Brunswick Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Quarterly Data (unaudited)

Quarterly Data (unaudited)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

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 three quarters of fiscal year 2018 ended on March 31, 2018, June 30, 2018, and September 29, 2018, and the first three quarters of fiscal year 2017 ended on April 1, 2017, July 1, 2017, and September 30, 2017.



	Quarter Ended
(in millions, except per share data)	March 31, 2018		June 30, 2018		September 29, 2018		December 31, 2018		Year Ended December 31, 2018
Net sales ^(A)	$	1,211.4	$	1,400.9	$	1,298.0	$	1,248.9	$	5,159.2
Gross margin ^{(A) (B) (C) (D)}	310.0		349.7		344.9		316.4		1,321.0
Restructuring, exit, integration and impairment charges ^(E)	3.8		34.8		17.7		24.6		80.9
Transaction financing charges ^(C)	—		—		5.1		—		5.1
Net earnings from continuing operations ^{(A) (C) (D) (E) (F) (G) (H)}	72.9		79.0		70.0		41.2		263.1
Net earnings from discontinued operations, net of tax	—		—		—		2.2		2.2
Net earnings	72.9		79.0		70.0		43.4		265.3

Basic earnings per common share:
Net earnings from continuing operations	$	0.83	$	0.90	$	0.80	$	0.47	$	3.00
Net earnings from discontinued operations	—		—		—		0.02		0.03
Net earnings	$	0.83	$	0.90	$	0.80	$	0.49	$	3.03
Diluted earnings per common share:
Net earnings from continuing operations	$	0.82	$	0.90	$	0.80	$	0.47	$	2.98
Net earnings from discontinued operations	—		—		—		0.03		0.03
Net earnings	$	0.82	$	0.90	$	0.80	$	0.50	$	3.01

Dividends declared	$	0.19	$	0.19	$	0.19	$	0.21	$	0.78

Common stock price (NYSE symbol: BC):
High	$	64.45	$	69.27	$	69.82	$	67.92	$	69.82
Low	$	55.35	$	56.41	$	61.78	$	41.92	$	41.92



	Quarter Ended
(in millions, except per share data)	April 1, 2017		July 1, 2017		September 30, 2017		December 31, 2017			December 31, 2017
Net sales ^(A)	$	1,160.3	$	1,352.0	$	1,141.5	$	1,182.1		$	4,835.9
Gross margin ^{(A) (B) (D)}	301.2		369.9		314.4		276.6			1,262.1
Restructuring, exit, integration and impairment charges ^(E)	15.2		5.7		6.8		53.6			81.3
Pension settlement charge ^(I)	—		—		—		96.6			96.6
Net earnings (loss) ^{(A) (D) (E) (H) (I)}	64.9		119.4		79.0		(116.9		)	146.4

Basic earnings (loss) per common share	$	0.72	$	1.33	$	0.89	$	(1.32	)	$	1.64
Diluted earnings (loss) per common share	$	0.71	$	1.32	$	0.88	$	(1.32	)	$	1.62

Dividends declared	$	0.165	$	0.165	$	0.165	$	0.19		$	0.685

Common stock price (NYSE symbol: BC):
High	$	61.74	$	63.82	$	63.79	$	60.25		$	63.82
Low	$	53.95	$	54.16	$	48.72	$	48.04		$	48.04

(A) In the second quarter of 2018, the Company announced its intention to wind down Sport Yacht & Yacht operations. During the first, second, third and fourth quarters and the full-year of 2018, Sport Yacht & Yacht operations had operating losses of $8.1 million, $27.4 million, $11.9 million, $11.0 million and $58.4 million, respectively, consisting of $15.1 million, $19.9 million, $9.0 million, $5.4 million and $49.4 million, respectively, of Net sales; $18.7 million, $43.1 million, $17.3 million, $10.0 million, $89.1 million of Cost of sales (COS); and $4.5 million, $4.2 million, $3.6 million, $6.4 million and $18.7 million, respectively, of Selling, general and administrative expense (SG&A). During the first, second, third and fourth quarters and the full-year of 2017, Sport Yacht & Yacht operations had operating losses of $8.0 million, $3.4 million, $9.8 million, $10.7 million and $31.9 million, respectively, consisting of $38.9 million, $53.1 million, $21.3 million, $38.3 million and $151.6 million, respectively, of Net sales; $41.0 million, $52.5 million, $26.3 million, $44.2 million, $164.0 million of Cost of sales (COS); and $5.9 million, $4.0 million, $4.8 million, $4.8 million and $19.5 million, respectively, of Selling, general and administrative expense (SG&A).

(B) Gross margin is defined as Net sales less COS as presented in the Consolidated Statements of Operations.

(C) In the third quarter of 2018, the Company acquired Power Products – Global Marine & Mobile. During the second, third and fourth quarters and full-year of 2018, the Company recorded acquisition-related costs from transaction costs of $2.5 million, $10.5 million, $0.8 million and $13.8 million, respectively, within SG&A; $5.1 million of Transaction financing charges during the third quarter and full-year of 2018, respectively, and $9.4 million, $11.8 million and $21.2 million of purchase accounting amortization during the third and fourth quarters and full-year of 2018, respectively; During the third and fourth quarters and full-year of 2018, the purchase accounting amortization reflected $4.8 million, $7.2 million and $12.0 million within SG&A, respectively, and $4.6 million, $4.6 million and $9.2 million within COS, respectively. Refer to Note 5 – Acquisitions for further details.

(D) During the second, third and fourth quarters and the full-year of 2018, the Company's Fitness segment recorded $1.6 million, $3.8 million, $6.4 million and $11.8 million of unusual charges. The charges in the second quarter consisted of $1.6 million within COS for a product field campaign. The charges in the third quarter consisted of $3.8 million within SG&A related to a contract dispute. The charges in the fourth quarter consisted of $3.1 million within COS related to the settlement of supplier obligations, $2.8 million within SG&A associated with the delayed submission of foreign import duty filings, $0.7 million within COS for a product field campaign and $(0.2) million within SG&A related to the contract dispute. In the fourth quarter of 2017, the Company's Fitness segment recorded $8.4 million and $5.1 million within COS and SG&A, respectively, related to field campaigns pertaining to certain Cybex products designed prior to the acquisition. Refer to Note 14 – Commitments and Contingencies for further details.

(E) Restructuring, exit, integration and impairment charges are discussed in Note 4 – Restructuring, Exit, Integration and Impairment Activities.

(F) During the first, second, third and fourth quarters and the full-year of 2018, the Company recorded $1.7 million, $2.5 million, $8.7 million, $6.4 million and $19.3 million of charges within SG&A related to the planned Fitness business separation.

(G) In the fourth quarter of 2018, the Company sold its non-controlling interest in a marine joint venture and recorded a gain of $2.3 million within Equity earnings.

(H) Net earnings (loss) includes the tax impacts of the items discussed in the aforementioned footnotes, as well as special tax items. During the first, second, third and fourth quarters and the full-year of 2018, special tax items were a net charge (benefit) of $6.7 million, $(1.0) million, $(10.4) million, $0.6 million and $(4.1) million, respectively. During the first, second, third and fourth quarters and the full-year of 2017, special tax items were a net charge (benefit) of $(0.5) million, $(0.2) million, $(0.7) million, $71.1 million and $69.7 million, respectively.

(I) Pension settlement charges are discussed in Note 18 – Postretirement Benefits.

^{[1],[2],[3],[4]}

[1]	(A) In the second quarter of 2018, the Company announced its intention to wind down Sport Yacht & Yacht operations. During the first, second, third and fourth quarters and the full-year of 2018, Sport Yacht & Yacht operations had operating losses of $8.1 million, $27.4 million, $11.9 million, $11.0 million and $58.4 million, respectively, consisting of $15.1 million, $19.9 million, $9.0 million, $5.4 million and $49.4 million, respectively, of Net sales; $18.7 million, $43.1 million, $17.3 million, $10.0 million, $89.1 million of Cost of sales (COS); and $4.5 million, $4.2 million, $3.6 million, $6.4 million and $18.7 million, respectively, of Selling, general and administrative expense (SG&A). During the first, second, third and fourth quarters and the full-year of 2017, Sport Yacht & Yacht operations had operating losses of $8.0 million, $3.4 million, $9.8 million, $10.7 million and $31.9 million, respectively, consisting of $38.9 million, $53.1 million, $21.3 million, $38.3 million and $151.6 million, respectively, of Net sales; $41.0 million, $52.5 million, $26.3 million, $44.2 million, $164.0 million of Cost of sales (COS); and $5.9 million, $4.0 million, $4.8 million, $4.8 million and $19.5 million, respectively, of Selling, general and administrative expense (SG&A).
[2]	(B) Gross margin is defined as Net sales less COS as presented in the Consolidated Statements of Operations.
[3]	(C) In the third quarter of 2018, the Company acquired Power Products – Global Marine & Mobile. During the second, third and fourth quarters and full-year of 2018, the Company recorded acquisition-related costs from transaction costs of $2.5 million, $10.5 million, $0.8 million and $13.8 million, respectively, within SG&A; $5.1 million of Transaction financing charges during the third quarter and full-year of 2018, respectively, and $9.4 million, $11.8 million and $21.2 million of purchase accounting amortization during the third and fourth quarters and full-year of 2018, respectively; During the third and fourth quarters and full-year of 2018, the purchase accounting amortization reflected $4.8 million, $7.2 million and $12.0 million within SG&A, respectively, and $4.6 million, $4.6 million and $9.2 million within COS, respectively. Refer to Note 5 – Acquisitions for further details.
[4]	(D) During the second, third and fourth quarters and the full-year of 2018, the Company's Fitness segment recorded $1.6 million, $3.8 million, $6.4 million and $11.8 million of unusual charges. The charges in the second quarter consisted of $1.6 million within COS for a product field campaign. The charges in the third quarter consisted of $3.8 million within SG&A related to a contract dispute. The charges in the fourth quarter consisted of $3.1 million within COS related to the settlement of supplier obligations, $2.8 million within SG&A associated with the delayed submission of foreign import duty filings, $0.7 million within COS for a product field campaign and $(0.2) million within SG&A related to the contract dispute. In the fourth quarter of 2017, the Company's Fitness segment recorded $8.4 million and $5.1 million within COS and SG&A, respectively, related to field campaigns pertaining to certain Cybex products designed prior to the acquisition. Refer to Note 14 – Commitments and Contingencies for further details.