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

Annual report pursuant to Section 13 and 15(d)

Financing Receivables

Financing Receivables

12 Months Ended

Dec. 31, 2014

Note 8 – Financing Receivables

The Company has recorded financing receivables, which are defined as a contractual right to receive money, as assets on its Consolidated Balance Sheets as of December 31, 2014 and 2013. Substantially all of the Company’s financing receivables are for commercial customers. The Company classifies its financing receivables into three categories: receivables repurchased under recourse provisions (Recourse Receivables); receivables sold to third-party finance companies (Third-Party Receivables) and customer notes and other (Other Receivables). Recourse Receivables are the result of the contingent recourse arrangements discussed in Note 13 – Commitments and Contingencies. Third-Party Receivables are accounts that have been sold to third-party finance companies, but do not meet the definition of a true sale, and are therefore recorded as an asset with an offsetting balance recorded as a secured obligation in Accrued expenses and Other long-term liabilities as discussed in Note 1 – Significant Accounting Policies. Other Receivables are mostly comprised of notes from customers, which are originated by the Company in the normal course of business. Financing receivables are carried at their face amounts less an allowance for doubtful accounts.

The Company sells a broad range of recreational products to a worldwide customer base and extends credit to its customers based upon an ongoing credit evaluation program. The Company’s business units maintain credit organizations to manage financial exposure and perform credit risk assessments on an individual account basis. Accounts are not aggregated into categories for credit risk determinations. Due to the composition of the account portfolio, the Company does not believe that the credit risk posed by the Company’s financing receivables is significant to its operations, financial condition or cash flows. There were no significant troubled debt restructurings during the years ended December 31, 2014 and 2013.

The following are the Company’s financing receivables, excluding trade accounts receivable contractually due within one year, by segment as of December 31, 2014:



(in millions)	Marine Engine		Boat			Fitness			Corporate^(A)			Total
Recourse Receivables:
Short-term	$	—	$	—		$	0.3		$	2.7		$	3.0
Long-term	—		—			0.2			0.8			1.0
Allowance for credit loss	—		—			(0.3		)	(2.9		)	(3.2		)
Total	—		—			0.2			0.6			0.8

Third-Party Receivables:
Short-term	2.6		4.5			16.6			—			23.7
Long-term	—		—			19.6			—			19.6
Allowance for credit loss	—		—			—			—			—
Total	2.6		4.5			36.2			—			43.3

Other Receivables:
Short-term	7.1		0.2			0.6			4.0			11.9
Long-term	0.6		0.1			0.3			1.3			2.3
Allowance for credit loss	—		(0.2		)	—			—			(0.2		)
Total	7.7		0.1			0.9			5.3			14.0

Total Financing Receivables	$	10.3	$	4.6		$	37.3		$	5.9		$	58.1

(A) Total recourse receivables of $0.6 million represent amounts previously reported in the former Bowling & Billiards segment that have been retained by Corporate as a result of the sale of the retail bowling business as discussed in Note 2 – Discontinued Operations. Other short-term receivables of $4.0 million represent a note receivable as partial consideration for the sale of the retail bowling business as discussed in Note 2 – Discontinued Operations.

The following are the Company’s financing receivables, excluding trade accounts receivable contractually due within one year, by segment as of December 31, 2013:



(in millions)	Marine Engine		Boat			Fitness			Corporate		Total
Recourse Receivables:
Short-term	$	—	$	—		$	0.7		$	—	$	0.7
Long-term	—		—			0.2			—		0.2
Allowance for credit loss	—		—			(0.4		)	—		(0.4		)
Total	—		—			0.5			—		0.5

Third-Party Receivables:
Short-term	12.0		3.1			21.1			—		36.2
Long-term	—		—			18.9			—		18.9
Allowance for credit loss	—		—			—			—		—
Total	12.0		3.1			40.0			—		55.1

Other Receivables:
Short-term	10.2		0.3			0.6			0.2		11.3
Long-term	0.9		0.2			0.1			—		1.2
Allowance for credit loss	—		(0.3		)	—			—		(0.3		)
Total	11.1		0.2			0.7			0.2		12.2

Total Financing Receivables	$	23.1	$	3.3		$	41.2		$	0.2	$	67.8

The following table sets forth activity related to the allowance for credit loss on financing receivables during the year ended December 31, 2014:



(in millions)	Boat			Fitness			Corporate^(A)		Total
Recourse Receivables:
Beginning balance	$	—		$	0.4		$	2.9	$	3.3
Current period provision	—			—			—		—
Direct write-downs	—			(0.1		)	—		(0.1		)
Recoveries	—			—			—		—
Ending balance	$	—		$	0.3		$	2.9	$	3.2

Other Receivables:
Beginning balance	$	0.3		$	—		$	—	$	0.3
Current period provision	(0.1		)	—			—		(0.1		)
Direct write-downs	—			—			—		—
Recoveries	—			—			—		—
Ending balance	$	0.2		$	—		$	—	$	0.2

(A) The allowance for doubtful accounts related to recourse receivables represents the amount previously reported in the former Bowling & Billiards segment that has been retained by Corporate as a result of the sale of the retail bowling business as discussed in Note 2 – Discontinued Operations.

The following table sets forth activity related to the allowance for credit loss on financing receivables during the year ended December 31, 2013:



(in millions)	Boat			Fitness			Total
Recourse Receivables:
Beginning balance	$	—		$	0.9		$	0.9
Current period provision	—			0.3			0.3
Direct write-downs	—			(0.4		)	(0.4		)
Recoveries	—			(0.4		)	(0.4		)
Ending balance	$	—		$	0.4		$	0.4

Other Receivables:
Beginning balance	$	2.8		$	0.2		$	3.0
Current period provision	(0.2		)	—			(0.2		)
Direct write-downs	(2.3		)	(0.2		)	(2.5		)
Recoveries	—			—			—
Ending balance	$	0.3		$	—		$	0.3