United States securities and exchange commission logo
January 25, 2023
David Foulkes
Chief Executive Officer
Brunswick Corporation
26125 N. Riverwoods Blvd., Suite 500
Mettawa, IL 60045-3420
Re: Brunswick
Corporation
Form 10-K for the
Fiscal Year Ended December 31, 2021
Filed February 16,
2022
File No. 001-01043
Dear David Foulkes:
We have reviewed your January 3, 2023 response to our comment
letter and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
December 16, 2022 letter.
Form 10-K for Fiscal Year Ended December 31, 2021
Notes to Consolidated Financial Statements
Note 6. Segment Information, page 73
1. Your response dated
December 5, 2022 explains that separate individuals are responsible
for the Engine P&A and
ASG operating segments. Beyond having separate segment
managers to increase
focus within each of these operating segments, tell us why Engine
P&A and ASG are
organized as separate operating segments for purposes of allocating
resources and assessing
performance.
David Foulkes
FirstName
Brunswick LastNameDavid Foulkes
Corporation
Comapany
January 25,NameBrunswick
2023 Corporation
January
Page 2 25, 2023 Page 2
FirstName LastName
2. You state in your December 5, 2022 response that operating margin
is the primary
measure of profitability used by the CODM for allocating resources and
assessing
performance. We also note your disclosure on page 74 of your 2021
Form 10-K that
[t]he Company evaluates performance based on segment operating
earnings. Please
address the following:
Identify what measures of segment profit or loss are reviewed by
the CODM for
assessing segment performance and deciding how to allocate
resources. In addition,
if your CODM uses more than one measure of segment profit or
loss, tell us if each
of those measures have been considered as part of your assessment
of whether Engine
P&A and ASG have similar economic characteristics.
The measure of operating margin from the quantitative information
provided in your
January 3, 2023 response letter appears to differ from the
non-GAAP measure of
Adjusted Operating Earnings as disclosed in your December 31,
2021 Form 10-K.
Please identify and explain the difference in such measures.
Tell us the extent to which, and underlying reasons why, any of
the adjustments to
operating margin referenced in your December 5, 2022 response are
applicable to one
operating segment versus the other with accompanying
quantification.
Provide us with segment operating earnings consistent with the
measure disclosed on
page 74 of your December 31, 2021 Form 10-K for Engine P&A and
ASG and an
analysis of economic similarity for each historical and
forecasted period considered
in your other analyses.
3. In response to prior comment 2, you refer to your evaluation of
revenue trends for the
Engine P&A and ASG operating segments. Please further describe this
evaluation and
explain how the particular factors underlying the differences in
revenue growth rates
between these segments were considered in your analysis of economic
similarity.
4. Your response to comment 2 indicates that your Engine P&A and ASG
operating
segments sell a portfolio of products that include several of the
exact same parts (e.g., boat
seats). It appears the segments also sell products that are different
(e.g., crankshafts for
Engine P&A and lithium-ion batteries for ASG). Please provide us with
a detailed
breakdown of sales by product category for each of these segments for
each of the three
most recent fiscal years along with an explanation of the products
within each category.
In addition, tell us how your assessment of similar economic
characteristics for these
segments considered any differences in sales by product category.
5. Your December 5, 2022 response indicates the extent to which each of
your Engine P&A
and ASG segment s operations are related to distribution, with the
remainder being
manufacturing. Please provide an overview of your distribution and
manufacturing
operations for each segment, tell us the reasons for any difference in
the mix of
distribution and manufacturing, and how it was considered in your
assessment of
similarity of the nature of production processes.
David Foulkes
FirstName
Brunswick LastNameDavid Foulkes
Corporation
Comapany
January 25,NameBrunswick
2023 Corporation
January
Page 3 25, 2023 Page 3
FirstName LastName
6. Provide us with a breakdown of external sales by type of customer
(e.g., big box retailers,
authorized dealers, original equipment manufacturers, aftermarket
channels, etc.) and
sales to other operating segments of the Company for each of Engine
P&A and ASG for
each of the three most recent fiscal years. Please also indicate what
percentage of sales
for these periods are to the same customers. Include your analysis of
differences in type
of customer between the two operating segments.
You may contact Chen Chen, Staff Accountant, at 202-551-7351 or Kathleen
Collins,
Accounting Branch Chief at 202-551-3499 with any questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Ryan M. Gwillim