange contracts Cost of sales $ (1.5) $ 5.4 $ (2.2) $ 1.8
Foreign exchange contracts Other expense, net (0.4) 0.2 (0.5) 0.2
Total $ (1.9) $ 5.6 $ (2.7) $ 2.0


(in millions)
Derivatives Designated as Fair Value Hedging Instruments	Location of Gain (Loss)	March 30, 2024		April 1, 2023
Interest-rate contracts	Interest expense	$	—	$	0.2

Other Hedging Activity
Foreign exchange contracts	Cost of sales	$	2.0	$	(0.7)
Foreign exchange contracts	Other expense, net	(2.7)		(0.1)
Total		$	(0.7)	$	(0.8)

Fair Value of Other Financial Instruments. The carrying values of the Company's short-term financial instruments, including cash and cash equivalents and accounts and notes receivable, approximate their fair values because of the short maturity of these instruments. As of ~~July~~March 30, 2024, December 31, 2023 and April 1, 2023, ~~December 31, 2022 and July 2, 2022,~~ the fair value of the Company’s long-term debt, including current maturities, and short-term debt was approximately ~~$2,267.3~~$2,659.5 million, ~~$2,225.0~~$2,228.2 million and ~~$2,272.0~~$2,257.4 million, respectively, and was determined using Level 1 and Level 2 inputs described in Note 6 to the Notes to Consolidated Financial Statements in the ~~2022~~2023 Form 10-K. The carrying value of long-term debt, including current maturities, and short-term debt was ~~$2,540.5~~$2,859.1 million, ~~$2,540.5~~$2,458.7 million and ~~$2,534.9~~$2,541.2 million as of ~~July~~March 30, 2024, December 31, 2023 and April 1, 2023, ~~December 31, 2022 and July 2, 2022,~~ respectively.

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

Note 6 – Fair Value Measurements

The following table summarizes the Company's financial assets and liabilities measured at fair value on a recurring basis:


			Fair Value												Fair Value
(in millions)	(in millions)			Fair Value						(in millions)	Fair Value Level	March 30, 2024	December 31, 2023	April 1, 2023
Category		Fair Value Level		July 1, 2023		December 31, 2022		July 2, 2022
Cash equivalents	Cash equivalents	1		$	0.3	$	0.4	$	39.2
Short-term investments in marketable securities	Short-term investments in marketable securities	1		0.8		4.5		37.0
Restricted cash	Restricted cash	1		11.0		12.9		11.9
Derivative assets	Derivative assets	2		10.9		16.1		40.5
Derivative liabilities	Derivative liabilities	2		11.0		9.9		4.4
Deferred compensation	Deferred compensation	1		1.4		1.6		1.4
Deferred compensation	Deferred compensation	2		16.8		14.1		14.2

Liabilities measured at net asset value	Liabilities measured at net asset value			12.2		10.4		10.4
Liabilities measured at net asset value
Liabilities measured at net asset value

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 7 – Commitments and Contingencies

Product Warranties

The following activity related to product warranty liabilities was recorded in Accrued expenses during the ~~six~~three months ended ~~July~~March 30, 2024 and April 1, ~~2023 and July 2, 2022:~~2023:


(in millions)	(in millions)	July 1, 2023		July 2, 2022		(in millions)	March 30, 2024	April 1, 2023
Balance at beginning of period	Balance at beginning of period	$	146.7	$	129.3
Payments	Payments	(40.2)		(29.2)

Provisions/additions for contracts issued/sold	Provisions/additions for contracts issued/sold	45.9		41.1
Provisions/additions for contracts issued/sold
Provisions/additions for contracts issued/sold
Aggregate changes for preexisting warranties	Aggregate changes for preexisting warranties	2.7		(0.2)
Foreign currency translation	Foreign currency translation	0.5		(1.3)

Other	Other	1.4		(0.9)

Other

Other
Balance at end of period	Balance at end of period	$	157.0	$	138.8

Extended Product Warranties

The following activity related to deferred revenue for extended product warranty contracts was recorded in Accrued expenses and Other long-term liabilities during the ~~six~~three months ended ~~July~~March 30, 2024 and April 1, ~~2023 and July 2, 2022:~~2023:

(in millions) July 1, 2023 July 2, 2022
Balance at beginning of period $ 112.5 $ 99.5
Extended warranty contracts sold 22.6 20.1
Revenue recognized on existing extended warranty contracts (12.8) (11.0)
Foreign currency translation 0.2 —
Other (0.2) (0.3)
Balance at end of period $ 122.3 $ 108.3

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~


(in millions)	March 30, 2024		April 1, 2023
Balance at beginning of period	$	127.2	$	112.5
Extended warranty contracts sold	9.6		8.9
Revenue recognized on existing extended warranty contracts	(7.3)		(6.3)
Foreign currency translation	(0.2)		—
Other	(0.1)		(0.1)
Balance at end of period	$	129.2	$	115.0

Note 8 – Goodwill and Other Intangibles

Changes in the Company's goodwill during the ~~six~~three months ended ~~July~~March 30, 2024 and April 1, 2023, ~~and July 2, 2022,~~ by segment, are summarized below:


(in millions)	(in millions)	Propulsion		Engine P&A		Navico Group		Boat		Total		(in millions)	Propulsion	Engine P&A	Navico Group	Boat	Total
December 31, 2023

Adjustments
Adjustments
Adjustments
March 30, 2024

December 31, 2022
December 31, 2022
December 31, 2022	December 31, 2022	$	14.0	$	232.8	$	595.8	$	125.0	$	967.6

Adjustments	Adjustments	(0.1)		0.1		2.1		4.9		7.0
July 1, 2023		$	13.9	$	232.9	$	597.9	$	129.9	$	974.6

December 31, 2021		$	14.7	$	233.1	$	581.8	$	58.8	$	888.4
Acquisitions		—		—		—		79.5		79.5
Adjustments	Adjustments	(0.8)		(0.4)		(0.1)		0.1		(1.2)
July 2, 2022		$	13.9	$	232.7	$	581.7	$	138.4	$	966.7
Adjustments
April 1, 2023

Adjustments in both periods include the effect of foreign currency translation on goodwill denominated in currencies other than the U.S. dollar. ~~In addition, adjustments~~Adjustments during the ~~six~~three months ended ~~July~~March 30, 2024 also include immaterial purchase accounting adjustments related to the 2023 Fliteboard and Freedom Boat Club acquisitions. Adjustments during the three months ended April 1, 2023 also include ~~$4.8~~$4.5 million of purchase accounting adjustments from ~~the~~ 2022 Freedom Boat Club acquisitions, ~~a majority of which relate~~related to boat fleet fair market value adjustments. There was no accumulated impairment loss on goodwill as of ~~July 1, 2023,~~March 30, 2024, December 31, ~~2022~~2023 or ~~July 2, 2022.~~April 1, 2023.

~~As discussed in~~ ~~Note 1 – Significant Accounting Policies~~, effective January 1, 2023, we changed our reportable segments. Concurrent with the change in reportable segments, the Navico Group operating segment is now also the reporting unit at which we evaluate goodwill for impairment. As a resultTable of ~~this change, we evaluated impairment indicators at the previous reporting units immediately prior~~Contents

BRUNSWICK CORPORATION

Notes to ~~the change and at the Navico Group reporting unit immediately following the change and concluded there were no indicators of impairment.~~Condensed Consolidated Financial Statements

(unaudited)

The Company's intangible assets, included within Other intangibles, net on the Condensed Consolidated Balance Sheets as of ~~July~~March 30, 2024, December 31, 2023 and April 1, 2023, ~~December 31, 2022 and July 2, 2022,~~ are summarized by intangible asset type below:


		July 1, 2023				December 31, 2022				July 2, 2022
	March 30, 2024																March 30, 2024		December 31, 2023			April 1, 2023
(in millions)	(in millions)	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization		(in millions)	Gross Amount	Accumulated Amortization		Gross Amount		Accumulated Amortization	Gross Amount		Accumulated Amortization
Intangible assets:	Intangible assets:
Customer relationships
Customer relationships
Customer relationships	Customer relationships	$	897.6	$	(408.7)	$	897.4	$	(386.1)	$	897.4	$	(362.4)
Trade names	Trade names	305.5		—		305.4		—		305.4		—
Developed technology	Developed technology	160.0		(18.7)		160.0		(13.3)		160.0		(8.0)
Other	Other	82.1		(38.4)		67.6		(33.6)		74.3		(28.5)
Total	Total	$	1,445.2	$	(465.8)	$	1,430.4	$	(433.0)	$	1,437.1	$	(398.9)

Other intangible assets primarily consist of software, patents, and franchise agreements. Gross amounts and related accumulated amortization amounts include adjustments related to the impact of foreign currency translation. Aggregate amortization expense for intangibles was ~~$17.2~~$17.9 million and ~~$33.8~~$16.6 million for three ~~andsix~~ months ended ~~July~~March 30, 2024 and April 1, 2023, ~~respectively. Aggregate amortization expense for intangibles was $15.4 million and $31.3 million for three and six months ended July 2, 2022,~~ respectively.

The Company tests its intangible assets for impairment during the fourth quarter of each year, or whenever a ~~significant~~ change in events and circumstances (triggering event) occurs that indicates the fair value of intangible assets may be below their carrying values. The Company did not record anany impairment ~~charge~~charges during the ~~six~~three months ended ~~July~~March 30, 2024 or April 1, ~~2023 or July 2, 2022.~~2023.

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

Note 9 – Segment ~~Data~~

~~Change in Reportable Segments~~

Effective January 1, 2023, the Company changed its management reporting and updated its reportable segments to Propulsion, Engine P&A, Navico Group and Boat to align with our internal operating structure.

~~Reportable Segments~~

~~The Company's segments are defined by management's reporting structure and operating activities. The Company's reportable segments are the following:~~

~~Propulsion~~. The Propulsion segment manufactures and markets a full range of outboard, sterndrive, and inboard engines, as well as propulsion-related controls, rigging, and propellers. These products are principally sold directly to boat builders, including Brunswick's Boat segment, and through marine retail dealers worldwide. The Propulsion segment primarily markets under the Mercury, Mercury MerCruiser, Mariner, Mercury Racing, and Mercury Diesel brands. The segment's engine manufacturing plants are located mainly in the United States and China, along with a joint venture in Japan, with sales mainly to markets in the Americas, Europe, and Asia-Pacific.

~~Engine P&A.~~ The Engine P&A segment manufactures, markets, supplies and distributes products for both marine and non-marine markets. These products are designed for and sold mostly to aftermarket retailers, distributors, and distribution businesses, as well as original equipment manufacturers (including Brunswick brands). Company-branded products include consumables, such as engine oils and lubricants, and are sold under the Mercury, Mercury Precision Parts, Quicksilver, and Seachoice brands. The Engine P&A segment also includes distribution businesses such as Land 'N' Sea, Kellogg Marine Supply, Lankhorst Taselaar, BLA, and Payne's Marine Group, which distribute third-party and Company products. These businesses are leading distributors of marine parts and accessories throughout North America, Europe, and Asia-Pacific. The segment's manufacturing and distribution facilities are primarily located in North America, Europe, Australia, and New Zealand.

~~Navico Group.~~ The Navico Group segment designs, develops, manufactures, and markets products and systems for the marine, RV, specialty vehicle and industrial markets. Navico Group's brand portfolio includes the Ancor, Attwood, B&G, BEP, Blue Sea Systems, C-MAP, CZone, Garelick, Lenco, Lowrance, Marinco, Mastervolt, MotorGuide, Progressive Industries, ProMariner, RELiON, Simrad and Whale brand names. These brands span multiple categories, including marine electronics, sensors, control systems, instruments, power systems, and general accessories. The segment's manufacturing and distribution facilities are primarily located in North America, Europe, Australia, and New Zealand.

~~Boat.~~ The Boat segment designs, manufactures, and markets the following boat brands and products: Sea Ray sport boats and cruisers; Bayliner sport cruisers, runabouts, and Heyday wake boats; Boston Whaler fiberglass offshore boats; Lund fiberglass fishing boats; Crestliner, Cypress Cay, Harris, Lowe, Lund and Princecraft aluminum fishing, utility, pontoon boats, and deck boats; Thunder Jet heavy-gauge aluminum boats; and Veer recreational and fishing boats designed specifically to support electric propulsion. The Boat segment procures substantially all of its outboard engines, gasoline sterndrive engines, and gasoline inboard engines from Brunswick's Propulsion segment. The Boat segment also includes Brunswick boat brands based in Europe and Asia-Pacific, which include Quicksilver, Uttern, and Rayglass (including Protector and Legend). The Boat segment's products are manufactured mainly in the United States, Europe, Mexico, and Canada and sold through a global network of dealer and distributor locations, primarily in North America and Europe.

The Boat segment includes Business Acceleration which, through innovative service models, shared access solutions, including the Freedom Boat Club business acquired in 2019, dealer services and emerging technology, aims to provide exceptional experiences to attract a wide range of customers to the marine industry and shape the future of boating.

The Company evaluates performance based on segment operating earnings. Segment operating earnings do not include the expenses of corporate administration, impairments or gains on the sale of equity investments, earnings from unconsolidated affiliates, other expenses and income of a non-operating nature, transaction financing charges, interest expense, and income or provisions or benefits for income taxes.

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

Corporate/Other results include items such as corporate staff and administrative costs, investments in technology solutions, business development and other growth-related expenses, including IT enhancements. Corporate/Other total assets consist of mainly cash, cash equivalents and investments in short-term marketable securities, restricted cash, income tax balances and investments in unconsolidated affiliates.

Segment eliminations adjust for sales between the Company's reportable segments and primarily relate to the sale of engines and parts and accessories to various boat brands, which are consummated at established arm's length transfer prices as the intersegment pricing for these engines and parts and accessories are based upon and consistent with selling prices to third-party customers.Information

Information about the operations of Brunswick's reportable segments is set forth below:


	Net Sales																				Net Sales			Operating Earnings (Loss)
		Net Sales								Operating Earnings (Loss)

		Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
		Three Months Ended
		Three Months Ended
		Three Months Ended																				Three Months Ended
(in millions)	(in millions)	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022		(in millions)	March 30, 2024	April 1, 2023			March 30, 2024		April 1, 2023
Propulsion	Propulsion	$	703.3	$	734.2	$	1,454.9	$	1,440.1	$	111.1	$	142.0	$	262.2	$	267.3
Engine P&A	Engine P&A	328.9		379.5		617.5		709.8		66.4		85.8		114.2		146.8
Navico Group	Navico Group	227.8		286.1		505.1		597.7		4.2		22.4		17.0		53.0
Boat	Boat	560.8		568.4		1,136.0		1,061.2		53.2		58.9		111.0		104.2
Corporate/Other	Corporate/Other	—		—		—		—		(40.5)		(30.1)		(73.9)		(52.8)
Segment Eliminations	Segment Eliminations	(118.5)		(132.6)		(267.6)		(277.5)		—		—		—		—
Total	Total	$	1,702.3	$	1,835.6	$	3,445.9	$	3,531.3	$	194.4	$	279.0	$	430.5	$	518.5


		Total Assets							Total Assets
(in millions)	(in millions)	July 1, 2023		December 31, 2022		July 2, 2022		(in millions)	March 30, 2024	December 31, 2023	April 1, 2023
Propulsion	Propulsion	$	1,621.7	$	1,516.7	$	1,400.0
Engine P&A	Engine P&A	883.6		868.6		902.6
Navico Group	Navico Group	2,113.9		2,169.0		2,152.7
Boat	Boat	886.9		829.8		816.4
Corporate/Other	Corporate/Other	784.0		937.2		894.8
Total	Total	$	6,290.1	$	6,321.3	$	6,166.5

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 10 – Comprehensive Income

Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets includes foreign currency cumulative translation adjustments; prior service costs and credits and net actuarial gains and losses for defined benefit plans; and unrealized derivative gains and losses, all net of tax. Changes in the components of Accumulated other comprehensive loss, all net of tax, for the three ~~and six~~ months ended ~~July~~March 30, 2024 and April 1, 2023 ~~and July 2, 2022~~ are as follows:

Three Months Ended Six Months Ended
(in millions) July 1,
2023 July 2,
2022 July 1,
2023 July 2,
2022
Net earnings $ 134.7 $ 197.3 $ 247.0 $ 371.5
Other comprehensive income (loss):
Foreign currency cumulative translation adjustments 2.2 (32.6) 8.5 (30.5)
Net change in unamortized actuarial gains 0.1 0.3 0.2 0.5
Net change in unrealized derivative gains (5.2) 20.0 (8.0) 27.6
Total other comprehensive (loss) income (2.9) (12.3) 0.7 (2.4)
Comprehensive income $ 131.8 $ 185.0 $ 247.7 $ 369.1

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~


	Three Months Ended
(in millions)	March 30, 2024		April 1, 2023
Net earnings	$	68.0	$	112.3
Other comprehensive income (loss):
Foreign currency cumulative translation adjustments	(19.6)		6.3
Net change in unamortized prior service credits	(0.1)		—
Net change in unamortized actuarial gains (losses)	(0.1)		0.1

Net change in unrealized derivative gains (losses)	9.3		(2.8)
Total other comprehensive (loss) income	(10.5)		3.6
Comprehensive income	$	57.5	$	115.9

The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the three months ended ~~July 1, 2023:~~March 30, 2024:


(in millions)	(in millions)	Foreign currency translation		Prior service credits		Net actuarial gains		Unrealized investment gains		Net derivative gains		Total
(in millions)
(in millions)														Foreign currency translation	Prior service credits	Net actuarial gains	Unrealized investment gains	Net derivative gains	Total
Beginning balance	Beginning balance	$	(65.0)	$	(4.1)	$	9.8	$	0.2	$	33.2	$	(25.9)
Other comprehensive income before reclassifications (A)		2.2		—		—		—		(2.6)		(0.4)
Amounts reclassified from Accumulated other comprehensive loss (B)		—		—		0.1		—		(2.6)		(2.5)
Net other comprehensive income (loss)		2.2		—		0.1		—		(5.2)		(2.9)
Other comprehensive (loss) income before reclassifications (A)
Amounts reclassified from Accumulated other comprehensive loss (B)(C)
Net other comprehensive (loss) income
Ending balance	Ending balance	$	(62.8)	$	(4.1)	$	9.9	$	0.2	$	28.0	$	(28.8)

(A) The tax effects for the three months ended ~~July 1, 2023~~March 30, 2024 were ~~$(0.4)~~$3.0 million for foreign currency translation and ~~$0.6~~$(3.7) million for derivatives.

(B) ~~See the table depicting reclassification adjustments out of Accumulated other comprehensive loss below for the~~The tax effects for the three months ended ~~July 1, 2023.~~March 30, 2024 were $0.4 million for derivatives.

(C) The ~~following table presents the changes in~~reclassification adjustments from Accumulated other comprehensive loss ~~by component, all net of~~and associated tax effects related to defined benefit items were not material for the ~~six~~three months ended ~~July 1, 2023:~~March 30, 2024. Refer to
(in millions) Foreign currency translation Prior service credits Net actuarial gains Unrealized investment gains Net derivative gains Total
Beginning balance $ (71.3) $ (4.1) $ 9.7 $ 0.2 $ 36.0 $ (29.5)
Other comprehensive income before reclassifications (A)
8.5 — — — (0.5) 8.0
Amounts reclassified from Accumulated other comprehensive loss (B)
— — 0.2 — (7.5) (7.3)
Net other comprehensive income 8.5 — 0.2 — (8.0) 0.7
Ending balance $ (62.8) $ (4.1) $ 9.9 $ 0.2 $ 28.0 $ (28.8)

Note 5 – Financial Instruments

~~(A) The tax effects~~ for the ~~six months ended July 1, 2023 were $(0.5) million for foreign currency translation and $(0.4) million for derivatives.~~

~~(B) See the table depicting~~ reclassification adjustments ~~out of~~from Accumulated other comprehensive loss ~~below for the tax effects for the six months ended July 1, 2023~~related to derivatives.

The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the three months ended ~~July 2, 2022:~~April 1, 2023:


(in millions)	(in millions)	Foreign currency translation		Prior service credits		Net actuarial losses		Unrealized investment gains		Net derivative gains		Total		(in millions)	Foreign currency translation	Prior service credits	Net actuarial losses	Unrealized investment gains	Net derivative gains	Total
Beginning balance	Beginning balance	$	(32.4)	$	(3.7)	$	(3.2)	$	0.2	$	17.5	$	(21.6)
Other comprehensive income before reclassifications (A)	Other comprehensive income before reclassifications (A)	(32.6)		—		—		—		25.6		(7.0)
Amounts reclassified from Accumulated other comprehensive loss (B)		—		—		0.3		—		(5.6)		(5.3)
Amounts reclassified from Accumulated other comprehensive loss (B)(C)
Net other comprehensive income (loss)	Net other comprehensive income (loss)	(32.6)		—		0.3		—		20.0		(12.3)
Ending balance	Ending balance	$	(65.0)	$	(3.7)	$	(2.9)	$	0.2	$	37.5	$	(33.9)

(A) The tax effects for the three months ended ~~July 2, 2022~~April 1, 2023 were ~~$1.5~~$(0.1) million for foreign currency translation and ~~$(9.2)~~$(1.0) million for derivatives.

(B) ~~See the table depicting reclassification adjustments out of Accumulated other comprehensive loss below for the~~The tax effects for the three months ended ~~July 2, 2022.~~April 1, 2023 were $1.9 million for derivatives.

(C) The reclassification adjustments from Accumulated other comprehensive loss and associated tax effects related to defined benefit items were not material for the three months ended April 1, 2023. Refer to Note 5 – Financial Instruments for the reclassification adjustments from Accumulated other comprehensive loss related to derivatives.

2117

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

~~The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the six months ended July 2, 2022:~~
(in millions) Foreign currency translation Prior service credits Net actuarial losses Unrealized investment gains Net derivative gains Total
Beginning balance $ (34.5) $ (3.7) $ (3.4) $ 0.2 $ 9.9 $ (31.5)
Other comprehensive (loss) income before reclassifications (A)
(30.5) — — — 36.4 5.9
Amounts reclassified from Accumulated other comprehensive loss (B)
— — 0.5 — (8.8) (8.3)
Net other comprehensive income (30.5) — 0.5 — 27.6 (2.4)
Ending balance $ (65.0) $ (3.7) $ (2.9) $ 0.2 $ 37.5 $ (33.9)

~~(A) The tax effects for the six months ended July 2, 2022 were $3.1 million for foreign currency translation and $(12.7) million for derivatives.~~

~~(B) See the table depicting reclassification adjustments out of Accumulated other comprehensive loss below for the tax effects for the six months ended July 2, 2022~~

~~The following table presents reclassification adjustments out of Accumulated other comprehensive loss during the three and six months ended July 1, 2023 and July 2, 2022:~~

Three Months Ended Six Months Ended
Details about Accumulated other comprehensive (loss) income components (in millions) July 1,
2023 July 2,
2022 July 1,
2023 July 2,
2022 Affected line item in the statement where net income is presented
Amortization of defined benefit items:
Net actuarial losses $ (0.1) $ (0.3) $ (0.2) $ (0.5) Other income (expense), net
(0.1) (0.3) (0.2) (0.5) Earnings before income taxes
— — — — Income tax provision
$ (0.1) $ (0.3) $ (0.2) $ (0.5) Net earnings from continuing operations
Amount of gain (loss) reclassified into earnings on derivative contracts:
Interest-rate contracts $ — $ (0.1) $ (0.1) $ (0.1) Interest expense
Foreign exchange contracts 4.1 5.3 11.6 8.0 Cost of sales
Commodity contracts (0.5) 2.3 (1.1) 3.9 Cost of sales
3.6 7.5 10.4 11.8 Earnings before income taxes
(1.0) (1.9) (2.9) (3.0) Income tax provision
$ 2.6 $ 5.6 $ 7.5 $ 8.8 Net earnings from continuing operations

Note 11 – Income Taxes

The effective tax rate for the three months ended ~~July~~March 30, 2024 and April 1, 2023 ~~and July 2, 2022~~ was ~~21.2~~21.4 percent and ~~21.9~~46.8 percent, respectively. The effective tax rate for the three months ended ~~July 1, 2023~~March 30, 2024 was lower than the same period in the prior year, primarily due to the ~~mix in earnings and the increase to the domestic benefit of export sales.~~

The effective tax rate for the six months ended July 1, 2023 and July 2, 2022 was 35.3 percent and 21.5 percent, respectively. The effective tax rate for the six months ended July 1, 2023 was higher than the same period in the prior year ~~primarily due to an~~ intercompany sale of certain intellectual property rights ~~(“IP rights”) in the first quarter of 2023, to better align the ownership of these rights with how our business operates. The completion of this sale~~ from one of our affiliates in Norway to the United States ~~resulted~~and lower pretax income in high tax jurisdictions.

The Company has evaluated the effects of the Global Anti-Base Erosion Model Rules set forth by the Organization for Economic Co-operation and Development (OECD), referred to as “Pillar Two”, which establishes a ~~discrete income~~global minimum corporate tax ~~expense~~rate of ~~$52.9 million~~15 percent. The Company has determined that Pillar Two legislation has been enacted in one or more of the ~~first quarter~~jurisdictions in which we operate and the Company is within the scope of ~~2023, which will be paid over time,~~the legislation. The Company assessed such enacted legislation, and, as ~~permitted under current Norwegian~~applicable, the Transitional Safe Harbor provisions of Pillar Two, and concluded that the tax ~~law.~~effects are not material to the financial statements.

The Company is regularly audited by federal, state and foreign tax authorities. The Internal Revenue Service ~~("IRS")~~(IRS) has completed its field examination and has issued its Revenue Agents Report through the 2014 tax year and all open issues have been resolved. The Company is currently open to tax examinations by the IRS for the ~~2019~~2020 through ~~2021~~2022 tax years. The Company is open to state and local tax audits in major tax jurisdictions dating back to the 2017 taxable year. The Company is no longer subject to income tax examinations by any major foreign tax jurisdiction for years prior to ~~2015.~~

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

2016.

Note 12 – Debt

The following table provides the changes in the Company's debt for the ~~six~~three months ended ~~July 1, 2023:~~March 30, 2024:


(in millions)	(in millions)	Short-term debt and current maturities of long-term debt		Long-term debt		Total		(in millions)	Short-term debt and current maturities of long-term debt	Long-term debt	Total
Balance as of December 31, 2022		$	89.0	$	2,420.0	$	2,509.0
Proceeds from issuances of debt		1.6		—		1.6
Balance as of December 31, 2023
Proceeds from issuances of debt (A)
Repayments of debt	Repayments of debt	(2.6)		(0.6)		(3.2)
Reclassification of long-term debt	Reclassification of long-term debt	0.3		(0.3)		—
Other	Other	—		2.9		2.9
Balance as of July 1, 2023		$	88.3	$	2,422.0	$	2,510.3
Balance as of March 30, 2024

(A) During the first quarter of 2024, $400.0 million of 5.850% Senior Notes due 2029 were issued.

As of ~~July 1, 2023,~~March 30, 2024, Brunswick was in compliance with the financial covenants associated with its debt.

~~2032 and 2052~~2029 Notes

In March ~~2022,~~2024, the Company issued an aggregate principal amount of ~~$450.0~~$400.0 million of ~~4.400%~~5.850% Senior Notes due ~~2032~~2029 (the ~~"2032 Notes") and $300.0 million of 5.100% Senior Notes due 2052 (the "2052 Notes" and, together with the 2032 Notes, the "Notes")~~2029 Notes) in a public offering, which resulted in aggregate net proceeds to the Company of ~~$741.8~~$396.9 million. The Company ~~used~~intends to use the net proceeds from the sale of the 2029 Notes for general corporate ~~purposes.~~purposes, which may include the repayment, repurchase or redemption of certain of its outstanding securities, including its 0.85% Senior Notes due 2024, as may be determined by management from time to time.

The ~~2032~~2029 Notes bear interest at a rate of ~~4.400% per year and the 2052 Notes bear interest at a rate of 5.100%~~5.850% per year. Interest on the ~~2032~~2029 Notes is payable semiannually in arrears on March 1518 and September 1518 of each year, and the first interest payment date ~~was~~will be September ~~15, 2022. Interest on the 2052 Notes is payable semiannually in arrears on April 1 and October 1 of each year, and the first interest payment date was October 1, 2022.~~18, 2024. The ~~2032~~2029 Notes will mature on ~~September 15, 2032, and the 2052 Notes will mature on April 1, 2052.~~March 18, 2029.

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company may, at its option, redeem the 2029 Notes, ~~of each series,~~ in whole or in part, at any time and from time to time prior to maturity. If the Company elects to redeem any (or all) of the 2029 Notes at any time prior to ~~(i) with respect to the 2032 Notes, June 15, 2032~~February 18, 2029 (the date that is ~~three months~~one month prior to the maturity of the ~~2032 Notes) or (ii) with respect to the 2052 Notes, October 1, 2051 (the date that is six months prior to the maturity of the 2052~~2029 Notes), it will pay a ~~“make-whole”~~"make-whole" redemption price set forth in the ~~Fifth~~Sixth Supplemental Indenture dated as of March ~~29, 2022 ("Fifth~~18, 2024 (Sixth Supplemental ~~Indenture").~~Indenture) to the Indenture dated as of October 3, 2018. On or after ~~June 15, 2032, in the case of the 2032 Notes, or October 1, 2051, in the case of the 2052 Notes,~~February 18, 2029, the Company may, at its option, redeem the 2029 Notes, ~~of each series,~~ in whole or in part at any time and from time to time, at a redemption price equal to 100% of the principal amount thereof. In addition to the redemption price, the Company will pay accrued and unpaid interest, if ~~any, to, but not including, the redemption date.~~any.

If the Company experiences a ~~change-of-control~~change of control triggering event with respect to ~~a series of~~the 2029 Notes, as defined in the ~~Fifth~~Sixth Supplemental Indenture, each holder of ~~such series of~~the 2029 Notes may require the Company to repurchase some or all of its 2029 Notes at a price equal to 101% of their principal amount, plus accrued and unpaid ~~interest to, but not including, the repurchase date.~~interest.

~~Term Loan~~Debentures

During the ~~six months ended July 2, 2022,~~third quarter of 2023, the Company made the remaining principal repayments, totaling ~~$56.3~~$79.7 million, of its ~~2023 floating-rate term loan.~~7.375% debentures due 2023. The ~~term loan was redeemed~~debentures were repaid at 100 percent of the principal amount plus accrued interest in accordance with the ~~redemption~~ provisions of the ~~term loan. The Company recognized a loss on early extinguishment of debt of $0.1 million related to the term loan redemption.~~debentures.

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

Credit Facility

The Company maintains a Revolving Credit Agreement ~~("Credit Facility")~~(Credit Facility). In March 2022, the Company amended its Credit Facility with certain wholly-owned subsidiaries of the Company as subsidiary borrowers and lenders as parties, and JPMorgan Chase Bank, N.A., as administrative agent. This amends and restates the Credit Facility, dated as of March 21, 2011, as amended and restated on July 16, 2021. The amended Credit Facility increased the revolving commitments to $750.0 million, with the capacity to add up to $100.0 million of additional revolving commitments, and amended the Credit Facility in certain respects, including, among other things:

•~~Extending the maturity date to March 31, 2027, with up to two one-year extensions available.~~

•Transitioning the reference rate for loans denominated in U.S. dollars from the London Interbank Offered Rate ("LIBOR") to the term Secured Overnight Financing Rate ("SOFR"), with a credit-spread adjustment of 10 basis points to be added to the reference rate for borrowings of U.S. dollar loans for each interest period.

During the ~~six~~three months ended ~~July~~March 30, 2024 and April 1, 2023, there were no borrowings under the Credit ~~Facility, and~~Facility. As of March 30, 2024, available borrowing capacity totaled $741.7 million, net of $8.3 million of letters of credit outstanding under the Credit Facility. As of April 1, 2023, available borrowing capacity totaled $741.9 million, net of $8.1 million of letters of credit outstanding under the Credit Facility.

~~During the~~ ~~six~~ ~~months ended~~ ~~July 2, 2022~~, gross borrowings under the Credit Facility totaled $125.0 million. As of July 2, 2022, there were no borrowings outstanding and available borrowing capacity totaled $747.2 million, net of $2.8 million of letters of credit outstanding, under the Credit Facility. ~~The maximum amount utilized under the Credit Facility during the six months ended July 2, 2022, including letters of credit outstanding under the Credit Facility, was~~ ~~$127.8 million.~~Refer to Note 1514 in the Notes to Consolidated Financial Statements in the ~~2022~~2023 Form 10-K for details regarding Brunswick's Credit Facility.

Commercial Paper

~~In December 2019, the~~The Company ~~entered into~~maintains an unsecured commercial paper program ~~("CP Program")~~(CP Program) pursuant to which the Company may issue short-term, unsecured commercial paper notes ~~("CP Notes")~~(CP Notes). During the second quarter of 2022, the Company increased the size of its CP Program to allow the issuance of CP Notes in an aggregate principal amount not to exceed $500.0 million outstanding at any time. Amounts available under the CP Program may be borrowed, repaid and re-borrowed from time to time, with the aggregate principal amount of CP Notes outstanding under the CP Program at any time not exceeding the lower of $500.0 million or the available borrowing amount under the Credit Facility. ~~During the first six~~three months of ~~2023~~,ended March 30, 2024, borrowings under the CP Program totaled ~~$285.0~~ $425.0 million, all of which were repaid during the period. During the ~~six~~three months ended ~~July~~March 30, 2024, the maximum amount utilized under the CP Program was $225.0 million. During the three months ended April 1, 2023, borrowings under the CP Program totaled $85.0 million, all of which were repaid during the period. During the three months ended April 1, 2023, the maximum amount utilized under the CP Program was ~~$100.0~~$85.0 million. Refer to Note 1514 in the Notes to Consolidated Financial Statements in the ~~2022~~2023 Form 10-K for details regarding Brunswick's CP Program.

Note 13 – Supplier Finance Program Obligations

Under our supplier finance program, the Company agrees to pay Bank of America (the Bank) the stated amount of confirmed invoices from our suppliers on the original invoice payment due date. Our suppliers may request payment from the Bank at a date earlier than the payment due date stated on the original invoice in exchange for a fee in the form of a discounted invoice amount. Brunswick or the Bank may terminate the agreement upon at least 90 days’ notice. The supplier invoices that have been confirmed as valid under the program require payment ranging from 60 to 120 days from the invoice date, consistent with the terms of the original invoice. The Company does not pay the Bank any service fees or subscription fees under the program. In addition, the Company does not pledge any assets as security or provide other forms of guarantees for the committed payment to the Bank. As of March 30, 2024, December 31, 2023, and April 1, 2023, the Company had $14.8 million, $11.6 million and $19.9 million confirmed invoices under the supplier finance program, respectively, which were included in Accounts payable on the Condensed Consolidated Balance Sheets.

Table of Contents

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

Certain statements in Management's Discussion and Analysis of Financial Condition and Results of Operations of Brunswick Corporation (the Company, we, us, our) are forward-looking statements. Forward-looking statements are based on current expectations, estimates, and projections about our business and by their nature address matters that are, to different degrees, uncertain. Actual results may differ materially from expectations and projections as of the date of this filing due to various risks and uncertainties. For additional information regarding forward-looking statements, refer to Forward-Looking Statements below.

Certain statements in Management's Discussion and Analysis are based on non-GAAP financial measures. GAAP refers to generally accepted accounting principles in the United States. A "non-GAAP financial measure" is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the consolidated statements of operations, balance sheets or statements of cash flows of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. For example, the discussion of our cash flows includes an analysis of free cash flows and total liquidity; the discussion of our net sales includes net sales on a constant currency basis; the discussion of our net sales includes net sales excluding acquisitions; and the discussion of our earnings includes a presentation of operating earnings and operating margin excluding restructuring, exit and impairment charges, purchase accounting amortization, ~~acquisition-related~~acquisition, integration, and IT related costs, IT security incident costs and other applicable charges and of diluted earnings per common share, as adjusted. Non-GAAP financial measures do not include operating and statistical measures.

We include non-GAAP financial measures in Management's Discussion and Analysis as management believes these measures and the information they provide are useful to investors because they permit investors to view our performance using the same tools that management uses to evaluate our ongoing business performance. In order to better align our reported results with the internal metrics management uses to evaluate business performance as well as to provide better comparisons to prior periods and peer data, non-GAAP measures exclude the impact of purchase accounting amortization related to acquisitions, among other adjustments.

We do not provide forward-looking guidance for certain financial measures on a GAAP basis because we are unable to predict certain items contained in the GAAP measures without unreasonable efforts. These items may include restructuring, exit and impairment costs, special tax items, acquisition-related costs, and certain other unusual adjustments.

~~IT Security Incident~~

~~As previously announced on June 13, 2023, the Company experienced an IT security incident that impacted some of its systems and global facilities. Please refer to~~ ~~Note 1 – Significant Accounting Policies~~ ~~for further details.~~

~~Change in Reportable Segments~~

Effective January 1, 2023, the Company changed its management reporting and updated its reportable segments to Propulsion, Engine P&A, Navico Group and Boat to align with its internal operating structure. For further information, refer to ~~Note 9 – Segment Data~~ ~~in the Notes to Condensed Consolidated Financial Statements.~~

Acquisitions

During the ~~second~~fourth quarter of ~~2022,~~2023, we acquired ~~certain~~additional Freedom Boat Club franchise operations and territory rights as well as certain marine assets in the Southeast United States for net cash consideration of ~~$93.9~~$16.0 million. On September 1, 2023, the Company acquired all of the issued and outstanding shares of Fliteboard for $88.3 million net cash consideration. Refer to Note 4 – Acquisitions in the Notes to Condensed Consolidated Financial Statements for further information.

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Overview

Net sales decreased 722 percent during the ~~second~~first quarter of ~~2023~~2024 when compared with the ~~second~~first quarter of ~~2022.~~2023. Our Propulsion segment results were below initial expectations solely due to the lost production days resulting from the IT security incident. Prior to the disruption, our high-horsepower outboard engine production ramp up was progressing and has since resumed, allowing us to increase shipments to repower customers and original equipment manufacturing ("OEM") partners. Our Engine P&A segment performed as expected, excluding the impact of the IT security incident, reflecting anticipateddelivered lower sales and operating earnings ~~declines~~ versus a record ~~second~~first quarter of ~~2022.~~2023, as boat manufacturers and dealers moderated orders and managed production of current model-year products and pipelines ahead of the retail season and model-year change-over. However, the Propulsion segment continued to outperform the industry, gaining 200 basis points of U.S. outboard engine market share versus the first quarter of 2023. Our Engine Parts and Accessories (Engine P&A) segment continued its steady performance with sales and operating earnings down modestly from the first quarter of 2023 as anticipated, but increasing sequentially over the prior quarter. As ~~anticipated,~~expected, our Navico Group ~~posted~~segment had lower ~~second~~sales and operating earnings versus the first quarter of 2023, but delivered sequential sales ~~versus 2022 as both marine~~ and ~~RV OEM orders slowed versus a record~~operating earnings increases over the prior ~~year~~ quarter. Our Boat segment ~~delivered a solid quarter~~performed to plan, with ~~sales slightly~~exceptional retail performance by Boston Whaler and Sea Ray at early season boat shows, while continuing to introduce new models to support market share gains. Sales and operating earnings were below prior ~~year.~~year, consistent with lower planned production levels, while operating margins improved sequentially over the prior quarter. Our international net sales decreased 1319 percent ~~and 12 percent~~ in the ~~second~~first quarter on a GAAP and constant currency basis ~~respectively.~~

~~Net sales decreased 2 percent during the first half of 2023,~~ when compared ~~with the first half of 2022, due~~ to the ~~same factors described above. Our international net sales decreased 8 percent and 5 percent in the first half on a GAAP and constant currency basis, respectively.~~

prior year quarter.

Operating earnings in the second quarter of 2023 were $194.4 million and $234.9 million on a GAAP and As Adjusted basis, respectively. This compares to operating earnings during the second quarter of 2022 of $279.0 million and $300.2 million on a GAAP and an As Adjusted basis, respectively.

Operating earnings in the first ~~half~~quarter of ~~2023~~2024 were ~~$430.5~~$110.6 million and ~~$497.3~~$141.5 million on a GAAP and As Adjusted basis, respectively. This compares to operating earnings during the first ~~half~~quarter of ~~2022~~2023 of ~~$518.5~~$236.1 million and ~~$567.7~~$262.4 million on a GAAP and an As Adjusted basis, respectively.

Matters Affecting Comparability

Changes in Foreign Currency Rates. Percentage changes in net sales expressed in constant currency reflect the impact that changes in currency exchange rates had on comparisons of net sales. To determine this information, net sales transacted in currencies other than the U.S. dollar have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative period. The percentage change in net sales expressed on a constant currency basis better reflects the changes in the underlying business trends, excluding the impact of translation arising from foreign currency ~~exchange-rate~~exchange rate fluctuations. Approximately 2425 percent of our ~~annual~~annual net sales are transacted in a currency other than the U.S. dollar. Our most material exposures include sales in Euros, Canadian dollars, Australian dollars, and Brazilian real.

The table below summarizes the impact of changes in currency exchange rates and also the impact of acquisitions on our net sales:


		Three Months Ended										Six Months Ended
		Net Sales				2023 vs. 2022						Net Sales				2023 vs. 2022
		Three Months Ended
		Three Months Ended
		Three Months Ended
		Net Sales
		Net Sales
		Net Sales
(in millions)
(in millions)
(in millions)	(in millions)	July 1, 2023		July 2, 2022		GAAP		Currency Impact		Acquisition Benefit		July 1, 2023		July 2, 2022		GAAP		Currency Impact		Acquisition Benefit
Propulsion	Propulsion	$	703.3	$	734.2	(4.2)	%	(0.4)	%	—	%	$	1,454.9	$	1,440.1	1.0	%	(1.0)	%	—	%
Propulsion
Propulsion
Engine P&A
Engine P&A
Engine P&A	Engine P&A	328.9		379.5		(13.3)	%	(0.5)	%	—	%	617.5		709.8		(13.0)	%	(0.9)	%	—	%
Navico Group	Navico Group	227.8		286.1		(20.4)	%	(0.1)	%	—	%	505.1		597.7		(15.5)	%	(0.8)	%	—	%
Navico Group
Navico Group
Boat
Boat
Boat	Boat	560.8		568.4		(1.3)	%	(0.1)	%	1.0	%	1,136.0		1,061.2		7.0	%	(0.6)	%	2.0	%
Segment Eliminations	Segment Eliminations	(118.5)		(132.6)		(10.6)	%	(0.2)	%	—	%	(267.6)		(277.5)		(3.6)	%	(0.5)	%	—	%
Segment Eliminations
Segment Eliminations
Total	Total	$	1,702.3	$	1,835.6	(7.3)	%	(0.3)	%	0.3	%	$	3,445.9	$	3,531.3	(2.4)	%	(0.8)	%	0.6	%
Total
Total

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Results of Operations

Consolidated

The following table sets forth certain amounts, ratios and relationships calculated from the Condensed Consolidated Statements of Comprehensive Income for the three ~~and six~~ months ended:


		Three Months Ended						2023 vs. 2022			Six Months Ended						2023 vs. 2022
	Three Months Ended																									Three Months Ended			2024 vs. 2023
(in millions, except per share data)	(in millions, except per share data)	July 1, 2023			July 2, 2022			$ Change		% Change	July 1, 2023			July 2, 2022			$ Change		% Change	(in millions, except per share data)	March 30, 2024			April 1, 2023			$ Change			% Change
Net sales	Net sales	$	1,702.3		$	1,835.6		$	(133.3)	(7.3)%	$	3,445.9		$	3,531.3		$	(85.4)	(2.4)%	Net sales	$	1,365.0		$	1,743.6		$	(378.6)		(21.7)%
Gross margin(A)	Gross margin(A)	472.3			536.4			(64.1)		(12.0)%	977.9			1,020.0			(42.1)		(4.1)%	Gross margin(A)	373.6			505.6			(132.0)			(26.1)%
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	13.9			—			13.9		NM	23.4			—			23.4		NM	Restructuring, exit and impairment charges	13.5			9.5			4.0			42.1%
Operating earnings	Operating earnings	194.4			279.0			(84.6)		(30.3)%	430.5			518.5			(88.0)		(17.0)%	Operating earnings	110.6			236.1			(125.5)			(53.2)%
Net earnings from continuing operations	Net earnings from continuing operations	135.3			198.8			(63.5)		(31.9)%	247.7			372.8			(125.1)		(33.6)%	Net earnings from continuing operations	68.4			112.4			(44.0)			(39.1)%

Diluted earnings per common share from continuing operations	Diluted earnings per common share from continuing operations	$	1.91		$	2.61		$	(0.70)	(26.8)%	$	3.47		$	4.86		$	(1.39)	(28.6)%
Diluted earnings per common share from continuing operations
Diluted earnings per common share from continuing operations																					$	1.00		$	1.56		$	(0.56)		(35.9)%

Expressed as a percentage of Net sales:
Expressed as a percentage of Net sales:
Expressed as a percentage of Net sales:	Expressed as a percentage of Net sales:
Gross margin (A)	Gross margin (A)	27.7		%	29.2		%			(150) bps	28.4		%	28.9		%			(50) bps	Gross margin (A)	27.4		%	29.0		%					(160) bps
Selling, general and administrative expense	Selling, general and administrative expense	12.6		%	11.3		%			130 bps	12.4		%	11.3		%			110 bps	Selling, general and administrative expense	14.9		%	12.1		%				280 bps
Research and development expense	Research and development expense	2.9		%	2.7		%			20 bps	2.8		%	2.9		%			(10) bps	Research and development expense	3.4		%	2.8		%				60 bps
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	0.8		%	—		%			80 bps	0.7		%	—		%			70 bps	Restructuring, exit and impairment charges	1.0		%	0.5		%				50 bps
Operating margin	Operating margin	11.4		%	15.2		%			(380) bps	12.5		%	14.7		%			(220) bps	Operating margin	8.1		%	13.5		%				(540) bps

bps = basis points

NM = not meaningful

(A)Gross margin is defined as Net sales less Cost of sales as presented in the Condensed Consolidated Statements of Comprehensive Income.

The following is a ~~summary~~reconciliation of ~~Adjusted~~our non-GAAP measures, adjusted operating earnings and ~~Adjusted~~adjusted diluted earnings per common share from continuing operations for the three ~~and six~~ months ended ~~July 1, 2023~~March 30, 2024 when compared with the same prior year comparative period:


		Three Months Ended										Six Months Ended
		Operating Earnings						Diluted Earnings Per Share				Operating Earnings						Diluted Earnings Per Share
	Three Months Ended																										Three Months Ended
	Operating Earnings																								Operating Earnings			Diluted Earnings Per Share
(in millions, except per share data)	(in millions, except per share data)	July 1, 2023			July 2, 2022			July 1, 2023		July 2, 2022		July 1, 2023			July 2, 2022			July 1, 2023		July 2, 2022		(in millions, except per share data)	March 30, 2024	April 1, 2023		March 30, 2024			April 1, 2023
GAAP	GAAP	$	194.4		$	279.0		$	1.91	$	2.61	$	430.5		$	518.5		$	3.47	$	4.86
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	13.9			—			0.15		—		23.4			—			0.25		—
Purchase accounting amortization	Purchase accounting amortization	14.1			14.1			0.15		0.14		28.3			37.1			0.30		0.37
Acquisition, integration, and IT related costs
IT security incident costs(A)	IT security incident costs(A)	8.1			—			0.09		—		8.1			—			0.09		—
Acquisition, integration and IT-related costs		4.4			7.1			0.05		0.07		7.0			12.1			0.08		0.12

Special tax items
Special tax items
Special tax items	Special tax items	—			—			—		—		—			—			0.72		—
As Adjusted	As Adjusted	$	234.9		$	300.2		$	2.35	$	2.82	$	497.3		$	567.7		$	4.91	$	5.35

GAAP operating margin	GAAP operating margin	11.4		%	15.2		%					12.5		%	14.7		%
GAAP operating margin
GAAP operating margin
Adjusted operating margin	Adjusted operating margin	13.8		%	16.4		%					14.4		%	16.1		%
Adjusted operating margin
Adjusted operating margin

(A) We incurred non-recurring costs related to the 2023 IT security incident during the three months ended March 30, 2024.

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Net sales decreased ~~7 percent during the second quarter of 2023 and 2~~22 percent during the first ~~half of 2023~~quarter when compared with the same prior year period. The components of the consolidated net sales change were as follows:

Percent change in net sales compared to the prior comparative period
Three Months Ended Six Months Ended
July 1, 2023 July 1, 2023
Volume (10.2) % (9.9) %
Product Mix and Price 7.3 % 10.0 %
IT Security Incident (4.4) % (2.3) %
Acquisitions 0.3 % 0.6 %
Currency (0.3) % (0.8) %
(7.3) % (2.4) %


	Percent change in net sales compared to the prior comparative period
	March 30, 2024
	Three Months Ended
Volume	(23.3)	%
Product Mix and Price	1.0	%
Currency	0.1	%
Acquisitions	0.5	%
	(21.7)	%

Gross margin decreased ~~150~~160 basis points in the ~~second~~first quarter of ~~2023~~2024 when compared to the same prior year period, driven by higher manufacturing costs including absorption (75 bps), material and labor inflation ~~(270 bps), the IT security incident (110~~(65 bps), unfavorable ~~timing of capitalized variances (70 bps), depreciation~~foreign currency exchange-rate fluctuations (50 bps) and ~~unfavorable foreign currency exchange rate fluctuations (40~~depreciation (15 bps), partially offset by sales-related drivers ~~(380~~(35 bps) and acquisitions (10 bps).

Gross margin decreased 50 basis points in the first half of 2023 when compared to the same prior year period, driven by higher manufacturing costs including material and labor inflation (350 bps), the IT security incident (60 bps), depreciation (60 bps) and unfavorable foreign currency exchange rate fluctuations (30 bps), partially offset by sales-related drivers (410 bps) and acquisitions (40 bps).

Selling, general and administrative expense as a percentage of net sales increased ~~130~~280 basis points during the ~~second~~first quarter of ~~2023~~2024 when compared with the same prior year period, due to lower sales ~~and increased relative spending on sales and marketing (60~~(340 bps), ~~information technology (40 bps) and variable~~partially offset by lower employee compensation ~~(30 bps). Research and development expense decreased in the second quarter of 2023 versus the same period in 2022.~~

~~Selling, general and administrative expense as a percentage of net sales increased 110 basis points during the first half of 2023 when compared~~costs associated with ~~the same prior year period, due to lower sales and increased relative spending on sales and marketing~~headcount reductions (60 ~~bps), information technology (30 bps) and variable compensation (20~~ bps). Research and development expense decreased in the first ~~half~~quarter of ~~2023~~2024 versus the same period in ~~2022.~~2023.

We recorded Restructuring, exit and impairment charges of ~~$13.9~~$13.5 million and ~~$23.4~~$9.5 million during the three ~~and~~ ~~six~~ months ended ~~July~~March 30, 2024 and April 1, 2023, respectively. We ~~did not recognize any Restructuring, exit and impairment charges during~~ estimate the ~~three and~~ ~~six months ended July 2, 2022, respectively.~~ first quarter 2024 actions will result in approximately $12 million of annualized cost savings. Refer to Note 3 – Restructuring, Exit and Impairment Activities in the Notes to Condensed Consolidated Financial Statements for further information.

We recorded Equity earnings of ~~$2.2~~$2.5 million and ~~$4.4~~$2.2 million in the three ~~and six~~ months ended ~~July~~March 30, 2024 and April 1, 2023, respectively, which were ~~mainly~~primarily related to our marine and technology-related joint ventures. ~~This compares with Equity earnings of $0.7~~

We recognized $0.0 million and ~~$1.5~~$(0.9) million of Other expense, net in the three ~~and six~~ months ended ~~July 2, 2022, respectively.~~

~~We recognized $1.8 million~~March 30, 2024 and ~~$0.9 million in Other income (expense), net in the~~ ~~three~~ ~~and six months ended July~~April 1, 2023, respectively. ~~This compares with $0.3 million and $(1.2) million recognized in~~ Other ~~income (expense), net in the~~ ~~three~~ ~~and six months ended July 2, 2022, respectively.~~ ~~Other income (expense),~~expense, net primarily includes remeasurement gains and losses resulting from changes in foreign currency rates and other postretirement benefit costs.

~~Net~~Net interest expense increased for the three ~~and six~~ months ended ~~July 1, 2023~~March 30, 2024 when compared with the same prior year period due to an increase in average daily debt outstanding, which was influenced by the timing of debt issuances. Refer to Note 12 – Debt in the Notes to Condensed Consolidated Financial Statements and Note 1514 – Debt in the Notes to Consolidated Financial Statements in the ~~2022~~2023 Form 10-K.

~~Table of Contents~~

We recognized an ~~Income~~income tax provision for the three ~~and six~~ months ended ~~July 1, 2023~~March 30, 2024 of ~~$36.3~~$18.6 million, ~~and $135.3 million, respectively,~~ compared to ~~$55.8 million and $102.2~~$99.0 million for the three ~~and six~~ months ended ~~July 2, 2022, respectively.~~April 1, 2023. The ~~increase~~decrease in the income tax provision for the ~~six~~three months ended ~~July 1, 2023~~March 30, 2024 is due to a discrete income tax expense recorded in connection with the intercompany sale of intellectual property rights in the first quarter of 2023. We have also evaluated the effects of Pillar Two legislation and concluded that the tax effects are not material to the financial statements. Refer to Note 11 – Income Taxes in the Notes to Condensed Consolidated Financial Statements for further information.

The effective tax rate, which is calculated as the ~~Income~~income tax provision as a percentage of ~~Earnings~~earnings before income taxes, ~~for the~~ ~~three~~ ~~and six months ended July 1, 2023~~ was ~~21.2~~21.4 percent and ~~35.3~~46.8 percent ~~respectively. The effective tax rate~~ for the three ~~and six~~ months ended ~~July 2, 2022 was 21.9 percent~~March 30, 2024 and ~~21.5 percent,~~April 1, 2023, respectively.

Due to the factors described in the preceding paragraphs, ~~Operating~~operating earnings, ~~Net~~net earnings from continuing operations, and ~~Diluted~~diluted earnings per common share from continuing operations decreased during the ~~second quarter and first half of 2023~~three months ended March 30, 2024 when compared with the same prior year period.

Table of Contents

Propulsion Segment

The following table sets forth Propulsion ~~segment's~~segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three ~~and six~~ months ended:


		Three Months Ended						2023 vs. 2022			Six Months Ended						2023 vs. 2022
		Three Months Ended
		Three Months Ended
		Three Months Ended
(in millions)	(in millions)	July 1, 2023			July 2, 2022			$ Change		% Change	July 1, 2023			July 2, 2022			$ Change		% Change
(in millions)
(in millions)
Net sales
Net sales
Net sales	Net sales	$	703.3		$	734.2		$	(30.9)	(4.2)%	$	1,454.9		$	1,440.1		$	14.8	1.0%

GAAP operating earnings	GAAP operating earnings	$	111.1		$	142.0		$	(30.9)	(21.8)%	$	262.2		$	267.3		$	(5.1)	(1.9)%
IT security incident costs		3.4			—			3.4		NM	3.4			—			3.4		NM

GAAP operating earnings

GAAP operating earnings
Restructuring, exit and impairment charges
Restructuring, exit and impairment charges
Restructuring, exit and impairment charges
Purchase accounting amortization
Purchase accounting amortization
Purchase accounting amortization
Acquisition, integration, and IT related costs
Acquisition, integration, and IT related costs
Acquisition, integration, and IT related costs

Adjusted operating earnings

Adjusted operating earnings

Adjusted operating earnings	Adjusted operating earnings	$	114.5		$	142.0		$	(27.5)	(19.4)%	$	265.6		$	267.3		$	(1.7)	(0.6)%

GAAP operating margin	GAAP operating margin	15.8		%	19.3		%			(350) bps	18.0		%	18.6		%			(60) bps

GAAP operating margin

GAAP operating margin
Adjusted operating margin	Adjusted operating margin	16.3		%	19.3		%			(300) bps	18.3		%	18.6		%			(30) bps
Adjusted operating margin
Adjusted operating margin

NM = not meaningful

bps = basis points

Propulsion segment's net sales decreased ~~$30.9~~$173.4 million, or ~~4 percent, i~~n the second quarter of 2023 compared to the second quarter of 2022 as benefits from pricing, favorable product mix related to continued strong high-horsepower outboard engine demand and higher sales to repower customers, were offset by the impact of production stoppages related to the IT security incident and planned reductions in lower horsepower outboard engine and sterndrive engine sales and production.

~~Propulsion segment's net sales increased $14.8 million, or 1~~23 percent, in the first ~~half~~quarter of ~~2023 versus 2022 due~~2024 compared to ~~continued increased sales~~the first quarter of ~~high-horsepower outboard engines offsetting~~2023, as boat manufacturers and dealers moderated order patterns, managing production of current model-year products and pipelines ahead of the ~~negative factors described above.~~retail season and model-year change-over.

The components of the Propulsion segment's net sales change were as follows:

Percent change in net sales compared to the prior comparative period
Three Months Ended Six Months Ended
July 1, 2023 July 1, 2023
Product Mix and Price 9.2 % 16.6 %
Volume (6.9) % (11.5) %
IT Security Incident (6.1) % (3.1) %
Currency (0.4) % (1.0) %
(4.2) % 1.0 %


	Percent change in net sales compared to the prior comparative period
	March 30, 2024
	Three Months Ended
Volume	(22.3)	%
Product Mix and Price	(1.7)	%
Currency	0.1	%
Acquisitions	0.8	%
	(23.1)	%

International sales were 29 percent of the Propulsion segment's net sales in the second quarter of 2023, and decreased 18 percent from the same period of the prior year on a GAAP basis. On a constant currency basis, international sales decreased 16 percent.

~~Table of Contents~~

~~International sales were 32~~35 percent of the Propulsion segment's net sales in the first ~~half~~quarter of ~~2023~~2024 and decreased 822 percent ~~from the prior~~year over year on a GAAP ~~basis. On a~~and constant currency ~~basis, international sales decreased 5 percent in the first half of 2023.~~basis.

Propulsion segment's operating earnings in the ~~second~~first quarter of ~~2023~~2024 were ~~$111.1~~$82.8 million, a decrease of 2245 percent when compared to the ~~second~~first quarter of ~~2022,~~2023, as prior year pricing gains and aggressive cost control measures partially offset the impact of lower sales, ~~higher input costs, and~~unfavorable changes in foreign currency exchange rates, the lapping of prior year favorable variances related to timing of capitalized inventory, ~~variances offset very aggressive cost control. Operating earnings for the first half of 2023 were $262.2 million, a decrease of 2 percent, as a result of the same factors described above.~~and lower absorption from reduced production.

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Engine P&A Segment

The following table sets forth Engine P&A ~~segment's~~segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three ~~and six~~ months ended:


		Three Months Ended						2023 vs. 2022			Six Months Ended						2023 vs. 2022
		Three Months Ended
		Three Months Ended
		Three Months Ended
(in millions)	(in millions)	July 1, 2023			July 2, 2022			$ Change		% Change	July 1, 2023			July 2, 2022			$ Change		% Change
(in millions)
(in millions)
Net sales
Net sales
Net sales	Net sales	$	328.9		$	379.5		$	(50.6)	(13.3)%	$	617.5		$	709.8		$	(92.3)	(13.0)%

GAAP operating earnings	GAAP operating earnings	$	66.4		$	85.8		$	(19.4)	(22.6)%	$	114.2		$	146.8		$	(32.6)	(22.2)%

GAAP operating earnings

GAAP operating earnings
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	0.3			—			0.3		NM	1.0			—			1.0		NM
IT security incident costs		0.5			—			0.5		NM	0.5			—			0.5		NM
Restructuring, exit and impairment charges
Restructuring, exit and impairment charges

Adjusted operating earnings

Adjusted operating earnings

Adjusted operating earnings	Adjusted operating earnings	$	67.2		$	85.8		$	(18.6)	(21.7)%	$	115.7		$	146.8		$	(31.1)	(21.2)%

GAAP operating margin	GAAP operating margin	20.2		%	22.6		%			(240) bps	18.5		%	20.7		%			(220) bps

GAAP operating margin

GAAP operating margin
Adjusted operating margin	Adjusted operating margin	20.4		%	22.6		%			(220) bps	18.7		%	20.7		%			(200) bps
Adjusted operating margin
Adjusted operating margin

NM = not meaningful

bps = basis points

Engine P&A segment's net sales decreased ~~$50.6~~$26.2 million, or 139 percent, in the ~~second~~first quarter of ~~2023 versus~~2024 compared to the ~~second~~first quarter of ~~2022,~~2023, due to ~~the impact of the IT security incident and~~ lower sales in our ~~third-party distribution~~Product and Distribution businesses. However, sales in both businesses ~~and international markets.~~

~~Engine P&A segment's net sales decreased $92.3 millions, or 13 percent, in~~improved sequentially over the ~~first half of 2023 versus~~ prior ~~year as a result of the same factors described above.~~quarter.

The components of the Engine P&A segment's net sales change were as follows:

Percent change in net sales compared to the prior comparative period
Three Months Ended Six Months Ended
July 1, 2023 July 1, 2023
Volume (10.7) % (13.6) %
IT Security Incident (5.9) % (3.2) %
Product Mix and Price 3.8 % 4.7 %
Currency (0.5) % (0.9) %
(13.3) % (13.0) %


	Percent change in net sales compared to the prior comparative period
	March 30, 2024
	Three Months Ended
Volume	(10.2)	%
Product Mix and Price	1.2	%

Currency	(0.1)	%
	(9.1)	%

International sales were 26 percent of the Engine P&A segment's net sales in the second quarter of 2023 and decreased 16 percent year over year on a GAAP basis. On a constant currency basis, international sales decreased 14 percent.

~~International sales were 28~~32 percent of the Engine P&A segment's net sales in the first ~~half~~quarter of ~~2023~~2024 and decreased 173 percent year over year on a GAAP ~~basis. On a~~and constant currency ~~basis, international sales decreased 14 percent in the first half of 2023.~~basis.

~~Table of Contents~~

Engine P&A segment's operating earnings in the ~~second~~first quarter of ~~2023~~2024 were ~~$66.4~~$33.2 million, a decrease of 2331 percent compared to the ~~second~~first quarter of ~~2022,~~2023, due to the ~~net~~ sales ~~factors described above together with slight increases in input costs~~declines which more than offset the impact of pricing and ~~the carry-over of start-up costs related to the newly opened Brownsburg distribution center, which collectively offset benefits from~~ cost ~~control measures. Operating earnings for the first half of 2023 were $114.2 million, a decrease of 22 percent, as a result of the same factors described above.~~control.

Table of Contents

Navico Group Segment

The following table sets forth Navico Group ~~segment's~~segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three ~~and six~~ months ended:


		Three Months Ended						2023 vs. 2022			Six Months Ended						2023 vs. 2022
	Three Months Ended																													Three Months Ended										2024 vs. 2023
(in millions)	(in millions)	July 1, 2023			July 2, 2022			$ Change		% Change	July 1, 2023			July 2, 2022			$ Change		% Change	(in millions)		March 30, 2024						April 1, 2023							$ Change						% Change
Net sales	Net sales	$	227.8		$	286.1		$	(58.3)	(20.4)%	$	505.1		$	597.7		$	(92.6)	(15.5)%	Net sales		$	210.9		$			$	277.3		$				$	(66.4)		(23.9)%				(23.9)%

GAAP operating earnings		$	4.2		$	22.4		$	(18.2)	(81.3)%	$	17.0		$	53.0		$	(36.0)	(67.9)%
GAAP operating (loss) earnings
GAAP operating (loss) earnings
GAAP operating (loss) earnings																						$	(2.4)					$	12.8						$	(15.2)					NM
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	7.3			—			7.3		NM	10.9			—			10.9		NM	Restructuring, exit and impairment charges		2.7			3.6				3.6			(0.9)					(0.9)		(25.0)%					(25.0)%
Purchase accounting amortization	Purchase accounting amortization	13.2			13.4			(0.2)		(1.5)%	26.5			35.8			(9.3)		(26.0)%	Purchase accounting amortization		13.2			13.3				13.3			(0.1)					(0.1)		(0.8)%					(0.8)%
Acquisition, integration, and IT-related costs		0.7			5.3			(4.6)		(86.8)%	1.5			7.9			(6.4)		(81.0)%
IT security incident costs		0.5			—			0.5		NM	0.5			—			0.5		NM
Acquisition, integration, and IT related costs																				Acquisition, integration, and IT related costs		1.6						0.8							0.8						NM

Adjusted operating earnings
Adjusted operating earnings
Adjusted operating earnings	Adjusted operating earnings	$	25.9		$	41.1		$	(15.2)	(37.0)%	$	56.4		$	96.7		$	(40.3)	(41.7)%	$	15.1			$		$	30.5			$			$	(15.4)			(50.5)%				(50.5)%

GAAP operating margin	GAAP operating margin	1.8		%	7.8		%			(600) bps	3.4		%	8.9		%			(550) bps
GAAP operating margin
GAAP operating margin																						(1.1)		%				4.6		%											(570) bps
Adjusted operating margin	Adjusted operating margin	11.4		%	14.4		%			(300) bps	11.2		%	16.2		%			(500) bps	Adjusted operating margin		7.2		%				11.0		%													(380) bps

NM = not meaningful

bps = basis points

Navico Group segment's net sales decreased ~~$58.3~~$66.4 million, or 2024 percent, in the ~~second~~first quarter of ~~2023 versus~~2024 compared to the ~~second~~first quarter of ~~2022,~~2023, driven by ~~lower~~reduced sales to marine OEMs as they moderate orders ~~versus a very strong second quarter~~to control the pipeline of ~~2022 together with the slow recovery of RV OEM production, which was~~their current model-year products, partially offset by strong new product ~~performance.~~

~~Navico Group segment's net~~momentum and slightly improved RV sales ~~decreased $92.6 million, or 16 percent, in the first half of 2023 versus prior year as a result of the same factors described above.~~trends.

The components of the Navico Group segment's net sales change were as follows:

Percent change in net sales compared to the prior comparative period
Three Months Ended Six Months Ended
July 1, 2023 July 1, 2023
Volume (17.2) % (14.3) %
IT Security Incident (4.5) % (2.2) %
Product Mix and Price 1.4 % 1.8 %
Currency (0.1) % (0.8) %
(20.4) % (15.5) %


	Percent change in net sales compared to the prior comparative period
	March 30, 2024
	Three Months Ended
Volume	(23.4)	%
Product Mix and Price	(0.7)	%

Currency	0.2	%
	(23.9)	%

International sales were 3941 percent of the Navico Group segment's net sales in the ~~second~~first quarter of ~~2023~~2024 and decreased 148 percent year over year on a GAAP basis. On a constant currency basis, international sales decreased 149 percent.

~~International sales were 36 percent of the~~ Navico Group segment's ~~net sales~~operating loss in the first ~~half~~quarter of ~~2023 and decreased 13 percent year over year on~~2024 was $2.4 million, a ~~GAAP basis. On a constant currency basis, international sales decreased 11 percent~~decrease from operating earnings of $12.8 million in the first ~~half~~quarter of ~~2023.~~2023, as the impact from lower sales and increased discount activity was partially offset by lower operating expenses.

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Table of Contents

Navico Group segment's operating earnings in the second quarter of 2023 were $4.2 million, a decrease of 81 percent compared to the second quarter of 2022 as a result of lower sales, slightly elevated input costs and restructuring charges associated with actions executed in the quarter, which were partially offset by benefits from ongoing cost reduction actions and reorganization efforts. Operating earnings for the first half of 2023 were $17.0 million, a decrease of 68 percent, as a result of the same factors described above.

Boat Segment

The following table sets forth Boat ~~segment's~~segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three ~~and six~~ months ended:


		Three Months Ended						2023 vs. 2022			Six Months Ended						2023 vs. 2022
	Three Months Ended																													Three Months Ended										2024 vs. 2023
(in millions)	(in millions)	July 1, 2023			July 2, 2022			$ Change		% Change	July 1, 2023			July 2, 2022			$ Change		% Change	(in millions)		March 30, 2024						April 1, 2023							$ Change						% Change
Net sales	Net sales	$	560.8		$	568.4		$	(7.6)	(1.3)%	$	1,136.0		$	1,061.2		$	74.8	7.0%	Net sales		$	425.7		$			$	575.2		$				$	(149.5)		(26.0)%				(26.0)%

GAAP operating earnings	GAAP operating earnings	$	53.2		$	58.9		$	(5.7)	(9.7)%	$	111.0		$	104.2		$	6.8	6.5%
GAAP operating earnings
GAAP operating earnings																						$	29.4					$	57.8						$	(28.4)					(49.1)%
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	4.5			—			4.5		NM	5.9			—			5.9		NM	Restructuring, exit and impairment charges		1.0			1.4				1.4			(0.4)					(0.4)		(28.6)%					(28.6)%
Acquisition, integration, and IT-related costs		3.1			1.8			1.3		72.2%	4.1			4.2			(0.1)		(2.4)%
Purchase accounting amortization	Purchase accounting amortization	0.9			0.7			0.2		28.6%	1.8			1.3			0.5		38.5%	Purchase accounting amortization		1.0			0.9				0.9			0.1					0.1		11.1%					11.1%
IT security incident costs		0.8			—			0.8		NM	0.8			—			0.8		NM
Acquisition, integration, and IT related costs																				Acquisition, integration, and IT related costs		0.2						1.0							(0.8)						(80.0)%

Adjusted operating earnings

Adjusted operating earnings

Adjusted operating earnings	Adjusted operating earnings	$	62.5		$	61.4		$	1.1	1.8%	$	123.6		$	109.7		$	13.9	12.7%	$	31.6			$		$	61.1			$			$	(29.5)			(48.3)%				(48.3)%

GAAP operating margin	GAAP operating margin	9.5		%	10.4		%			(90) bps	9.8		%	9.8		%			NM
GAAP operating margin
GAAP operating margin																						6.9		%				10.0		%											(310) bps
Adjusted operating margin	Adjusted operating margin	11.1		%	10.8		%			30 bps	10.9		%	10.3		%			60 bps	Adjusted operating margin		7.4		%				10.6		%													(320) bps

~~NM = not meaningful~~

bps = basis points

Boat segment's net sales decreased ~~$7.6~~$149.5 million, or 126 percent, in the ~~second~~first quarter of ~~2023 versus~~2024 compared to the ~~second~~first quarter of ~~2022,~~2023, due to softer wholesale orders, as its channel partners continue to order cautiously ahead of the model-year change-over, partially offset by the favorable impact of ~~prior year~~carry-over pricing ~~actions~~ and ~~favorable mix toward premium products being offset by the impact of lower value product shipments and higher discount levels.~~

share gains.

~~Boat segment's net sales increased $74.8 million, or 7 percent, in the first half of 2023 due to positive mix and price and acquisitions.~~

The components of the Boat segment's net sales change were as follows:

Percent change in net sales compared to the prior comparative period
Three Months Ended Six Months Ended
July 1, 2023 July 1, 2023
Volume (8.6) % (0.5) %
Product Mix and Price 6.4 % 6.1 %
Acquisitions 1.0 % 2.0 %
Currency (0.1) % (0.6) %
(1.3) % 7.0 %


	Percent change in net sales compared to the prior comparative period
	March 30, 2024
	Three Months Ended
Volume	(26.0)	%
Product Mix and Price	(0.4)	%
Currency	0.1	%
Acquisitions	0.3	%
	(26.0)	%

International sales were ~~25 percent of the Boat segment's net sales in the second quarter of 2023 and decreased 2 percent on a GAAP basis. On a constant currency basis, international sales decreased 1 percent.~~

~~International sales were 24~~22 percent of the Boat segment's net sales in the first ~~half~~quarter of ~~2023~~2024 and ~~increased 3~~decreased 32 percent on a GAAP ~~basis. On a~~and constant currency ~~basis, international sales increased 5 percent in the first half of 2023.~~basis.

~~Table of Contents~~

Boat segment's operating earnings in the ~~second~~first quarter of ~~2023~~2024 were ~~$53.2~~$29.4 million, a decrease of 1049 percent when compared to the ~~second~~first quarter of ~~2022, driven by~~ ~~restructuring charges associated with actions executed in the quarter~~2023, due to lower sales and ~~the IT security incident,~~lower absorption from reduced production, partially offset by ~~share gains and sustained operational productivity gains. Operating earnings in the first half of 2023 were $111.0 million, an increase of 7 percent, as increased sales were partially offset by the negative factors above.~~focused cost reduction activities.

Table of Contents

Corporate/Other

The following table sets forth Corporate/Other results and a reconciliation to our non-GAAP measure of adjusted operating loss for the three ~~and six~~ months ended:


		Three Months Ended				2023 vs. 2022			Six Months Ended				2023 vs. 2022
	Three Months Ended																					Three Months Ended								2024 vs. 2023
(in millions)	(in millions)	July 1, 2023		July 2, 2022		$ Change		% Change	July 1, 2023		July 2, 2022		$ Change		% Change	(in millions)	March 30, 2024			April 1, 2023					$ Change						% Change
Operating loss		$	(40.5)	$	(30.1)	$	(10.4)	34.6%	$	(73.9)	$	(52.8)	$	(21.1)	40.0%
GAAP operating loss																GAAP operating loss	$	(32.4)		$	(33.4)				$	1.0					(3.0)%
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	1.8		—		1.8		NM	5.6		—		5.6		NM	Restructuring, exit and impairment charges	0.9		3.8		3.8			(2.9)			(2.9)		(76.3)%				(76.3)%
Acquisition, integration, and IT related costs																Acquisition, integration, and IT related costs	—			0.8					(0.8)						NM
IT security incident costs	IT security incident costs	2.9		—		2.9		NM	2.9		—		2.9		NM	IT security incident costs	0.3		—		—			0.3			0.3		NM				NM
Acquisition, integration, and IT-related costs		0.6		—		0.6		NM	1.4		—		1.4		NM
Adjusted operating loss	Adjusted operating loss	$	(35.2)	$	(30.1)	$	(5.1)	16.9%	$	(64.0)	$	(52.8)	$	(11.2)	21.2%	Adjusted operating loss	$	(31.2)	$	$	(28.8)		$		$	(2.4)		8.3%				8.3%

NM = not meaningful

Corporate operating ~~expenses~~loss in the ~~second~~first quarter of ~~2023 were $40.5~~2024 was $32.4 million, ~~an increase~~a decrease of 353 percent when compared to the ~~second~~first quarter of ~~2022, primarily due to increased spending on enterprise growth initiatives, the IT security incident~~2023, driven by lower restructuring, exit and ~~restructuring charges associated with actions executed in the quarter.~~

impairment charges.

~~Corporate operating expenses increased 40 percent in the first half of 2023 versus 2022, resulting from the same factors described above.~~

Cash Flow, Liquidity and Capital Resources

The following table sets forth an analysis of free cash flow for the ~~six~~three months ended:

(in millions)

July 1,
2023

July 2,
2022

(in millions)

March 30,
2024

April 1,
2023

Net cash provided by operating activities of continuing operations

254.4

149.4

Net cash used for operating activities of continuing operations

Net cash (used for) provided by:

Plus: Capital expenditures

(173.4)

(196.5)

Plus: Proceeds from the sale of property, plant and equipment

6.3

3.0

Plus: Effect of exchange rate changes

1.6

(11.2)

Plus: Effect of exchange rate changes on cash and cash equivalents

Total free cash flow (A)

88.9

(55.3)

Total free cash flow (A)

(A) We define "Free cash flow" as cash flow from operating and investing activities of continuing operations (excluding cash provided by or used for acquisitions, investments, purchases or sales/maturities of marketable securities and other investing ~~activities)~~activities, net of tax) and the effect of exchange rate changes on cash and cash equivalents. Free cash flow is not intended as an alternative measure of cash flow from operations, as determined in accordance with GAAP in the United States. We use this financial measure both in presenting our results to shareholders and the investment community and in our internal evaluation and management of our businesses. We believe that this financial measure and the information it provides are useful to investors because it permits investors to view our performance using the same tool that we use to gauge progress in achieving our goals. We believe that the non-GAAP financial measure "Free cash flow" is also useful to investors because it is an indication of cash flow that may be available to fund investments in future growth initiatives.

Our major sources of funds for capital investments, acquisitions, ~~share-repurchase~~share repurchase programs and dividend payments are cash generated from operating activities, available cash and marketable securities balances, divestitures and borrowings. We evaluate potential acquisitions, divestitures and joint ventures in the ordinary course of business.

~~Table of Contents~~

~~2023~~2024 Cash Flow

Net cash ~~provided by~~used for operating activities of continuing operations in the ~~six~~three months ended ~~July 1, 2023~~March 30, 2024 totaled ~~$254.4~~$148.1 million ~~versus $149.4~~compared to $14.5 million in the ~~comparable period of 2022.~~three months ended April 1, 2023. The increase is primarily due to ~~decreases~~increases in working capital usage ~~partially offset by~~and lower net earnings. Working capital is defined as Accounts and notes receivable, Inventories and Prepaid expenses and other, net of Accounts payable and Accrued expenses as presented in the Condensed Consolidated Balance Sheets, excluding the impact of acquisitions and non-cash adjustments.

Table of Contents

The primary drivers of net cash ~~provided by~~used for operating activities of continuing operations in the ~~six~~three months ended ~~July 1, 2023 were~~March 30, 2024 was working capital usage partially offset by net earnings, net of non-cash ~~items, partially offset by seasonal increases in working capital.~~items. Accounts and notes receivable increased ~~$69.0~~$130.4 million, primarily due to the timing of collections. Inventory increased $104.8 million due to seasonal inventory build. Accounts payable decreased $28.8 million, primarily due to timing of payments. Accrued expenses decreased $29.6 million, primarily driven by lower accrued variable compensation expense, including the payment of the prior year's variable compensation which had been accrued as of December 31, 2023.

Net cash used for investing activities was $55.4 million, primarily related to $54.0 million of capital expenditures. Our capital spending was focused on investments in new products and technologies.

Net cash provided by financing activities was $294.1 million and primarily related to long-term debt issuances, partially offset by common stock repurchases and cash dividends paid to common shareholders.

2023 Cash Flow

Net cash used for operating activities of continuing operations in the three months ended April 1, 2023 totaled $14.5 million versus $140.9 million in the comparable period of 2022. The decrease is primarily due to decreases in working capital usage and income taxes, partially offset by lower net earnings.

The primary drivers of net cash used for operating activities of continuing operations in the three months ended April 1, 2023 were seasonal increases in working capital, partially offset by net earnings, net of non-cash items. Accounts and notes receivable increased $153.8 million, primarily due to increased sales. Inventory increased ~~$22.0~~$38.0 million, driven by seasonal inventory purchases and cost inflation. Accounts payable decreased ~~$93.2~~$59.1 million, primarily due to timing of payments. Accrued expenses ~~increased $16.1~~decreased $17.4 million, primarily driven by ~~increased expenses associated with restructuring actions executed during~~lower accrued variable compensation expense, including the ~~year and~~payment of the ~~IT security incident.~~prior year's variable compensation which had been accrued as of December 31, 2022.

Net cash used for investing activities ~~of continuing operations~~ was ~~$169.7~~$94.6 million, which included ~~$173.4~~$93.5 million of capital expenditures and ~~$6.4~~$7.6 millionof ~~investments~~investment in our joint venture, partially offset by ~~$6.3 million of sales of property, plant and equipment and~~ $3.8 million of sales or maturities of marketable ~~securities.~~securities and $2.7 million of sales of property, plant and equipment. Our capital spending was focused on investments in capacity expansion, new products and technologies.

Net cash used for financing activities was ~~$204.0~~$100.9 million and primarily related to common stock repurchases and cash dividends paid to common shareholders.

~~2022 Cash Flow~~

Net cash provided by operating activities of continuing operations in the first six months of 2022 totaled $149.4 million versus $350.5 million in the comparable period of 2021. The decrease is primarily due to increases in working capital, partially offset by higher net earnings during the quarter.

The primary drivers of net cash provided by operating activities of continuing operations in the first six months of 2022 were net earnings, net of non-cash items, partially offset by increases in working capital. Accounts and notes receivable increased $125.1 million, primarily due to increased sales across all segments. Inventory increased $162.3 million, driven primarily by increases in work-in-process and raw materials to support higher production volumes. Accrued expenses decreased $30.9 million, primarily driven by payment of prior year variable compensation which had been accrued as of December 31, 2021.

Net cash used for investing activities of continuing operations was $312.7 million, which included $196.5 million of capital expenditures, $95.7 million of cash paid for acquisitions, net of cash acquired and $36.2 million of purchases of marketable securities, partially offset by $16.7 million of cross-currency swap settlements. Our capital spending was focused on investments in new products and technologies.

Net cash provided by financing activities was $388.9 million and primarily related to proceeds of issuances of long-term debt, partially offset by common stock repurchases, payments of long-term debt including current maturities, and cash dividends paid to common shareholders. Refer to ~~Note 12 – Debt~~ ~~in the Notes to Condensed Consolidated Financial Statements for further details on our debt activity during the quarter.~~

Liquidity and Capital Resources

We view our highly liquid assets as of ~~July~~March 30, 2024, December 31, 2023 and April 1, 2023 ~~December 31, 2022 and July 2, 2022~~ as:


(in millions)	(in millions)	July 1, 2023		December 31, 2022		July 2, 2022		(in millions)	March 30, 2024	December 31, 2023	April 1, 2023
Cash and cash equivalents		$	477.5	$	595.6	$	566.7
Cash and cash equivalents, at cost, which approximates fair value
Short-term investments in marketable securities	Short-term investments in marketable securities	0.8		4.5		37.0
Total cash, cash equivalents and marketable securities	Total cash, cash equivalents and marketable securities	$	478.3	$	600.1	$	603.7

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The following table sets forth an analysis of total liquidity as of ~~July 1, 2023,~~March 30, 2024, December 31, ~~2022~~2023 and ~~July 2, 2022:~~April 1, 2023:


(in millions)	(in millions)	July 1, 2023		December 31, 2022		July 2, 2022		(in millions)	March 30, 2024	December 31, 2023	April 1, 2023
Cash, cash equivalents and marketable securities	Cash, cash equivalents and marketable securities	$	478.3	$	600.1	$	603.7
Amounts available under lending facility (A)	Amounts available under lending facility (A)	741.9		747.2		747.2
Total liquidity (B)	Total liquidity (B)	$	1,220.2	$	1,347.3	$	1,350.9

(A) See Note 12 – Debt in the Notes to Condensed Consolidated Financial Statements for further details on our lending facility.

(B) We define Total liquidity as Cash and cash equivalents and Short-term investments in marketable securities as presented in the Condensed Consolidated Balance Sheets, plus amounts available for borrowing under its lending facilities. Total liquidity is not intended as an alternative measure to Cash and cash equivalents and Short-term investments in marketable securities as determined in accordance with GAAP in the United States. We use this financial measure both in presenting our results to shareholders and the investment community and in our internal evaluation and management of our businesses. We believe that this financial measure and the information it provides are useful to investors because it permits investors to view our performance using the same metric that we use to gauge progress in achieving our goals. We believe that the non-GAAP financial measure “Total liquidity” is also useful to investors because it is an indication of our available highly liquid assets and immediate sources of financing.

Cash, cash equivalents and marketable securities ~~totaled~~ t~~$478.3~~otaled $549.2 million as of ~~July 1, 2023,~~March 30, 2024, ~~a decrease~~an increase of ~~$121.8~~$80.6 million from ~~$600.1~~$468.6 million as of December 31, ~~2022,~~2023, and ~~a decrease~~an increase of ~~$125.4~~$160.6 million from ~~$603.7~~$388.6 million as of ~~July 2, 2022.~~April 1, 2023. Total debt as of ~~July~~March 30, 2024, December 31, 2023 and April 1, 2023 ~~December 31, 2022 and July 2, 2022~~ was ~~$2,510.3~~$2,827.3 million, ~~$2,509.0~~$2,430.4 million and ~~$2,502.0~~$2,510.3 million, respectively. Our debt-to-capitalization ratio was 58 percent as of March 30, 2024, an increase from 54 percent as of ~~July 1,~~December 31, 2023 ~~a decrease~~and from 55 percent as of ~~December 31, 2022 and from 56 percent as of July 2, 2022.~~April 1, 2023.

There were no borrowings under the Revolving Credit ~~Facility~~Agreement (Credit Facility) during the ~~six~~three months ended ~~July 1, 2023,~~March 30, 2024 and ~~thus~~ we did not have any borrowings outstanding ~~under the Credit Facility~~as of ~~July 1, 2023. Available~~March 30, 2024. Available borrowing capacity under the Credit Facility ~~totaled~~ ~~$741.9~~as of March 30, 2024 totaled $741.7 million,, net of ~~$8.1~~$8.3 million of letters of credit outstanding. During the ~~six~~three months ended ~~July 1, 2023,~~March 30, 2024, the ~~maxim~~ummaximum amount utilized under the CP Program was ~~$100~~$225.0 million. Refer to Note 12 – Debt in the Notes to Condensed Consolidated Financial Statements and Note 1514 - Debt in the Notes to Consolidated Financial Statements in the ~~2022~~2023 Form 10-K, for further details.

The levels of borrowing capacity under our Credit Facility and CP Program are limited by both a leverage and interest coverage test. These covenants also pertain to termination provisions included in our wholesale financing joint-venture arrangements with Wells Fargo Commercial Distribution Finance. Based on our anticipated earnings generation throughout the year, we expect to maintain sufficient cushion against the existing debt covenants.

~~2023~~2024 Capital Strategy

~~Our expected~~We continue to anticipate full-year capital expenditures ~~remain at~~of approximately ~~$350 million and our estimate of full-year interest expense remains at approximately $100~~$225 million. ~~We increased our anticipated~~Additionally, we anticipate share repurchases ~~for 2023 to now exceed~~of approximately $250 million, lowering our expected average diluted shares outstanding for the year to ~~70.5~~68 million shares. ~~Additionally, our estimate of working capital usage remains at approximately $100 million for the year.~~

Financing Joint Venture

Details of our Financing Joint Venture are outlined in the ~~2022~~2023 Form 10-K. There have been no material changes in our Financing Joint Venture since December 31, ~~2022.~~2023.

Off-Balance Sheet Arrangements and Contractual Obligations

Our off-balance sheet arrangements and contractual obligations as of December 31, ~~2022~~2023 are detailed in the ~~2022~~2023 Form 10-K. There have been no material changes in these arrangements and obligations outside the ordinary course of business since December 31, ~~2022.~~2023.

Environmental Regulation

There were no material changes in our environmental regulatory requirements since the filing of our ~~2022~~2023 Form 10-K.

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Critical Accounting Policies

There were no material changes in our critical accounting policies since the filing of our ~~2022~~2023 Form 10-K.

As discussed in the ~~2022~~2023 Form 10-K, the preparation of the consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amount of reported assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and revenues and expenses during the periods reported. Actual results may differ from those estimates.

Recent Accounting Pronouncements

Recent accounting pronouncements that have been adopted during the three months ended ~~July 1, 2023,~~March 30, 2024, or will be adopted in future periods, are included in Note 1 – Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements.

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, estimates, and projections about Brunswick’s business and by their nature address matters that are, to different degrees, uncertain. Words such as “may,” “could,” “should,” “expect,” "anticipate," "project," "position," “intend,” “target,” “plan,” “seek,” “estimate,” “believe,” “predict,” “outlook,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this report. These risks include, but are not limited to: the effect of adverse general economic conditions, including rising interest rates, and the amount of disposable income consumers have available for discretionary spending; changes in currency exchange rates; fiscal and monetary policy changes; adverse capital market conditions; competitive pricing pressures; higher energy and fuel costs; ~~competitive pricing pressures; adverse capital market conditions;~~managing our manufacturing footprint and operations; loss of key customers; international business risks, geopolitical tensions or conflicts, sanctions, embargoes, or other regulations; actual or anticipated increases in costs, disruptions of supply, or defects in raw materials, parts, or components we purchase from third parties; supplier manufacturing constraints, increased demand for shipping carriers, and transportation disruptions; managing our manufacturing footprint; international business risks, geopolitical tensions or conflicts, sanctions, embargoes, or other regulations; public health emergencies or pandemics, such as the coronavirus (COVID-19) pandemic; adverse weather conditions, climate change events and other catastrophic event risks; our ability to develop new and innovative products and services at a competitive price; ~~loss of key customers;~~ our ability to meet demand in a rapidly changing environment; absorbing fixed costs in production; public health emergencies or pandemics, such as the coronavirus (COVID-19) pandemic; risks associated with joint ventures that do not operate solely for our benefit; ~~our ability to integrate acquisitions, including Navico, and the risk for associated disruption to our business;~~ our ability to successfully implement our strategic plan and growth initiatives; attracting and retaining skilled labor, implementing succession plans for key leadership, and executing organizational and leadership changes; our ability to integrate acquisitions and the risk for associated disruption to our business; our ability to identify, complete, and integrate targeted acquisitions; the risk that restructuring or strategic divestitures will not provide business benefits; maintaining effective distribution; dealers and customers being able to access adequate financing; ~~requirements for us to repurchase inventory;~~ inventory reductions by dealers, retailers, or independent boat builders; requirements for us to repurchase inventory; risks related to the Freedom Boat Club franchise business model; outages, breaches, or other cybersecurity events regarding our technology systems, which have affected and could further affect manufacturing and business operations and could result in lost or stolen information and associated remediation costs; our ability to protect our brands and intellectual property; changes to ~~U.S.~~ trade policy and tariffs; ~~any~~an impairment to the value of goodwill and other assets; product liability, warranty, and other claims risks; legal, environmental, and other regulatory compliance, including increased costs, fines, and reputational risks; changes in income tax legislation or enforcement; managing our share repurchases; and risks associated with certain divisive shareholder activist actions.

Additional risk factors are included in the ~~2022~~2023 Form 10-K. Forward-looking statements speak only as of the date on which they are made, and Brunswick does not undertake any obligation to update them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

3631

Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in foreign currency exchange rates, interest rates and commodity prices. We enter into various hedging transactions to mitigate these risks in accordance with guidelines established by our management. We do not use financial instruments for trading or speculative purposes. Our risk management objectives are described in Note 5 – Financial Instruments in the Notes to Condensed Consolidated Financial Statements and Note 1412 in the Notes to Consolidated Financial Statements in the ~~2022~~2023 Form 10-K.

There have been no significant changes to our market risk since December 31, ~~2022.~~2023. For a discussion of exposure to market risk, refer to Part II, Item 7A – Quantitative and Qualitative Disclosures about Market Risk, set forth in the ~~2022~~2023 Form 10-K.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer (our principal executive officer and principal financial officer, respectively), we have evaluated our disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting during the fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

3732

Table of Contents

PART II – OTHER INFORMATION

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in Part I, "Item 1A. Risk Factors" in our ~~2022~~2023 Form 10-K.

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

On ~~July 19, 2022,~~January 30, 2024, our Board of Directors approved a $500 million increase to our share repurchase authorization. During the ~~six~~three months ended ~~July 1, 2023,~~March 30, 2024, we repurchased ~~$132.2~~$63.6 million of stock, and the remaining authorization was ~~$264.3~~$557.8 million as of ~~July 1, 2023.~~March 30, 2024.

We repurchased the following shares of common stock during the three months ended ~~July 1, 2023:~~March 30, 2024:

Period Total Number of Shares Purchased Weighted Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Amount of Dollars that May Yet Be Used to Purchase Shares Under the Program
April 2 to April 29 183,118 $ 81.91 183,118
April 30 to May 27 331,651 78.84 331,651
May 28 to July 1 387,673 80.03 387,673
Total 902,442 $ 79.98 902,442 $ 264,268,446


Period	Total Number of Shares Purchased	Weighted Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Amount of Dollars that May Yet Be Used to Purchase Shares Under the Program
January 1 to January 27	88,785	$	89.19	88,785
January 28 to February 24	244,713	85.53		244,713
February 25 to March 30	390,433	89.13		390,433
Total	723,931	$	87.92	723,931	$	557,821,206

3833

Table of Contents

Item 5. Other Information

~~Frequency of Say-on-Pay~~

At the May 3, 2023 Annual Meeting of Shareholders of the Company, shareholders voted for a non-binding resolution approving annual (every one year) advisory votes to approve the compensation of the Company's named executive officers. Based on the Board's recommendation, as set forth in our Proxy Statement, and the shareholder voting results, the Company has determined that we will continue to hold an advisory vote on executive compensation on an annual basis.

Securities Trading Plans of Executive Officers and Directors

Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables pre-arranged transactions in securities in a manner that avoids concerns about initiating transactions at a future date while possibly in possession of material nonpublic information. Our Insider Trading and Unauthorized Disclosures Policy permits our officers and directors to enter into trading plans designed to comply with Rule 10b5-1.

During the quarterly period ended ~~July 1, 2023~~,March 30, 2024, none of our officers (as defined in Rule 16a-1(f) under the Exchange Act) or directors adopted or terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K). On October 27, 2023, Nancy E. Cooper, our Board Chair, adopted a Rule 10b5-1 trading arrangement providing for the sale each quarter of 35 percent of net shares of her Director compensation paid in common stock. The duration of the trading arrangement is until November 11, 2024, or earlier if all transactions under the trading arrangement are completed. The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c).

Annual Meeting of Shareholders Results

At the May 1, 2024 Annual Meeting of Shareholders of the Company (Annual Meeting), Nancy E. Cooper, David C. Everitt, Reginald Fils-Aime, Lauren P. Flaherty, David M. Foulkes, Joseph W. McClanathan, David V. Singer, J. Steven Whisler, Roger J. Wood, and MaryAnn Wright were elected as directors of the Company for terms expiring at the 2025 Annual Meeting of Shareholders of the Company. The number of shares voted with respect to these directors were:


Nominee	For	Against	Abstain	Broker Non-votes
Nancy E. Cooper	57,921,871	1,321,048	42,063	2,718,883
David C. Everitt	55,283,193	3,955,800	45,989	2,718,883
Reginald Fils-Aime	59,093,530	142,980	48,472	2,718,883
Lauren P. Flaherty	58,056,457	1,179,845	48,680	2,718,883
David M. Foulkes	58,866,163	373,332	45,487	2,718,883
Joseph W. McClanathan	59,079,814	157,425	47,743	2,718,883
David V. Singer	58,785,614	456,530	42,838	2,718,883
J. Steven Whisler	54,237,505	4,940,420	107,057	2,718,883
Roger J. Wood	57,628,584	1,610,134	46,264	2,718,883
MaryAnn Wright	58,732,445	505,679	46,858	2,718,883

At the Annual Meeting, shareholders voted for a non-binding resolution approving the compensation of the Company's named executive officers pursuant to the following vote:


			Number of Shares
For			56,082,910
Against			3,121,558
Abstain			80,514
Broker Non-votes			2,718,883

At the Annual Meeting, shareholders ratified the Audit Committee's appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the Company and its subsidiaries for the fiscal year ending December 31, 2024 pursuant to the following vote:


			Number of Shares
For			61,674,783
Against			253,498
Abstain			75,584
Broker Non-votes			—

Table of Contents

Item 6. Exhibits


4.1		Sixth Supplemental Indenture, dated as of March 18, 2024, between the Company and U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as trustee, filed as Exhibit 4.2 to the Company's Current Report on Form 8-K filed March 18, 2024, and hereby incorporated by reference.
31.1	Certification of CEO Pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of CFO Pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of CEO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

4035

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.


	BRUNSWICK CORPORATION
~~August 3, 2023~~May 2, 2024	By:	/s/ RANDALL S. ALTMAN
		Randall S. Altman
		Senior Vice President and Controller*

*Mr. Altman is signing this report both as a duly authorized officer and as the principal accounting officer.

4136


PART I – FINANCIAL INFORMATION		Page

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3













Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2520

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3732

Item 4.	Controls and Procedures	3732


PART II – OTHER INFORMATION



Item 1A.	Risk Factors	3833

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3833

Item 5.	Other Information	3934

Item 6.	Exhibits	4035


	Three Months Ended				Six Months Ended
Details about Accumulated other comprehensive (loss) income components (in millions)	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022		Affected line item in the statement where net income is presented






Amortization of defined benefit items:

Net actuarial losses	$	(0.1)	$	(0.3)	$	(0.2)	$	(0.5)	Other income (expense), net
	(0.1)		(0.3)		(0.2)		(0.5)		Earnings before income taxes
	—		—		—		—		Income tax provision
	$	(0.1)	$	(0.3)	$	(0.2)	$	(0.5)	Net earnings from continuing operations

Amount of gain (loss) reclassified into earnings on derivative contracts:
Interest-rate contracts	$	—	$	(0.1)	$	(0.1)	$	(0.1)	Interest expense
Foreign exchange contracts	4.1		5.3		11.6		8.0		Cost of sales
Commodity contracts	(0.5)		2.3		(1.1)		3.9		Cost of sales
	3.6		7.5		10.4		11.8		Earnings before income taxes
	(1.0)		(1.9)		(2.9)		(3.0)		Income tax provision
	$	2.6	$	5.6	$	7.5	$	8.8	Net earnings from continuing operations