BRUNSWICK CORP

Previous wording

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.

Current wording

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 effort. These items may include restructuring, exit and impairment costs, special tax items, acquisition-related costs, and certain other unusual adjustments.

Previous wording

On September 12, 2024, we acquired additional Freedom Boat Club franchise operations and territories in Southeast Florida for net cash consideration of $31.2 million. Refer to Note 4 – Acquisitionsin the Notes to the Consolidated Financial Statements for further information.

Current wording

On September 12, 2024, we acquired additional Freedom Boat Club franchise operations and territories in Southeast Florida for net cash consideration of $31.3 million. Refer to Note 4 – Acquisitionsin the Notes to the Consolidated Financial Statements for further information.

Previous wording

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 the U.S. dollar 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 Brazilian real.

Current wording

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 the U.S. dollar 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 26 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 Brazilian real.

Previous wording

(A) Special tax items during the year ended December 31, 2024 primarily relate to the discrete income tax expense recorded associated with an increase in the state valuation allowance.

Current wording

(A) Special tax items during the year ended December 31, 2025 primarily relates to the discrete income tax benefit associated with goodwill impairment and 2024 tax return to provision adjustments. Special tax items during the year ended December 31, 2024 primarily relate to the discrete income tax expense recorded associated with an increase in the state valuation allowance and the discrete income tax benefit associated with goodwill impairment.

Previous wording

Net sales decreased 18.2 percent during 2024 when compared with 2023. The components of the consolidated net sales change were as follows:

Current wording

Net sales increased 2.4 percent during 2025 when compared with 2024. The components of the consolidated net sales change were as follows:

Previous wording

Gross margin decreased 210 basis points in 2024 when compared with 2023 driven by lower absorption from decreased production levels (90 bps), material and labor inflation (60 bps), sales-related drivers (60 bps), and foreign currency exchange-rate fluctuations (20 bps), partially offset by acquisitions (20 bps).

Current wording

Gross margin decreased 100 basis points in 2025 when compared with 2024 driven by material inflation including tariffs (250 bps), partially offset by an increase in sales (120 bps), favorable currency exchange-rate fluctuations (20 bps), and higher absorption (10 bps).

Previous wording

Selling, general and administrative expenses as a percentage of net sales increased 160 basis points during 2024 when compared with the same prior year period, due to lower sales (280 bps), partially offset by cost control measures across the enterprise, including lower employee compensation costs associated with headcount reductions and lower variable compensation (120 bps). Research and development expense decreased during 2024 versus 2023.

Current wording

Selling, general and administrative expenses as a percentage of net sales increased 160 basis points during 2025 when compared with the same prior year period, primarily due to the reinstatement of variable compensation (194 bps), which was partially offset by higher sales (34 bps). Research and development expense remained flat during 2025 versus 2024.

Previous wording

During 2024, we recorded restructuring, exit and impairment charges of $121.7 million compared with $54.7 million in 2023. The Company estimates the restructuring actions executed in 2024 will result in approximately $24.0 million of annualized cost savings. See Note 3 – Restructuring, Exit and Impairment Activities in the Notes to Consolidated Financial Statements for further details.

Current wording

During 2025, we recorded restructuring, exit and impairment charges of $353.1 million compared with $121.7 million in 2024. Restructuring, exit and impairment charges include $322.5 million and $85.0 million of Navico Group impairments in 2025 and 2024 respectively. We estimate that the restructuring actions executed in 2025 will result in approximately $16.0 million of annualized cost savings. See Note 3 – Restructuring, Exit and Impairment Activities in the Notes to Consolidated Financial Statements for further details.

Previous wording

We recognized Equity earnings (loss) of $8.6 million and $(11.4) million in 2024 and 2023, respectively. The primary driver of the loss in 2023 is the impairment charge taken related to our investment in TN-BC Holdings LLC. Refer to Note 1 – Significant Accounting Policies in the Notes to Consolidated Financial Statements for further information.

Current wording

We recognized Equity earnings (loss) of $7.0 million and $8.6 million in 2025 and 2024, respectively, which were mainly related to our marine and technology-related joint ventures. Refer to Note 1 – Significant Accounting Policies in the Notes to Consolidated Financial Statements for further information.

Previous wording

We recognized $9.0 million and $7.6 million in 2024 and 2023, respectively, in Other income (expense), net. Other income (expense), net primarily includes remeasurement gains and losses resulting from changes in foreign currency rates and other postretirement benefit costs as well as the gain on sale of one of our businesses in 2024.

Current wording

We recognized $(1.6) million and $9.0 million in 2025 and 2024, respectively, in Other (loss) income, net. Other (loss) income, net primarily includes remeasurement gains and losses resulting from changes in foreign currency rates and other postretirement benefit costs as well as the gain on sale of one of our businesses in 2024.

Previous wording

Net interest expense increased in 2024 compared with 2023 due to an increase in average daily debt outstanding, which was influenced by the timing of debt issuances. We also recognized a loss on early extinguishment of debt related to the redemption of our 2027 Notes. Refer to Note 14 – Debtin the Notes to Consolidated Financial Statements.

Current wording

Net interest expense decreased in 2025 compared with 2024 due to a decrease in average daily debt outstanding, which was driven by early extinguishment of debt. We recognized a gain on early extinguishment of debt related to the tender offer slightly offset by a loss on early extinguishment of debt related to 2048 Notes and 2049 Notes. Refer to Note 14 – Debtin the Notes to Consolidated Financial Statements.

Previous wording

We recognized an income tax provision of $54.0 million and $196.3 million in 2024 and 2023, respectively. The decrease is primarily due to lower pretax income and the prior year intercompany sale of certain intellectual property rights. The effective tax rate, which is calculated as the income tax provision as a percentage of earnings before income taxes, was 26.6 percent and 31.2 percent for 2024 and 2023, respectively. We have also evaluated the effects of Pillar Two legislation and concluded that the tax effects are not material to the financial statements. See Note 10 – Income Taxes in the Notes to Consolidated Financial Statements for a reconciliation of our effective tax rate and statutory Federal income tax rate.

Current wording

We recognized an income tax provision of $0.2 million and $54.0 million in 2025 and 2024, respectively. For the year ended December 31, 2025 the effective income tax rate differed from the statutory federal income tax rate of 21%, primarily due to the impact of the goodwill and intangible asset impairments. The effective tax rate, which is calculated as the income tax provision as a percentage of earnings before income taxes, was (0.2) percent and 26.6 percent for 2025 and 2024, respectively. See Note 10 – Income Taxes in the Notes to Consolidated Financial Statements for a reconciliation of our effective tax rate and statutory Federal income tax rate.

Previous wording

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 decreased during 2024. Diluted earnings per common share from continuing operations benefited from common stock repurchases in both years.

Current wording

Due to the factors described in the preceding paragraphs, Operating (loss) earnings, Net (loss) earnings from continuing operations, and Diluted (loss) earnings per common share from continuing operations decreased during 2025. Diluted (loss) earnings per common share from continuing operations benefited from common stock repurchases in both years.

Previous wording

International sales were 36 percent of the Propulsion segment's net sales in 2024. International sales decreased 15 percent year-over-year on a GAAP basis and 14 percent on a constant currency basis.

Current wording

International sales were 37 percent of the Propulsion segment's net sales in 2025. International sales increased 8 percent year-over-year on a GAAP basis and 8 percent on a constant currency basis.

Previous wording

Engine P&A segment's net sales decreased in 2024 versus the prior year as a result of softer market conditions. The components of the Engine P&A segment's net sales change were as follows:

Current wording

Engine P&A segment's net sales increased 4.9 percent in 2025 versus the prior year reflecting strong boater participation and continued share gains in our distribution business line. The components of the Engine P&A segment's net sales change were as follows:

Previous wording

International sales were 30 percent of the Engine P&A segment's net sales in 2024. International sales increased slightly year-over-year on a GAAP basis and increased 1 percent on a constant currency basis.

Current wording

International sales were 29 percent of the Engine P&A segment's net sales in 2025. International sales increased 2 percent year-over-year on a GAAP basis and increased 1 percent on a constant currency basis.

Previous wording

International sales were 41 percent of the Navico Group segment's net sales in 2024. International sales decreased 5 percent year-over-year on a GAAP and constant currency basis.

Current wording

International sales were 42 percent of the Navico Group segment's net sales in 2025. International sales increased 2 percent year-over-year on a GAAP and slight decrease on a constant currency basis.

Previous wording

International sales were 20 percent of the Boat segment's net sales in 2024. International sales decreased 31 percent year-over-year on a GAAP basis and 30 percent on a constant currency basis.

Current wording

International sales were 20 percent of the Boat segment's net sales in 2025. International sales decreased 2 percent year-over-year on a GAAP basis and 3 percent on a constant currency basis.

Previous wording

Corporate operating loss decreased compared with 2023 driven by lower variable compensation costs along with the impact of both the IT security incident and restructuring charges in the prior year.

Current wording

Corporate operating loss increased compared with 2024 driven by higher variable compensation costs slightly offset by lower restructuring charges compared to prior year.

Previous wording

The primary drivers of Net cash provided by operating activities of continuing operations in 2024 were net earnings, net of non-cash items, partially offset by 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 Consolidated Balance Sheets, excluding the impact of acquisitions and non-cash adjustments. Net inventory decreased $112.8 million primarily due to lower planned production. Accounts and notes receivable decreased $45.0 million primarily due to lower sales and timing of collections. Accounts payable decreased $144.2 million, primarily due to lower purchasing resulting from reduced production. Accrued expenses decreased $104.0 million, primarily driven by a reduction in accrued variable compensation.

Current wording

Net cash provided by operating activities of continuing operations in 2025 totaled $585.7 million versus $449.5 million in 2024. The primary drivers of Net cash provided by operating activities of continuing operations in 2025 were net earnings, net of non-cash items, and working capital. Net inventory decreased $114.3 million primarily due to lower production. Accounts and notes receivable increased $73.4 million primarily due to increased sales and timing of collections. Accounts payable decreased $26.1 million, primarily due to lower purchasing resulting from reduced production. Accrued expenses increased $96.8 million, primarily driven by an increase in accrued variable compensation.

Previous wording

Net cash used for investing activities was $168.9 million, which included $167.4 million of capital expenditures, $80.9 million of purchases of marketable securities and $31.8 million of cash paid for acquisitions, net of cash acquired, partially offset by $82.1 million of sales or maturities of marketable securities and $15.0 million of proceeds from sales of property, plant and equipment. Our capital spending was focused on investments in new products and technologies.

Current wording

Net cash used for investing activities was $141.6 million, which included $165.8 million of capital expenditures, and $12.6 million of proceeds from sales of property, plant and equipment. Our capital spending was focused on investments in new products and technologies.

Previous wording

Net cash used for financing activities was $442.7 million, which included $613.2 million of payments of long-term debt including current maturities, $200.0 million of common stock repurchases, $112.3 million of cash dividends paid to common shareholders, and $87.4 million of payments of short-term debt, partially offset by $396.9 million of proceeds from issuances of long-term debt and $201.1 million of proceeds from issuances of short-term debt. Refer to Note 14 – Debtin the Notes to Consolidated Financial Statements for further details on our debt activity during the year ended December 31, 2024.

Current wording

Net cash used for financing activities was $441.2 million, which included $412.6 million of payments of long-term debt including current maturities, $80.0 million of common stock repurchases, $112.6 million of cash dividends paid to common shareholders, partially offset by $173.1 million of proceeds from issuances of short-term debt. Refer to Note 14 – Debtin the Notes to Consolidated Financial Statements for further details on our debt activity during the year ended December 31, 2025.

Previous wording

Cash, cash equivalents and marketable securities totaled $269.8 million as of December 31, 2024, a decrease of $198.8 million from $468.6 million as of December 31, 2023. Total debt as of December 31, 2024 and December 31, 2023 was $2,340.6 million and $2,430.4 million, respectively. Our debt-to-capitalization ratio was 55 percent and 54 percent as of December 31, 2024 and December 31, 2023, respectively.

Current wording

Cash, cash equivalents and marketable securities totaled $257.6 million as of December 31, 2025, a decrease of $12.2 million from $269.8 million as of December 31, 2024. Total debt as of December 31, 2025 and December 31, 2024 was $2,102.2 million and $2,340.6 million, respectively. Our debt-to-capitalization ratio was 56 percent and 55 percent as of December 31, 2025 and December 31, 2024, respectively.

Previous wording

There were no borrowings under the Revolving Credit Agreement (Credit Facility) during 2024. Available borrowing capacity under the Credit Facility as of December 31, 2024 totaled $997.0 million, net of $3.0 million of letters of credit outstanding. During 2024, the maximum amount utilized under our unsecured commercial paper program (CP Program) was $280.0 million and as of December 31, 2024, the Company had $115.0 million of borrowings outstanding under the CP Program.

Current wording

There were no borrowings under the Revolving Credit Agreement (Credit Facility) during 2025. Available borrowing capacity under the Credit Facility as of December 31, 2025 totaled $994.0 million, net of $6.0 million of letters of credit outstanding. During 2025, the maximum amount utilized under our unsecured commercial paper program (CP Program) was $445.5 and as of December 31, 2025, we had $290.0 million of borrowings outstanding under the CP Program.

Previous wording

There were no borrowings under the Credit Facility during 2023. Available borrowing capacity under the Credit Facility as of December 31, 2023 totaled $741.9 million, net of $8.1 million of letters of credit outstanding. During 2023, the maximum amount utilized under our CP Program was $125.0 million.

Current wording

There were no borrowings under the Credit Facility during 2024. Available borrowing capacity under the Credit Facility as of December 31, 2024 totaled $997.0 million, net of $3.0 million of letters of credit outstanding. During 2024, the maximum amount utilized under our CP Program was $280.0 million.

Previous wording

We anticipate executing a thoughtful capital strategy in 2025 with planned debt reductions of $125 million, capital expenditures at levels similar to 2024 of $160 million, and a minimum of $80 million of share repurchases, which could increase in the event cash generation outpaces initial expectations.

Current wording

We anticipate executing a thoughtful capital strategy in 2026 with planned debt reductions of approximately $160 million, capital expenditures of approximately $200 million, and $50 million of share repurchases, which could increase in the event cash generation outpaces initial expectations.

Previous wording

(E) Other long-term liabilities primarily includes long-term warranty contracts, future projected payments related to our nonqualified pension plans and deferred revenue.

Current wording

(E) Other long-term liabilities primarily include long-term warranty contracts, future projected payments related to our nonqualified pension plans.

Previous wording

We recorded an $80.0 million impairment of the Navico Group reporting unit's goodwill during the year ended December 31, 2024. We did not record any goodwill impairments in 2023 or 2022.

Current wording

We recorded a $305.8 million and $80.0 million impairment of the Navico Group reporting unit's goodwill in 2025 and 2024, respectively.

Previous wording

The costs of amortizable intangible assets are recognized over their expected useful lives, typically between three and fifteen years, using the straight-line method. Intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used to evaluate long-lived assets. Intangible assets not subject to amortization are assessed for impairment at least annually and whenever events or changes in circumstances indicate that it is more likely than not that an asset may be impaired. The impairment test for indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying amount. An impairment loss is recognized for the amount by which the carrying value exceeds the fair value of the asset. The Company recorded impairment charges of $5.0 million during the year ended December 31, 2024 related to the Navico trade name. The Company recorded impairment charges of $16.6 million during the year ended December 31, 2023 including a $13.0 million impairment of the Navico trade name. The Company recorded impairment charges of $17.4 million during the year ended December 31, 2022 related to capitalized software intangible assets that will not be placed into service.

Current wording

The costs of amortizable intangible assets are recognized over their expected useful lives, typically between three and fifteen years, using the straight-line method. Intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used to evaluate long-lived assets. Intangible assets not subject to amortization are assessed for impairment at least annually and whenever events or changes in circumstances indicate that it is more likely than not that an asset may be impaired. The impairment test for indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying amount. An impairment loss is recognized for the amount by which the carrying value exceeds the fair value of the asset. We recorded impairment charges of $16.7 million during the year ended December 31, 2025 related to various Navico trade names. We recorded impairment charges of $5.0 million during the year ended December 31, 2024 related to the Navico trade name. We recorded impairment charges of $16.6 million during the year ended December 31, 2023, including a $13.0 million impairment of the Navico trade name.