x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 36-0848180 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | o |
Emerging growth company | o |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
Common stock, par value $0.75 per share 6.500% Senior Notes due 2048 6.625% Senior Notes due 2049 6.375% Senior Notes due 2049 | BC BC-A BC-B BC-C | New York Stock Exchange |
PART I – FINANCIAL INFORMATION | Page | |
PART II – OTHER INFORMATION | ||
BRUNSWICK CORPORATION Condensed Consolidated Statements of Comprehensive Income (unaudited) | |||||||
Three Months Ended | |||||||
(in millions, except per share data) | March 30, 2019 | March 31, 2018 | |||||
Net sales | $ | 1,275.9 | $ | 1,211.4 | |||
Cost of sales | 938.4 | 901.4 | |||||
Selling, general and administrative expense | 189.6 | 163.5 | |||||
Research and development expense | 35.0 | 37.6 | |||||
Restructuring, exit, integration and impairment charges | 141.5 | 3.8 | |||||
Operating earnings (loss) | (28.6 | ) | 105.1 | ||||
Equity earnings | 1.9 | 1.0 | |||||
Other expense, net | (1.6 | ) | (0.0 | ) | |||
Earnings (loss) before interest and income taxes | (28.3 | ) | 106.1 | ||||
Interest expense | (19.8 | ) | (6.7 | ) | |||
Interest income | 0.4 | 0.7 | |||||
Earnings (loss) before income taxes | (47.7 | ) | 100.1 | ||||
Income tax provision (benefit) | (11.4 | ) | 27.2 | ||||
Net earnings (loss) | $ | (36.3 | ) | $ | 72.9 | ||
Earnings (loss) per common share: | |||||||
Basic | $ | (0.42 | ) | $ | 0.83 | ||
Diluted | $ | (0.42 | ) | $ | 0.82 | ||
Weighted average shares used for computation of: | |||||||
Basic earnings (loss) per common share | 87.5 | 88.1 | |||||
Diluted earnings (loss) per common share | 87.5 | 88.8 | |||||
Comprehensive income (loss) | $ | (35.3 | ) | $ | 83.9 | ||
The Notes to Condensed Consolidated Financial Statements are an integral part of these consolidated statements. |
BRUNSWICK CORPORATION Condensed Consolidated Balance Sheets (unaudited) | |||||||||||
(in millions) | March 30, 2019 | December 31, 2018 | March 31, 2018 | ||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents, at cost, which approximates fair value | $ | 161.5 | $ | 294.4 | $ | 284.0 | |||||
Restricted cash | 9.1 | 9.0 | 9.4 | ||||||||
Short-term investments in marketable securities | 0.8 | 0.8 | 0.8 | ||||||||
Total cash and short-term investments in marketable securities | 171.4 | 304.2 | 294.2 | ||||||||
Accounts and notes receivable, less allowances of $10.0, $11.3 and $9.4 | 683.7 | 550.7 | 623.6 | ||||||||
Inventories | |||||||||||
Finished goods | 650.2 | 614.2 | 562.0 | ||||||||
Work-in-process | 112.1 | 106.1 | 133.1 | ||||||||
Raw materials | 228.8 | 223.4 | 208.0 | ||||||||
Net inventories | 991.1 | 943.7 | 903.1 | ||||||||
Prepaid expenses and other | 91.6 | 81.6 | 41.8 | ||||||||
Current assets | 1,937.8 | 1,880.2 | 1,862.7 | ||||||||
Property | |||||||||||
Land | 24.0 | 24.0 | 25.2 | ||||||||
Buildings and improvements | 477.6 | 469.7 | 420.1 | ||||||||
Equipment | 1,145.5 | 1,128.9 | 1,038.6 | ||||||||
Total land, buildings and improvements and equipment | 1,647.1 | 1,622.6 | 1,483.9 | ||||||||
Accumulated depreciation | (967.7 | ) | (952.4 | ) | (910.6 | ) | |||||
Net land, buildings and improvements and equipment | 679.4 | 670.2 | 573.3 | ||||||||
Unamortized product tooling costs | 131.8 | 135.1 | 149.4 | ||||||||
Net property | 811.2 | 805.3 | 722.7 | ||||||||
Other assets | |||||||||||
Goodwill | 634.1 | 767.1 | 428.3 | ||||||||
Other intangibles, net | 636.7 | 646.4 | 148.0 | ||||||||
Operating lease assets | 99.2 | — | — | ||||||||
Deferred income tax asset | 109.4 | 96.1 | 171.0 | ||||||||
Equity investments | 38.5 | 34.6 | 29.5 | ||||||||
Other long-term assets | 62.9 | 56.0 | 42.4 | ||||||||
Other assets | 1,580.8 | 1,600.2 | 819.2 | ||||||||
Total assets | $ | 4,329.8 | $ | 4,285.7 | $ | 3,404.6 | |||||
The Notes to Condensed Consolidated Financial Statements are an integral part of these consolidated statements. |
BRUNSWICK CORPORATION Condensed Consolidated Balance Sheets (unaudited) | |||||||||||
(in millions) | March 30, 2019 | December 31, 2018 | March 31, 2018 | ||||||||
Liabilities and shareholders’ equity | |||||||||||
Current liabilities | |||||||||||
Short-term debt and current maturities of long-term debt | $ | 40.9 | $ | 41.3 | $ | 5.1 | |||||
Accounts payable | 473.3 | 527.8 | 431.0 | ||||||||
Accrued expenses | 691.5 | 687.4 | 640.3 | ||||||||
Current liabilities | 1,205.7 | 1,256.5 | 1,076.4 | ||||||||
Long-term liabilities | |||||||||||
Debt | 1,245.6 | 1,179.5 | 428.9 | ||||||||
Operating lease liabilities | 83.8 | — | — | ||||||||
Postretirement benefits | 70.0 | 71.6 | 218.9 | ||||||||
Other | 197.8 | 195.5 | 199.6 | ||||||||
Long-term liabilities | 1,597.2 | 1,446.6 | 847.4 | ||||||||
Shareholders’ equity | |||||||||||
Common stock; authorized: 200,000,000 shares, $0.75 par value; issued: 102,538,000 shares; outstanding: 87,063,000, 86,757,000 and 87,277,000 shares | 76.9 | 76.9 | 76.9 | ||||||||
Additional paid-in capital | 359.9 | 371.1 | 357.4 | ||||||||
Retained earnings | 2,081.1 | 2,135.7 | 1,994.4 | ||||||||
Treasury stock, at cost: 15,475,000, 15,781,000 and 15,261,000 shares | (628.9 | ) | (638.0 | ) | (599.1 | ) | |||||
Accumulated other comprehensive loss | (362.1 | ) | (363.1 | ) | (348.8 | ) | |||||
Shareholders’ equity | 1,526.9 | 1,582.6 | 1,480.8 | ||||||||
Total liabilities and shareholders’ equity | $ | 4,329.8 | $ | 4,285.7 | $ | 3,404.6 | |||||
The Notes to Condensed Consolidated Financial Statements are an integral part of these consolidated statements. |
BRUNSWICK CORPORATION Condensed Consolidated Statements of Cash Flows (unaudited) | |||||||
Three Months Ended | |||||||
(in millions) | March 30, 2019 | March 31, 2018 | |||||
Cash flows from operating activities | |||||||
Net earnings (loss) | $ | (36.3 | ) | $ | 72.9 | ||
Depreciation and amortization | 39.8 | 27.8 | |||||
Stock compensation expense | 3.3 | 1.9 | |||||
Pension expense, net of funding | 0.3 | 0.9 | |||||
Asset impairment charges | 138.7 | — | |||||
Deferred income taxes | (3.4 | ) | 20.0 | ||||
Changes in certain current assets and current liabilities | (211.2 | ) | (224.2 | ) | |||
Long-term extended warranty contracts and other deferred revenue | 1.2 | 2.6 | |||||
Fitness business separation costs | 7.8 | — | |||||
Cash paid for Fitness business separation costs | (1.5 | ) | — | ||||
Income taxes | (16.2 | ) | 32.5 | ||||
Other, net | (1.9 | ) | (1.5 | ) | |||
Net cash used for operating activities | (79.4 | ) | (67.1 | ) | |||
Cash flows from investing activities | |||||||
Capital expenditures | (88.1 | ) | (37.1 | ) | |||
Investments | (3.8 | ) | (4.8 | ) | |||
Proceeds from the sale of property, plant and equipment | — | 0.1 | |||||
Other, net | — | (0.2 | ) | ||||
Net cash used for investing activities | (91.9 | ) | (42.0 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from issuances of short-term debt | 215.0 | — | |||||
Payments of short-term debt | (215.0 | ) | — | ||||
Net proceeds from issuances of long-term debt | 222.0 | — | |||||
Payments of long-term debt including current maturities | (159.0 | ) | (0.1 | ) | |||
Common stock repurchases | — | (35.0 | ) | ||||
Cash dividends paid | (18.3 | ) | (16.6 | ) | |||
Proceeds from share-based compensation activity | 0.5 | 1.0 | |||||
Tax withholding associated with shares issued for share-based compensation | (6.8 | ) | (9.3 | ) | |||
Other, net | (0.2 | ) | — | ||||
Net cash provided by (used for) financing activities | 38.2 | (60.0 | ) | ||||
Effect of exchange rate changes | 0.3 | 4.3 | |||||
Net decrease in Cash and cash equivalents and Restricted cash | (132.8 | ) | (164.8 | ) | |||
Cash and cash equivalents and Restricted cash at beginning of period | 303.4 | 458.2 | |||||
Cash and cash equivalents and Restricted cash at end of period | 170.6 | 293.4 | |||||
Less: Restricted cash | 9.1 | 9.4 | |||||
Cash and cash equivalents at end of period | $ | 161.5 | $ | 284.0 | |||
The Notes to Condensed Consolidated Financial Statements are an integral part of these consolidated statements. |
Brunswick Corporation Condensed Consolidated Statements of Shareholders' Equity (unaudited) | |||||||||||||||||||||||
(in millions, except per share data) | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||
Balance at December 31, 2018 | $ | 76.9 | $ | 371.1 | $ | 2,135.7 | $ | (638.0 | ) | $ | (363.1 | ) | $ | 1,582.6 | |||||||||
Net loss | — | — | (36.3 | ) | — | — | (36.3 | ) | |||||||||||||||
Other comprehensive income | — | — | — | — | 1.0 | 1.0 | |||||||||||||||||
Dividends ($0.21 per common share) | — | — | (18.3 | ) | — | — | (18.3 | ) | |||||||||||||||
Compensation plans and other | — | (11.2 | ) | — | 9.1 | — | (2.1 | ) | |||||||||||||||
Balance at March 30, 2019 | $ | 76.9 | $ | 359.9 | $ | 2,081.1 | $ | (628.9 | ) | $ | (362.1 | ) | $ | 1,526.9 |
(in millions, except per share data) | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||
Balance at December 31, 2017 | $ | 76.9 | $ | 374.4 | $ | 1,966.8 | $ | (575.4 | ) | $ | (359.8 | ) | $ | 1,482.9 | |||||||||
Net earnings | — | — | 72.9 | — | — | 72.9 | |||||||||||||||||
Other comprehensive income | — | — | — | — | 11.0 | 11.0 | |||||||||||||||||
Dividends ($0.19 per common share) | — | — | (16.6 | ) | — | — | (16.6 | ) | |||||||||||||||
Compensation plans and other | — | (17.0 | ) | — | 11.3 | — | (5.7 | ) | |||||||||||||||
Common stock repurchases | — | — | — | (35.0 | ) | — | (35.0 | ) | |||||||||||||||
ASU No. 2014-09 adoption | — | — | (28.7 | ) | — | — | (28.7 | ) | |||||||||||||||
Balance at March 31, 2018 | $ | 76.9 | $ | 357.4 | $ | 1,994.4 | $ | (599.1 | ) | $ | (348.8 | ) | $ | 1,480.8 |
(in millions) | Balance as of December 31, 2018 | Adjustments Due to ASC 842 | Balance as of January 1, 2019 | ||||||||
Assets | |||||||||||
Operating lease assets | $ | — | $ | 101.2 | $ | 101.2 | |||||
Current liabilities | |||||||||||
Accrued expenses | 687.4 | 19.3 | 706.7 | ||||||||
Long-term liabilities | |||||||||||
Other | 195.5 | (3.4 | ) | 192.1 | |||||||
Operating lease liabilities | — | 85.3 | 85.3 |
Three Months Ended | |||||||||||||||
March 30, 2019 | |||||||||||||||
Marine Engine | Boat | Fitness | Total | ||||||||||||
Geographic Markets | |||||||||||||||
United States | $ | 524.2 | $ | 273.9 | $ | 115.1 | $ | 913.2 | |||||||
Europe | 119.2 | 36.7 | 45.4 | 201.3 | |||||||||||
Asia-Pacific | 56.1 | 5.4 | 35.7 | 97.2 | |||||||||||
Canada | 31.3 | 50.0 | 6.4 | 87.7 | |||||||||||
Rest-of-World | 35.2 | 7.3 | 22.6 | 65.1 | |||||||||||
Marine eliminations | (88.6 | ) | — | — | (88.6 | ) | |||||||||
Total | $ | 677.4 | $ | 373.3 | $ | 225.2 | $ | 1,275.9 | |||||||
Major Product Lines | |||||||||||||||
Propulsion | $ | 400.0 | $ | — | $ | — | $ | 400.0 | |||||||
Parts & Accessories | 366.0 | — | — | 366.0 | |||||||||||
Aluminum Freshwater Boats | — | 166.2 | — | 166.2 | |||||||||||
Recreational Fiberglass Boats | — | 115.0 | — | 115.0 | |||||||||||
Saltwater Fishing Boats | — | 90.2 | — | 90.2 | |||||||||||
Commercial Cardio Fitness Equipment | — | — | 121.5 | 121.5 | |||||||||||
Commercial Strength Fitness Equipment | — | — | 84.8 | 84.8 | |||||||||||
Consumer Fitness Equipment | — | — | 18.9 | 18.9 | |||||||||||
Other | — | 1.9 | — | 1.9 | |||||||||||
Marine eliminations | (88.6 | ) | — | — | (88.6 | ) | |||||||||
Total | $ | 677.4 | $ | 373.3 | $ | 225.2 | $ | 1,275.9 |
Three Months Ended | |||||||||||||||
March 31, 2018 | |||||||||||||||
Marine Engine | Boat | Fitness | Total | ||||||||||||
Geographic Markets | |||||||||||||||
United States | $ | 476.5 | $ | 274.7 | $ | 121.6 | $ | 872.8 | |||||||
Europe | 97.8 | 43.1 | 53.4 | 194.3 | |||||||||||
Asia-Pacific | 50.4 | 7.0 | 42.1 | 99.5 | |||||||||||
Canada | 28.9 | 46.8 | 7.1 | 82.8 | |||||||||||
Rest-of-World | 33.5 | 4.9 | 20.2 | 58.6 | |||||||||||
Marine eliminations | (96.6 | ) | — | — | (96.6 | ) | |||||||||
Total | $ | 590.5 | $ | 376.5 | $ | 244.4 | $ | 1,211.4 | |||||||
Major Product Lines | |||||||||||||||
Propulsion | $ | 379.0 | $ | — | $ | — | $ | 379.0 | |||||||
Parts & Accessories | 308.1 | — | — | 308.1 | |||||||||||
Aluminum Freshwater Boats | — | 161.6 | — | 161.6 | |||||||||||
Recreational Fiberglass Boats | — | 127.7 | — | 127.7 | |||||||||||
Saltwater Fishing Boats | — | 85.7 | — | 85.7 | |||||||||||
Commercial Cardio Fitness Equipment | — | — | 132.3 | 132.3 | |||||||||||
Commercial Strength Fitness Equipment | — | — | 90.9 | 90.9 | |||||||||||
Consumer Fitness Equipment | — | — | 21.2 | 21.2 | |||||||||||
Other | — | 1.5 | — | 1.5 | |||||||||||
Marine eliminations | (96.6 | ) | — | — | (96.6 | ) | |||||||||
Total | $ | 590.5 | $ | 376.5 | $ | 244.4 | $ | 1,211.4 |
March 30, 2019 | March 31, 2018 | ||||||||||||||||||||||||||
(in millions) | Fitness | Boat | Corporate | Total | Fitness | Boat | Total | ||||||||||||||||||||
Restructuring and exit activities: | |||||||||||||||||||||||||||
Employee termination and other benefits | $ | 1.1 | $ | 0.4 | $ | 1.2 | $ | 2.7 | $ | 0.8 | $ | 2.0 | $ | 2.8 | |||||||||||||
Current asset write-downs (gains on disposal) | — | 0.2 | — | 0.2 | (0.4 | ) | — | (0.4 | ) | ||||||||||||||||||
Professional fees | — | — | — | — | — | 0.6 | 0.6 | ||||||||||||||||||||
Other | — | 0.1 | — | 0.1 | — | — | — | ||||||||||||||||||||
Asset disposition and impairment actions: | |||||||||||||||||||||||||||
Goodwill impairment | 137.2 | — | — | 137.2 | — | — | — | ||||||||||||||||||||
Definite-lived and other asset impairments | — | 1.3 | — | 1.3 | — | — | — | ||||||||||||||||||||
Integration activities: | |||||||||||||||||||||||||||
Employee termination and other benefits | — | — | — | — | 0.0 | — | 0.0 | ||||||||||||||||||||
Professional fees | — | — | — | — | 0.7 | — | 0.7 | ||||||||||||||||||||
Other | — | — | — | — | 0.1 | — | 0.1 | ||||||||||||||||||||
Total restructuring, exit, integration and impairment charges | $ | 138.3 | $ | 2.0 | $ | 1.2 | $ | 141.5 | $ | 1.2 | $ | 2.6 | $ | 3.8 | |||||||||||||
Total cash payments for restructuring, exit, integration and impairment charges (A) | $ | 0.7 | $ | 5.0 | $ | 0.2 | $ | 5.9 | $ | 2.0 | $ | 0.2 | $ | 2.5 | |||||||||||||
Accrued charges at end of the period (B) | $ | 4.0 | $ | 10.8 | $ | 2.0 | $ | 16.8 | $ | 4.4 | $ | 3.4 | $ | 8.0 |
(in millions) | Fair Value | Useful Life | |||
Accounts and notes receivable | $ | 38.3 | |||
Inventory | 64.3 | ||||
Goodwill (A) (B) | 348.6 | ||||
Trade names | 111.0 | Indefinite | |||
Customer relationships | 430.0 | 15 years | |||
Property and equipment | 10.6 | ||||
Other assets | 5.6 | ||||
Total assets acquired | 1,008.4 | ||||
Accounts payable (B) | 24.3 | ||||
Accrued expenses (B) | 19.8 | ||||
Deferred tax liabilities | 54.7 | ||||
Total liabilities assumed | 98.8 | ||||
Net cash consideration paid | $ | 909.6 |
Three Months Ended | |||||||
(in millions) | March 30, 2019 | March 31, 2018 | |||||
Pro forma Net sales | $ | 1,275.9 | $ | 1,272.7 | |||
Pro forma Operating earnings (loss) | (28.6 | ) | 93.8 | ||||
Pro forma Net earnings (loss) | (34.9 | ) | 59.2 |
(in millions) | ||||||||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||
Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||||||||
Mar 30, 2019 | Dec 31, 2018 | Mar 31, 2018 | Mar 30, 2019 | Dec 31, 2018 | Mar 31, 2018 | |||||||||||||||||||||||
Derivatives Designated as Cash Flow Hedges | ||||||||||||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other | $ | 6.9 | $ | 8.1 | $ | 2.8 | Accrued expenses | $ | 1.0 | $ | 1.1 | $ | 5.8 | ||||||||||||||
Derivatives Designated as Fair Value Hedges | ||||||||||||||||||||||||||||
Interest rate contracts | Prepaid expenses and other | $ | 0.0 | $ | 0.0 | $ | 2.9 | Accrued expenses | $ | 0.2 | $ | 0.1 | $ | 2.6 | ||||||||||||||
Interest rate contracts | Other long-term assets | 0.9 | — | — | Other long-term liabilities | 0.4 | 1.8 | 2.8 | ||||||||||||||||||||
Total | $ | 0.9 | $ | 0.0 | $ | 2.9 | $ | 0.6 | $ | 1.9 | $ | 5.4 | ||||||||||||||||
Other Hedging Activity | ||||||||||||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other | $ | 1.3 | $ | 1.0 | $ | 0.4 | Accrued expenses | $ | 0.2 | $ | 0.1 | $ | 0.5 |
(in millions) | ||||||||||||||||||
Derivatives Designated as Cash Flow Hedging Instruments | Amount of Gain (Loss) on Derivatives Recognized in Accumulated Other Comprehensive Loss | Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings | |||||||||||||||
Mar 30, 2019 | Mar 31, 2018 | Mar 30, 2019 | Mar 31, 2018 | |||||||||||||||
Interest rate contracts | $ | — | $ | — | Interest expense | $ | (0.1 | ) | $ | (0.3 | ) | |||||||
Foreign exchange contracts | 1.5 | (3.6 | ) | Cost of sales | 2.8 | (2.6 | ) | |||||||||||
Total | $ | 1.5 | $ | (3.6 | ) | $ | 2.7 | $ | (2.9 | ) |
Derivatives Designated as Fair Value Hedging Instruments | Location of Gain (Loss) on Derivatives Recognized in Earnings | Amount of Gain (Loss) on Derivatives Recognized in Earnings | ||||||||
Mar 30, 2019 | Mar 31, 2018 | |||||||||
Interest rate contracts | Interest expense | $ | (0.1 | ) | $ | 0.2 |
Other Hedging Activity | Location of Gain (Loss) on Derivatives Recognized in Earnings | Amount of Gain (Loss) on Derivatives Recognized in Earnings | ||||||||
Mar 30, 2019 | Mar 31, 2018 | |||||||||
Foreign exchange contracts | Cost of sales | $ | 1.3 | $ | (3.7 | ) | ||||
Foreign exchange contracts | Other expense, net | 0.0 | (1.1 | ) | ||||||
Total | $ | 1.3 | $ | (4.8 | ) |
(in millions) | Level 1 | Level 2 | Total | ||||||||
Assets: | |||||||||||
Cash equivalents | $ | 0.2 | $ | — | $ | 0.2 | |||||
Short-term investments in marketable securities | 0.8 | — | 0.8 | ||||||||
Restricted cash | 9.1 | — | 9.1 | ||||||||
Derivatives | — | 9.1 | 9.1 | ||||||||
Total assets | $ | 10.1 | $ | 9.1 | $ | 19.2 | |||||
Liabilities: | |||||||||||
Derivatives | $ | — | $ | 1.8 | $ | 1.8 | |||||
Deferred compensation | 3.8 | 24.6 | 28.4 | ||||||||
Total liabilities at fair value | $ | 3.8 | $ | 26.4 | $ | 30.2 | |||||
Liabilities measured at net asset value | 10.2 | ||||||||||
Total liabilities | $ | 40.4 |
(in millions) | Level 1 | Level 2 | Total | ||||||||
Assets: | |||||||||||
Short-term investments in marketable securities | $ | 0.8 | $ | — | $ | 0.8 | |||||
Restricted cash | 9.0 | — | 9.0 | ||||||||
Derivatives | — | 9.1 | 9.1 | ||||||||
Total assets | $ | 9.8 | $ | 9.1 | $ | 18.9 | |||||
Liabilities: | |||||||||||
Derivatives | $ | — | $ | 3.1 | $ | 3.1 | |||||
Deferred compensation | 3.5 | 22.9 | 26.4 | ||||||||
Total liabilities at fair value | $ | 3.5 | $ | 26.0 | $ | 29.5 | |||||
Liabilities measured at net asset value | 10.2 | ||||||||||
Total liabilities | $ | 39.7 |
(in millions) | Level 1 | Level 2 | Total | ||||||||
Assets: | |||||||||||
Short-term investments in marketable securities | $ | 0.8 | $ | — | $ | 0.8 | |||||
Restricted cash | 9.4 | — | 9.4 | ||||||||
Derivatives | — | 6.1 | 6.1 | ||||||||
Total assets | $ | 10.2 | $ | 6.1 | $ | 16.3 | |||||
Liabilities: | |||||||||||
Derivatives | $ | — | $ | 11.7 | $ | 11.7 | |||||
Deferred compensation | 3.6 | 27.8 | 31.4 | ||||||||
Total liabilities at fair value | $ | 3.6 | $ | 39.5 | $ | 43.1 | |||||
Liabilities measured at net asset value | 8.8 | ||||||||||
Total liabilities | $ | 51.9 |
2019 | 2018 | ||||
Risk-free interest rate | 2.9 | % | 2.4 | % | |
Dividend yield | 1.7 | % | 1.3 | % | |
Volatility factor | 41.0 | % | 38.9 | % | |
Expected life of award | 2.9 years | 2.9 years |
(in millions) | March 30, 2019 | March 31, 2018 | |||||
Balance at beginning of period | $ | 141.9 | $ | 127.2 | |||
Payments made | (23.4 | ) | (16.2 | ) | |||
Provisions/additions for contracts issued/sold | 18.9 | 19.0 | |||||
Aggregate changes for preexisting warranties | 0.1 | (4.3 | ) | ||||
Foreign currency translation | (0.0 | ) | 0.7 | ||||
Other | 0.5 | (0.1 | ) | ||||
Balance at end of period | $ | 138.0 | $ | 126.3 |
(in millions) | March 30, 2019 | March 31, 2018 | |||||
Balance at beginning of period | $ | 133.1 | $ | 112.1 | |||
Extended warranty contracts sold | 16.8 | 12.9 | |||||
Revenue recognized on existing extended warranty contracts | (14.1 | ) | (10.1 | ) | |||
Foreign currency translation | 0.1 | 0.5 | |||||
Balance at end of period | $ | 135.9 | $ | 115.4 |
(in millions) | December 31, 2018 | Impairments | Adjustments | March 30, 2019 | |||||||||||
Marine Engine | $ | 375.1 | $ | — | $ | 4.5 | $ | 379.6 | |||||||
Boat | 2.2 | — | — | 2.2 | |||||||||||
Fitness | 389.8 | (137.2 | ) | (0.3 | ) | 252.3 | |||||||||
Total | $ | 767.1 | $ | (137.2 | ) | $ | 4.2 | $ | 634.1 |
(in millions) | December 31, 2017 | Impairments | Adjustments | March 31, 2018 | |||||||||||
Marine Engine | $ | 31.7 | $ | — | $ | 1.2 | $ | 32.9 | |||||||
Boat | 2.2 | — | — | 2.2 | |||||||||||
Fitness | 391.4 | — | 1.8 | 393.2 | |||||||||||
Total | $ | 425.3 | $ | — | $ | 3.0 | $ | 428.3 |
March 30, 2019 | December 31, 2018 | March 31, 2018 | |||||||||||||||||||||
(in millions) | Gross Amount | Accumulated Amortization | Gross Amount | Accumulated Amortization | Gross Amount | Accumulated Amortization | |||||||||||||||||
Intangible assets: | |||||||||||||||||||||||
Customer relationships | $ | 734.3 | $ | (265.2 | ) | $ | 734.4 | $ | (256.5 | ) | $ | 306.5 | $ | (240.1 | ) | ||||||||
Trade names | 164.5 | (0.6 | ) | 164.4 | — | 76.1 | — | ||||||||||||||||
Other | 22.4 | (18.7 | ) | 22.3 | (18.2 | ) | 22.6 | (17.1 | ) | ||||||||||||||
Total | $ | 921.2 | $ | (284.5 | ) | $ | 921.1 | $ | (274.7 | ) | $ | 405.2 | $ | (257.2 | ) |
March 30, 2019 | December 31, 2018 | March 31, 2018 | |||||||||||||||||||||
(in millions) | Gross Amount | Accumulated Amortization | Gross Amount | Accumulated Amortization | Gross Amount | Accumulated Amortization | |||||||||||||||||
Intangible assets: | |||||||||||||||||||||||
Marine Engine | $ | 618.6 | $ | (59.7 | ) | $ | 618.3 | $ | (52.0 | ) | $ | 79.1 | $ | (39.2 | ) | ||||||||
Boat | 223.4 | (204.2 | ) | 223.4 | (203.9 | ) | 223.6 | (203.2 | ) | ||||||||||||||
Fitness | 79.2 | (20.6 | ) | 79.4 | (18.8 | ) | 102.5 | (14.8 | ) | ||||||||||||||
Total | $ | 921.2 | $ | (284.5 | ) | $ | 921.1 | $ | (274.7 | ) | $ | 405.2 | $ | (257.2 | ) |
Net Sales | Operating Earnings (Loss) | ||||||||||||||
(in millions) | March 30, 2019 | March 31, 2018 | March 30, 2019 | March 31, 2018 | |||||||||||
Marine Engine | $ | 766.0 | $ | 687.1 | $ | 112.9 | $ | 95.7 | |||||||
Boat | 373.3 | 376.5 | 22.0 | 14.4 | |||||||||||
Marine eliminations | (88.6 | ) | (96.6 | ) | — | — | |||||||||
Total Marine | 1,050.7 | 967.0 | 134.9 | 110.1 | |||||||||||
Fitness | 225.2 | 244.4 | (139.1 | ) | 11.0 | ||||||||||
Corporate/Other | — | — | (24.4 | ) | (16.0 | ) | |||||||||
Total | $ | 1,275.9 | $ | 1,211.4 | $ | (28.6 | ) | $ | 105.1 |
Total Assets | |||||||||||
(in millions) | March 30, 2019 | December 31, 2018 | March 31, 2018 | ||||||||
Marine Engine | $ | 2,628.4 | $ | 2,380.9 | $ | 1,384.6 | |||||
Boat | 433.6 | 423.2 | 449.7 | ||||||||
Total Marine | 3,062.0 | 2,804.1 | 1,834.3 | ||||||||
Fitness | 844.9 | 972.7 | 1,004.9 | ||||||||
Corporate/Other | 422.9 | 508.9 | 565.4 | ||||||||
Total | $ | 4,329.8 | $ | 4,285.7 | $ | 3,404.6 |
(in millions) | March 30, 2019 | March 31, 2018 | |||||
Net earnings (loss) | $ | (36.3 | ) | $ | 72.9 | ||
Other comprehensive income (loss): | |||||||
Foreign currency cumulative translation adjustment | 0.1 | 9.9 | |||||
Net change in unamortized prior service credits | (0.1 | ) | (0.1 | ) | |||
Net change in unamortized actuarial losses | 1.9 | 1.9 | |||||
Net change in unrealized derivative losses | (0.9 | ) | (0.7 | ) | |||
Total other comprehensive income | 1.0 | 11.0 | |||||
Comprehensive income (loss) | $ | (35.3 | ) | $ | 83.9 |
(in millions) | Foreign currency translation | Prior service credits | Net actuarial losses | Net derivative losses | Total | ||||||||||||||
Beginning balance | $ | (48.9 | ) | $ | (6.1 | ) | $ | (306.2 | ) | $ | (1.9 | ) | $ | (363.1 | ) | ||||
Other comprehensive income (loss) before reclassifications (A) | 0.1 | — | (0.0 | ) | 1.0 | 1.1 | |||||||||||||
Amounts reclassified from Accumulated other comprehensive loss (B) | — | (0.1 | ) | 1.9 | (1.9 | ) | (0.1 | ) | |||||||||||
Net other comprehensive income (loss) | 0.1 | (0.1 | ) | 1.9 | (0.9 | ) | 1.0 | ||||||||||||
Ending balance | $ | (48.8 | ) | $ | (6.2 | ) | $ | (304.3 | ) | $ | (2.8 | ) | $ | (362.1 | ) |
(in millions) | Foreign currency translation | Prior service credits | Net actuarial losses | Net derivative losses | Total | ||||||||||||||
Beginning balance | $ | (31.6 | ) | $ | (5.6 | ) | $ | (310.8 | ) | $ | (11.8 | ) | $ | (359.8 | ) | ||||
Other comprehensive income (loss) before reclassifications (A) | 9.9 | — | (0.1 | ) | (2.8 | ) | 7.0 | ||||||||||||
Amounts reclassified from Accumulated other comprehensive loss (B) | — | (0.1 | ) | 2.0 | 2.1 | 4.0 | |||||||||||||
Net other comprehensive income (loss) | 9.9 | (0.1 | ) | 1.9 | (0.7 | ) | 11.0 | ||||||||||||
Ending balance | $ | (21.7 | ) | $ | (5.7 | ) | $ | (308.9 | ) | $ | (12.5 | ) | $ | (348.8 | ) |
Details about Accumulated other comprehensive income (loss) components (in millions) | March 30, 2019 | March 31, 2018 | Affected line item in the statement where net income is presented | |||||||
Amortization of defined benefit items: | ||||||||||
Prior service credits | $ | 0.2 | $ | 0.2 | Other expense, net | |||||
Net actuarial losses | (2.5 | ) | (2.5 | ) | Other expense, net | |||||
(2.3 | ) | (2.3 | ) | Earnings (loss) before income taxes | ||||||
0.5 | 0.4 | Income tax provision (benefit) | ||||||||
$ | (1.8 | ) | $ | (1.9 | ) | Net earnings (loss) | ||||
Amount of gain (loss) reclassified into earnings on derivative contracts: | ||||||||||
Interest rate contracts | $ | (0.1 | ) | $ | (0.3 | ) | Interest expense | |||
Foreign exchange contracts | 2.8 | (2.6 | ) | Cost of sales | ||||||
2.7 | (2.9 | ) | Earnings (loss) before income taxes | |||||||
(0.8 | ) | 0.8 | Income tax provision (benefit) | |||||||
$ | 1.9 | $ | (2.1 | ) | Net earnings (loss) |
Pension Benefits | Other Postretirement Benefits | ||||||||||||||
(in millions) | March 30, 2019 | March 31, 2018 | March 30, 2019 | March 31, 2018 | |||||||||||
Interest cost | $ | 2.6 | $ | 5.7 | $ | 0.3 | $ | 0.3 | |||||||
Expected return on plan assets | (3.3 | ) | (6.3 | ) | — | — | |||||||||
Amortization of prior service credits | — | — | (0.2 | ) | (0.2 | ) | |||||||||
Amortization of net actuarial losses | 2.5 | 2.5 | — | — | |||||||||||
Net pension and other benefit costs | $ | 1.8 | $ | 1.9 | $ | 0.1 | $ | 0.1 |
(in millions) | |||
Remainder of 2019 | $ | 31.2 | |
2020 | 41.6 | ||
2021 | 190.1 | ||
2022 | 36.0 | ||
2023 | 304.2 | ||
Thereafter | 683.4 | ||
Total debt | $ | 1,286.5 |
(in millions) | Classification | March 30, 2019 | |||
Lease Assets | |||||
Operating lease assets | Operating lease assets | $ | 99.2 | ||
Lease Liabilities | |||||
Current operating lease liabilities | Accrued expenses | 23.2 | |||
Non-current operating lease liabilities | Operating lease liabilities | 83.8 | |||
Total lease liabilities | $ | 107.0 |
(in millions) | Classification | March 30, 2019 | |||
Operating lease cost | Selling, general, and administrative expense | $ | 5.0 | ||
Cost of sales | 8.7 | ||||
Variable lease cost | Selling, general, and administrative expense | 1.2 | |||
Cost of sales | 2.0 | ||||
Total lease cost (A) | $ | 16.9 |
(in millions) | |||
2019 | $ | 21.9 | |
2020 | 24.7 | ||
2021 | 20.6 | ||
2022 | 17.6 | ||
2023 | 14.8 | ||
Thereafter | 23.0 | ||
Total lease payments | $ | 122.6 | |
Less: Interest | (15.6 | ) | |
Present value of lease liabilities | $ | 107.0 |
(in millions) | |||
2019 | $ | 40.3 | |
2020 | 32.3 | ||
2021 | 26.5 | ||
2022 | 17.7 | ||
2023 | 13.7 | ||
Thereafter | 22.9 | ||
Total (not reduced by minimum sublease income of $0.1) | $ | 153.4 |
Net Sales | Q1 2019 vs. Q1 2018 | ||||||||||||||
(in millions) | Q1 2019 | Q1 2018 | GAAP | Currency Impact | Acquisition Impact | Impact of Sport Yacht and Yacht | |||||||||
Marine Engine | $ | 766.0 | $ | 687.1 | 11.5% | (2.1)% | 8.2% | — | |||||||
Boat | 373.3 | 376.5 | (0.8)% | (1.0)% | — | (4.1)% | |||||||||
Marine eliminations | (88.6 | ) | (96.6 | ) | |||||||||||
Total Marine | 1,050.7 | 967.0 | 8.7% | (1.8)% | 5.7% | (1.6)% | |||||||||
Fitness | 225.2 | 244.4 | (7.9)% | (1.5)% | — | — | |||||||||
Total | $ | 1,275.9 | $ | 1,211.4 | 5.3% | (1.8)% | 4.5% | (1.3)% |
(in millions) | March 31, 2018 | ||
Net sales | $ | 15.1 | |
Gross margin | (3.6 | ) | |
Restructuring, exit, integration and impairment charges | 1.4 | ||
Operating loss | (8.1 | ) |
(in millions) | March 30, 2019 | March 31, 2018 | |||||
Cash charges: | |||||||
Boat | $ | 0.5 | $ | 2.6 | |||
Fitness | 1.1 | 1.6 | |||||
Corporate | 1.2 | — | |||||
Total cash charges | 2.8 | 4.2 | |||||
Non-cash charges (gains on disposal): | |||||||
Boat | 1.5 | — | |||||
Fitness (A) | 137.2 | (0.4 | ) | ||||
Total non-cash charges | 138.7 | (0.4 | ) | ||||
Total restructuring, exit, integration and impairment charges | $ | 141.5 | $ | 3.8 |
(in millions, except per share data) | March 30, 2019 | March 31, 2018 | $ Change | % Change | ||||||||||
Net sales (A) | $ | 1,275.9 | $ | 1,211.4 | $ | 64.5 | 5.3 | % | ||||||
Gross margin (B) (A) | 337.5 | 310.0 | 27.5 | 8.9 | % | |||||||||
Restructuring, exit, integration and impairment charges (A) (C) | 141.5 | 3.8 | 137.7 | NM | ||||||||||
Operating earnings (loss) (D) | (28.6 | ) | 105.1 | (133.7 | ) | NM | ||||||||
Net earnings (loss) | (36.3 | ) | 72.9 | (109.2 | ) | NM | ||||||||
Diluted earnings (loss) per common share | $ | (0.42 | ) | $ | 0.82 | $ | (1.24 | ) | NM | |||||
Expressed as a percentage of Net sales: | ||||||||||||||
Gross margin | 26.5 | % | 25.6 | % | 90 bps | |||||||||
Selling, general and administrative expense (D) | 14.9 | % | 13.5 | % | 140 bps | |||||||||
Research and development expense | 2.7 | % | 3.1 | % | (40) bps | |||||||||
Restructuring, exit, integration and impairment charges (C) | 11.1 | % | 0.3 | % | NM | |||||||||
Operating margin | (2.2 | )% | 8.7 | % | NM |
(B) | Gross margin is defined as Net sales less Cost of sales as presented in the Condensed Consolidated Statements of Comprehensive Income. |
(C) | 2019 includes a $137.2 million goodwill impairment charge. Refer to Note 9 – Goodwill and Other Intangibles in the Notes to Condensed Consolidated Financial Statements for more information. |
(D) | Includes $7.8 million and $1.7 million in the first quarters of 2019 and 2018, respectively, of charges related to the planned Fitness business separation. The first quarter of 2019 includes $7.2 million of purchase accounting amortization related to the acquisition of Power Products in the third quarter of 2018. |
(in millions) | March 30, 2019 | March 31, 2018 | $ Change | % Change | ||||||||||
Net sales | $ | 766.0 | $ | 687.1 | $ | 78.9 | 11.5 | % | ||||||
Operating earnings (A) | 112.9 | 95.7 | 17.2 | 18.0 | % | |||||||||
Operating margin (A) | 14.7 | % | 13.9 | % | 80 bps |
(in millions) | March 30, 2019 | March 31, 2018 | $ Change | % Change | ||||||||||
Boat segment: | ||||||||||||||
Net sales | $ | 373.3 | $ | 376.5 | $ | (3.2 | ) | (0.8 | )% | |||||
Restructuring, exit, integration and impairment charges | 2.0 | 2.6 | (0.6 | ) | (23.1 | )% | ||||||||
Operating earnings | 22.0 | 14.4 | 7.6 | 52.8 | % | |||||||||
Operating margin | 5.9 | % | 3.8 | % | 210 bps | |||||||||
Sport Yacht and Yacht operations: | ||||||||||||||
Net sales | 0.3 | 15.1 | (14.8 | ) | (98.0 | )% | ||||||||
Restructuring, exit, integration and impairment charges | — | 1.4 | (1.4 | ) | NM | |||||||||
Operating loss | (1.1 | ) | (8.1 | ) | 7.0 | 86.4 | % |
(in millions) | March 30, 2019 | March 31, 2018 | $ Change | % Change | ||||||||
Net sales | 225.2 | 244.4 | $ | (19.2 | ) | (7.9 | )% | |||||
Restructuring, exit, integration and impairment charges (A) | 138.3 | 1.2 | 137.1 | NM | ||||||||
Operating earnings (loss) (B) | (139.1 | ) | 11.0 | (150.1 | ) | NM | ||||||
Operating margin (B) | (61.8 | )% | 4.5 | % | NM |
(in millions) | March 30, 2019 | March 31, 2018 | $ Change | % Change | ||||||||||
Restructuring, exit, integration and impairment charges | $ | 1.2 | $ | — | $ | 1.2 | NM | |||||||
Operating loss (A) | (24.4 | ) | (16.0 | ) | (8.4 | ) | (52.5 | )% |
(in millions) | March 30, 2019 | March 31, 2018 | |||||
Net cash used for operating activities | $ | (79.4 | ) | $ | (67.1 | ) | |
Net cash provided by (used for): | |||||||
Plus: Capital expenditures | (88.1 | ) | (37.1 | ) | |||
Plus: Proceeds from the sale of property, plant and equipment | — | 0.1 | |||||
Plus: Effect of exchange rate changes | 0.3 | 4.3 | |||||
Less: Cash paid for Fitness business separation costs, net of tax | 0.3 | — | |||||
Total free cash flow (A) | $ | (167.5 | ) | $ | (99.8 | ) |
(in millions) | March 30, 2019 | December 31, 2018 | March 31, 2018 | ||||||||
Cash and cash equivalents | $ | 161.5 | $ | 294.4 | $ | 284.0 | |||||
Short-term investments in marketable securities | 0.8 | 0.8 | 0.8 | ||||||||
Total cash, cash equivalents and marketable securities | $ | 162.3 | $ | 295.2 | $ | 284.8 |
(in millions) | March 30, 2019 | December 31, 2018 | March 31, 2018 | ||||||||
Cash, cash equivalents and marketable securities | $ | 162.3 | $ | 295.2 | $ | 284.8 | |||||
Amounts available under lending facility (A) | 396.4 | 295.7 | 295.7 | ||||||||
Total liquidity (B) | $ | 558.7 | $ | 590.9 | $ | 580.5 |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
BRUNSWICK CORPORATION | ||
May 1, 2019 | By: | /s/ DANIEL J. TANNER |
Daniel J. Tanner | ||
Vice President and Controller* |
Purpose | Reward achievement of annual goals |
Eligibility | Key managers identified on an individual basis. Employees must be hired prior to October 1, 2019, to be eligible for the current year's plan. |
Performance Period | 2019 fiscal year. |
Performance Measures | Bonuses based 100% on achievement against the following financial measures as of the end of the performance period. * For Corporate-level and Business Acceleration employees, * 75% based on Earnings Per Share ("EPS" (ex. items)), and * 25% based on overall Brunswick Free Cash Flow ("FCF") * For Division participants, * 25% based on EPS (ex. items), * 25% based on overall Brunswick FCF, and * 50% based on applicable division Earnings Before Interest and Taxes ("EBIT"). FCF is consistent with external reporting definition. FCF, EPS (ex. items) and EBIT from continuing operations results for the year will be adjusted for: * Restructuring, exit, integration, and impairment costs (including debt issuance and extinguishment costs) and associated savings - variance from budget; * Acquisition/sale of “strategic” assets (e.g., transformational or material acquisitions) not contemplated in the budget; * Impact of any “unusual in nature” or “infrequently occurring” charges or impacts related to changes in accounting principles; * Impact of unplanned financing arrangements (including debt issuance, off-balance sheet and factoring); * Cash taxes--variance from budget; * Pension contributions--variance from budget; * Pension liability settlement or plan amendment related charges; * Impact of change in tax law or stutory rates--variance from budget; and * Unusual tax items (i.e., FIN 48, Discrete Tax Items, Valuation Allowance Reversals, etc.). Performance results may be adjusted, as appropriate, for extraordinary or unanticipated items. The Human Resources and Compensation Committee will determine the applicable performance goals and the bonuses payable upon attainment of such goals. Notwithstanding the above, no award shall be payable unless the blended performance metrics above are attained at a level that is at least 25% of the target payout level, as certified by the Human Resources and Compensation Committee. |
Funding Review and Approval | The following steps will be taken to review and approve funding: * CFO will review performance to evaluate required accruals; * CEO will review performance at end of performance period and recommend bonuses to the Human Resources and Compensation Committee as appropriate; and * Human Resources and Compensation Committee will review and approve bonuses as deemed appropriate. |
Individual Awards | Individual awards will be determined on a discretionary basis using overall approved funding, evaluation of individual performance for the performance period, target incentives as a percentage of salary and covered salary (actual paid for year). In no case shall an award exceed 200% of an individual’s target incentive opportunity. Individuals must be employed at the end of the performance period to be eligible for an award, with ultimate payout at the discretion of the Human Resources and Compensation Committee. Those employees whose employment terminates due to death, permanent and total disability, or as a result of restructuring activities or plant shutdown will be eligible to receive individual awards at the discretion of the CEO and Chief Human Resources Officer. In addition, if an employee retires later than June 30th of the performance period and after either the sum of the employee’s age and years of continuous service from his or her latest hire date equals 70 or more or the employee’s age is 62 or more, then, subject to prior approval by the Vice President and Chief Human Resources Officer or, in the case of the Corporation’s executive officers, the Human Resources and Compensation Committee, in its sole discretion, such employee may be eligible for a prorated payout, based on the number of days of employment in the performance period completed prior to the date of retirement. Any awards payable in the event of termination due to death, permanent disability, as a result of restructuring activities or plant shutdown, or retirement shall be subject to the achievement of the applicable performance conditions and shall be paid as specified under "Timing and Form of Award Payments." |
Timing and Form of Award Payments | In 2020, after financial results are confirmed and appropriate approvals are obtained; provided, however, that any such award shall be paid to U.S.-based employees no later than March 15, 2020. Payment may be made in cash, shares of Brunswick common stock granted under the Brunswick Corporation 2014 Stock Incentive Plan, a combination of cash or stock, or an alternate form of equity, as determined by the Human Resources and Compensation Committee. |
Claw Back | The Human Resources and Compensation Committee will evaluate the facts and circumstances of any restatement of earnings due to fraud or intentional misconduct that results in material noncompliance with any financial reporting requirement and, in its sole discretion, may require the repayment of all or a portion of bonus awards from individual(s) responsible for the restatement and others assigned to salary grade 21 and above, including senior executives, as deemed appropriate by the Human Resources and Compensation Committee. In addition, bonus awards shall be subject to forfeiture, recovery by Brunswick or other action pursuant to any other clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. |
Additional Terms & Conditions | Payment of any bonus is in the sole discretion of the Human Resources and Compensation Committee. The Human Resources and Compensation Committee may modify, revise, discontinue, cancel or terminate this plan or any payments associated with this plan at any time, without notice. |
Purpose | To provide incentives to (i) support the execution of Brunswick Corporation’s business strategies and (ii) more closely align the interests of the award recipient with those of Brunswick Corporation’s stockholders. |
Grant Date | [_______ __, 2019] |
Performance Shares | Shares of Brunswick Corporation (“Brunswick”) common stock (“Common Stock”) where the number of shares of Common Stock delivered is based on attainment of Performance Criteria set forth herein. Shares of Common Stock subject to this Grant shall be referred to herein as “Performance Shares.” |
Target Award | [_______] Performance Shares is the target against which Performance Criteria shall apply. |
Performance Period | For purposes of these Terms and Conditions, “Performance Period” shall mean the three-year performance period commencing January 1, 2019 and ending December 31, 2021. |
Performance Criteria | CFROI: 75% of the Performance Shares shall be earned based on the three-year average of Brunswick's annual CFROI, as defined in Appendix A attached hereto, with payout between 0% and 200% of such percentage of the target number of Performance Shares, based solely on CFROI performance over the Performance Period, as set forth in Appendix A attached hereto. Operating Margin: 25% of the Performance Shares shall be earned based on the three-year average of Brunswick's annual Operating Margin, as defined in Appendix A attached hereto, with payout between 0% and 200% of such percentage of the target number of Performance Shares, based solely on Operating Margin performance over the Performance Period, as set forth in Appendix A attached hereto. |
Vesting Upon Death, Permanent Disability or Retirement (as defined below) | In the case of a termination of employment (other than for Cause (as defined below)) on or after the first anniversary of the beginning of the Performance Period and prior to a Change in Control due to (i) death, (ii) Permanent Disability or (iii) Retirement (as defined below), the Grantee or his or her estate or personal representative shall receive the award, calculated as if the Grantee had remained employed throughout the entire Performance period and based on actual CFROI and Operating Margin Performance. The Performance Shares shall be distributed to the Grantee in accordance with the terms of this award under "Timing of Distribution." In the case of a termination of employment (other than for Cause) prior to the first anniversary of the beginning of the Performance Period and prior to a Change in Control due to (i) death, (ii) Permanent Disability or (iii) Retirement, a pro-rata portion of the award will be distributed to the Grantee or his or her estate or personal representative in accordance with the terms of this award under "Timing of Distribution." For purposes of the foregoing sentence, a "pro-rata portion" will mean the product of (x) the number of Performance Shares that would otherwise be paid out at the end of the Performance Period based on actual CFROI and Operating Margin and (y) a fraction, the numerator of which is the number of days that have elapsed since the beginning of the Performance Period through the date of termination of the Grantee's employment, and the denominator of which is 365. All remaining Performance Shares shall be forfeited. The Performance Shares shall be forfeited in their entirety upon any termination for Cause, even if the Grantee would otherwise be eligible for Retirement. |
Prorated Vesting Upon Involuntary Termination Without Cause | If the Grantee's employment is terminated by Brunswick for a reason other than Cause or Permanent Disability, and the Grantee is not eligible for Retirement, a pro-rata portion of the award will be vested as of the date of such termination of employment and be distributed as of the third anniversary of the Grant Date. For purposes of the foregoing sentence, a "pro-rata portion" will mean the product of (x) the number of Performance Shares that would otherwise be paid out at the end of the Performance Period based on actual CFROI and Operating Margin and (y) a fraction, the numerator of which is the number of days that have elapsed since the beginning of the Performance Period through the date of termination of the Grantee's employment, and the denominator of which is 1,095. All remaining Performance Shares shall be forfeited. |
Other Terminations of Employment | The Performance Shares shall be forfeited in their entirety in the event the Grantee's employment terminates prior to the end of the Performance Period and prior to a Change in Control for a reason other than death, Permanent Disability (as defined below), Retirement or a termination by Brunswick for a reason other than Cause. |
Change in Control | In the event of a Change in Control prior to the end of the Performance Period, the Performance Criteria shall be deemed to be achieved at target (and the remainder of the award shall be forfeited) and: If the award is effectively assumed or continued by the surviving or acquiring corporation and the Grantee remains continuously employed through the last day of the Performance Period, then the Performance Shares shall be distributed to Grantee in accordance with the terms of the award under "Timing of Distribution," provided that: In the event of Grantee’s termination of employment (other than for Cause) (i) due to death or Permanent Disability, (ii) Retirement, or (iii) by Brunswick without Cause or by the Grantee for Good Reason (as defined below), the vested portion of the award shall be distributed to the Grantee or his or her estate or personal representative within thirty (30) days following Grantee’s death or termination of employment (or, in the case of termination due to death, Permanent Disability or Retirement that had occurred prior to the Change in Control, within 30 days following the Change in Control to the extent permitted by Internal Revenue Code Section 409A); provided, however, that if the award is considered "nonqualified deferred compensation" and (x) the Change in Control was not a "change in control event" within the meaning of Internal Revenue Code Section 409A or (y) the termination of employment occurred more than two years following the occurrence of such "change in control event," then the vested portion of the award shall be distributed to Grantee in accordance with the terms of this award under "Timing of Distribution." If the award is not effectively assumed or continued by the surviving or acquiring corporation, then the vested portion of the award shall be distributed within thirty (30) days of such Change in Control; provided, however, if the award is considered "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A with respect to the Grantee and the Change in Control was not a "change in control event" within the meaning of Internal Revenue Code Section 409A or to the extent distribution would be impermissible under Internal Revenue Code Section 409A, then the vested portion of the award shall be distributed to Grantee in accordance with the terms of this award under "Timing of Distribution." Determinations as to whether the award has been effectively assumed or continued by the surviving or acquiring corporation shall be made by the Human Resources and Compensation Committee, as constituted prior to the Change in Control. The Performance Shares shall be forfeited in their entirety upon any termination for Cause, even if the Grantee would otherwise be eligible for Retirement. |
Timing of Distribution | Except as otherwise provided for herein, shares of Common Stock shall be delivered to the Grantee in settlement of the award within 60 days after the end of the Performance Period, subject to certification in writing of Brunswick’s attainment of the Performance Criteria. If you are a “specified employee” (as such term is defined under Internal Revenue Code Section 409A) as of the date of your “separation from service” (as such term is defined under Internal Revenue Code Section 409A), then to the extent any amount to be distributed in connection with the settlement of the award is payable upon the Grantee’s “separation from service” and constitutes the payment of nonqualified deferred compensation, within the meaning of Internal Revenue Code Section 409A, the distribution will not be made before 6 months after separation from service (or, if earlier, death). In all cases, fractional shares shall be rounded down to the nearest whole share. |
Tax Withholding | Tax withholding liability (to meet required FICA, Federal, state, and local withholding) must be paid via share reduction upon distribution. |
Form of Distribution | Shares will be deposited to your brokerage account on record with Shareholder Services. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan shall govern. The Human Resources and Compensation Committee of the Board administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. "Cause" shall mean willful misconduct in the performance of duties. "Good Reason" shall have the meaning set forth in the employment agreement, if any, between the Grantee and Brunswick as in effect on the Grant Date, provided that if the Grantee is not a party to an employment agreement that contains such definition, then Good Reason means the occurrence of any of the following events without the Grantee’s express written consent: (a) a material breach by Brunswick of any provision of this agreement; (b) Brunswick’s failure to pay any portion of Grantee’s compensation when due or to include Grantee in any bonus or incentive plan that applies to similarly situated employees of Brunswick; (c) Brunswick’s failure to provide, or continue to provide, Grantee with either the perquisites or employee health and welfare benefits (including, without limitation, life insurance, medical, dental, vision, long-term disability and similar benefits), generally provided to similarly situated employees of Brunswick; (d) a Reduction in Authority or Responsibility of the Grantee (as defined below); (e) a Reduction in Compensation (as defined below); or (f) a Business Relocation Beyond a Reasonable Commuting Distance (as defined below; provided, however, that the occurrence of any such condition shall not constitute Good Reason unless (x) the Grantee provides written notice to Brunswick of the existence of such condition not later than 60 days after the Grantee knows or reasonably should know of the existence of such condition, (y) Brunswick fails to remedy such condition within 30 days after receipt of such notice and (z) Grantee resigns due to the existence of such condition within 60 days after the expiration of the remedial period described in clause (y) hereof. Whether a Reduction in Authority or Responsibility of the Grantee has occurred shall be determined in accordance with the criteria set forth below in the definition of Reduction in Authority or Responsibility; provided, however, that (A) a change in the Grantee’s reporting relationship to another employee who is within the same reporting level (as that term is used in Brunswick’s Delegation of Authority Policy or any successor policy); or (B) a reduction in the Grantee’s business unit’s budget or a reduction in the Grantee’s business unit’s head count or number of direct reports, by themselves, shall not constitute Good Reason. "Reduction in Authority or Responsibility" shall mean the assignment to the Grantee of any duties that are materially inconsistent in any respect with the Grantee’s position (which may include status, offices, titles, and reporting requirements), authority, duties, or responsibilities as in effect immediately prior to such assignment. It is intended by this definition that a Change in Control by itself, absent a Reduction in Authority or Responsibility as described above, will not constitute Good Reason. "Reduction in Compensation" shall mean (i) a reduction in the Grantee’s total annual compensation (defined as the sum of the Grantee’s base salary and target annual bonus) for any calendar or fiscal year, as applicable, to an amount that is less than the Grantee’s total annual compensation in effect immediately prior to such reduction, (ii) the elimination of any Brunswick incentive compensation plan in which Grantee is a participant without the adoption of a substantially comparable replacement plan, or (iii) the failure to provide the Grantee with equity compensation opportunities or long-term cash incentive compensation opportunities that have a value that is substantially comparable to the value of the equity compensation opportunities provided to the Grantee immediately prior to the Change in Control. "Business Relocation Beyond a Reasonable Commuting Distance" shall mean that, as a result of either a relocation of Brunswick or a reassignment of the Grantee, a change occurs in the Grantee’s principal work location to a location that (i) is more than fifty (50) highway miles from the Grantee’s principal work location immediately prior to the relocation, and (ii) increases the Grantee’s commuting distance in highway mileage. |
Additional Terms and Conditions | "Permanent Disability" means the inability, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition, in the opinion of a physician selected by the Committee, is expected to have a duration of not less than 120 days. "Retirement" shall mean that the Grantee’s employment terminates for a reason other than Cause on or after the date on which either (i) the Grantee has either attained age 62 or (ii) the sum of the Grantee’s age plus years of continuous service from his or her latest hire date equals 70 or more. Notwithstanding anything to the contrary in these terms and conditions, for purposes of applying the favorable Retirement vesting terms set forth herein to grants made to residents of the European Union, the Grantee shall be deemed to be eligible for Retirement if, and only if, the Grantee has attained the retirement date specified in the retirement plan in which such Grantee participates. This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
Annual Cash Flow Return on Investment (CFROI): Applicable to 75% of Performance Shares CFROI defined as Adjusted Free Cash Flow divided by Operating Capital Employed. Adjusted Free Cash Flow is defined as Free Cash Flow consistent with the external reporting definition excluding the impact of cash pension contributions and cash tax payments or refunds. Operating Capital Employed defined as total assets less current liabilities excluding cash, debt, tax balances and lease assets and liabilities related to ASC 842. Operating Capital Employed will be calculated on a two point basis. Adjusted Free Cash Flow and Operating Capital Employed will be adjusted for the following variances from plan: * Acquisition/sale of “strategic” assets (e.g., transformational or material acquisitions) not contemplated in the plan; * Restructuring, integration, and exit activities; * Impact of unplanned financing arrangements (including debt issuance, off-balance sheet and factoring); * Pension liability settlement or plan amendment changes; * Impact of change in accounting standards; and * Executive deferred compensation payouts not included in plan. Performance results may be adjusted, as appropriate, for extraordinary or unanticipated items. | Payout as a % of Target (1) | 2019 - 2021 Average | |
Threshold | 0% | XX.X% | |
Target | 100% | YY.Y% | |
Maximum | 200% | ZZ.Z% |
Annual Operating Margin: Applicable to 25% of Performance Shares Operating Margin defined as Operating Earnings (ex. items) divided by Sales. Operating Earnings and Sales are consistent with reporting definitions. Operating Earnings (on an ex. items basis) and Sales will be adjusted for the following variances from plan: * Acquisition/sale of “strategic” assets (e.g., transformational or material acquisitions) not contemplated in the plan; * Restructuring, exit, integration and impairment activities; * Impact of any “unusual in nature” or “infrequently occurring” charges or impacts related to changes in accounting principles; * Impact of unplanned financing arrangements (including debt issuance, off-balance sheet and factoring); and * Pension liability settlement or plan amendment related charges. Performance results may be adjusted, as appropriate, for extraordinary or unanticipated items. | Payout as a % of Target (1) | 2019 - 2021 Average | |
Threshold | 0% | X.X% | |
Target | 100% | Y.Y% | |
Maximum | 200% | Z.Z% |
Purpose | To provide incentives to (i) support the execution of Brunswick Corporation’s business strategies and (ii) more closely align the interests of the award recipient with those of Brunswick Corporation’s stockholders. |
Grant Date | [_______ __, 2019] |
Performance Shares | Shares of Brunswick Corporation (“Brunswick”) common stock (“Common Stock”) where the number of shares of Common Stock delivered is based on attainment of Performance Criteria set forth herein. Shares of Common Stock subject to this Grant shall be referred to herein as “Performance Shares.” |
Target Award | [_______] Performance Shares is the target against which Performance Criteria shall apply. |
Performance Period | For purposes of these Terms and Conditions, “Performance Period” shall mean the three-year performance period commencing January 1, 2019 and ending December 31, 2021. |
Performance Criteria | CFROI: 75% of the Performance Shares shall be earned based on the three-year average of Brunswick's annual CFROI, as defined in Appendix A attached hereto, with payout between 0% and 200% of such percentage of the target number of Performance Shares, based solely on CFROI performance over the Performance Period, as set forth in Appendix A attached hereto. Operating Margin: 25% of the Performance Shares shall be earned based on the three-year average of Brunswick's annual Operating Margin, as defined in Appendix A attached hereto, with payout between 0% and 200% of such percentage of the target number of Performance Shares, based solely on Operating Margin performance over the Performance Period, as set forth in Appendix A attached hereto. TSR Modifier: Performance Shares calculated based on CFROI and Operating Margin performance (the "CFROI/OM Earned Award") shall be subject to a +/- 20% modifier for Brunswick’s TSR Performance against TSR Comparator Group. If Brunswick’s TSR Performance is equal to or below the 25th percentile of the TSR Performance of the TSR Comparator Group over the Performance Period, then the CFROI/OM Earned Award shall be reduced by 20%. If Brunswick’s TSR Performance is equal to or greater than the 75th percentile of the TSR Performance of the TSR Comparator Group over the Performance Period, then the CFROI/OM Earned Award shall be increased by 20%; provided that in no event shall the number of Performance Shares that become payable exceed 200% of the target number of Performance Shares. The CFROI/OM Earned Award shall not be modified for Brunswick’s TSR Performance between the 25th and 75th percentile of the TSR Performance of the TSR Comparator Group over the Performance Period. See Appendix A attached hereto for the definitions of "TSR Performance" and "TSR Comparator Group." Notwithstanding the level of performance achieved, the number of shares of Common Stock delivered pursuant to the "Timing of Distribution" discussed below shall not exceed the number of shares having a Fair Market Value, as of the date of distribution, equal to 400% of the target dollar value of the award as of the grant date, as set forth in the award notice given to the Grantee in connection with the award. |
Vesting Upon Death, Permanent Disability or Retirement (as defined below) | In the case of a termination of employment (other than for Cause (as defined below)) on or after the first anniversary of the beginning of the Performance Period and prior to a Change in Control due to (i) death, (ii) Permanent Disability or (iii) Retirement (as defined below), the Grantee or his or her estate or personal representative shall receive the award, calculated as if the Grantee had remained employed throughout the entire Performance period and based on actual CFROI and Operating Margin Performance. The Performance Shares shall be distributed to the Grantee in accordance with the terms of this award under "Timing of Distribution." In the case of a termination of employment (other than for Cause) prior to the first anniversary of the beginning of the Performance Period and prior to a Change in Control due to (i) death, (ii) Permanent Disability or (iii) Retirement, a pro-rata portion of the award will be distributed to the Grantee or his or her estate or personal representative in accordance with the terms of this award under "Timing of Distribution." For purposes of the foregoing sentence, a "pro-rata portion" will mean the product of (x) the number of Performance Shares that would otherwise be paid out at the end of the Performance Period based on actual CFROI and Operating Margin and (y) a fraction, the numerator of which is the number of days that have elapsed since the beginning of the Performance Period through the date of termination of the Grantee's employment, and the denominator of which is 365. All remaining Performance Shares shall be forfeited. The Performance Shares shall be forfeited in their entirety upon any termination for Cause, even if the Grantee would otherwise be eligible for Retirement. |
Prorated Vesting Upon Involuntary Termination Without Cause | If the Grantee's employment is terminated by Brunswick for a reason other than Cause or Permanent Disability, and the Grantee is not eligible for Retirement, a pro-rata portion of the award will be vested as of the date of such termination of employment and be distributed as of the third anniversary of the Grant Date. For purposes of the foregoing sentence, a "pro-rata portion" will mean the product of (x) the number of Performance Shares that would otherwise be paid out at the end of the Performance Period based on actual CFROI and Operating Margin and (y) a fraction, the numerator of which is the number of days that have elapsed since the beginning of the Performance Period through the date of termination of the Grantee's employment, and the denominator of which is 1,095. All remaining Performance Shares shall be forfeited. |
Other Terminations of Employment | The Performance Shares shall be forfeited in their entirety in the event the Grantee's employment terminates prior to the end of the Performance Period and prior to a Change in Control for a reason other than death, Permanent Disability (as defined below), Retirement or a termination by Brunswick for a reason other than Cause. |
Change in Control | In the event of a Change in Control prior to the end of the Performance Period, the Performance Criteria shall be deemed to be achieved at target (and the remainder of the award shall be forfeited) and: If the award is effectively assumed or continued by the surviving or acquiring corporation and the Grantee remains continuously employed through the last day of the Performance Period, then the Performance Shares shall be distributed to Grantee in accordance with the terms of the award under "Timing of Distribution," provided that: In the event of Grantee’s termination of employment (other than for Cause) (i) due to death or Permanent Disability, (ii) Retirement, or (iii) by Brunswick without Cause or by the Grantee for Good Reason (as defined below), the vested portion of the award shall be distributed to the Grantee or his or her estate or personal representative within thirty (30) days following Grantee’s death or termination of employment (or, in the case of termination due to death, Permanent Disability or Retirement that had occurred prior to the Change in Control, within 30 days following the Change in Control to the extent permitted by Internal Revenue Code Section 409A); provided, however, that if the award is considered "nonqualified deferred compensation" and (x) the Change in Control was not a "change in control event" within the meaning of Internal Revenue Code Section 409A or (y) the termination of employment occurred more than two years following the occurrence of such "change in control event," then the vested portion of the award shall be distributed to Grantee in accordance with the terms of this award under "Timing of Distribution." If the award is not effectively assumed or continued by the surviving or acquiring corporation, then the vested portion of the award shall be distributed within thirty (30) days of such Change in Control; provided, however, if the award is considered "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A with respect to the Grantee and the Change in Control was not a "change in control event" within the meaning of Internal Revenue Code Section 409A or to the extent distribution would be impermissible under Internal Revenue Code Section 409A, then the vested portion of the award shall be distributed to Grantee in accordance with the terms of this award under "Timing of Distribution." Determinations as to whether the award has been effectively assumed or continued by the surviving or acquiring corporation shall be made by the Human Resources and Compensation Committee, as constituted prior to the Change in Control. The Performance Shares shall be forfeited in their entirety upon any termination for Cause, even if the Grantee would otherwise be eligible for Retirement. |
Timing of Distribution | Except as otherwise provided for herein, shares of Common Stock shall be delivered to the Grantee in settlement of the award within 60 days after the end of the Performance Period, subject to certification in writing of Brunswick’s attainment of the Performance Criteria. If you are a “specified employee” (as such term is defined under Internal Revenue Code Section 409A) as of the date of your “separation from service” (as such term is defined under Internal Revenue Code Section 409A), then to the extent any amount to be distributed in connection with the settlement of the award is payable upon the Grantee’s “separation from service” and constitutes the payment of nonqualified deferred compensation, within the meaning of Internal Revenue Code Section 409A, the distribution will not be made before 6 months after separation from service (or, if earlier, death). In all cases, fractional shares shall be rounded down to the nearest whole share. |
Tax Withholding | Tax withholding liability (to meet required FICA, Federal, state, and local withholding) must be paid via share reduction upon distribution. |
Form of Distribution | Shares will be deposited to your brokerage account on record with Shareholder Services. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan shall govern. The Human Resources and Compensation Committee of the Board administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. "Cause" shall mean willful misconduct in the performance of duties. "Good Reason" shall have the meaning set forth in the employment agreement, if any, between the Grantee and Brunswick as in effect on the Grant Date, provided that if the Grantee is not a party to an employment agreement that contains such definition, then Good Reason means the occurrence of any of the following events without the Grantee’s express written consent: (a) a material breach by Brunswick of any provision of this agreement; (b) Brunswick’s failure to pay any portion of Grantee’s compensation when due or to include Grantee in any bonus or incentive plan that applies to similarly situated employees of Brunswick; (c) Brunswick’s failure to provide, or continue to provide, Grantee with either the perquisites or employee health and welfare benefits (including, without limitation, life insurance, medical, dental, vision, long-term disability and similar benefits), generally provided to similarly situated employees of Brunswick; (d) a Reduction in Authority or Responsibility of the Grantee (as defined below); (e) a Reduction in Compensation (as defined below); or (f) a Business Relocation Beyond a Reasonable Commuting Distance (as defined below; provided, however, that the occurrence of any such condition shall not constitute Good Reason unless (x) the Grantee provides written notice to Brunswick of the existence of such condition not later than 60 days after the Grantee knows or reasonably should know of the existence of such condition, (y) Brunswick fails to remedy such condition within 30 days after receipt of such notice and (z) Grantee resigns due to the existence of such condition within 60 days after the expiration of the remedial period described in clause (y) hereof. Whether a Reduction in Authority or Responsibility of the Grantee has occurred shall be determined in accordance with the criteria set forth below in the definition of Reduction in Authority or Responsibility; provided, however, that (A) a change in the Grantee’s reporting relationship to another employee who is within the same reporting level (as that term is used in Brunswick’s Delegation of Authority Policy or any successor policy); or (B) a reduction in the Grantee’s business unit’s budget or a reduction in the Grantee’s business unit’s head count or number of direct reports, by themselves, shall not constitute Good Reason. "Reduction in Authority or Responsibility" shall mean the assignment to the Grantee of any duties that are materially inconsistent in any respect with the Grantee’s position (which may include status, offices, titles, and reporting requirements), authority, duties, or responsibilities as in effect immediately prior to such assignment. It is intended by this definition that a Change in Control by itself, absent a Reduction in Authority or Responsibility as described above, will not constitute Good Reason. "Reduction in Compensation" shall mean (i) a reduction in the Grantee’s total annual compensation (defined as the sum of the Grantee’s base salary and target annual bonus) for any calendar or fiscal year, as applicable, to an amount that is less than the Grantee’s total annual compensation in effect immediately prior to such reduction, (ii) the elimination of any Brunswick incentive compensation plan in which Grantee is a participant without the adoption of a substantially comparable replacement plan, or (iii) the failure to provide the Grantee with equity compensation opportunities or long-term cash incentive compensation opportunities that have a value that is substantially comparable to the value of the equity compensation opportunities provided to the Grantee immediately prior to the Change in Control. "Business Relocation Beyond a Reasonable Commuting Distance" shall mean that, as a result of either a relocation of Brunswick or a reassignment of the Grantee, a change occurs in the Grantee’s principal work location to a location that (i) is more than fifty (50) highway miles from the Grantee’s principal work location immediately prior to the relocation, and (ii) increases the Grantee’s commuting distance in highway mileage. |
Additional Terms and Conditions | "Permanent Disability" means the inability, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition, in the opinion of a physician selected by the Committee, is expected to have a duration of not less than 120 days. "Retirement" shall mean that the Grantee’s employment terminates for a reason other than Cause on or after the date on which either (i) the Grantee has either attained age 62 or (ii) the sum of the Grantee’s age plus years of continuous service from his or her latest hire date equals 70 or more. Notwithstanding anything to the contrary in these terms and conditions, for purposes of applying the favorable Retirement vesting terms set forth herein to grants made to residents of the European Union, the Grantee shall be deemed to be eligible for Retirement if, and only if, the Grantee has attained the retirement date specified in the retirement plan in which such Grantee participates. This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
Annual Cash Flow Return on Investment (CFROI): Applicable to 75% of Performance Shares CFROI defined as Adjusted Free Cash Flow divided by Operating Capital Employed. Adjusted Free Cash Flow is defined as Free Cash Flow consistent with the external reporting definition excluding the impact of cash pension contributions and cash tax payments or refunds. Operating Capital Employed defined as total assets less current liabilities excluding cash, debt, tax balances and lease assets and liabilities related to ASC 842. Operating Capital Employed will be calculated on a two point basis. Adjusted Free Cash Flow and Operating Capital Employed will be adjusted for the following variances from plan: * Acquisition/sale of “strategic” assets (e.g., transformational or material acquisitions) not contemplated in the plan; * Restructuring, integration, and exit activities; * Impact of unplanned financing arrangements (including debt issuance, off-balance sheet and factoring); * Pension liability settlement or plan amendment changes; * Impact of change in accounting standards; and * Executive deferred compensation payouts not included in plan. Performance results may be adjusted, as appropriate, for extraordinary or unanticipated items. | Payout as a % of Target (1) | 2019 - 2021 Average | |
Threshold | 0% | XX.X% | |
Target | 100% | YY.Y% | |
Maximum | 200% | ZZ.Z% |
Annual Operating Margin: Applicable to 25% of Performance Shares Operating Margin defined as Operating Earnings (ex. items) divided by Sales. Operating Earnings and Sales are consistent with reporting definitions. Operating Earnings (on an ex. items basis) and Sales will be adjusted for the following variances from plan: * Acquisition/sale of “strategic” assets (e.g., transformational or material acquisitions) not contemplated in the plan; * Restructuring, exit, integration and impairment activities; * Impact of any “unusual in nature” or “infrequently occurring” charges or impacts related to changes in accounting principles; * Impact of unplanned financing arrangements (including debt issuance, off-balance sheet and factoring); and * Pension liability settlement or plan amendment related charges. Performance results may be adjusted, as appropriate, for extraordinary or unanticipated items. | Payout as a % of Target (1) | 2019 - 2021 Average | |
Threshold | 0% | X.X% | |
Target | 100% | Y.Y% | |
Maximum | 200% | Z.Z% |
Purpose | To encourage retention of key managers so as to support the execution of business strategies in order to encourage and reward the creation of sustainable, long-term shareholder value and achieve future goals. |
Restricted Stock Units | Restricted Stock Units valued on the same basis as Brunswick Corporation (“Brunswick”) common stock (“Stock”) where one unit equals one share. Dividend equivalents will be reinvested in additional restricted stock units. There are no voting rights attached to restricted stock units. |
Grant Date | ____________, 2019 |
Award | ____________ Restricted Stock Units. |
Normal Vesting | Restricted Stock Units will vest and be distributed three years after the Grant Date, subject to continued employment through such date. |
Prorated Vesting Upon Involuntary Termination Without Cause | If the Grantee’s employment is terminated by Brunswick for a reason other than Cause or Permanent Disability, a pro-rata portion of the award will be vested as of the date of such termination of employment and be distributed as of the third anniversary of the Grant Date. For purposes of the foregoing sentence, a pro-rata portion will mean the product of (i) the number of Restricted Stock Units awarded that would have vested on the normal vesting date and (ii) a fraction, the numerator of which is the number of days that have elapsed since the Date of Grant through the date of termination of the Grantee’s employment, and the denominator of which is 1,095. |
Vesting Upon Death or Permanent Disability | In the case of a termination of employment due to death or a Permanent Disability, the award will become fully vested and distributed as of the date of such death or Permanent Disability. |
Vesting Upon Termination After Change in Control | If the award is effectively assumed or continued by the surviving or acquiring corporation in a Change in Control and (i) Brunswick terminates the Grantee’s employment without Cause or (ii) the Grantee resigns for Good Reason (as defined below), then in each case all of the award will be vested and distributed as of the date of such termination of employment; provided, however, that if the award is considered nonqualified deferred compensation within the meaning of Internal Revenue Code Section 409A with respect to the Grantee and (A) the Change in Control was not a change in control event within the meaning of Internal Revenue Code Section 409A or (B) the termination of employment occurred more than two years following the occurrence of the change in control event, then the vested award shall be distributed three years after the Grant Date. ▪ If the award is not effectively assumed or continued by the surviving or acquiring corporation in a Change in Control, the award shall vest in full and be distributed as of the date of the Change in Control; provided, however, that if the award is considered nonqualified deferred compensation within the meaning of Internal Revenue Code Section 409A with respect to the Grantee and the Change in Control was not a change in control event within the meaning of Internal Revenue Code Section 409A or to the extent distribution would be impermissible under Internal Revenue Code Section 409A, then the vested award shall be distributed three years after the Grant Date. ▪ Determinations as to whether the award has been effectively assumed or continued by the surviving or acquiring corporation shall be made by the Human Resources and Compensation Committee, as constituted prior to the Change in Control. |
Forfeiture Upon Termination | Except as otherwise provided herein, Restricted Stock Units will be forfeited upon a termination of employment prior to vesting. The Restricted Stock Units shall be forfeited in their entirety upon any termination for Cause. |
Timing and Form of Distribution | Upon distribution, shares will be deposited to Grantee's brokerage account on record with Shareholder Services. Distributions will occur as soon as practical, but no later than 30 days after the distribution date provided above, except that if the Grantee is a "specified employee" (as such term is defined under Internal Revenue Code Section 409A), then to the extent any amount to be distributed in connection with the settlement of the award is payable upon the Grantee’s “separation from service” and constitutes the payment of nonqualified deferred compensation, within the meaning of Internal Revenue Code Section 409A, the distribution will not be made before 6 months after separation from service (or, if earlier, death). |
Tax Withholding | For those whose employment is terminated by Brunswick for a reason other than Cause or Permanent Disability prior to the year of a scheduled distribution, tax withholding liability to meet required FICA must be paid via payroll or participant check by the end of the year of such termination. Subsequent Federal, state and local income tax withholding must be paid via share reduction upon distribution. For all others, tax withholding liability (to meet required FICA, Federal, state, and local withholding) must be paid via share reduction upon distribution. |
Definitions | "Cause" shall mean the Grantee’s willful misconduct in the performance of his or her duties. "Good Reason" shall have the meaning set forth in the employment agreement, if any, between the Grantee and Brunswick as in effect on the Grant Date, provided that if the Grantee is not a party to an employment agreement that contains such definition, then Good Reason means the occurrence of any of the following events without the Grantee’s express written consent: (a) a material breach by Brunswick of any provision of this Agreement; (b) Brunswick’s failure to pay any portion of Grantee’s compensation when due or to include Grantee in any bonus or incentive plan that applies to similarly situated employees of Brunswick; (c) Brunswick’s failure to provide, or continue to provide, Grantee with either the perquisites or employee health and welfare benefits (including, without limitation, life insurance, medical, dental, vision, long-term disability and similar benefits), generally provided to similarly situated employees of Brunswick; (d) a Reduction in Authority or Responsibility of the Grantee (as defined below); (e) a Reduction in Compensation (as defined below); and (f) a Business Relocation Beyond a Reasonable Commuting Distance (as defined below); provided, however, that the occurrence of any such condition shall not constitute Good Reason unless (x) the Grantee provides written notice to Brunswick of the existence of such condition not later than 60 days after the Grantee knows or reasonably should know of the existence of such condition, (y) Brunswick fails to remedy such condition within 30 days after receipt of such notice and (z) Grantee resigns due to the existence of such condition within 60 days after the expiration of the remedial period described in clause (y) hereof. For purposes of this definition: Whether a Reduction in Authority or Responsibility of the Grantee has occurred shall be determined in accordance with the criteria set forth below in the definition of Reduction in Authority or Responsibility; provided, however, that (A) a change in the Grantee’s reporting relationship to another employee who is within the same reporting level (as that term is used in Brunswick’s Delegation of Authority Policy or any successor policy); or (B) a reduction in the Grantee’s business unit’s budget or a reduction in the Grantee’s business unit’s head count or number of direct reports, by themselves, shall not constitute Good Reason. "Reduction in Authority or Responsibility" shall mean the assignment to the Grantee of any duties that are materially inconsistent in any respect with the Grantee’s position (which may include status, offices, titles, and reporting requirements), authority, duties, or responsibilities as in effect immediately prior to such assignment. It is intended by this definition that a Change in Control by itself, absent a Reduction in Authority or Responsibility as described above, will not constitute Good Reason. "Reduction in Compensation" shall mean (i) a reduction in the Grantee’s total annual compensation (defined as the sum of the Grantee’s base salary and target annual bonus) for any calendar or fiscal year, as applicable, to an amount that is less than the Grantee’s total annual compensation in effect immediately prior to such reduction, (ii) the elimination of any Brunswick incentive compensation plan in which Grantee is a participant without the adoption of a substantially comparable replacement plan, or (iii) the failure to provide Grantee with equity compensation opportunities or long-term cash incentive compensation opportunities that have a value that is substantially comparable to the value of the equity compensation opportunities provided to the Grantee immediately prior to the Change in Control. "Business Relocation Beyond a Reasonable Commuting Distance" shall mean that, as a result of either a relocation of Brunswick or a reassignment of the Grantee, a change occurs in the Grantee’s principal work location to a location that (i) is more than fifty (50) highway miles from the Grantee’s principal work location immediately prior to the relocation, and (ii) increases the Grantee’s commuting distance in highway mileage. "Permanent Disability" means the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan shall govern. The Human Resources and Compensation Committee of the Board administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
Purpose | To encourage retention of key managers so as to support the execution of business strategies in order to encourage and reward the creation of sustainable, long-term shareholder value and achieve future goals. |
Restricted Stock Units | Restricted Stock Units valued on the same basis as Brunswick Corporation (“Brunswick”) common stock (“Stock”) where one unit equals one share. Dividend equivalents will be reinvested in additional restricted stock units. There are no voting rights attached to restricted stock units. |
Grant Date | ____________, 2019 |
Award | ____________ Restricted Stock Units. |
Normal Vesting | Restricted Stock Units will vest and be distributed three years after the Grant Date, subject to continued employment through such date. |
Vesting Upon Retirement (as defined below) | Upon a termination of employment due to Retirement (as defined below) on or after the first anniversary of the Grant Date, and prior to a Change in Control (as defined in the Plan), all of the award will become fully vested as of the date of Retirement and be distributed as of the third anniversary of the Grant Date. Upon a termination of employment due to Retirement prior to the first anniversary of the Grant Date, and prior to a Change in Control, a pro-rata portion of the award will be vested as of the date of Retirement and be distributed as of the third anniversary of the Grant Date. For purposes of the foregoing sentence, a pro-rata portion will mean the product of (i) the number of restricted stock units awarded that would have vested on the normal vesting date and (ii) a fraction, the numerator of which is the number of days that have elapsed since January 1 of the year of grant through the date of termination of the Grantee’s employment, provided such number does not exceed 365, and the denominator of which is 365. The award shall be forfeited in its entirety upon a termination for Cause, even if the Grantee would otherwise be eligible for Retirement. |
Prorated Vesting Upon Involuntary Termination Without Cause | If the Grantee’s employment is terminated by Brunswick for a reason other than Cause or Permanent Disability, and the Grantee is not eligible for Retirement, a pro-rata portion of the award will be vested as of the date of such termination of employment and be distributed as of the third anniversary of the Grant Date. For purposes of the foregoing sentence, a "pro-rata portion" will mean the product of (i) the number of Restricted Stock Units awarded that would have vested on the normal vesting date and (ii) a fraction, the numerator of which is the number of days that have elapsed since the Date of Grant through the date of termination of the Grantee’s employment, and the denominator of which is 1,095. |
Vesting Upon Death or Permanent Disability | In the case of a termination of employment due to death or a Permanent Disability, the award will become fully vested and distributed as of the date of such death or Permanent Disability. |
Vesting Upon Termination After Change in Control | If the award is effectively assumed or continued by the surviving or acquiring corporation in a Change in Control and (i) Brunswick terminates the Grantee’s employment without Cause or (ii) the Grantee resigns for Good Reason (as defined below), then in each case all of the award will be vested and distributed as of the date of such termination of employment; provided, however, that if the award is considered "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A with respect to the Grantee and (A) the Change in Control was not a "change in control event" within the meaning of Internal Revenue Code Section 409A or (B) the termination of employment occurred more than two years following the occurrence of the change in control event, then the vested award shall be distributed three years after the Grant Date. If the award is not effectively assumed or continued by the surviving or acquiring corporation in a Change in Control, the award shall vest in full and be distributed as of the date of the Change in Control; provided, however, that if the award is considered "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A with respect to the Grantee and the Change in Control was not a "change in control event" within the meaning of Internal Revenue Code Section 409A or to the extent distribution would be impermissible under Internal Revenue Code Section 409A, then the vested award shall be distributed three years after the Grant Date. Determinations as to whether the award has been effectively assumed or continued by the surviving or acquiring corporation shall be made by the Human Resources and Compensation Committee, as constituted prior to the Change in Control. |
Forfeiture Upon Termination | Except as otherwise provided herein, Restricted Stock Units will be forfeited upon a termination of employment prior to vesting. |
Timing and form of Distribution | Upon distribution, shares will be deposited to Grantee's brokerage account on record with Shareholder Services. Distributions will occur as soon as practical, but no later than 30 days after the distribution date provided above, except that if the Grantee is a "specified employee" (as such term is defined under Internal Revenue Code Section 409A), then to the extent any amount to be distributed in connection with the settlement of the award is payable upon the Grantee’s “separation from service” and constitutes the payment of nonqualified deferred compensation, within the meaning of Internal Revenue Code Section 409A, the distribution will not be made before 6 months after separation from service (or, if earlier, death). |
Tax Withholding | For those becoming eligible for Retirement or whose employment is terminated by Brunswick for a reason other than Cause or Permanent Disability prior to the year of a scheduled distribution, tax withholding liability to meet required FICA must be paid via payroll or participant check by the end of the year of becoming eligible for Retirement or terminating employment, as the case my be, except that the FICA taxes on amounts vesting during the first December after grant for those who have become eligible for Retirement during the year of grant will be collected during the next calendar quarter. Subsequent Federal, state and local income tax withholding must be paid via share reduction upon distribution. For all others, tax withholding liability (to meet required FICA, Federal, state, and local withholding) must be paid via share reduction upon distribution. |
Definitions | "Cause" shall mean the Grantee’s willful misconduct in the performance of his or her duties. "Good Reason" shall have the meaning set forth in the employment agreement, if any, between the Grantee and Brunswick as in effect on the Grant Date, provided that if the Grantee is not a party to an employment agreement that contains such definition, then Good Reason means the occurrence of any of the following events without the Grantee’s express written consent: (a) a material breach by Brunswick of any provision of this Agreement; (b) Brunswick’s failure to pay any portion of Grantee’s compensation when due or to include Grantee in any bonus or incentive plan that applies to similarly situated employees of Brunswick; (c) Brunswick’s failure to provide, or continue to provide, Grantee with either the perquisites or employee health and welfare benefits (including, without limitation, life insurance, medical, dental, vision, long-term disability and similar benefits), generally provided to similarly situated employees of Brunswick; (d) a Reduction in Authority or Responsibility of the Grantee (as defined below); (e) a Reduction in Compensation (as defined below); and (f) a Business Relocation Beyond a Reasonable Commuting Distance (as defined below); provided, however, that the occurrence of any such condition shall not constitute Good Reason unless (x) the Grantee provides written notice to Brunswick of the existence of such condition not later than 60 days after the Grantee knows or reasonably should know of the existence of such condition, (y) Brunswick fails to remedy such condition within 30 days after receipt of such notice and (z) Grantee resigns due to the existence of such condition within 60 days after the expiration of the remedial period described in clause (y) hereof. For purposes of this definition: Whether a Reduction in Authority or Responsibility of the Grantee has occurred shall be determined in accordance with the criteria set forth below in the definition of Reduction in Authority or Responsibility; provided, however, that (A) a change in the Grantee’s reporting relationship to another employee who is within the same reporting level (as that term is used in Brunswick’s Delegation of Authority Policy or any successor policy); or (B) a reduction in the Grantee’s business unit’s budget or a reduction in the Grantee’s business unit’s head count or number of direct reports, by themselves, shall not constitute Good Reason. "Reduction in Authority or Responsibility" shall mean the assignment to the Grantee of any duties that are materially inconsistent in any respect with the Grantee’s position (which may include status, offices, titles, and reporting requirements), authority, duties, or responsibilities as in effect immediately prior to such assignment. It is intended by this definition that a Change in Control by itself, absent a Reduction in Authority or Responsibility as described above, will not constitute Good Reason. "Reduction in Compensation" shall mean (i) a reduction in the Grantee’s total annual compensation (defined as the sum of the Grantee’s base salary and target annual bonus) for any calendar or fiscal year, as applicable, to an amount that is less than the Grantee’s total annual compensation in effect immediately prior to such reduction, (ii) the elimination of any Brunswick incentive compensation plan in which Grantee is a participant without the adoption of a substantially comparable replacement plan, or (iii) the failure to provide Grantee with equity compensation opportunities or long-term cash incentive compensation opportunities that have a value that is substantially comparable to the value of the equity compensation opportunities provided to the Grantee immediately prior to the Change in Control. "Business Relocation Beyond a Reasonable Commuting Distance" shall mean that, as a result of either a relocation of Brunswick or a reassignment of the Grantee, a change occurs in the Grantee’s principal work location to a location that (i) is more than fifty (50) highway miles from the Grantee’s principal work location immediately prior to the relocation, and (ii) increases the Grantee’s commuting distance in highway mileage. "Permanent Disability" means the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. "Retirement" shall mean that the Grantee’s employment terminates for a reason other than Cause on or after the date on which either (i) the Grantee has either attained age 62 or (ii) the sum of the Grantee’s age plus years of continuous service from his or her latest hire date equals 70 or more. Notwithstanding anything to the contrary in these terms and conditions, for purposes of applying the favorable Retirement vesting terms set forth herein to grants made to residents of the European Union, the Grantee shall be deemed to be eligible for Retirement if, and only if, the Grantee has attained the retirement date specified in the retirement plan in which such Grantee participates. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan shall govern. The Human Resources and Compensation Committee of the Board administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
Purpose | To encourage retention of key managers so as to support the execution of business strategies in order to encourage and reward the creation of sustainable, long-term shareholder value and achieve future goals. |
Cash-settled Restricted Stock Units | Cash-settled Restricted Stock Units valued on the same basis as Brunswick Corporation (“Brunswick”) common stock (“Stock”) where one unit equals one share. Dividend equivalents will be reinvested in additional restricted stock units. There are no voting rights attached to restricted stock units. |
Grant Date | _____________, 2019 |
Award | ____________ Cash-settled Restricted Stock Units. |
Normal Vesting | Cash-settled Restricted Stock Units will vest and be distributed three years after the Grant Date, subject to continued employment through such date. |
Vesting Upon Retirement (as defined below) | Upon a termination of employment due to Retirement (as defined below) on or after the first anniversary of the Grant Date, and prior to a Change in Control (as defined in the Plan), all of the award will become fully vested as of the date of Retirement and be distributed as of the third anniversary of the Grant Date. Upon a termination of employment due to Retirement prior to the first anniversary of the Grant Date, and prior to a Change in Control, a pro-rata portion of the award will be vested as of the date of Retirement and be distributed as of the third anniversary of the Grant Date. For purposes of the foregoing sentence, a "pro-rata portion" will mean the product of (i) the number of restricted stock units awarded that would have vested on the normal vesting date and (ii) a fraction, the numerator of which is the number of days that have elapsed since January 1 of the year of grant through the date of termination of the Grantee’s employment, provided such number does not exceed 365, and the denominator of which is 365. The award shall be forfeited in its entirety upon a termination for Cause, even if the Grantee would otherwise be eligible for Retirement. |
Prorated Vesting Upon Involuntary Termination Without Cause | If the Grantee’s employment is terminated by Brunswick for a reason other than Cause or Permanent Disability, a pro-rata portion of the award will be vested as of the date of such termination of employment and be distributed as of the third anniversary of the Grant Date. For purposes of the foregoing sentence, a "pro-rata portion" will mean the product of (i) the number of Restricted Stock Units awarded that would have vested on the normal vesting date and (ii) a fraction, the numerator of which is the number of days that have elapsed since the Date of Grant through the date of termination of the Grantee’s employment, and the denominator of which is 1,095. |
Vesting Upon Death or Permanent Disability | In the case of a termination of employment due to death or a Permanent Disability, the award will become fully vested and distributed as of the date of such death or Permanent Disability. |
Vesting Upon Termination After Change in Control | If the award is effectively assumed or continued by the surviving or acquiring corporation in a Change in Control and (i) Brunswick terminates the Grantee’s employment without Cause or (ii) the Grantee resigns for Good Reason (as defined below), then in each case all of the award will be vested and distributed as of the date of such termination of employment; provided, however, that if the award is considered "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A with respect to the Grantee and (A) the Change in Control was not a "change in control event" within the meaning of Internal Revenue Code Section 409A or (B) the termination of employment occurred more than two years following the occurrence of the change in control event, then the vested award shall be distributed three years after the Grant Date. If the award is not effectively assumed or continued by the surviving or acquiring corporation in a Change in Control, the award shall vest in full and be distributed as of the date of the Change in Control; provided, however, that if the award is considered "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A with respect to the Grantee and the Change in Control was not a "change in control event" within the meaning of Internal Revenue Code Section 409A or to the extent distribution would be impermissible under Internal Revenue Code Section 409A, then the vested award shall be distributed three years after the Grant Date. Determinations as to whether the award has been effectively assumed or continued by the surviving or acquiring corporation shall be made by the Human Resources and Compensation Committee, as constituted prior to the Change in Control. |
Forfeiture Upon Termination | Except as otherwise provided herein, Cash-settled Restricted Stock Units will be forfeited upon a termination of employment prior to vesting. |
Timing and Form of Distribution | Distribution will be in the form of a cash payment in an amount equal to the number of Cash-Settled Restricted Stock Units multiplied by the Fair Market Value of a share of Stock at the time of distribution, less applicable withholding. Distributions will occur as soon as practical, but no later than 30 days after the distribution date provided above, except that if the Grantee is a “specified employee” (as such term is defined under Internal Revenue Code Section 409A) as of the date of his or her “separation from service” (as such term is defined under Internal Revenue Code Section 409A), then to the extent any amount to be distributed in connection with the settlement of the award is payable upon the Grantee’s “separation from service” and constitutes the payment of nonqualified deferred compensation, within the meaning of Internal Revenue Code Section 409A, the distribution will not be made before 6 months after separation from service (or, if earlier, death). |
Tax Withholding | For those whose employment is terminated by Brunswick for a reason other than Cause or Permanent Disability prior to the year of a scheduled distribution, tax withholding liability to meet required FICA must be paid via payroll or participant check by the end of the year of such termination. Subsequent Federal, state and local income tax withholding must be paid via share reduction upon distribution. For all others, tax withholding liability (to meet required FICA, Federal, state, and local withholding) must be paid via share reduction upon distribution. |
Definitions | "Cause" shall mean the Grantee’s willful misconduct in the performance of his or her duties. "Good Reason" shall have the meaning set forth in the employment agreement, if any, between the Grantee and Brunswick as in effect on the Grant Date, provided that if the Grantee is not a party to an employment agreement that contains such definition, then Good Reason means the occurrence of any of the following events without the Grantee’s express written consent: (a) a material breach by Brunswick of any provision of this Agreement; (b) Brunswick’s failure to pay any portion of Grantee’s compensation when due or to include Grantee in any bonus or incentive plan that applies to similarly situated employees of Brunswick; (c) Brunswick’s failure to provide, or continue to provide, Grantee with either the perquisites or employee health and welfare benefits (including, without limitation, life insurance, medical, dental, vision, long-term disability and similar benefits), generally provided to similarly situated employees of Brunswick; (d) a Reduction in Authority or Responsibility of the Grantee (as defined below); (e) a Reduction in Compensation (as defined below); and (f) a Business Relocation Beyond a Reasonable Commuting Distance (as defined below); provided, however, that the occurrence of any such condition shall not constitute Good Reason unless (x) the Grantee provides written notice to Brunswick of the existence of such condition not later than 60 days after the Grantee knows or reasonably should know of the existence of such condition, (y) Brunswick fails to remedy such condition within 30 days after receipt of such notice and (z) Grantee resigns due to the existence of such condition within 60 days after the expiration of the remedial period described in clause (y) hereof. For purposes of this definition: Whether a Reduction in Authority or Responsibility of the Grantee has occurred shall be determined in accordance with the criteria set forth below in the definition of Reduction in Authority or Responsibility; provided, however, that (A) a change in the Grantee’s reporting relationship to another employee who is within the same reporting level (as that term is used in Brunswick’s Delegation of Authority Policy or any successor policy); or (B) a reduction in the Grantee’s business unit’s budget or a reduction in the Grantee’s business unit’s head count or number of direct reports, by themselves, shall not constitute Good Reason. "Reduction in Authority or Responsibility" shall mean the assignment to the Grantee of any duties that are materially inconsistent in any respect with the Grantee’s position (which may include status, offices, titles, and reporting requirements), authority, duties, or responsibilities as in effect immediately prior to such assignment. It is intended by this definition that a Change in Control by itself, absent a Reduction in Authority or Responsibility as described above, will not constitute Good Reason. "Reduction in Compensation" shall mean (i) a reduction in the Grantee’s total annual compensation (defined as the sum of the Grantee’s base salary and target annual bonus) for any calendar or fiscal year, as applicable, to an amount that is less than the Grantee’s total annual compensation in effect immediately prior to such reduction, (ii) the elimination of any Brunswick incentive compensation plan in which Grantee is a participant without the adoption of a substantially comparable replacement plan, or (iii) the failure to provide Grantee with equity compensation opportunities or long-term cash incentive compensation opportunities that have a value that is substantially comparable to the value of the equity compensation opportunities provided to the Grantee immediately prior to the Change in Control. "Business Relocation Beyond a Reasonable Commuting Distance" shall mean that, as a result of either a relocation of Brunswick or a reassignment of the Grantee, a change occurs in the Grantee’s principal work location to a location that (i) is more than fifty (50) highway miles from the Grantee’s principal work location immediately prior to the relocation, and (ii) increases the Grantee’s commuting distance in highway mileage. "Permanent Disability" means the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. "Retirement" shall mean that the Grantee’s employment terminates for a reason other than Cause on or after the date on which either (i) the Grantee has either attained age 62 or (ii) the sum of the Grantee’s age plus years of continuous service from his or her latest hire date equals 70 or more. Notwithstanding anything to the contrary in these terms and conditions, for purposes of applying the favorable Retirement vesting terms set forth herein to grants made to residents of the European Union, the Grantee shall be deemed to be eligible for Retirement if, and only if, the Grantee has attained the retirement date specified in the retirement plan in which such Grantee participates. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan shall govern. The Human Resources and Compensation Committee of the Board administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
Purpose | To encourage retention of key managers so as to support the execution of business strategies in order to encourage and reward the creation of sustainable, long-term shareholder value and achieve future goals. |
Cash-settled Restricted Stock Units | Cash-settled Restricted Stock Units valued on the same basis as Brunswick Corporation (“Brunswick”) common stock (“Stock”) where one unit equals one share. Dividend equivalents will be reinvested in additional restricted stock units. There are no voting rights attached to restricted stock units. |
Grant Date | _____________, 2019 |
Award | ____________ Cash-settled Restricted Stock Units. |
Normal Vesting | Cash-settled Restricted Stock Units will vest and be distributed three years after the Grant Date, subject to continued employment through such date. |
Prorated Vesting Upon Involuntary Termination Without Cause | If the Grantee’s employment is terminated by Brunswick for a reason other than Cause or Permanent Disability, a pro-rata portion of the award will be vested as of the date of such termination of employment and be distributed as of the third anniversary of the Grant Date. For purposes of the foregoing sentence, a pro-rata portion will mean the product of (i) the number of Restricted Stock Units awarded that would have vested on the normal vesting date and (ii) a fraction, the numerator of which is the number of days that have elapsed since the Date of Grant through the date of termination of the Grantee’s employment, and the denominator of which is 1,095. |
Vesting Upon Death or Permanent Disability | In the case of a termination of employment due to death or a Permanent Disability, the award will become fully vested and distributed as of the date of such death or Permanent Disability. |
Vesting Upon Termination After Change in Control | If the award is effectively assumed or continued by the surviving or acquiring corporation in a Change in Control and (i) Brunswick terminates the Grantee’s employment without Cause or (ii) the Grantee resigns for Good Reason (as defined below), then in each case all of the award will be vested and distributed as of the date of such termination of employment; provided, however, that if the award is considered "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A with respect to the Grantee and (A) the Change in Control was not a "change in control event" within the meaning of Internal Revenue Code Section 409A or (B) the termination of employment occurred more than two years following the occurrence of the change in control event, then the vested award shall be distributed three years after the Grant Date. If the award is not effectively assumed or continued by the surviving or acquiring corporation in a Change in Control, the award shall vest in full and be distributed as of the date of the Change in Control; provided, however, that if the award is considered "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A with respect to the Grantee and the Change in Control was not a "change in control event" within the meaning of Internal Revenue Code Section 409A or to the extent distribution would be impermissible under Internal Revenue Code Section 409A, then the vested award shall be distributed three years after the Grant Date. Determinations as to whether the award has been effectively assumed or continued by the surviving or acquiring corporation shall be made by the Human Resources and Compensation Committee, as constituted prior to the Change in Control. |
Forfeiture Upon Termination | Except as otherwise provided herein, Cash-settled Restricted Stock Units will be forfeited upon a termination of employment prior to vesting. The Cash-settled Restricted Stock Units shall be forfeited in their entirety upon any termination for Cause. |
Timing and Form of Distribution | Distribution will be in the form of a cash payment in an amount equal to the number of Cash-Settled Restricted Stock Units multiplied by the Fair Market Value of a share of Stock at the time of distribution, less applicable withholding. Distributions will occur as soon as practical, but no later than 30 days after the distribution date provided above (and, in no event later than March 15, 2022), except that if the Grantee is a “specified employee” (as such term is defined under Internal Revenue Code Section 409A) as of the date of his or her “separation from service” (as such term is defined under Internal Revenue Code Section 409A), then to the extent any amount to be distributed in connection with the settlement of the award is payable upon the Grantee’s “separation from service” and constitutes the payment of nonqualified deferred compensation, within the meaning of Internal Revenue Code Section 409A, the distribution will not be made before 6 months after separation from service (or, if earlier, death). |
Tax Withholding | For those whose employment is terminated by Brunswick for a reason other than Cause or Permanent Disability prior to the year of a scheduled distribution, tax withholding liability to meet required FICA must be paid via payroll or participant check by the end of the year of such termination. Subsequent Federal, state and local income tax withholding must be paid via share reduction upon distribution. For all others, tax withholding liability (to meet required FICA, Federal, state, and local withholding) must be paid via share reduction upon distribution. |
Definitions | "Cause" shall mean the Grantee’s willful misconduct in the performance of his or her duties. "Good Reason" shall have the meaning set forth in the employment agreement, if any, between the Grantee and Brunswick as in effect on the Grant Date, provided that if the Grantee is not a party to an employment agreement that contains such definition, then Good Reason means the occurrence of any of the following events without the Grantee’s express written consent: (a) a material breach by Brunswick of any provision of this Agreement; (b) Brunswick’s failure to pay any portion of Grantee’s compensation when due or to include Grantee in any bonus or incentive plan that applies to similarly situated employees of Brunswick; (c) Brunswick’s failure to provide, or continue to provide, Grantee with either the perquisites or employee health and welfare benefits (including, without limitation, life insurance, medical, dental, vision, long-term disability and similar benefits), generally provided to similarly situated employees of Brunswick; (d) a Reduction in Authority or Responsibility of the Grantee (as defined below); (e) a Reduction in Compensation (as defined below); and (f) a Business Relocation Beyond a Reasonable Commuting Distance (as defined below); provided, however, that the occurrence of any such condition shall not constitute Good Reason unless (x) the Grantee provides written notice to Brunswick of the existence of such condition not later than 60 days after the Grantee knows or reasonably should know of the existence of such condition, (y) Brunswick fails to remedy such condition within 30 days after receipt of such notice and (z) Grantee resigns due to the existence of such condition within 60 days after the expiration of the remedial period described in clause (y) hereof. For purposes of this definition: Whether a Reduction in Authority or Responsibility of the Grantee has occurred shall be determined in accordance with the criteria set forth below in the definition of Reduction in Authority or Responsibility; provided, however, that (A) a change in the Grantee’s reporting relationship to another employee who is within the same reporting level (as that term is used in Brunswick’s Delegation of Authority Policy or any successor policy); or (B) a reduction in the Grantee’s business unit’s budget or a reduction in the Grantee’s business unit’s head count or number of direct reports, by themselves, shall not constitute Good Reason. "Reduction in Authority or Responsibility" shall mean the assignment to the Grantee of any duties that are materially inconsistent in any respect with the Grantee’s position (which may include status, offices, titles, and reporting requirements), authority, duties, or responsibilities as in effect immediately prior to such assignment. It is intended by this definition that a Change in Control by itself, absent a Reduction in Authority or Responsibility as described above, will not constitute Good Reason. "Reduction in Compensation" shall mean (i) a reduction in the Grantee’s total annual compensation (defined as the sum of the Grantee’s base salary and target annual bonus) for any calendar or fiscal year, as applicable, to an amount that is less than the Grantee’s total annual compensation in effect immediately prior to such reduction, (ii) the elimination of any Brunswick incentive compensation plan in which Grantee is a participant without the adoption of a substantially comparable replacement plan, or (iii) the failure to provide Grantee with equity compensation opportunities or long-term cash incentive compensation opportunities that have a value that is substantially comparable to the value of the equity compensation opportunities provided to the Grantee immediately prior to the Change in Control. "Business Relocation Beyond a Reasonable Commuting Distance" shall mean that, as a result of either a relocation of Brunswick or a reassignment of the Grantee, a change occurs in the Grantee’s principal work location to a location that (i) is more than fifty (50) highway miles from the Grantee’s principal work location immediately prior to the relocation, and (ii) increases the Grantee’s commuting distance in highway mileage. "Permanent Disability" means the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. "Retirement" shall mean that the Grantee’s employment terminates for a reason other than Cause on or after the date on which either (i) the Grantee has either attained age 62 or (ii) the sum of the Grantee’s age plus years of continuous service from his or her latest hire date equals 70 or more. Notwithstanding anything to the contrary in these terms and conditions, for purposes of applying the favorable Retirement vesting terms set forth herein to grants made to residents of the European Union, the Grantee shall be deemed to be eligible for Retirement if, and only if, the Grantee has attained the retirement date specified in the retirement plan in which such Grantee participates. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan shall govern. The Human Resources and Compensation Committee of the Board administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
Purpose | To promote Brunswick’s long term financial interests and growth. |
Stock-Settled Stock Appreciation Right | The right to receive a payment in Brunswick Stock (as defined in the Plan) equal to the excess of the Stock’s Fair Market Value (as defined in the Plan) at exercise over the exercise price as established on the Grant Date attributable to the number of underlying Stock-Settled Stock Appreciation Rights (“Stock-Settled SARs”) granted. By exercising Stock-Settled SARs, you agree to the terms and conditions of the grant. |
Exercise Price | Closing price as reported on the New York Stock Exchange Composite Transactions Tape on the Grant Date. |
Grant Date | ___________, 2019 |
Award | ____________ Stock-Settled SARs |
Normal Vesting | One-fourth of the Stock-Settled SARs granted shall vest and become exercisable on each fo the first, second, third, and fourth anniversaries of the Grant Date, so long as employment by Brunswick or its designated affiliates continues on each such anniversary date. |
Vesting or Prorated Vesting Upon Retirement (as defined below) | Upon a termination of employment due to Retirement (as defined below) on or after the first anniversary of the Grant Date, and prior to a Change in Control (as defined in the Plan), vesting will continue on the normal vesting schedule described immediately above. Upon a termination of employment due to Retirement prior to the first anniversary of the Grant Date, and prior to a Change in Control, a pro-rata portion of the award will become vested and exercisable. For purposes of the foregoing sentence, a "pro-rata portion" will mean the product of (x) the number of shares underlying the Stock-Settled SAR award that would have vested on the applicable anniversary of the Grant Date pursuant to the normal vesting schedule and (y) a fraction, the numerator of which is the number of days that have elapsed since January 1 of the year of grant through the date of termination of the recipient’s employment, provided number does not exceed 365, and the denominator of which is 365. All remaining shares will be forfeited. The award shall be forfeited in its entirety upon a termination for Cause, even if the Grantee would otherwise be eligible for Retirement. |
Prorated Vesting Upon Involuntary Termination Without Cause | If the Grantee’s employment is terminated by Brunswick for a reason other than Cause or Permanent Disability, and the Grantee is not eligible for Retirement, a pro-rata portion of the award scheduled to vest on the next scheduled vesting date will become vested and exercisable as of the date such termination of employment. For purposes of the foregoing sentence, a "pro-rata portion" will mean the product of (i) the number of share underlying the Stock-Settled SAR award that would have vested on the next scheduled vesting date had employment continued through such date and (ii) a fraction, not greater than 365/365, the numerator of which is the number of days that have elapsed since January 1st of the year in which the most recent vesting date occurred (or, if the termination occurs prior to the first vesting date, January 1st of the year in which the Date of Grant occurred) through the date of termination of the Grantee’s employment, and the denominator of which is 365. |
Vesting Upon Death or Permanent Disability | The award shall vest on death or termination due to Permanent Disability. |
Vesting Upon Termination After Change in Control | If the award is effectively assumed or continued by the surviving or acquiring corporation in a Change in Control and (i) the Grantee’s employment terminated due to Retirement (and not for Cause or due to death or Permanent Disability), (ii) the Grantee resigns for Good Reason (as defined below), then in each case all of the award will be vested and distributed as of the date of such termination of employment. If the award is not effectively assumed or continued by the surviving or acquiring corporation in a Change in Control, the award shall vest in full aas of the date of the Change in Control. Determinations as to whether the award has been effectively assumed or continued by the surviving or acquiring corporation shall be made by the Human Resources and Compensation Committee, as constituted prior to the Change in Control. |
Grant Term | Vested Stock-Settled SARs will remain exercisable as follows: ▪ Until the termination of employment, if involuntarily terminated for Cause, including any termination for Cause of an employee who would otherwise be eligible for Retirement, or ▪ Based on eligibility as of the last day employed, the latest of the following: *30 days after voluntary termination; *One year after involuntary termination without Cause (for example, reductions-in-force or reorganization), or if your employer ceases to be a Subsidiary (as defined in the Plan) of Brunswick, unless the Committee provides otherwise; *Two years after termination following a Change in Control; *Five years after termination due to death or Permanent Disability; or *Five years after termination of employment due to Retirement. ▪ But, in no event may your Stock-Settled SAR be exercised later than ten years from the Grant Date. |
Exercise Settlement-Payment / Tax Withholding | On exercise, the number of shares of Brunswick Stock delivered will be determined as follows: The difference between the Fair Market Value on date of exercise and the per share exercise price will be determined. This difference will be multiplied by the number of Stock-Settled SARs being exercised to determine the total dollar gain. The total dollar gain will be divided by the Fair Market Value on date of exercise. If, upon exercise, you would be entitled to a fractional security, such fractional security shall be disregarded and the cash equivalent of such fractional security shall be applied to your tax withholding liability. Should you elect to have the required tax withholding satisfied by delivery of shares, then the ultimate Stock delivered will be reduced by an amount necessary to accommodate the required tax withholding. Tax withholding liability (to meet required FICA, federal, state, and local withholding) can be paid in any combination of the following: * Reduction in shares delivered to accommodate the required minimum tax withholding, or * Cash or check. |
Additional Terms and Conditions | Grants are subject to the terms of the Plan. To the extent any provision herein conflicts with the Plan, the Plan will govern. The Committee administers the Plan. The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate. Committee determinations are binding. "Cause" shall mean the Grantee’s willful misconduct in the performance of his or her duties. "Good Reason" shall have the meaning set forth in the employment agreement, if any, between the Grantee and Brunswick as in effect on the Grant Date, provided that if the Grantee is not a party to an employment agreement that contains such definition, then Good Reason means the occurrence of any of the following events without the Grantee’s express written consent: (a) a material breach by Brunswick of any provision of this Agreement; (b) Brunswick’s failure to pay any portion of Grantee’s compensation when due or to include Grantee in any bonus or incentive plan that applies to similarly situated employees of Brunswick; (c) Brunswick’s failure to provide, or continue to provide, Grantee with either the perquisites or employee health and welfare benefits (including, without limitation, life insurance, medical, dental, vision, long-term disability and similar benefits), generally provided to similarly situated employees of Brunswick; (d) a Reduction in Authority or Responsibility of the Grantee (as defined below); (e) a Reduction in Compensation (as defined below); and (f) a Business Relocation Beyond a Reasonable Commuting Distance (as defined below); provided, however, that the occurrence of any such condition shall not constitute Good Reason unless (x) the Grantee provides written notice to Brunswick of the existence of such condition not later than 60 days after the Grantee knows or reasonably should know of the existence of such condition, (y) Brunswick fails to remedy such condition within 30 days after receipt of such notice and (z) Grantee resigns due to the existence of such condition within 60 days after the expiration of the remedial period described in clause (y) hereof. For purposes of this definition: Whether a Reduction in Authority or Responsibility of the Grantee has occurred shall be determined in accordance with the criteria set forth below in the definition of Reduction in Authority or Responsibility; provided, however, that (A) a change in the Grantee’s reporting relationship to another employee who is within the same reporting level (as that term is used in Brunswick’s Delegation of Authority Policy or any successor policy); or (B) a reduction in the Grantee’s business unit’s budget or a reduction in the Grantee’s business unit’s head count or number of direct reports, by themselves, shall not constitute Good Reason. "Reduction in Authority or Responsibility" shall mean the assignment to the Grantee of any duties that are materially inconsistent in any respect with the Grantee’s position (which may include status, offices, titles, and reporting requirements), authority, duties, or responsibilities as in effect immediately prior to such assignment. It is intended by this definition that a Change in Control by itself, absent a Reduction in Authority or Responsibility as described above, will not constitute Good Reason. "Reduction in Compensation" shall mean (i) a reduction in the Grantee’s total annual compensation (defined as the sum of the Grantee’s base salary and target annual bonus) for any calendar or fiscal year, as applicable, to an amount that is less than the Grantee’s total annual compensation in effect immediately prior to such reduction, (ii) the elimination of any Brunswick incentive compensation plan in which Grantee is a participant without the adoption of a substantially comparable replacement plan, or (iii) the failure to provide Grantee with equity compensation opportunities or long-term cash incentive compensation opportunities that have a value that is substantially comparable to the value of the equity compensation opportunities provided to the Grantee immediately prior to the Change in Control. "Business Relocation Beyond a Reasonable Commuting Distance" shall mean that, as a result of either a relocation of Brunswick or a reassignment of the Grantee, a change occurs in the Grantee’s principal work location to a location that (i) is more than fifty (50) highway miles from the Grantee’s principal work location immediately prior to the relocation, and (ii) increases the Grantee’s commuting distance in highway mileage. "Permanent Disability" means the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. "Retirement" shall mean that the Grantee’s employment terminates for a reason other than Cause on or after the date on which either (i) the Grantee has either attained age 62 or (ii) the sum of the Grantee’s age plus years of continuous service from his or her latest hire date equals 70 or more. Notwithstanding anything to the contrary in these terms and conditions, for purposes of applying the favorable Retirement vesting terms set forth herein to grants made to residents of the European Union, the Grantee shall be deemed to be eligible for Retirement if, and only if, the Grantee has attained the retirement date specified in the retirement plan in which such Grantee participates. |
This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. The Plan may be amended, suspended or terminated at any time. The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction. |
a. | To the extent that the Nonexempt Compensation is otherwise payable in cash to a Covered Executive, payment of such cash shall be deferred under the Automatic Cash Deferral Account, in accordance with this Section 3. |
b. | To the extent that the Nonexempt Compensation is otherwise payable in Company Stock, delivery of those shares shall be deferred under the Automatic Stock Deferral Account, in accordance with this Section 3. |
c. | Nothing in the Plan shall be construed to require a deferral of the Covered Executive’s salary or any compensation or benefits payable to the Covered Executive in a form other than cash or Company Stock. |
d. | No compensation earned on or after January 1, 2018 shall be deferred under the Plan, except for Nonexempt Compensation payable pursuant to a written binding agreement in effect as of January 1, 2018 that vests and becomes payable after such date, or as otherwise required under Section 409A of the Code. |
a. | Unless a Covered Executive makes an election at such time and in such form as may be determined by the Committee from time to time to have paragraph (b) next below apply, the Automatic Cash Deferral Account shall be credited as of the last day of each calendar month with interest for that month at a rate equal to the greater of: (a) the prime rate in effect at JPMorgan Chase on the first day of the month plus two percentage points, or (b) the Company’s short-term borrowing rate. |
b. | If a Covered Executive elects application of this paragraph (b), the Company, after consultation with the Covered Executive, may invest amounts credited to the Covered Executive’s Automatic Cash Deferral Account in securities and other assets as the Company may determine. The Company and its agents shall not incur any liability by reason of purchasing, or failing to purchase, any security or other asset in good faith. A Covered Executive’s Automatic Cash Deferral Account shall be charged or credited as of the last day of each fiscal year of the Company, and at such other times as the balance in the Automatic Cash Deferral Account shall be determined, to reflect (i) dividends, interest or other earnings on any such investments, reduced by the cost of funds (for the period of deferral) for the amount of any taxes incurred by the Company with respect thereto; (ii) any gains or losses (whether or not realized) on such investment; (iii) the cost of funds (for the period of deferral) for the amount of any taxes incurred with respect to net gains realized on any such investments, taking into account any applicable capital loss carryovers and carrybacks, provided that in computing such taxes, capital gains and losses on assets of the Company other than such investments shall be disregarded; and (iv) any direct expenses incurred by the Company in such fiscal year or other applicable period which would not have been incurred but for the investment of |
a. | Distribution of Nondeferred Amounts. As of December 15th of each calendar year in which any Nonexempt Compensation is credited to a Covered Executive’s Automatic Cash Deferral Account or Automatic Stock Deferral Account pursuant to Section 3.2 or 3.3 hereof, the Company shall determine the aggregate amount of Nonexempt Compensation paid or payable to the Covered Executive for such calendar year. Any amounts credited to the Covered Executive’s Automatic Cash Deferral Account or Automatic Stock Deferral Account for such calendar year shall be distributed to the Covered Executive on or before December 31st of such calendar year to the extent such distributions can be made without causing the Covered Executive’s aggregate Nonexempt Compensation for such calendar year to exceed $1,500,000, and the remainder of the amounts credited to the Covered Executive’s Automatic Cash Deferral Account and Automatic Stock Deferral Account shall be distributed to the Covered Executive in accordance with Section 4.1(b). Unless the Committee or its delegate determines otherwise, the amounts distributed pursuant to this Section 4.1(a) for a calendar year shall be distributed from the Covered Executive’s Automatic Cash Deferral Account and Automatic Stock Deferral Account in the same proportion by which Nonexempt Compensation was credited to such accounts during such calendar year. The number of shares of Company Stock distributed from the Covered Executive’s Automatic Stock Deferral Account pursuant to this Section 4.1(a) shall be determined based on the Fair Market Value of a share of Company Stock as of December 15th of the applicable calendar year, as determined in accordance with the terms of the Company’s 2014 Stock Incentive Plan, or any successor thereto. |
b. | Distribution of Deferred Amounts. Amounts credited to a Covered Executive’s Automatic Cash Deferral Account and Automatic Stock Deferral Account (and not previously distributed to the Covered Executive pursuant to Section 4.1(a), above) shall be paid or distributed upon the earlier of the following: |
a. | Subject to the provisions of subsection 1.2 (relating to changes in the Code), no amendment or termination may materially adversely affect the rights of any Covered Executive or beneficiary under the Plan. |
b. | Notwithstanding any other provision of the Plan to the contrary, neither the Committee nor the Board may delegate its rights and responsibilities under this Section 7; provided, however, that the Board may, from time to time, substitute itself, or another committee of the Board, for the Human Resources and Compensation Committee under this Section 7. |
1. | I have reviewed this Quarterly Report on Form 10-Q of Brunswick Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
BRUNSWICK CORPORATION | ||
May 1, 2019 | By: | /s/ DAVID M. FOULKES |
David M. Foulkes | ||
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Brunswick Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
BRUNSWICK CORPORATION | ||
May 1, 2019 | By: | /s/ WILLIAM L. METZGER |
William L. Metzger | ||
Senior Vice President and Chief Financial Officer |
BRUNSWICK CORPORATION | ||
May 1, 2019 | By: | /s/ DAVID M. FOULKES |
David M. Foulkes | ||
Chief Executive Officer |
BRUNSWICK CORPORATION | ||
May 1, 2019 | By: | /s/ WILLIAM L. METZGER |
William L. Metzger | ||
Senior Vice President and Chief Financial Officer |
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Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Apr. 29, 2019 |
|
Entity Information Line Items [Abstract] | ||
Entity Registrant Name | BRUNSWICK CORP | |
Entity Central Index Key | 0000014930 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 87,076,644 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 30, 2019 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Mar. 30, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
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Current Assets | |||
Accounts and Notes Receivable, Allowances | $ 10.0 | $ 11.3 | $ 9.4 |
Shareholders' equity | |||
Common Stock, Shares Authorized (in Shares) | 200,000,000 | 200,000,000 | 200,000,000 |
Common Stock, Par Value (in Dollars per Share) | $ 0.75 | $ 0.75 | $ 0.75 |
Common Stock, Shares Issued (in Shares) | 102,538,000 | 102,538,000 | 102,538,000 |
Common Stock, Shares Outstanding (in Shares) | 87,063,000 | 86,757,000 | 87,277,000 |
Treasury Stock, Shares (in Shares) | 15,475,000 | 15,781,000 | 15,261,000 |
Condensed Consolidated Statements of Shareholders' Equity Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions |
Total |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Treasury Stock [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
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Balance, at Beginning of the Year at Dec. 31, 2017 | $ 1,482.9 | $ 76.9 | $ 374.4 | $ 1,966.8 | $ (575.4) | $ (359.8) |
Net Earnings (Loss) | 72.9 | 0.0 | 0.0 | 72.9 | 0.0 | 0.0 |
Other Comprehensive Income | 11.0 | 0.0 | 0.0 | 0.0 | 0.0 | 11.0 |
Dividends | (16.6) | 0.0 | 0.0 | (16.6) | 0.0 | 0.0 |
Compensation Plans and Other | (5.7) | 0.0 | (17.0) | 0.0 | 11.3 | 0.0 |
Common Stock Repurchases | (35.0) | 0.0 | 0.0 | 0.0 | (35.0) | 0.0 |
Balance, at End of Quarter at Mar. 31, 2018 | 1,480.8 | 76.9 | 357.4 | 1,994.4 | (599.1) | (348.8) |
ASU No. 2014-09 Adoption | (28.7) | 0.0 | 0.0 | (28.7) | 0.0 | 0.0 |
Balance, at Beginning of the Year at Dec. 31, 2018 | 1,582.6 | 76.9 | 371.1 | 2,135.7 | (638.0) | (363.1) |
Net Earnings (Loss) | (36.3) | 0.0 | 0.0 | (36.3) | 0.0 | 0.0 |
Other Comprehensive Income | 1.0 | 0.0 | 0.0 | 0.0 | 0.0 | 1.0 |
Dividends | (18.3) | 0.0 | 0.0 | (18.3) | 0.0 | 0.0 |
Compensation Plans and Other | (2.1) | 0.0 | (11.2) | 0.0 | 9.1 | 0.0 |
Balance, at End of Quarter at Mar. 30, 2019 | $ 1,526.9 | $ 76.9 | $ 359.9 | $ 2,081.1 | $ (628.9) | $ (362.1) |
Condensed Consolidated Statements of Shareholders' Equity Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | |
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Mar. 30, 2019 |
Mar. 31, 2018 |
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Statement of Stockholders' Equity [Abstract] | ||
Cash Dividends Declared Per Common Share (in Dollars per Share) | $ 0.21 | $ 0.19 |
Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | Significant Accounting Policies Interim Financial Statements. The unaudited interim condensed consolidated financial statements of Brunswick Corporation (Brunswick or the Company) have been prepared pursuant to Securities and Exchange Commission (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 2018 Annual Report on Form 10-K for the year ended December 31, 2018 (the 2018 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 first quarter of fiscal year 2019 ended on March 30, 2019 and the first quarter of fiscal year 2018 ended on March 31, 2018. On March 1, 2018, the Company's Board of Directors authorized proceeding with separating its Fitness business from the Company portfolio. While the Company continues to maintain its preparedness for a spin-off of the Fitness business, there has been a strong level of buyer interest in the sales process. Should the separation take the form of a sale, the Company anticipates a sale would be announced in the second quarter of 2019. Recently Adopted Accounting Standards Recognition of Leases: In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases, (new leasing standard), which amended the Accounting Standards Codification (ASC) to require lessees to recognize assets and liabilities on the balance sheet for all leases with terms greater than twelve months. On January 1, 2019, the Company adopted the new leasing standard and all related amendments. The Company elected the optional transition method provided by the FASB in ASU 2018-11, Leases (Topic 842): Targeted Improvements, and as a result, has not restated its condensed consolidated financial statements for prior periods presented. The Company has elected the practical expedients upon transition to retain the lease classification and initial direct costs for any leases that existed prior to adoption. The Company has also not reassessed whether any contracts entered into prior to adoption are leases. The standard did not have a material impact on the Company's Condensed Consolidated Statements of Comprehensive Income. The cumulative effect of the changes made to the Company's Consolidated Balance Sheet as of January 1, 2019 for the adoption of the new leasing standard was as follows:
The Company determines if an arrangement is a lease at lease inception. Operating lease right-of-use (ROU) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company's lease contracts do not include an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date in determining the present value of future payments. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The operating lease ROU asset also includes any initial direct costs and lease payments made prior to lease commencement, and excludes lease incentives incurred. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has certain lease agreements that contain both lease and non-lease components, which it has elected to account for as a single lease component for all asset classes. Measurement of Goodwill Impairment: In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment. The standard simplifies the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test. Instead, goodwill impairment is measured as the difference between the fair value and the carrying value of the reporting unit. The standard also clarifies the treatment of the income tax effect of tax-deductible goodwill when measuring goodwill impairment loss. The Company early adopted this amendment on January 1, 2019. Tax Effects in Other Comprehensive Income: In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI), which requires certain new disclosures and permits companies to reclassify the disproportionate income tax effects of the Tax Cuts and Jobs Act of 2017 on items within AOCI to retained earnings. The Company currently records its stranded tax effects in AOCI using the portfolio approach. Upon adoption, the Company elected not to reclassify stranded tax effects in AOCI to retained earnings and there was no impact on its consolidated financial statements. Hedge Accounting: In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities, to simplify the application of hedge accounting and to better align an entity's risk management activities with the financial reporting of hedging relationships. The Company adopted this ASC amendment and it did not have a material impact on its consolidated financial statements. |
Revenue Recognition (Notes) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | Revenue Recognition The following table presents the Company's revenue into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors:
As of January 1, 2019, $178.7 million of contract liabilities associated with extended warranties, customer deposits, and product rebates were reported in Accrued expenses and Other Long-term liabilities and $28.2 million of this amount was recognized as revenue during the three months ended March 30, 2019. As of March 30, 2019, total contract liabilities were $187.7 million. The total amount of the transaction price allocated to unsatisfied performance obligations as of March 30, 2019 was $163.1 million for contracts greater than one year, which includes both extended warranties and product rebates. The Company expects to recognize approximately $45.3 million of this amount in 2019, $57.7 million in 2020, and $60.1 million thereafter. |
Restructuring, Exit and Integration Activities |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring, Exit and Integration Activities [Text Block] | Restructuring, Exit, Integration and Impairment Activities As discussed in Note 9 – Goodwill and Other Intangibles, in the first quarter of 2019 the Company determined that the carrying value of its Fitness reporting unit was in excess of its fair value. As a result, the Company recorded a goodwill impairment charge of $137.2 million within the Fitness segment. In the first quarter of 2019, the Company recorded restructuring charges within the Boat segment related to consolidating its commercial and government products operations in order to rationalize its product line to better align with customer demand. In the first quarter of 2019, the Company recorded charges within Corporate for headcount reductions aimed at streamlining the cost structure. In the first quarter of 2019 and 2018, the Company implemented headcount reductions in the Fitness segment aimed at improving general operating efficiencies. The Company recorded restructuring, exit, integration and impairment charges in the Condensed Consolidated Statements of Comprehensive Income as a result of the activities described above. The following table is a summary of the expense associated with the restructuring, exit, integration and impairment activities for the three months ended March 30, 2019 and March 31, 2018, as discussed above:
(A) Total cash payments for the three months ended March 31, 2018 also include $0.3 million of payments for Corporate restructuring, exit, integration and impairment charges. Cash payments may include payments related to prior period charges. (B) Restructuring, exit, integration and impairment charges accrued as of March 31, 2018 also include $0.2 million of Corporate charges. The accrued charges as of March 30, 2019 are expected to be paid during 2019 and 2020. |
Acquisitions (Notes) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination Disclosure [Text Block] | Acquisitions 2018 Acquisitions On August 9, 2018, the Company completed its acquisition of the Global Marine & Mobile business of Power Products Holdings, LLC (Power Products) for $909.6 million in cash, on a cash-free, debt-free basis. Brunswick used proceeds from a combination of 364-day, three-year and five-year term loans (Term Loans) totaling $800.0 million as described in the 2018 Form 10-K along with cash on hand to fund this acquisition. Power Products is a leading provider of electrical products to marine and other recreational and specialty vehicle markets. The acquisition advances Brunswick’s leadership by adding integrated electrical systems solutions to the marine market and an array of other mobile, specialty vehicle and industrial applications. Power Products is managed as part of the Marine Engine segment. The purchase price allocation for the assets acquired and liabilities assumed is preliminary and subject to change within the allowed measurement period as the Company finalizes its fair value estimates. The following table is a summary of the assets acquired, liabilities assumed and net cash consideration paid for the Power Products acquisition during 2018:
(A) The goodwill recorded for the acquisition of Power Products is partially deductible for tax purposes. (B) Includes $4.4 million of purchase accounting adjustments in the first quarter of 2019 related to contingency reserves. Pro Forma Financial Information (Unaudited) The pro forma information has been prepared as if the Power Products acquisition and the related debt financing had occurred on January 1, 2018. These pro forma results are based on estimates and assumptions which the Company believes to be reasonable. They are not the results that would have been realized had the acquisition actually occurred on January 1, 2018 and are not necessarily indicative of Brunswick's consolidated net earnings in future periods. The pro forma results include adjustments primarily related to interest expense on the Term Loans and amortization of intangible assets.
The pro forma results reflect an effective income tax rate of 23.9 percent and 22.5 percent for the three months ended March 30, 2019 and March 31, 2018, respectively. |
Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | 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 15 in the Notes to Consolidated Financial Statements in the 2018 Form 10-K for further details regarding the Company's financial instruments and hedging policies. Foreign Currency Derivatives. Forward exchange contracts outstanding at March 30, 2019, December 31, 2018 and March 31, 2018 had notional contract values of $493.8 million, $424.1 million and $436.0 million, respectively. There were no option contracts outstanding at March 30, 2019. Option contracts outstanding at December 31, 2018 and March 31, 2018 had notional contract values of $27.2 million and $18.0 million, respectively. The forward contracts outstanding at March 30, 2019 mature through 2020 and mainly relate to the Euro, Japanese yen, Canadian dollar and Australian dollar. As of March 30, 2019, the Company estimates that during the next 12 months, it will reclassify approximately $6.8 million of net gains (based on current rates) from Accumulated other comprehensive loss to Cost of sales. Interest Rate Derivatives. The Company enters into fixed-to-floating interest rate swaps to convert a portion of the Company's long-term debt from fixed to floating rate debt. As of March 30, 2019, December 31, 2018 and March 31, 2018, the outstanding swaps had notional contract values of $200.0 million, of which $150.0 million corresponds to the Company's 4.625 percent Senior notes due 2021 and $50.0 million corresponds to the Company's 7.375 percent Debentures due 2023. These instruments have been designated as fair value hedges, with the fair value recorded in long-term debt. As of March 30, 2019, December 31, 2018 and March 31, 2018, the Company had $2.4 million, $2.5 million and $3.2 million, respectively, of net deferred losses associated with all settled forward-starting interest rate swaps, which were designated as cash flow hedges with gains and losses included in Accumulated other comprehensive loss. As of March 30, 2019, the Company estimates that during the next 12 months, it will reclassify approximately $0.6 million of net losses resulting from settled forward-starting interest rate swaps from Accumulated other comprehensive loss to Interest expense. As of March 30, 2019, December 31, 2018 and March 31, 2018, the fair values of the Company’s derivative instruments were:
The effect of derivative instruments on the Condensed Consolidated Statements of Comprehensive Income for the three months ended March 30, 2019 and March 31, 2018 was:
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. At March 30, 2019, December 31, 2018 and March 31, 2018, the fair value of the Company’s long-term debt was approximately $1,363.0 million, $1,292.9 million and $497.6 million, respectively, and was determined using Level 1 and Level 2 inputs described in Note 8 to the Notes to Consolidated Financial Statements in the 2018 Form 10-K. The carrying value of long-term debt, including current maturities, was $1,310.1 million, $1,226.4 million and $438.8 million as of March 30, 2019, December 31, 2018 and March 31, 2018, respectively. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 30, 2019:
The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2018:
The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2018:
In addition to the items shown in the tables above, refer to Note 18 in the Notes to Consolidated Financial Statements in the 2018 Form 10-K for further discussion regarding the fair value measurements associated with the Company’s postretirement benefit plans. |
Share-Based Compensation |
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Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation Under the Brunswick Corporation 2014 Stock Incentive Plan, the Company may grant stock appreciation rights (SARs), non-vested stock awards and performance awards to executives, other employees and non-employee directors from treasury shares and from authorized, but unissued, shares of common stock initially available for grant, in addition to: (i) the forfeiture of past awards; (ii) shares not issued upon the net settlement of SARs; or (iii) shares delivered to or withheld by the Company to pay the withholding taxes related to awards. As of March 30, 2019, 4.9 million shares remained available for grant. Non-Vested Stock Awards The Company grants both stock-settled and cash-settled non-vested stock units and awards to key employees as determined by management and the Human Resources and Compensation Committee of the Board of Directors. The Company granted 0.3 million of stock awards during both the three months ended March 30, 2019 and March 31, 2018. The Company recognizes the cost of non-vested stock units and awards on a straight-line basis over the requisite vesting period. Additionally, cash-settled non-vested stock units and awards are recorded as a liability on the balance sheet and adjusted to fair value each reporting period through stock compensation expense. During the three months ended March 30, 2019 and March 31, 2018, the Company charged $2.6 million and $2.5 million, respectively, to compensation expense for non-vested stock awards. As of March 30, 2019, there was $27.1 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements. The Company expects this cost to be recognized over a weighted average period of 2.4 years. Performance Awards In both February of 2019 and 2018, the Company granted 0.1 million performance shares to certain senior executives. Performance share awards are based on three performance measures: a cash flow return on investment (CFROI) measure, an operating margin (OM) measure and a total shareholder return (TSR) modifier. Performance shares are earned based on a three-year performance period commencing at the beginning of the calendar year of each grant. The performance shares earned are then subject to a TSR modifier based on the Company's stock returns measured against stock returns of a predefined comparator group over a three-year performance period. Additionally, in February 2019 and 2018, the Company granted 24,605 and 24,490 performance shares, respectively, to certain officers and certain senior managers based on the respective measures and performance periods described above but excluding the TSR modifier. During the three months ended March 30, 2019 and March 31, 2018, the Company recognized a charge of $0.7 million and a benefit of $0.5 million, respectively, based on projections of probable attainment of the performance measures and the projected TSR modifier used to determine the performance awards. The fair values of the senior executives' performance share award grants with a TSR modifier for grants in 2019 and 2018 were $49.64 and $61.59, respectively, which were estimated using the Monte Carlo valuation model, and incorporated the following assumptions:
The fair value of certain officers' and certain senior managers' performance awards granted based solely on the CFROI and OM performance factors was $47.61 and $57.19 in 2019 and 2018, respectively, which was equal to the stock price on the date of grant in 2019 and 2018, respectively, less the present value of expected dividend payments over the vesting period. As of March 30, 2019, the Company had $8.4 million of total unrecognized compensation cost related to performance awards. The Company expects this cost to be recognized over a weighted average period of 1.5 years. Director Awards The Company issues stock awards to non-employee directors in accordance with the terms and conditions determined by the Nominating and Corporate Governance Committee of the Board of Directors. A portion of each director’s annual fee is paid in Brunswick common stock, the receipt of which may be deferred until a director retires from the Board of Directors. Each director may elect to have the remaining portion paid in cash, in Brunswick common stock distributed at the time of the award, or in deferred Brunswick common stock with a 20 percent premium. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies There were no material changes during the three months ended March 30, 2019 to the financial commitments or the legal and environmental contingencies that were discussed in Note 14 in the Notes to Consolidated Financial Statements in the 2018 Form 10-K. Product Warranties The following activity related to product warranty liabilities was recorded in Accrued expenses during the three months ended March 30, 2019 and March 31, 2018:
Extended 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 three months ended March 30, 2019 and March 31, 2018:
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Goodwill and Intangibles |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangibles [Text Block] | Goodwill and Other Intangibles Changes in the Company's goodwill during the three months ended March 30, 2019, by segment, are summarized below:
Changes in the Company's goodwill during the three months ended March 31, 2018, by segment, are summarized below:
Due to recent, significant progress made toward the planned Fitness business separation and the strong level of buyer interest in the sales process, the Company re-evaluated the fair value of the Fitness reporting unit in the first quarter of 2019. To assess fair value, the Company performed a quantitative test using a combination of the market approach and the income approach. Fair value under the market approach was informed by significant progress made on the sale process during the quarter. The income approach calculates the fair value of the reporting unit using a discounted cash flow approach utilizing a Gordon Growth model. Internally forecasted future cash flows are discounted using a weighted average cost of capital (Discount Rate) developed for each reporting unit. The Discount Rate is developed using market observable inputs, as well as considering whether or not there is a measure of risk related to the specific reporting unit’s forecasted performance. As a result of performing the fair value test, the Company determined the fair value of the Fitness reporting unit was less than its carrying value resulting in a pre-tax goodwill impairment charge of $137.2 million ($103.0 million after tax) for the three months ended March 30, 2019. The impairment was calculated in accordance with ASU 2017-04 as discussed in Note 1 - Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements. The charge was recorded within the Company’s Fitness segment within Restructuring, exit, integration and impairment in the Condensed Consolidated Statements of Comprehensive Income. Adjustments for the three months ended March 30, 2019 mainly relate to refining purchase accounting related to the Power Products acquisition. See Note 4 – Acquisitions for further details on the Company's acquisitions. Adjustments in both periods include the effect of foreign currency translation on goodwill denominated in currencies other than the U.S. dollar. As of March 30, 2019 the Company had $137.2 million of accumulated impairment loss on Goodwill. There was no accumulated impairment loss on Goodwill as of December 31, 2018 and March 31, 2018. The Company's intangible assets, included within Other intangibles, net on the Condensed Consolidated Balance Sheets as of March 30, 2019, December 31, 2018 and March 31, 2018, are summarized by intangible asset type below:
The Company's intangible assets, included within Other intangibles, net on the Condensed Consolidated Balance Sheets as of March 30, 2019, December 31, 2018 and March 31, 2018, are summarized by segment below:
Other intangible assets primarily consist of patents. Gross amounts and related accumulated amortization amounts include adjustments related to the impact of foreign currency translation. Aggregate amortization expense for intangibles was $9.8 million and $2.2 million for the three months ended March 30, 2019 and March 31, 2018, respectively. |
Segment Data |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Data | Segment Data Reportable Segments The following table sets forth net sales and operating earnings (loss) of each of the Company's reportable segments for the three months ended March 30, 2019 and March 31, 2018:
The following table sets forth total assets of each of the Company's reportable segments:
As of March 30, 2019, December 31, 2018 and March 31, 2018, the Company had $8.9 million, $8.9 million and $12.8 million, respectively, of net assets classified as held-for-sale within Net property in the Condensed Consolidated Balance Sheets. |
Comprehensive Income |
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Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income | Comprehensive Income Accumulated other comprehensive loss 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, all net of tax. Changes in the components of Accumulated other comprehensive loss, all net of tax, for the three months ended March 30, 2019 and March 31, 2018 were as follows:
The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the three months ended March 30, 2019:
(A) The tax effects for the three months ended March 30, 2019 were $0.2 million for foreign currency translation, $0.0 million for net actuarial losses arising during the period and $(0.5) million for derivatives. (B) See the table below for the tax effects for the three months ended March 30, 2019. The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the three months ended March 31, 2018:
(A) The tax effects for the three months ended March 31, 2018 were $0.2 million for foreign currency translation, $0.1 million for net actuarial losses arising during the period and $0.8 million for derivatives. (B) See the table below for the tax effects for the three months ended March 31, 2018. The following table presents reclassification adjustments out of Accumulated other comprehensive loss during the three months ended March 30, 2019 and March 31, 2018:
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Income Taxes |
3 Months Ended |
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Mar. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recognized an income tax benefit of $(11.4) million and an income tax provision of $27.2 million for the three months ended March 30, 2019 and March 31, 2018, respectively, which included a net benefit of $(0.6) million and a net charge of $6.7 million, respectively. The net benefit of $(0.6) million related to certain special tax items. The net charge of $6.7 million was due primarily to updates related to 2017 tax reform. The effective tax rate, which is calculated as the income tax provision (benefit) as a percentage of earnings (loss) before income taxes, for the three months ended March 30, 2019 and March 31, 2018 was 23.9 percent and 27.2 percent, respectively. No deferred income taxes have been provided as of March 30, 2019, December 31, 2018 or March 31, 2018 on the applicable undistributed earnings of the non-U.S. subsidiaries where the indefinite reinvestment assertion has been applied. If at some future date these earnings cease to be indefinitely reinvested and are repatriated, the Company may be subject to additional U.S. income taxes and foreign withholding taxes on such amounts. The Company continues to provide deferred taxes, as required, on the undistributed net earnings of foreign subsidiaries and unconsolidated affiliates that are not deemed to be indefinitely reinvested in operations outside the United States. As of March 30, 2019, December 31, 2018 and March 31, 2018, the Company had $2.7 million, $2.3 million and $2.8 million of gross unrecognized tax benefits, including interest, respectively. The Company believes it is reasonably possible that the total amount of gross unrecognized tax benefits as of March 30, 2019 could decrease by approximately $1.0 million in the next 12 months due to settlements with taxing authorities or lapses in the applicable statute of limitations. Due to the various jurisdictions in which the Company files tax returns and the uncertainty regarding the timing of the settlement of tax audits, it is possible that there could be significant changes in the amount of unrecognized tax benefits in 2019, but the amount cannot be estimated at this time. The Company is regularly audited by federal, state and foreign tax authorities. The Internal Revenue Service (IRS) has completed its field examination and has issued its Revenue Agents Report through the 2014 tax year and all open issues have been resolved. The Company is currently open to tax examinations by the IRS for the 2014 through 2017 tax years. Primarily as a result of filing amended returns, which were generated by the closing of federal income tax audits, the Company is still open to state and local tax audits in major tax jurisdictions dating back to the 2012 taxable year. The Company is no longer subject to income tax examinations by any major foreign tax jurisdiction for years prior to 2013. |
Postretirement Benefits |
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Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits | Postretirement Benefits The Company has defined contribution plans, qualified and nonqualified defined benefit pension plans and other postretirement benefit plans covering substantially all of its employees. The Company's contributions to its defined contribution plans include matching and annual discretionary contributions which are based on various percentages of compensation, and in some instances are based on the amount of the employees' contributions to the plans. See Note 18 in the Notes to Consolidated Financial Statements in the 2018 Form 10-K for further details regarding these plans. Pension and other postretirement benefit costs included the following components for the three months ended March 30, 2019 and March 31, 2018:
Employer Contributions and Benefit Payments. The Company did not make contributions to its qualified pension plans during the three months ended March 30, 2019 or March 31, 2018. During the three months ended March 30, 2019 and March 31, 2018, the Company contributed $1.5 million and $1.0 million, respectively, to fund benefit payments to its nonqualified pension plan. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Text Block] | Debt In March 2019, the Company issued an aggregate principal amount of $230.0 million of its 6.375% Senior Notes (2049 Notes) due April 2049 in a public offering, which resulted in aggregate net proceeds to the Company of $222.0 million. Net proceeds from the offering of the 2049 Notes were used to prepay all of the $150.0 million, 3-year tranche loan due 2021 and for general corporate purposes. Interest on the 2049 Notes is due quarterly, commencing on April 15, 2019. The Company may, at its option, redeem the 2049 Notes on or after (but not prior to) April 15, 2024, either in whole or in part, at a redemption price equal to 100 percent of the principal amount plus any accrued and unpaid interest. Additionally, in the event of a change in control, the Company may be required to repurchase some or all of its 2049 Notes at a price equal to 101 percent of the principal amount plus any accrued and unpaid interest. The 2049 Notes are unsecured and do not contain subsidiary guarantees. Scheduled maturities, net:
The Company maintains an Amended and Restated Credit Agreement (Credit Facility) providing for $400.0 million of borrowing capacity in effect through September 2023. The Credit Facility includes provisions to add up to $100.0 million of additional borrowing capacity and extend the facility for two additional one-year terms, subject to lender approval. During the first quarter of 2019, borrowings under the Credit Facility totaled $215.0 million, all of which were repaid during the quarter. No borrowings were outstanding as of March 30, 2019, and available borrowing capacity totaled $396.4 million, net of $3.6 million of letters of credit outstanding under the Credit Facility. The maximum amount utilized under the Credit Facility during the three months ended March 30, 2019, including letters of credit outstanding, was $163.4 million. See Note 17 in the Notes to Consolidated Financial Statements in the 2018 Form 10-K for details regarding the Company's Credit Facility. As of March 30, 2019, the Company was in compliance with the financial covenants associated with the Company's debt. |
Leases (Notes) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee, Operating Leases [Text Block] | Leases The Company has operating lease agreements for offices, branches, factories, distribution and service facilities and certain personal property. Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. Finance leases are not material to the Company's condensed consolidated financial statements. Several leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more. The exercise of lease renewal options is at our sole discretion. Certain of our lease agreements include rental payments that vary based on changes in volume activity, storage activity, or changes in the Consumer Price Index (CPI) or other indices. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. A summary of the Company's lease assets and lease liabilities as of March 30, 2019 is as follows:
A summary of the Company's total lease cost for the three months ended March 30, 2019 is as follows:
(A) Includes total short-term lease cost which is immaterial. The Company's maturity analysis of its operating lease liabilities as of March 30, 2019 is as follows:
The total weighted-average discount rate and remaining lease term for the Company's operating leases was 4.92 percent and 5.15 years, respectively, as of March 30, 2019. Total operating cash flows from operating leases were $7.3 million for the three months ended March 30, 2019. The following represents the Company's future minimum rental payments at December 31, 2018 for agreements classified as operating leases under ASC 840 with non-cancelable terms in excess of one year:
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Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Accounting | Interim Financial Statements. The unaudited interim condensed consolidated financial statements of Brunswick Corporation (Brunswick or the Company) have been prepared pursuant to Securities and Exchange Commission (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. |
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Fiscal Period Policy | 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 quarter of fiscal year 2019 ended on March 30, 2019 and the first quarter of fiscal year 2018 ended on March 31, 2018. |
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Recent Accounting Pronouncements | Recently Adopted Accounting Standards Recognition of Leases: In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases, (new leasing standard), which amended the Accounting Standards Codification (ASC) to require lessees to recognize assets and liabilities on the balance sheet for all leases with terms greater than twelve months. On January 1, 2019, the Company adopted the new leasing standard and all related amendments. The Company elected the optional transition method provided by the FASB in ASU 2018-11, Leases (Topic 842): Targeted Improvements, and as a result, has not restated its condensed consolidated financial statements for prior periods presented. The Company has elected the practical expedients upon transition to retain the lease classification and initial direct costs for any leases that existed prior to adoption. The Company has also not reassessed whether any contracts entered into prior to adoption are leases. The standard did not have a material impact on the Company's Condensed Consolidated Statements of Comprehensive Income. The cumulative effect of the changes made to the Company's Consolidated Balance Sheet as of January 1, 2019 for the adoption of the new leasing standard was as follows:
The Company determines if an arrangement is a lease at lease inception. Operating lease right-of-use (ROU) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company's lease contracts do not include an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date in determining the present value of future payments. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The operating lease ROU asset also includes any initial direct costs and lease payments made prior to lease commencement, and excludes lease incentives incurred. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has certain lease agreements that contain both lease and non-lease components, which it has elected to account for as a single lease component for all asset classes. Measurement of Goodwill Impairment: In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment. The standard simplifies the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test. Instead, goodwill impairment is measured as the difference between the fair value and the carrying value of the reporting unit. The standard also clarifies the treatment of the income tax effect of tax-deductible goodwill when measuring goodwill impairment loss. The Company early adopted this amendment on January 1, 2019. Tax Effects in Other Comprehensive Income: In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI), which requires certain new disclosures and permits companies to reclassify the disproportionate income tax effects of the Tax Cuts and Jobs Act of 2017 on items within AOCI to retained earnings. The Company currently records its stranded tax effects in AOCI using the portfolio approach. Upon adoption, the Company elected not to reclassify stranded tax effects in AOCI to retained earnings and there was no impact on its consolidated financial statements. Hedge Accounting: In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities, to simplify the application of hedge accounting and to better align an entity's risk management activities with the financial reporting of hedging relationships. The Company adopted this ASC amendment and it did not have a material impact on its consolidated financial statements. |
Significant Accounting Policies (Tables) |
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Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | The cumulative effect of the changes made to the Company's Consolidated Balance Sheet as of January 1, 2019 for the adoption of the new leasing standard was as follows:
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Revenue Recognition (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Table Text Block] | The following table presents the Company's revenue into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors:
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Restructuring, Exit and Integration Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs [Table Text Block] | The following table is a summary of the expense associated with the restructuring, exit, integration and impairment activities for the three months ended March 30, 2019 and March 31, 2018, as discussed above:
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Acquisitions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following table is a summary of the assets acquired, liabilities assumed and net cash consideration paid for the Power Products acquisition during 2018:
(A) The goodwill recorded for the acquisition of Power Products is partially deductible for tax purposes. (B) Includes $4.4 million of purchase accounting adjustments in the first quarter of 2019 related to contingency reserves. |
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Business Acquisition, Pro Forma Information [Table Text Block] | The pro forma results include adjustments primarily related to interest expense on the Term Loans and amortization of intangible assets.
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Financial Instruments Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Derivative Instruments | As of March 30, 2019, December 31, 2018 and March 31, 2018, the fair values of the Company’s derivative instruments were:
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Effect of Derivative Instruments on the Condensed Consolidated Statements of Comprehensive Income | The effect of derivative instruments on the Condensed Consolidated Statements of Comprehensive Income for the three months ended March 30, 2019 and March 31, 2018 was:
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 30, 2019:
The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2018:
The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2018:
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Share-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Fair Value Assumptions for Performance Awards | The fair values of the senior executives' performance share award grants with a TSR modifier for grants in 2019 and 2018 were $49.64 and $61.59, respectively, which were estimated using the Monte Carlo valuation model, and incorporated the following assumptions:
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranty Liabilities | The following activity related to product warranty liabilities was recorded in Accrued expenses during the three months ended March 30, 2019 and March 31, 2018:
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Extended Product Warranty Liabilities | The following activity related to deferred revenue for extended product warranty contracts was recorded in Accrued expenses and Other long-term liabilities during the three months ended March 30, 2019 and March 31, 2018:
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Goodwill and Intangibles (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | Changes in the Company's goodwill during the three months ended March 30, 2019, by segment, are summarized below:
Changes in the Company's goodwill during the three months ended March 31, 2018, by segment, are summarized below:
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Schedule of Other Intangible Assets [Table Text Block] | The Company's intangible assets, included within Other intangibles, net on the Condensed Consolidated Balance Sheets as of March 30, 2019, December 31, 2018 and March 31, 2018, are summarized by intangible asset type below:
The Company's intangible assets, included within Other intangibles, net on the Condensed Consolidated Balance Sheets as of March 30, 2019, December 31, 2018 and March 31, 2018, are summarized by segment below:
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Segment Data (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Segments | The following table sets forth net sales and operating earnings (loss) of each of the Company's reportable segments for the three months ended March 30, 2019 and March 31, 2018:
The following table sets forth total assets of each of the Company's reportable segments:
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Comprehensive Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the Components in Accumulated Other Comprehensive Income (Loss) | Changes in the components of Accumulated other comprehensive loss, all net of tax, for the three months ended March 30, 2019 and March 31, 2018 were as follows:
The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the three months ended March 30, 2019:
(A) The tax effects for the three months ended March 30, 2019 were $0.2 million for foreign currency translation, $0.0 million for net actuarial losses arising during the period and $(0.5) million for derivatives. (B) See the table below for the tax effects for the three months ended March 30, 2019. The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the three months ended March 31, 2018:
(A) The tax effects for the three months ended March 31, 2018 were $0.2 million for foreign currency translation, $0.1 million for net actuarial losses arising during the period and $0.8 million for derivatives. (B) See the table below for the tax effects for the three months ended March 31, 2018. |
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Reclassification out of Accumulated Other Comprehensive Income (Loss) | The following table presents reclassification adjustments out of Accumulated other comprehensive loss during the three months ended March 30, 2019 and March 31, 2018:
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Postretirement Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Pension and Other Benefit Costs | Pension and other postretirement benefit costs included the following components for the three months ended March 30, 2019 and March 31, 2018:
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt [Table Text Block] | Scheduled maturities, net:
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Assets and Lease Liabilities [Table Text Block] | A summary of the Company's lease assets and lease liabilities as of March 30, 2019 is as follows:
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Lease Cost [Table Text Block] | A summary of the Company's total lease cost for the three months ended March 30, 2019 is as follows:
(A) Includes total short-term lease cost which is immaterial. |
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Operating Lease Liability, Maturity Analysis [Table Text Block] | The Company's maturity analysis of its operating lease liabilities as of March 30, 2019 is as follows:
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Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | The following represents the Company's future minimum rental payments at December 31, 2018 for agreements classified as operating leases under ASC 840 with non-cancelable terms in excess of one year:
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Significant Accounting Policies Leases (Details) - USD ($) $ in Millions |
Mar. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating Lease Assets | $ 99.2 | $ 101.2 | $ 0.0 | $ 0.0 |
Accrued Expenses | 691.5 | 706.7 | 687.4 | 640.3 |
Other | 197.8 | 192.1 | 195.5 | 199.6 |
Operating Lease Liabilities | $ 83.8 | 85.3 | $ 0.0 | $ 0.0 |
Accounting Standards Update 2016-02 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating Lease Assets | 101.2 | |||
Accrued Expenses | 19.3 | |||
Other | (3.4) | |||
Operating Lease Liabilities | $ 85.3 |
Revenue Recognition - Contracts with Customer (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Jan. 01, 2019 |
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Revenue from Contract with Customer [Abstract] | ||
Contract with Customer, Liability | $ 187.7 | $ 178.7 |
Contract with Customer, Liability, Revenue Recognized | $ 28.2 |
Acquisitions (Details) - USD ($) $ in Millions |
3 Months Ended | |||||||||
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Aug. 09, 2018 |
Mar. 30, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Business Acquisition [Line Items] | ||||||||||
Debt Instrument, Face Amount | $ 800.0 | |||||||||
Goodwill | $ 634.1 | $ 428.3 | $ 767.1 | $ 425.3 | ||||||
Power Products [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Consideration Transferred | 909.6 | |||||||||
Accounts and Notes Receivable | 38.3 | |||||||||
Inventory | 64.3 | |||||||||
Goodwill | [1],[2] | 348.6 | ||||||||
Property and Equipment | 10.6 | |||||||||
Other Assets | 5.6 | |||||||||
Total Assets Acquired | 1,008.4 | |||||||||
Accounts Payable | [2] | 24.3 | ||||||||
Accrued Expenses | [2] | 19.8 | ||||||||
Deferred Tax Liabilities | 54.7 | |||||||||
Total Liabilities Assumed | 98.8 | |||||||||
Net Cash Consideration Paid | 909.6 | |||||||||
Purchase Accounting Adjustment | 4.4 | |||||||||
Pro Forma Net Sales | 1,275.9 | 1,272.7 | ||||||||
Pro Forma Operating Earnings (Loss) | (28.6) | 93.8 | ||||||||
Pro Forma Net Earnings (Loss) | $ (34.9) | $ 59.2 | ||||||||
Pro Forma Effective Income Tax Rate | 23.90% | 22.50% | ||||||||
Power Products [Member] | Trade Names [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Trade Names | 111.0 | |||||||||
Power Products [Member] | Customer Relationships [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Customer Relationships | $ 430.0 | |||||||||
Useful Life | 15 years | |||||||||
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Financial Instruments Financial Instruments (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
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Senior Notes Due 2021 [Member] | |||
Derivative [Line Items] | |||
Interest Rate | 4.625% | 4.625% | 4.625% |
Debentures Due 2023 [Member] | |||
Derivative [Line Items] | |||
Interest Rate | 7.375% | 7.375% | 7.375% |
Foreign Exchange Forward [Member] | |||
Derivative [Line Items] | |||
Notional Values | $ 493,800,000 | $ 436,000,000 | $ 424,100,000 |
Foreign Exchange Option [Member] | |||
Derivative [Line Items] | |||
Notional Values | 0 | 18,000,000 | 27,200,000 |
Foreign Exchange Contracts [Member] | |||
Derivative [Line Items] | |||
Cash Flow Hedge Gain (Loss) to be Reclassified Within Twelve Months | 6,800,000 | ||
Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Notional Values | 200,000,000 | 200,000,000 | 200,000,000 |
Interest Rate Swap [Member] | Senior Notes Due 2021 [Member] | |||
Derivative [Line Items] | |||
Notional Values | 150,000,000 | 150,000,000 | 150,000,000 |
Interest Rate Swap [Member] | Debentures Due 2023 [Member] | |||
Derivative [Line Items] | |||
Notional Values | 50,000,000 | 50,000,000 | 50,000,000 |
Forward-Starting Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Cash Flow Hedge Gain (Loss) to be Reclassified Within Twelve Months | (600,000) | ||
Amount of Gain (Loss) Estimated to be Reclassified from Accumulated Other Comprehensive Loss to Cost of Sales or Interest Expense | $ (2,400,000) | $ (3,200,000) | $ (2,500,000) |
Financial Instruments, Fair Values of Derivative Instruments (Details) - USD ($) $ in Millions |
Mar. 30, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
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Foreign Exchange Contracts [Member] | Prepaid Expenses and Other [Member] | Other Hedging Activity [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Derivative Assets | $ 1.3 | $ 1.0 | $ 0.4 |
Foreign Exchange Contracts [Member] | Accrued Expenses [Member] | Other Hedging Activity [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Derivative Liabilities | 0.2 | 0.1 | 0.5 |
Cash Flow Hedging [Member] | Foreign Exchange Contracts [Member] | Prepaid Expenses and Other [Member] | Derivatives Designated as Hedging Instruments [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Derivative Assets | 6.9 | 8.1 | 2.8 |
Cash Flow Hedging [Member] | Foreign Exchange Contracts [Member] | Accrued Expenses [Member] | Derivatives Designated as Hedging Instruments [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Derivative Liabilities | 1.0 | 1.1 | 5.8 |
Fair Value Hedging [Member] | Derivatives Designated as Hedging Instruments [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Derivative Assets | 0.9 | 0.0 | 2.9 |
Total Derivative Liabilities | 0.6 | 1.9 | 5.4 |
Fair Value Hedging [Member] | Interest Rate Contracts [Member] | Prepaid Expenses and Other [Member] | Derivatives Designated as Hedging Instruments [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Derivative Assets | 0.0 | 0.0 | 2.9 |
Fair Value Hedging [Member] | Interest Rate Contracts [Member] | Accrued Expenses [Member] | Derivatives Designated as Hedging Instruments [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Derivative Liabilities | 0.2 | 0.1 | 2.6 |
Fair Value Hedging [Member] | Interest Rate Contracts [Member] | Other Long-Term Assets [Member] | Derivatives Designated as Hedging Instruments [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Derivative Assets | 0.9 | 0.0 | 0.0 |
Fair Value Hedging [Member] | Interest Rate Contracts [Member] | Other Long-Term Liabilities [Member] | Derivatives Designated as Hedging Instruments [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Derivative Liabilities | $ 0.4 | $ 1.8 | $ 2.8 |
Financial Instruments, Condensed Consolidated Statements of Comprehensive Income, Effect of Derivative Instruments (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
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Other Hedging Activity [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) on Derivatives Recognized in Earnings | $ 1.3 | $ (4.8) |
Foreign Exchange Contracts [Member] | Cost of Sales [Member] | Other Hedging Activity [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) on Derivatives Recognized in Earnings | 1.3 | (3.7) |
Foreign Exchange Contracts [Member] | Other Income (Expense), Net | Other Hedging Activity [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) on Derivatives Recognized in Earnings | 0.0 | (1.1) |
Cash Flow Hedging [Member] | Derivatives Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) on Derivatives Recognized in Accumulated Other Comprehensive Loss (Effective Portion) | 1.5 | (3.6) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings (Effective Portion) | 2.7 | (2.9) |
Cash Flow Hedging [Member] | Interest Rate Contracts [Member] | Derivatives Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) on Derivatives Recognized in Accumulated Other Comprehensive Loss (Effective Portion) | 0.0 | 0.0 |
Cash Flow Hedging [Member] | Interest Rate Contracts [Member] | Interest Expense [Member] | Derivatives Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings (Effective Portion) | (0.1) | (0.3) |
Cash Flow Hedging [Member] | Foreign Exchange Contracts [Member] | Derivatives Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) on Derivatives Recognized in Accumulated Other Comprehensive Loss (Effective Portion) | 1.5 | (3.6) |
Cash Flow Hedging [Member] | Foreign Exchange Contracts [Member] | Cost of Sales [Member] | Derivatives Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings (Effective Portion) | 2.8 | (2.6) |
Fair Value Hedging [Member] | Interest Rate Contracts [Member] | Interest Expense [Member] | Derivatives Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) on Derivatives Recognized in Earnings | $ (0.1) | $ 0.2 |
Financial Instruments, Fair Value of Other Financial Instruments (Details) - USD ($) $ in Millions |
Mar. 30, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
---|---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Fair Value of the Company's Long-Term Debt Including Current Maturities | $ 1,363.0 | $ 1,292.9 | $ 497.6 |
Long-Term Debt | $ 1,310.1 | $ 1,226.4 | $ 438.8 |
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions |
Mar. 30, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
---|---|---|---|
Assets: | |||
Cash Equivalents | $ 0.2 | ||
Short-Term Investments in Marketable Securities | 0.8 | $ 0.8 | $ 0.8 |
Restricted Cash | 9.1 | 9.0 | 9.4 |
Derivatives | 9.1 | 9.1 | 6.1 |
Total Assets | 19.2 | 18.9 | 16.3 |
Liabilities: | |||
Derivatives | 1.8 | 3.1 | 11.7 |
Deferred Compensation | 28.4 | 26.4 | 31.4 |
Total Liabilities at Fair Value | 30.2 | 29.5 | 43.1 |
Liabilities Measured at Net Asset Value | 10.2 | 10.2 | 8.8 |
Total Liabilities | 40.4 | 39.7 | 51.9 |
Level 1 [Member] | |||
Assets: | |||
Cash Equivalents | 0.2 | ||
Short-Term Investments in Marketable Securities | 0.8 | 0.8 | 0.8 |
Restricted Cash | 9.1 | 9.0 | 9.4 |
Derivatives | 0.0 | 0.0 | 0.0 |
Total Assets | 10.1 | 9.8 | 10.2 |
Liabilities: | |||
Derivatives | 0.0 | 0.0 | 0.0 |
Deferred Compensation | 3.8 | 3.5 | 3.6 |
Total Liabilities at Fair Value | 3.8 | 3.5 | 3.6 |
Level 2 [Member] | |||
Assets: | |||
Cash Equivalents | 0.0 | ||
Short-Term Investments in Marketable Securities | 0.0 | 0.0 | 0.0 |
Restricted Cash | 0.0 | 0.0 | 0.0 |
Derivatives | 9.1 | 9.1 | 6.1 |
Total Assets | 9.1 | 9.1 | 6.1 |
Liabilities: | |||
Derivatives | 1.8 | 3.1 | 11.7 |
Deferred Compensation | 24.6 | 22.9 | 27.8 |
Total Liabilities at Fair Value | $ 26.4 | $ 26.0 | $ 39.5 |
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares Available for Grant (in Shares) | 4,900,000 | |
Percentage of Premium Paid Out in Deferred Company Common Stock | 20.00% | |
Non-Vested Stock Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Performance Shares Granted (in Shares) | 300,000 | 300,000 |
Share-Based Compensation Expense | $ 2.6 | $ 2.5 |
Unrecognized Compensation Cost | $ 27.1 | |
Unrecognized Compensation Cost, Period for Recognition | 2 years 4 months 24 days | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-Based Compensation Expense | $ 0.7 | $ (0.5) |
Unrecognized Compensation Cost | $ 8.4 | |
Unrecognized Compensation Cost, Period for Recognition | 1 year 6 months | |
Certain Senior Executives [Member] | Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Performance Shares Granted (in Shares) | 100,000 | 100,000 |
Weighted Average Price at Grant Date (in Dollars per Share) | $ 49.64 | $ 61.59 |
Risk-Free Interest Rate | 2.90% | 2.40% |
Dividend Yield | 1.70% | 1.30% |
Volatility Factor | 41.00% | 38.90% |
Expected Life of Award | 2 years 10 months 24 days | 2 years 10 months 24 days |
Certain Officers and Certain Senior Managers [Member] | Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Performance Shares Granted (in Shares) | 24,605 | 24,490 |
Weighted Average Price at Grant Date (in Dollars per Share) | $ 47.61 | $ 57.19 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Activity Related to Product Warranty Liabilities [Roll Forward] | ||
Balance at Beginning of Period | $ 141.9 | $ 127.2 |
Payments Made | (23.4) | (16.2) |
Provisions/Additions for Contracts Issued/Sold | 18.9 | 19.0 |
Aggregate Changes for Preexisting Warranties | 0.1 | (4.3) |
Foreign Currency Translation | 0.0 | 0.7 |
Other | 0.5 | (0.1) |
Balance at End of Period | 138.0 | 126.3 |
Activity Related to Extended Product Warranty Accrual [Roll Forward] | ||
Balance at Beginning of Period | 133.1 | 112.1 |
Extended Warranty Contracts Sold | 16.8 | 12.9 |
Revenue Recognized on Existing Extended Warranty Contracts | (14.1) | (10.1) |
Foreign Currency Translation | 0.1 | 0.5 |
Balance at End of Period | $ 135.9 | $ 115.4 |
Goodwill and Intangibles Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Goodwill [Roll Forward] | |||
Goodwill, Beginning Balance | $ 767.1 | $ 425.3 | |
Impairments | (137.2) | 0.0 | |
Adjustments | 4.2 | 3.0 | |
Goodwill, Ending Balance | 634.1 | 428.3 | |
Goodwill, Impaired, Accumulated Impairment Loss | 137.2 | 0.0 | $ 0.0 |
Marine Engine [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning Balance | 375.1 | 31.7 | |
Impairments | 0.0 | 0.0 | |
Adjustments | 4.5 | 1.2 | |
Goodwill, Ending Balance | 379.6 | 32.9 | |
Boat [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning Balance | 2.2 | 2.2 | |
Impairments | 0.0 | 0.0 | |
Adjustments | 0.0 | 0.0 | |
Goodwill, Ending Balance | 2.2 | 2.2 | |
Fitness [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning Balance | 389.8 | 391.4 | |
Impairments | (137.2) | 0.0 | |
Adjustments | (0.3) | 1.8 | |
Goodwill, Ending Balance | 252.3 | $ 393.2 | |
Goodwill, Impairment Loss, Net of Tax | $ 103.0 |
Goodwill and Intangibles Finite-Lived Intangibles (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 921.2 | $ 405.2 | $ 921.1 |
Accumulated Amortization | (284.5) | (257.2) | (274.7) |
Amortization Expense for Intangibles | 9.8 | 2.2 | |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 164.5 | 76.1 | 164.4 |
Accumulated Amortization | (0.6) | 0.0 | 0.0 |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 734.3 | 306.5 | 734.4 |
Accumulated Amortization | (265.2) | (240.1) | (256.5) |
Other [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 22.4 | 22.6 | 22.3 |
Accumulated Amortization | (18.7) | (17.1) | (18.2) |
Marine Engine [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 618.6 | 79.1 | 618.3 |
Accumulated Amortization | (59.7) | (39.2) | (52.0) |
Boat [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 223.4 | 223.6 | 223.4 |
Accumulated Amortization | (204.2) | (203.2) | (203.9) |
Fitness [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 79.2 | 102.5 | 79.4 |
Accumulated Amortization | $ (20.6) | $ (14.8) | $ (18.8) |
Segment Data (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Segment Reporting Information [Line Items] | |||
Net Sales | $ 1,275.9 | $ 1,211.4 | |
Operating Earnings (Loss) | (28.6) | 105.1 | |
Total Assets | 4,329.8 | 3,404.6 | $ 4,285.7 |
Assets Held-For-Sale | 8.9 | 12.8 | 8.9 |
Marine Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | (88.6) | (96.6) | |
Operating Earnings (Loss) | 0.0 | 0.0 | |
Marine Engine [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 766.0 | 687.1 | |
Operating Earnings (Loss) | 112.9 | 95.7 | |
Total Assets | 2,628.4 | 1,384.6 | 2,380.9 |
Boat [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 373.3 | 376.5 | |
Operating Earnings (Loss) | 22.0 | 14.4 | |
Total Assets | 433.6 | 449.7 | 423.2 |
Total Marine [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 1,050.7 | 967.0 | |
Operating Earnings (Loss) | 134.9 | 110.1 | |
Total Assets | 3,062.0 | 1,834.3 | 2,804.1 |
Fitness [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 225.2 | 244.4 | |
Operating Earnings (Loss) | (139.1) | 11.0 | |
Total Assets | 844.9 | 1,004.9 | 972.7 |
Corporate/Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 0.0 | 0.0 | |
Operating Earnings (Loss) | (24.4) | (16.0) | |
Total Assets | 422.9 | 565.4 | $ 508.9 |
Total - Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 1,275.9 | 1,211.4 | |
Operating Earnings (Loss) | $ (28.6) | $ 105.1 |
Comprehensive Income (Details) - USD ($) $ in Millions |
3 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|||||||||||
Comprehensive Income [Abstract] | ||||||||||||
Net Earnings (Loss) | $ (36.3) | $ 72.9 | ||||||||||
Foreign Currency Cumulative Translation Adjustment | 0.1 | 9.9 | ||||||||||
Net Change in Unamortized Prior Service Credits | (0.1) | (0.1) | ||||||||||
Net Change in Unamortized Actuarial Losses | 1.9 | 1.9 | ||||||||||
Net Change in Unrealized Derivative Losses | (0.9) | (0.7) | ||||||||||
Total Other Comprehensive Income | 1.0 | 11.0 | ||||||||||
Comprehensive Income | (35.3) | 83.9 | ||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||||||
Accumulated Other Comprehensive Loss, Net of Tax, Beginning Balance | (363.1) | (359.8) | ||||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Abstract] | ||||||||||||
Other Comprehensive Income (Loss) Before Reclassifications | 1.1 | [1] | 7.0 | [2] | ||||||||
Amounts Reclassified from Accumulated Other Comprehensive Loss | (0.1) | [3] | 4.0 | [4] | ||||||||
Net Other Comprehensive Income (Loss) | 1.0 | 11.0 | ||||||||||
Accumulated Other Comprehensive Loss, Net of Tax, Ending Balance | (362.1) | (348.8) | ||||||||||
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent [Abstract] | ||||||||||||
Foreign Currency Translation Adjustments Arising During Period, Tax Effect | 0.2 | 0.2 | ||||||||||
Net Actuarial Gains (Losses) Arising During Period, Tax Effect | 0.0 | 0.1 | ||||||||||
Gains (Losses) on Derivatives Arising During Period, Tax Effect | (0.5) | 0.8 | ||||||||||
Foreign Currency Translation | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||||||
Accumulated Other Comprehensive Loss, Net of Tax, Beginning Balance | (48.9) | (31.6) | ||||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Abstract] | ||||||||||||
Other Comprehensive Income (Loss) Before Reclassifications | 0.1 | [1] | 9.9 | [2] | ||||||||
Amounts Reclassified from Accumulated Other Comprehensive Loss | 0.0 | [3] | 0.0 | [4] | ||||||||
Net Other Comprehensive Income (Loss) | 0.1 | 9.9 | ||||||||||
Accumulated Other Comprehensive Loss, Net of Tax, Ending Balance | (48.8) | (21.7) | ||||||||||
Prior Service Credits | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||||||
Accumulated Other Comprehensive Loss, Net of Tax, Beginning Balance | (6.1) | (5.6) | ||||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Abstract] | ||||||||||||
Other Comprehensive Income (Loss) Before Reclassifications | 0.0 | [1] | 0.0 | [2] | ||||||||
Amounts Reclassified from Accumulated Other Comprehensive Loss | (0.1) | [3] | (0.1) | [4] | ||||||||
Net Other Comprehensive Income (Loss) | (0.1) | (0.1) | ||||||||||
Accumulated Other Comprehensive Loss, Net of Tax, Ending Balance | (6.2) | (5.7) | ||||||||||
Net Actuarial Losses | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||||||
Accumulated Other Comprehensive Loss, Net of Tax, Beginning Balance | (306.2) | (310.8) | ||||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Abstract] | ||||||||||||
Other Comprehensive Income (Loss) Before Reclassifications | 0.0 | [1] | (0.1) | [2] | ||||||||
Amounts Reclassified from Accumulated Other Comprehensive Loss | 1.9 | [3] | 2.0 | [4] | ||||||||
Net Other Comprehensive Income (Loss) | 1.9 | 1.9 | ||||||||||
Accumulated Other Comprehensive Loss, Net of Tax, Ending Balance | (304.3) | (308.9) | ||||||||||
Net Derivative Losses | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||||||
Accumulated Other Comprehensive Loss, Net of Tax, Beginning Balance | (1.9) | (11.8) | ||||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Abstract] | ||||||||||||
Other Comprehensive Income (Loss) Before Reclassifications | 1.0 | [1] | (2.8) | [2] | ||||||||
Amounts Reclassified from Accumulated Other Comprehensive Loss | (1.9) | [3] | 2.1 | [4] | ||||||||
Net Other Comprehensive Income (Loss) | (0.9) | (0.7) | ||||||||||
Accumulated Other Comprehensive Loss, Net of Tax, Ending Balance | $ (2.8) | $ (12.5) | ||||||||||
|
Comprehensive Income, Reclassification out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Prior Service Credits | $ 0.2 | $ 0.2 |
Net Actuarial Losses | (2.5) | (2.5) |
Defined Benefit Items, Earnings Before Income Taxes | (2.3) | (2.3) |
Defined Benefit Items, Income Tax Provision | 0.5 | 0.4 |
Defined Benefit Items, Net Earnings From Continuing Operations | (1.8) | (1.9) |
Derivatives, Earnings Before Income Taxes | 2.7 | (2.9) |
Derivatives, Income Tax Provision | (0.8) | 0.8 |
Derivatives, Net Earnings From Continuing Operations | 1.9 | (2.1) |
Interest Expense [Member] | Interest Rate Contract [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Derivatives, Earnings Before Income Taxes | (0.1) | (0.3) |
Cost of Sales [Member] | Foreign Exchange Contracts [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Derivatives, Earnings Before Income Taxes | $ 2.8 | $ (2.6) |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | |||
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | $ 0.0 | $ 0.0 | $ 0.0 |
Income Tax Provision From Continuing Operations | (11.4) | 27.2 | |
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount | $ (0.6) | $ 6.7 | |
Effective Tax Rate From Continuing Operations | 23.90% | 27.20% | |
Gross Unrecognized Tax Benefits, Including Interest | $ 2.7 | $ 2.8 | $ 2.3 |
Possible Decrease in Unrecognized Tax Benefits in the Next 12 Months | $ 1.0 |
Postretirement Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Pension Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest Cost | $ 2.6 | $ 5.7 |
Expected Return on Plan Assets | (3.3) | (6.3) |
Amortization of Prior Service Credits | 0.0 | 0.0 |
Amortization of Net Actuarial Losses | 2.5 | 2.5 |
Net Pension and Other Benefit Costs | 1.8 | 1.9 |
Other Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest Cost | 0.3 | 0.3 |
Expected Return on Plan Assets | 0.0 | 0.0 |
Amortization of Prior Service Credits | (0.2) | (0.2) |
Amortization of Net Actuarial Losses | 0.0 | 0.0 |
Net Pension and Other Benefit Costs | 0.1 | 0.1 |
Nonqualified Plan [Member] | Pension Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Company Contributions | 1.5 | 1.0 |
Qualified Plan [Member] | Pension Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Company Contributions | $ 0.0 | $ 0.0 |
Debt (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 04, 2019 |
Mar. 30, 2019 |
Aug. 09, 2018 |
|
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 800.0 | ||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 31.2 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Two | 41.6 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Three | 190.1 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Four | 36.0 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 304.2 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 683.4 | ||
Long-term Debt | 1,286.5 | ||
Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 400.0 | ||
Line of Credit Facility, Increase (Decrease), Other, Net | 100.0 | ||
Proceeds from Lines of Credit | 215.0 | ||
Repayments of Lines of Credit | 215.0 | ||
Line of Credit Facility, Fair Value of Amount Outstanding | 0.0 | ||
Line of Credit Facility, Remaining Borrowing Capacity | 396.4 | ||
Letters of Credit Outstanding, Amount | 3.6 | ||
Line of Credit Facility, Maximum Amount Utilized | $ 163.4 | ||
Unsecured Debt [Member] | Senior Notes Due 2049 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 230.0 | ||
Interest Rate | 6.375% | ||
Debt Instrument, Maturity Date | Apr. 15, 2049 | ||
Proceeds from Issuance of Debt | $ 222.0 | ||
Debt Instrument, Redemption Price, Percentage | 100.00% | ||
Debt Instrument, Redemption Price, Triggering Event | 101.00% | ||
Unsecured Debt [Member] | Term Loan Due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 150.0 |
Leases Lease Assets and Lease Liabilities (Details) - USD ($) $ in Millions |
Mar. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
---|---|---|---|---|
Assets and Liabilities, Lessee [Abstract] | ||||
Operating Lease Assets | $ 99.2 | $ 101.2 | $ 0.0 | $ 0.0 |
Current Operating Lease Liabilities | 23.2 | |||
Non-Current Operating Lease Liabilities | 83.8 | $ 85.3 | $ 0.0 | $ 0.0 |
Total Lease Liabilities | $ 107.0 |
Leases Lease Cost (Details) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 30, 2019
USD ($)
| ||||
Lessee, Lease, Description [Line Items] | ||||
Lease, Cost | $ 16.9 | [1] | ||
Selling, General and Administrative Expenses [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating Lease, Cost | 5.0 | |||
Variable Lease, Cost | 1.2 | |||
Cost of Sales [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating Lease, Cost | 8.7 | |||
Variable Lease, Cost | $ 2.0 | |||
|
Leases Operating Lease Liability, Maturity Analysis (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 30, 2019
USD ($)
| |
Operating Lease Liabilities, Payments Due [Abstract] | |
2019 | $ 21.9 |
2020 | 24.7 |
2021 | 20.6 |
2022 | 17.6 |
2023 | 14.8 |
Thereafter | 23.0 |
Total Lease Payments | 122.6 |
Less: Interest | 15.6 |
Present Value of Lease Liabilities | $ 107.0 |
Leases Other Lease Disclosures (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 30, 2019
USD ($)
| |
Lessee, Lease, Description [Line Items] | |
Operating Lease, Weighted Average Discount Rate, Percent | 4.92% |
Operating Lease, Weighted Average Remaining Lease Term | 5 years 1 month 24 days |
Operating Cash Flows From Operating Leases | $ 7.3 |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee, Operating Lease, Renewal Term | 1 year |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee, Operating Lease, Renewal Term | 5 years |
Leases Future Minimum Lease Payments (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 30, 2019
USD ($)
| |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2019 | $ 40.3 |
2020 | 32.3 |
2021 | 26.5 |
2022 | 17.7 |
2023 | 13.7 |
Thereafter | 22.9 |
Total (Not Reduced by Minimum Sublease Income of $0.1) | 153.4 |
Sublease Income | $ 0.1 |
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