UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended ~~April~~July 03, 2021


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

For the transition period from to

Commission file number 001-01043

____________

Brunswick Corporation

(Exact name of registrant as specified in its charter)


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

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

(Address of principal executive offices) (Zip code)

(847) 735-4700

(Registrant’s telephone number, including area code)

N/A

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

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

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

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


Large Accelerated Filer	☒	Accelerated Filer	☐

Non-accelerated Filer	☐	Smaller reporting company	☐

Emerging growth company	☐

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

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

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

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common stock, par value $0.75 per share

New York Stock Exchange

Chicago Stock Exchange

6.500% Senior Notes due 2048

BC-A

New York Stock Exchange

6.625% Senior Notes due 2049

BC-B

New York Stock Exchange

6.375% Senior Notes due 2049

BC-C

New York Stock Exchange

The number of shares of Common Stock ($0.75 par value) of the registrant outstanding as of ~~May 6,~~July 29, 2021 was ~~77,897,771~~77,499,307.

BRUNSWICK CORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

~~April~~July 3, 2021

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION		Page

Item 1.	Condensed Consolidated Financial Statements

	Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three months and six months ended ~~April~~July 3, 2021 and June 2 37 , ~~202~~1 ~~and March~~ ~~28,~~ 2020	4



	Condensed Consolidated Balance Sheets (unaudited) as of A ~~pril~~July 3,~~, 202~~1 , 2021, December 31, 202020 and 20June ~~and March~~ 2 ~~28,~~7 , 2020	5

	Condensed Consolidated Statements of Cash Flows (unaudited) for the ~~three~~s ix months ended ~~April~~July 3, 2021 and June ~~and March~~ 2 287 , 2020	7

	Condensed Consolidated Statements of Shareholders' Equity (unaudited) for the three months ~~ended~~ ~~April 3, 2021~~ and ~~March~~ six months 28 ended July 3, 2021 and June 2 7 , 2020	8

	Notes to Condensed Consolidated Financial Statements (unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2325

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3236

Item 4.	Controls and Procedures	3237


PART II – OTHER INFORMATION



Item 1A.	Risk Factors	3338

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3338

Item 5.	Other Information	3439

Item 6.	Exhibits	3539

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

BRUNSWICK CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(unaudited)


		Three Months Ended					Three Months Ended				Six Months Ended
(in millions, except per share data)	(in millions, except per share data)	April 3, 2021		March 28, 2020				(in millions, except per share data)	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Net sales	Net sales	$	1,433.2	$	965.5			Net sales	$	1,554.8	$	987.8	$	2,988.0	$	1,953.3
Cost of sales	Cost of sales	1,015.9		721.7				Cost of sales	1,093.3		731.8		2,109.2		1,453.5
Selling, general and administrative expense	Selling, general and administrative expense	150.8		111.3				Selling, general and administrative expense	173.6		119.2		324.4		230.5
Research and development expense	Research and development expense	34.1		28.9				Research and development expense	37.5		27.7		71.6		56.6
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	0.5		0.4				Restructuring, exit and impairment charges	0.2		2.1		0.7		2.5
Operating earnings	Operating earnings	231.9		103.2				Operating earnings	250.2		107.0		482.1		210.2
Equity earnings	Equity earnings	0.8		1.8				Equity earnings	0.4		1.1		1.2		2.9

Other (expense) income, net		(1.3)		0.7
Other expense, net								Other expense, net	(1.5)		(0.9)		(2.8)		(0.2)
Earnings before interest and income taxes	Earnings before interest and income taxes	231.4		105.7				Earnings before interest and income taxes	249.1		107.2		480.5		212.9
Interest expense	Interest expense	(14.8)		(16.9)				Interest expense	(15.4)		(18.7)		(30.2)		(35.6)
Interest income	Interest income	0.2		0.3				Interest income	0.9		0.3		1.1		0.6

Earnings before income taxes	Earnings before income taxes	216.8		89.1				Earnings before income taxes	234.6		88.8		451.4		177.9
Income tax provision	Income tax provision	47.4		18.4				Income tax provision	55.2		17.6		102.6		36.0
Net earnings from continuing operations	Net earnings from continuing operations	169.4		70.7				Net earnings from continuing operations	179.4		71.2		348.8		141.9

Discontinued operations:	Discontinued operations:							Discontinued operations:
Loss from discontinued operations, net of tax	Loss from discontinued operations, net of tax	(0.1)		(0.6)				Loss from discontinued operations, net of tax	(0.0)		(0.5)		(0.1)		(1.1)
Loss on disposal of discontinued operations, net of tax	Loss on disposal of discontinued operations, net of tax	0		(1.1)				Loss on disposal of discontinued operations, net of tax	0		0		0		(1.1)
Net loss from discontinued operations, net of tax	Net loss from discontinued operations, net of tax	(0.1)		(1.7)				Net loss from discontinued operations, net of tax	(0.0)		(0.5)		(0.1)		(2.2)
Net earnings	Net earnings	$	169.3	$	69.0			Net earnings	$	179.4	$	70.7	$	348.7	$	139.7

Earnings per common share:
Earnings (loss) per common share:								Earnings (loss) per common share:
Basic	Basic							Basic
Earnings from continuing operations	Earnings from continuing operations	$	2.17	$	0.88			Earnings from continuing operations	$	2.30	$	0.89	$	4.47	$	1.78
Loss from discontinued operations	Loss from discontinued operations	(0.00)		(0.02)				Loss from discontinued operations	(0.00)		(0.00)		(0.00)		(0.03)
Net earnings	Net earnings	$	2.17	$	0.86			Net earnings	$	2.30	$	0.89	$	4.47	$	1.75

Diluted	Diluted							Diluted
Earnings from continuing operations	Earnings from continuing operations	$	2.15	$	0.88			Earnings from continuing operations	$	2.29	$	0.89	$	4.44	$	1.77
Loss from discontinued operations	Loss from discontinued operations	(0.00)		(0.02)				Loss from discontinued operations	(0.00)		(0.00)		(0.00)		(0.02)
Net earnings	Net earnings	$	2.15	$	0.86			Net earnings	$	2.29	$	0.89	$	4.44	$	1.75

Weighted average shares used for computation of:	Weighted average shares used for computation of:							Weighted average shares used for computation of:
Basic earnings per common share	Basic earnings per common share	78.2		80.0				Basic earnings per common share	78.0		79.6		78.0		79.8
Diluted earnings per common share	Diluted earnings per common share	78.8		80.3				Diluted earnings per common share	78.5		79.8		78.6		80.0

Comprehensive income	Comprehensive income	$	174.9	$	61.1			Comprehensive income	$	184.0	$	71.4	$	358.9	$	132.5

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

Table of Contents

BRUNSWICK CORPORATION

Condensed Consolidated Balance Sheets

(unaudited)


(in millions)	(in millions)	April 3, 2021		December 31, 2020		March 28, 2020		(in millions)	July 3, 2021		December 31, 2020		June 27, 2020
Assets	Assets							Assets
Current assets	Current assets							Current assets
Cash and cash equivalents, at cost, which approximates fair value	Cash and cash equivalents, at cost, which approximates fair value	$	471.9	$	519.6	$	502.9	Cash and cash equivalents, at cost, which approximates fair value	$	590.2	$	519.6	$	541.5
Restricted cash	Restricted cash	9.7		10.7		11.6		Restricted cash	9.7		10.7		11.6
Short-term investments in marketable securities	Short-term investments in marketable securities	7.3		56.7		0.8		Short-term investments in marketable securities	0.8		56.7		0.8
Total cash and short-term investments in marketable securities	Total cash and short-term investments in marketable securities	488.9		587.0		515.3		Total cash and short-term investments in marketable securities	600.7		587.0		553.9
Accounts and notes receivable, less allowances of $9.8, $10.7, $12.0		539.1		337.6		465.4
Accounts and notes receivable, less allowances of $10.3, $10.7, $12.1								Accounts and notes receivable, less allowances of $10.3, $10.7, $12.1	503.3		337.6		452.6
Inventories	Inventories							Inventories
Finished goods	Finished goods	463.7		446.8		549.3		Finished goods	468.6		446.8		411.5
Work-in-process	Work-in-process	125.4		94.0		108.3		Work-in-process	147.6		94.0		99.3
Raw materials	Raw materials	176.5		171.0		182.5		Raw materials	218.9		171.0		166.1
Net inventories	Net inventories	765.6		711.8		840.1		Net inventories	835.1		711.8		676.9
Prepaid expenses and other	Prepaid expenses and other	42.1		34.1		49.0		Prepaid expenses and other	48.9		34.1		30.7

Current assets	Current assets	1,835.7		1,670.5		1,869.8		Current assets	1,988.0		1,670.5		1,714.1

Property	Property							Property
Land	Land	17.6		17.7		17.8		Land	17.6		17.7		17.8
Buildings and improvements	Buildings and improvements	440.3		435.5		419.7		Buildings and improvements	446.8		435.5		423.0
Equipment	Equipment	1,198.2		1,184.9		1,107.3		Equipment	1,244.4		1,184.9		1,124.5

Total land, buildings and improvements and equipment	Total land, buildings and improvements and equipment	1,656.1		1,638.1		1,544.8		Total land, buildings and improvements and equipment	1,708.8		1,638.1		1,565.3
Accumulated depreciation	Accumulated depreciation	(944.9)		(929.8)		(877.3)		Accumulated depreciation	(964.5)		(929.8)		(895.4)
Net land, buildings and improvements and equipment	Net land, buildings and improvements and equipment	711.2		708.3		667.5		Net land, buildings and improvements and equipment	744.3		708.3		669.9
Unamortized product tooling costs	Unamortized product tooling costs	161.2		155.3		143.1		Unamortized product tooling costs	167.7		155.3		145.5
Net property	Net property	872.4		863.6		810.6		Net property	912.0		863.6		815.4

Other assets	Other assets							Other assets
Goodwill	Goodwill	422.7		417.7		414.0		Goodwill	434.3		417.7		415.4
Other intangibles, net	Other intangibles, net	544.3		552.3		575.0		Other intangibles, net	536.3		552.3		567.1
Deferred income tax asset	Deferred income tax asset	126.4		136.6		109.7		Deferred income tax asset	117.2		136.6		102.9
Operating lease assets	Operating lease assets	80.7		83.0		82.3		Operating lease assets	85.9		83.0		81.9
Equity investments	Equity investments	36.3		32.5		31.3		Equity investments	41.4		32.5		29.4
Other long-term assets	Other long-term assets	24.7		14.4		11.9		Other long-term assets	23.4		14.4		12.9

Other assets	Other assets	1,235.1		1,236.5		1,224.2		Other assets	1,238.5		1,236.5		1,209.6

Total assets	Total assets	$	3,943.2	$	3,770.6	$	3,904.6	Total assets	$	4,138.5	$	3,770.6	$	3,739.1

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

Table of Contents


BRUNSWICK CORPORATION Condensed Consolidated Balance Sheets (unaudited)								BRUNSWICK CORPORATION Condensed Consolidated Balance Sheets (unaudited)
(in millions)	(in millions)	April 3, 2021		December 31, 2020		March 28, 2020		(in millions)	July 3, 2021		December 31, 2020		June 27, 2020
Liabilities and shareholders' equity	Liabilities and shareholders' equity							Liabilities and shareholders' equity
Current liabilities	Current liabilities							Current liabilities
Short-term debt and current maturities of long-term debt	Short-term debt and current maturities of long-term debt	$	43.8	$	43.1	$	425.7	Short-term debt and current maturities of long-term debt	$	43.5	$	43.1	$	225.3
Accounts payable	Accounts payable	532.4		457.6		366.8		Accounts payable	588.2		457.6		328.3
Accrued expenses	Accrued expenses	552.8		578.5		493.7		Accrued expenses	619.6		578.5		501.0

Current liabilities	Current liabilities	1,129.0		1,079.2		1,286.2		Current liabilities	1,251.3		1,079.2		1,054.6

Long-term liabilities	Long-term liabilities							Long-term liabilities
Debt	Debt	900.9		908.3		1,069.0		Debt	832.0		908.3		1,060.4
Postretirement benefits	Postretirement benefits	72.3		74.7		72.1		Postretirement benefits	71.9		74.7		71.8
Operating lease liabilities	Operating lease liabilities	64.9		69.8		69.6		Operating lease liabilities	69.5		69.8		69.0
Other	Other	133.5		128.6		104.0		Other	144.3		128.6		118.9

Long-term liabilities	Long-term liabilities	1,171.6		1,181.4		1,314.7		Long-term liabilities	1,117.7		1,181.4		1,320.1

Shareholders' equity	Shareholders' equity							Shareholders' equity
Common stock; authorized: 200,000,000 shares, $0.75 par value; issued: 102,538,000 shares; outstanding: 77,941,000, 77,875,000 and 79,114,000 shares		76.9		76.9		76.9
Common stock; authorized: 200,000,000 shares, $0.75 par value; issued: 102,538,000 shares; outstanding: 77,554,000, 77,875,000 and 79,135,000 shares								Common stock; authorized: 200,000,000 shares, $0.75 par value; issued: 102,538,000 shares; outstanding: 77,554,000, 77,875,000 and 79,135,000 shares	76.9		76.9		76.9
Additional paid-in capital	Additional paid-in capital	371.2		383.8		358.8		Additional paid-in capital	380.1		383.8		366.5
Retained earnings	Retained earnings	2,374.0		2,225.7		1,981.1		Retained earnings	2,527.2		2,225.7		2,032.8
Treasury stock, at cost: 24,597,000, 24,663,000 and 23,424,000 shares		(1,142.4)		(1,133.7)		(1,051.8)
Treasury stock, at cost: 24,984,000, 24,663,000 and 23,403,000 shares								Treasury stock, at cost: 24,984,000, 24,663,000 and 23,403,000 shares	(1,182.2)		(1,133.7)		(1,051.2)

Accumulated other comprehensive loss	Accumulated other comprehensive loss	(37.1)		(42.7)		(61.3)		Accumulated other comprehensive loss	(32.5)		(42.7)		(60.6)
Shareholders' equity	Shareholders' equity	1,642.6		1,510.0		1,303.7		Shareholders' equity	1,769.5		1,510.0		1,364.4

Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	3,943.2	$	3,770.6	$	3,904.6	Total liabilities and shareholders' equity	$	4,138.5	$	3,770.6	$	3,739.1

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

Table of Contents

BRUNSWICK CORPORATION

Condensed Consolidated Statements of Cash Flows

(unaudited)


		Three Months Ended					Six Months Ended
(in millions)	(in millions)	April 3, 2021		March 28, 2020		(in millions)	July 3, 2021		June 27, 2020
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net earnings	Net earnings	$	169.3	$	69.0	Net earnings	$	348.7	$	139.7
Less: net loss from discontinued operations, net of tax	Less: net loss from discontinued operations, net of tax	(0.1)		(1.7)		Less: net loss from discontinued operations, net of tax	(0.1)		(2.2)
Net earnings from continuing operations, net of tax	Net earnings from continuing operations, net of tax	169.4		70.7		Net earnings from continuing operations, net of tax	348.8		141.9
Stock compensation expense	Stock compensation expense	6.1		(0.1)		Stock compensation expense	14.8		8.8
Depreciation and amortization	Depreciation and amortization	41.6		35.2		Depreciation and amortization	84.6		72.2
Pension funding, net of expense	Pension funding, net of expense	(0.8)		(0.6)		Pension funding, net of expense	(1.3)		(2.5)

Asset impairment charges						Asset impairment charges	0.8		0

Deferred income taxes	Deferred income taxes	7.9		10.6		Deferred income taxes	12.3		15.6

Changes in certain current assets and current liabilities	Changes in certain current assets and current liabilities	(236.2)		(196.9)		Changes in certain current assets and current liabilities	(136.5)		(38.6)
Long-term extended warranty contracts and other deferred revenue	Long-term extended warranty contracts and other deferred revenue	2.4		1.0		Long-term extended warranty contracts and other deferred revenue	9.0		6.1

Income taxes	Income taxes	29.6		(2.5)		Income taxes	10.0		7.0
Other, net	Other, net	(2.7)		(1.3)		Other, net	8.0		5.2
Net cash provided by (used for) operating activities of continuing operations		17.3		(83.9)
Net cash provided by operating activities of continuing operations						Net cash provided by operating activities of continuing operations	350.5		215.7
Net cash (used for) provided by operating activities of discontinued operations	Net cash (used for) provided by operating activities of discontinued operations	(9.0)		4.8		Net cash (used for) provided by operating activities of discontinued operations	(9.1)		0.9
Net cash provided by (used for) operating activities		8.3		(79.1)
Net cash provided by operating activities						Net cash provided by operating activities	341.4		216.6

Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Capital expenditures	Capital expenditures	(42.9)		(55.9)		Capital expenditures	(110.3)		(90.7)

Sales or maturities of marketable securities	Sales or maturities of marketable securities	49.4		0		Sales or maturities of marketable securities	55.9		0
Investments	Investments	(3.9)		(3.6)		Investments	(9.1)		(1.1)
Acquisition of businesses, net of cash acquired	Acquisition of businesses, net of cash acquired	(5.3)		0		Acquisition of businesses, net of cash acquired	(16.7)		0
Proceeds from the sale of property, plant and equipment	Proceeds from the sale of property, plant and equipment	4.2		0.4		Proceeds from the sale of property, plant and equipment	4.6		1.6

Net cash provided by (used for) investing activities		1.5		(59.1)
Net cash used for investing activities						Net cash used for investing activities	(75.6)		(90.2)

Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Proceeds from issuances of short-term debt	Proceeds from issuances of short-term debt	0		610.0		Proceeds from issuances of short-term debt	0		610.0
Payments of short-term debt	Payments of short-term debt	0		(225.0)		Payments of short-term debt	0		(425.0)
Net proceeds from issuances of long-term debt	Net proceeds from issuances of long-term debt	1.9		0		Net proceeds from issuances of long-term debt	1.9		0
Payments of long-term debt including current maturities	Payments of long-term debt including current maturities	(9.2)		(0.3)		Payments of long-term debt including current maturities	(78.5)		(9.4)

Common stock repurchases	Common stock repurchases	(15.9)		(34.1)		Common stock repurchases	(55.9)		(34.1)
Cash dividends paid	Cash dividends paid	(21.0)		(19.2)		Cash dividends paid	(47.2)		(38.2)
Proceeds from share-based compensation activity	Proceeds from share-based compensation activity	0.5		0.4		Proceeds from share-based compensation activity	0.5		0.6
Tax withholding associated with shares issued for share-based compensation	Tax withholding associated with shares issued for share-based compensation	(12.7)		(6.5)		Tax withholding associated with shares issued for share-based compensation	(12.8)		(6.7)
Other, net	Other, net	(0.1)		(0.1)		Other, net	(3.7)		0

Net cash (used for) provided by financing activities	Net cash (used for) provided by financing activities	(56.5)		325.2		Net cash (used for) provided by financing activities	(195.7)		97.2

Effect of exchange rate changes	Effect of exchange rate changes	(2.0)		(4.4)		Effect of exchange rate changes	(0.5)		(2.4)
Net (decrease) increase in Cash and cash equivalents and Restricted cash		(48.7)		182.6
Net increase in Cash and cash equivalents and Restricted cash						Net increase in Cash and cash equivalents and Restricted cash	69.6		221.2
Cash and cash equivalents and Restricted cash at beginning of period	Cash and cash equivalents and Restricted cash at beginning of period	530.3		331.9		Cash and cash equivalents and Restricted cash at beginning of period	530.3		331.9

Cash and cash equivalents and Restricted cash at end of period	Cash and cash equivalents and Restricted cash at end of period	481.6		514.5		Cash and cash equivalents and Restricted cash at end of period	599.9		553.1
Less: Restricted cash	Less: Restricted cash	9.7		11.6		Less: Restricted cash	9.7		11.6
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	471.9	$	502.9	Cash and cash equivalents at end of period	$	590.2	$	541.5

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

Table of Contents

Brunswick Corporation

Condensed Consolidated Statements of Shareholders' Equity

(unaudited)


(in millions, except per share data)	(in millions, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total		(in millions, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2020	Balance at December 31, 2020	$	76.9	$	383.8	$	2,225.7	$	(1,133.7)	$	(42.7)	$	1,510.0	Balance at December 31, 2020	$	76.9	$	383.8	$	2,225.7	$	(1,133.7)	$	(42.7)	$	1,510.0
Net earnings	Net earnings	0		0		169.3		0		0		169.3		Net earnings	0		0		169.3		0		0		169.3
Other comprehensive income	Other comprehensive income	0		0		0		0		5.6		5.6		Other comprehensive income	0		0		0		0		5.6		5.6
Dividends ($0.27 per common share)	Dividends ($0.27 per common share)	0		0		(21.0)		0		0		(21.0)		Dividends ($0.27 per common share)	0		0		(21.0)		0		0		(21.0)
Compensation plans and other	Compensation plans and other	0		(12.6)		0		7.2		0		(5.4)		Compensation plans and other	0		(12.6)		0		7.2		0		(5.4)
Common stock repurchases	Common stock repurchases	0		0		0		(15.9)		0		(15.9)		Common stock repurchases	0		0		0		(15.9)		0		(15.9)

Balance at April 3, 2021	Balance at April 3, 2021	$	76.9	$	371.2	$	2,374.0	$	(1,142.4)	$	(37.1)	$	1,642.6	Balance at April 3, 2021	76.9		371.2		2,374.0		(1,142.4)		(37.1)		1,642.6
Net earnings														Net earnings	0		0		179.4		0		0		179.4
Other comprehensive income														Other comprehensive income	0		0		0		0		4.6		4.6
Dividends ($0.335 per common share)														Dividends ($0.335 per common share)	0		0		(26.2)		0		0		(26.2)
Compensation plans and other														Compensation plans and other	0		8.9		0		0.2		0		9.1
Common stock repurchases														Common stock repurchases	0		0		0		(40.0)		0		(40.0)

Balance at July 3, 2021														Balance at July 3, 2021	$	76.9	$	380.1	$	2,527.2	$	(1,182.2)	$	(32.5)	$	1,769.5


(in millions, except per share data)	(in millions, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total		(in millions, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2019	Balance at December 31, 2019	$	76.9	$	369.2	$	1,931.3	$	(1,023.1)	$	(53.4)	$	1,300.9	Balance at December 31, 2019	$	76.9	$	369.2	$	1,931.3	$	(1,023.1)	$	(53.4)	$	1,300.9
Net earnings	Net earnings	0		0		69.0		0		0		69.0		Net earnings	0		0		69.0		0		0		69.0
Other comprehensive loss	Other comprehensive loss	0		0		0		0		(7.9)		(7.9)		Other comprehensive loss	0		0		0		0		(7.9)		(7.9)
Dividends ($0.24 per common share)	Dividends ($0.24 per common share)	0		0		(19.2)		0		0		(19.2)		Dividends ($0.24 per common share)	0		0		(19.2)		0		0		(19.2)
Compensation plans and other	Compensation plans and other	0		(10.4)		0		5.4		0		(5.0)		Compensation plans and other	0		(10.4)		0		5.4		0		(5.0)
Common stock repurchases	Common stock repurchases	0		0		0		(34.1)		0		(34.1)		Common stock repurchases	0		0		0		(34.1)		0		(34.1)

Balance at March 28, 2020	Balance at March 28, 2020	$	76.9	$	358.8	$	1,981.1	$	(1,051.8)	$	(61.3)	$	1,303.7	Balance at March 28, 2020	76.9		358.8		1,981.1		(1,051.8)		(61.3)		1,303.7
Net earnings														Net earnings	0		0		70.7		0		0		70.7
Other comprehensive income														Other comprehensive income	0		0		0		0		0.7		0.7
Dividends ($0.24 per common share)														Dividends ($0.24 per common share)	0		0		(19.0)		0		0		(19.0)
Compensation plans and other														Compensation plans and other	0		7.7		0		0.6		0		8.3

Balance at June 27, 2020														Balance at June 27, 2020	$	76.9	$	366.5	$	2,032.8	$	(1,051.2)	$	(60.6)	$	1,364.4

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

Table of Contents

BRUNSWICK CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1 – Significant Accounting Policies

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

These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included in Brunswick's 2020 Annual Report on Form 10-K for the year ended December 31, 2020 (the 2020 Form 10-K). These results include, in management's opinion, all normal and recurring adjustments necessary to present fairly Brunswick's financial position, results of operations and cash flows. Due to the seasonality of Brunswick's businesses, the interim results are not necessarily indicative of the results that may be expected for the remainder of the year.

The Company maintains its financial records on the basis of a fiscal year ending on December 31, with the fiscal quarters spanning approximately thirteen weeks. The first quarter ends on the Saturday closest to the end of the first thirteen-week period. The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The ~~first~~second quarter of fiscal year 2021 ended on ~~April~~July 3, 2021 and the ~~first~~second quarter of fiscal year 2020 ended on ~~March 28,~~June 27, 2020.

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

Note 2 – Revenue Recognition

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


		Three Months Ended									Three Months Ended
		April 3, 2021									July 3, 2021								June 27, 2020
(in millions)	(in millions)	Propulsion		Parts & Accessories		Boat		Total		(in millions)	Propulsion		Parts & Accessories		Boat		Total		Propulsion		Parts & Accessories		Boat		Total
Geographic Markets	Geographic Markets									Geographic Markets
United States	United States	$	421.3	$	312.3	$	312.6	$	1,046.2	United States	$	404.4	$	391.7	$	314.1	$	1,110.2	$	224.9	$	293.8	$	183.2	$	701.9
Europe	Europe	109.0		63.5		41.6		214.1		Europe	119.7		69.9		52.5		242.1		69.8		41.9		35.3		147.0
Asia-Pacific	Asia-Pacific	65.7		42.5		6.7		114.9		Asia-Pacific	66.6		39.9		7.3		113.8		66.5		24.6		3.2		94.3
Canada	Canada	25.2		25.4		48.4		99.0		Canada	24.1		34.2		66.8		125.1		13.4		19.5		23.7		56.6
Rest-of-World	Rest-of-World	36.6		15.9		10.2		62.7		Rest-of-World	34.7		13.2		8.4		56.3		20.8		6.7		4.5		32.0
Segment Eliminations	Segment Eliminations	(94.9)		(8.8)		0		(103.7)		Segment Eliminations	(85.6)		(7.1)		0		(92.7)		(39.8)		(4.2)		0		(44.0)
Total	Total	$	562.9	$	450.8	$	419.5	$	1,433.2	Total	$	563.9	$	541.8	$	449.1	$	1,554.8	$	355.6	$	382.3	$	249.9	$	987.8

		Three Months Ended									Six Months Ended
		March 28, 2020									July 3, 2021								June 27, 2020
		Propulsion		Parts & Accessories		Boat		Total
(in millions)										(in millions)	Propulsion		Parts & Accessories		Boat		Total		Propulsion		Parts & Accessories		Boat		Total
Geographic Markets	Geographic Markets									Geographic Markets
United States	United States	$	290.9	$	210.9	$	215.5	$	717.3	United States	$	825.7	$	704.0	$	626.7	$	2,156.4	$	515.8	$	504.7	$	398.7	$	1,419.2
Europe	Europe	69.6		42.8		35.1		147.5		Europe	228.7		133.4		94.1		456.2		139.4		84.7		70.4		294.5
Asia-Pacific	Asia-Pacific	49.3		24.7		5.6		79.6		Asia-Pacific	132.3		82.4		14.0		228.7		115.8		49.3		8.8		173.9
Canada	Canada	14.1		13.7		31.8		59.6		Canada	49.3		59.6		115.2		224.1		27.5		33.2		55.5		116.2
Rest-of-World	Rest-of-World	24.7		9.5		3.5		37.7		Rest-of-World	71.3		29.1		18.6		119.0		45.5		16.2		8.0		69.7
Segment Eliminations	Segment Eliminations	(69.1)		(7.1)		0		(76.2)		Segment Eliminations	(180.5)		(15.9)		0		(196.4)		(108.9)		(11.3)		0		(120.2)
Total	Total	$	379.5	$	294.5	$	291.5	$	965.5	Total	$	1,126.8	$	992.6	$	868.6	$	2,988.0	$	735.1	$	676.8	$	541.4	$	1,953.3

Table of Contents

Notes to Condensed Consolidated Financial Statements

(unaudited)


		Three Months Ended									Three Months Ended
		April 3, 2021									July 3, 2021								June 27, 2020
(in millions)	(in millions)	Propulsion		Parts & Accessories		Boat		Total		(in millions)	Propulsion		Parts & Accessories		Boat		Total		Propulsion		Parts & Accessories		Boat		Total
Major Product Lines	Major Product Lines									Major Product Lines
Outboard Engines	Outboard Engines	$	504.5	$	0	$	0	$	504.5	Outboard Engines	$	494.2	$	0	$	0	$	494.2	$	314.3	$	0	$	0	$	314.3
Controls, Rigging, and Propellers	Controls, Rigging, and Propellers	94.9		0		0		94.9		Controls, Rigging, and Propellers	96.1		0		0		96.1		53.2		0		0		53.2
Sterndrive Engines	Sterndrive Engines	58.4		0		0		58.4		Sterndrive Engines	59.2		0		0		59.2		27.9		0		0		27.9
Distribution Parts and Accessories	Distribution Parts and Accessories	0		200.6		0		200.6		Distribution Parts and Accessories	0		255.2		0		255.2		0		190.7		0		190.7
Advanced Systems Group	Advanced Systems Group	0		134.8		0		134.8		Advanced Systems Group	0		138.3		0		138.3		0		86.8		0		86.8
Engine Parts and Accessories	Engine Parts and Accessories	0		124.2		0		124.2		Engine Parts and Accessories	0		155.4		0		155.4		0		109.0		0		109.0
Aluminum Freshwater Boats	Aluminum Freshwater Boats	0		0		177.8		177.8		Aluminum Freshwater Boats	0		0		190.1		190.1		0		0		94.2		94.2
Recreational Fiberglass Boats	Recreational Fiberglass Boats	0		0		135.4		135.4		Recreational Fiberglass Boats	0		0		154.2		154.2		0		0		89.6		89.6
Saltwater Fishing Boats	Saltwater Fishing Boats	0		0		96.8		96.8		Saltwater Fishing Boats	0		0		93.0		93.0		0		0		59.0		59.0
Business Acceleration	Business Acceleration	0		0		12.7		12.7		Business Acceleration	0		0		15.3		15.3		0		0		8.3		8.3
Boat Eliminations/Other	Boat Eliminations/Other	0		0		(3.2)		(3.2)		Boat Eliminations/Other	0		0		(3.5)		(3.5)		0		0		(1.2)		(1.2)
Segment Eliminations	Segment Eliminations	(94.9)		(8.8)		0		(103.7)		Segment Eliminations	(85.6)		(7.1)		0		(92.7)		(39.8)		(4.2)		0		(44.0)
Total	Total	$	562.9	$	450.8	$	419.5	$	1,433.2	Total	$	563.9	$	541.8	$	449.1	$	1,554.8	$	355.6	$	382.3	$	249.9	$	987.8

		Three Months Ended									Six Months Ended
		March 28, 2020									July 3, 2021								June 27, 2020
		Propulsion		Parts & Accessories		Boat		Total
(in millions)										(in millions)	Propulsion		Parts & Accessories		Boat		Total		Propulsion		Parts & Accessories		Boat		Total
Major Product Lines	Major Product Lines									Major Product Lines
Outboard Engines	Outboard Engines	$	353.8	$	0	$	0	$	353.8	Outboard Engines	$	998.7	$	0	$	0	$	998.7	$	668.1	$	0	$	0	$	668.1
Controls, Rigging, and Propellers	Controls, Rigging, and Propellers	57.5		0		0		57.5		Controls, Rigging, and Propellers	191.0		0		0		191.0		110.7		0		0		110.7
Sterndrive Engines	Sterndrive Engines	37.3		0		0		37.3		Sterndrive Engines	117.6		0		0		117.6		65.2		0		0		65.2
Distribution Parts and Accessories	Distribution Parts and Accessories	0		121.3		0		121.3		Distribution Parts and Accessories	0		455.8		0		455.8		0		312.0		0		312.0
Advanced Systems Group	Advanced Systems Group	0		103.1		0		103.1		Advanced Systems Group	0		273.1		0		273.1		0		189.9		0		189.9
Engine Parts and Accessories	Engine Parts and Accessories	0		77.2		0		77.2		Engine Parts and Accessories	0		279.6		0		279.6		0		186.2		0		186.2
Aluminum Freshwater Boats	Aluminum Freshwater Boats	0		0		120.5		120.5		Aluminum Freshwater Boats	0		0		367.9		367.9		0		0		214.7		214.7
Recreational Fiberglass Boats	Recreational Fiberglass Boats	0		0		101.8		101.8		Recreational Fiberglass Boats	0		0		289.6		289.6		0		0		191.4		191.4
Saltwater Fishing Boats	Saltwater Fishing Boats	0		0		59.8		59.8		Saltwater Fishing Boats	0		0		189.8		189.8		0		0		118.8		118.8
Business Acceleration	Business Acceleration	0		0		10.0		10.0		Business Acceleration	0		0		28.0		28.0		0		0		18.3		18.3
Boat Eliminations/Other	Boat Eliminations/Other	0		0		(0.6)		(0.6)		Boat Eliminations/Other	0		0		(6.7)		(6.7)		0		0		(1.8)		(1.8)
Segment Eliminations	Segment Eliminations	(69.1)		(7.1)		0		(76.2)		Segment Eliminations	(180.5)		(15.9)		0		(196.4)		(108.9)		(11.3)		0		(120.2)
Total	Total	$	379.5	$	294.5	$	291.5	$	965.5	Total	$	1,126.8	$	992.6	$	868.6	$	2,988.0	$	735.1	$	676.8	$	541.4	$	1,953.3

As of December 31, 2020, $113.0 million of contract liabilities associated with extended warranties and customer deposits were reported in Accrued expenses and Other Long-term liabilities, of which ~~$11.6~~$9.5 million ~~was~~and $21.1 million were recognized as revenue during the three and six months ended ~~April~~July 3, ~~2021.~~2021, respectively. As of ~~April~~July 3, 2021, total contract liabilities were ~~$121.0~~$130.5 million. The total amount of the transaction price allocated to unsatisfied performance obligations as of ~~April~~July 3, 2021 was ~~$112.3~~$122.0 million for contracts greater than one year, which primarily relates to extended warranties. The Company expects to recognize ~~$24.9~~$22.4 million of this amount in the second half of 2021, ~~$25.9~~$29.9 million in 2022, and ~~$61.5~~$69.7 million thereafter.

109

Table of Contents

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 3 – Discontinued Operations

On June 27, 2019, the Company completed the sale of its Fitness business to KPS Capital Partners, LP. As a result, this business, which was previously reported in the Company's Fitness segment, is being reported as discontinued operations in the Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows for all periods presented. Refer to Note 3 in the 2020 Form 10-K for further information.

In connection with the sale of its Fitness business, the Company retained assets of $26.4 million primarily related to VAT receivables, and retained liabilities of ~~$45.1~~$45.1 million primarily related to VAT payables, product warranty liabilities and certain employee benefits. As of ~~April~~July 3, 2021, retained assets and ~~liabilities~~liabilities were $4.1 million and $2.2 million, ~~respectively.~~respectively. As of ~~March 28,~~June 27, 2020, retained assets and liabilities were ~~$11.1~~$10.8 million and ~~$30.4~~$28.5 million, respectively.

Note 4 – Restructuring, Exit and Impairment Activities

The Company recorded restructuring, exit and impairment charges in the Condensed Consolidated Statements of Comprehensive Income in 2021 and 2020.

The following table is a summary of those expenses for the three months ended ~~April~~July 3, 2021 and ~~March 28,~~June 27, 2020:

April 3, 2021 March 28, 2020
(in millions) Parts & Accessories Boat Corporate Total Parts & Accessories Boat Corporate Total
Restructuring and exit activities:
Employee termination and other benefits $ 0.5 $ (0.0) $ 0 $ 0.5 $ 0.3 $ (0.0) $ 0.1 $ 0.4
Other 0 0.0 0 0 0 0 0 0
Total restructuring, exit and impairment charges $ 0.5 $ (0.0) $ 0 $ 0.5 $ 0.3 $ (0.0) $ 0.1 $ 0.4
Total cash payments for restructuring, exit and impairment charges (A)
$ 0.3 $ 0.2 $ 1.6 $ 2.1 $ 0.6 $ 2.2 $ 1.0 $ 3.8
Accrued charges at end of the period (B)
$ 0.5 $ 1.0 $ 0.1 $ 1.6 $ 1.0 $ 3.8 $ 0.6 $ 5.4


	July 3, 2021						June 27, 2020
(in millions)	Parts & Accessories		Boat		Corporate		Total		Parts & Accessories		Boat		Corporate		Total
Restructuring and exit activities:
Employee termination and other benefits	$	0.2	$	0	$	0	$	0.2	$	0.0	$	0.2	$	1.7	$	1.9
Asset-related	0		0		0		0		0		0.1		0		0.1


Other	0		0		0		0		0		0		0.1		0.1

















Total restructuring, exit and impairment charges	$	0.2	$	0	$	0	$	0.2	$	0.0	$	0.3	$	1.8	$	2.1

Total cash payments for restructuring, exit and impairment charges (A)	$	0.3	$	0.3	$	0.1	$	0.7	$	0.4	$	1.6	$	0.3	$	2.3
Accrued charges at end of the period (B)	$	0.4	$	0.7	$	0	$	1.1	$	0.6	$	2.5	$	2.1	$	5.2

(A) Cash payments for the three months ended ~~April~~July 3, 2021 and ~~March 28,~~June 27, 2020 may include payments related to prior period charges.

(B) Restructuring, exit and impairment charges accrued as of ~~April~~July 3, 2021 are expected to be paid primarily during 2021.

The following table is a summary of those expenses for the six months ended July 3, 2021 and June 27, 2020:


	July 3, 2021						June 27, 2020
(in millions)	Parts & Accessories		Boat		Corporate		Total		Parts & Accessories		Boat		Corporate		Total
Restructuring and exit activities:
Employee termination and other benefits	$	0.7	$	(0.0)	$	0	$	0.7	$	0.3	$	0.2	$	1.8	$	2.3
Asset-related	0		0		0		0		0		0.1		0		0.1

















Other	0		0.0		0		0		0		0		0.1		0.1
Total restructuring, exit and impairment charges	$	0.7	$	(0.0)	$	0	$	0.7	$	0.3	$	0.3	$	1.9	$	2.5

Total cash payments for restructuring, exit and impairment charges (A)	$	0.6	$	0.5	$	1.7	$	2.8	$	1.0	$	3.8	$	1.3	$	6.1
Accrued charges at end of the period (B)	$	0.4	$	0.7	$	0	$	1.1	$	0.6	$	2.5	$	2.1	$	5.2

(A) Cash payments for the six months ended July 3, 2021 and June 27, 2020 may include payments related to prior period charges.

(B) Restructuring, exit and impairment charges accrued as of July 3, 2021 are expected to be paid primarily during 2021.

Table of Contents

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 5 – Acquisitions

2021 Acquisitions

On June 23, 2021, the Company entered into a definitive agreement to acquire all of the issued and outstanding shares of Marine Innovations Group AS, known as "Navico," for $1.05 billion. The Company intends to use a combination of debt and cash to fund the acquisition, which is expected to close during the second half of 2021 subject to usual and customary closing conditions as well as regulatory review and approval. Navico is a privately held global company based in Egersund, Norway, and is a global leader in marine electronics and sensors, including multi-function displays, fish finders, autopilots, sonar, radar, and cartography.

Note ~~5 –Financial~~6 – Financial Instruments

The Company operates globally with manufacturing and sales facilities around the world. Due to the ~~Company’s~~Company's global operations, the Company engages in activities involving both financial and market risks. The Company utilizes normal operating and financing activities, along with derivative financial instruments, to minimize these risks. See Note 14 in the Notes to Consolidated Financial Statements in the 2020 Form 10-K for further details regarding the Company's financial instruments and hedging policies.

Cross-Currency Swaps. During the second quarter of 2021, the Company entered into cross-currency swaps to hedge Euro currency exposures of the net investment in certain foreign subsidiaries. As of July 3, 2021, the notional value of cross-currency swap contracts outstanding was $200.0 million. The cross-currency swaps were designated as net investment hedges, with the amount of gain or loss associated with the change in fair value of these instruments included in Accumulated other comprehensive loss and recognized upon termination of the respective investment.

Commodity Price. The Company uses commodity swaps to hedge anticipated purchases of aluminum. As of ~~April~~July 3, 2021, December 31, 2020 and ~~March 28,~~June 27, 2020, the notional value of commodity swap contracts outstanding were $~~14.0~~11.2 million, $10.0 million and ~~$1.2~~$1.0 million, respectively, and the contracts mature through ~~2022.~~2022. The amount of gain or loss associated with the change in fair value of these instruments is deferred in Accumulated other comprehensive loss and recognized in Cost of sales in the same period or periods during which the hedged transaction affects earnings. As of ~~April~~July 3, 2021, the Company estimates that during the next 12 months it will reclassify approximately ~~$2.5~~$3.6 million in net gains (based on current prices) from Accumulated other comprehensive loss to Cost of sales.

Foreign Currency Derivatives. Forward exchange contracts outstanding at ~~April~~July 3, 2021, December 31, 2020 and ~~March 28,~~June 27, 2020 had notional contract values of $~~493.9~~481.1 million, $395.9 million and ~~$281.1~~$270.6 million, respectively. There were no option contracts outstanding at either ~~April~~July 3, 2021 or December 31, 2020. Option contracts outstanding at ~~March 28,~~June 27, 2020 had

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

a notional contract value of $17.8 million. The forward contracts outstanding at ~~April~~July 3, 2021 mature through 2022 and mainly relate to the Euro, Australian dollar, Japanese yen, and Canadian dollar. As of ~~April~~July 3, 2021, the Company estimates that during the next 12 months, it will reclassify approximately ~~$4.6~~$4.5 million of net losses (based on current rates) from Accumulated other comprehensive loss to Cost of sales.

Interest Rate Derivatives. The Company previously entered into fixed-to-floating interest rate swaps to convert a portion of its long-term debt from fixed to floating rate debt. In the second half of 2019, the Company settled its fixed-to-floating interest rate swaps, resulting in a net deferred gain of ~~$2.5~~$2.5 million included within Debt. The Company will reclassify ~~$0.7~~$0.7 million of net deferred gains from Debt to Interest expense during the next 12 months. There ~~are~~were no outstanding fixed-to-floating interest rate swaps as of ~~April~~July 3, 2021, December 31, 2020 or ~~March 28,~~June 27, 2020.

During the first quarter of 2021, the Company entered into forward-starting interest rate swaps to hedge the interest rate risk associated with anticipated debt issuances. As of ~~April~~July 3, 2021, the outstanding forward-starting interest rate swaps had a total notional contract value of $150.0 million. As of ~~April~~July 3, 2021, the Company had ~~$8.6~~$1.7 million of net deferred gains associated with forward-starting interest rate ~~swaps and as~~swaps. As of December 31, 2020 and ~~March 28,~~June 27, 2020, the Company had ~~$1.4~~$1.4 million and ~~$1.8~~$1.7 million, respectively, of net deferred losses associated with previously settled forward-starting interest rate swaps. ~~These forward-starting~~Forward-starting interest rate swaps ~~were~~are designated as cash flow hedges with gains and losses included in Accumulated other comprehensive loss. As of ~~April~~July 3, 2021, the Company estimates that during the next 12 months, it will reclassify approximately ~~$0.6~~$0.6 million of net losses resulting from settled forward-starting interest rate swaps from Accumulated other comprehensive loss to Interest expense.

~~As of April 3, 2021, December 31, 2020 and March 28, 2020, the fair values of the Company’s derivative instruments were:~~

(in millions) Fair Value
Asset Derivatives April 3, 2021 December 31, 2020 March 28, 2020
Derivatives Designated as Cash Flow Hedges
Foreign exchange contracts $ 3.3 $ 1.3 $ 9.7
Commodity contracts 2.5 0.9 0
Interest rate contracts 9.8 0 0
Total $ 15.6 $ 2.2 $ 9.7
Other Hedging Activity
Foreign exchange contracts $ 0.2 $ 0.0 $ 2.6
Liability Derivatives
Derivatives Designated as Cash Flow Hedges
Foreign exchange contracts $ 6.9 $ 11.3 $ 3.3
Commodity contracts 0 0 0.1
Total $ 6.9 $ 11.3 $ 3.4
Other Hedging Activity
Foreign exchange contracts $ 0.4 $ 0.7 $ 0.2

1211

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Notes to Condensed Consolidated Financial Statements

(unaudited)

As of ~~April~~July 3, 2021, December 31, 2020 and ~~March 28,~~June 27, 2020, the fair values of the Company's derivative instruments were:



(in millions)	Fair Value
Asset Derivatives	July 3, 2021		December 31, 2020		June 27, 2020
Derivatives Designated as Cash Flow Hedges
Foreign exchange contracts	$	3.4	$	1.3	$	2.8
Commodity contracts	3.3		0.9		0
Interest rate contracts	2.8		0		0
Total	$	9.5	$	2.2	$	2.8

Derivatives Designated as Net Investment Hedges
Cross-currency swaps	$	5.9	$	0	$	0



Other Hedging Activity
Foreign exchange contracts	$	0.2	$	0.0	$	0.7

Liability Derivatives
Derivatives Designated as Cash Flow Hedges
Foreign exchange contracts	$	5.4	$	11.3	$	1.8
Commodity contracts	0		0		0.1

Total	$	5.4	$	11.3	$	1.9






Other Hedging Activity
Foreign exchange contracts	$	0.3	$	0.7	$	0.6

As of July 3, 2021, December 31, 2020 and June 27, 2020, asset derivatives are included within Prepaid expenses and other, and Other long-term assets and liability derivatives are included within Accrued expenses and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

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Notes to Condensed Consolidated Financial Statements

(unaudited)

The effect of derivative instruments on the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended ~~April~~July 3, 2021 and ~~March 28,~~June 27, 2020 ~~are~~is as shown in the tables below.

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


(in millions)	(in millions)					(in millions)	Three Months Ended				Six Months Ended
Derivatives Designated as Cash Flow Hedging Instruments	Derivatives Designated as Cash Flow Hedging Instruments	April 3, 2021		March 28, 2020		Derivatives Designated as Cash Flow Hedging Instruments	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Interest rate contracts	Interest rate contracts	$	9.8	$	0	Interest rate contracts	$	(7.0)	$	0	$	2.8	$	0
Foreign exchange contracts	Foreign exchange contracts	2.6		9.5		Foreign exchange contracts	(2.2)		(2.9)		0.4		6.6
Commodity contracts	Commodity contracts	2.1		(0.1)		Commodity contracts	2.2		0.0		4.3		(0.1)
Total	Total	$	14.5	$	9.4	Total	$	(7.0)	$	(2.9)	$	7.5	$	6.5

Derivatives Designated as Net Investment Hedging Instruments						Derivatives Designated as Net Investment Hedging Instruments
Cross-currency swaps						Cross-currency swaps	$	5.9	$	0	$	5.9	$	0

The amount of ~~Gain~~gain (loss) reclassified from Accumulated other comprehensive loss into earnings was as follows:


(in millions)	(in millions)						(in millions)		Three Months Ended				Six Months Ended
Derivatives Designated as Cash Flow Hedging Instruments	Derivatives Designated as Cash Flow Hedging Instruments	Location of Gain (Loss)	April 3, 2021		March 28, 2020		Derivatives Designated as Cash Flow Hedging Instruments	Location of Gain (Loss)	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Interest rate contracts	Interest rate contracts	Interest expense	$	(0.1)	$	(0.1)	Interest rate contracts	Interest expense	$	(0.2)	$	(0.2)	$	(0.3)	$	(0.3)
Foreign exchange contracts	Foreign exchange contracts	Cost of sales	(3.1)		2.7		Foreign exchange contracts	Cost of sales	(4.0)		4.0		(7.1)		6.7
Commodity contracts	Commodity contracts	Cost of sales	0.3		0		Commodity contracts	Cost of sales	1.2		0.0		1.5		0.0
Total	Total		$	(2.9)	$	2.6	Total		$	(3.0)	$	3.8	$	(5.9)	$	6.4

Derivatives Designated as Fair Value Hedging Instruments	Derivatives Designated as Fair Value Hedging Instruments						Derivatives Designated as Fair Value Hedging Instruments
Interest rate contracts	Interest rate contracts	Interest expense	$	0.2	$	0.2	Interest rate contracts	Interest expense	$	0.1	$	0.1	$	0.3	$	0.3

Other Hedging Activity	Other Hedging Activity						Other Hedging Activity
Foreign exchange contracts	Foreign exchange contracts	Cost of sales	$	1.8	$	4.8	Foreign exchange contracts	Cost of sales	$	(2.8)	$	(1.4)	$	(1.0)	$	3.4
Foreign exchange contracts	Foreign exchange contracts	Other (expense) income, net	(2.2)		1.1		Foreign exchange contracts	Other expense, net	(0.2)		0.1		(2.4)		1.2
Total	Total		$	(0.4)	$	5.9	Total		$	(3.0)	$	(1.3)	$	(3.4)	$	4.6

Fair Value of Other Financial Instruments. The carrying values of the Company's short-term financial instruments, including cash and cash equivalents and accounts and notes receivable, approximate their fair values because of the short maturity of these instruments. ~~At April~~As of July 3, 2021, December 31, 2020 and ~~March 28,~~June 27, 2020, the fair value of the Company’s long-term debt, including short-term debt and current maturities, was approximately $~~1,063.2~~1,001.4 million, $1,062.3 million and ~~$1,503.0~~$1,382.7 million, respectively, and was determined using Level 1 and Level 2 inputs described in Note 7 to the Notes to Consolidated Financial Statements in the 2020 Form 10-K. The carrying value of long-term debt, including short-term debt and current maturities, was $~~965.2~~895.6 million, $972.1 million and ~~$1,516.6~~$1,307.3 million as of ~~April~~July 3, 2021, December 31, 2020 and ~~March 28,~~June 27, 2020, respectively.

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Notes to Condensed Consolidated Financial Statements

(unaudited)

Note ~~6 –Fair~~7 – Fair Value Measurements

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


(in millions)	(in millions)		Fair Value						(in millions)		Fair Value
Category	Category	Fair Value Level	April 3, 2021		December 31, 2020		March 28, 2020		Category	Fair Value Level	July 3, 2021		December 31, 2020		June 27, 2020
Cash equivalents	Cash equivalents	1	$	0.2	$	19.3	$	0.2	Cash equivalents	1	$	0.2	$	19.3	$	0.2
Short-term investments in marketable securities	Short-term investments in marketable securities	1	7.3		56.7		0.8		Short-term investments in marketable securities	1	0.8		56.7		0.8
Restricted cash	Restricted cash	1	9.7		10.7		11.6		Restricted cash	1	9.7		10.7		11.6
Derivatives assets	Derivatives assets	2	15.8		2.2		12.3		Derivatives assets	2	15.6		2.2		3.5
Derivative liabilities	Derivative liabilities	2	7.3		12.0		3.6		Derivative liabilities	2	5.7		12.0		2.5
Deferred compensation	Deferred compensation	2	21.5		19.8		15.1		Deferred compensation	2	18.2		19.8		16.4

Liabilities measured at net asset value	Liabilities measured at net asset value		9.7		10.7		7.5		Liabilities measured at net asset value		9.3		10.7		9.4

In addition to the items shown in the tables above, refer to Note 17 in the Notes to Consolidated Financial Statements in the 2020 Form 10-K for further information regarding the fair value measurements associated with the Company's postretirement benefit plans.

Note ~~7 –Share-Based~~8 – Share-Based Compensation

Under the Brunswick Corporation 2014 Stock Incentive Plan, the Company may grant stock appreciation rights (SARs), non-vested stock units, and performance awards to executives, other employees and non-employee directors from treasury shares and from authorized, but unissued, shares of common stock initially available for grant, ~~in addition to:~~as well as from: (i) the forfeiture of past stock units and awards; (ii) shares not issued upon the net settlement of SARs; or (iii) shares delivered to or withheld by the Company to pay the withholding taxes related to stock units and awards. As of ~~April~~July 3, 2021, 4.7 million shares remained available for grant.

Share grant amounts, fair values, and fair value assumptions reflect all outstanding stock units and awards for both continuing and discontinued operations.

Non-Vested Stock Units

The Company grants both stock-settled and cash-settled non-vested stock units to key employees as determined by management and the Human Resources and Compensation Committee of the Board of Directors. The Company granted nominal stock units during the three months ended July 3, 2021 and June 27, 2020, respectively. The Company granted 0.2 million and 0.3 million of stock units during ~~both~~ the ~~three~~six months ended ~~April~~July 3, 2021 and ~~March 28, 2020.~~June 27, 2020, respectively. The Company recognizes the cost of non-vested stock units on a straight-line basis over the requisite vesting period. Additionally, cash-settled non-vested stock units are recorded as a liability on the balance sheet and adjusted to fair value each reporting period through stock compensation expense. ~~During the three months ended April 3, 2021 and March 28, 2020, the~~The Company ~~charged $2.9 million and $2.0 million, respectively, to~~recorded compensation expense for non-vested stock ~~units.~~units of $4.4 million and $7.3 million during the three and six months ended July 3, 2021, respectively, and recorded compensation expense for non-vested stock units of $4.4 million and $6.4 million during the three and six months ended June 27, 2020, respectively.

As of ~~April~~July 3, 2021, there was ~~$23.6~~$19.1 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements. The Company expects this cost to be recognized over a weighted average period of ~~1.7~~1.4 years.

Performance Awards

The Company did not grant any performance shares for the three months ended July 3, 2021 and granted a nominal number of performance shares for the three months ended June 27, 2020. The company granted 0.2 million and 0.1 million performance shares to certain senior executives for the ~~three~~six months ended ~~April~~July 3, 2021 and ~~March 28,~~June 27, 2020, respectively. Performance share awards are based on three performance measures: a cash flow return on investment (CFROI) measure, an operating margin (OM) measure and a total shareholder return (TSR) modifier. Performance shares are earned based on a three-year performance period commencing at the beginning of the calendar year of each grant. The performance shares earned are then subject to a TSR modifier based on the Company's stock returns measured against stock returns of a predefined comparator group over a

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Notes to Condensed Consolidated Financial Statements

(unaudited)

three-year performance period. Additionally, in February 2021 and 2020, the Company granted 24,560 and 26,750 performance shares, respectively, to certain officers and certain senior managers based on the respective measures and performance periods described above but excluding the TSR modifier. ~~During~~The Company recorded compensation expense of $4.3 million and $7.5 million during the three and six months ended ~~April~~July 3, 2021, respectively, and ~~March 28, 2020, the Company recognized a charge of $3.2 million~~

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

~~and a benefit of $2.1 million, respectively, to~~recorded compensation expense of $4.5 million and $2.4 million during the three and six months ended June 27, 2020, respectively, based on projections of probable attainment of the performance measures and the projected TSR modifier used to determine the performance awards.

The fair ~~values~~value of the senior executives' performance share award grants with a TSR modifier for grants in 2021 and 2020 ~~were~~was $91.44 and $64.72, ~~respectively, which~~respectively. The fair values were estimated using the Monte Carlo valuation model, and incorporated the following assumptions:


	2021		2020
Risk-free interest rate	0.2	%	1.4	%
Dividend yield	1.2	%	1.5	%
Volatility factor	65.6	%	46.6	%
Expected life of award	2.9 years		2.9 years

The fair value of certain officers' and certain senior managers' performance awards granted based solely on the CFROI and OM performance factors was $87.48 and $61.91 in 2021 and 2020, respectively, which was equal to the stock price on the date of grant in 2021 and 2020, respectively, less the present value of expected dividend payments over the vesting period.

As of ~~April~~July 3, 2021, the Company had ~~$10.8~~$13.3 million of total unrecognized compensation cost related to performance awards. The Company expects this cost to be recognized over a weighted average period of ~~1.5~~1.3 years.

Director Awards

The Company issues stock awards to non-employee directors in accordance with the terms and conditions determined by the Nominating and Corporate Governance Committee of the Board of Directors. A portion of each ~~director’s~~director's annual fee is paid in Brunswick common stock, the receipt of which may be deferred until a director retires from the Board of Directors. Each director may elect to have the remaining portion paid in cash, in Brunswick common stock distributed at the time of the award, or in deferred Brunswick common stock with a 20 percent premium.

Note 89 – Commitments and Contingencies

Product Warranties

The following activity related to product warranty liabilities was recorded in Accrued expenses during the ~~three~~six months ended ~~April~~July 3, 2021 and ~~March 28,~~June 27, 2020:


(in millions)	(in millions)	April 3, 2021		March 28, 2020		(in millions)	July 3, 2021		June 27, 2020
Balance at beginning of period	Balance at beginning of period	$	115.9	$	117.6	Balance at beginning of period	$	115.9	$	117.6
Payments - Recurring	Payments - Recurring	(14.5)		(11.6)		Payments - Recurring	(31.1)		(22.5)
(Payments)/Provisions - Sport Yacht and Yachts and Fitness businesses	(Payments)/Provisions - Sport Yacht and Yachts and Fitness businesses	(0.9)		(1.7)		(Payments)/Provisions - Sport Yacht and Yachts and Fitness businesses	(1.7)		(2.8)
Provisions/additions for contracts issued/sold	Provisions/additions for contracts issued/sold	18.7		13.8		Provisions/additions for contracts issued/sold	37.8		25.2
Aggregate changes for preexisting warranties	Aggregate changes for preexisting warranties	0.2		(1.3)		Aggregate changes for preexisting warranties	(1.8)		(2.5)
Foreign currency translation	Foreign currency translation	(0.5)		(0.8)		Foreign currency translation	(0.2)		(0.6)

Other	Other	(1.0)		0		Other	(1.2)		0
Balance at end of period	Balance at end of period	$	117.9	$	116.0	Balance at end of period	$	117.7	$	114.4

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Notes to Condensed Consolidated Financial Statements

(unaudited)

Extended Product Warranties

The following activity related to deferred revenue for extended product warranty contracts was recorded in Accrued expenses and Other long-term liabilities during the ~~three~~six months ended ~~April~~July 3, 2021 and ~~March 28,~~June 27, 2020:


(in millions)	(in millions)	April 3, 2021		March 28, 2020		(in millions)	July 3, 2021		June 27, 2020
Balance at beginning of period	Balance at beginning of period	$	87.4	$	75.3	Balance at beginning of period	$	87.4	$	75.3
Extended warranty contracts sold	Extended warranty contracts sold	7.2		5.7		Extended warranty contracts sold	18.7		15.3
Revenue recognized on existing extended warranty contracts	Revenue recognized on existing extended warranty contracts	(4.8)		(3.9)		Revenue recognized on existing extended warranty contracts	(9.7)		(8.1)
Foreign currency translation	Foreign currency translation	0.1		(0.4)		Foreign currency translation	0.3		(0.3)
Other	Other	(0.1)		(0.1)		Other	(0.3)		(0.1)
Balance at end of period	Balance at end of period	$	89.8	$	76.6	Balance at end of period	$	96.4	$	82.1

Note ~~9 –Goodwill~~10 – Goodwill and Other Intangibles

Changes in the Company's goodwill during the ~~three~~six months ended ~~April~~July 3, 2021 and ~~March 28,~~June 27, 2020, by segment, are summarized below:

(in millions) Propulsion Parts and Accessories Boat Total
December 31, 2020 $ 15.3 $ 372.5 $ 29.9 $ 417.7
Acquisitions 0 0 5.3 5.3
Adjustments (0.3) 0 0 (0.3)
April 3, 2021 $ 15.0 $ 372.5 $ 35.2 $ 422.7
December 31, 2019 $ 14.5 $ 371.9 $ 28.6 $ 415.0
Adjustments (0.7) (0.3) 0 (1.0)
March 28, 2020 $ 13.8 $ 371.6 $ 28.6 $ 414.0


(in millions)	Propulsion		Parts and Accessories		Boat		Total
December 31, 2020	$	15.3	$	372.5	$	29.9	$	417.7
Acquisitions	0		0		16.8		16.8
Adjustments	(0.2)		0		0		(0.2)
July 3, 2021	$	15.1	$	372.5	$	46.7	$	434.3

December 31, 2019	$	14.5	$	371.9	$	28.6	$	415.0
Adjustments	(0.2)		(0.3)		0.9		0.4
June 27, 2020	$	14.3	$	371.6	$	29.5	$	415.4

Adjustments in both periods include the effect of foreign currency translation on goodwill denominated in currencies other than the U.S. dollar. Adjustments in the Boat segment for the six months ended June 27, 2020 relate to finalizing purchase accounting related to the Freedom Boat Club acquisition, primarily related to deferred taxes. There was no accumulated impairment loss on Goodwill as of ~~April~~July 3, 2021, December 31, 2020 or ~~March 28,~~June 27, 2020.

The Company's intangible assets, included within Other intangibles, net on the Condensed Consolidated Balance Sheets as of ~~April~~July 3, 2021, December 31, 2020 and ~~March 28,~~June 27, 2020, are summarized by intangible asset type below:


		April 3, 2021				December 31, 2020				March 28, 2020					July 3, 2021				December 31, 2020				June 27, 2020
(in millions)	(in millions)	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization		(in millions)	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Intangible assets:	Intangible assets:													Intangible assets:
Customer relationships	Customer relationships	$	687.7	$	(314.3)	$	687.7	$	(306.4)	$	686.6	$	(282.3)	Customer relationships	$	687.6	$	(322.3)	$	687.7	$	(306.4)	$	686.6	$	(290.2)
Trade names	Trade names	166.2		0		166.2		0		165.5		0		Trade names	166.3		0		166.2		0		165.6		0
Other	Other	18.5		(13.8)		18.5		(13.7)		18.3		(13.1)		Other	18.5		(13.8)		18.5		(13.7)		18.3		(13.2)
Total	Total	$	872.4	$	(328.1)	$	872.4	$	(320.1)	$	870.4	$	(295.4)	Total	$	872.4	$	(336.1)	$	872.4	$	(320.1)	$	870.5	$	(303.4)

Other intangible assets primarily consist of patents and franchise agreements. Gross amounts and related accumulated amortization amounts include adjustments related to the impact of foreign currency translation. Aggregate amortization expense for intangibles was $8.0 million and $16.0 million for ~~both~~three and six months ended July 3, 2021, respectively. Aggregate amortization expense for intangibles was $8.0 million and $16.0 million for the three and six months ended ~~April 3, 2021 and March 28,~~June 27, 2020, respectively.

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Notes to Condensed Consolidated Financial Statements

(unaudited)


		April 3, 2021				December 31, 2020				March 28, 2020					July 3, 2021				December 31, 2020				June 27, 2020
(in millions)	(in millions)	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization		(in millions)	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization

Propulsion	Propulsion	$	1.0	$	(0.5)	$	1.0	$	(0.5)	$	1.0	$	(0.5)	Propulsion	$	1.0	$	(0.5)	$	1.0	$	(0.5)	$	1.0	$	(0.5)
Parts and Accessories	Parts and Accessories	618.7		(119.9)		618.8		(112.4)		616.9		(89.2)		Parts and Accessories	618.8		(127.4)		618.8		(112.4)		617.0		(96.7)
Boat	Boat	252.7		(207.7)		252.6		(207.2)		252.5		(205.7)		Boat	252.6		(208.2)		252.6		(207.2)		252.5		(206.2)

Total	Total	$	872.4	$	(328.1)	$	872.4	$	(320.1)	$	870.4	$	(295.4)	Total	$	872.4	$	(336.1)	$	872.4	$	(320.1)	$	870.5	$	(303.4)

The Company tests its intangible assets for impairment during the fourth quarter of each year, or whenever a significant change in events and circumstances (triggering event) occurs that indicates the fair value of intangible assets may be below their carrying values. The Company did not record an impairment charge during the ~~three~~six months ended ~~April~~July 3, 2021 or ~~March 28,~~June 27, 2020.

Note ~~10 –Segment~~11 – Segment Data

Reportable Segments

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

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

Parts & Accessories. The Parts & Accessories (P&A) segment consists of the Engine Parts and Accessories and the Advanced Systems Group operating segments, which are aggregated and presented as a single reportable segment.

The P&A segment manufactures, markets, and supplies parts and accessories for both marine and non-marine markets. These products are designed for and sold mostly to aftermarket retailers, distributors, and distribution businesses, as well as original equipment manufacturers (including Brunswick brands). Branded parts and accessories include consumables, such as engine oils and lubricants, and are sold under the Mercury, Mercury Precision Parts, Quicksilver, and Seachoice brands. The P&A segment also consists of distribution businesses such as Land 'N' Sea, Kellogg Marine Supply, Lankhorst Taselaar, BLA, and Payne's Marine Group, which distribute third-party and Company products. These businesses are leading distributors of marine parts and accessories throughout North America, Europe, and Asia-Pacific. The P&A segment also includes businesses operating under the Ancor, Attwood, BEP, Blue Sea Systems, CZone, Del City, Garelick, Lenco Marine, Marinco, Mastervolt, MotorGuide, ParkPower, Progressive Industries, ProMariner, Whale and ASG Connect brand names. Products include marine electronics and control systems, instruments, trolling motors, fuel systems, and electrical systems, as well as specialty vehicle, mobile, and transportation aftermarket products.

The P&A segment's manufacturing and distribution facilities are primarily located in North America, Europe, Australia and New Zealand.

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

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Notes to Condensed Consolidated Financial Statements

(unaudited)

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

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

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

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

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


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

						Three Months Ended	Six Months Ended						Three Months Ended				Six Months Ended
(in millions)	(in millions)	April 3, 2021		March 28, 2020				April 3, 2021		March 28, 2020		(in millions)	Jul 3, 2021		Jun 27, 2020		July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Propulsion	Propulsion	$	657.8	$	448.6			$	124.5	$	61.3	Propulsion	$	649.5	$	395.4	$	1,307.3	$	844.0	$	122.1	$	47.7	$	246.6	$	109.0
Parts and Accessories	Parts and Accessories	459.6		301.6				91.9		46.2		Parts and Accessories	548.9		386.5		1,008.5		688.1		114.4		80.1		206.3		126.3
Boat	Boat	419.5		291.5				40.8		5.1		Boat	449.1		249.9		868.6		541.4		44.2		2.0		85.0		7.1
Corporate/Other	Corporate/Other	0		0				(25.3)		(9.4)		Corporate/Other	0		0		0		0		(30.5)		(22.8)		(55.8)		(32.2)
Segment Eliminations	Segment Eliminations	(103.7)		(76.2)				0		0		Segment Eliminations	(92.7)		(44.0)		(196.4)		(120.2)		0		0		0		0
Total	Total	$	1,433.2	$	965.5			$	231.9	$	103.2	Total	$	1,554.8	$	987.8	$	2,988.0	$	1,953.3	$	250.2	$	107.0	$	482.1	$	210.2


		Total Assets							Total Assets
(in millions)	(in millions)	April 3, 2021		December 31, 2020		March 28, 2020		(in millions)	July 3, 2021		December 31, 2020		June 27, 2020
Propulsion	Propulsion	$	1,039.2	$	962.4	$	1,062.6	Propulsion	$	1,095.1	$	962.4	$	974.2
Parts and Accessories	Parts and Accessories	1,634.9		1,500.6		1,609.9		Parts and Accessories	1,640.7		1,500.6		1,534.9
Boat (A)	Boat (A)	540.2		488.1		488.8		Boat (A)	564.0		488.1		463.7
Corporate/Other	Corporate/Other	728.9		819.5		743.3		Corporate/Other	838.7		819.5		766.3
Total	Total	$	3,943.2	$	3,770.6	$	3,904.6	Total	$	4,138.5	$	3,770.6	$	3,739.1

(A) The Company had $3.0 million of net assets classified as held for sale which were not related to discontinued operations, as of both December 31, 2020 and ~~March 28,~~June 27, 2020. These assets were recorded within Net Property.

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Notes to Condensed Consolidated Financial Statements

(unaudited)

Note ~~11 –Comprehensive~~12 – Comprehensive Income

Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets includes foreign currency cumulative translation adjustments; net changes in prior service costs and credits and net actuarial gains and losses for defined benefit plans; and unrealized derivative gains and losses, all net of tax. Changes in the components of Accumulated other comprehensive loss, all net of tax, for the three and six months ended ~~April~~July 3, 2021 and ~~March 28,~~June 27, 2020 are as follows:


		Three Months Ended						Six Months Ended
(in millions)	(in millions)		April 3, 2021		March 28, 2020		(in millions)	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Net earnings	Net earnings		$	169.3	$	69.0	Net earnings	$	179.4	$	70.7	$	348.7	$	139.7
Other comprehensive income (loss):	Other comprehensive income (loss):						Other comprehensive income (loss):
Foreign currency cumulative translation adjustment	Foreign currency cumulative translation adjustment		(7.5)		(13.3)		Foreign currency cumulative translation adjustment	3.2		5.8		(4.3)		(7.5)

Net change in unamortized prior service credits	Net change in unamortized prior service credits		(0.2)		(0.2)		Net change in unamortized prior service credits	0		(0.1)		(0.2)		(0.3)
Net change in unamortized actuarial losses			0.2		0.4
Net change in unrealized derivative losses			13.1		5.2
Net change in unamortized actuarial gains							Net change in unamortized actuarial gains	0.1		0		0.3		0.4
Net change in unrealized derivative gains (losses)							Net change in unrealized derivative gains (losses)	1.3		(5.0)		14.4		0.2
Total other comprehensive income (loss)	Total other comprehensive income (loss)		5.6		(7.9)		Total other comprehensive income (loss)	4.6		0.7		10.2		(7.2)
Comprehensive income	Comprehensive income		$	174.9	$	61.1	Comprehensive income	$	184.0	$	71.4	$	358.9	$	132.5

The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the three months ended ~~April~~July 3, 2021:


(in millions)	(in millions)	Foreign currency translation		Prior service credits		Net actuarial losses		Net derivative losses		Total		(in millions)	Foreign currency translation		Prior service credits		Net actuarial losses		Net derivative losses		Total
Beginning balance	Beginning balance	$	(15.1)	$	(3.5)	$	(8.9)	$	(15.2)	$	(42.7)	Beginning balance	$	(22.6)	$	(3.7)	$	(8.7)	$	(2.1)	$	(37.1)
Other comprehensive (loss) income before reclassifications (A)		(7.5)		0		0		11.0		3.5
Other comprehensive income (loss) before reclassifications (A)												Other comprehensive income (loss) before reclassifications (A)	3.2		0		0		(0.9)		2.3
Amounts reclassified from Accumulated other comprehensive loss (B)	Amounts reclassified from Accumulated other comprehensive loss (B)	0		(0.2)		0.2		2.1		2.1		Amounts reclassified from Accumulated other comprehensive loss (B)	0		0		0.1		2.2		2.3
Net other comprehensive (loss) income	Net other comprehensive (loss) income	(7.5)		(0.2)		0.2		13.1		5.6		Net other comprehensive (loss) income	3.2		0		0.1		1.3		4.6
Ending balance	Ending balance	$	(22.6)	$	(3.7)	$	(8.7)	$	(2.1)	$	(37.1)	Ending balance	$	(19.4)	$	(3.7)	$	(8.6)	$	(0.8)	$	(32.5)

(A) The tax effects for the three months ended ~~April~~July 3, 2021 were ~~$0.9~~$(0.9) million for foreign currency translation and ~~$(3.6)~~$0.2 million for derivatives.

(B) See the table below for the tax effects for the three months ended ~~April~~July 3, 2021.

The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the six months ended July 3, 2021:


(in millions)	Foreign currency translation		Prior service credits		Net actuarial losses		Net derivative losses		Total
Beginning balance	$	(15.1)	$	(3.5)	$	(8.9)	$	(15.2)	$	(42.7)
Other comprehensive income (loss) before reclassifications (A)	(4.3)		0		0		10.1		5.8
Amounts reclassified from Accumulated other comprehensive loss (B)	0		(0.2)		0.3		4.3		4.4
Net other comprehensive (loss) income	(4.3)		(0.2)		0.3		14.4		10.2
Ending balance	$	(19.4)	$	(3.7)	$	(8.6)	$	(0.8)	$	(32.5)

(A) The tax effects for the six months ended July 3, 2021 were $0.0 million for foreign currency translation and $(3.4) million for derivatives.

(B) See the table below for the tax effects for the six months ended July 3, 2021.

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Notes to Condensed Consolidated Financial Statements

(unaudited)

The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the three months ended ~~March 28,~~June 27, 2020:


(in millions)	(in millions)	Foreign currency translation		Prior service credits		Net actuarial losses		Net derivative losses		Total		(in millions)	Foreign currency translation		Prior service credits		Net actuarial losses		Net derivative losses		Total
Beginning balance	Beginning balance	$	(37.6)	$	(3.0)	$	(7.3)	$	(5.5)	$	(53.4)	Beginning balance	$	(50.9)	$	(3.2)	$	(6.9)	$	(0.3)	$	(61.3)
Other comprehensive (loss) income before reclassifications (A)		(13.3)		0		0.3		7.1		(5.9)
Other comprehensive income (loss) before reclassifications (A)												Other comprehensive income (loss) before reclassifications (A)	5.8		0		(0.2)		(2.2)		3.4
Amounts reclassified from Accumulated other comprehensive loss (B)	Amounts reclassified from Accumulated other comprehensive loss (B)	0		(0.2)		0.1		(1.9)		(2.0)		Amounts reclassified from Accumulated other comprehensive loss (B)	0		(0.1)		0.2		(2.8)		(2.7)
Net other comprehensive (loss) income	Net other comprehensive (loss) income	(13.3)		(0.2)		0.4		5.2		(7.9)		Net other comprehensive (loss) income	5.8		(0.1)		0		(5.0)		0.7
Ending balance	Ending balance	$	(50.9)	$	(3.2)	$	(6.9)	$	(0.3)	$	(61.3)	Ending balance	$	(45.1)	$	(3.3)	$	(6.9)	$	(5.3)	$	(60.6)

(A) The tax effects for the three months ended ~~March 28,~~June 27, 2020 were ~~$2.8~~$(2.0) million for foreign currency translation and ~~$(0.9)~~$0.7 million for derivatives.

(B) See the table below for the tax effects for the three months ended ~~March 28,~~June 27, 2020.

The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the six months ended June 27, 2020:


(in millions)	Foreign currency translation		Prior service credits		Net actuarial losses		Net derivative losses		Total
Beginning balance	$	(37.6)	$	(3.0)	$	(7.3)	$	(5.5)	$	(53.4)
Other comprehensive income (loss) before reclassifications (A)	(7.5)		0		0.1		4.9		(2.5)
Amounts reclassified from Accumulated other comprehensive loss (B)	0		(0.3)		0.3		(4.7)		(4.7)
Net other comprehensive (loss) income	(7.5)		(0.3)		0.4		0.2		(7.2)
Ending balance	$	(45.1)	$	(3.3)	$	(6.9)	$	(5.3)	$	(60.6)

(A) The tax effects for the six months ended June 27, 2020were $0.8 million for foreign currency translation and $(1.6) million for derivatives.

(B) See the table below for the tax effects for the six months ended June 27, 2020.

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Notes to Condensed Consolidated Financial Statements

(unaudited)

The following table presents reclassification adjustments out of Accumulated other comprehensive loss during the three and six months ended ~~April~~July 3, 2021 and ~~March 28,~~June 27, 2020:


								Three Months Ended				Six Months Ended
Details about Accumulated other comprehensive income (loss) components (in millions)	Details about Accumulated other comprehensive income (loss) components (in millions)	April 3, 2021		March 28, 2020		Affected line item in the statement where net income is presented	Details about Accumulated other comprehensive income (loss) components (in millions)	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020		Affected line item in the statement where net income is presented

Amortization of defined benefit items:	Amortization of defined benefit items:						Amortization of defined benefit items:
Prior service credits	Prior service credits	$	0.2	$	0.2	Other (expense) income, net	Prior service credits	$	0	$	0.1	$	0.2	$	0.3	Other expense, net
Net actuarial losses	Net actuarial losses	(0.2)		(0.1)		Other (expense) income, net	Net actuarial losses	(0.2)		(0.2)		(0.4)		(0.3)		Other expense, net
		0.0		0.1		Earnings before income taxes		(0.2)		(0.1)		(0.2)		0.0		Earnings before income taxes
		0.0		0.0		Income tax provision		0.1		0.0		0.1		0.0		Income tax provision
		$	0.0	$	0.1	Net earnings from continuing operations		$	(0.1)	$	(0.1)	$	(0.1)	$	0.0	Net earnings from continuing operations

Amount of gain (loss) reclassified into earnings on derivative contracts:	Amount of gain (loss) reclassified into earnings on derivative contracts:						Amount of gain (loss) reclassified into earnings on derivative contracts:
Interest rate contracts	Interest rate contracts	$	(0.1)	$	(0.1)	Interest expense	Interest rate contracts	$	(0.2)	$	(0.2)	$	(0.3)	$	(0.3)	Interest expense
Foreign exchange contracts	Foreign exchange contracts	(3.1)		2.7		Cost of sales	Foreign exchange contracts	(4.0)		4.0		(7.1)		6.7		Cost of sales
Commodity contracts	Commodity contracts	0.3		0		Cost of sales	Commodity contracts	1.2		(0.0)		1.5		(0.0)		Cost of sales
		(2.9)		2.6		Earnings before income taxes		(3.0)		3.8		(5.9)		6.4		Earnings before income taxes
		0.8		(0.7)		Income tax provision		0.8		(1.0)		1.6		(1.7)		Income tax provision
		$	(2.1)	$	1.9	Net earnings from continuing operations		$	(2.2)	$	2.8	$	(4.3)	$	4.7	Net earnings from continuing operations

Note ~~12 –Income~~13 – Income Taxes

The Company recognized an income tax provision for the three and six months ended ~~April~~July 3, 2021 ~~and March 28, 2020~~ of ~~$47.4~~$55.2 million and ~~$18.4~~$102.6 million, respectively, which included a net charge of $6.2 million and $3.2 million, respectively. The ~~income tax provision~~net charge of ~~$47.4~~$6.2 million ~~included a net benefit of $3.0 million~~is primarily associated with the restructuring of certain branch operations. The net charge of $3.2 million includes the aforementioned branch restructuring charges offset by net excess tax benefits related to share-based compensation and valuation allowance adjustments. The Company recognized an income tax provision for the three and six months ended June 27, 2020 of ~~$18.4~~$17.6 million and $36.0 million, respectively, which included a net charge of $0.4 million related primarily to valuation allowance changes, and a net benefit of ~~$0.8~~$0.4 million associated primarily ~~associated~~ with the net excess tax benefits related to share-based ~~compensation.~~compensation, respectively. The excess tax benefit related to share-based compensation was $0.1 million and $1.6 million for the three and six months ended July 3, 2021, respectively. There was no excess tax benefit related to share-based compensation for the three months ended ~~April 3, 2021~~June 27, 2020, and ~~March 28, 2020~~the excess tax benefits related to share-based compensation was ~~$1.5 million and~~ $0.5 million ~~respectively.~~for the six months ended June 27, 2020. The effective tax rate, which is calculated as the income tax provision as a percentage of earnings before income taxes, for the three and six months ended ~~April~~July 3, 2021 was ~~21.9 percent. The~~ 23.5 percent and 22.7 percent, respectively. The effective tax rate for the three and six months ended ~~March 28,~~June 27, 2020 was ~~20.7 percent.~~19.8 percent and 20.2 percent, respectively.

No deferred income taxes have been provided as of ~~April~~July 3, 2021, December 31, 2020 or ~~March 28,~~June 27, 2020 on the applicable undistributed earnings of the non-U.S. subsidiaries where the indefinite reinvestment assertion has been applied. If at some future date these earnings cease to be indefinitely reinvested and are repatriated, the Company may be subject to additional U.S. income taxes and foreign withholding taxes on such amounts. The Company continues to provide deferred taxes, as required, on the undistributed net earnings of foreign subsidiaries and unconsolidated affiliates that are not deemed to be indefinitely reinvested in operations outside the United States.

As of ~~April~~July 3, 2021, December 31, 2020 and ~~March 28,~~June 27, 2020, the Company had ~~$4.5~~$4.6 million, $4.1 million and ~~$4.3~~$4.4 million of gross unrecognized tax benefits, including interest, respectively. The Company believes it is reasonably possible that the total amount of gross unrecognized tax benefits as of ~~April~~July 3, 2021 could decrease by approximately ~~$0.5~~$0.6 million in the next 12 months due to settlements with taxing authorities or lapses in the applicable statute of limitations. Due to the various jurisdictions in which the Company files tax returns and the uncertainty regarding the timing of the settlement of tax audits, it is

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Notes to Condensed Consolidated Financial Statements

(unaudited)

possible that there could be significant changes in the amount of unrecognized tax benefits in 2021, but the amount cannot be estimated at this time.

The Company is regularly audited by federal, state and foreign tax authorities. The Internal Revenue Service (IRS) has completed its field examination and has issued its Revenue Agents Report through the 2014 tax year and all open issues have been resolved. The Company is currently open to tax examinations by the IRS for the 2017 through 2019 tax years. Primarily as a result of filing amended returns, which were generated by the closing of federal income tax audits, the Company is still open to state and local tax audits in major tax jurisdictions dating back to the 2014 taxable year. The Company is no longer subject to income tax examinations by any major foreign tax jurisdiction for years prior to 2013.

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~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited)~~

Note ~~13 –Debt~~14 – Debt

The following table provides the changes in the Company's long-term debt for the ~~three~~six months ended ~~April~~July 3, 2021:


(in millions)	(in millions)	Current maturities of long-term debt		Long-term debt		Total		(in millions)	Current maturities of long-term debt		Long-term debt		Total
Balance as of December 31, 2020	Balance as of December 31, 2020	$	43.1	$	908.3	$	951.4	Balance as of December 31, 2020	$	43.1	$	908.3	$	951.4
Proceeds from issuances of long-term debt	Proceeds from issuances of long-term debt	0.9		1.0		1.9		Proceeds from issuances of long-term debt	0.9		1.0		1.9
Repayments of long-term debt	Repayments of long-term debt	(0.4)		(8.8)		(9.2)		Repayments of long-term debt	(0.1)		(78.4)		(78.5)
Other	Other	0.2		0.4		0.6		Other	(0.4)		1.1		0.7
Balance as of April 3, 2021		$	43.8	$	900.9	$	944.7
Balance as of July 3, 2021								Balance as of July 3, 2021	$	43.5	$	832.0	$	875.5

As of ~~April~~July 3, 2021, Brunswick was in compliance with the financial covenants associated with its debt.

On June 23, 2021, the Company entered into a commitment letter with JPMorgan Chase Bank, N.A. ("JP Morgan") to obtain a 364-day senior unsecured bridge facility in an aggregate amount of principal not to exceed $900.0 million. This commitment letter was completed in anticipation of the acquisition of Navico. Refer to Note 5 – Acquisitions for further details regarding the acquisition.

Credit Facility

The Company maintains an Amended and Restated Credit Agreement (Credit Facility) providing for $400.0 million of borrowing capacity in effect through September 2024. The Credit Facility includes provisions to add up to $100.0 million of additional borrowing capacity and extend the facility for two additional one-year terms, subject to lender approval. As of ~~April~~July 3, 2021 there were no borrowings outstanding, and available borrowing capacity totaled $397.2 million, net of $2.8 million of letters of credit outstanding under the Credit Facility. Refer to Note 16 in the Notes to Consolidated Financial Statements in the 2020 Form 10-K for details regarding Brunswick's Credit Facility and Note 15 – Subsequent Events for details regarding amendments to the Credit Facility.

Note ~~14 –Subsequent~~15 – Subsequent Events

On ~~April~~July 16, 2021, the Company ~~repaid $60.0~~entered into an Amended and Restated Credit Agreement (the "Amended Credit Facility") with certain wholly-owned subsidiaries of the Company as subsidiary borrowers and lenders as parties, and JPMorgan as administrative agent. The Amended Credit Facility amends and restates the Credit Facility dated as of March 21, 2011, as amended and restated through November 12, 2019. The Amended Credit Facility increases the revolving commitments to $500.0 million, with the capacity to add up to $100.0 million of ~~principal on its 2023 floating~~additional revolving commitments, and amends the Credit Facility in certain respects, including, among other things:

•Extending the maturity date to July 16, 2026, with up to two one-year extensions available.

•Modifying the applicable interest rate margin range such that the highest applicable interest rate margin is reduced from 1.90 percent per annum to 1.70 percent per annum.

•Increasing the net cash offset for purposes of determining the leverage ratio from $150.0 million to $350.0 million.

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Notes to Condensed Consolidated Financial Statements

(unaudited)

•Modifying the leverage ratio maintenance covenant to allow for a 12-month increase of the maximum leverage ratio to 4.00 to 1.00 following the consummation of a Qualified Acquisition (as such term ~~loan.~~is defined in the Amended Credit Facility).

•Including "hardwired" LIBOR transition provisions substantially consistent with those published by the Alternative Reference Rates Committee.

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

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

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

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

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

Impact of COVID-19

All global manufacturing and distribution facilities continue to focus on rigorously applying, evolving, and automating COVID-19 mitigation procedures, while continuing to ramp-up ~~global~~global production to meet unprecedented demand as consumers continue to take advantage of more flexible work schedules allowing for more leisure time. The strong demand environment for our products experienced during the second half of 2020 has continued into 2021. Despite elevated production levels consistent with our plan, the continued surge in retail demand combined with market share gains ~~continues~~continue to drive historically low pipeline inventory levels with 4150 percent fewer boats in dealer inventory at the end of the ~~first~~second quarter versus the same period last year.

We will continue to actively monitor the impact of COVID-19 and may take further actions that alter business operations as legally required or that we determine are in the best interests of our employees, customers, dealers, suppliers, and other stakeholders. The full extent of the impact of COVID-19 on our business, operations, and financial results will depend on evolving factors that we cannot accurately predict. Refer to ~~Part II.~~ Item 1A. Risk Factorsin our ~~below~~ 2020 Form 10-K for further information.

Discontinued Operations

On June 27, 2019, we completed the sale of the Fitness business. This business, which was previously reported as our Fitness segment, is being reported as discontinued operations for all periods presented.

Our results for all periods presented, as discussed in Management's Discussion and Analysis, are presented on a continuing operations basis, unless otherwise noted. Refer to Note 3 – Discontinued Operations in the Notes to Condensed Financial Statements for further information.

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Acquisitions

On June 23, 2021, the Company entered into a definitive agreement to acquire Navico for $1.05 billion. The Company intends to use a combination of debt and cash to fund the acquisition, which is expected to close during the second half of 2021 subject to usual and customary closing conditions as well as regulatory review and approval. Navico is a privately held global company based in Egersund, Norway, and is a global leader in marine electronics and sensors, including multi-function displays, fish finders, autopilots, sonar, radar, and cartography.

Overview

Net sales increased 4857 percent during the ~~first~~second quarter of 2021 when compared with the ~~first~~second quarter of 2020, primarily attributable to outstanding operating performance across all segments together with strong global demand for marine products. ~~All segments reported substantial net sales increases during the quarter when compared to the first quarter of 2020.~~ In the Propulsion segment, we continue to gain significant retail market share in outboard engines, especially in higher horsepower categories where we have focused higher levels of investment in recent years. In thethe Parts and Accessories segment, aftermarket sales remained elevated due to strong participation trends and service needs ~~with~~and favorable weather conditions, and increased OEM orders ~~to keep up with production~~ resulting from ~~the~~ accelerating retail demand. Boat segment sales also increased across all brands, when compared to the ~~first~~second quarter of 2020, due to the strong retail demand surge. Our international net sales increased 5162 percent and 4249 percent in the ~~first~~second quarter on a GAAP and constant currency basis, respectively, with growth in all ~~regions, including continued strength~~regions.

Net sales increased 53 percent during the first half of 2021, when compared with the first half of 2020, due to the same factors described above. Our international net sales increased 57 percent and 46 percent in ~~Europe~~the first half on a GAAP and ~~Asia-Pacific contributing to~~constant currency basis, respectively, with growth in ~~Propulsion~~all regions.

Operating earnings in the second quarter of 2021 were $250.2 million and ~~P&A sales~~$266.4 million on a GAAP and ~~Canada continuing its growth trend from~~As Adjusted basis, respectively. This compares to operating earnings during the ~~back half~~second quarter of ~~2020.~~2020 of $107.0 million and $117.9 million on a GAAP and As Adjusted basis, respectively.

Operating earnings in the first ~~quarter~~half of 20202121 were ~~$231.9~~$482.1 million and ~~$243.0~~$509.4 million on a GAAP and As Adjusted basis, respectively. This compares to operating earnings during the first ~~quarter~~half of 2020 of ~~$103.2~~$210.2 million and ~~$112.5~~$230.4 million on a GAAP and As Adjusted basis, respectively.

Matters Affecting Comparability

Changes in Foreign Currency Rates. Percentage changes in net sales expressed in constant currency reflect the impact that changes in currency exchange rates had on comparisons of net sales. To determine this information, net sales transacted in currencies other than U.S. dollars have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative period. The percentage change in net sales expressed on a constant currency basis better reflects the changes in the underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations. Approximately 25 percent of our annual net sales are transacted in a currency other than the U.S. dollar. Our most material exposures include sales in Euros, Canadian dollars, Australian dollars and Chinese Yuan.

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

Three Months Ended
Net Sales 2021 vs. 2020
(in millions) April 3,
2021 March 28,
2020 GAAP Currency impact
Propulsion $ 657.8 $ 448.6 46.6 % 2.6 %
Parts & Accessories 459.6 301.6 52.4 % 3.3 %
Boat 419.5 291.5 43.9 % 1.7 %
Segment Eliminations (103.7) (76.2) 36.1 % 1.2 %
Total $ 1,433.2 $ 965.5 48.4 % 2.6 %


	Three Months Ended						Six Months Ended
	Net Sales				2021 vs. 2020		Net Sales			2021 vs. 2020
(in millions)	July 3, 2021		June 27, 2020		GAAP	Currency impact		July 3, 2021		June 27, 2020		GAAP	Currency impact
Propulsion	$	649.5	$	395.4	64.3%	5.1%		$	1,307.3	$	844.0	54.9%	3.8%
Parts & Accessories	548.9		386.5		42.0%	3.8%		1,008.5		688.1		46.6%	3.6%
Boat	449.1		249.9		79.7%	3.5%		868.6		541.4		60.4%	2.6%
Segment Eliminations	(92.7)		(44.0)		110.7%	2.0%		(196.4)		(120.2)		63.4%	1.5%
Total	$	1,554.8	$	987.8	57.4%	4.3%		$	2,988.0	$	1,953.3	53.0%	3.5%

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Table of Contents

Results of Operations

Consolidated

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


											Three Months Ended	2021 vs. 2020				Six Months Ended					2021 vs. 2020
(in millions, except per share data)	(in millions, except per share data)	April 3, 2021			March 28, 2020			$ Change		% Change			(in millions, except per share data)	July 3, 2021			June 27, 2020		$ Change			% Change		Jul 3, 2021		Jun 27, 2020		$ Change		% Change
Net sales	Net sales	$	1,433.2		$	965.5		$	467.7	48.4	%		Net sales	$	1,554.8		$	987.8	$	567.0		57.4%		$	2,988.0	$	1,953.3	$	1,034.7	53.0%
Gross margin(A)	Gross margin(A)	417.3			243.8			173.5		71.2	%		Gross margin(A)	461.5			256.0		205.5			80.3%		878.8		499.8		379.0		75.8%
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	0.5			0.4			0.1		25.0	%		Restructuring, exit and impairment charges	0.2			2.1		(1.9)			(90.5%)		0.7		2.5		(1.8)		(72.0)%
Operating earnings	Operating earnings	231.9			103.2			128.7		124.7	%		Operating earnings	250.2			107.0		143.2			133.8%		482.1		210.2		271.9		129.4%
Net earnings from continuing operations	Net earnings from continuing operations	169.4			70.7			98.7		139.6	%		Net earnings from continuing operations	179.4			71.2		108.2			152.0%		348.8		141.9		206.9		145.8%

Diluted earnings per common share from continuing operations	Diluted earnings per common share from continuing operations	$	2.15		$	0.88		$	1.27	144.3	%		Diluted earnings per common share from continuing operations	$	2.29		$	0.89	$	1.40		157.3%		$	4.44	$	1.77	$	2.67	150.8%

Expressed as a percentage of Net sales:	Expressed as a percentage of Net sales:												Expressed as a percentage of Net sales:
Gross margin (A)	Gross margin (A)	29.1		%	25.3		%			380	bps		Gross margin (A)	29.7%			25.9%					380	bps	29.4%		25.6%				380	bps
Selling, general and administrative expense	Selling, general and administrative expense	10.5		%	11.5		%			(100)	bps		Selling, general and administrative expense	11.2%			12.1%					(90)	bps	10.9%		11.8%				(90)	bps
Research and development expense	Research and development expense	2.4		%	3.0		%			(60)	bps		Research and development expense	2.4%			2.8%					(40)	bps	2.4%		2.9%				(50)	bps
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	0.0		%	0.0		%			—	bps		Restructuring, exit and impairment charges	0.0%			0.2%					(20)	bps	0.0%		0.1%				(10)	bps
Operating margin	Operating margin	16.2		%	10.7		%			550	bps		Operating margin	16.1%			10.8%					530	bps	16.1%		10.8%				530	bps

bps = basis points

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

Table of Contents

The following is a summary of Adjusted operating earnings and Adjusted diluted earnings per common share from continuing operations for the three and six months ended ~~April 3, 2021~~ when compared with the same prior year comparative period:

Operating Earnings Diluted Earnings (Loss) Per Share
(in millions, except per share data) April 3,
2021 March 28,
2020 April 3,
2021 March 28,
2020
GAAP $ 231.9 $ 103.2 $ 2.15 $ 0.88
Restructuring, exit, and impairment charges 0.5 0.4 0.00 0.00
Purchase accounting amortization 7.5 7.5 0.07 0.06
Sport Yacht & Yachts 2.5 — 0.03 —
Acquisition, integration, and IT related costs 1.3 1.4 0.01 0.02
Palm Coast reclassified from held-for-sale 0.8 — 0.01 —
Gain on sale of assets (1.5) — (0.01) —
Special tax items — — (0.02) (0.00)
As Adjusted $ 243.0 $ 112.5 $ 2.24 $ 0.96
GAAP operating margin 16.2 % 10.7 %
Adjusted operating margin 17.0 % 11.7 %


	Three Months Ended								Six Months Ended
	Operating Earnings				Diluted Earnings (Loss) Per Share				Operating Earnings				Diluted Earnings (Loss) Per Share
(in millions, except per share data)	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
GAAP	$	250.2	$	107.0	$	2.29	$	0.89	$	482.1	$	210.2	$	4.44	$	1.77
Restructuring, exit, and impairment charges	0.2		2.1		0.00		0.02		0.7		2.5		0.00		0.02
Purchase accounting amortization	7.6		7.6		0.08		0.07		15.1		15.1		0.15		0.15
Sport Yacht & Yachts	1.3		—		0.01		—		3.8		—		0.04		—
Acquisition, integration, and IT related costs	7.1		1.2		0.07		0.01		8.4		2.6		0.08		0.03
Palm Coast reclassified from held-for-sale	—		—		—		—		0.8		—		0.01		—
Gain on sale of assets	—		—		—		—		(1.5)		—		(0.01)		—
Pension settlement benefit	—		—		—		(0.01)		—		—		—		(0.01)
Special tax items	—		—		0.07		0.01		—		—		0.05		(0.00)
As Adjusted	$	266.4	$	117.9	$	2.52	$	0.99	$	509.4	$	230.4	$	4.76	$	1.96

GAAP operating margin	16.1%		10.8%						16.1%		10.8%
Adjusted operating margin	17.1%		11.9%						17.0%		11.8%

Net sales increased 4857 percent and 53 percent during the second quarter and first ~~quarter~~half of 2021, respectively, when compared with the same prior year period. Refer to the Propulsion, Parts and Accessories, and Boat segments for further details on the drivers of net sales changes.

Gross margin percentage increased 380 basis points in both the second quarter and first ~~quarter~~half of 2021 when compared with the same prior year ~~period,~~period, with all segments benefiting from increased sales resulting from strong global demand, ~~for marine products, with~~ favorable factory absorption from increased production, and favorable changes in foreign currency exchange rates.

~~Table of Contents~~

Selling, general and administrative expense (SG&A) increased during the ~~first~~second quarter and second half of 2021 when compared with the same prior year period. Excluding certain one-time items presented above, SG&A as a percentage of sales was lower in the second quarter and first ~~quarter~~half of 2021 compared with the same prior year ~~period,~~periods, reflecting the strong increase in net ~~sales.~~sales, partially offset by higher variable compensation costs and increased spending on sales and marketing and ACES/other growth initiatives. Research and development expense increased in 2021 versus 2020, reflecting continued investment in new products in all ~~segments, as well as higher variable compensation costs.~~segments.

We recorded restructuring, exit and impairment charges of ~~$0.5~~$0.2 million ~~during the three months ended April 3, 2021~~ and ~~recorded $0.4~~$0.7 million during the three and six months ended ~~March 28, 2020.~~July 3, 2021, respectively, and recorded $2.1 million and $2.5 million during the three and six months ended June 27, 2020, respectively. Refer to Note 4 – Restructuring, Exit and Impairment Activities in the Notes to Condensed Consolidated Financial Statements for further information.

We recorded Equity earnings of ~~$0.8~~$0.4 million and ~~$1.8~~$1.2 million in the three and six months ended ~~April~~July 3, 2021, ~~and March 28, 2020,~~ respectively, which were mainly related to our marine and technology-related joint ventures. This compares with Equity earnings of $1.1 million and $2.9 million in the three and six months ended June 27, 2020, respectively.

We recognized ~~$(1.3)~~$(1.5) million and ~~$0.7~~$(2.8) million in Other ~~(expense) income,~~expense, net in the three and six months ended ~~April~~July 3, 2021, respectively. This compares with $(0.9) million and ~~March 28,~~$(0.2) million recognized in Other expense, net in the three and six months ended June 27, 2020, respectively. Other ~~(expense) income,~~expense, net primarily includes other postretirement benefit costs and remeasurement gains and losses resulting from changes in foreign currency rates.

Net interest expense decreased for the three and six months ended ~~April~~July 3, 2021 when compared with the same prior year period due to reduction in average daily debt outstanding, which was influenced by the timing of debt retirements and debt issuances. Refer to Note ~~13 –Debt~~14 – Debt in the Notes to Condensed Consolidated Financial Statements and Note 16 in the Notes to Consolidated Financial Statements in the 2020 Form 10-K.

~~We recognized an income~~Table of Contents

Income tax provision for the three and six months ended ~~April~~July 3, 2021 of ~~$47.4~~was $55.2 million ~~an increase of $29.0~~and $102.6 million, ~~when~~respectively, compared to ~~the tax provision~~$17.6 million and $36.0 million for the three and six months ended ~~March 28,~~June 27, 2020, ~~of $18.4 million,~~respectively. The increase compared with the same prior year periods is primarily due to increased earnings before income taxes.

The effective tax rate, which is calculated as the income tax provision as a percentage of earnings before income taxes, for the three and six months ended ~~April~~July 3, 2021, was 23.5 percent and ~~March 28,~~22.7 percent, respectively. The effective tax rate for the three and six months ended June 27, 2020 was ~~21.9~~19.8 percent and ~~20.7~~20.2 percent, respectively.

Due to the factors described in the preceding paragraphs, operating earnings, net earnings from continuing operations, and diluted earnings per common share from continuing operations increased during the second quarter and first ~~quarter~~half of 2021 when compared with the same prior year ~~period.~~periods.

Propulsion Segment

The following table sets forth Propulsion segment results for the three and six months ended:


													Three Months Ended				2021 vs. 2020				Six Months Ended				2021 vs. 2020
(in millions)	(in millions)	April 3, 2021			March 28, 2020			$ Change		% Change		(in millions)	July 3, 2021		June 27, 2020		$ Change		% Change		July 3, 2021		June 27, 2020		$ Change		% Change
Net sales	Net sales	$	657.8		$	448.6		$	209.2	46.6	%	Net sales	$	649.5	$	395.4	$	254.1	64.3%		$	1,307.3	$	844.0	$	463.3	54.9%

Operating earnings	Operating earnings	124.5			61.3			63.2		103.1	%	Operating earnings	122.1		47.7		74.4		156.0%		246.6		109.0		137.6		126.2%
Operating margin	Operating margin	18.9		%	13.7		%			520	bps	Operating margin	18.8%		12.1%				670	bps	18.9%		12.9%				600	bps

bps = basis points

Propulsion segment net sales increased~~increased $209.2~~ $254.1 million, or 4764 percent, in the ~~first~~second quarter of 2021 compared to the ~~first~~second quarter of 2020 as a result of strong global demand for all product categories and continued market share gains. The Propulsion segment gained substantial U.S. retail market share in every outboard engine horsepower category in excess of 5075 horsepower, ~~in the quarter,~~ with outsized gains in engines over 200 horsepower, and also experienced continued strong sales growth in international markets. Our increased capacity enabled continued elevated sales to the independent OEM and international channels.

Propulsion segment net sales increased $463.3 million, or 55 percent, in the first half of 2021 versus prior year as a result of the same factors described above.

International sales ~~were 36~~were 38 percent of the segment's net sales ~~through~~during the ~~first~~second quarter of 2021 and increased 5044 percent from the prior year on a GAAP basis. On a constant currency basis, international net sales increased 4232 percent, with increases across all regions. International sales were 37 percent of the segment's net sales through the first half of 2021 and increased 47 percent from the prior year on a GAAP basis. On a constant currency basis, international sales increased 37 percent through the first half of 2021, with increases across all regions.

Propulsion segment operating earnings in the ~~first~~second quarter of 2021 were ~~$124.5~~$122.1 million, an increase of ~~103~~156 percent when compared to the ~~first~~second quarter of 2020, as a result of increased net sales ~~and favorable customer mix,~~ in addition to the factors affecting all of our segments previously mentioned. Operating earnings for the first half of 2021 were $246.6 million, an increase of 126 percent as a result of the same factors described above.

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Parts & Accessories Segment

The following table sets forth Parts and Accessories (P&A) segment results for the three and six months ended:


												Three Months Ended	2021 vs. 2020		Six Months Ended				2021 vs. 2020
(in millions)	(in millions)	April 3, 2021			March 28, 2020			$ Change		% Change				(in millions)	July 3, 2021		June 27, 2020		$ Change		% Change		July 3, 2021		June 27, 2020		$ Change		% Change
Net sales	Net sales	$	459.6		$	301.6		$	158.0	52.4	%			Net sales	$	548.9	$	386.5	$	162.4	42.0%		$	1,008.5	$	688.1	$	320.4	46.6%

GAAP operating earnings	GAAP operating earnings	$	91.9		$	46.2		$	45.7	98.9	%			GAAP operating earnings	$	114.4	$	80.1	$	34.3	42.8%		$	206.3	$	126.3	$	80.0	63.3%
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	0.5			0.3			0.2		66.7	%			Restructuring, exit and impairment charges	0.2		—		0.2		NM		0.7		0.3		0.4		133.3%
Purchase accounting amortization	Purchase accounting amortization	7.2			7.2			—		NM				Purchase accounting amortization	7.2		7.2		—		NM		14.4		14.4		—		NM
Acquisition, integration and IT costs														Acquisition, integration and IT costs	5.8		—		5.8		NM		5.8		—		5.8		NM
Gain on sale of assets	Gain on sale of assets	(1.5)			—			(1.5)		NM				Gain on sale of assets	—		—		—		NM		(1.5)		—		(1.5)		NM
Adjusted operating earnings	Adjusted operating earnings	$	98.1		$	53.7		$	44.4	82.7	%			Adjusted operating earnings	$	127.6	$	87.3	$	40.3	46.2%		$	225.7	$	141.0	$	84.7	60.1%

GAAP operating margin	GAAP operating margin	20.0		%	15.3		%			470	bps			GAAP operating margin	20.8%		20.7%				10	bps	20.5%		18.4%				210	bps
Adjusted operating margin	Adjusted operating margin	21.3		%	17.8		%			350	bps			Adjusted operating margin	23.2%		22.6%				60	bps	22.4%		20.5%				190	bps

NM = not meaningful

bps = basis points

P&A segment net sales increased~~increased $158.0~~ $162.4 million, or 5242 percent in the ~~first~~second quarter of 2021 versus the ~~first~~second quarter of 2020 due to strong sales growth across all product categories. Net sales increases ofin our aftermarket business were driven by ~~increased~~a continued increase in boating participation, which elevated parts and service needs, ~~during the off-season,~~ and favorable ~~early-season~~ weather conditions in many areas. Net sales also increased in the OEM component of the business, as we leveraged investments in technology to take advantage of strong demand from boat builders as they continued to increase production.

P&A segment net sales increased ~~production.~~$320.4 million, or 47 percent, in the first half of 2021 versus prior year as a result of the same factors described above.

International sales were 3229 percent of the P&A segment's net sales in the ~~first~~second quarter of 2021 and increased 6270 percent year over year on a GAAP basis. On a constant currency basis, international net sales increased 5154 percent, with increases across all regions. International sales were 30 percent of the P&A segment's net sales in the first half of 2021 and increased 66 percent year over year on a GAAP basis. On a constant currency basis, international net sales increased 53 percent through the first half of 2021, with increases across all regions.

P&A segment operating earnings were $114.4 million in the ~~first~~second quarter of 2021, ~~were $91.9 million,~~ an increase of 9943 percent when compared to the ~~first~~second quarter of ~~2020. Contributing to the increase were~~2020, as a result of strong sales increases ~~and favorable sales mix, as well as~~in addition to the factors affecting all of our segments previously mentioned. Operating earnings for the first half of 2021 were $206.3 million, an increase of 63 percent, as a result of the same factors described above.

Table of Contents

Boat Segment

The following table sets forth Boat segment results for the three and six months ended:


												Three Months Ended	2021 vs. 2020		Six Months Ended				2021 vs. 2020
(in millions)	(in millions)	April 3, 2021			March 28, 2020			$ Change		% Change				(in millions)	July 3, 2021		June 27, 2020		$ Change		% Change		July 3, 2021		June 27, 2020		$ Change		% Change
Net sales	Net sales	$	419.5		$	291.5		$	128.0	43.9	%			Net sales	$	449.1	$	249.9	$	199.2	79.7%		$	868.6	$	541.4	$	327.2	60.4%

GAAP operating earnings	GAAP operating earnings	$	40.8		$	5.1		$	35.7	NM				GAAP operating earnings	$	44.2	$	2.0	$	42.2	NM		$	85.0	$	7.1	$	77.9	NM
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	(0.0)			(0.0)			0.0		NM				Restructuring, exit and impairment charges	—		0.3		(0.3)		(100.0)%		—		0.3		(0.3)		(100.0)%
Sport Yacht & Yachts	Sport Yacht & Yachts	2.5			—			2.5		NM				Sport Yacht & Yachts	1.3		—		1.3		NM		3.8		—		3.8		NM
Acquisition, integration, and IT related costs	Acquisition, integration, and IT related costs	1.3			0.7			0.6		85.7	%			Acquisition, integration, and IT related costs	1.3		0.6		0.7		116.7%		2.6		1.3		1.3		100.0%
Palm Coast reclassified from held-for-sale	Palm Coast reclassified from held-for-sale	0.8			—			0.8		NM				Palm Coast reclassified from held-for-sale	—		—		—		NM		0.8		—		0.8		NM
Purchase accounting amortization	Purchase accounting amortization	0.3			0.3			—		NM				Purchase accounting amortization	0.4		0.4		—		NM		0.7		0.7		—		NM
Adjusted operating earnings	Adjusted operating earnings	$	45.7		$	6.1		$	39.6	NM				Adjusted operating earnings	$	47.2	$	3.3	$	43.9	NM		$	92.9	$	9.4	$	83.5	NM

GAAP operating margin	GAAP operating margin	9.7		%	1.7		%			800	bps			GAAP operating margin	9.8%		0.8%				900	bps	9.8%		1.3%				850	bps
Adjusted operating margin	Adjusted operating margin	10.9		%	2.1		%			880	bps			Adjusted operating margin	10.5%		1.3%				920	bps	10.7%		1.7%				900	bps

NM = not meaningful

bps = basis points

~~Table~~Boat segment net sales increased $199.2 million, or 80 percent, in the second quarter of ~~Contents~~2021 versus the second quarter of 2020, res

ulting from increased sales volumes to dealers in order to meet continued strong retail customer demand.

Boat segment net sales increased ~~$128.0~~$327.2 million, or 4460 percent, in the first ~~quarter~~half of 2021, ~~versus the first quarter of 2020,~~ resulting from ~~higher wholesale volume to dealers to meet increased customer demand at~~ the ~~retail level and to begin refilling pipeline inventories.~~same factor described above.

International sales were 2530 percent of the segment's net sales in the ~~first three months~~second quarter of 2021 and increased 41102 percent on a GAAP basis. On a constant currency basis, international sales increased 3489 percent, with increases across all regions. International sales were 28 percent of the segment's net sales in the first half of 2021 and increased 70 percent on a GAAP basis. On a constant currency basis, international sales increased 60 percent through the first half of 2021, with increases across all regions.

Boat segment operating earnings in the ~~first~~second quarter of 2021 were ~~$40.8~~$44.2 million, an increase of $~~35.7~~42.2 million when compared to the ~~first~~second quarter of 2020, due to increased sales, ~~and~~ lower retail discount levels, ~~versus 2020,~~and success in mitigating supply chain challenges, in addition to the factors affecting all of our segments. Operating earnings in the first half of 2021 were $85.0 million, an increase of $77.9 million, as a result of the same factors described above.

Table of Contents

Corporate/Other

The following table sets forth Corporate/Other results for the three and six months ended:


										Three Months Ended	2021 vs. 2020		Six Months Ended				2021 vs. 2020
(in millions)	(in millions)	April 3, 2021		March 28, 2020		$ Change		% Change				(in millions)	July 3, 2021		June 27, 2020		$ Change		% Change	July 3, 2021		June 27, 2020		$ Change		% Change
GAAP operating loss	GAAP operating loss	$	(25.3)	$	(9.4)	$	(15.9)	169.1	%			GAAP operating loss	$	(30.5)	$	(22.8)	$	(7.7)	33.8%	$	(55.8)	$	(32.2)	$	(23.6)	73.3%
Restructuring, exit and impairment charges	Restructuring, exit and impairment charges	—		0.1		(0.1)		(100.0	%)			Restructuring, exit and impairment charges	—		1.8		(1.8)		(100.0)%	—		1.9		(1.9)		(100.0)%
Acquisition, integration, and IT related costs	Acquisition, integration, and IT related costs	—		0.7		(0.7)		(100.0	%)			Acquisition, integration, and IT related costs	—		0.6		(0.6)		(100.0)%	—		1.3		(1.3)		(100.0)%
Adjusted operating loss	Adjusted operating loss	$	(25.3)	$	(8.6)	$	(16.7)	194.2	%			Adjusted operating loss	$	(30.5)	$	(20.4)	$	(10.1)	49.5%	$	(55.8)	$	(29.0)	$	(26.8)	92.4%

NM = not meaningful

Corporate operating expenses in the ~~first~~second quarter of 2021 were $~~25.3~~30.5 million, an increase of $~~15.9~~7.7 million when compared to the ~~first~~second quarter of 2020, primarily due to ~~the increase~~an increase in variable compensation expense ~~unfavorable mark-to-market adjustments for deferred compensation arrangements and~~as well as an increase in ~~investments in~~spending on certain enterprise ~~growth initiatives.~~initiatives including ACES.

Corporate operating expenses increased 73 percent in the first half of 2021 versus 2020, resulting from the same factors described above.

Cash Flow, Liquidity and Capital Resources

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


(in millions)	(in millions)	April 3, 2021		March 28, 2020		(in millions)	July 3, 2021		June 27, 2020
Net cash provided by (used for) operating activities of continuing operations		$	17.3	$	(83.9)
Net cash provided by operating activities of continuing operations						Net cash provided by operating activities of continuing operations	$	350.5	$	215.7
Net cash (used for) provided by:	Net cash (used for) provided by:					Net cash (used for) provided by:
Plus: Capital expenditures	Plus: Capital expenditures	(42.9)		(55.9)		Plus: Capital expenditures	(110.3)		(90.7)
Plus: Proceeds from the sale of property, plant and equipment	Plus: Proceeds from the sale of property, plant and equipment	4.2		0.4		Plus: Proceeds from the sale of property, plant and equipment	4.6		1.6

Plus: Effect of exchange rate changes	Plus: Effect of exchange rate changes	(2.0)		(4.4)		Plus: Effect of exchange rate changes	(0.5)		(2.4)

Total free cash flow (A)	Total free cash flow (A)	$	(23.4)	$	(143.8)	Total free cash flow (A)	$	244.3	$	124.2

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

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

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2021 Cash Flow

Net cash provided by operating activities of continuing operations in the first ~~three~~six months of 2021 totaled ~~$17.3~~$350.5 million versus ~~$83.9~~$215.7 million ~~used for operating activities~~ in the comparable period of 2020. The increase is primarily due to higher net earnings during the ~~quarter.~~

~~The primary drivers~~first half of ~~net cash provided by operating activities of continuing operations in~~ 2021, ~~were net earnings, net of non-cash items,~~ partially offset by ~~an increase in~~ working capital. Working capital is defined as Accounts and notes receivable, Inventories and Prepaid expenses and other, net of Accounts payable and Accrued expenses as presented in the Condensed Consolidated Balance Sheets, excluding the impact of acquisitions and non-cash adjustments.

The primary drivers of net cash provided by operating activities of continuing operations in 2021 were net earnings, net of non-cash items, partially offset by the seasonal impact of increasing working capital. Accounts and notes receivable increased ~~$202.0~~

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$167.5 million primarily due to increased sales across all segments. Inventory increased ~~$57.9~~$129.9 million, driven by increases to support higher production ~~volumes in advance of the marine selling season.~~volumes. Accounts payable increased ~~$78.6~~$129.8 million primarily due to timing of payments and higher inventory levels across all reportable segments. Accrued expenses ~~decreased $47.0~~increased $42.1 million primarily driven by ~~payment of prior year variable compensation, which had been accrued as of December 31, 2020.~~increases in program-related volume discounts and rebates.

Net cash ~~provided by~~used for investing activities of continuing operations was ~~$1.5~~$75.6 million, which primarily included capital expenditures of $110.3 million, offset by sales of marketable securities of ~~$49.4 million offset by capital expenditures of $42.9~~$55.9 million. Our capital spending was focused on investments in new products and technologies.

Net cash used for financing activities was ~~$56.5~~$195.7 million and primarily related to ~~cash dividends paid to common shareholders, common stock repurchases, and~~ payments of long-term debt including current ~~maturities.~~maturities, common stock repurchases, and cash dividends paid to common shareholders. Refer to Note 1314 –Debt in the Notes to Condensed Consolidated Financial Statements for further details on our debt activity during the quarter.

2020 Cash Flow

Net cash ~~used for~~provided by operating activities of continuing operations in the first ~~three~~six months of 2020 totaled ~~$83.9~~$215.7 million. The primary driver of cash used for operating activities of continuing operations was ~~a seasonal increase in~~favorable working capital usage, which was partially offset by net earnings net of non-cash expense items. During the first six months of 2020, Inventory decreased $146.2 million due to higher net sales in the period and production disruptions due to COVID-19. Accounts and notes receivable increased ~~$143.2~~$129.6 million primarily due to the seasonal changes in sales in the Propulsion and P&A segments. Inventory increased $15.6 million, driven by the impact of temporary production suspensions in response to COVID-19, which resulted in slightly higher increases in raw material and work-in-process inventories. Accrued expenses decreased $15.6 million, primarily driven by payment of prior year variable compensation, which had been accrued as of December 31, 2019.net sales. Accounts payable decreased ~~$13.3~~$49.6 million primarily due to timing of payments and lower production levels across all reportable segments due to temporary production suspensions in response to COVID-19. Accrued expenses decreased $6.3 million, primarily driven by the impact of payments of the prior year's variable compensation, which had been accrued as of December 31, 2019.

Net cash used for investing activities of continuing operations wa~~s $59.1~~was $90.2 million, which included capital expenditures of ~~$55.9~~$90.7 million. The Company's capital spending was focused on investments in new products and expediting existing capital projects given the available free cash flow during the year.

Net cash provided by financing activities was ~~$325.2~~$97.2 million and primarily related to net proceeds ~~from issuances~~ from short-term debt, which exceeded common stock repurchases and cash dividends paid to common shareholders. Refer to Note 16 –- Debt in the Notes to Consolidated Financial Statements in the 2020 Form 10-K, for further details on our 2020 debt activity.

Liquidity and Capital Resources

We view our highly liquid assets as of ~~April~~July 3, 2021, December 31, 2020 and ~~March 28,~~June 27, 2020 as:


(in millions)	(in millions)	April 3, 2021		December 31, 2020		March 28, 2020		(in millions)	July 3, 2021		December 31, 2020		June 27, 2020
Cash and cash equivalents	Cash and cash equivalents	$	471.9	$	519.6	$	502.9	Cash and cash equivalents	$	590.2	$	519.6	$	541.5
Short-term investments in marketable securities	Short-term investments in marketable securities	7.3		56.7		0.8		Short-term investments in marketable securities	0.8		56.7		0.8
Total cash, cash equivalents and marketable securities	Total cash, cash equivalents and marketable securities	$	479.2	$	576.3	$	503.7	Total cash, cash equivalents and marketable securities	$	591.0	$	576.3	$	542.3

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The following table sets forth an analysis of total liquidity as of ~~April~~July 3, 2021, December 31, 2020 and ~~March 28,~~June 27, 2020:


(in millions)	(in millions)	April 3, 2021		December 31, 2020		March 28, 2020		(in millions)	July 3, 2021		December 31, 2020		June 27, 2020
Cash, cash equivalents and marketable securities	Cash, cash equivalents and marketable securities	$	479.2	$	576.3	$	503.7	Cash, cash equivalents and marketable securities	$	591.0	$	576.3	$	542.3
Amounts available under lending facility (A)	Amounts available under lending facility (A)	397.2		395.0		2.9		Amounts available under lending facility (A)	397.2		395.0		202.9
Total liquidity (B)	Total liquidity (B)	$	876.4	$	971.3	$	506.6	Total liquidity (B)	$	988.2	$	971.3	$	745.2

(A) See Note ~~13 –Debt~~14 – Debt in the Notes to Condensed Consolidated Financial Statements for further details on our lending facility.

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

Cash, cash equivalents and marketable securities totaled ~~$479.2~~$591.0 million as of ~~April~~July 3, 2021, ~~a decrease~~an increase of ~~$97.1~~$14.7 million from $576.3 million as of December 31, 2020, and ~~a decrease~~an increase of ~~$24.5~~$48.7 million from ~~$503.7~~$542.3 million as of ~~March 28,~~June 27, 2020. Total debt as of ~~April~~July 3, 2021, December 31, 2020 and ~~March 28,~~June 27, 2020 was ~~$944.7~~$875.5 million, $951.4 million and ~~$1,494.7~~$1,285.7 million, respectively. Our debt-to-capitalization ratio was ~~36.5~~33.1 percent as of ~~April~~July 3, 2021, down from 38.7 percent as of December 31, 2020 and from ~~53.4~~48.5 percent as of ~~March 28,~~June 27, 2020.

We believe that we have adequate sources of liquidity to meet our short-term (for at least the next twelve months) and foreseeable long-term needs.

There was ~~not any~~no borrowing activity under the Credit Facility during the first ~~three months~~half of 2021, and we did not have any borrowings outstanding as of ~~April~~July 3, 2021. Available borrowing capacity totaled $397.2 million, net of $2.8 million of letters of credit outstanding under the Credit Facility. During the first ~~three months~~half of 2021, there was ~~not any~~no borrowing activity under our unsecured commercial paper program (CP Program)., pursuant to which we may issue short-term, unsecured commercial paper notes. Refer to Note ~~13 –Debt~~14 – Debt in the Notes to Condensed Consolidated Financial Statements and Note 16 - Debt in the Notes to Consolidated Financial Statements in the 2020 Form 10-K, for further details.

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

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2021 Capital Strategy

~~Our~~In anticipation of the acquisition of Navico, we entered into a commitment letter with JPMorgan Chase Bank, N.A on June 23, 2021, to obtain a 364-day senior unsecured bridge facility in an aggregate amount of principal not to exceed $900 million. Permanent financing for the acquisition is expected to include a mix of senior unsecured notes and cash on hand. Refer to Note 5 – Acquisitions in the Notes to Condensed Consolidated Financial Statements for further details.

Aside from financing related to the acquisition of Navico, our capital strategy assumptions have ~~also been augmented~~not materially changed since last quarter. We have taken steps to strengthen our overall liquidity and shareholder return profile. In July, we extended and expanded our revolving credit agreement, which is now in ~~places~~effect through July 2026 and provides for $500 million of borrowing capacity, an increase of $100 million. Refer to ~~leverage~~Note 15 – Subsequent Events in the Notes to Condensed Consolidated Financial Statements for further details. On July 20, 2021, our ~~strong cash position. We~~Board of Directors approved a $350 million increase to our share repurchase authorization, and we now have over $400 million approved for repurchases, which we plan to ~~retire~~ ~~approximately $100 million of our long-term debt obligations and~~ ~~to continue our systematic approach to share repurchases,~~systemically deploy consistent with our ~~plan~~capital strategy, including between $80 million and $120 million of repurchases in 2021. These actions follow the increase of our dividend to 33.5 cents a share, a 24 percent dividend increase that was approved by the Board of Directors in April 2021, ~~spread relatively evenly across the year.~~ as we continue to balance increases in shareholder return and investment and growth initiatives.

~~Additionally, we~~

We are planning for capital expenditures in the range of approximately ~~$250~~$270 million to ~~$270~~$300 million to support, and in some cases accelerate, growth initiatives throughout our organization. This ~~slightly increased~~ spending will be directed to new product investments in all of our businesses, cost reduction and automation projects, and select additional ~~capacity~~capacity-related initiatives to support demand and future growth, primarily in the Propulsion business.

~~We also raised~~ Additionally, we plan to retire approximately $100 million of our dividend to 33.5 cents a share, or a 24 percent increase, as our strong cash position enables us to raise our dividend earlier in the year than usual, keep our payout ratio close to our target of 20 to 25 percent, and continue to provide strong returns to our shareholders.long-term debt obligations.

Financing Joint Venture

On March 10, 2021, through our Brunswick Financial Services Corporation subsidiary, we entered into an amended and restated joint venture agreement with Wells Fargo Commercial Distribution Finance to extend the term of our financial services joint venture, Brunswick Acceptance Company, LLC (BAC), through December 31, 2025. The amendment did not otherwise materially change the terms of the agreement. BAC is detailed further in the 2020 Form 10-K.

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Off-Balance Sheet Arrangements and Contractual Obligations

Our off-balance sheet arrangements and contractual obligations as of December 31, 2020 are detailed in the 2020 Form 10-K. There have been no material changes in these arrangements and obligations outside the ordinary course of business since December 31, 2020.

Environmental Regulation

There were no material changes in our environmental regulatory requirements since the filing of our 2020 Form 10-K.

Critical Accounting Policies

There were no further material changes in our critical accounting policies since the filing of our 2020 Form 10-K.

As discussed in the 2020 Form 10-K, the preparation of the consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amount of reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the periods reported. Actual results may differ from those estimates.

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Recent Accounting Pronouncements

Recent accounting pronouncements that have been adopted during the three months ended ~~April~~July 3, 2021, or will be adopted in future periods, are included in Note 1 ~~– Significant~~–Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements.

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, estimates, and projections about Brunswick’s business and by their nature address matters that are, to different degrees, uncertain. Words such as "may," "could," "should," "expect," "anticipate," "project," "position," "intend," "target," "plan," "seek," "estimate," "believe," "predict," "outlook," and similar expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this quarterly report. These risks include, but are not limited to: the effect of adverse general economic conditions, including the amount of disposable income consumers have available for discretionary spending; changes in currency exchange rates; fiscal policy concerns; adverse economic, credit, and capital market conditions; higher energy and fuel costs; competitive pricing pressures; the coronavirus (COVID-19) pandemic including, without limitation, the impact on global economic conditions and on capital and financial markets, changes in consumer behavior and demand, the potential unavailability of personnel or key facilities, modifications to our operations, and the ~~potential implementation~~emergence of ~~regulatory actions;~~variant strains; managing our manufacturing footprint; adverse weather conditions, climate change events, and other catastrophic event risks; international business risks; our ability to develop new and innovative products and services at a competitive price; our ability to meet demand in a rapidly changing environment; loss of key customers; actual or anticipated increases in costs, disruptions of supply, or defects in raw materials, parts, or components we purchase from third parties, including as a result of pressures due to the pandemic; supplier manufacturing constraints, increased demand for shipping carriers, and transportation disruptions; absorbing fixed costs in production; risks associated with joint ventures that do not operate solely for our benefit; our ability to successfully implement our strategic plan and growth initiatives; the possibility that the announced acquisition of Navico will not be consummated within the anticipated time period or at all, including as the result of regulatory, market, or other factors; our ability to integrate acquisitions, including Navico; the potential for disruption to our business in connection with the Navico acquisition, making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred in connection with the Navico transaction; the possibility that the expected synergies and value creation from the Navico transaction will not be realized or will not be realized within the expected time period; attracting and retaining skilled labor, implementing succession plans for key leadership, and executing organizational and leadership changes; our ability to identify, complete, and integrate targeted acquisitions; the risk that strategic divestitures will not provide business benefits; maintaining effective distribution; adequate financing access for dealers and customers; requirements for us to repurchase inventory; inventory reductions by dealers, retailers, or independent boat builders; risks related to the Freedom Boat Club franchise business model; outages, breaches, or other cybersecurity events regarding our technology systems, which could affect manufacturing and business operations and could result in lost or stolen information and associated remediation costs; our ability to protect our brands and intellectual property; changes to U.S. trade policy and tariffs; ~~having to record an~~any impairment to the value of goodwill and other assets; product liability, warranty, and other claims risks; legal and regulatory compliance, including increased costs, fines, and reputational risks; changes in income tax legislation or enforcement; managing our share repurchases; and risks associated with certain divisive shareholder activist actions.

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Additional risk factors are included in the 2020 Form 10-K. Forward-looking statements speak only as of the date on which they are made, and Brunswick does not undertake any obligation to update them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in foreign currency exchange rates, interest rates and commodity prices. We enter into various hedging transactions to mitigate these risks in accordance with guidelines established by our management. We do not use financial instruments for trading or speculative purposes. Our risk management objectives are described in Note 56 –Financial Instruments in the Notes to Condensed Consolidated Financial Statements and Note 14 in the Notes to Consolidated Financial Statements in the 2020 Form 10-K.

There have been no significant changes to our market risk since December 31, 2020. For a discussion of exposure to market risk, refer to Part II, Item 7A – Quantitative and Qualitative Disclosures about Market Risk, set forth in the 2020 Form 10-K.

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Item 4. Controls and Procedures

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

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PART II – OTHER INFORMATION

Item 1A. Risk Factors

Brunswick's operations and financial results are subject to various risks and uncertainties that could adversely affect the Company’s business, financial condition, results of operations, cash flows, and the trading price of Brunswick’s common stock. There have been no material changes ~~from~~to the risk factors previously disclosed in ~~Part I, "Item 1A. Risk Factors" in our Annual Report on~~the 2020 Form 10-K ~~for~~other than as set forth below.

The inability to complete the ~~year ended December 31, 2020.~~Navico acquisition, or the failure to successfully integrate Navico, could negatively impact our business.

On June 23, 2021, Brunswick entered into a share purchase agreement to acquire Navico, which produces marine electronics and sensors. The closing of the transaction is subject to usual and customary closing conditions as well as regulatory review and approval. However, we cannot provide assurance regarding the timing and ultimate completion of the proposed acquisition, including the timing, receipt, and terms and conditions of any required governmental and regulatory approvals. In addition, there is a risk of the occurrence of an event, change, or other circumstance that could give rise to the termination of the proposed transaction, and the possibility that the proposed transaction does not close, including due to the failure to satisfy closing conditions.

Acquisitions pose risks, such as our ability to project and evaluate market demand; maximize potential synergies and cost savings; make accurate accounting estimates; and achieve anticipated business objectives. The Navico acquisition presents these and other integration risks, including:

•the risk that the businesses of Brunswick and Navico will not be integrated successfully;

•disruption from the proposed transaction could make it more difficult to maintain business and operational relationships;

•the possibility that the expected synergies and value creation from the proposed transaction will not be realized or will not be realized within the expected time period; and

•the risk that unexpected costs will be incurred.

If the acquired business does not achieve projected results, our growth may be limited and our results adversely affected.

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

On July 20, 2021, our Board of Directors expanded our share repurchase authorization for an additional amount of $350 million, which was in addition to the prior authorization of $600 million from July 2019. Such repurchase authorizations do not have an expiration date.During the first ~~quarter~~six months of 2021, we repurchased approximately ~~$15.9~~$55.9 million of our common stock and, ~~as of April 3,~~including the increase effective July 20, 2021, the remaining authorization was ~~$100.6~~$410.6 million.

We repurchased the following shares of common stock during the three months ended ~~April~~July 3, 2021:

Period Total Number of Shares Purchased Weighted Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Amount of Dollars that May Yet Be Used to Purchase Shares Under the Program
January 1 to January 30 92,868 $ 86.14 92,868
January 31 to February 27 46,457 88.61 46,457
February 28 to April 3 39,009 96.41 39,009
Total 178,334 $ 89.03 178,334 $ 100,640,578


Period	Total Number of Shares Purchased	Weighted Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Amount of Dollars that May Yet Be Used to Purchase Shares Under the Program
April 4 to May 1	48,960	$	102.12	48,960
May 2 to May 29	210,525	104.02		210,525
May 30 to July 3	135,038	97.02		135,038
Total	394,523	$	101.39	394,523	$	410,640,787

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~~Item 5. Other Information~~

At the May 5, 2021 Annual Meeting of Shareholders of the Company ("Annual Meeting"), Nancy E. Cooper, David C. Everitt, Reginald Fils-Aime, Lauren P. Flaherty, David M. Foulkes, Joseph W. McClanathan, David V. Singer, Jane L. Warner, J. Steven Whisler, and Roger J. Wood were elected as directors of the Company for terms expiring at the 2022 Annual Meeting of Shareholders of the Company. The number of shares voted with respect to these directors were:

Nominee For Against Abstain Broker Non-votes
Nancy E. Cooper 68,215,181 1,286,090 396,256 2,677,228
David C. Everitt 66,955,438 2,626,836 315,253 2,677,228
Reginald Fils-Aime 69,641,825 67,927 187,775 2,677,228
Lauren P. Flaherty 69,300,375 552,032 45,120 2,677,228
David M. Foulkes 69,778,636 80,515 38,376 2,677,228
Joseph W. McClanathan 69,781,703 67,749 48,075 2,677,228
David V. Singer 69,510,272 340,223 47,032 2,677,228
Jane L. Warner 69,782,939 69,340 45,248 2,677,228
J. Steven Whisler 67,805,357 2,043,609 48,561 2,677,228
Roger J. Wood 69,521,702 61,650 314,175 2,677,228

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


			~~Number of Shares~~
~~For~~			~~65,679,030~~
~~Against~~			~~4,049,465~~
~~Abstain~~			~~169,032~~
~~Broker Non-votes~~			~~2,677,228~~

At the Annual Meeting, shareholders ratified the Audit Committee's appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the Company and its subsidiaries for the fiscal year ending December 31, 2021 pursuant to the following vote:


			~~Number of Shares~~
~~For~~			~~72,166,971~~
~~Against~~			~~75,774~~
~~Abstain~~			~~332,010~~
~~Broker Non-votes~~			—

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Item 6. Exhibits






























2.1			Share Purchase Agreement, dated as of June 23 , 2021, by and among Brunswick Corporation, Altor Group AB, West Street Capital Partners VII Investments, L.P., West Street Capital Partners VII Offshore Investments, L.P., West Street Capital Partners VII – Parallel, SLP, Nanna MFN AS and Nanna MFN II AS , filed as Exhibit 2.1 to the Company's Current Repo rt on F orm 8-K filed with the Securities and Exchange Commission on June 25, 2021 and hereby incorporated by reference
2.2			Management Warranty Agreement, dated as of June 23, 2021, by and among Brunswick Corporation and the persons listed on Schedule 1.1 thereto, filed as Exhibit 2.2 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 25, 2021 and hereby incorporated by reference
10.1			Amended and Restated Credit Agreement, dated as of March 21, 2011, as amended and restated as of June 26, 2014, as further amended and restated as of June 30, 2016, as further amended as of July 13, 2018, as further amended and restated as of September 26, 2018, as further amended as of November 12, 2019, and as further amended and restated as of July 16, 2021, among Brunswick Corporation, the subsidiary borrowers party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 19, 2021 and hereby incorporated by reference
31.1			Certification of CEO Pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2			Certification of CFO Pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1			Certification of CEO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2			Certification of CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS			XBRL Instance Document
101.SCH			XBRL Taxonomy Extension Schema Document
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document
101.LAB			XBRL Taxonomy Extension Label Linkbase Document
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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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.


	BRUNSWICK CORPORATION
~~May 11,~~August 2, 2021	By:	/s/ RANDALL S. ALTMAN
		Randall S. Altman
		Vice President and Controller*

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

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Nominee	For	Against	Abstain	Broker Non-votes
Nancy E. Cooper	68,215,181	1,286,090	396,256	2,677,228
David C. Everitt	66,955,438	2,626,836	315,253	2,677,228
Reginald Fils-Aime	69,641,825	67,927	187,775	2,677,228
Lauren P. Flaherty	69,300,375	552,032	45,120	2,677,228
David M. Foulkes	69,778,636	80,515	38,376	2,677,228
Joseph W. McClanathan	69,781,703	67,749	48,075	2,677,228
David V. Singer	69,510,272	340,223	47,032	2,677,228
Jane L. Warner	69,782,939	69,340	45,248	2,677,228
J. Steven Whisler	67,805,357	2,043,609	48,561	2,677,228
Roger J. Wood	69,521,702	61,650	314,175	2,677,228