Separate Financial Information Of Subsidiary Guarantor Of Indebtedness | Separate Financial Information of Subsidiary Guarantor of Indebtedness Under the terms of the Company’s Senior Notes and the Revolver (collectively, the “Domestic Indebtedness”), Briggs & Stratton Power Products Group, LLC, a 100% owned subsidiary of the Company, was the sole joint and several guarantor of the Domestic Indebtedness (the “Guarantor”) as of March 27, 2016 and June 28, 2015. The Guarantor provides a full and unconditional guarantee of the Domestic Indebtedness, except for certain customary limitations. These customary limitations, which are described in detail in the First Supplemental Indenture (Indenture) dated December 20, 2010, include (i) the sale of the guarantor or substantially all of the guarantor’s assets, (ii) the designation of the guarantor as an unrestricted subsidiary for covenant purposes, (iii) the guarantor ceasing to guarantee certain other indebtedness, if the guarantor is also not a significant subsidiary within the meaning of Article 1, Rule 1-02 of Regulation S-X, and (iv) achieving the Indenture’s requirements for legal defeasance, covenant defeasance or discharge. Additionally, if at any time a domestic subsidiary of the Company constitutes a significant domestic subsidiary, then such domestic subsidiary will also become a guarantor of the Domestic Indebtedness. Currently, all of the Domestic Indebtedness is unsecured. If the Company were to fail to make a payment of interest or principal on its due date, the Guarantor is obligated to pay the outstanding Domestic Indebtedness. The Company had the following outstanding amounts related to the guaranteed debt (in thousands): March 27, 2016 Carrying Amount Maximum Guarantee Senior Notes $ 223,149 $ 223,149 Multicurrency Credit Agreement $ 32,443 $ 500,000 The following condensed supplemental consolidating financial information reflects the summarized financial information of Briggs & Stratton, its Guarantor Subsidiary and its Non-Guarantor Subsidiaries (in thousands): CONSOLIDATING BALANCE SHEET As of March 27, 2016 (Unaudited) Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated CURRENT ASSETS: Cash and Cash Equivalents $ 3,768 $ 1,183 $ 38,765 $ — $ 43,716 Accounts Receivable, Net 160,137 68,737 50,253 — 279,127 Intercompany Accounts Receivable 22,635 6,015 40,037 (68,687 ) — Inventories, Net 190,230 141,279 88,028 — 419,537 Deferred Income Tax Asset 31,959 13,351 2,592 — 47,902 Prepaid Expenses and Other Current Assets 18,593 5,084 6,316 — 29,993 Total Current Assets $ 427,322 $ 235,649 $ 225,991 $ (68,687 ) $ 820,275 OTHER ASSETS: Goodwill $ 128,300 $ — $ 32,698 $ — $ 160,998 Investments 56,715 — — — 56,715 Investments in Subsidiaries 491,980 — — (491,980 ) — Intercompany Note Receivable 33,676 111,375 53,021 (198,072 ) — Debt Issuance Costs 3,937 — — — 3,937 Other Intangible Assets, Net — 53,804 52,740 — 106,544 Long-Term Deferred Income Tax Asset 43,310 — 799 (29,716 ) 14,393 Other Long-Term Assets, Net 9,551 2,429 1,133 — 13,113 Total Other Assets $ 767,469 $ 167,608 $ 140,391 $ (719,768 ) $ 355,700 PLANT AND EQUIPMENT, NET 263,601 23,941 26,841 — 314,383 TOTAL ASSETS $ 1,458,392 $ 427,198 $ 393,223 $ (788,455 ) $ 1,490,358 CURRENT LIABILITIES: Accounts Payable $ 127,072 $ 59,189 $ 26,111 $ — $ 212,372 Intercompany Accounts Payable 32,153 5,563 30,971 (68,687 ) — Short-Term Debt 32,443 — — — 32,443 Accrued Liabilities 83,147 49,149 23,669 — 155,965 Total Current Liabilities $ 274,815 $ 113,901 $ 80,751 $ (68,687 ) $ 400,780 OTHER LIABILITIES: Accrued Pension Cost $ 193,672 $ 358 $ 512 $ — $ 194,542 Accrued Employee Benefits 22,778 — — — 22,778 Accrued Postretirement Health Care Obligation 26,206 14,959 — — 41,165 Intercompany Note Payable 122,638 — 75,434 (198,072 ) — Deferred Income Tax Liabilities — 13,365 16,357 (29,716 ) 6 Other Long-Term Liabilities 39,495 11,730 1,074 — 52,299 Long-Term Debt 223,149 — — — 223,149 Total Other Liabilities $ 627,938 $ 40,412 $ 93,377 $ (227,788 ) $ 533,939 TOTAL SHAREHOLDERS’ INVESTMENT 555,639 272,885 219,095 (491,980 ) 555,639 TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT $ 1,458,392 $ 427,198 $ 393,223 $ (788,455 ) $ 1,490,358 CONSOLIDATING BALANCE SHEET As of June 28, 2015 Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated CURRENT ASSETS: Cash and Cash Equivalents $ 45,395 $ 17,237 $ 55,758 $ — $ 118,390 Accounts Receivable, Net 99,852 72,859 43,130 — 215,841 Intercompany Accounts Receivable 21,697 8,060 40,772 (70,529 ) — Inventories, Net 161,343 125,698 91,647 — 378,688 Deferred Income Tax Asset 30,692 13,187 1,992 — 45,871 Prepaid Expenses and Other Current Assets 23,580 19,916 7,031 (14,074 ) 36,453 Total Current Assets $ 382,559 $ 256,957 $ 240,330 $ (84,603 ) $ 795,243 OTHER ASSETS: Goodwill $ 128,300 $ — $ 37,222 $ — $ 165,522 Investments 30,779 — — — 30,779 Investments in Subsidiaries 537,799 — — (537,799 ) — Intercompany Note Receivable 36,448 89,186 26,722 (152,356 ) — Debt Issuance Costs 3,714 — — — 3,714 Other Intangible Assets, Net — 54,706 56,574 — 111,280 Long-Term Deferred Income Tax Asset 54,622 — 133 (32,303 ) 22,452 Other Long-Term Assets, Net 8,800 4,999 1,335 — 15,134 Total Other Assets $ 800,462 $ 148,891 $ 121,986 $ (722,458 ) $ 348,881 PLANT AND EQUIPMENT, NET 260,843 24,314 29,681 — 314,838 TOTAL ASSETS $ 1,443,864 $ 430,162 $ 391,997 $ (807,061 ) $ 1,458,962 CURRENT LIABILITIES: Accounts Payable $ 116,972 $ 38,672 $ 27,032 $ — $ 182,676 Intercompany Accounts Payable 33,898 6,945 29,686 (70,529 ) — Accrued Liabilities 90,168 51,851 24,495 (14,074 ) 152,440 Total Current Liabilities $ 241,038 $ 97,468 $ 81,213 $ (84,603 ) $ 335,116 OTHER LIABILITIES: Accrued Pension Cost $ 207,745 $ 367 $ 511 $ — $ 208,623 Accrued Employee Benefits 23,298 — — — 23,298 Accrued Postretirement Health Care Obligation 32,405 15,140 — — 47,545 Intercompany Note Payable 104,676 — 47,680 (152,356 ) — Deferred Income Tax Liabilities — 15,483 17,043 (32,303 ) 223 Other Long-Term Liabilities 35,452 8,511 944 — 44,907 Long-Term Debt 225,000 — — — 225,000 Total Other Liabilities $ 628,576 $ 39,501 $ 66,178 $ (184,659 ) $ 549,596 TOTAL SHAREHOLDERS’ INVESTMENT 574,250 293,193 244,606 (537,799 ) 574,250 TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT $ 1,443,864 $ 430,162 $ 391,997 $ (807,061 ) $ 1,458,962 CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Three Months Ended March 27, 2016 (Unaudited) Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ 394,555 $ 180,035 $ 79,969 $ (50,809 ) $ 603,750 Cost of Goods Sold 306,243 159,877 60,764 (50,809 ) 476,075 Restructuring Charges — 580 — — 580 Gross Profit 88,312 19,578 19,205 — 127,095 Engineering, Selling, General and Administrative Expenses 44,929 11,274 19,085 — 75,288 Restructuring Charges — 144 — — 144 Goodwill Impairment — 7,651 — — 7,651 Equity in Earnings of Unconsolidated Affiliates 554 551 — — 1,105 Equity in Earnings from Subsidiaries 986 — — (986 ) — Income from Operations 44,923 1,060 120 (986 ) 45,117 Interest Expense (5,477 ) (114 ) (2 ) — (5,593 ) Other Income (Loss), Net (195 ) 6 700 — 511 Income before Income Taxes 39,251 952 818 (986 ) 40,035 Provision for Income Taxes 12,428 366 418 — 13,212 Net Income $ 26,823 $ 586 $ 400 $ (986 ) $ 26,823 Comprehensive Income $ 33,561 $ 349 $ 2,132 $ (2,481 ) $ 33,561 CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Three Months Ended March 29, 2015 (Unaudited) Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ 408,530 $ 165,804 $ 95,155 $ (50,474 ) $ 619,015 Cost of Goods Sold 321,429 150,392 71,500 (50,474 ) 492,847 Restructuring Charges — 7,088 — — 7,088 Gross Profit 87,101 8,324 23,655 — 119,080 Engineering, Selling, General and Administrative Expenses 43,252 19,504 9,958 — 72,714 Restructuring Charges — 943 — — 943 Equity in Earnings from Subsidiaries 5,072 — — (5,072 ) — Income (Loss) from Operations 48,921 (12,123 ) 13,697 (5,072 ) 45,423 Interest Expense (5,159 ) (72 ) (2 ) — (5,233 ) Other Income, Net 1,375 293 655 — 2,323 Income (Loss) before Income Taxes 45,137 (11,902 ) 14,350 (5,072 ) 42,513 Provision (Credit) for Income Taxes 11,216 (4,448 ) 1,824 — 8,592 Net Income (Loss) $ 33,921 $ (7,454 ) $ 12,526 $ (5,072 ) $ 33,921 Comprehensive Income (Loss) $ 23,200 $ (8,010 ) $ 4,740 $ 3,270 $ 23,200 CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Nine Months Ended March 27, 2016 (Unaudited) Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ 794,269 $ 411,123 $ 247,294 $ (146,099 ) $ 1,306,587 Cost of Goods Sold 628,055 360,446 189,996 (146,099 ) 1,032,398 Restructuring Charges — 5,222 464 — 5,686 Gross Profit 166,214 45,455 56,834 — 268,503 Engineering, Selling, General and Administrative Expenses 125,363 45,133 49,484 — 219,980 Restructuring Charges 890 540 — — 1,430 Goodwill Impairment — 7,651 — — 7,651 Equity in Earnings of Unconsolidated Affiliates 554 551 — — 1,105 Equity in Earnings from Subsidiaries 1,853 — — (1,853 ) — Income (Loss) from Operations 42,368 (7,318 ) 7,350 (1,853 ) 40,547 Interest Expense (14,923 ) (213 ) (6 ) — (15,142 ) Other Income, Net 1,987 1,204 1,157 — 4,348 Income (Loss) before Income Taxes 29,432 (6,327 ) 8,501 (1,853 ) 29,753 Provision (Credit) for Income Taxes 8,220 (2,263 ) 2,584 — 8,541 Net Income (Loss) $ 21,212 $ (4,064 ) $ 5,917 $ (1,853 ) $ 21,212 Comprehensive Income (Loss) $ 19,382 $ (4,354 ) $ (984 ) $ 5,338 $ 19,382 CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Nine Months Ended March 29, 2015 (Unaudited) Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ 816,386 $ 413,772 $ 295,066 $ (169,293 ) $ 1,355,931 Cost of Goods Sold 650,398 372,129 227,649 (169,293 ) 1,080,883 Restructuring Charges — 20,780 — — 20,780 Gross Profit 165,988 20,863 67,417 — 254,268 Engineering, Selling, General and Administrative Expenses 120,553 55,248 40,966 — 216,767 Restructuring Charges — 2,481 — — 2,481 Equity in Earnings (Loss) from Subsidiaries (930 ) — — 930 — Income (Loss) from Operations 44,505 (36,866 ) 26,451 930 35,020 Interest Expense (14,460 ) (178 ) (3 ) — (14,641 ) Other Income, Net 4,690 1,069 990 — 6,749 Income (Loss) before Income Taxes 34,735 (35,975 ) 27,438 930 27,128 Provision (Credit) for Income Taxes 9,149 (13,426 ) 5,819 — 1,542 Net Income (Loss) $ 25,586 $ (22,549 ) $ 21,619 $ 930 $ 25,586 Comprehensive Income (Loss) $ 2,003 $ (23,041 ) $ 2,677 $ 20,364 $ 2,003 CONSOLIDATING STATEMENT OF CASH FLOWS For the Nine Months Ended March 27, 2016 (Unaudited) Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated Net Cash Provided by (Used in) Operating Activities $ 3,980 $ 8,420 $ 3,829 $ (21,585 ) $ (5,356 ) Cash Flows from Investing Activities: Additions to Plant and Equipment (36,672 ) (3,229 ) (1,191 ) — (41,092 ) Proceeds Received on Disposition of Plant and Equipment 18 955 24 — 997 Cash Paid for Acquisition, Net of Cash Acquired — — (3,074 ) — (3,074 ) Cash Paid for Investments in Unconsolidated Affiliates (19,100 ) — — — (19,100 ) Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt 15,351 — — (15,351 ) — Other, Net (750 ) — — — (750 ) Net Cash Used in Investing Activities (41,153 ) (2,274 ) (4,241 ) (15,351 ) (63,019 ) Cash Flows from Financing Activities: Net Borrowings (Repayments) on Loans, Revolver, Notes Payable and Long-Term Debt 32,443 (22,200 ) 6,849 15,351 32,443 Repayments on Long-Term Debt (1,851 ) — — — (1,851 ) Debt Issuance Costs (932 ) — — — (932 ) Treasury Stock Purchases (33,394 ) — — — (33,394 ) Stock Option Exercise Proceeds and Tax Benefits 11,165 — — — 11,165 Cash Dividends Paid (11,885 ) — — — (11,885 ) Cash Investment in Subsidiary — — (21,585 ) 21,585 — Net Cash (Used in) Provided by Financing Activities (4,454 ) (22,200 ) (14,736 ) 36,936 (4,454 ) Effect of Foreign Currency Exchange Rate Changes on Cash and Cash Equivalents — — (1,845 ) — (1,845 ) Net Decrease in Cash and Cash Equivalents (41,627 ) (16,054 ) (16,993 ) — (74,674 ) Cash and Cash Equivalents, Beginning 45,395 17,237 55,758 — 118,390 Cash and Cash Equivalents, Ending $ 3,768 $ 1,183 $ 38,765 $ — $ 43,716 CONSOLIDATING STATEMENT OF CASH FLOWS For the Nine Months Ended March 29, 2015 (Unaudited) Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated Net Cash Provided by (Used in) Operating Activities $ (44,164 ) $ (9,889 ) $ 3,398 $ (1,480 ) $ (52,135 ) Cash Flows from Investing Activities: Additions to Plant and Equipment (34,008 ) (4,680 ) (5,469 ) — (44,157 ) Proceeds Received on Disposition of Plant and Equipment 90 156 72 — 318 Cash Investment in Subsidiary (6,880 ) — — 6,880 — Cash Paid for Acquisition, Net of Cash Acquired (59,855 ) — — — (59,855 ) Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt (1,000 ) — — 1,000 — Other, Net (250 ) — — — (250 ) Net Cash (Used in) Provided by Investing Activities (101,903 ) (4,524 ) (5,397 ) 7,880 (103,944 ) Cash Flows from Financing Activities: Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt 60,100 12,188 (11,188 ) (1,000 ) 60,100 Treasury Stock Purchases (39,560 ) — — — (39,560 ) Stock Option Exercise Proceeds and Tax Benefits 3,921 — — — 3,921 Cash Dividends Paid (11,374 ) — — — (11,374 ) Cash Investment in Subsidiary — — 5,400 (5,400 ) — Net Cash Provided by (Used in) Financing Activities 13,087 12,188 (5,788 ) (6,400 ) 13,087 Effect of Foreign Currency Exchange Rate Changes on Cash and Cash Equivalents — — (1,982 ) — (1,982 ) Net Decrease in Cash and Cash Equivalents (132,980 ) (2,225 ) (9,769 ) — (144,974 ) Cash and Cash Equivalents, Beginning 138,926 2,680 53,062 — 194,668 Cash and Cash Equivalents, Ending $ 5,946 $ 455 $ 43,293 $ — $ 49,694 |