BRUNSWICK CORP

Item 1. Condensed Consolidated Financial Statements

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Cash Flows

Brunswick Corporation

Condensed Consolidated Statements of Shareholders' Equity

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

Note 1 – Significant Accounting Policies

Interim Financial Statements

Brunswick's unaudited interim condensed consolidated financial statements have been prepared pursuant to 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 Annual Report on Form 10-K for the year ended December 31, 2024 (the 2024 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 third quarter of fiscal year 2025 ended on September 27, 2025 and the third quarter of fiscal year 2024 ended on September 28, 2024.

Recently Issued Accounting Standards

Income Statement: In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). This guidance requires disclosures about significant expense categories, including, but not limited to, inventory purchases, employee compensation, depreciation, amortization, and selling expenses. ASU 2024-03 is effective for financial statements for annual periods beginning after December 15, 2026. We are currently evaluating the impact of adopting this guidance on the consolidated financial statements.

Income Taxes: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. Under this ASU, entities must disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires entities to disclose additional information about income taxes paid. ASU 2023-09 is effective for financial statements for annual periods beginning after December 15, 2024. We are currently evaluating the impact of adopting this guidance on the consolidated financial statements.

Note 2 –Revenue Recognition

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

During the third quarter of 2025, the Company changed the presentation of major product lines for the Navico Group segment to disaggregate the previous Navico Group product line into Electronic Solutions, Power Solutions, and Performance Solutions to conform to Navico Group's new organizational structure. Prior period amounts have been reclassified to conform to the current period presentation.

As of December 31, 2024,$191.2 million of contract liabilities associated with extended warranties, deferred revenue and customer deposits were reported in Accrued expenses and Other long-term liabilities, of which $51.7 million were recognized as revenue during the nine months ended September 27, 2025. As of September 27, 2025, total contract liabilities were $199.4 million. The total amount of the transaction price allocated to unsatisfied performance obligations as of September 27, 2025 was $197.5 million for contracts greater than one year, which primarily relates to extended warranties. The Company expects to recognize $20.4 million of this amount in 2025, $60.8 million in 2026, and $116.3 million thereafter.

Note 3 –Restructuring, Exit, and Impairment Activities

During the three and nine months ended September 27, 2025 and September 28, 2024, the Company recorded restructuring charges related to headcount reductions and related costs associated with streamlining the enterprise-wide cost structure and improving operating efficiencies. The Company also incurred charges related to the rationalization of its manufacturing footprint, including the decision in the third quarter of 2025 to rationalize our fiberglass boat manufacturing footprint and exit our facilities in Reynosa, Mexico and Flagler Beach, Florida and consolidate production from those facilities into existing U.S. facilities.

The following table is a summary of these expenses for the three months ended September 27, 2025:

(A) Includes $0.9 million of benefit associated with pension plan adjustments included within Other expense, net in the Condensed Consolidated Statements of Comprehensive Income during the three months ended September 27, 2025.

(B) Includes impairment charges of $322.8 million associated with an impairment of the Navico Group reporting unit's goodwill and trade names during the three months ended September 27, 2025.

(C) Cash payments for the three months ended September 27, 2025 may include payments related to prior period charges.

(D) Restructuring, exit, and impairment charges accrued as of September 27, 2025 are expected to be paid in the next twelve months.

The following table is a summary of these expenses for the three months ended September 28, 2024:

(A) Cash payments for the three months ended September 28, 2024 may include payments related to prior period charges.

The following table is a summary of these expenses for the nine months ended September 27, 2025:

(A) Includes $0.9 million of benefit associated with pension plan adjustments included within Other expense, net in the Condensed Consolidated Statements of Comprehensive Income during the nine months ended September 27, 2025.

(B) Includes impairment charges of $322.8 million associated with an impairment of the Navico Group reporting unit's goodwill and trade names during the nine months ended September 27, 2025.

(C) Cash payments for the nine months ended September 27, 2025 may include payments related to prior period charges.

(D) Restructuring, exit, and impairment charges accrued as of September 27, 2025 are expected to be paid in the next twelve months.

The following table is a summary of these expenses for the nine months ended September 28, 2024:

(A) Cash payments for the nine months ended September 28, 2024 may include payments related to prior period charges.

Note 4 –Acquisitions

2024 Acquisition

On September 12, 2024, the Company acquired additional Freedom Boat Club franchise operations and territories in Southeast Florida. The acquisition enhances Freedom Boat Club's presence in Florida and provides an opportunity to leverage synergies across Brunswick's portfolio of brands. The acquisition is included as part of the Company's Boat segment.

The Company paid net cash consideration of $31.3 million for the acquisition. The opening balance sheet includes $26.9 million of goodwill and $5.2 million of customer relationships. The amount assigned to customer relationships will be amortized over the estimated useful life of 10 years. Transaction costs associated with the acquisition were not material to the Company's consolidated results of operations. The acquisition is not material to the Company's net sales, results of operations, or total assets during any period presented. Accordingly, the Company's consolidated results of operations do not differ materially from historical performance as a result of the acquisition, and pro forma results for prior periods are not presented. Purchase accounting is final for this acquisition.

Note 5 –Financial Instruments

The Company operates globally with manufacturing and sales facilities around the world. Due to the 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 12 in the Notes to Consolidated Financial Statements in the 2024 Form 10-K for further details regarding the Company's financial instruments and hedging policies.

The Company regularly enters into cross-currency swaps to hedge Euro and Yuan currency exposures of the net investment in certain foreign subsidiaries. During the first half of 2025, the Company entered into $500.0 million of cross-currency swap contracts and settled $400.0 million of cross-currency swap contracts previously entered into, resulting in a deferred gain of $4.9 million within Accumulated other comprehensive loss, net of tax.

The following table summarizes the notional values of the Company's derivative instruments as of September 27, 2025, December 31, 2024, and September 28, 2024:

(A) Commodity contracts outstanding as of September 27, 2025 mature through 2027.

(B) The amount of gain or loss that is expected to be reclassified from Accumulated other comprehensive loss to earnings in the next twelve months is immaterial.

(C) Forward contracts outstanding as of September 27, 2025 mature through 2027 and mainly relate to the Euro, Australian dollar, Mexican peso, and Norwegian krone.

As of September 27, 2025, December 31, 2024, and September 28, 2024, the fair values of the Company’s derivative instruments were:

As of September 27, 2025, December 31, 2024, and September 28, 2024, 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.

The effect of derivative instruments on the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 27, 2025 and September 28, 2024 is shown in the tables below.

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

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

The amount of gain (loss) on derivatives recognized directly into earnings was as follows:

Note 6 –Fair Value Measurements

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

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. The fair value of the Company's long-term debt, including current maturities, and short-term debt is determined using Level 1 and Level 2 inputs described in Note 6 to Notes to Consolidated Financial Statements in the 2024 Form 10-K. The fair value and carrying value of long-term debt, including current maturities, and short term debt as of September 27, 2025, December 31, 2024, and September 28, 2024 was as follows:

Note 7 –Commitments and Contingencies

Product Warranties

The following activity related to product warranty liabilities was recorded in Accrued expenses during the nine months ended September 27, 2025 and September 28, 2024:

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 nine months ended September 27, 2025 and September 28, 2024:

Note 8 –Goodwill and Other Intangibles

Changes in the Company's goodwill during the nine months ended September 27, 2025 and September 28, 2024, by segment, are summarized below:

The Company tests goodwill for impairment during the fourth quarter of each year, or whenever a change in events and circumstances (triggering event) occurs that indicates the carrying value of a reporting unit may exceed its fair value. With the 2025 marine retail selling season substantially complete, and a new organizational structure in place for Navico Group during the third quarter of 2025, the Company assessed the current economic and trade environment impact on future results and performed a third quarter goodwill impairment assessment of the Navico Group reporting unit and determined the carrying value exceeded its fair value. We calculate the fair value of our reporting units considering both the income approach and the guideline public company method. As a result of the impairment test, the Company recorded an $305.8 million impairment charge during the three months ended September 27, 2025, which is included as a component of Restructuring, exit and impairment charges in the Condensed Consolidated Statement of Comprehensive Income. Following the impairment charge, the Navico Group reporting unit has goodwill assigned to it of $222.7 million as of September 27, 2025 and its fair value approximates its carrying value. The accumulated impairment loss on goodwill was $385.8 million and $80.0 million as of September 27, 2025 and December 31, 2024, respectively. There was no accumulated impairment loss on goodwill as of September 28, 2024.

Adjustments in both periods include the effect of foreign currency translation on goodwill denominated in currencies other than the U.S. dollar. Adjustments during the nine months ended September 28, 2024 also include $1.6 million of purchase accounting adjustments related to the 2023 Fliteboard and Freedom Boat Club acquisitions.

The Company's intangible assets, included within Other intangibles, net on the Condensed Consolidated Balance Sheets as of September 27, 2025, December 31, 2024, and September 28, 2024, are summarized by intangible asset type below:

The Company tests its intangible assets for impairment during the fourth quarter of each year, or whenever a change in events and circumstances (triggering event) occurs that indicates the fair value of intangible assets may be below their carrying values. With the 2025 marine selling season substantially complete, and a new organizational structure in place for Navico Group during the third quarter of 2025, the Company performed a third quarter impairment assessment of the legacy Navico trade name and determined the carrying value exceeded its fair value. The Company recorded a total impairment charge of $17.0 million during the three months ended

September 27, 2025, related to various Navico Group trade names, which is included as a component of Restructuring, exit and impairment charges on the Condensed Consolidated Statement of Comprehensive Income. The Company did not record any impairment charges on its intangible assets during the nine months ended September 28, 2024.

Other intangible assets primarily consist of software, 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 $19.7 million and $59.0 million for the three and nine months ended September 27, 2025, respectively. Aggregate amortization expense for intangibles was $18.2 million and $54.0 million for the three and nine months ended September 28, 2024, respectively.

Note 9 –Segment Information

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

(A) Net sales include $63.4 million, $1.8 million, $20.6 million, and $0.2 million of segment eliminations for the Propulsion, Engine P&A, Navico Group and Boat reportable segments, respectively.

(B) Includes $8.6 million of Cost of sales related Restructuring, exit, and impairment charges.

(C) Includes $215.8 million of Selling, general, and administrative expense, $43.4 million of Research and development expense and $325.2 million of Restructuring, exit, and impairment charges.

(A) Net sales include $58.8 million, $1.4 million, and $17.9 million of segment eliminations for the Propulsion, Engine P&A, and Navico Group reportable segments, respectively.

(B) Includes $4.8 million of Cost of sales related Restructuring, exit, and impairment charges.

(C) Includes $180.7 million of Selling, general, and administrative expense, $41.7 million of Research and development expense and $7.4 million of Restructuring, exit, and impairment charges.

(A) Net sales include $209.9 million, $6.1 million, $66.9 million, and $0.8 million of segment eliminations for the Propulsion, Engine P&A, Navico Group, and Boat reportable segments, respectively.

(B) Includes $11.4 million of Cost of sales related Restructuring, exit, and impairment charges.

(C) Includes $640.4 million of Selling, general, and administrative expense, $123.7 million of Research and development expense and $331.5 million of Restructuring, exit, and impairment charges.

(A) Net sales include $212.7 million, $5.1 million, and $67.0 million of segment eliminations for the Propulsion, Engine P&A, and Navico Group reportable segments, respectively.

(B) Includes $14.7 million of Cost of sales related Restructuring, exit, and impairment charges.

(C) Includes $566.2 million of Selling, general, and administrative expense, $130.5 million of Research and development expense and $18.9 million of Restructuring, exit, and impairment charges.

Note 10 – Comprehensive Income

Accumulated other comprehensive loss, net of tax, in the Condensed Consolidated Balance Sheets includes foreign currency cumulative translation adjustments; prior service costs and credits and net actuarial gains and losses for defined benefit plans; and unrealized derivative gains and losses. Changes in the components of Accumulated other comprehensive loss, net of tax, for the three and nine months ended September 27, 2025 and September 28, 2024 are as follows:

The following table presents the changes in Accumulated other comprehensive loss, net of tax, by component for the three months ended September 27, 2025:

(A) The tax effects for the three months ended September 27, 2025 were $1.3 million for foreign currency translation and $(2.0) million for derivatives.

(B) The tax effects for the three months ended September 27, 2025 were $0.0 million for derivatives.

(C) The reclassification adjustments from Accumulated other comprehensive loss and associated tax effects related to defined benefit items were not material for the three months ended September 27, 2025. Refer to Note 5 – Financial Instruments for the reclassification adjustments from Accumulated other comprehensive loss, net of tax related to derivatives.

The following table presents the changes in Accumulated other comprehensive loss, net of tax, by component for the nine months ended September 27, 2025:

(A) The tax effects for the nine months ended September 27, 2025 were $(10.5) million for foreign currency translation and $12.9 million for derivatives.

(B) The tax effects for the nine months ended September 27, 2025 were $0.9 million for derivatives.

(C) The reclassification adjustments from Accumulated other comprehensive loss and associated tax effects related to defined benefit items were not material for the nine months ended September 27, 2025. Refer to Note 5 – Financial Instruments for the reclassification adjustments from Accumulated other comprehensive loss, net of tax related to derivatives.

The following table presents the changes in Accumulated other comprehensive loss, net of tax, by component for the three months ended September 28, 2024:

(A) The tax effects for the three months ended September 28, 2024 were $(3.3) million for foreign currency translation and $4.2 million for derivatives.

(B) The tax effects for the three months ended September 28, 2024 were $(0.2) million for derivatives.

(C) The reclassification adjustments from Accumulated other comprehensive loss and associated tax effects related to defined benefit items were not material for the three months ended September 28, 2024. Refer to Note 5 – Financial Instruments for the reclassification adjustments from Accumulated other comprehensive loss, net of tax related to derivatives.

The following table presents the changes in Accumulated other comprehensive loss, net of tax, by component for the nine months ended September 28, 2024:

(A) The tax effects for the nine months ended September 28, 2024 were $1.0 million for foreign currency translation and $1.1 million for derivatives.

(B) The tax effects for the nine months ended September 28, 2024 were $0.9 million for derivatives.

(C) The reclassification adjustments from Accumulated other comprehensive loss and associated tax effects related to defined benefit items were not material for the nine months ended September 28, 2024. Refer to Note 5 – Financial Instruments for the reclassification adjustments from Accumulated other comprehensive loss, net of tax related to derivatives.

Note 11 –Income Taxes

The effective tax rate, which is calculated as the Income tax (benefit) provision as a percentage of (Loss) earnings before income taxes, for the three months ended September 27, 2025 and September 28, 2024 was 12.0% and 32.3%, respectively. The effective tax rate for the three months ended September 27, 2025 was lower than the same period in the prior year, primarily due to lower pretax income and the discrete income tax benefit recorded for the impairment of goodwill and trademark intangible assets related to our Navico Group segment.

The effective tax rate for the nine months ended September 27, 2025 and September 28, 2024 was 5.2% and 23.8%, respectively. The effective tax rate for the nine months ended September 27, 2025 was lower than the same period in the prior year, primarily due to lower pretax income and the discrete income tax benefit recorded for the impairment of goodwill and trademark intangible assets related to our Navico Group segment.

On July 4, 2025, H.R.1, commonly referred to as the One Big Beautiful Bill Act (the Act), was signed into law. The Act includes tax reform provisions affecting business. Key tax-related provisions include an elective deduction for domestic research and development expenses and a reinstatement of elective 100% first-year bonus depreciation. Certain changes adopted in the act will not take effect until 2026, such as the modifications to the international tax framework. We continue to monitor the impact of the Act and to evaluate the different elections that are available with respect to the timing of deductions. The Act did not have a material impact on the Company's financial statements for the three months ended September 27, 2025.

Note 12 –Debt

The following table provides the changes in the Company's debt for the nine months ended September 27, 2025:

(A) During 2025, the Company had short-term borrowings and repayments under its unsecured commercial paper program and borrowings outstanding of $90.0 million as of September 27, 2025.

(B) During 2025, the Company made the remaining principal repayments, totaling $125.0 million of its 6.625% Senior Notes due 2049.

As of September 27, 2025, Brunswick was in compliance with the financial covenants associated with its debt.

2049 Notes

During the fourth quarter of 2024, the Company issued an irrevocable notice of redemption to the holders of its 6.625% Senior Notes due 2049 (2049 Notes). The 2049 Notes were redeemed in the first quarter of 2025 at a redemption price equal to 100 percent of the outstanding principal amount of $125.0 million plus accrued interest of $2.1 million in accordance with the redemption provision of the 2049 Notes. The Company recognized a loss on early extinguishment of debt of $3.7 million related to unamortized issuance costs. The Company financed the retirement of the 2049 Notes using commercial paper borrowings.

Credit Facility

The Company maintains a Revolving Credit Agreement (Credit Facility). During the nine months ended September 27, 2025, and September 28, 2024, there were no borrowings under the Credit Facility. As of September 27, 2025, available borrowing capacity totaled $997.0 million, net of $3.0 million of letters of credit outstanding under the Credit Facility. As of September 28, 2024, available borrowing capacity totaled $747.0 million, net of $3.0 million of letters of credit outstanding under the Credit Facility. Refer to Note 14 in the Notes to Consolidated Financial Statements in the 2024 Form 10-K for details regarding Brunswick's Credit Facility.

Commercial Paper

The Company maintains an unsecured commercial paper program (CP Program) pursuant to which the Company may issue short-term, unsecured commercial paper notes (CP Notes). During the nine months ended September 27, 2025, borrowings under the CP Program totaled $704.4 million. As of September 27, 2025, the Company had $90.0 million of borrowings outstanding under the CP Program with a weighted average interest rate of 4.75%. During the nine months ended September 27, 2025, the maximum amount utilized under the CP Program was $445.5 million. During the nine months ended September 28, 2024, borrowings under the CP Program totaled $720.0 million. As of September 28, 2024, the Company had $195.0 million of borrowings outstanding under the CP Program. During the nine months ended September 28, 2024, the maximum amount utilized under the CP Program was $245.0 million. Refer to Note 14 in the Notes to Consolidate Financial Statements in the 2024 Form 10-K for details regarding Brunswick's CP Program.

Note 13 –Supplier Finance Program Obligations

As of September 27, 2025, December 31, 2024, and September 28, 2024, the Company had $8.1 million, $8.2 million, and $7.2 million confirmed invoices under the supplier finance program, respectively, which were included in Accounts payable on the Condensed Consolidated Balance Sheets.