UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________

FORM 10-Q

_____________________________________

(Mark One)



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

For the quarterly period ended ~~March 27,~~October 2, 2016



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

For the transition period from __________ to __________

Commission file number 1-1370

BRIGGS & STRATTON CORPORATION

(Exact name of registrant as specified in its charter)

_____________________________________



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

12301 West Wirth Street, Wauwatosa, Wisconsin 53222

(Address of Principal Executive Offices) (Zip Code)

(414) 259-5333

(Registrant’s telephone number, including area code)

____________________________________________

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

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

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



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

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

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



Class		Outstanding at ~~April 29,~~October 21, 2016
COMMON STOCK, par value $0.01 per share		~~43,335,265~~42,808,827 Shares

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

INDEX



		Page No.

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets – ~~March 27,~~October 2, 2016 and ~~June 28, 2015~~July 3, 2016	3

	Condensed Consolidated Statements of Operations – Three ~~and Nine~~ Months Ended ~~March 27,~~October 2, 2016 and ~~March 29,~~September 27, 2015	5

	Condensed Consolidated Statements of Comprehensive Income (Loss) – Three ~~and Nine~~ Months Ended ~~March 27,~~October 2, 2016 and ~~March 29,~~September 27, 2015	6

	Condensed Consolidated Statements of Cash Flows – ~~Nine~~Three Months Ended ~~March 27,~~October 2, 2016 and ~~March 29,~~September 27, 2015	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3326

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4030

Item 4.	Controls and Procedures	4030

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	4130

Item 1A.	Risk Factors	4131

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4131

Item 6.	Exhibits	4232

Signatures		4333

Exhibit Index		4434

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

ASSETS



	March 27, 2016		June 28, 2015		October 2, 2016		July 3, 2016
CURRENT ASSETS:
Cash and Cash Equivalents	$	43,716	$	118,390	$	42,960	$	89,839
Accounts Receivable, Net	279,127		215,841		160,710		191,678
Inventories -
Finished Products	287,585		266,726		342,447		271,718
Work in Process	124,446		101,285		120,324		104,468
Raw Materials	7,506		10,677		8,036		9,879
Total Inventories	419,537		378,688		470,807		386,065
Deferred Income Tax Asset	47,902		45,871		43,693		44,736
Prepaid Expenses and Other Current Assets	29,993		36,453		41,470		28,419
Total Current Assets	820,275		795,243		759,640		740,737
OTHER ASSETS:
Goodwill	160,998		165,522		161,670		161,568
Investments	56,715		30,779		52,049		52,757
Debt Issuance Costs	3,937		3,714
Other Intangible Assets, Net	106,544		111,280		103,318		104,164
Long-Term Deferred Income Tax Asset	14,393		22,452		49,730		53,467
Other Long-Term Assets, Net	13,113		15,134		17,488		17,701
Total Other Assets	355,700		348,881		384,255		389,657
PLANT AND EQUIPMENT:
Cost	1,038,994		1,035,326		1,065,847		1,056,893
Less - Accumulated Depreciation	724,611		720,488		737,044		730,620
Total Plant and Equipment, Net	314,383		314,838		328,803		326,273
TOTAL ASSETS	$	1,490,358	$	1,458,962	$	1,472,698	$	1,456,667

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(In thousands, except per share data)

(Unaudited)

LIABILITIES & SHAREHOLDERS’ INVESTMENT



	March 27, 2016			June 28, 2015			October 2, 2016			July 3, 2016
CURRENT LIABILITIES:
Accounts Payable	$	212,372		$	182,676		$	186,468		$	181,152
Short-Term Debt	32,443			—			50,175			—
Accrued Liabilities	155,965			152,440			129,705			137,149
Total Current Liabilities	400,780			335,116			366,348			318,301
OTHER LIABILITIES:
Accrued Pension Cost	194,542			208,623			306,319			310,378
Accrued Employee Benefits	22,778			23,298			23,341			23,483
Accrued Postretirement Health Care Obligation	41,165			47,545			36,120			38,441
Deferred Income Tax Liability	6			223
Other Long-Term Liabilities	52,299			44,907			49,538			51,099
Long-Term Debt	223,149			225,000			221,456			221,339
Total Other Liabilities	533,939			549,596			636,774			644,740
SHAREHOLDERS’ INVESTMENT:
Common Stock - Authorized 120,000 shares, $.01 par value, issued 57,854 shares	579			579			579			579
Additional Paid-In Capital	73,072			77,272			67,383			72,020
Retained Earnings	1,074,959			1,071,493			1,054,251			1,074,437
Accumulated Other Comprehensive Loss	(280,940		)	(279,110		)	(334,336		)	(338,450		)
Treasury Stock at cost, 14,535 and 13,480 shares, respectively	(312,031		)	(295,984		)
Treasury Stock at cost, 14,874 and 14,675 shares, respectively							(318,301		)	(314,960		)
Total Shareholders’ Investment	555,639			574,250			469,576			493,626
TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT	$	1,490,358		$	1,458,962		$	1,472,698		$	1,456,667

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended						Nine Months Ended						Three Months Ended
	March 27, 2016			March 29, 2015			March 27, 2016			March 29, 2015			October 2, 2016			September 27, 2015
NET SALES	$	603,750		$	619,015		$	1,306,587		$	1,355,931		$	286,797		$	289,458
COST OF GOODS SOLD	476,075			492,847			1,032,398			1,080,883			234,276			237,287
RESTRUCTURING CHARGES	580			7,088			5,686			20,780			—			2,459
Gross Profit	127,095			119,080			268,503			254,268			52,521			49,712
ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	75,288			72,714			219,980			216,767			72,063			72,134
RESTRUCTURING CHARGES	144			943			1,430			2,481			—			914
GOODWILL IMPAIRMENT	7,651			—			7,651			—
EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATES	1,105			—			1,105			—			3,228			—
Income from Operations	45,117			45,423			40,547			35,020
Loss from Operations													(16,314		)	(23,336		)
INTEREST EXPENSE	(5,593		)	(5,233		)	(15,142		)	(14,641		)	(4,505		)	(4,536		)
OTHER INCOME, Net	511			2,323			4,348			6,749			457			1,455
Income Before Income Taxes	40,035			42,513			29,753			27,128
PROVISION FOR INCOME TAXES	13,212			8,592			8,541			1,542
NET INCOME	$	26,823		$	33,921		$	21,212		$	25,586
Loss Before Income Taxes													(20,362		)	(26,417		)
CREDIT FOR INCOME TAXES													(6,214		)	(8,246		)
NET LOSS													$	(14,148	)	$	(18,171	)

EARNINGS PER SHARE
EARNINGS (LOSS) PER SHARE
Basic	$	0.62		$	0.75		$	0.48		$	0.56		$	(0.34	)	$	(0.42	)
Diluted	0.61			0.75			0.48			0.56			(0.34		)	(0.42		)

WEIGHTED AVERAGE SHARES OUTSTANDING
Basic	42,621			44,160			43,158			44,605			42,494			43,478
Diluted	42,889			44,241			43,377			44,656			42,494			43,478

DIVIDENDS PER SHARE	$	0.135		$	0.125		$	0.405		$	0.375		$	0.140		$	0.135

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

Three Months Ended Nine Months Ended
March 27,
2016 March 29,
2015 March 27,
2016 March 29,
2015
Net Income $ 26,823
$ 33,921
$ 21,212
$ 25,586
Other Comprehensive Income (Loss):
Cumulative Translation Adjustments 5,661
(12,925 ) (8,522 ) (34,045 )
Gain (Loss) on Derivative Instruments, Net of Tax (1,022 ) (173 ) (2,323 ) 3,333
Pension & Postretirement Obligation, Net of Tax 2,278
2,377
6,831
7,129
Gain (Loss) on Marketable Securities, Net of Tax (179 ) —
2,184
—
Other Comprehensive Income (Loss) 6,738
(10,721 ) (1,830 ) (23,583 )
Total Comprehensive Income $ 33,561
$ 23,200
$ 19,382
$ 2,003



	Three Months Ended
	October 2, 2016			September 27, 2015
Net Loss	$	(14,148	)	$	(18,171	)
Other Comprehensive Income (Loss):
Cumulative Translation Adjustments	1,601			(12,473		)
Unrealized Loss on Derivative Instruments, Net of Tax	(47		)	(351		)
Unrecognized Pension & Postretirement Obligation, Net of Tax	2,560			2,193
Other Comprehensive Income (Loss)	4,114			(10,631		)
Total Comprehensive Loss	$	(10,034	)	$	(28,802	)

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended						Three Months Ended
	March 27, 2016			March 29, 2015			October 2, 2016			September 27, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	21,212		$	25,586
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities:
Net Loss							$	(14,148	)	$	(18,171	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Depreciation and Amortization	40,579			39,302			14,286			13,397
Stock Compensation Expense	4,792			4,840			1,248			1,627
Goodwill Impairment	7,651			—
Loss on Disposition of Plant and Equipment	454			300			113			46
Provision for Deferred Income Taxes	3,656			914			3,498			3,844
Equity in Earnings of Unconsolidated Affiliates	(4,292		)	(5,005		)	(3,228		)	(1,436		)
Dividends Received from Unconsolidated Affiliates	5,039			4,381			3,043			728
Non-Cash Restructuring Charges	1,725			12,445			—			229
Change in Operating Assets and Liabilities:
Accounts Receivable	(64,488		)	(88,898		)	29,422			45,558
Inventories	(41,903		)	(58,715		)	(84,733		)	(95,342		)
Other Current Assets	1,429			5,917			(2,234		)	2,408
Accounts Payable, Accrued Liabilities and Income Taxes	25,598			18,844			(18,212		)	(30,337		)
Other, Net	(6,808		)	(12,046		)	(5,552		)	(5,240		)
Net Cash Used in Operating Activities	(5,356		)	(52,135		)	(76,497		)	(82,689		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Plant and Equipment	(41,092		)	(44,157		)
Capital Expenditures							(15,764		)	(12,428		)
Proceeds Received on Disposition of Plant and Equipment	997			318			52			515
Cash Paid for Acquisition, Net of Cash Acquired	(3,074		)	(59,855		)	—			(2,174		)
Cash Paid for Investment in Unconsolidated Affiliates	(19,100		)	—
Other, Net	(750		)	(250		)
Proceeds on Sale of Investment in Marketable Securities							3,343			—
Net Cash Used in Investing Activities	(63,019		)	(103,944		)	(12,369		)	(14,087		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings on Revolver	32,443			60,100			50,175			38,410
Repayments on Long-Term Debt	(1,851		)	—
Debt Issuance Costs	(932		)	—
Treasury Stock Purchases	(33,394		)	(39,560		)	(8,654		)	(11,178		)
Payment of Acquisition Contingent Liability							(813		)	—
Stock Option Exercise Proceeds and Tax Benefits	11,165			3,921			1,117			6,433
Cash Dividends Paid	(11,885		)	(11,374		)
Net Cash (Used in) Provided by Financing Activities	(4,454		)	13,087
Net Cash Provided by Financing Activities							41,825			33,665
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(1,845		)	(1,982		)	162			(1,284		)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(74,674		)	(144,974		)	(46,879		)	(64,395		)
CASH AND CASH EQUIVALENTS, Beginning	118,390			194,668			89,839			118,390
CASH AND CASH EQUIVALENTS, Ending	$	43,716		$	49,694		$	42,960		$	53,995

The accompanying notes are an integral part of these statements.

Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of Business and General Information

Briggs & Stratton (the “Company”) is a U.S. based producer of gasoline engines and outdoor power equipment. The Company’s Engines segment sells engines worldwide, primarily to original equipment manufacturers ("OEMs") of lawn and garden equipment and other gasoline engine powered equipment. The Company also sells related service parts and accessories for its engines. The Company’s Products segment designs, manufacturers and markets a wide range of outdoor power equipment, job site products, and related accessories.

The majority of lawn and garden equipment is sold during the spring and summer months when most lawn care and gardening activities are performed. Engine sales in the Company’s third fiscal quarter have historically been the highest, while sales in the first fiscal quarter have historically been the lowest. Sales of pressure washers and lawn and garden powered equipment are typically higher during the third and fourth fiscal quarters than at other times of the year. Sales of portable generators and snowthrowers are typically higher during the first and second fiscal quarters.

Inventory levels generally increase during the first and second fiscal quarters in anticipation of customer demand. Inventory levels begin to decrease as sales increase in the third fiscal quarter. This seasonal pattern results in high inventories and low cash flow for the Company in the first, second and the beginning of the third fiscal quarters. The pattern generally results in higher cash flow in the latter portion of the third fiscal quarter and in the fourth fiscal quarter as inventories are liquidated and receivables are collected.

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

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

2. New Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU was issued as part of the FASB Simplification Initiative and involves several aspects of accounting for ~~shared-based~~share-based payment transactions, including the income tax consequences and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is currently assessing the impact of this new accounting pronouncement on ~~the Company's~~its results of operations, financial position, and cash flows.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Certain qualitative and quantitative disclosures are required, as well as a modified retrospective recognition and measurement of impacted leases. The new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. The Company is currently assessing the impact of this new accounting pronouncement on ~~the Company's~~its results of operations, financial position, and cash flows.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial ~~Liabilities (ASU No. 2016-01).~~Liabilities. ASU No. 2016-01 enhances the existing financial instruments reporting model by modifying fair value measurement tools, simplifying impairment assessments for

certain equity instruments, and modifying overall presentation and disclosure requirements. The new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. The Company is currently assessing the impact of this new accounting pronouncement on ~~the Company's~~its results of operations, financial position, and cash flows.

In November 2015, the FASB issued ASU No. ~~2015-07,~~2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740). Current guidance requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position; however, the new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company ~~is currently assessing~~does not expect the ~~potential~~ impact of ~~this new accounting pronouncement~~adoption to have a significant impact on the ~~Company's~~Company’s financial position and ~~cash flows.~~

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03). ASU No. 2015-03 amends the guidance within ASC Topic 835, Interest, to require that debt issuance costs related to a recognized debt liability be presentedwill have no impact on the ~~balance sheet as a direct deduction from the carrying amount~~results of ~~that debt liability, consistent with debt premiums and discounts. In August 2015, the FASB~~

further clarified their views on debt costs incurred in connection with a line of credit arrangement by issuing ASU No. 2015-15 Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (ASU 2015-15). ASU No. 2015-15 amends the guidance within ASC Topic 835 to allow an entity to defer and present debt issuance costs associated with a line of credit arrangement as an asset, regardless of whether there are any outstanding borrowings on the line of credit arrangement. The new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of this new accounting pronouncement on the Company's financial positionoperations and cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, under either full or modified retrospective adoption. Early application is only permitted for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently assessing the ~~potential~~ impact of this new accounting pronouncement on ~~the Company's~~its results of operations, financial position, and cash flows.

3. Accumulated Other Comprehensive Income (Loss)

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


	Three Months Ended March 27, 2016															Three Months Ended October 2, 2016
	Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Marketable Securities			Total			Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Total
Beginning Balance	$	(33,300	)	$	(89	)	$	(256,652	)	$	2,363		$	(287,678	)	$	(23,863	)	$	(1,552	)	$	(313,035	)	$	(338,450	)
Other Comprehensive Income (Loss) Before Reclassification	5,661			(730		)	—			(286		)	4,645			1,601			(710		)	—			891
Income Tax Benefit (Expense)	—			274			—			107			381			—			266			—			266
Net Other Comprehensive Income (Loss) Before Reclassifications	5,661			(456		)	—			(179		)	5,026			1,601			(444		)	—			1,157
Reclassifications:
Realized (Gains) Losses - Foreign Currency Contracts (1)	—			(1,527		)	—			—			(1,527		)	—			324			—			324
Realized (Gains) Losses - Commodity Contracts (1)	—			364			—			—			364			—			80			—			80
Realized (Gains) Losses - Interest Rate Swaps (1)	—			257			—			—			257			—			232			—			232
Amortization of Prior Service Costs (Credits) (2)	—			—			(620		)	—			(620		)	—			—			(618		)	(618		)
Amortization of Actuarial Losses (2)	—			—			4,263			—			4,263			—			—			4,714			4,714
Total Reclassifications Before Tax	—			(906		)	3,643			—			2,737			—			636			4,096			4,732
Income Tax Expense (Benefit)	—			340			(1,365		)	—			(1,025		)	—			(239		)	(1,536		)	(1,775		)
Net Reclassifications	—			(566		)	2,278			—			1,712			—			397			2,560			2,957
Other Comprehensive Income (Loss)	5,661			(1,022		)	2,278			(179		)	6,738			1,601			(47		)	2,560			4,114
Ending Balance	$	(27,639	)	$	(1,111	)	$	(254,374	)	$	2,184		$	(280,940	)	$	(22,262	)	$	(1,599	)	$	(310,475	)	$	(334,336	)

(1) Amounts reclassified to net income (loss) are included in net sales or cost of goods sold. See Note 118 for information related to derivative financial instruments.

(2) Amounts reclassified to net income (loss) are included in the computation of net periodic expense, which is presented in cost of goods sold or engineering, selling, general and administrative expenses. See Note 96 for information related to pension and postretirement benefit plans.

Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES


	Three Months Ended March 29, 2015												Three Months Ended September 27, 2015
	Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Total			Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Total
Beginning Balance	$	(8,067	)	$	2,422		$	(202,474	)	$	(208,119	)	$	(19,117	)	$	1,212		$	(261,205	)	$	(279,110	)
Other Comprehensive Income (Loss) Before Reclassification	(12,925		)	3,824			—			(9,101		)	(12,473		)	2,176			—			(10,297		)
Income Tax Benefit (Expense)	—			(1,453		)	—			(1,453		)	—			(816		)	—			(816		)
Net Other Comprehensive Income (Loss) Before Reclassifications	(12,925		)	2,371			—			(10,554		)	(12,473		)	1,360			—			(11,113		)
Reclassifications:
Realized (Gains) Losses - Foreign Currency Contracts (1)	—			(4,728		)	—			(4,728		)	—			(3,171		)	—			(3,171		)
Realized (Gains) Losses - Commodity Contracts (1)	—			319			—			319			—			132			—			132
Realized (Gains) Losses - Interest Rate Swaps (1)	—			306			—			306			—			302			—			302
Amortization of Prior Service Costs (Credits) (2)	—			—			(644		)	(644		)	—			—			(620		)	(620		)
Amortization of Actuarial Losses (2)	—			—			4,477			4,477			—			—			4,129			4,129
Total Reclassifications Before Tax	—			(4,103		)	3,833			(270		)	—			(2,737		)	3,509			772
Income Tax Expense (Benefit)	—			1,559			(1,456		)	103			—			1,026			(1,316		)	(290		)
Net Reclassifications	—			(2,544		)	2,377			(167		)	—			(1,711		)	2,193			482
Other Comprehensive Income (Loss)	(12,925		)	(173		)	2,377			(10,721		)	(12,473		)	(351		)	2,193			(10,631		)
Ending Balance	$	(20,992	)	$	2,249		$	(200,097	)	$	(218,840	)	$	(31,590	)	$	861		$	(259,012	)	$	(289,741	)

(1) Amounts reclassified to net income (loss) are included in net sales or cost of goods sold. See Note 118 for information related to derivative financial instruments.

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Nine Months Ended March 27, 2016
Cumulative Translation Adjustments Derivative Financial Instruments Pension and Postretirement Benefit Plans Marketable Securities Total
Beginning Balance $ (19,117 ) $ 1,212
$ (261,205 ) $ —
$ (279,110 )
Other Comprehensive Income (Loss) Before Reclassification (8,522 ) 1,442
—
3,494
(3,586 )
Income Tax Benefit (Expense) —
(541 ) —
(1,310 ) (1,851 )
Net Other Comprehensive Income (Loss) Before Reclassifications (8,522 ) 901
—
2,184
(5,437 )
Reclassifications:

Realized (Gains) Losses - Foreign Currency Contracts (1) —
(6,771 ) —
—
(6,771 )
Realized (Gains) Losses - Commodity Contracts (1) —
756
—
—
756
Realized (Gains) Losses - Interest Rate Swaps (1) —
857
—
—
857
Amortization of Prior Service Costs (Credits) (2) —
—
(1,859 ) —
(1,859 )
Amortization of Actuarial Losses (2) —
—
12,788
—
12,788
Total Reclassifications Before Tax —
(5,158 ) 10,929
—
5,771
Income Tax Expense (Benefit) —
1,934
(4,098 ) —
(2,164 )
Net Reclassifications —
(3,224 ) 6,831
—
3,607
Other Comprehensive Income (Loss) (8,522 ) (2,323 ) 6,831
2,184
(1,830 )
Ending Balance $ (27,639 ) $ (1,111 ) $ (254,374 ) $ 2,184
$ (280,940 )

~~(1) Amounts reclassified to net income (loss) are included in net sales or cost of goods sold. See Note 11 for information related to derivative financial instruments.~~

(2) Amounts reclassified to net income (loss) are included in the computation of net periodic expense, which is presented in cost of goods sold or engineering, selling, general and administrative expenses. See Note 9 for information related to pension and postretirement benefit plans.

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Nine Months Ended March 29, 2015
Cumulative Translation Adjustments Derivative Financial Instruments Pension and Postretirement Benefit Plans Total
Beginning Balance $ 13,053
$ (1,084 ) $ (207,226 ) $ (195,257 )
Other Comprehensive Income (Loss) Before Reclassification (34,045 ) 10,629
—
(23,416 )
Income Tax Benefit (Expense) —
(4,039 ) —
(4,039 )
Net Other Comprehensive Income (Loss) Before Reclassifications (34,045 ) 6,590
—
(27,455 )
Reclassifications: —
Realized (Gains) Losses - Foreign Currency Contracts (1) —
(7,025 ) —
(7,025 )
Realized (Gains) Losses - Commodity Contracts (1) —
841
—
841
Realized (Gains) Losses - Interest Rate Swaps (1) —
931
—
931
Amortization of Prior Service Costs (Credits) (2) —
—
(1,933 ) (1,933 )
Amortization of Actuarial Losses (2) —
—
13,432
13,432
Total Reclassifications Before Tax —
(5,253 ) 11,499
6,246
Income Tax Expense (Benefit) —
1,996
(4,370 ) (2,374 )
Net Reclassifications —
(3,257 ) 7,129
3,872
Other Comprehensive Income (Loss) (34,045 ) 3,333
7,129
(23,583 )
Ending Balance $ (20,992 ) $ 2,249
$ (200,097 ) $ (218,840 )

~~(1) Amounts reclassified to net income (loss) are included in net sales or cost of goods sold. See Note 11 for information related to derivative financial instruments.~~

(2) Amounts reclassified to net income (loss) are included in the computation of net periodic expense, which is presented in cost of goods sold or engineering, selling, general and administrative expenses. See Note 9 for information related to pension and postretirement benefit plans.

4. ~~Acquisitions~~

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

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

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

~~5. Restructuring Actions~~

In fiscal 2015, the Company announced and began implementing restructuring actions to narrow its assortment of lower-priced Snapper consumer lawn and garden equipment and consolidate its Products Segment manufacturing facilities in order to further reduce costs. The Company continues to focus on premium residential products to customers through its Snapper and Simplicity brands and commercial products through its Snapper Pro and Ferris brands. The Company closed its McDonough, Georgia location in the fourth quarter of fiscal 2015 and consolidated production into existing facilities. Production of pressure washers, riding mowers, and snow throwers has been moved to the Company's Wauwatosa, Wisconsin facility. At March 27, 2016, the Company had $3.5 million classified as assets held for sale, which is included in Prepaid Expenses and Other Current Assets within the Condensed Consolidated Balance Sheets, related to the McDonough location.

The Products Segment recorded pre-tax charges of $0.7 million and $5.8 million during the third quarter and first nine months of fiscal 2016, respectively. As of March 27, 2016, the Products Segment cumulative pre-tax restructuring costs associated with the restructuring actions announced in fiscal 2015 are $33.1 million. Total cumulative pre-tax restructuring cost estimates for the Product Segment restructuring actions are $33 million to $35 million.

During the first quarter of fiscal 2016, the Company implemented restructuring actions within the Engines Segment. These actions, which were completed in the first quarter of fiscal 2016, included a headcount reduction at its plant in Chongqing, China to offset lower production of engines used on snow throwers as well as changes in salaried personnel in the United States. The Engines Segment recorded pre-tax charges of $1.4 million during the first quarter of fiscal 2016, which represented the cumulative pre-tax restructuring costs and the total costs expected to be incurred under these restructuring actions.

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

The restructuring actions discussed above resulted in pre-tax charges of $0.7 million ($0.5 million after tax or $0.01 per diluted share) and $7.1 million ($4.7 million after tax or $0.11 per diluted share) for the third quarter and first nine months of fiscal 2016, respectively.

The following is a rollforward of the restructuring reserve (included in Accrued Liabilities within the Condensed Consolidated Balance Sheets) attributable to Engines Segment restructuring activities for the nine month period ended March 27, 2016 (in thousands):

Termination Benefits Other Costs Total
Reserve Balance at June 28, 2015 $ —
$ —
$ —
Provisions 1,354
—
1,354
Cash Expenditures (750 ) —
(750 )
Other Adjustments (182 ) —
(182 )
Reserve Balance at March 27, 2016 $ 422
$ —
$ 422

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The following is a rollforward of the restructuring reserve (included in Accrued Liabilities within the Condensed Consolidated Balance Sheets) attributable to Products Segment restructuring activities for the nine month period ended March 27, 2016 (in thousands):

Termination Benefits Other Costs Total
Reserve Balance at June 28, 2015 $ 2,107
$ —
$ 2,107
Provisions —
5,762
5,762
Cash Expenditures (1,932 ) (4,219 ) (6,151 )
Other Adjustments (1) —
(1,543 ) (1,543 )
Reserve Balance at March 27, 2016 $ 175
$ —
$ 175

~~(1) Other adjustments includes $1.5 million of asset impairments.~~

~~6. Goodwill and Other Intangible Assets~~

Goodwill represents the excess of purchase price over tangible and intangible assets acquired less liabilities assumed arising from business combinations. Goodwill is assigned to reporting units. The Engines reporting segment is a reporting unit. The Products reporting segment has three reporting units, which are Turf & Consumer, Standby, and Job Site.

~~The changes in the carrying amount of goodwill by reporting segment for the period ended March 27, 2016 are as follows (in thousands):~~

Engines Products Total
Goodwill Balance at June 28, 2015 $ 138,281
$ 27,241
$ 165,522
Impairment Loss —
(7,651 ) (7,651 )
Acquisitions —
4,104
4,104
Effect of Translation (638 ) (339 ) (977 )
Goodwill Balance at March 27, 2016 $ 137,643
$ 23,355
$ 160,998

~~At March 27, 2016 and June 28, 2015, accumulated goodwill impairment losses, as recorded in the Products segment, were $131.4 million and $123.7 million, respectively.~~

Goodwill and other indefinite-lived intangibles assets are not amortized. The Company evaluates goodwill and other indefinite-lived intangible assets for impairment annually as of the end of the fourth fiscal quarter, or more frequently if events or circumstances indicate that the assets may be impaired.

For the goodwill evaluation for certain reporting units, the Company generally first determines based on a qualitative assessment whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. For other reporting units or if the Company's qualitative assessment conclusion is that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company will test goodwill using a two-step process. The first step of the goodwill impairment test is to identify a potential impairment by comparing the carrying values of each of the Company’s reporting units to their estimated fair values as of the test dates. The estimates of fair value of the reporting units are computed using an income approach. The income approach utilizes a multi-year forecast of estimated cash flows and a terminal value at the end of the cash flow period. The forecast period assumptions consist of internal projections that are based on the Company’s budget and long-range strategic plan. The discount rate used at the test date is the weighted-average cost of capital which reflects the overall level of inherent risk of the reporting unit and the rate of return an outside investor would expect to earn.

If the fair value of a reporting unit exceeds its book value, goodwill of the reporting unit is not deemed impaired and the second step of the impairment test is not performed. If the book value of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined by allocating the estimated fair value of the reporting unit to the estimated fair value of its existing tangible assets and liabilities as well as existing identified intangible assets and previously unrecognized intangible assets in a manner similar to a purchase price allocation. The unallocated portion of the estimated fair value of the reporting unit is the implied fair value of

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~~goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.~~

For purposes of the tradename impairment analysis, the Company performs its assessment of fair value based on an income approach using the relief-from-royalty method. This methodology assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets. The Company determines the fair value of each tradename by applying a royalty rate to a projection of net sales discounted using a risk adjusted cost of capital. The Company believes the relief-from-royalty method to be an acceptable methodology due to its common use by valuation specialists in determining the fair value of intangible assets. Sales growth rates are determined after considering current and future economic conditions, recent sales trends, discussions with customers, planned timing of new product launches and many other variables. Each royalty rate is based on profitability of the business to which it relates and observed market royalty rates. The fair value of indefinite-lived intangibles is considered a non-recurring level 3 fair value measurement in accordance with ASC 820 Fair Value Measurement.

The Company determined that its forecasted cash flow estimates used in the goodwill assessment and other intangibles assessment for its Job Site reporting unit as of March 27, 2016 were adversely impacted by elevated channel inventories. The inventory channel for job site products, particularly portable light towers and portable heaters, was elevated due to the rapid and significant change in market demand following the reduction in North American oil production and was compounded by the recent mild winter.

The Company performed an interim goodwill impairment test on its Job Site reporting unit as of March 27, 2016. As a result of the test, the Company concluded that the carrying value of the Job Site reporting unit exceeded its fair value as of March 27, 2016. The Company recorded a non-cash goodwill impairment charge in the third quarter of fiscal 2016 of $7.7 million, which was determined by comparing the carrying value of the reporting unit’s goodwill with the implied fair value of goodwill for the reporting unit. The impairment charge is a non-cash expense that was recorded as a separate component of operating expenses. The goodwill impairment was not deductible for income tax purposes. The impairment charge did not adversely affect the Company’s debt position, cash flow, liquidity or compliance with financial covenants under its revolving credit facility.

The Company also performed the impairment test on its indefinite-lived intangible assets in its Job Site reporting unit as of March 27, 2016. Based on the results of the impairment test, no indefinite-lived intangible asset impairment charges were taken.

The assumptions included in the impairment test require judgment, and changes to these inputs could impact the results of the calculation. Other than management’s internal projections of future cash flows, the primary assumptions used in the impairment test were the weighted-average cost of capital and long-term growth rates.

Quantitative assessments of goodwill and tradenames involve significant judgments by management. Although the Company’s cash flow forecasts are based on assumptions that are considered reasonable by management and consistent with the plans and estimates management is using to operate the underlying businesses, there is significant judgment in determining the expected future cash flows attributable to these businesses. Changes in such estimates or the application of alternative assumptions could produce significantly different results.

Definite-lived intangible assets consist primarily of customer relationships and patents. These definite-lived intangible assets are amortized over their estimated useful lives and are subject to impairment testing if events or changes in circumstances indicate that an asset may be impaired. The Company performed the impairment test on its definite-lived intangible assets in its Job Site reporting unit as of March 27, 2016. Based on the results of the impairment test, no definite-lived intangible asset impairment charges were taken.

7. Earnings (Loss) Per Share

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

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

Three Months Ended Nine Months Ended
March 27,
2016 March 29,
2015 March 27,
2016 March 29,
2015
Net Income $ 26,823
$ 33,921
$ 21,212
$ 25,586
Less: Allocation to Participating Securities (579 ) (893 ) (402 ) (626 )
Net Income Available to Common Shareholders $ 26,244
$ 33,028
$ 20,810
$ 24,960
Average Shares of Common Stock Outstanding 42,621
44,160
43,158
44,605
Diluted Average Shares Outstanding 42,889
44,241
43,377
44,656
Basic Earnings Per Share $ 0.62
$ 0.75
$ 0.48
$ 0.56
Diluted Earnings Per Share $ 0.61
$ 0.75
$ 0.48
$ 0.56



	Three Months Ended
	October 2, 2016			September 27, 2015
Net Loss	$	(14,148	)	$	(18,171	)
Less: Allocation to Participating Securities	(112		)	(109		)
Net Loss Available to Common Shareholders	$	(14,260	)	$	(18,280	)
Average Shares of Common Stock Outstanding	42,494			43,478
Diluted Average Shares Outstanding	42,494			43,478
Basic Earnings (Loss) Per Share	$	(0.34	)	$	(0.42	)
Diluted Earnings (Loss) Per Share	$	(0.34	)	$	(0.42	)

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


	Three Months Ended				Nine Months Ended				Three Months Ended
	March 27, 2016		March 29, 2015		March 27, 2016		March 29, 2015		October 2, 2016		September 27, 2015
Options to Purchase Shares of Common Stock (in thousands)	408		845		910		845		408		910
Weighted Average Exercise Price of Options Excluded	$	20.82	$	20.33	$	20.31	$	20.33	$	20.82	$	20.31

As a result of the Company incurring a net loss for the three months ended October 2, 2016 and September 27, 2015, potential incremental common shares of 695,455 and 882,464 respectively, were excluded from the calculation of diluted earnings (loss) per share because the effect would have been anti-dilutive.

On August 13, 2014, the Board of Directors of the Company authorized up to $50 million in funds associated with the common share repurchase program with an expiration date of June 30, 2016. As of March 27, 2016, the total remaining authorization was approximately $6.9 million. On April 21, 2016, the Board of Directors authorized up to ~~an additional~~ $50 million in funds for use in the common share repurchase program with an expiration date of June 29, 2018. As of October 2, 2016, the total remaining authorization was approximately $41.5 million. The common share repurchase program authorizes the purchase of shares of the Company's common stock on the open market or in private transactions from time to time, depending on market conditions and certain governing loan covenants. During the ~~nine~~three months ended ~~March 27,~~October 2, 2016, the Company repurchased ~~1,841,078~~443,384 shares on the open market at an average price of $~~18.14~~19.52 per share, as compared to ~~2,039,399~~589,882 shares purchased on the open market at an average price of $~~19.40~~18.95 per share during the ~~nine~~three months ended ~~March 29,~~September 27, 2015.

8.5. Investments

Investments represent the Company’s investments in unconsolidated affiliated ~~companies and marketable securities.~~

During the third quarter of fiscal 2014, the Company joined with one of its independent distributors to form Power Distributors, LLC (the venture) to distribute service parts. The Company contributed non-cash assets in exchange for receiving an ownership interest in the venture. As a result of the transaction, the Company recorded an investment of $6.5 million. In the first quarter of fiscal 2015, a second independent distributor joined the venture and, as a result, the Company recorded an additional investment of $2.8 million. During the second quarter of fiscal 2015 and the first quarter of fiscal 2016, the venture acquired the assets of a third and fourth independent distributor, respectively. During the third quarter of fiscal 2016, the Company contributed $19.1 million in cash as well as non-cash assets in exchange for receiving an additional ownership interest in the venture, which acquired the assets of the final independent distributor needed to achieve a national distribution network during the third quarter of fiscal 2016 as well. The Company uses the equity method to account for this investment and the earnings of the unconsolidated affiliate are allocated between the Engines and Products Segments. At March 27, 2016 and June 28, 2015, the Company's total investment in the venture was $31.6 million and $10.0 million, respectively, and its ownership percentage was 38.0% and 11.9%, respectively. The Company's equity method investments also include entities that are suppliers for the Engines Segment.companies.

The Company concluded that its equity method investments are integral to its business. The equity method investments provide manufacturing and distribution functions, which are important parts of its operations. ~~Beginning~~

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~~with~~Since the third quarter of fiscal 2016, the Company ishas prospectively ~~classifying~~classified its equity in earnings of unconsolidated affiliates as a separate line item within Income (Loss) from Operations. For periods prior to the third quarter of fiscal 2016, equity in earnings from unconsolidated affiliates is classified in Other Income, Net.

~~The Company's~~During the fourth quarter of fiscal 2016, the Company sold its investment in marketable securities ~~relates~~related to its ownership of common stock of a publicly-traded ~~company.~~company and recognized a gain in the Consolidated Statements of Operations. The Company ~~classifies its investment as available-for-sale securities, and it is reported at fair value. Unrealized gains and losses, net~~received proceeds of $3.3 million related to the ~~related tax effects, are reported as a separate component of Accumulated Other Comprehensive Income (Loss). At June 28, 2015,~~sale in the ~~investment was not recorded. During the second~~first quarter of fiscal 2016, the Company corrected its investment balance to report it at fair value. The correction, which primarily related to prior periods, was not material. At March 27, 2016, the available-for-sale securities had a cost basis and fair value of $0 and $3.5 million, respectively, and unrealized gains, net of tax, of $2.2 million.2017.

9.6. Pension and Postretirement Benefits

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


	Pension Benefits						Other Postretirement Benefits						Pension Benefits						Other Postretirement Benefits
	Three Months Ended						Three Months Ended						Three Months Ended						Three Months Ended
	March 27, 2016			March 29, 2015			March 27, 2016			March 29, 2015			October 2, 2016			September 27, 2015			October 2, 2016			September 27, 2015
Components of Net Periodic Expense (Income):
Service Cost	$	883		$	858		$	65		$	74		$	1,727		$	857		$	63		$	76
Interest Cost on Projected Benefit Obligation	13,028			12,445			811			902			10,846			13,042			594			809
Expected Return on Plan Assets	(17,800		)	(18,659		)	—			—			(16,118		)	(17,827		)	—			—
Amortization of:
Prior Service Cost (Credit)	45			45			(665		)	(689		)	45			45			(663		)	(665		)
Actuarial Loss	3,252			3,315			1,011			1,162			4,202			3,172			737			957
Net Periodic Expense (Income)	$	(592	)	$	(1,996	)	$	1,222		$	1,449		$	702		$	(711	)	$	731		$	1,177

Pension Benefits Other Postretirement Benefits
Nine Months Ended Nine Months Ended
March 27,
2016 March 29,
2015 March 27,
2016 March 29,
2015
Components of Net Periodic Expense (Income):
Service Cost $ 2,649
$ 2,574
$ 196
$ 222
Interest Cost on Projected Benefit Obligation 39,083
37,336
2,432
2,706
Expected Return on Plan Assets (53,401 ) (55,978 ) —
—
Amortization of:
Prior Service Cost (Credit) 135
135
(1,994 ) (2,068 )
Actuarial Loss 9,755
9,946
3,033
3,486
Net Periodic Expense (Income) $ (1,779 ) $ (5,987 ) $ 3,667
$ 4,346

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The Company expects to make benefit payments of $3.0 million attributable to its non-qualified pension plans during fiscal ~~2016.~~2017. During the first ~~nine~~three months of fiscal ~~2016,~~2017, the Company made payments of approximately ~~$2.4~~$0.6 million for its non-qualified pension plans. The Company anticipates making benefit payments of approximately ~~$11.9~~$9.0 million for its other postretirement benefit plans during fiscal ~~2016.~~2017. During the first ~~nine~~three months of fiscal ~~2016,~~2017, the Company made payments of ~~$10.6~~$3.4 million for its other postretirement benefit plans.

During the first ~~nine~~three months of fiscal ~~2016,~~2017, the Company made no cash contributions to the qualified pension plan. Based upon current regulations and actuarial studies, the Company is not required to make contributions to the qualified pension plan in fiscal ~~2016~~2017 through fiscal 2018. ~~The Company expects to make a contribution to the qualified pension plan in fiscal 2019.~~ The Company may be required to make further contributions in future years or the future expected funding requirements may change depending ~~upon~~on a variety of factors including the actual return on plan assets, ~~and~~ the funded status of the plan in future ~~periods.~~

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In the third quarter of fiscal 2016, the Company initiated a limited offer for former employees with vested benefits to elect to receive a lump sum payout of their benefit. This program would reduce the sizeperiods, and volatility of the pension plan while allowing former employees who accept the offer to control the investment of their retirement funds. The Company intends to complete this program during the fourth quarter of fiscal 2016. Depending on the number of former employees who participate, the Company could incur a pre-tax pension settlement chargechanges in ~~the fourth quarter of fiscal 2016 in the range of $15 million to $25 million.~~actuarial assumptions or regulations.

~~10.~~7. Stock Incentives

Stock based compensation expense is calculated by estimating the fair value of incentive stock awards granted and amortizing the estimated value over the awards' vesting period. Stock based compensation expense was ~~$1.6 million and $4.8~~$1.2 million for the three ~~and nine~~ months ended ~~March 27, 2016, respectively.~~October 2, 2016. For the three ~~and nine~~ months ended ~~March 29,~~September 27, 2015, stock based compensation expense was ~~$1.5 million and $4.8 million, respectively.~~

$1.6 million.

~~11.~~8. Derivative Instruments & Hedging Activities

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

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

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

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

The Company enters into interest rate swaps to manage a portion of its interest rate risk from financing certain dealer and distributor inventories through a third party financing source. The swaps are designated as cash flow hedges and are used to effectively fix the interest payments to a third party financing source, exclusive of lender spreads, ranging from ~~1.17%~~0.98% to 1.60% for a notional principal amount of $95157.5 million with expiration dates ranging from July 2017 through ~~May 2019~~July 2021.

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

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

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

As of ~~March 27,~~October 2, 2016 and ~~June 28, 2015~~July 3, 2016, the Company had the following outstanding derivative contracts (in thousands):


Contract	Contract		Notional Amount		Contract		Notional Amount
			March 27, 2016	June 28, 2015			October 2, 2016	July 3, 2016
Interest Rate:
LIBOR Interest Rate (U.S. Dollars)		Fixed	95,000	95,000		Fixed	157,500	145,000
Foreign Currency:
Australian Dollar		Sell	36,844	29,473		Sell	41,121	39,935
Brazilian Real		Sell	19,724	22,443		Buy	17,014	16,436
Canadian Dollar		Sell	4,185	9,326		Sell	17,785	8,675
Chinese Renminbi		Buy	216,525	259,350		Buy	133,450	171,475
Euro		Sell	55,380	62,740		Sell	40,030	41,730
Japanese Yen		Buy	665,000	711,000		Buy	805,000	587,000
Mexican Peso		Sell	9,500	—		Sell	—	3,500
Commodity:
Natural Gas (Therms)		Buy	12,857	11,324		Buy	11,764	11,771

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

Balance Sheet Location Asset (Liability) Fair Value
March 27,
2016 June 28,
2015
Interest rate contracts
Other Long-Term Liabilities $ (1,090 ) $ (1,034 )
Foreign currency contracts
Other Current Assets 1,009
4,417
Other Long-Term Assets 149
276
Accrued Liabilities (1,816 ) (1,041 )
Other Long-Term Liabilities (271 ) (43 )
Commodity contracts
Accrued Liabilities (701 ) (493 )
Other Long-Term Liabilities (179 ) (134 )
$ (2,899 ) $ 1,948

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Balance Sheet Location	Asset (Liability) Fair Value
	October 2, 2016			July 3, 2016
Interest rate contracts
Other Long-Term Assets	$	88		$	—
Accrued Liabilities	(498		)	—
Other Long-Term Liabilities	(374		)	(1,367		)
Foreign currency contracts
Other Current Assets	940			1,356
Other Long-Term Assets	12			2
Accrued Liabilities	(2,708		)	(2,601		)
Other Long-Term Liabilities	(86		)	(185		)
Commodity contracts
Other Long-Term Assets	19			64
Accrued Liabilities	(211		)	(190		)
Other Long-Term Liabilities	(36		)	(16		)
	$	(2,854	)	$	(2,937	)

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


	Three Months Ended March 27, 2016									Three Months Ended October 2, 2016
	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives, Net of Taxes (Effective Portion)			Classification of Gain (Loss)	Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Recognized in Earnings (Ineffective Portion)		Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives, Net of Taxes (Effective Portion)			Classification of Gain (Loss)	Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Recognized in Earnings (Ineffective Portion)
Interest rate contracts	$	(100	)	Net Sales	$	(257	)	$	—	$	364		Net Sales	$	(232	)	$	—
Foreign currency contracts - sell	(1,671		)	Net Sales	1,520			—		(126		)	Net Sales	(306		)	—
Foreign currency contracts - buy	571			Cost of Goods Sold	7			—		(232		)	Cost of Goods Sold	(18		)	—
Commodity contracts	178			Cost of Goods Sold	(364		)	—		(53		)	Cost of Goods Sold	(80		)	—
	$	(1,022	)		$	906		$	—	$	(47	)		$	(636	)	$	—

Three Months Ended March 29, 2015

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

Classification of
Gain (Loss)

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

Recognized in
Earnings
(Ineffective Portion)
Interest rate contracts $ (381 ) Net Sales $ (306 ) $ —
Foreign currency contracts - sell (120 ) Net Sales 5,146
—
Foreign currency contracts - buy 357
Cost of Goods Sold (418 ) —
Commodity contracts (29 ) Cost of Goods Sold (319 ) —
$ (173 ) $ 4,103
$ —

Nine Months Ended March 27, 2016

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

Classification of
Gain (Loss)

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

Recognized in
Earnings
(Ineffective Portion)
Interest rate contracts $ (40 ) Net Sales $ (857 ) $ —
Foreign currency contracts - sell (2,002 ) Net Sales 7,058
—
Foreign currency contracts - buy (119 ) Cost of Goods Sold (287 ) —
Commodity contracts (162 ) Cost of Goods Sold (756 ) —
$ (2,323 ) $ 5,158
$ —

Nine Months Ended March 29, 2015

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

Classification of
Gain (Loss)

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

Recognized in
Earnings
(Ineffective Portion)
Interest rate contracts $ (120 ) Net Sales $ (931 ) $ —
Foreign currency contracts - sell 3,720
Net Sales 7,689
—
Foreign currency contracts - buy (51 ) Cost of Goods Sold (664 ) —
Commodity contracts (216 ) Cost of Goods Sold (841 ) —
$ 3,333
$ 5,253
$ —

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

During the next twelve months, the estimated net amount of losses on cash flow hedges as of ~~March 27,~~October 2, 2016 expected to be reclassified out of AOCI into earnings is $~~0.7~~1.8 million.

~~12.~~

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9. Fair Value Measurements

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

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

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

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

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of ~~March 27,~~October 2, 2016 and ~~June 28, 2015~~July 3, 2016 (in thousands):


			Fair Value Measurements Using								Fair Value Measurements Using
	March 27, 2016		Level 1		Level 2		Level 3		October 2, 2016		Level 1		Level 2		Level 3
Assets:
Derivatives	$	1,158	$	—	$	1,158	$	—	$	1,059	$	—	$	1,059	$	—
Marketable Securities	$	3,494	$	3,494	$	—	$	—
Liabilities:
Derivatives	$	4,057	$	—	$	4,057	$	—	$	3,913	$	—	$	3,913	$	—
	June 28, 2015		Level 1		Level 2		Level 3		July 3, 2016		Level 1		Level 2		Level 3
Assets:
Derivatives	$	4,693	$	—	$	4,693	$	—	$	1,422	$	—	$	1,422	$	—
Marketable Securities	$	—	$	—	$	—	$	—
Liabilities:
Derivatives	$	2,745	$	—	$	2,745	$	—	$	4,359	$	—	$	4,359	$	—

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

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

The estimated fair value of the Company's Senior Notes (as defined in Note ~~17)~~14) at ~~March 27,~~October 2, 2016 and ~~June 28, 2015~~July 3, 2016 was $~~244.9~~245.7 million and $~~248.3~~240.2 million, respectively, compared to the carrying value of $223.1 million ~~and 225.0 million, respectively.~~. The estimated fair value of the Senior Notes is based on quoted market prices for similar instruments and is, therefore, classified as Level 2 within the valuation hierarchy. The carrying value of the Revolver (as defined in Note ~~17)~~14) approximates fair value since the underlying rate of interest is variable based upon LIBOR rates.

The Company believes that the carrying values of cash and cash equivalents, trade receivables, and accounts payable are reasonable estimates of their fair values at ~~March 27,~~October 2, 2016 and ~~June 28, 2015~~July 3, 2016 due to the short-term nature of these instruments.

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~~13.~~10. Warranty

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


	Nine Months Ended						Three Months Ended
	March 27, 2016			March 29, 2015			October 2, 2016			September 27, 2015
Beginning Balance	$	48,006		$	44,744		$	44,367		$	48,006
Payments	(20,460		)	(20,106		)	(8,196		)	(8,635		)
Provision for Current Year Warranties	19,966			22,493			4,600			5,834
Changes in Estimates	(41		)	(46		)	(415		)	(38		)
Ending Balance	$	47,471		$	47,085		$	40,356		$	45,167

~~14.~~11. Income Taxes

The effective tax ~~rates~~rate for the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2016 were 33.0% and 28.7%~~2017 was 30.5%, compared to ~~20.2% and 5.7%~~31.2% for the same respective ~~periods~~period last year. The effective tax rates for the ~~third quarter and~~ first ~~nine months~~quarters of fiscal 2017 and 2016 were primarily impacted by ~~non-deductible goodwill impairment. The~~losses incurred at certain foreign subsidiaries for which the Company does not receive tax ~~rates for the third quarter and first nine months of fiscal 2016 and 2015 were driven by the U.S. research and development tax credit~~benefits and foreign earnings in jurisdictions with tax rates that vary from the U.S. statutory rate. ~~The tax rate for the first nine months of 2015 was additionally impacted by the reversal of previously recorded reserves as a result of the effective settlement of the Company’s IRS audit.~~

For the ~~nine~~three months ended ~~March 27,~~October 2, 2016, the Company's unrecognized tax benefits increased by ~~$1.0~~$0.2 million, all of which impacted the current effective tax rate.

Income tax returns are filed in the U.S., state, and foreign jurisdictions and related audits occur on a regular basis. In the U.S., the Company is currently under audit for the fiscal years 2010 and 2013, and is no longer subject to U.S. federal income tax examinations before fiscal 2010. The Company is also currently under audit by various state and foreign jurisdictions. ~~With respect to the Company's major foreign jurisdictions, they are~~The Company is no longer subject to tax examinations before fiscal ~~2005.~~ 2006 in its major foreign jurisdictions.

~~15.~~12. Commitments and Contingencies

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

On May 14, 2010, the Company notified retirees and certain retirement eligible employees of various amendments to the Company-sponsored retiree medical plans intended to better align the plans offered to both hourly and salaried retirees. On August 16, 2010, a putative class of retirees who retired prior to August 1, 2006 and the United Steel Workers filed a complaint in the U.S. District Court for the Eastern District of Wisconsin (Merrill, Weber, Carpenter, et al.; United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO/CLC v. Briggs & Stratton Corporation; Group Insurance Plan of Briggs & Stratton Corporation; and Does 1 through 20, Docket No. 10-C-0700), contesting the Company's right to make these changes. The complaint ~~seeks~~sought an injunction preventing the alleged unilateral termination or reduction in insurance coverage to the class of retirees, a permanent injunction preventing defendants from ever making changes to the retirees' insurance coverage, restitution with interest (if applicable) and attorneys' fees and costs. A class ~~has been~~was certified and discovery ~~has~~was concluded. Both parties moved for summary judgment, which was fully briefed on December 23, 2014. The court denied both sides’ motions on September 3, 2015, concluding that factual issues were present which ~~preclude~~precluded summary judgment and should be determined by the jury at trial. The Company filed a motion requesting permission to appeal the court’s decision on an interlocutory basis. The plaintiffs

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also moved the court to clarify its decision. Upon the request of all parties, the court stayed any further decisions in the matter pending mediation in mid-December 2015. The mediation led to an agreement in principle to settle this case for an aggregate payment of $3.95 million covering both claimed benefits and plaintiffs’ attorneys fees, which ~~will result~~

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resulted in a contribution of $1.975 million from the Company and $1.975 million from a third party insurance provider. The parties filed a signed Stipulation of Settlement with the court on April 12, 2016, which will not become effective until it is approved by the court. The court has scheduled a hearing for a final determination on the fairness, reasonableness and adequacy of the terms and conditions of the settlement and on the fee petition of the plaintiffs' counsel for August 11, 2016. The Company ~~previously~~ recorded a total charge of $1.975 million as Engineering, Selling, General and Administrative Expense on the Condensed Consolidated Statements of Operations in the second quarter of fiscal 2016 related to this matter. The parties filed a signed Stipulation of Settlement with the court on April 12, 2016 and the court held a hearing on the fairness, reasonableness and adequacy of the terms and conditions of the settlement and on the fee petition of the plaintiffs' counsel on August 11, 2016. The court approved the settlement following that hearing.

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

The trial began on September 8, 2015, and on September 18, 2015, the jury returned its verdict, finding that BSPPG’s current mower deck designs do not infringe the Exmark patent. As to the older designs, the jury awarded Exmark $24.3 million in damages and found that the infringement was willful, ~~which would allow~~allowing the judge to enhance the jury’s damages award post-trial by up to three times. Also on September 18, 2015, the U.S. Court of Appeals for the Federal Circuit issued its decision in an unrelated case, SCA Hygiene Products Aktiebolag SCA Personal Care, Inc. v. First Quality Baby Products, LLC, et al. (Case No. 2013-1564) (“SCA”), confirming the availability of laches as a defense to patent infringement claims. Laches is an equitable doctrine that may bar a patent owner from obtaining damages prior to commencing suit, in circumstances in which the owner knows or should have known its patent was being infringed for more than six years. Although the court in the Exmark case ruled before trial that BSPPG could not rely on the defense of laches, as a result of the subsequent SCA decision, the court held a bench trial on that defense on October 21 and 22, 2015. On May 2, 2016, the United States Supreme Court agreed to review the SCA decision.

The parties submitted post-trial motions and briefing related to: damages; willfulness; laches; attorney fees; enhanced damages; and prejudgment/post-judgment interest and costs. All post-trial motions and briefing were completed on December 18, 2015. ~~The parties are awaiting~~On May 11, 2016, the ~~court’s rulings.~~

court ruled on those post-trial motions and entered judgment against BSPPG and in favor of Exmark in the amount of $24.3 million in compensatory damages, an additional $24.3 million in enhanced damages, and $1.5 million in pre-judgment interest along with post-judgment interest and costs to be determined. BSPPG and the Company strongly disagree with the jury verdict, ~~and~~ certain rulings made ~~in connection with the jury~~before and during trial, and the May 11, 2016 post-trial rulings. BSPPG ~~is vigorously pursuing its rights through post-trial motions~~has appealed to the U.S. Court of Appeals for the Federal Circuit on several bases, including the issues of obviousness and ~~will continue to do so, if necessary, on appeal.~~ invalidity of Exmark’s patent, the damages calculation, willfulness and laches.

In assessing whether the Company should accrue a liability in its financial statements as a result of the ~~jury verdict,~~May 11, 2016 post-trial rulings, the Company considered various factors, including the legal and factual circumstances of the case, the trial record, the post-trial orders, the current status of the proceedings, applicable law, ~~(including without limitation the precedence of the SCA decision),~~ the views of legal counsel, and the likelihood of successful ~~post-trial motions and~~ appeals. As a result of this review, the Company has concluded that a loss from this case is not probable and reasonably estimable at this time and, therefore, a liability has not been recorded with respect to this case as of ~~March 27,~~October 2, 2016.

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

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~~16.~~13. Segment Information

The Company aggregates operating segments that have similar economic characteristics, products, production processes, types or classes of customers and distribution methods into reportable segments. The Company concluded that it operates two reportable segments: Engines and Products.

The Company concluded that its equity method investments are integral to its business. Beginning with the third quarter of fiscal 2016, the Company is prospectively classifying its equity in earnings of unconsolidated affiliates as a separate line item within Income from Operations. For periods prior to the third quarter of fiscal 2016, equity in earnings from unconsolidated affiliates is classified in Other Income, Net. For all periods presented, equity in earnings from unconsolidated affiliates is included in segment income (loss).

The Company uses “segment income (loss)” as the primary measure to evaluate operating performance and allocate capital resources for the Engines and Products Segments. Prior to the third quarter of fiscal 2016, segment income (loss) is defined as income (loss) from operations plus equity in earnings of unconsolidated affiliates. Beginning with the third quarter of fiscal 2016, segment income (loss) is equal to operating income (loss).

Summarized segment data is as follows (in thousands):

Three Months Ended Nine Months Ended
March 27,
2016 March 29,
2015 March 27,
2016 March 29,
2015
NET SALES:
Engines $ 415,680
$ 432,248
$ 827,770
$ 857,067
Products 220,845
211,135
555,883
576,313
Inter-Segment Eliminations (32,775 ) (24,368 ) (77,066 ) (77,449 )
Total* $ 603,750
$ 619,015
$ 1,306,587
$ 1,355,931
* International sales included in net sales based on product shipment destination $ 160,227
$ 190,083
$ 404,493
$ 465,130
GROSS PROFIT:
Engines $ 99,371
$ 98,885
$ 188,783
$ 189,580
Products 27,527
19,908
81,414
64,505
Inter-Segment Eliminations 197
287
(1,694 ) 183
Total $ 127,095
$ 119,080
$ 268,503
$ 254,268
SEGMENT INCOME (LOSS):
Engines $ 52,166
$ 54,928
$ 52,195
$ 59,967
Products (7,246 ) (8,128 ) (6,767 ) (20,125 )
Inter-Segment Eliminations 197
287
(1,694 ) 183
Total $ 45,117
$ 47,087
$ 43,734
$ 40,025

Reconciliation from Segment Income (Loss) to Income Before Income Taxes:
Equity in Earnings of Unconsolidated Affiliates —
1,664
3,187
5,005
Income from Operations $ 45,117
$ 45,423
$ 40,547
$ 35,020
INTEREST EXPENSE (5,593 ) (5,233 ) (15,142 ) (14,641 )
OTHER INCOME, Net 511
2,323
4,348
6,749
Income Before Income Taxes 40,035
42,513
29,753
27,128
PROVISION FOR INCOME TAXES 13,212
8,592
8,541
1,542
Net Income $ 26,823
$ 33,921
$ 21,212
$ 25,586

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	Three Months Ended
	October 2, 2016			September 27, 2015
NET SALES:
Engines	$	154,498		$	150,083
Products	150,795			162,541
Inter-Segment Eliminations	(18,496		)	(23,166		)
Total*	$	286,797		$	289,458
* International sales included in net sales based on product shipment destination	$	109,887		$	91,541
GROSS PROFIT:
Engines	$	30,985		$	23,777
Products	22,951			27,143
Inter-Segment Eliminations	(1,415		)	(1,208		)
Total	$	52,521		$	49,712
SEGMENT INCOME (LOSS):
Engines	$	(11,654	)	$	(20,754	)
Products	(3,245		)	62
Inter-Segment Eliminations	(1,415		)	(1,208		)
Total	$	(16,314	)	$	(21,900	)

Reconciliation from Segment Income (Loss) to Loss Before Income Taxes:
Equity in Earnings of Unconsolidated Affiliates	—			1,436
Loss from Operations	$	(16,314	)	$	(23,336	)
INTEREST EXPENSE	(4,505		)	(4,536		)
OTHER INCOME, Net	457			1,455
Loss Before Income Taxes	(20,362		)	(26,417		)
CREDIT FOR INCOME TAXES	(6,214		)	(8,246		)
Net Loss	$	(14,148	)	$	(18,171	)

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


	Three Months Ended				Nine Months Ended				Three Months Ended
	March 27, 2016		March 29, 2015		March 27, 2016		March 29, 2015		October 2, 2016		September 27, 2015
Engines	$	—	$	—	$	464	$	—	$	—	$	464
Products	580		7,088		5,472		21,952		—		2,245
Total	$	580	$	7,088	$	5,936	$	21,952	$	—	$	2,709

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


	Three Months Ended				Nine Months Ended				Three Months Ended
	March 27, 2016		March 29, 2015		March 27, 2016		March 29, 2015		October 2, 2016		September 27, 2015
Engines	$	—	$	—	$	4,179	$	—	$	—	$	2,204
Products	8,375		8,141		13,689		24,902		—		2,295
Total	$	8,375	$	8,141	$	17,868	$	24,902	$	—	$	4,499

~~17.~~14. Debt

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


	March 27, 2016		June 28, 2015		October 2, 2016		July 3, 2016
Senior Notes	$	223,149	$	225,000
Multicurrency Credit Agreement	32,443		—		$	50,175	$	—
Total Short-Term Debt					$	50,175	$	—
	$	255,592	$	225,000
6.875% Senior Notes					$	223,149	$	223,149
Unamortized Debt Issuance Costs associated with 6.875% Senior Notes					1,693		1,810
Total Long-Term Debt					$	221,456	$	221,339

On December 20, 2010, the Company issued $225 million of 6.875% Senior Notes ("Senior Notes") due December 15, 2020. During ~~the third quarter of~~ fiscal 2016, the Company repurchased $1.9 million of the Senior Notes after receiving unsolicited offers from bondholders.

On March 25, 2016, the Company entered into a $500 million amended and restated multicurrency credit agreement (the “Revolver”) that matures on March 25, 2021. The Revolver amended and restated the Company’s $500 million multicurrency credit agreement dated as of October 13, 2011 (as previously amended), which would have matured on October 21, 2018. The initial maximum availability under the ~~revolving credit facility~~Revolver is

~~$500~~$500 million. Availability under the revolving credit facility is reduced by outstanding letters of credit. The Company may from time to time increase the maximum availability under the revolving credit facility by up to $250 million if certain conditions are satisfied. As of ~~March 27,~~October 2, 2016, ~~$32.4~~$50.2 million was outstanding under the Revolver. There were no borrowings under the Revolver as of ~~June 28, 2015. In connection with the amendment~~July 3, 2016. The Company classifies debt issuance costs related to the Revolver as an asset, regardless of whether it has any outstanding borrowings on the ~~Company incurred approximately $0.9 million in new debt issuance costs, which are being amortized over the life~~line of ~~the Revolver using the straight-line method.~~credit arrangements.

The Senior Notes and the Revolver contain restrictive covenants. These covenants include restrictions on the ability of the Company and/or certain subsidiaries to pay dividends, repurchase equity interests of the Company and certain subsidiaries, incur indebtedness, create liens, ~~and~~ consolidate and merge and dispose of ~~assets.~~assets, and enter into transaction with the Company's affiliates. The Revolver contains financial covenants that require the Company to maintain a minimum interest coverage ratio and impose on the Company a maximum average leverage ratio.

~~18.~~15. 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,~~October 2, 2016 and ~~June 28, 2015.~~July 3, 2016. The Guarantor provides a full and unconditional guarantee of the Domestic Indebtedness, except for certain customary

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~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~

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

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

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		October 2, 2016 Carrying Amount		Maximum Guarantee
Senior Notes	$	223,149	$	223,149
6.875% Senior Notes					$	223,149	$	223,149
Multicurrency Credit Agreement	$	32,443	$	500,000	$	50,175	$	500,000

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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,~~October 2, 2016

(Unaudited)


	Briggs & Stratton Corporation		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated		Briggs & Stratton Corporation		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
CURRENT ASSETS:
Cash and Cash Equivalents	$	3,768	$	1,183	$	38,765	$	—		$	43,716	$	1,416	$	429	$	41,115	$	—		$	42,960
Accounts Receivable, Net	160,137		68,737		50,253		—			279,127		66,065		50,636		44,009		—			160,710
Intercompany Accounts Receivable	22,635		6,015		40,037		(68,687		)	—		37,178		6,942		45,540		(89,660		)	—
Inventories, Net	190,230		141,279		88,028		—			419,537		222,452		161,963		86,392		—			470,807
Deferred Income Tax Asset	31,959		13,351		2,592		—			47,902		29,162		11,978		2,553		—			43,693
Prepaid Expenses and Other Current Assets	18,593		5,084		6,316		—			29,993		29,453		5,935		6,082		—			41,470
Total Current Assets	$	427,322	$	235,649	$	225,991	$	(68,687	)	$	820,275	385,726		237,883		225,691		(89,660		)	759,640
OTHER ASSETS:
Goodwill	$	128,300	$	—	$	32,698	$	—		$	160,998	128,300		—		33,370		$	—		161,670
Investments	56,715		—		—		—			56,715		52,049		—		—		—			52,049
Investments in Subsidiaries	491,980		—		—		(491,980		)	—		510,845		—		—		(510,845		)	—
Intercompany Note Receivable	33,676		111,375		53,021		(198,072		)	—		982		84,641		53,457		(139,080		)	—
Debt Issuance Costs	3,937		—		—		—			3,937
Other Intangible Assets, Net	—		53,804		52,740		—			106,544		—		53,202		50,116		—			103,318
Long-Term Deferred Income Tax Asset	43,310		—		799		(29,716		)	14,393		76,502		—		2,459		(29,231		)	49,730
Other Long-Term Assets, Net	9,551		2,429		1,133		—			13,113		12,117		4,306		1,065		—			17,488
Total Other Assets	$	767,469	$	167,608	$	140,391	$	(719,768	)	$	355,700	780,795		142,149		140,467		(679,156		)	384,255
PLANT AND EQUIPMENT, NET	263,601		23,941		26,841		—			314,383		277,018		24,527		27,258		—			328,803
TOTAL ASSETS	$	1,458,392	$	427,198	$	393,223	$	(788,455	)	$	1,490,358	$	1,443,539	$	404,559	$	393,416	$	(768,816	)	$	1,472,698

CURRENT LIABILITIES:
Accounts Payable	$	127,072	$	59,189	$	26,111	$	—		$	212,372	$	114,995	$	48,576	$	22,897	$	—		$	186,468
Intercompany Accounts Payable	32,153		5,563		30,971		(68,687		)	—		34,012		9,634		46,014		(89,660		)	—
Short-Term Debt	32,443		—		—		—			32,443		50,175		—		—		—			50,175
Accrued Liabilities	83,147		49,149		23,669		—			155,965		66,303		39,868		23,534		—			129,705
Total Current Liabilities	$	274,815	$	113,901	$	80,751	$	(68,687	)	$	400,780	265,485		98,078		92,445		(89,660		)	366,348
OTHER LIABILITIES:
Accrued Pension Cost	$	193,672	$	358	$	512	$	—		$	194,542	305,112		355		852		—			306,319
Accrued Employee Benefits	22,778		—		—		—			22,778		23,341		—		—		—			23,341
Accrued Postretirement Health Care Obligation	26,206		14,959		—		—			41,165		22,418		13,702		—		—			36,120
Intercompany Note Payable	122,638		—		75,434		(198,072		)	—		98,621		—		40,459		(139,080		)	—
Deferred Income Tax Liabilities	—		13,365		16,357		(29,716		)	6
Other Long-Term Liabilities	39,495		11,730		1,074		—			52,299		37,530		24,698		16,541		(29,231		)	49,538
Long-Term Debt	223,149		—		—		—			223,149		221,456		—		—		—			221,456
Total Other Liabilities	$	627,938	$	40,412	$	93,377	$	(227,788	)	$	533,939	708,478		38,755		57,852		(168,311		)	636,774
TOTAL SHAREHOLDERS’ INVESTMENT	555,639		272,885		219,095		(491,980		)	555,639		469,576		267,726		243,119		(510,845		)	469,576
TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT	$	1,458,392	$	427,198	$	393,223	$	(788,455	)	$	1,490,358	$	1,443,539	$	404,559	$	393,416	$	(768,816	)	$	1,472,698

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CONSOLIDATING BALANCE SHEET

As of ~~June 28, 2015~~July 3, 2016


	Briggs & Stratton Corporation		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated		Briggs & Stratton Corporation		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
CURRENT ASSETS:
Cash and Cash Equivalents	$	45,395	$	17,237	$	55,758	$	—		$	118,390	$	40,966	$	741	$	48,132	$	—		$	89,839
Accounts Receivable, Net	99,852		72,859		43,130		—			215,841		96,366		61,467		33,845		—			191,678
Intercompany Accounts Receivable	21,697		8,060		40,772		(70,529		)	—		26,340		5,528		41,530		(73,398		)	—
Inventories, Net	161,343		125,698		91,647		—			378,688		160,596		138,175		87,294		—			386,065
Deferred Income Tax Asset	30,692		13,187		1,992		—			45,871		30,260		12,470		2,006		—			44,736
Prepaid Expenses and Other Current Assets	23,580		19,916		7,031		(14,074		)	36,453		18,105		7,767		4,801		(2,254		)	28,419
Total Current Assets	$	382,559	$	256,957	$	240,330	$	(84,603	)	$	795,243	372,633		226,148		217,608		(75,652		)	740,737
OTHER ASSETS:
Goodwill	$	128,300	$	—	$	37,222	$	—		$	165,522	128,300		—		33,268		—			161,568
Investments	30,779		—		—		—			30,779		52,757		—		—		—			52,757
Investments in Subsidiaries	537,799		—		—		(537,799		)	—		516,796		—		—		(516,796		)	—
Intercompany Note Receivable	36,448		89,186		26,722		(152,356		)	—		5,976		111,290		47,157		(164,423		)	—
Debt Issuance Costs	3,714		—		—		—			3,714
Other Intangible Assets, Net	—		54,706		56,574		—			111,280		—		53,503		50,661		—			104,164
Long-Term Deferred Income Tax Asset	54,622		—		133		(32,303		)	22,452		80,409		—		2,230		(29,172		)	53,467
Other Long-Term Assets, Net	8,800		4,999		1,335		—			15,134		11,992		4,639		1,070		—			17,701
Total Other Assets	$	800,462	$	148,891	$	121,986	$	(722,458	)	$	348,881	796,230		169,432		134,386		(710,391		)	389,657
PLANT AND EQUIPMENT, NET	260,843		24,314		29,681		—			314,838		274,741		24,702		26,830		—			326,273
TOTAL ASSETS	$	1,443,864	$	430,162	$	391,997	$	(807,061	)	$	1,458,962	$	1,443,604	$	420,282	$	378,824	$	(786,043	)	$	1,456,667

CURRENT LIABILITIES:
Accounts Payable	$	116,972	$	38,672	$	27,032	$	—		$	182,676	$	112,178	$	50,529	$	18,445	$	—		$	181,152
Intercompany Accounts Payable	33,898		6,945		29,686		(70,529		)	—		33,079		6,347		33,972		(73,398		)	—
Accrued Liabilities	90,168		51,851		24,495		(14,074		)	152,440		65,884		48,997		24,522		(2,254		)	137,149
Total Current Liabilities	$	241,038	$	97,468	$	81,213	$	(84,603	)	$	335,116	211,141		105,873		76,939		(75,652		)	318,301
OTHER LIABILITIES:
Accrued Pension Cost	$	207,745	$	367	$	511	$	—		$	208,623	309,191		343		844		—			310,378
Accrued Employee Benefits	23,298		—		—		—			23,298		23,483		—		—		—			23,483
Accrued Postretirement Health Care Obligation	32,405		15,140		—		—			47,545		24,587		13,854		—		—			38,441
Intercompany Note Payable	104,676		—		47,680		(152,356		)	—		123,232		—		41,191		(164,423		)	—
Deferred Income Tax Liabilities	—		15,483		17,043		(32,303		)	223
Other Long-Term Liabilities	35,452		8,511		944		—			44,907		37,005		26,679		16,587		(29,172		)	51,099
Long-Term Debt	225,000		—		—		—			225,000		221,339		—		—		—			221,339
Total Other Liabilities	$	628,576	$	39,501	$	66,178	$	(184,659	)	$	549,596	738,837		40,876		58,622		(193,595		)	644,740
TOTAL SHAREHOLDERS’ INVESTMENT	574,250		293,193		244,606		(537,799		)	574,250		493,626		273,533		243,263		(516,796		)	493,626
TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT	$	1,443,864	$	430,162	$	391,997	$	(807,061	)	$	1,458,962	$	1,443,604	$	420,282	$	378,824	$	(786,043	)	$	1,456,667

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended ~~March 27,~~October 2, 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



	Briggs & Stratton Corporation			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	144,146		$	98,861		$	81,685		$	(37,895	)	$	286,797
Cost of Goods Sold	119,430			87,089			65,652			(37,895		)	234,276
Gross Profit	24,716			11,772			16,033			—			52,521
Engineering, Selling, General and Administrative Expenses	38,965			17,396			15,702			—			72,063
Equity in Earnings of Unconsolidated Affiliates	1,816			1,412			—			—			3,228
Equity in Loss (Earnings) from Subsidiaries	2,001			—			—			(2,001		)	—
Income (Loss) from Operations	(14,434		)	(4,212		)	331			2,001			(16,314		)
Interest Expense	(4,436		)	(67		)	(2		)	—			(4,505		)
Other Income (Loss), Net	(404		)	11			850			—			457
Income (Loss) before Income Taxes	(19,274		)	(4,268		)	1,179			2,001			(20,362		)
Provision (Credit) for Income Taxes	(5,126		)	(1,548		)	460			—			(6,214		)
Net Income (Loss)	$	(14,148	)	$	(2,720	)	$	719		$	2,001		$	(14,148	)
Comprehensive Income (Loss)	$	(10,034	)	$	(2,347	)	$	1,064		$	1,283		$	(10,034	)

CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended ~~March 29,~~September 27, 2015

(Unaudited)


	Briggs & Stratton Corporation			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated			Briggs & Stratton Corporation			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	408,530		$	165,804		$	95,155		$	(50,474	)	$	619,015		$	149,500		$	106,506		$	82,492		$	(49,040	)	$	289,458
Cost of Goods Sold	321,429			150,392			71,500			(50,474		)	492,847			128,601			93,485			64,241			(49,040		)	237,287
Restructuring Charges	—			7,088			—			—			7,088			—			1,995			464			—			2,459
Gross Profit	87,101			8,324			23,655			—			119,080			20,899			11,026			17,787			—			49,712
Engineering, Selling, General and Administrative Expenses	43,252			19,504			9,958			—			72,714			37,805			16,954			17,375			—			72,134
Restructuring Charges	—			943			—			—			943			890			24			—			—			914
Equity in Earnings from Subsidiaries	5,072			—			—			(5,072		)	—
Equity in Loss (Earnings) from Subsidiaries																3,695			—			—			(3,695		)	—
Income (Loss) from Operations	48,921			(12,123		)	13,697			(5,072		)	45,423			(21,491		)	(5,952		)	412			3,695			(23,336		)
Interest Expense	(5,159		)	(72		)	(2		)	—			(5,233		)	(4,472		)	(64		)	—			—			(4,536		)
Other Income, Net	1,375			293			655			—			2,323			703			790			(38		)	—			1,455
Income (Loss) before Income Taxes	45,137			(11,902		)	14,350			(5,072		)	42,513			(25,260		)	(5,226		)	374			3,695			(26,417		)
Provision (Credit) for Income Taxes	11,216			(4,448		)	1,824			—			8,592			(7,089		)	(1,898		)	741			—			(8,246		)
Net Income (Loss)	$	33,921		$	(7,454	)	$	12,526		$	(5,072	)	$	33,921		$	(18,171	)	$	(3,328	)	$	(367	)	$	3,695		$	(18,171	)
Comprehensive Income (Loss)	$	23,200		$	(8,010	)	$	4,740		$	3,270		$	23,200		$	(28,802	)	$	(3,601	)	$	(6,506	)	$	10,107		$	(28,802	)

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~~BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES~~

~~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

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CONSOLIDATING STATEMENT OF CASH FLOWS

For the ~~Nine~~Three Months Ended ~~March 27,~~October 2, 2016

(Unaudited)


	Briggs & Stratton Corporation			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated			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	)	$	(51,795	)	$	(26,097	)	$	1,692		$	(297	)	$	(76,497	)
Cash Flows from Investing Activities:
Additions to Plant and Equipment	(36,672		)	(3,229		)	(1,191		)	—			(41,092		)
Capital Expenditures																(13,463		)	(881		)	(1,420		)	—			(15,764		)
Proceeds Received on Disposition of Plant and Equipment	18			955			24			—			997			—			17			35			—			52
Cash Paid for Acquisition, Net of Cash Acquired	—			—			(3,074		)	—			(3,074		)
Cash Paid for Investments in Unconsolidated Affiliates	(19,100		)	—			—			—			(19,100		)
Proceeds on Sale of Investments in Marketable Securities																3,343			—			—			—			3,343
Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt	15,351			—			—			(15,351		)	—			(20,273		)	—			—			20,273			—
Other, Net	(750		)	—			—			—			(750		)
Net Cash Used in Investing Activities	(41,153		)	(2,274		)	(4,241		)	(15,351		)	(63,019		)
Net Cash Provided by (Used in) Investing Activities																(30,393		)	(864		)	(1,385		)	20,273			(12,369		)
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			50,175			26,649			(6,376		)	(20,273		)	50,175
Repayments on Long-Term Debt	(1,851		)	—			—			—			(1,851		)
Debt Issuance Costs	(932		)	—			—			—			(932		)
Treasury Stock Purchases	(33,394		)	—			—			—			(33,394		)	(8,654		)	—			—			—			(8,654		)
Payment of Acquisition Contingent Liability																—			—			(813		)	—			(813		)
Stock Option Exercise Proceeds and Tax Benefits	11,165			—			—			—			11,165			1,117			—			—			—			1,117
Cash Dividends Paid	(11,885		)	—			—			—			(11,885		)	—			—			(297		)	297			—
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		)	42,638			26,649			(7,486		)	(19,976		)	41,825
Effect of Foreign Currency Exchange Rate Changes on Cash and Cash Equivalents	—			—			(1,845		)	—			(1,845		)	—			—			162			—			162
Net Decrease in Cash and Cash Equivalents	(41,627		)	(16,054		)	(16,993		)	—			(74,674		)	(39,550		)	(312		)	(7,017		)	—			(46,879		)
Cash and Cash Equivalents, Beginning	45,395			17,237			55,758			—			118,390			40,966			741			48,132			—			89,839
Cash and Cash Equivalents, Ending	$	3,768		$	1,183		$	38,765		$	—		$	43,716		$	1,416		$	429		$	41,115		$	—		$	42,960

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CONSOLIDATING STATEMENT OF CASH FLOWS

For the ~~Nine~~Three Months Ended ~~March 29,~~September 27, 2015

(Unaudited)


	Briggs & Stratton Corporation			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated			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	)
Net Cash Used in Operating Activities																$	(67,715	)	$	(8,420	)	$	(6,311	)	$	(243	)	$	(82,689	)
Cash Flows from Investing Activities:
Additions to Plant and Equipment	(34,008		)	(4,680		)	(5,469		)	—			(44,157		)
Capital Expenditures																(10,916		)	(1,126		)	(386		)	—			(12,428		)
Proceeds Received on Disposition of Plant and Equipment	90			156			72			—			318			—			504			11			—			515
Cash Investment in Subsidiary	(6,880		)	—			—			6,880			—			—			—			—			—			—
Cash Paid for Acquisition, Net of Cash Acquired	(59,855		)	—			—			—			(59,855		)	—			—			(2,174		)	—			(2,174		)
Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt	(1,000		)	—			—			1,000			—			2,489			—			—			(2,489		)	—
Other, Net	(250		)	—			—			—			(250		)
Net Cash (Used in) Provided by Investing Activities	(101,903		)	(4,524		)	(5,397		)	7,880			(103,944		)
Net Cash Used in Investing Activities																(8,427		)	(622		)	(2,549		)	(2,489		)	(14,087		)
Cash Flows from Financing Activities:
Net Borrowings (Repayments) on Loans, Notes Payable and Long-Term Debt	60,100			12,188			(11,188		)	(1,000		)	60,100			38,410			(8,063		)	5,574			2,489			38,410
Treasury Stock Purchases	(39,560		)	—			—			—			(39,560		)	(11,178		)	—			—			—			(11,178		)
Stock Option Exercise Proceeds and Tax Benefits	3,921			—			—			—			3,921			6,433			—			—			—			6,433
Cash Dividends Paid	(11,374		)	—			—			—			(11,374		)
Cash Investment in Subsidiary	—			—			5,400			(5,400		)	—			—			—			(243		)	243			—
Net Cash Provided by (Used in) Financing Activities	13,087			12,188			(5,788		)	(6,400		)	13,087			33,665			(8,063		)	5,331			2,732			33,665
Effect of Foreign Currency Exchange Rate Changes on Cash and Cash Equivalents	—			—			(1,982		)	—			(1,982		)	—			—			(1,284		)	—			(1,284		)
Net Decrease in Cash and Cash Equivalents	(132,980		)	(2,225		)	(9,769		)	—			(144,974		)	(42,477		)	(17,105		)	(4,813		)	—			(64,395		)
Cash and Cash Equivalents, Beginning	138,926			2,680			53,062			—			194,668			45,395			17,237			55,758			—			118,390
Cash and Cash Equivalents, Ending	$	5,946		$	455		$	43,293		$	—		$	49,694		$	2,918		$	132		$	50,945		$	—		$	53,995

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

RESULTS OF OPERATIONS

The following table is a reconciliation of financial results by segment, as reported, to adjusted financial results by segment, excluding restructuring charges, acquisition-related charges, and ~~goodwill impairment~~litigation charges, for the three months ended fiscal ~~March~~September 2017 and 2016 ~~and 2015~~ (in thousands, except per share data):


	Three Months Ended Fiscal March														Three Months Ended Fiscal September
	2016 Reported			Adjustments⁽¹⁾		2016 Adjusted⁽²⁾		2015 Reported			Adjustments⁽¹⁾		2015 Adjusted⁽²⁾		2017 Reported			Adjustments		2017 Adjusted⁽²⁾			2016 Reported			Adjustments⁽¹⁾		2016 Adjusted⁽²⁾
Gross Profit:
Engines	$	99,371		$	—	$	99,371	$	98,885		$	—	$	98,885	$	30,985		$	—	$	30,985		$	23,777		$	464	$	24,241
Products	27,527			580		28,107		19,908			7,088		26,996		22,951			—		22,951			27,143			2,245		29,388
Inter-Segment Eliminations	197			—		197		287			—		287		(1,415		)	—		(1,415		)	(1,208		)	—		(1,208		)
Total	$	127,095		$	580	$	127,675	$	119,080		$	7,088	$	126,168	$	52,521		$	—	$	52,521		$	49,712		$	2,709	$	52,421

Engineering, Selling, General and Administrative Expenses:
Engines	$	47,759		$	—	$	47,759	$	45,345		$	—	$	45,345	$	44,455		$	—	$	44,455		$	44,301		$	850	$	43,451
Products	27,529			—		27,529		27,369			110		27,259		27,608			—		27,608			27,833			26		27,807
Total	$	75,288		$	—	$	75,288	$	72,714		$	110	$	72,604	$	72,063		$	—	$	72,063		$	72,134		$	876	$	71,258

Segment Income (Loss)(3):
Engines	$	52,166		$	—	$	52,166	$	54,928		$	—	$	54,928	$	(11,654	)	$	—	$	(11,654	)	$	(20,754	)	$	2,204	$	(18,550	)
Products	(7,246		)	8,375		1,129		(8,128		)	8,141		13		(3,245		)	—		(3,245		)	62			2,295		2,357
Inter-Segment Eliminations	197			—		197		287			—		287		(1,415		)	—		(1,415		)	(1,208		)	—		(1,208		)
Total	$	45,117		$	8,375	$	53,492	$	47,087		$	8,141	$	55,228	$	(16,314	)	$	—	$	(16,314	)	$	(21,900	)	$	4,499	$	(17,401	)

Reconciliation from Segment Income (Loss) to Income Before Income Taxes:
Reconciliation from Segment Income (Loss) to Income (Loss) Before Income Taxes:
Equity in Earnings of Unconsolidated Affiliates	—			—		—		1,664			—		1,664		—			—		—			1,436			—		1,436
Income from Operations	$	45,117		$	8,375	$	53,492	$	45,423		$	8,141	$	53,564
Income (Loss) from Operations															$	(16,314	)	$	—	$	(16,314	)	$	(23,336	)	$	4,499	$	(18,837	)

Income Before Income Taxes	40,035			8,375		48,410		42,513			8,141		50,654
Provision for Income Taxes	13,212			254		13,466		8,592			2,849		11,441
Net Income	$	26,823		$	8,121	$	34,944	$	33,921		$	5,292	$	39,213
Income (Loss) Before Income Taxes															(20,362		)	—		(20,362		)	(26,417		)	4,499		(21,918		)
Provision (Credit) for Income Taxes															(6,214		)	—		(6,214		)	(8,246		)	1,528		(6,718		)
Net Income (Loss)															$	(14,148	)	$	—	$	(14,148	)	$	(18,171	)	$	2,971	$	(15,200	)

Earnings Per Share
Earnings (Loss) Per Share
Basic	$	0.62		$	0.18	$	0.80	$	0.75		$	0.11	$	0.86	$	(0.34	)	$	—	$	(0.34	)	$	(0.42	)	$	0.07	$	(0.35	)
Diluted	0.61			0.19		0.80		0.75			0.11		0.86		(0.34		)	—		(0.34		)	(0.42		)	0.07		(0.35		)

(1) For the ~~third~~first quarter of fiscal 2016, includes pre-tax restructuring charges of ~~$724~~$3,373 ($~~470~~2,239 after tax) and a goodwill impairment charge of $7,651 which is not deductible for income tax purposes. For the third quarter of fiscal 2015, includes pre-tax restructuring charges of $8,031 ($5,220 after tax) and, pre-tax acquisition-related charges of ~~$110~~$276 ($72179 after tax), and pre-tax litigation charges of $850 ($553 after tax). There were no such charges in the first quarter of fiscal 2017.

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

(3) The Company defines segment income (loss) as income from operations plus equity in earnings of unconsolidated affiliates. For all periods presented, equity in earnings of unconsolidated affiliates is included in segment income (loss). ~~Beginning with~~Since the third quarter of fiscal 2016, the Company ~~classifies~~has classified its equity in earnings of unconsolidated affiliates within income from operations. Prior to the third quarter of fiscal 2016, equity in earnings of unconsolidated affiliates is classified in other income.

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NET SALES

Consolidated net sales for the ~~third~~first quarter of fiscal ~~2016~~2017 were ~~$604~~$287 million, a decrease of ~~$15~~$3 million, or ~~2.5%~~0.9%, from the ~~third~~first quarter of fiscal 2015. Net sales decreased during the quarter partially due to an unfavorable foreign currency impact, net of price increases, of $6.5 million, predominately related to the weakening of the Euro, Australian Dollar, and Brazilian Real. Excluding currency impacts, net sales decreased by $9 million. The decrease in net sales was primarily a result of lower shipments in international regions, particularly Europe, Australia and Brazil, as well as lower sales of job site products. Partially offsetting this decrease were increased shipments of engines to customers in North America, higher sales of commercial lawn and garden products in North America, and sales from Billy Goat, which was acquired in May 2015.2016.

Engines Segment net sales in the ~~third~~first quarter of fiscal ~~2016 decreased $17~~2017 increased $4 million or ~~3.8%~~2.9% from the prior year. ~~Unfavorable foreign currency, net~~Starting in fiscal 2017, the Company implemented new sales terms for engines shipped to overseas customers in which title and risk of ~~offsetting price increases, negatively impacted~~loss pass to the customer when the engines are delivered to a carrier for shipment. Sales terms used in previous fiscal years caused deferral of revenue recognition for certain in-transit shipments. Net sales were higher by $18 million in the first quarter of fiscal 2017 for approximately 150,000 units shipped for which revenue would have been deferred, if sold under the former terms. If comparable sales terms had been used, the volume of engines recognized in revenue in the first quarter of fiscal 2017 would have decreased 13%, or approximately 130,000 engines. The decrease is due to lower sales of engines used on snowthrowers due to elevated channel inventories and continued anticipation that customers will produce later in fiscal 2017 compared to fiscal 2016. With regard to the new sales terms implemented this year, the Company expects that the impact of this change will be to shift sales from the second half of fiscal 2017 to the first half, with the majority of the first half impact to occur in the first quarter. Given the seasonal nature of our business, the full year impact of the terms change is expected to be insignificant on net sales by approximately $3.4 million, largely due to the weakening of the Euro. Total engine volumes shipped in the quarter decreased by 3.8% or approximately 120,000 engines, mainly attributable to lower shipments into Europe and Asia as OEMs have ordered less due to caution over the global economy, including the strength of the U.S. dollar. Shipments of small engines to North American customers increased in the quarter due to more normal timing of pressure washer production as well as continued strength in walk mower engine shipments. In fiscal 2015 pressure washer production was accelerated earlier in the year to build inventory in advance of the McDonough closure.profitability.

Products Segment net sales in the ~~third~~first quarter of fiscal ~~2016 increased $10~~2017 decreased $12 million, or ~~4.6%~~7.2%, from the prior year. ~~Unfavorable foreign currency, net~~Net sales decreased primarily due to lower shipments of ~~offsetting price increases, negatively impacted net sales~~snowthrowers, pressure washers, and service parts, partially offset by ~~approximately $3.2 million, primarily related to the Australian Dollar and Brazilian Real. Excluding currency impacts, net sales increased by $12.9 million, primarily from increased sales~~higher shipments of high-end residential and commercial lawn and garden equipment through ~~our~~the Company's North American dealer channel and the Billy Goat acquisition. Partially offsetting this increase were lower international sales, primarily in Australia, lower sales of job site products due to high channel inventories and lower sales related to our previously announced strategic decision to exit the sale of lower margin Snapper products.channel.

GROSS PROFIT

The consolidated gross profit percentage was ~~21.1%~~18.3% in the ~~third~~first quarter of fiscal ~~2016,~~2017, an increase from ~~19.2%~~17.2% in the same period last year.

The Engines Segment gross profit percentage was ~~23.9%~~20.1% in the ~~third~~first quarter of fiscal ~~2016,~~2017, an increase of ~~100~~430 basis points from the ~~22.9%~~15.8% in the ~~third~~first quarter of fiscal 2015. Expanded margins on new products, manufacturing efficiency improvements and lower material costs contributed to the higher gross profit percentage compared to the third quarter of fiscal 2015. Manufacturing volume was consistent year over year during the third quarter. Partially offsetting the higher2016. Adjusted gross profit percentage was ~~a 40 basis point unfavorable impact from~~16.2% in the first quarter last year. Gross profit percentage increased due to favorable sales mix, slightly lower material costs, favorable foreign ~~currency, net of offsetting price increases.~~exchange and manufacturing efficiency improvements. Production volume decreased by 7% as planned.

The Products Segment gross profit percentage ~~including restructuring charges,~~ was ~~12.5%~~15.2% for the ~~third~~first quarter of fiscal ~~2016, up~~2017, down from ~~9.4%~~16.7% in the ~~third~~first quarter of fiscal ~~2015. The adjusted gross profit percentage of 12.7% in the third quarter of fiscal 2016 decreased 10 basis points year over year.~~2016. Adjusted gross margins decreased due to lower manufacturing volume related to job site products and standby generators. Unfavorable foreign currency, net of offsetting price increases, also negatively impacted gross profit percentage by 30 basis points. Partially offsetting the lower gross profit percentage was ~~incremental savings~~18.1% in the first quarter last year. Gross profit percentage decreased primarily due to unfavorable foreign exchange and reduced production of $2.0 million realized from the previously announced restructuring actions and a favorable sales mix, which improved adjusted gross margins by approximately 90 basis points and was driven by our focus on selling higher margin lawn and garden equipment and the results from last year’s Billy Goat acquisition.snowthrowers due to elevated channel inventories.

ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Engineering, selling, general and administrative expenses were ~~$75.3~~$72.1 million in the ~~third~~first quarter of fiscal ~~2016, an increase~~2017, a decrease of ~~$2.6~~$0.1 million or ~~3.5%~~0.1% from the ~~third~~first quarter of fiscal ~~2015.~~2016.

The Engines Segment engineering, selling, general and administrative expenses for the ~~third~~first quarter of fiscal 2017 increased $0.2 million compared to the first quarter of fiscal 2016. Adjusted Engines Segment engineering, selling, general and administrative expenses (which only included adjustments last year) increased $1.0 million largely due to higher costs associated with the ERP upgrade project and higher pension costs.

The Products Segment engineering, selling, general and administrative expenses were $27.6 million for the first quarter of fiscal 2017, a decrease of $0.2 million from the first quarter of fiscal 2016. Adjusted engineering, selling, general and administrative expenses (which only included adjustments last year) in the first quarter of fiscal 2016 ~~increased $2.4~~were $0.2 million ~~compared to~~lower than the ~~third~~same period last year.

INTEREST EXPENSE

Interest expense for the first quarter of fiscal ~~2015 largely due to strategic initiatives and higher~~2017 was consistent with the same period last year.

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~~costs related to pension expense, partially offset by the benefit of the movement in foreign currency rates.~~

The Products Segment engineering, selling, general and administrative expenses were $27.5 million for the third quarter of fiscal 2016, an increase of $0.2 million from the third quarter of fiscal 2015. Adjusted engineering, selling, general and administrative expenses in the third quarter of fiscal 2016 were $0.3 million higher than the same period last year, primarily due to the Billy Goat acquisition, partially offset by the benefit of the movement in foreign currency rates.

The following table is a reconciliation of financial results by segment, as reported, to adjusted financial results by segment, excluding restructuring charges, acquisition-related charges, certain litigation charges, goodwill impairment charges, and the reinstatement of a deferred tax asset for the nine months ended fiscal March 2016 and 2015 (in thousands, except per share data):

Nine Months Ended Fiscal March
2016 Reported
Adjustments⁽¹⁾

2016 Adjusted⁽²⁾
2015 Reported
Adjustments⁽¹⁾

2015 Adjusted⁽²⁾
Gross Profit:
Engines $ 188,783
$ 464
$ 189,247
$ 189,580
$ —
$ 189,580
Products 81,414
5,472
86,886
64,505
21,952
86,457
Inter-Segment Eliminations (1,694 ) —
(1,694 ) 183
—
183
Total $ 268,503
$ 5,936
$ 274,439
$ 254,268
$ 21,952
$ 276,220

Engineering, Selling, General and Administrative Expenses:
Engines $ 138,273
$ 2,825
$ 135,448
$ 133,612
$ —
$ 133,612
Products 81,707
26
81,681
83,155
469
82,686
Total $ 219,980
$ 2,851
$ 217,129
$ 216,767
$ 469
$ 216,298

Segment Income (Loss) (3):
Engines $ 52,195
$ 4,179
$ 56,374
$ 59,967
$ —
$ 59,967
Products (6,767 ) 13,689
6,922
(20,125 ) 24,902
4,777
Inter-Segment Eliminations (1,694 ) —
(1,694 ) 183
—
183
Total $ 43,734
$ 17,868
$ 61,602
$ 40,025
$ 24,902
$ 64,927

Reconciliation from Segment Income (Loss) to Income Before Income Taxes:
Equity in Earnings of Unconsolidated Affiliates 3,187
—
3,187
5,005
—
5,005
Income from Operations $ 40,547
$ 17,868
$ 58,415
$ 35,020
$ 24,902
$ 59,922

Income Before Income Taxes 29,753
17,868
47,621
27,128
24,902
52,030
Provision for Income Taxes 8,541
4,199
12,740
1,542
8,716
10,258
Net Income $ 21,212
$ 13,669
$ 34,881
$ 25,586
$ 16,186
$ 41,772

Earnings Per Share
Basic $ 0.48
$ 0.31
$ 0.79
$ 0.56
$ 0.35
$ 0.91
Diluted 0.48
0.31
0.79
0.56
0.35
0.91

(1) For the first nine months of fiscal 2016, includes pre-tax restructuring charges of $7,116 ($4,671 after tax), a goodwill impairment charge of $7,651 which is not deductible for income tax purposes, pre-tax acquisition-related charges of $276 ($180 after tax), pre-tax litigation charges of $2,825 ($1,836 after tax), and a tax benefit of $669 for reinstatement of a deferred tax asset related to an investment in marketable securities. For the first nine months of fiscal 2015, includes pre-tax restructuring charges of $23,261 ($15,120 after tax) and pre-tax acquisition-related charges of $1,641 ($1,066 after tax).

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

(3) For all periods presented, equity in earnings of unconsolidated affiliates is included in segment income (loss). Beginning with the third quarter of fiscal 2016, the Company classifies its equity in earnings of unconsolidated affiliates within income from operations. Prior to the third quarter of fiscal 2016, equity in earnings of unconsolidated affiliates is classified in other income.

~~NET SALES~~

Consolidated net sales for the first nine months of fiscal 2016 were $1.31 billion, a decrease of $49 million or 3.6% from the first nine months of fiscal 2015. Net sales decreased during the first nine months of fiscal year 2016 partially due to an unfavorable foreign currency impact, net of price increases, of $21.4 million, predominately related to the weakening of the Euro, Australian Dollar, and Brazilian Real. Excluding currency impacts, net sales decreased by $27.9 million. The decrease in net sales was primarily from lower shipments to international regions, and an approximately $20 million decrease in sales of job site products due to higher channel inventory. Partially offsetting this decrease were higher shipments of small engines used on walk mowers to North American customers, increased sales of commercial lawn and garden products, and sales from Billy Goat.

Engines Segment net sales for the first nine months of fiscal 2016 decreased $29 million or 3.4% from the prior year. Unfavorable foreign currency, net of offsetting price increases, negatively impacted net sales by approximately $8.8 million, largely due to the weakening of the Euro. Total engine volumes shipped in the first nine months of fiscal 2016 decreased by 1.4% or approximately 80,000 engines, mainly attributable to lower shipments into Europe and Asia as OEMs have ordered less due to caution over the global economy, including the strength of the U.S. dollar. Shipments of small engines to North American customers increased during the first nine months of fiscal 2016 mainly attributable to higher shipments of small engines used on walk mowers due to improved lawn and garden markets in North America this past season and more normal pacing of walk mower production.

Products Segment net sales for the first nine months of fiscal 2016 decreased $20 million or 3.5% from the prior year. Unfavorable foreign currency, net of offsetting price increases, negatively impacted net sales by $12.6 million, primarily related to the Australian Dollar and Brazilian Real. Net sales also decreased due to lower sales of job site products, lower sales of pressure washers, lower international sales, primarily in Australia and Europe, and lower sales related to our previously announced strategic decision to exit the sale of lower margin Snapper products. Partially offsetting this decrease were increased sales of high-end residential and commercial lawn and garden equipment through our North American dealer channel and sales from Billy Goat.

~~GROSS PROFIT~~

~~The consolidated gross profit percentage was 20.6% in the first nine months of fiscal 2016, an increase from 18.8% in the same period last year.~~

The Engines Segment gross profit percentage, including restructuring charges, was 22.8% in the first nine months of fiscal 2016, higher than the 22.1% in the first nine months of fiscal 2015. The adjusted gross profit percentage was 22.9% in the first nine months of fiscal 2016, an increase of 80 basis points from the prior year. Expanded margins on new products, manufacturing efficiency improvements and lower material costs contributed to the higher gross profit percentage compared to the first nine months of fiscal 2015. Manufacturing volume was slightly lower year over year. Unfavorable foreign currency, net of offsetting price increases, also negatively impacted gross profit percentage, largely due to the weakening of the Euro.

The Products Segment gross profit percentage, including restructuring and acquisition-related charges, was 14.6% for the first nine months of fiscal 2016, up from 11.2% in the first nine months of fiscal 2015. The adjusted gross profit percentage of 15.6% in the first nine months of fiscal 2016 increased 60 basis points year over year. Adjusted gross margins increased due to improved manufacturing efficiencies, including $6.1 million of incremental savings realized from the previously announced restructuring actions and a favorable sales mix, which was driven by our focus on selling higher margin lawn and garden equipment and the results from last year’s Billy Goat acquisition.

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~~Partially offsetting the higher gross profit margins was lower manufacturing volume related to job site products and standby generators.~~

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

~~Engineering, selling, general and administrative expenses were $220.0 million in the first nine months of fiscal 2016, an increase of $3.2 million or 1.5% from the first nine months of fiscal 2015.~~

The Engines Segment engineering, selling, general and administrative expenses were $138.3 million in the first nine months of fiscal 2016, compared to $133.6 million in the same period last year. Adjusted engineering, selling, general and administrative expenses for the first nine months of fiscal 2016 were $135.4 million, an increase of $1.8 million from the first nine months of fiscal 2015, largely due to strategic initiatives and higher costs related to pension expense, partially offset by the benefit of the movement in foreign currency rates.

The Products Segment engineering, selling, general and administrative expenses were $81.7 million for the first nine months of fiscal 2016, a decrease of $1.4 million from the first nine months of fiscal 2015. Adjusted engineering, selling, general and administrative expenses in the first nine months of fiscal 2016 were $81.7 million, a decrease of $1.0 million from the prior year due to the benefit of the movement in foreign currency rates, partially offset by the Billy Goat acquisition.

~~INTEREST EXPENSE~~

Interest expense for the third quarter and first nine months of fiscal 2016 increased by $0.4 million and $0.5 million, respectively, compared to the same periods a year ago due to higher average borrowings in fiscal 2016.

PROVISION FOR INCOME TAXES

The effective tax rate for the first quarter of fiscal 2017 was 30.5%, compared to 31.2% for the same respective period last year. The effective tax rates for the ~~third quarter and~~ first ~~nine months~~quarters of fiscal 2017 and 2016 were ~~33.0% and 28.7% respectively, compared to 20.2% and 5.7% for the same respective periods last year. The tax rates for the third quarter and first nine months of fiscal 2016 were~~primarily impacted by ~~non-deductible goodwill impairment. The~~losses incurred at certain foreign subsidiaries for which the Company does not receive tax ~~rates for the third quarter and first nine months of fiscal 2016 and 2015 were impacted by the U.S. research and development tax credit~~benefits and foreign earnings in jurisdictions with tax rates that vary from the U.S. statutory rate. ~~The tax rate for the first nine months of 2015 was additionally impacted by the reversal of previously recorded reserves as a result of the effective settlement of the Company’s IRS audit.~~

~~RESTRUCTURING ACTIONS~~

During the third quarter of fiscal 2016, the Company continued implementing the previously announced restructuring actions to narrow its assortment of lower-priced Snapper consumer lawn and garden equipment and consolidate its Products Segment manufacturing facilities in order to reduce costs. Products Segment pre-tax restructuring costs for the third quarter and first nine months of fiscal 2016 were $0.7 million and $5.8 million, respectively. Pre-tax restructuring cost estimates for the Products Segment for fiscal 2016 are $6 million to $8 million. Incremental pre-tax savings related to the Products Segment restructuring actions during the third quarter of fiscal 2016 were $2.0 million. Incremental cost savings as a result of Products Segment restructuring actions are anticipated to be $6 million to $7 million in fiscal 2016. Engines Segment restructuring actions implemented and completed in the first quarter of fiscal 2016 resulted in pre-tax restructuring costs of $1.4 million.

~~GOODWILL IMPAIRMENT~~

During the third quarter of 2016, the Company recognized a non-cash goodwill impairment charge of $7.7 million within its Job Site reporting unit. The Job Site reporting unit, which is included in the Products Segment, designs, manufactures, and sells portable light towers and heaters under the Allmand brand. The impairment charge is a non-cash expense that did not adversely affect the Company’s debt position, cash flow, liquidity, or compliance with financial covenants under its credit facilities. See Note 6 in Notes to Condensed Consolidated Financial Statements for additional information.

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LIQUIDITY AND CAPITAL RESOURCES

Cash flows used in operating activities for the first ~~nine~~three months of fiscal ~~2016~~2017 were ~~$5.4~~$76.5 million compared to ~~$52.1~~$82.7 million in the first ~~nine~~three months of fiscal ~~2015.~~2016. The improvement in operating cash flows used was primarily related to ~~changes in working capital due to~~a lower ~~inventory levels and accounts receivable. Inventory levels were elevated last year in the third quarter to support the McDonough plant closure and the introduction of a new engine line.~~net loss.

Cash flows used in investing activities were ~~$63.0~~$12.4 million and ~~$103.9~~$14.1 million during the first ~~nine~~three months of fiscal ~~2016~~2017 and fiscal ~~2015,~~2016, respectively. The ~~$40.9~~$1.7 million decrease in cash used in investing activities was primarily related to ~~$19.1~~$3.3 million in proceeds received from the sale of ~~cash paid for~~ an investment in ~~Power Distributors, an unconsolidated affiliate,~~marketable securities during the first quarter of fiscal 2017 compared to no proceeds received in the same period last year and ~~$3.1~~no acquisitions in the first quarter of fiscal 2017 compared to $2.2 million of cash paid for acquisitions in the ~~nine months~~first quarter of fiscal 2016, ~~as compared to $59.9~~partially offset by $3.3 million of ~~cash paid for the Allmand acquisition~~higher capital expenditures in the first ~~nine months~~quarter of fiscal ~~2015.~~2017 compared to the same period last year.

Cash ~~flows used in financing activities were $4.5 million during the first nine months of fiscal 2016 as compared to cash~~ flows provided by financing activities ~~of $13.1~~were $41.8 million during the first ~~nine~~three months of fiscal ~~2015.~~2017 as compared to $33.7 million during the first three months of fiscal 2016. The ~~$17.5~~$8.1 million increase in cash ~~used~~provided by financing activities was attributable to ~~$32.4~~$50.2 million of borrowings under the Revolver in the first ~~nine~~three months of fiscal ~~2016~~2017 compared to ~~$60.1~~$38.4 million of borrowings in fiscal ~~2015, partially offset by $7.2 million of higher stock option proceeds, and~~2016 as well as a ~~$6.2~~$2.5 million decrease in treasury stock purchases in the first ~~nine~~three months of fiscal ~~2016~~2017 compared to fiscal ~~2015.~~2016, partially offset by $5.3 million of lower stock option proceeds in the first quarter of fiscal 2017 compared to the same period last year and $0.8 million of cash paid related to an acquisition contingent liability in the first quarter of fiscal 2017 compared to no payments in the same period last year.

FUTURE LIQUIDITY AND CAPITAL RESOURCES

On December 20, 2010, the Company issued $225 million of 6.875% Senior Notes ("Senior Notes") due December 15, 2020. During the third quarter of fiscal 2016, the Company repurchased $1.9 million of the Senior Notes after receiving unsolicited offers from bondholders.

$500 million. Availability under the revolving credit facility is reduced by outstanding letters of credit. The Company may from time to time increase the maximum availability under the revolving credit facility by up to $250 million if certain conditions are satisfied. As of ~~March 27,~~October 2, 2016, ~~$32.4~~$50.2 million was outstanding under the Revolver. There were no borrowings under the Revolver as of June 28, 2015. In connection with the amendment to the Revolver, the Company incurred approximately $0.9 million in new debt issuance costs, which are being amortized over the life of the Revolver using the straight-line method.July 3, 2016.

In August ~~2015,~~2016, the Company announced that its Board of Directors declared an increase in the quarterly dividend from ~~$0.125~~$0.135 per share to ~~$0.135~~$0.14 per share on the Company's common stock ~~beginning with~~for the dividend payable on ~~September 30, 2015.~~October 3, 2016.

On August 13, 2014, the Board of Directors of the Company authorized up to $50 million in funds associated with the common share repurchase program with an expiration date of June 30, 2016. As of March 27, 2016, the total remaining authorization was approximately $6.9 million. On April 21, 2016, the Board of Directors authorized up to ~~an additional~~ $50 million in funds for use in the common share repurchase program with an expiration date of June ~~29.~~29, 2018. The prior share repurchase program expired as of June 30, 2016. As of October 2, 2016, the total remaining authorization was approximately $41.5 million. The common share repurchase program authorizes the purchase of shares of the Company's common stock on the open market or in private transactions from time to time, depending on market conditions and certain governing loan covenants. During the ~~nine~~three months ended ~~March 27,~~October 2, 2016, the Company repurchased ~~1,841,078~~443,384 shares on the ~~open market at an average price of $18.14 per share.~~

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open market at an average price of $19.52 per share, as compared to 589,882 shares purchased on the ~~Company's total investment in~~open market at an average price of $18.95 per share during the ~~venture was $31.6 million and $10.0 million, respectively, and its ownership percentage was 38.0% and 11.9%, respectively.~~three months ended September 27, 2015.

The Company expects capital expenditures to be approximately ~~$65~~$70 million to ~~$70~~$80 million in fiscal ~~2016.~~2017. These anticipated expenditures reflect its plans to continue to invest in efficient equipment and innovative new ~~products, manufacturing efficiencies and technology update projects.~~products.

During the first ~~nine~~three months of fiscal ~~2016,~~2017, the Company made no cash contributions to the qualified pension plan. Based upon current regulations and actuarial studies, the Company ~~estimates that it will~~is not be required to make ~~minimum~~ contributions to the qualified pension plan in fiscal ~~2016~~2017 through fiscal 2018. ~~The Company expects to make a contribution to the qualified pension plan in fiscal 2019.~~ The Company may be required to make further contributions in future years or the future expected funding requirements may change depending ~~upon~~on a variety of factors including the actual return on plan assets, ~~and~~ the funded status of the plan in future ~~periods.~~

In the third quarter of fiscal 2016, the Company initiated a limited offer for former employees with vested benefits to elect to receive a lump sum payout of their benefit. This program would reduce the sizeperiods, and volatility of the pension plan while allowing former employees who accept the offer to control the investment of their retirement funds. The Company intends to complete this program during the fourth quarter of fiscal 2016. Depending on the number of former employees who participate, the Company could incur a pre-tax pension settlement chargechanges in ~~the fourth quarter of fiscal 2016 in the range of $15 to 25 million.~~actuarial assumptions or regulations.

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

OFF-BALANCE SHEET ARRANGEMENTS

There have been no material changes since the August ~~21, 2015~~30, 2016 filing of the Company’s Annual Report on Form 10-K.

CONTRACTUAL OBLIGATIONS

There have been no material changes since the August ~~21, 2015~~30, 2016 filing of the Company’s Annual Report on Form 10-K, except that subsequent to the filing of the Company's Annual Report on Form 10-K, ~~on March 25, 2016, the Company entered into an amended and restated Revolver, which, among other things, extended the maturity of the Revolver from October 21, 2018 to March 25, 2021. Additionally,~~ based upon current regulations and actuarial studies, the Company ~~expects~~continues to expect it will be required to make no minimum contributions to the qualified pension plan in fiscal ~~2016~~2017 through fiscal 2018; however, the Company now expects ~~to make a contribution~~that its required contributions to the qualified pension plan will be approximately $15 million in fiscal ~~2019.~~2019 and $56 million during the period of fiscal 2020 through fiscal 2021.

CRITICAL ACCOUNTING POLICIES

There have been no material changes in the Company’s critical accounting policies since the August ~~21, 2015~~30, 2016 filing of its Annual Report on Form 10-K. As discussed in its annual report, the preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.

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

~~The Company has contingent liabilities related to litigation and claims that arise in the normal course~~

Table of business. The Company accrues for contingent liabilities when management determines it is probable that a liability has been incurred and the amount can be reasonably estimated. Liabilities are recorded based on management’s current judgments as to the probable and reasonably estimable outcome of the contingencies. To the extent that management’s future judgments related to the outcome of the contingencies differ from current expectations or as additional information becomes available, earnings could be impacted in the period such changes occur. See Note 15, “Commitments and Contingencies,” for a description of these matters.Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

NEW ACCOUNTING PRONOUNCEMENTS

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

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes since the August ~~21, 2015~~30, 2016 filing of the Company’s Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

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

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INTERNAL CONTROL OVER FINANCIAL REPORTING

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

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

There have been no material changes since the August ~~21, 2015~~30, 2016 filing of the Company’s Annual Report on Form 10-K.

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

The table below sets forth the information with respect to purchases made by or on behalf of the Company of its common stock during the quarterly period ended ~~March 27,~~October 2, 2016.

2016 Fiscal Month Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of a Publicly Announced Program (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
December 28, 2015 to January 24, 2016 395,401
$ 16.72
395,401
$ 8,742,594
January 25, 2016 to February 21, 2016 101,709
18.50
101,709
6,860,978
February 22, 2016 to March 27, 2016 —
—
—
6,860,978
Total Third Quarter 497,110
$ 17.08
497,110
$ 6,860,978



2017 Fiscal Month	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program (b)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
July 4, 2016 to July 31, 2016	59,689	$	21.65	59,689	$	48,906,454
August 1, 2016 to August 28, 2016 (a)	114,852	21.30		75,554	47,336,442
August 29, 2016 to October 2, 2016	308,141	18.79		308,141	41,546,473
Total First Quarter	482,682	$	19.74	443,384	$	41,546,473


~~(1)~~(a)	On39,298 shares reported during August ~~13, 2014, the Board~~were surrendered by employees to satisfy tax withholding obligations upon vesting of ~~Directors authorized up to an additional~~ ~~$50 million~~ ~~in funds for use in the Company’s common share repurchase program with an expiration date of June 30, 2016.~~ restricted stock.


(b)	On April 21, 2016, the Board of Directors authorized up to ~~an additional~~ $50 million in funds for use in the common share repurchase program with an expiration date of June 29, 2018.

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ITEM 6. EXHIBITS



Exhibit Number		Description

~~3.1~~		~~Amendment to Bylaws, as adopted on April 21, 2016 (Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated April 21, 2016 and incorporated herein by reference)~~

~~10.1~~		Amended and Restated Multicurrency Credit Agreement, dated as of March 25, 2016, among Briggs & Stratton Corporation, Briggs & Stratton AG, the other subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association, as syndication agent and BMO Harris Bank, N.A., Bank of America, N.A., Wells Fargo, National Association and PNC Bank, National Association, as documentation agents (Filed herewith)

~~10.2~~		~~Annual Incentive Plan, as amended (Filed herewith)~~

~~10.3~~		~~Second Amendment to Expatriate Agreement between William H. Reitman and Briggs & Stratton International, Inc., dated January 19, 2016 (Filed herewith)~~

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

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

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


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

101		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~March 27,~~October 2, 2016 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows, and (v) related Notes to Condensed Consolidated Financial Statements

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SIGNATURES

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



		BRIGGS & STRATTON CORPORATION
		(Registrant)

Date:	~~May 3,~~November 1, 2016	/s/ Mark A. Schwertfeger
		Mark A. Schwertfeger
		Senior Vice President and Chief Financial Officer and Duly Authorized Officer

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EXHIBIT INDEX



Exhibit Number		Description

~~3.1~~		~~Amendment to Bylaws, as adopted on April 21, 2016 (Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated April 21, 2016 and incorporated herein by reference)~~

~~10.1~~		Amended and Restated Multicurrency Credit Agreement, dated as of March 25, 2016, among Briggs & Stratton Corporation, Briggs & Stratton AG, the other subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association, as syndication agent and BMO Harris Bank, N.A., Bank of America, N.A., Wells Fargo, National Association and PNC Bank, National Association, as documentation agents (Filed herewith)

~~10.2~~		~~Annual Incentive Plan, as amended (Filed herewith)~~

~~10.3~~		~~Second Amendment to Expatriate Agreement between William H. Reitman and Briggs & Stratton International, Inc., dated January 19, 2016 (Filed herewith)~~

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

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

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

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

101		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~March 27,~~October 2, 2016 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows, and (v) related Notes to Condensed Consolidated Financial Statements

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	Nine Months Ended March 27, 2016
	Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Marketable Securities			Total
Beginning Balance	$	(19,117	)	$	1,212		$	(261,205	)	$	—		$	(279,110	)
Other Comprehensive Income (Loss) Before Reclassification	(8,522		)	1,442			—			3,494			(3,586		)
Income Tax Benefit (Expense)	—			(541		)	—			(1,310		)	(1,851		)
Net Other Comprehensive Income (Loss) Before Reclassifications	(8,522		)	901			—			2,184			(5,437		)
Reclassifications:
Realized (Gains) Losses - Foreign Currency Contracts (1)	—			(6,771		)	—			—			(6,771		)
Realized (Gains) Losses - Commodity Contracts (1)	—			756			—			—			756
Realized (Gains) Losses - Interest Rate Swaps (1)	—			857			—			—			857
Amortization of Prior Service Costs (Credits) (2)	—			—			(1,859		)	—			(1,859		)
Amortization of Actuarial Losses (2)	—			—			12,788			—			12,788
Total Reclassifications Before Tax	—			(5,158		)	10,929			—			5,771
Income Tax Expense (Benefit)	—			1,934			(4,098		)	—			(2,164		)
Net Reclassifications	—			(3,224		)	6,831			—			3,607
Other Comprehensive Income (Loss)	(8,522		)	(2,323		)	6,831			2,184			(1,830		)
Ending Balance	$	(27,639	)	$	(1,111	)	$	(254,374	)	$	2,184		$	(280,940	)



	Nine Months Ended March 29, 2015
	Cumulative Translation Adjustments			Derivative Financial Instruments			Pension and Postretirement Benefit Plans			Total
Beginning Balance	$	13,053		$	(1,084	)	$	(207,226	)	$	(195,257	)
Other Comprehensive Income (Loss) Before Reclassification	(34,045		)	10,629			—			(23,416		)
Income Tax Benefit (Expense)	—			(4,039		)	—			(4,039		)
Net Other Comprehensive Income (Loss) Before Reclassifications	(34,045		)	6,590			—			(27,455		)
Reclassifications:										—
Realized (Gains) Losses - Foreign Currency Contracts (1)	—			(7,025		)	—			(7,025		)
Realized (Gains) Losses - Commodity Contracts (1)	—			841			—			841
Realized (Gains) Losses - Interest Rate Swaps (1)	—			931			—			931
Amortization of Prior Service Costs (Credits) (2)	—			—			(1,933		)	(1,933		)
Amortization of Actuarial Losses (2)	—			—			13,432			13,432
Total Reclassifications Before Tax	—			(5,253		)	11,499			6,246
Income Tax Expense (Benefit)	—			1,996			(4,370		)	(2,374		)
Net Reclassifications	—			(3,257		)	7,129			3,872
Other Comprehensive Income (Loss)	(34,045		)	3,333			7,129			(23,583		)
Ending Balance	$	(20,992	)	$	2,249		$	(200,097	)	$	(218,840	)



	Termination Benefits			Other Costs		Total
Reserve Balance at June 28, 2015	$	—		$	—	$	—
Provisions	1,354			—		1,354
Cash Expenditures	(750		)	—		(750		)
Other Adjustments	(182		)	—		(182		)
Reserve Balance at March 27, 2016	$	422		$	—	$	422



	Nine Months Ended Fiscal March
	2016 Reported			Adjustments⁽¹⁾		2016 Adjusted⁽²⁾			2015 Reported			Adjustments⁽¹⁾		2015 Adjusted⁽²⁾
Gross Profit:
Engines	$	188,783		$	464	$	189,247		$	189,580		$	—	$	189,580
Products	81,414			5,472		86,886			64,505			21,952		86,457
Inter-Segment Eliminations	(1,694		)	—		(1,694		)	183			—		183
Total	$	268,503		$	5,936	$	274,439		$	254,268		$	21,952	$	276,220

Engineering, Selling, General and Administrative Expenses:
Engines	$	138,273		$	2,825	$	135,448		$	133,612		$	—	$	133,612
Products	81,707			26		81,681			83,155			469		82,686
Total	$	219,980		$	2,851	$	217,129		$	216,767		$	469	$	216,298

Segment Income (Loss) (3):
Engines	$	52,195		$	4,179	$	56,374		$	59,967		$	—	$	59,967
Products	(6,767		)	13,689		6,922			(20,125		)	24,902		4,777
Inter-Segment Eliminations	(1,694		)	—		(1,694		)	183			—		183
Total	$	43,734		$	17,868	$	61,602		$	40,025		$	24,902	$	64,927

Reconciliation from Segment Income (Loss) to Income Before Income Taxes:
Equity in Earnings of Unconsolidated Affiliates	3,187			—		3,187			5,005			—		5,005
Income from Operations	$	40,547		$	17,868	$	58,415		$	35,020		$	24,902	$	59,922

Income Before Income Taxes	29,753			17,868		47,621			27,128			24,902		52,030
Provision for Income Taxes	8,541			4,199		12,740			1,542			8,716		10,258
Net Income	$	21,212		$	13,669	$	34,881		$	25,586		$	16,186	$	41,772

Earnings Per Share
Basic	$	0.48		$	0.31	$	0.79		$	0.56		$	0.35	$	0.91
Diluted	0.48			0.31		0.79			0.56			0.35		0.91



2016 Fiscal Month	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
December 28, 2015 to January 24, 2016	395,401	$	16.72	395,401	$	8,742,594
January 25, 2016 to February 21, 2016	101,709	18.50		101,709	6,860,978
February 22, 2016 to March 27, 2016	—	—		—	6,860,978
Total Third Quarter	497,110	$	17.08	497,110	$	6,860,978