BRUNSWICK CORP

Previous wording

Certain statements in Management's Discussion and Analysis are based on non-GAAP financial measures. GAAP refers to generally accepted accounting principles in the United States. A "non-GAAP financial measure" is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the consolidated statements of operations, balance sheets or statements of cash flows of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. For example, the discussion of our cash flows includes an analysis of free cash flows and total liquidity; the discussion of our net sales includes net sales on a constant currency basis; the discussion of our net sales includes net sales excluding acquisitions; and the discussion of our earnings includes a presentation of operating earnings and operating margin excluding restructuring, exit and impairment charges, purchase accounting amortization, acquisition, integration, and IT related costs, IT security incident costs and other applicable charges and of diluted earnings per common share, as adjusted. Non-GAAP financial measures do not include operating and statistical measures.

Current wording

Certain statements in Management's Discussion and Analysis are based on non-GAAP financial measures. GAAP refers to generally accepted accounting principles in the United States. A "non-GAAP financial measure" is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the consolidated statements of operations, balance sheets or statements of cash flows of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. For example, the discussion of our cash flows includes an analysis of free cash flows and total liquidity; the discussion of our net sales includes net sales on a constant currency basis; and the discussion of our earnings includes a presentation of operating earnings and operating margin excluding restructuring, exit and impairment charges, purchase accounting amortization, acquisition, integration, and IT related costs, supplier bankruptcy expenses and other applicable charges, and of diluted earnings per common share, as adjusted. Supplier bankruptcy expenses include additional expenses incurred, in excess of normal inventory costs, to purchase inventory from a key supplier that filed for bankruptcy. Non-GAAP financial measures do not include operating and statistical measures.

Previous wording

Operating (loss) earnings in the third quarter of 2025 were $(242.2) million and $106.4 million on a GAAP and As Adjusted basis, respectively. This compares to operating earnings during the third quarter of 2024 of $98.4 million and $125.9 million on a GAAP and As Adjusted basis, respectively. Operating earnings were down versus prior year due to the impact of restructuring and impairment charges, tariffs, and reinstatement of variable compensation, which were only partially offset by the impacts of sales increases.

Current wording

Operating earnings in the first quarter of 2026 were $50.3 million and $82.6 million on a GAAP and as adjusted basis, respectively. This compares to operating earnings during the first quarter of 2025 of $56.3 million and $72.1 million on a GAAP and As Adjusted basis, respectively. Adjusted operating earnings increased due to increased sales, favorable mix, pricing, improved absorption and disciplined cost management more than offsetting the impact of incremental tariffs implemented after the first quarter of 2025.

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 24 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

The table below summarizes the impact of changes in currency exchange rates and the impact of acquisitions on our net sales:

Current wording

The table below summarizes the impact of changes in currency exchange rates on our net sales:

Previous wording

The following table sets forth certain amounts, ratios, and relationships calculated from the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended:

Current wording

The following table sets forth certain amounts, ratios, and relationships calculated from the Condensed Consolidated Statements of Comprehensive Income for the three months ended:

Previous wording

The following is a reconciliation of our non-GAAP measures, adjusted operating earnings and adjusted diluted earnings per common share from continuing operations for the three and nine months ended September 27, 2025 when compared with the same prior year comparative period:

Current wording

The following is a reconciliation of our non-GAAP measures, adjusted operating earnings and adjusted diluted earnings per common share from continuing operations for the three months ended April 4, 2026 compared with the same prior year comparative period:

Previous wording

Net sales increased 7 percent during the third quarter of 2025 and decreased slightly during the nine months ended September 27, 2025 when compared with the same prior year periods. The components of the consolidated net sales change were as follows:

Current wording

Net sales increased 12.8% during the first quarter of 2026 compared with the same prior year period. The components of the consolidated net sales change were as follows:

Previous wording

Selling, general and administrative expense as a percentage of net sales increased 170 basis points during the third quarter of 2025 when compared with the same prior year period due to reinstatement of variable compensation. Research and development expense slightly increased in the third quarter of 2025 versus the same period in 2024.

Current wording

Selling, general and administrative expense as a percentage of net sales increased 60 basis points during the first quarter of 2026 compared with the same prior year period due to increased spending in support of growth and operational initiatives. Research and development expense increased in the first quarter of 2026 versus the same period in 2025 due to accelerated, strategic investments in new products.

Previous wording

We recorded Restructuring, exit and impairment charges of $333.8 million and $342.9 million during the three and nine months ended September 27, 2025, respectively. We recorded Restructuring, exit and impairment charges of $12.2 million and $33.6 million during the three and nine months ended September 28, 2024, respectively. We estimate 2025 actions to date will result in approximately $14.0 million of annualized cost savings. Refer to Note 3 –Restructuring, Exit, and Impairment Activities in the Notes to Condensed Consolidated Financial Statements for further information.

Current wording

We recorded Restructuring, exit and impairment charges of $4.8 million and $1.1 million during the three months ended April 4, 2026 and March 29, 2025 respectively. First quarter 2026 actions are not expected to result in material annualized cost savings. Refer to Note 3 –Restructuring, Exit, and Impairment Activities in the Notes to Condensed Consolidated Financial Statements for further information.

Previous wording

We recorded Equity earnings of $1.5 million and $5.4 million in the three and nine months ended September 27, 2025, respectively, which were primarily related to our marine and technology-related joint ventures. This compares with Equity earnings of $1.6 million and $7.0 million in the three and nine months ended September 28, 2024, respectively.

Current wording

We recorded Equity earnings of $1.6 million and $2.2 million in the three months ended April 4, 2026 and March 29, 2025, respectively, which were primarily related to our marine and technology-related joint ventures.

Previous wording

We recognized $(0.4) million and $(0.5) million of Other expense, net in the three and nine months ended September 27, 2025, respectively. This compares with $(1.1) million and $(1.9) million of Other expense, net in the three and nine months ended September 28, 2024, respectively. Other expense, net primarily includes remeasurement gains and losses resulting from changes in foreign currency rates and other post-retirement benefit costs.

Current wording

We recognized $(1.6) million and $1.3 million of Other (expense) income, net in the three months ended April 4, 2026, and March 29, 2025, respectively. Other (expense) income, net primarily includes remeasurement gains and losses resulting from changes in foreign currency rates and other post-retirement benefit costs.

Previous wording

Net interest expense decreased for the three and nine months ended September 27, 2025 when compared with the same prior year period. We also recognized a loss on early extinguishment of debt during the nine months ended September 27, 2025, related to the redemption of our 2049 Notes. Refer to Note 12 – Debt in the Notes to Condensed Consolidated Financial Statements and Note 14 – Debt in the Notes to Consolidated Financial Statements in the 2024 Form 10-K.

Current wording

Net interest expense decreased for the three months ended April 4, 2026 compared with the same prior year period. Refer to Note 10 – Debt in the Notes to Condensed Consolidated Financial Statements and Note 14 – Debt in the Notes to Consolidated Financial Statements in the 2025 Form 10-K.

Previous wording

The effective tax rate, which is calculated as the Income tax (benefit) provision as a percentage of (Loss) earnings before income taxes, was 12.0 percent and 5.2 percent for the three and nine months ended September 27, 2025, respectively. The effective tax rate for the three and nine months ended September 28, 2024, was 32.3 percent and 23.8 percent, respectively. Refer to Note 11 – Income Taxesin the Notes to Condensed Consolidated Financial Statements for further information.

Current wording

We recognized an Income tax provision for the three months ended April 4, 2026 of $5.9 million compared to $7.9 million for the three months ended March 29, 2025. The effective tax rate, which is calculated as the Income tax provision as a percentage of Earnings before income taxes, was 21.9% and 28.1% for the three months ended April 4, 2026 and March 29, 2025, respectively.

Previous wording

Due to the factors described in the preceding paragraphs, Operating (loss) earnings, Net (loss) earnings from continuing operations, and Diluted earnings per common share from continuing operations decreased during both the three and nine months ended September 27, 2025 when compared with the same prior year period.

Current wording

Due to the factors described in the preceding paragraphs, Net earnings from continuing operations and Diluted earnings per common share from continuing operations increased during the three months ended April 4, 2026 compared with the same prior year period.

Previous wording

The following table sets forth Propulsion segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:

Current wording

The following table sets forth Propulsion segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three months ended:

Previous wording

International sales were 36 percent of the Propulsion segment's net sales in the third quarter of 2025 and increased 8 percent from the prior year on a GAAP basis. On a constant currency basis, international sales increased 6 percent.

Current wording

International sales were 39 percent of the Propulsion segment's net sales in the first quarter of 2026 and increased 20 percent from the prior year on a GAAP basis. On a constant currency basis, international sales increased 10 percent.

Previous wording

The following table sets forth Engine P&A segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:

Current wording

The following table sets forth Engine P&A segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three months ended:

Previous wording

The following table sets forth Navico Group segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:

Current wording

The following table sets forth Navico Group segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three months ended:

Previous wording

The following table sets forth Boat segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:

Current wording

The following table sets forth Boat segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three months ended:

Previous wording

The following table sets forth Corporate/Other results and a reconciliation to our non-GAAP measure of adjusted operating loss for the three and nine months ended:

Current wording

The following table sets forth Corporate/Other results for the three months ended:

Previous wording

Corporate operating loss in the third quarter of 2025 increased compared to the third quarter of 2024 due to the impact of reinstated variable compensation.

Current wording

Corporate operating loss in the first quarter of 2026 increased compared to the first quarter of 2025 driven by increased spending in support of growth and operational initiatives.

Previous wording

Recent accounting pronouncements that have been adopted during the nine months ended September 27, 2025, or will be adopted in future periods, are included in Note 1 – Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements.

Current wording

Recent accounting pronouncements that have been adopted during the three months ended April 4, 2026, or will be adopted in future periods, are included in Note 1 – Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements.

Previous wording

Certain statements in this Quarterly Report on Form 10-Q are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, estimates, and projections about Brunswick’s business and by their nature address matters that are, to different degrees, uncertain. Words such as “may,” “could,” “should,” “expect,” "anticipate," "project," "position," “intend,” “target,” “plan,” “seek,” “estimate,” “believe,” “predict,” “outlook,” "will," and similar expressions are intended to identify forward-looking statements. Forward-looking 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 report. These risks include, but are not limited to: the effect of adverse general economic conditions, including rising interest rates, and the amount of disposable income consumers have available for discretionary spending; changes to trade policy and tariffs, including retaliatory tariffs; changes in currency exchange rates; fiscal and monetary policy changes; adverse capital market conditions; competitive pricing pressures; higher energy and fuel costs; managing our manufacturing footprint and operations; loss of key customers; international business risks, geopolitical tensions or conflicts, sanctions, embargoes, or other regulations; actual or anticipated increases in costs, disruptions of supply, or defects in raw materials, parts, or components we purchase from third parties; supplier manufacturing constraints, increased demand for shipping carriers, and transportation disruptions; adverse weather conditions, climate change events and other catastrophic event risks; our ability to develop new and innovative products and services at a competitive price; absorbing fixed costs in production; our ability to meet demand in a rapidly changing environment; public health emergencies or pandemics; our ability to successfully implement our strategic plan and growth initiatives; attracting and retaining skilled labor, implementing succession plans for key leadership, and executing organizational and leadership changes; our ability to integrate acquisitions and the risk for associated disruption to our business; the risk that restructuring or strategic divestitures will not provide business benefits; our ability to identify and complete targeted acquisitions; maintaining effective distribution; dealer and customer ability to access adequate financing; inventory reductions by dealers, retailers, or independent boat builders; requirements for us to repurchase inventory; risks related to the Freedom Boat Club franchise business model; outages, breaches, or other cybersecurity events regarding our technology systems, which have affected and could further affect manufacturing and business operations and could result in lost or stolen information and associated re…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Certain statements in this Quarterly Report on Form 10-Q are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, estimates, and projections about Brunswick’s business and by their nature address matters that are, to different degrees, uncertain. Words such as “may,” “could,” “should,” “expect,” "anticipate," "project," "position," “intend,” “target,” “plan,” “seek,” “estimate,” “believe,” “predict,” “outlook,” "will," and similar expressions are intended to identify forward-looking statements. Forward-looking 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 report. These risks include, but are not limited to: the effect of adverse general economic conditions, including rising interest rates, and the amount of disposable income consumers have available for discretionary spending; changes to trade policy and tariffs, including retaliatory tariffs; fiscal and monetary policy changes; adverse capital market conditions; changes in currency exchange rates; competitive pricing pressures; higher energy and fuel costs; managing our manufacturing footprint and operations; loss of key customers; international business risks, geopolitical tensions or conflicts, sanctions, embargoes, or other regulations; actual or anticipated increases in costs, disruptions of supply, or defects in raw materials, parts, or components we purchase from third parties; supplier manufacturing constraints, increased demand for shipping carriers, and transportation disruptions; adverse weather conditions, climate change events and other catastrophic event risks; our ability to develop new and innovative products and services at a competitive price; absorbing fixed costs in production; our ability to meet demand in a rapidly changing environment; public health emergencies or pandemics; our ability to successfully implement our strategic plan and growth initiatives; attracting and retaining skilled labor, implementing succession plans for key leadership and executing organizational and leadership changes; our ability to integrate acquisitions and the risk for associated disruption to our business; the risk that restructuring or strategic divestitures will not provide business benefits; our ability to identify and complete targeted acquisitions; maintaining effective distribution; dealer and customer ability to access adequate financing; inventory reductions by dealers, retailers, or independent boat builders; requirements for us to repurchase inventory; risks related to the Freedom Boat Club franchise business model; outages, breaches, or other cybersecurity events regarding our technology systems, which have affected and could further affect manufacturing and business operations and could result in lost or stolen information and associated rem…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Additional risk factors are included in the 2024 Form 10-K, in subsequent Quarterly Reports on Form 10-Q, and may be further updated in our filings with the SEC. Forward-looking statements speak only as of the date on which they are made, and Brunswick does not undertake any obligation to update them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

Current wording

Additional risk factors are included in the 2025 Form 10-K and may be further updated in our filings with the SEC. Forward-looking statements speak only as of the date on which they are made, and Brunswick does not undertake any obligation to update them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

Previous wording

The following table sets forth an analysis of free cash flow for the nine months ended:

Current wording

The following table sets forth an analysis of free cash flow for the three months ended:

Previous wording

Net cash provided by operating activities of continuing operations in the nine months ended September 27, 2025 totaled $451.1 million compared to $137.5 million in the nine months ended September 28, 2024. The improvement is primarily due to working capital usage in the prior year. 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 Condensed Consolidated Balance Sheets, excluding the impact of acquisitions and non-cash adjustments.

Current wording

Net cash used for operating activities of continuing operations in the three months ended April 4, 2026 totaled $63.7 million compared to $13.4 million in the three months ended March 29, 2025. The increase is primarily due to operating results and changes in 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 Condensed Consolidated Balance Sheets, excluding the impact of acquisitions and non-cash adjustments. Accounts and notes receivable increased $118.7 million, due to timing of collections, Accounts payable increased $96.3 million, due to timing of payments, inventory increased $81.8 million due to increased production, and Accrued expenses decreased $44.4 million, due to payment of approximately $80.0 million of the prior year's variable compensation expense which had been accrued as of December 31, 2025.

Previous wording

Net cash used for investing activities was $97.5 million and primarily related to $116.5 million of capital expenditures. Our capital spending was focused on investments in new products and technologies.

Current wording

Net cash used for investing activities was $55.2 million and primarily related to $57.2 million of capital expenditures. Our capital spending was focused on investments in new products and technologies.

Previous wording

Net cash used for financing activities was $313.2 million and primarily related to repayments of short-term debt, repayments of long-term debt, dividends paid to common shareholders and common stock repurchases, partially offset by the net proceeds from issuances of short-term debt.

Current wording

Net cash provided by financing activities was $133.5 million and primarily related to proceeds from issuance of short-term debt, partially offset by dividends paid to common shareholders and common stock repurchases.

Previous wording

Cash, cash equivalents and marketable securities totaled $298.5 million as of September 27, 2025, an increase of $28.7 million from $269.8 million as of December 31, 2024, and an increase of $13.6 million from $284.9 million as of September 28, 2024. Total debt as of September 27, 2025, December 31, 2024 and September 28, 2024 was $2,193.2 million, $2,340.6 million and $2,571.9 million, respectively. Our debt-to-capitalization ratio was 57 percent as of September 27, 2025 compared to 55 percent as of December 31, 2024 and 56 percent as of September 28, 2024.

Current wording

Cash, cash equivalents and marketable securities totaled $278.6 million as of April 4, 2026, an increase of $21.0 million from $257.6 million as of December 31, 2025, and a decrease of $8.9 million from $287.5 million as of March 29, 2025. Total debt as of April 4, 2026, December 31, 2025 and March 29, 2025 was $2,296.4 million, $2,102.2 million and $2,484.1 million, respectively. Our debt-to-capitalization ratio was approximately 59 percent as of April 4, 2026 compared to 56 percent as of December 31, 2025 and 57 percent as of March 29, 2025.

Previous wording

There were no borrowings under the Revolving Credit Agreement (Credit Facility) during the nine months ended September 27, 2025 and we did not have any borrowings outstanding as of September 27, 2025. Available borrowing capacity under the Credit Facility as of September 27, 2025 totaled $997.0 million, net of $3.0 million of letters of credit outstanding. During the nine months ended September 27, 2025, the maximum amount utilized under the CP Program was $445.5 million, and as of September 27, 2025, the Company had $90.0 million of borrowings outstanding under the CP Program. Refer to Note 12 – Debt in the Notes to Condensed Consolidated Financial Statements and Note 14 - Debt in the Notes to Consolidated Financial Statements in the 2024 Form 10-K, for further details.

Current wording

There were no borrowings under the Revolving Credit Agreement (Credit Facility) during the three months ended April 4, 2026 and we did not have any borrowings outstanding as of April 4, 2026. Available borrowing capacity under the Credit Facility as of April 4, 2026 totaled $984.0 million, net of $16.0 million of letters of credit outstanding. During the three months ended April 4, 2026, the maximum amount utilized under the CP Program was $540.0 million, and as of April 4, 2026, the Company had $485.0 million of borrowings outstanding under the CP Program. Refer to Note 10 – Debt in the Notes to Condensed Consolidated Financial Statements and Note 14 - Debt in the Notes to Consolidated Financial Statements in the 2025 Form 10-K, for further details.

Previous wording

The levels of borrowing capacity under our Credit Facility and CP Program are limited by both a leverage and interest coverage test. These covenants also pertain to termination provisions included in our wholesale financing joint-venture arrangements with Wells Fargo Commercial Distribution Finance. Based on our anticipated earnings generation throughout the year, we expect to maintain sufficient cushion against the existing debt covenants.

Current wording

The levels of borrowing capacity under our Credit Facility and CP Program are limited by both a leverage and interest coverage test. These covenants also pertain to termination provisions included in our wholesale financing joint-venture arrangements with Wells Fargo Commercial Distribution Finance. As of April 4, 2026, Brunswick was in compliance with the financial covenants associated with its debt and based on our anticipated earnings generation throughout the year, we expect to maintain sufficient cushion against the existing debt covenants.

Previous wording

We are anticipating approximately $200 million of debt reduction, $150 million of capital expenditures, and share repurchases in excess of $80 million for the year.

Current wording

The Company anticipates approximately $160 million of debt reduction, $200 million of capital expenditures, and share repurchases of at least $50 million for the year.