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| 8-K - FORM 8-K - BRUNSWICK CORP | bc2015q3earnings8-k.htm |
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Brunswick Corporation 1 N. Field Court Lake Forest, IL 60045 | |
Telephone 847.735.4700 Facsimile 847.735.4750 | |
Release: | IMMEDIATE | |
Contact: | Bruce Byots | |
Vice President - Investor Relations | ||
Phone: | 847-735-4612 | |
Contact: | Daniel Kubera | |
Director - Media Relations and Corporate Communications | ||
Phone: | 847-735-4617 | |
Email: | daniel.kubera@brunswick.com | |
Brunswick Reports Third Quarter Results
6% Growth in Revenue; 11% Increase on a Constant Currency Basis
22% Growth in Diluted EPS, as adjusted
2015 Guidance: Diluted EPS, as adjusted, Narrowed Range of $2.80 to $2.85
Free Cash Flow Estimate Exceeds $200 million
LAKE FOREST, Ill., Oct. 29, 2015 -- Brunswick Corporation (NYSE: BC) today reported results for the third quarter of 2015:
• | Consolidated net sales increased 6 percent versus third quarter 2014; |
11 percent growth on a constant currency basis.
• | Adjusted operating earnings increased by 22 percent. On a GAAP basis, operating earnings were up 24 percent. |
• | Adjusted pretax earnings increased by 25 percent. On a GAAP basis, pretax earnings were up 26 percent. |
• | Diluted EPS of $0.77, a 22 percent increase compared with prior year, on an as adjusted basis, and a 20 percent increase on a GAAP basis. |
• | Year-to-date free cash flow of $131 million, an $82 million increase compared with prior year. |
“Our reported third quarter revenues increased by 6 percent; 11 percent on a constant currency basis,” said Brunswick Chairman and Chief Executive Officer Dustan E. McCoy. “Our top line reflected strong growth rates in fiberglass outboard and sterndrive/inboard boats. This growth also included a solid performance by marine parts and accessories, outboard engines, fitness equipment and aluminum boats.
“Sales growth was driven by solid market demand, higher average marine selling prices and continued market share gains.
“Adjusted operating earnings in the third quarter increased by 22 percent as compared to the prior year, reflecting an adjusted operating margin increase of 160 basis points. Diluted earnings per common share, as adjusted, also increased by 22 percent. This strong earnings growth was also supported by a more favorable product mix, benefits from cost reductions and savings related to sourcing initiatives, partially offset by the unfavorable effects of foreign exchange,” McCoy said.
Discontinued Operations
On Sept. 18, 2014, and May 22, 2015, the Company completed the sale of its Retail Bowling and Bowling Products businesses, respectively. As a result, the historical and future results of these businesses are reported as discontinued operations and the historical and future results of the Billiards business, which remains part of the Company, are now reflected in the Fitness segment. Therefore, for all periods presented in this release, all figures and outlook statements incorporate these changes and reflect continuing operations only, unless otherwise noted.
Third Quarter Results
For the third quarter of 2015, the Company reported net sales of $991.9 million, up from $932.1 million a year earlier. For the quarter, the Company reported operating earnings of $115.8 million, compared to $93.7 million in the prior year. Operating earnings for the third quarter of 2014 included $0.9 million of net restructuring, exit and impairment charges.
Brunswick reported net earnings of $72.2 million, or $0.77 per diluted share, compared with net earnings of $61.0 million, or $0.64 per diluted share, for the third quarter of 2014. The diluted earnings per share for the third quarter of 2014 included $0.01 per diluted share of restructuring, exit and impairment charges and $0.02 per diluted share benefit from special tax items.
Review of Cash Flow and Balance Sheet
Cash and marketable securities totaled $654.4 million at the end of the third quarter, up $18.5 million from year-end 2014 levels. This change versus year-end reflects net cash provided by operating activities of $240.7 million, an increase of $113.3 million versus the prior year. Net proceeds received from the sale of the Bowling Products business (reported in discontinued operations) also contributed to the increase.
In addition, cash used for investing and financing activities of $194.6 million affected cash and marketable securities balances. Investing and financing activities during the first nine months included $98.5 million for capital expenditures, $100.0 million for common stock repurchases and $34.6 million for dividends.
Marine Engine Segment
The Marine Engine segment, consisting of the Mercury Marine Group, including the marine parts and accessories businesses, reported net sales of $588.2 million in the third quarter of 2015, up 4 percent from $566.9 million in the third quarter of 2014. International sales, which represented 32 percent of total segment sales in the quarter, were down 5 percent compared to the prior year period. On a constant currency basis, international sales were up 10 percent. For the quarter, the Marine Engine segment reported operating earnings of $102.5 million. This compares with operating earnings of $93.3 million in the third quarter of 2014.
Sales increases in the quarter were led by the segment’s parts and accessories businesses, which included revenues from acquisitions completed in the second quarter of 2015 and during the third quarter of 2014. Higher revenues, a more favorable product mix, cost reductions and savings related to sourcing initiatives contributed to the increase in operating earnings in the third quarter of 2015. Partially offsetting these positive factors were the unfavorable effects of foreign exchange.
Boat Segment
The Boat segment is comprised of the Brunswick Boat Group, and includes 14 boat brands. The Boat segment reported net sales of $271.3 million for the third quarter of 2015, an increase of 16 percent compared with $234.6 million in the third quarter of 2014. International sales, which represented 21 percent of total segment sales in the quarter, decreased by 16 percent during the period. On a constant currency basis, international sales were down 6 percent. For the third quarter of 2015, the Boat segment reported operating earnings of $6.4 million. This compares with an operating
loss of $7.0 million in the third quarter of 2014, including net restructuring charges of $0.9 million.
The Boat segment's revenue growth reflected a strong increase in units shipped to dealers, as well as higher average selling prices. Operating earnings benefited from higher sales and a more favorable product mix, as well as savings related to sourcing initiatives and cost reductions.
Fitness Segment
The Fitness segment is comprised of the Life Fitness Division, which designs, manufactures and sells strength and cardiovascular fitness equipment and billiards tables. Fitness segment sales in the third quarter of 2015 totaled $197.5 million, up 4 percent from $189.0 million in the third quarter of 2014. International sales, which represented 47 percent of total segment sales in the quarter, decreased by 4 percent. On a constant currency basis, international sales were up 4 percent. For the quarter, the Fitness segment reported operating earnings of $27.6 million. This compares with operating earnings of $25.8 million in the third quarter of 2014.
The increase in revenue reflected growth in the U.S. at health clubs and local and federal governments. Sales in the quarter included revenues from an acquisition completed in the third quarter of 2015. The increase in operating earnings included benefits from higher sales, cost reductions and savings related to sourcing initiatives, partially offset by an unfavorable impact from foreign exchange.
2015 Outlook
“We continue to target 2015 to be another year of strong earnings growth, with outstanding cash flow generation. Our plan reflects a 7 percent annual sales growth, which includes benefits from the success of our new products and the continuation of solid growth in the U.S. and Europe, partially offset by the negative impact of a stronger U.S. dollar and weakness in certain international markets.
“For the full-year, we anticipate a slight improvement in gross margin levels and solid gains in operating margins, as we plan to continue to benefit from volume leverage, modest positive product mix factors, cost reductions and savings related to sourcing initiatives, partially offset by foreign currency headwinds.
“Our guidance for 2015 reflects adjusted pretax earnings growth of 18 percent to 20 percent, and we are narrowing the range for our expectations of diluted EPS, as adjusted, to $2.80 to $2.85. Finally, for the full-year, we expect free cash flow to exceed $200 million,” McCoy concluded.
Use of Non-GAAP Financial Information and Constant Currency Reporting
A reconciliation of GAAP to non-GAAP financial measures is provided in the supplemental information sections of the consolidated financial statements accompanying this release.
For purpose of comparison, third quarter 2015 net sales growth is also shown using third quarter 2014 exchange rates for the comparative period to enhance the visibility of the underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations.
Conference Call Scheduled
Brunswick will host a conference call today at 10 a.m. CDT, hosted by Dustan E. McCoy, chairman and chief executive officer, Mark D. Schwabero, president and chief operating officer, William L. Metzger, senior vice president and chief financial officer, and Bruce J. Byots, vice president - investor relations.
The call will be broadcast over the Internet at ir.brunswick.com. To listen to the call, go to the website at least 15 minutes before the call to register, download and install any needed audio software.
See Brunswick’s website for slides used to supplement conference call remarks at ir.brunswick.com.
Security analysts and investors wishing to participate via telephone should call 800-708-4539 (passcode: Brunswick Q3). Callers outside North America should call 847-619-6396 (passcode: Brunswick Q3) to be connected. These numbers can be accessed 15 minutes before the call begins, as well as during the call. A replay of the conference call will be available through midnight CST Thursday, Nov. 5, 2015, by calling 888-843-7419 or international dial 630-652-3042 (passcode: 4092 4290#). The replay will also be available at Hir.brunswick.comH.
Forward-Looking Statements
Certain statements in this news release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about Brunswick’s business. Forward-looking statements by their nature address matters that are, to different degrees, uncertain and often contain words such as “may”, “could”, “expect”, “intend”, “target”, “plan”, “seek”, “estimate”, “believe”, “predict”, “potential” or “continue”. These 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 news release. These risks include, but are not limited to: the effect of adverse general economic conditions, including the amount of disposable income available to consumers for discretionary purchases, tight consumer credit markets, and the level of consumer confidence on the demand for the Company’s products and services; the ability of dealers and customers to secure adequate access to financing and the Company’s ability to access capital and credit markets; the ability to maintain strong relationships with dealers, distributors and independent boat builders; the ability to maintain effective distribution and develop alternative distribution channels without disrupting incumbent distribution partners; negative currency trends, including shifts in exchange rates; the ability to successfully manage pipeline inventories and respond to any excess supply of repossessed and aged boats in the market; credit and collections risks, including the potential obligation to repurchase dealer inventory; the risk of losing a key customer or a critical supplier; the strength and protection of the Company’s brands and other intellectual property; the ability to absorb fixed costs and manage production facilities while expanding capacity and enhancing product offerings; the ability to successfully manage the expansion of the Company’s manufacturing footprint; the ability of the Company to successfully implement its strategic plan and growth initiatives; the ability to obtain components, parts and raw materials from suppliers in a timely manner and for a reasonable price; the need to meet pension funding obligations; the effect of higher energy and logistics costs, interest rates and fuel prices on the Company’s results; competitive pricing pressures, including the impact of inflation and increased competition from international competitors; the ability to develop new and innovative products in response to changing retail demands and expectations that are differentiated for the global marketplace at a competitive price and in compliance with applicable laws; the effect of competition from other leisure pursuits on the level of participation in boating and fitness activities; the risk of product liability, warranty and other claims in connection with the manufacture and sale of products; the ability to respond to and minimize the negative financial impact of legislative and regulatory developments, including those related to environmental restrictions, climate change, healthcare costs, taxes and employee benefits; the ability to complete environmental remediation efforts and resolve claims and litigation at the cost estimated; the ability to
maintain market share, particularly in high-margin products; the ability to maintain product quality and service standards expected by customers; the ability to protect the Company’s intellectual property; competition from new technologies; the uncertainty and risks of doing business in international locations, including international political instability, civil unrest and other risks associated with operations in emerging markets; the risk of having to record an impairment to the value of goodwill and other assets; the effect that catastrophic events may have on consumer demand and the ability to manufacture products, including hurricanes, floods, earthquakes, and environmental spills; the effect of weather conditions on demand for marine products; the inability to attract and retain individuals who could be key contributors to the organization; and risks associated with the Company’s information technology systems, including the continued use of legacy systems and the risk of a failure of or attacks on the Company’s information systems, which could result in data security breaches, lost or stolen assets or information, and associated remediation costs.
Additional risk factors are included in the Company’s Annual Report on Form 10-K for 2014. Such forward-looking statements speak only as of the date on which they are made and Brunswick does not undertake any obligation to update any forward-looking statements to reflect events or circumstances after the date of this news release or for changes made to this document by wire services or Internet service providers.
About Brunswick
Headquartered in Lake Forest, Ill., Brunswick Corporation endeavors to instill "Genuine Ingenuity"(TM) in all its leading consumer brands, including Mercury and Mariner outboard engines; Mercury MerCruiser sterndrives and inboard engines; MotorGuide trolling motors; Attwood and Whale marine parts and accessories; Land 'N' Sea, Kellogg Marine, Diversified Marine, BLA and Bell RPG parts and accessories distributors; Bayliner, Boston Whaler, Brunswick Commercial and Government Products, Crestliner, Cypress Cay, Harris, Lowe, Lund, Meridian, Princecraft, Quicksilver, Rayglass, Sea Ray and Uttern boats, and Life Fitness, Hammer Strength and SCIFIT fitness equipment, and Brunswick billiards tables, accessories and game room furniture and InMovement products and services for productive well-being. For more information, visit http://www.brunswick.com.
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) | ||||||||||
Three Months Ended | ||||||||||
October 3, 2015 | September 27, 2014 | % Change | ||||||||
Net sales | $ | 991.9 | $ | 932.1 | 6 | % | ||||
Cost of sales | 710.2 | 672.9 | 6 | % | ||||||
Selling, general and administrative expense | 135.6 | 134.9 | 1 | % | ||||||
Research and development expense | 30.3 | 29.7 | 2 | % | ||||||
Restructuring, exit and impairment charges | — | 0.9 | NM | |||||||
Operating earnings | 115.8 | 93.7 | 24 | % | ||||||
Equity earnings | 1.2 | 0.7 | 71 | % | ||||||
Other income, net | 1.2 | 1.2 | 0 | % | ||||||
Earnings before interest and income taxes | 118.2 | 95.6 | 24 | % | ||||||
Interest expense | (7.0 | ) | (6.9 | ) | 1 | % | ||||
Interest income | 0.7 | 0.2 | NM | |||||||
Earnings before income taxes | 111.9 | 88.9 | 26 | % | ||||||
Income tax provision | 39.7 | 27.9 | 42 | % | ||||||
Net earnings from continuing operations | 72.2 | 61.0 | 18 | % | ||||||
Net earnings from discontinued operations, net of tax | 3.7 | 43.4 | NM | |||||||
Net earnings | $ | 75.9 | $ | 104.4 | (27 | )% | ||||
Earnings per common share: | ||||||||||
Basic | ||||||||||
Earnings from continuing operations | $ | 0.78 | $ | 0.65 | 20 | % | ||||
Earnings from discontinued operations | 0.04 | 0.46 | ||||||||
Net earnings | $ | 0.82 | $ | 1.11 | (26 | )% | ||||
Diluted | ||||||||||
Earnings from continuing operations | $ | 0.77 | $ | 0.64 | 20 | % | ||||
Earnings from discontinued operations | 0.04 | 0.46 | ||||||||
Net earnings | $ | 0.81 | $ | 1.10 | (26 | )% | ||||
Weighted average shares used for computation of: | ||||||||||
Basic earnings per common share | 92.7 | 93.7 | ||||||||
Diluted earnings per common share | 94.0 | 95.2 | ||||||||
Effective tax rate from continuing operations | 35.5 | % | 31.4 | % | ||||||
Supplemental Information | ||||||||||
Continuing Operations: | ||||||||||
Operating earnings | $ | 115.8 | $ | 93.7 | 24 | % | ||||
Restructuring, exit and impairment charges | — | 0.9 | NM | |||||||
Adjusted operating earnings | $ | 115.8 | $ | 94.6 | 22 | % | ||||
Earnings before income taxes | $ | 111.9 | $ | 88.9 | 26 | % | ||||
Restructuring, exit and impairment charges | — | 0.9 | NM | |||||||
Adjusted pretax earnings | $ | 111.9 | $ | 89.8 | 25 | % | ||||
Earnings per common share: | ||||||||||
Diluted earnings from continuing operations | $ | 0.77 | $ | 0.64 | ||||||
Restructuring, exit and impairment charges from continuing operations | — | 0.01 | ||||||||
Special tax items | 0.00 | (0.02 | ) | |||||||
Diluted earnings from continuing operations, as adjusted | $ | 0.77 | $ | 0.63 | 22 | % | ||||
NM = not meaningful | ||||||||||
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) | ||||||||||
Nine Months Ended | ||||||||||
October 3, 2015 | September 27, 2014 | % Change | ||||||||
Net sales | $ | 3,119.6 | $ | 2,900.1 | 8 | % | ||||
Cost of sales | 2,254.7 | 2,093.3 | 8 | % | ||||||
Selling, general and administrative expense | 414.0 | 402.8 | 3 | % | ||||||
Research and development expense | 92.2 | 86.1 | 7 | % | ||||||
Restructuring, exit and impairment charges | — | 4.0 | NM | |||||||
Operating earnings | 358.7 | 313.9 | 14 | % | ||||||
Equity earnings | 3.2 | 0.5 | NM | |||||||
Other income, net | 4.4 | 3.5 | 26 | % | ||||||
Earnings before interest and income taxes | 366.3 | 317.9 | 15 | % | ||||||
Interest expense | (21.0 | ) | (22.7 | ) | (7 | )% | ||||
Interest income | 1.7 | 0.7 | NM | |||||||
Earnings before income taxes | 347.0 | 295.9 | 17 | % | ||||||
Income tax provision | 110.6 | 98.7 | 12 | % | ||||||
Net earnings from continuing operations | 236.4 | 197.2 | 20 | % | ||||||
Net earnings from discontinued operations, net of tax | 14.3 | 52.8 | (73 | )% | ||||||
Net earnings | $ | 250.7 | $ | 250.0 | 0 | % | ||||
Earnings per common share: | ||||||||||
Basic | ||||||||||
Earnings from continuing operations | $ | 2.54 | $ | 2.11 | 20 | % | ||||
Earnings from discontinued operations | 0.15 | 0.56 | ||||||||
Net earnings | $ | 2.69 | $ | 2.67 | 1 | % | ||||
Diluted | ||||||||||
Earnings from continuing operations | $ | 2.50 | $ | 2.07 | 21 | % | ||||
Earnings from discontinued operations | 0.15 | 0.56 | ||||||||
Net earnings | $ | 2.65 | $ | 2.63 | 1 | % | ||||
Weighted average shares used for computation of: | ||||||||||
Basic earnings per common share | 93.3 | 93.5 | ||||||||
Diluted earnings per common share | 94.5 | 95.1 | ||||||||
Effective tax rate from continuing operations | 31.9 | % | 33.4 | % | ||||||
Supplemental Information | ||||||||||
Continuing Operations: | ||||||||||
Operating earnings | $ | 358.7 | $ | 313.9 | 14 | % | ||||
Restructuring, exit and impairment charges | — | 4.0 | NM | |||||||
Adjusted operating earnings | $ | 358.7 | $ | 317.9 | 13 | % | ||||
Earnings before income taxes | $ | 347.0 | $ | 295.9 | 17 | % | ||||
Restructuring, exit and impairment charges | — | 4.0 | NM | |||||||
Adjusted pretax earnings | $ | 347.0 | $ | 299.9 | 16 | % | ||||
Earnings per common share: | ||||||||||
Diluted earnings from continuing operations | $ | 2.50 | $ | 2.07 | ||||||
Restructuring, exit and impairment charges from continuing operations | — | 0.03 | ||||||||
Special tax items | (0.09 | ) | (0.01 | ) | ||||||
Diluted earnings from continuing operations, as adjusted | $ | 2.41 | $ | 2.09 | 15 | % | ||||
NM = not meaningful | ||||||||||
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Segment Information - Continuing Operations | ||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||
Net Sales | Operating Earnings (Loss) (1) | Operating Margin | ||||||||||||||||||||||||||||
October 3, 2015 | September 27, 2014 | % Change | % Change Constant Currency | October 3, 2015 | September 27, 2014 | % Change | October 3, 2015 | September 27, 2014 | ||||||||||||||||||||||
Marine Engine | $ | 588.2 | $ | 566.9 | 4 | % | 8 | % | $ | 102.5 | $ | 93.3 | 10 | % | 17.4 | % | 16.5 | % | ||||||||||||
Boat | 271.3 | 234.6 | 16 | % | 19 | % | 6.4 | (7.0 | ) | NM | 2.4 | % | (3.0 | )% | ||||||||||||||||
Marine eliminations | (65.1 | ) | (58.4 | ) | — | — | ||||||||||||||||||||||||
Total Marine | 794.4 | 743.1 | 7 | % | 11 | % | 108.9 | 86.3 | 26 | % | 13.7 | % | 11.6 | % | ||||||||||||||||
Fitness | 197.5 | 189.0 | 4 | % | 9 | % | 27.6 | 25.8 | 7 | % | 14.0 | % | 13.7 | % | ||||||||||||||||
Pension - non-service costs | — | — | (2.7 | ) | (3.7 | ) | 27 | % | ||||||||||||||||||||||
Corp/Other | — | — | (18.0 | ) | (14.7 | ) | (22 | )% | ||||||||||||||||||||||
Total | $ | 991.9 | $ | 932.1 | 6 | % | 11 | % | $ | 115.8 | $ | 93.7 | 24 | % | 11.7 | % | 10.1 | % | ||||||||||||
Nine Months Ended | ||||||||||||||||||||||||||||||
Net Sales | Operating Earnings (Loss) (1) | Operating Margin | ||||||||||||||||||||||||||||
October 3, 2015 | September 27, 2014 | % Change | % Change Constant Currency | October 3, 2015 | September 27, 2014 | % Change | October 3, 2015 | September 27, 2014 | ||||||||||||||||||||||
Marine Engine | $ | 1,839.6 | $ | 1,724.4 | 7 | % | 11 | % | $ | 308.5 | $ | 277.5 | 11 | % | 16.8 | % | 16.1 | % | ||||||||||||
Boat | 938.6 | 841.5 | 12 | % | 15 | % | 35.0 | 21.3 | 64 | % | 3.7 | % | 2.5 | % | ||||||||||||||||
Marine eliminations | (215.5 | ) | (200.1 | ) | — | — | ||||||||||||||||||||||||
Total Marine | 2,562.7 | 2,365.8 | 8 | % | 12 | % | 343.5 | 298.8 | 15 | % | 13.4 | % | 12.6 | % | ||||||||||||||||
Fitness | 556.9 | 534.3 | 4 | % | 8 | % | 76.6 | 74.5 | 3 | % | 13.8 | % | 13.9 | % | ||||||||||||||||
Pension - non-service costs | — | — | (8.8 | ) | (11.1 | ) | 21 | % | ||||||||||||||||||||||
Corp/Other | — | — | (52.6 | ) | (48.3 | ) | (9 | )% | ||||||||||||||||||||||
Total | $ | 3,119.6 | $ | 2,900.1 | 8 | % | 12 | % | $ | 358.7 | $ | 313.9 | 14 | % | 11.5 | % | 10.8 | % | ||||||||||||
NM = not meaningful | ||||||||||||||||||||||||||||||
(1) There were no pretax restructuring, exit and impairment charges during the three months and nine months ended October 3, 2015. Operating earnings (loss) in the three months ended September 27, 2014, includes net $0.9 million of pretax restructuring, exit and impairment charges, consisting of $0.9 million in the Boat segment. Operating earnings (loss) in the nine months ended September 27, 2014, includes net $4.0 million of pretax restructuring, exit and impairment charges, consisting of $1.3 million in the Boat segment and $2.7 million in Corp/Other. | ||||||||||||||||||||||||||||||
Brunswick Corporation Comparative Condensed Consolidated Balance Sheets (in millions) (unaudited) | |||||||||||
October 3, 2015 | December 31, 2014 | September 27, 2014 | |||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 621.9 | $ | 552.7 | $ | 596.0 | |||||
Short-term investments in marketable securities | 32.5 | 83.2 | 0.8 | ||||||||
Total cash, cash equivalents and short-term investments in marketable securities | 654.4 | 635.9 | 596.8 | ||||||||
Restricted cash | 15.6 | 15.6 | 18.6 | ||||||||
Accounts and notes receivable, net | 400.7 | 386.5 | 401.3 | ||||||||
Inventories | |||||||||||
Finished goods | 444.3 | 434.9 | 433.9 | ||||||||
Work-in-process | 109.8 | 82.1 | 88.4 | ||||||||
Raw materials | 155.7 | 135.3 | 146.5 | ||||||||
Net inventories | 709.8 | 652.3 | 668.8 | ||||||||
Deferred income taxes | 207.8 | 208.0 | 139.2 | ||||||||
Prepaid expenses and other | 35.3 | 39.5 | 31.2 | ||||||||
Current assets held for sale | — | 30.0 | 39.3 | ||||||||
Current assets | 2,023.6 | 1,967.8 | 1,895.2 | ||||||||
Net property | 489.6 | 460.3 | 441.2 | ||||||||
Other assets | |||||||||||
Goodwill | 298.5 | 296.9 | 299.0 | ||||||||
Other intangibles, net | 49.9 | 45.5 | 46.8 | ||||||||
Equity investments | 19.6 | 19.0 | 39.9 | ||||||||
Non-current deferred tax asset | 201.1 | 290.9 | 294.1 | ||||||||
Other long-term assets | 44.7 | 37.5 | 35.9 | ||||||||
Long-term assets held for sale | — | 12.6 | 13.0 | ||||||||
Other assets | 613.8 | 702.4 | 728.7 | ||||||||
Total assets | $ | 3,127.0 | $ | 3,130.5 | $ | 3,065.1 | |||||
Liabilities and shareholders' equity | |||||||||||
Current liabilities | |||||||||||
Short-term debt | $ | 4.0 | $ | 5.5 | $ | 4.3 | |||||
Accounts payable | 341.0 | 317.4 | 326.1 | ||||||||
Accrued expenses | 518.4 | 561.5 | 515.0 | ||||||||
Current liabilities held for sale | — | 15.7 | 18.1 | ||||||||
Current liabilities | 863.4 | 900.1 | 863.5 | ||||||||
Long-term debt | 449.1 | 446.3 | 448.3 | ||||||||
Other long-term liabilities | 525.4 | 604.4 | 466.9 | ||||||||
Long-term liabilities held for sale | — | 8.2 | 7.2 | ||||||||
Shareholders' equity | 1,289.1 | 1,171.5 | 1,279.2 | ||||||||
Total liabilities and shareholders' equity | $ | 3,127.0 | $ | 3,130.5 | $ | 3,065.1 | |||||
Supplemental Information | |||||||||||
Debt-to-capitalization rate | 26.0 | % | 27.8 | % | 26.1 | % | |||||
Brunswick Corporation Comparative Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) | |||||||
Nine Months Ended | |||||||
October 3, 2015 | September 27, 2014 | ||||||
Cash flows from operating activities | |||||||
Net earnings | $ | 250.7 | $ | 250.0 | |||
Less: net earnings from discontinued operations, net of tax | 14.3 | 52.8 | |||||
Net earnings from continuing operations | 236.4 | 197.2 | |||||
Depreciation and amortization | 66.3 | 58.4 | |||||
Pension funding, net of expense | (63.9 | ) | (61.5 | ) | |||
Deferred income taxes | 75.9 | 66.8 | |||||
Excess tax benefits from share-based compensation | (6.6 | ) | (6.4 | ) | |||
Equity in earnings of unconsolidated affiliates, net of dividends | (3.2 | ) | (0.5 | ) | |||
Changes in certain current assets and current liabilities, excluding acquisitions | (82.2 | ) | (150.6 | ) | |||
Income taxes | 15.3 | 12.7 | |||||
Other, net | 2.7 | 11.3 | |||||
Net cash provided by operating activities of continuing operations | 240.7 | 127.4 | |||||
Net cash (used for) provided by operating activities of discontinued operations | (13.4 | ) | 1.2 | ||||
Net cash provided by operating activities | 227.3 | 128.6 | |||||
Cash flows from investing activities | |||||||
Capital expenditures | (98.5 | ) | (79.6 | ) | |||
Purchases of marketable securities | (47.6 | ) | — | ||||
Sales or maturities of marketable securities | 98.3 | 11.9 | |||||
Transfers to restricted cash | — | (12.1 | ) | ||||
Investments | 2.3 | (1.0 | ) | ||||
Acquisition of businesses, net of cash acquired | (18.7 | ) | (41.8 | ) | |||
Proceeds from the sale of property, plant and equipment | 2.1 | 5.6 | |||||
Net cash (used for) investing activities of continuing operations | (62.1 | ) | (117.0 | ) | |||
Net cash provided by investing activities of discontinued operations | 44.5 | 260.3 | |||||
Net cash provided by (used for) investing activities | (17.6 | ) | 143.3 | ||||
Cash flows from financing activities | |||||||
Net proceeds from issuances of long-term debt | 0.1 | — | |||||
Payments of long-term debt including current maturities | (0.4 | ) | (1.4 | ) | |||
Common stock repurchases | (100.0 | ) | — | ||||
Cash dividends paid | (34.6 | ) | (30.2 | ) | |||
Excess tax benefits from share-based compensation | 6.6 | 6.4 | |||||
Proceeds from share-based compensation activity | 4.3 | 7.8 | |||||
Tax withholding associated with shares issued for share-based compensation | (8.5 | ) | (8.1 | ) | |||
Other, net | — | (2.2 | ) | ||||
Net cash used for financing activities of continuing operations | (132.5 | ) | (27.7 | ) | |||
Net cash provided by financing activities of discontinued operations | 5.3 | — | |||||
Net cash used for financing activities | (127.2 | ) | (27.7 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (13.3 | ) | (4.7 | ) | |||
Net increase in cash and cash equivalents | 69.2 | 239.5 | |||||
Cash and cash equivalents at beginning of period | 552.7 | 356.5 | |||||
Cash and cash equivalents at end of period | $ | 621.9 | $ | 596.0 | |||
Supplemental Information | |||||||
Free Cash Flow | |||||||
Net cash provided by operating activities of continuing operations | $ | 240.7 | $ | 127.4 | |||
Net cash provided by (used for): | |||||||
Capital expenditures | (98.5 | ) | (79.6 | ) | |||
Proceeds from the sale of property, plant and equipment | 2.1 | 5.6 | |||||
Effect of exchange rate changes on cash and cash equivalents | (13.3 | ) | (4.7 | ) | |||
Total free cash flow | $ | 131.0 | $ | 48.7 | |||