Separate Financial Information of Subsidiary Guarantors 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 July 3, 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): July 3, 2016 Carrying Amount Maximum Guarantee 6.875% Senior Notes $ 223,149 $ 223,149 Multicurrency Credit Agreement $ — $ 500,000 The following condensed supplemental consolidating financial information reflects the summarized financial information of Briggs & Stratton, its Guarantor Subsidiary and Non-Guarantor Subsidiaries (in thousands): CONSOLIDATING BALANCE SHEET: As of July 3, 2016 Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated CURRENT ASSETS: Cash and Cash Equivalents $ 40,966 $ 741 $ 48,132 $ — $ 89,839 Accounts Receivable, Net 96,366 61,467 33,845 — 191,678 Intercompany Accounts Receivable 26,340 5,528 41,530 (73,398 ) — Inventories, Net 160,596 138,175 87,294 — 386,065 Deferred Tax Asset 30,260 12,470 2,006 — 44,736 Prepaid Expenses and Other 18,105 7,767 4,801 (2,254 ) 28,419 Total Current Assets $ 372,633 $ 226,148 $ 217,608 $ (75,652 ) $ 740,737 OTHER ASSETS: Goodwill $ 128,300 $ — $ 33,268 $ — $ 161,568 Investments 52,757 — — — 52,757 Investments in Subsidiaries 516,796 — — (516,796 ) — Intercompany Note Receivable 5,976 111,290 47,157 (164,423 ) — Other Intangible Assets, Net — 53,503 50,661 — 104,164 Long-Term Deferred Tax Asset 80,409 — 2,230 (29,172 ) 53,467 Other Long-Term Assets, Net 11,992 4,639 1,070 — 17,701 Total Other Assets $ 796,230 $ 169,432 $ 134,386 $ (710,391 ) $ 389,657 PLANT AND EQUIPMENT, NET 274,741 24,702 26,830 — 326,273 TOTAL ASSETS $ 1,443,604 $ 420,282 $ 378,824 $ (786,043 ) $ 1,456,667 CURRENT LIABILITIES: Accounts Payable $ 112,178 $ 50,529 $ 18,445 $ — $ 181,152 Intercompany Accounts Payable 33,079 6,347 33,972 (73,398 ) — Accrued Liabilities 65,884 48,997 24,522 (2,254 ) 137,149 Total Current Liabilities $ 211,141 $ 105,873 $ 76,939 $ (75,652 ) $ 318,301 OTHER LIABILITIES: Accrued Pension Cost 309,191 343 844 — 310,378 Accrued Employee Benefits 23,483 — — — 23,483 Accrued Postretirement Health Care Obligation 24,587 13,854 — — 38,441 Accrued Warranty 10,500 7,554 — — 18,054 Intercompany Note Payable 123,232 — 41,191 (164,423 ) — Other Long-Term Liabilities 26,505 19,125 16,587 (29,172 ) 33,045 Long-Term Debt 221,339 — — — 221,339 Total Other Liabilities $ 738,837 $ 40,876 $ 58,622 $ (193,595 ) $ 644,740 TOTAL SHAREHOLDERS’ INVESTMENT: 493,626 273,533 243,263 (516,796 ) 493,626 TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT $ 1,443,604 $ 420,282 $ 378,824 $ (786,043 ) $ 1,456,667 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 Tax Asset 30,692 13,187 1,992 — 45,871 Prepaid Expenses and Other 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 ) — Other Intangible Assets, Net — 54,706 56,574 — 111,280 Long-Term Deferred Tax Asset 54,622 — 133 (32,303 ) 22,452 Other Long-Term Assets, Net 10,199 4,999 1,335 — 16,533 Total Other Assets $ 798,147 $ 148,891 $ 121,986 $ (722,458 ) $ 346,566 PLANT AND EQUIPMENT, NET 260,843 24,314 29,681 — 314,838 TOTAL ASSETS $ 1,441,549 $ 430,162 $ 391,997 $ (807,061 ) $ 1,456,647 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 Accrued Warranty 12,300 6,127 — — 18,427 Intercompany Note Payable 104,676 — 47,680 (152,356 ) — Other Long-Term Liabilities 23,152 17,867 17,987 (32,303 ) 26,703 Long-Term Debt 222,685 — — — 222,685 Total Other Liabilities $ 626,261 $ 39,501 $ 66,178 $ (184,659 ) $ 547,281 TOTAL SHAREHOLDERS’ INVESTMENT: 574,250 293,193 244,606 (537,799 ) 574,250 TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT $ 1,441,549 $ 430,162 $ 391,997 $ (807,061 ) $ 1,456,647 CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Fiscal Year Ended July 3, 2016 Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ 1,098,592 $ 584,996 $ 319,408 $ (194,218 ) $ 1,808,778 Cost of Goods Sold 874,044 513,914 244,426 (194,218 ) 1,438,166 Restructuring Charges — 6,593 1,564 — 8,157 Gross Profit 224,548 64,489 73,418 — 362,455 Engineering, Selling, General and Administrative Expenses 175,530 72,455 57,497 — 305,482 Restructuring Charges 890 847 301 — 2,038 Goodwill Impairment — — 7,651 — 7,651 Tradename Impairment — — 2,683 — 2,683 Equity in Earnings of Unconsolidated Affiliates 397 1,363 — — 1,760 Equity in Income from Subsidiaries (2,433 ) — — 2,433 — Income (Loss) from Operations 50,958 (7,450 ) 5,286 (2,433 ) 46,361 Interest Expense (19,656 ) (368 ) (9 ) — (20,033 ) Other Income, Net 4,478 1,387 3,163 — 9,028 Income (Loss) Before Provision for Income Taxes 35,780 (6,431 ) 8,440 (2,433 ) 35,356 Provision (Credit) for Income Taxes 9,219 (2,254 ) 1,830 — 8,795 Net Income (Loss) $ 26,561 $ (4,177 ) $ 6,610 $ (2,433 ) $ 26,561 Comprehensive Income (Loss) $ (32,779 ) $ (8,631 ) $ (1,244 ) $ 9,875 $ (32,779 ) For the Fiscal Year Ended June 28, 2015 Net Sales $ 1,160,651 $ 581,919 $ 372,231 $ (220,051 ) $ 1,894,750 Cost of Goods Sold 919,128 521,925 290,361 (220,051 ) 1,511,363 Restructuring Charges — 24,288 — — 24,288 Gross Profit 241,523 35,706 81,870 — 359,099 Engineering, Selling, General and Administrative Expenses 161,160 72,723 56,033 — 289,916 Restructuring Charges — 3,000 — — 3,000 Equity in Loss from Subsidiaries 2,267 — — (2,267 ) — Income (Loss) from Operations 78,096 (40,017 ) 25,837 2,267 66,183 Interest Expense (19,218 ) (310 ) (4 ) — (19,532 ) Other Income, Net 6,760 1,711 1,836 — 10,307 Income (Loss) Before Provision for Income Taxes 65,638 (38,616 ) 27,669 2,267 56,958 Provision (Credit) for Income Taxes 19,951 (14,074 ) 5,394 — 11,271 Net Income (Loss) $ 45,687 $ (24,542 ) $ 22,275 $ 2,267 $ 45,687 Comprehensive Income (Loss) $ (38,166 ) $ (25,647 ) $ 4,500 $ 21,147 $ (38,166 ) For the Fiscal Year Ended June 29, 2014 Net Sales $ 1,156,394 $ 599,013 $ 304,160 $ (200,507 ) $ 1,859,060 Cost of Goods Sold 928,557 544,313 234,073 (200,507 ) 1,506,436 Restructuring Charges 3,830 228 1,783 — 5,841 Gross Profit 224,007 54,472 68,304 — 346,783 Engineering, Selling, General and Administrative Expenses 163,594 76,021 51,752 — 291,367 Restructuring Charges 77 67 554 — 698 Goodwill Impairment — — 2,960 — 2,960 Tradename Impairment — 5,500 — — 5,500 Equity in Loss from Subsidiaries 5,622 — — (5,622 ) — Income (Loss) from Operations 54,714 (27,116 ) 13,038 5,622 46,258 Interest Expense (18,431 ) (6 ) (29 ) — (18,466 ) Other Income, Net 8,251 152 939 — 9,342 Income (Loss) Before Provision for Income Taxes 44,534 (26,970 ) 13,948 5,622 37,134 Provision (Credit) for Income Taxes 16,187 (9,889 ) 2,489 — 8,787 Net Income (Loss) $ 28,347 $ (17,081 ) $ 11,459 $ 5,622 $ 28,347 Comprehensive Income (Loss) $ 58,018 $ (16,836 ) $ 12,832 $ 4,004 $ 58,018 CONSOLIDATING STATEMENT OF CASH FLOWS: For the Fiscal Year Ended July 3, 2016 Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net Cash Provided by (Used in)Operating Activities $ 100,946 $ 9,764 $ 22,646 $ (21,533 ) $ 111,823 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to Plant and Equipment (56,445 ) (5,108 ) (2,608 ) — (64,161 ) Cash Paid for Acquisitions, Net of Cash Acquired — — (3,074 ) — (3,074 ) Cash Paid for Investment in Unconsolidated Affiliates (19,100 ) — — — (19,100 ) Proceeds Received on Disposition of Plant and Equipment 26 960 373 — 1,359 Cash Investment in Subsidiary (24,844 ) — — 24,844 — Net Borrowings (Repayments) on Loans, Revolver, Notes Payable and Long-Term Debt 47,300 — — (47,300 ) — Other, Net (860 ) — — — (860 ) Net Cash Used in Investing Activities (53,923 ) (4,148 ) (5,309 ) (22,456 ) (85,836 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net Borrowings (Repayments) on Loans, Revolver, Notes Payable and Long-Term Debt — (22,112 ) (25,188 ) 47,300 — Repayments of Long-Term Debt (1,851 ) — — — (1,851 ) Debt Issuance Costs (932 ) — — — (932 ) Cash Dividends Paid (23,617 ) — (21,533 ) 21,533 (23,617 ) Stock Option Exercise Proceeds and Tax Benefits 12,389 — — — 12,389 Cash Investment from Parent — — 24,844 (24,844 ) — Treasury Stock Repurchases (37,441 ) — — — (37,441 ) Net Cash Provided by (Used in) Financing Activities (51,452 ) (22,112 ) (21,877 ) 43,989 (51,452 ) EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (3,086 ) — (3,086 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,429 ) (16,496 ) (7,626 ) — (28,551 ) Cash and Cash Equivalents, Beginning of Year 45,395 17,237 55,758 — 118,390 Cash and Cash Equivalents, End of Year $ 40,966 $ 741 $ 48,132 $ — $ 89,839 CONSOLIDATING STATEMENT OF CASH FLOWS: For the Fiscal Year Ended June 28, 2015 Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net Cash Provided by (Used in) Operating Activities $ 97,780 $ 24,453 $ 27,343 $ (1,480 ) $ 148,096 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to Plant and Equipment (56,067 ) (7,183 ) (8,460 ) — (71,710 ) Cash Paid for Acquisition, Net of Cash Acquired (88,144 ) — — — (88,144 ) Proceeds Received on Disposition of Plant and Equipment 90 1,930 97 — 2,117 Cash Investment in Subsidiary (11,077 ) — — 11,077 — Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt 28,615 — — (28,615 ) — Other, Net (250 ) — — — (250 ) Net Cash Used in Investing Activities (126,833 ) (5,253 ) (8,363 ) (17,538 ) (157,987 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net Borrowings (Repayments) on Loans, Revolver, Notes Payable and Long-Term Debt — (4,643 ) (23,972 ) 28,615 — Cash Dividends Paid (22,559 ) — — — (22,559 ) Stock Option Exercise Proceeds and Tax Benefits 5,126 — — — 5,126 Treasury Stock Repurchases (47,045 ) — — — (47,045 ) Cash Investment from Parent — — 9,597 (9,597 ) — Net Cash Used in Financing Activities (64,478 ) (4,643 ) (14,375 ) 19,018 (64,478 ) EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (1,909 ) — (1,909 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (93,531 ) 14,557 2,696 — (76,278 ) Cash and Cash Equivalents, Beginning of Year 138,926 2,680 53,062 — 194,668 Cash and Cash Equivalents, End of Year $ 45,395 $ 17,237 $ 55,758 $ — $ 118,390 CONSOLIDATING STATEMENT OF CASH FLOWS: For the Fiscal Year Ended June 29, 2014 Briggs & Stratton Corporation Guarantor Subsidiary Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net Cash Provided by Operating Activities $ 77,161 $ 6,816 $ 43,102 $ — $ 127,079 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to Plant and Equipment (55,775 ) (2,718 ) (1,878 ) — (60,371 ) Proceeds Received on Disposition of Plant and Equipment 170 33 425 — 628 Cash Investment in Subsidiary 13,307 — (13,307 ) — — Net Cash Used in Investing Activities (42,298 ) (2,685 ) (14,760 ) — (59,743 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net Borrowings (Repayments) on Loans, Revolver, Notes Payable and Long-Term Debt 2,726 (2,726 ) (300 ) — (300 ) Debt Issuance Costs (949 ) — — — (949 ) Cash Dividends Paid (22,697 ) — — — (22,697 ) Stock Option Exercise Proceeds and Tax Benefits 5,402 — — — 5,402 Treasury Stock Repurchases (43,047 ) — — — (43,047 ) Net Cash Used in Financing Activities (58,565 ) (2,726 ) (300 ) — (61,591 ) EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — 478 — 478 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (23,702 ) 1,405 28,520 — 6,223 Cash and Cash Equivalents, Beginning of Year 162,628 1,275 24,542 — 188,445 Cash and Cash Equivalents, End of Year $ 138,926 $ 2,680 $ 53,062 $ — $ 194,668 |