[X]
Quarterly
report pursuant to Section 13 or 15(d) of the
Securities
|
Exchange
Act of 1934
|
For
the quarterly period ended September 30, 2006
|
or
|
[ ]
Transition
Report Pursuant to Section 13 or 15(d) of the
Securities
|
Exchange
Act of 1934
|
Commission
file number 1-1043
|
Delaware
|
36-0848180
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer Identification No.)
|
1
N. Field Court, Lake Forest, Illinois
|
60045-4811
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(847)
735-4700
|
|
(Registrant’s
telephone number, including area
code)
|
Page
|
||
PART
I -
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
Consolidated
Financial Statements
|
|
Consolidated
Statements of Income for the three months and nine
months
ended September 30, 2006, and October 1, 2005 (unaudited)
|
1
|
|
Consolidated
Balance Sheets as of September 30, 2006 (unaudited),
December
31, 2005, and October 1, 2005 (unaudited)
|
2
|
|
Condensed
Consolidated Statements of Cash Flows for the nine months
ended
September 30, 2006, and October 1, 2005 (unaudited)
|
4
|
|
Notes
to Consolidated Financial Statements (unaudited)
|
5
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and
Results
of Operations
|
20
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
34
|
Item
4.
|
Controls
and Procedures
|
34
|
PART
II -
|
OTHER
INFORMATION
|
|
Item
1.
|
Legal
Proceedings
|
35
|
Item
1A.
|
Risk
Factors
|
35
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
35
|
Item
6.
|
Exhibits
|
36
|
BRUNSWICK
CORPORATION
|
Consolidated
Statements of Income
|
(in
millions, except per share data)
|
(unaudited)
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
October
1,
|
September
30,
|
October
1,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Net
sales
|
$
|
1,337.8
|
$
|
1,351.1
|
$
|
4,294.2
|
$
|
4,225.2
|
|||||
Cost
of sales
|
1,048.9
|
1,045.6
|
3,337.1
|
3,211.9
|
|||||||||
Selling,
general and administrative expense
|
182.5
|
173.3
|
549.8
|
553.7
|
|||||||||
Research
and development expense
|
32.1
|
30.1
|
96.6
|
90.5
|
|||||||||
Operating
earnings
|
74.3
|
102.1
|
310.7
|
369.1
|
|||||||||
Equity
earnings
|
2.9
|
3.3
|
14.7
|
13.9
|
|||||||||
Investment
sale gain
|
-
|
-
|
-
|
38.7
|
|||||||||
Other
income (expense), net
|
0.5
|
(0.2
|
)
|
(2.2
|
)
|
(1.0
|
)
|
||||||
Earnings
before interest and income taxes
|
77.7
|
105.2
|
323.2
|
420.7
|
|||||||||
Interest
expense
|
(15.7
|
)
|
(13.5
|
)
|
(43.5
|
)
|
(39.6
|
)
|
|||||
Interest
income
|
5.0
|
3.9
|
10.4
|
10.1
|
|||||||||
Earnings
before income taxes
|
67.0
|
95.6
|
290.1
|
391.2
|
|||||||||
Income
tax provision
|
16.6
|
13.2
|
71.1
|
103.8
|
|||||||||
Net
earnings from continuing operations
|
50.4
|
82.4
|
219.0
|
287.4
|
|||||||||
Net
earnings (loss) from discontinued operations,
net of tax
|
(13.9
|
)
|
6.0
|
(31.9
|
)
|
9.7
|
|||||||
Net
earnings
|
$
|
36.5
|
$
|
88.4
|
$
|
187.1
|
$
|
297.1
|
|||||
Earnings
per common share:
|
|||||||||||||
Basic
|
|||||||||||||
Earnings
from continuing operations
|
$
|
0.54
|
$
|
0.84
|
$
|
2.32
|
$
|
2.93
|
|||||
Earnings
(loss) from discontinued operations
|
(0.15
|
)
|
0.06
|
(0.34
|
)
|
0.10
|
|||||||
Net
earnings
|
$
|
0.39
|
$
|
0.90
|
$
|
1.98
|
$
|
3.03
|
|||||
Diluted
|
|||||||||||||
Earnings
from continuing operations
|
$
|
0.54
|
$
|
0.83
|
$
|
2.30
|
$
|
2.90
|
|||||
Earnings
(loss) from discontinued operations
|
(0.15
|
)
|
0.06
|
(0.34
|
)
|
0.10
|
|||||||
Net
earnings
|
$
|
0.39
|
$
|
0.89
|
$
|
1.96
|
$
|
3.00
|
|||||
Weighted
average shares used for computation
of:
|
|||||||||||||
Basic
earnings per share
|
93.2
|
98.1
|
94.5
|
97.9
|
|||||||||
Diluted
earnings per share
|
93.7
|
99.3
|
95.3
|
99.2
|
|||||||||
The
Notes to Consolidated Financial Statements are an integral part of
these
consolidated statements.
|
BRUNSWICK
CORPORATION
|
Consolidated
Balance Sheets
|
(in
millions)
|
September
30,
|
December
31,
|
October
1,
|
||||||||
2006
|
2005
|
2005
|
||||||||
(unaudited)
|
(unaudited)
|
|||||||||
Assets
|
||||||||||
Current
assets
|
||||||||||
Cash
and cash equivalents, at cost, which approximates
market
|
$
|
559.5
|
$
|
487.7
|
$
|
535.9
|
||||
Accounts
and notes receivable, less allowances
of $26.0, $22.1 and $25.2
|
473.3
|
471.6
|
449.8
|
|||||||
Inventories
|
||||||||||
Finished
goods
|
398.5
|
384.3
|
406.0
|
|||||||
Work-in-process
|
330.6
|
298.5
|
314.4
|
|||||||
Raw
materials
|
152.6
|
134.1
|
149.4
|
|||||||
Net
inventories
|
881.7
|
816.9
|
869.8
|
|||||||
Deferred
income taxes
|
282.8
|
274.8
|
293.7
|
|||||||
Prepaid
expenses and other
|
65.0
|
70.3
|
48.8
|
|||||||
Current
assets held for sale
|
111.3
|
113.7
|
100.5
|
|||||||
Current
assets
|
2,373.6
|
2,235.0
|
2,298.5
|
|||||||
Property
|
||||||||||
Land
|
87.8
|
76.7
|
74.9
|
|||||||
Buildings
and improvements
|
618.9
|
603.2
|
581.8
|
|||||||
Equipment
|
1,177.9
|
1,111.2
|
1,094.7
|
|||||||
Total
land, buildings and improvements and equipment
|
1,884.6
|
1,791.1
|
1,751.4
|
|||||||
Accumulated
depreciation
|
(1,045.4
|
)
|
(987.6
|
)
|
(973.6
|
)
|
||||
Net
land, buildings and improvements and equipment
|
839.2
|
803.5
|
777.8
|
|||||||
Unamortized
product tooling costs
|
154.0
|
149.8
|
141.2
|
|||||||
Net
property
|
993.2
|
953.3
|
919.0
|
|||||||
Other
assets
|
||||||||||
Goodwill
|
659.4
|
617.3
|
604.8
|
|||||||
Other
intangibles
|
345.8
|
331.9
|
347.4
|
|||||||
Investments
|
140.0
|
141.4
|
121.2
|
|||||||
Other
long-term assets
|
228.5
|
249.6
|
236.3
|
|||||||
Long-term
assets held for sale
|
94.2
|
93.0
|
91.3
|
|||||||
Other
assets
|
1,467.9
|
1,433.2
|
1,401.0
|
|||||||
Total
assets
|
$
|
4,834.7
|
$
|
4,621.5
|
$
|
4,618.5
|
||||
The
Notes to Consolidated Financial Statements are an integral part of
these
consolidated statements.
|
BRUNSWICK
CORPORATION
|
Consolidated
Balance Sheets
|
(in
millions, except share
data)
|
September
30,
|
December
31,
|
October
1,
|
||||||||
2006
|
2005
|
2005
|
||||||||
(unaudited)
|
(unaudited)
|
|||||||||
Liabilities
and shareholders’ equity
|
||||||||||
Current
liabilities
|
||||||||||
Short-term
debt, including current maturities of
long-term debt
|
$
|
249.7
|
$
|
1.1
|
$
|
5.8
|
||||
Accounts
payable
|
403.3
|
431.7
|
406.8
|
|||||||
Accrued
expenses
|
742.5
|
803.8
|
778.3
|
|||||||
Current
liabilities held for sale
|
69.7
|
68.6
|
65.4
|
|||||||
Current
liabilities
|
1,465.2
|
1,305.2
|
1,256.3
|
|||||||
Long-term
liabilities
|
||||||||||
Debt
|
726.0
|
723.7
|
726.8
|
|||||||
Deferred
income taxes
|
138.4
|
147.5
|
153.0
|
|||||||
Postretirement
and postemployment benefits
|
212.4
|
215.6
|
233.8
|
|||||||
Other
|
246.0
|
245.0
|
249.4
|
|||||||
Long-term
liabilities held for sale
|
8.1
|
5.7
|
5.4
|
|||||||
Long-term
liabilities
|
1,330.9
|
1,337.5
|
1,368.4
|
|||||||
Shareholders’
equity
|
||||||||||
Common
stock; authorized: 200,000,000 shares,
$0.75
par value; issued: 102,538,000 shares
|
76.9
|
76.9
|
76.9
|
|||||||
Additional
paid-in capital
|
373.0
|
368.3
|
369.8
|
|||||||
Retained
earnings
|
1,928.9
|
1,741.8
|
1,710.8
|
|||||||
Treasury
stock, at cost:
|
||||||||||
10,746,000;
6,881,000 and 5,485,000 shares
|
(284.5
|
)
|
(136.0
|
)
|
(78.7
|
)
|
||||
Unearned
compensation and other
|
-
|
(6.1
|
)
|
(6.4
|
)
|
|||||
Accumulated
other comprehensive loss, net of tax
|
(55.7
|
)
|
(66.1
|
)
|
(78.6
|
)
|
||||
Shareholders’
equity
|
2,038.6
|
1,978.8
|
1,993.8
|
|||||||
Total
liabilities and shareholders’ equity
|
$
|
4,834.7
|
$
|
4,621.5
|
$
|
4,618.5
|
||||
The
Notes to Consolidated Financial Statements are an integral part
of these
consolidated statements.
|
BRUNSWICK
CORPORATION
|
Condensed
Consolidated Statements of Cash Flows
|
(in
millions)
|
(unaudited)
|
For
the Nine Months Ended
|
|||||||
September
30,
|
October
1,
|
||||||
2006
|
2005
|
||||||
Cash
flows from operating activities
|
|||||||
Net
earnings from continuing operations
|
$
|
219.0
|
$
|
287.4
|
|||
Depreciation
and amortization
|
123.1
|
114.3
|
|||||
Changes
in noncash current assets and current liabilities
|
(143.7
|
)
|
(132.4
|
)
|
|||
Income
taxes
|
3.7
|
4.5
|
|||||
Other,
net
|
13.9
|
(34.2
|
)
|
||||
Net
cash provided by operating activities of continuing
operations
|
216.0
|
239.6
|
|||||
Net
cash (used for) provided by operating activities of discontinued
operations
|
(38.2
|
)
|
13.1
|
||||
Net
cash provided by operating activities
|
177.8
|
252.7
|
|||||
Cash
flows from investing activities
|
|||||||
Capital
expenditures
|
(139.7
|
)
|
(150.4
|
)
|
|||
Acquisitions
of businesses, net of cash acquired
|
(82.7
|
)
|
(127.5
|
)
|
|||
Investments
|
14.5
|
4.7
|
|||||
Proceeds
from investment sale
|
-
|
57.9
|
|||||
Proceeds
from the sale of property, plant and equipment
|
6.8
|
13.4
|
|||||
Other,
net
|
(0.4
|
)
|
(1.2
|
)
|
|||
Net
cash used for investing activities of continuing
operations
|
(201.5
|
)
|
(203.1
|
)
|
|||
Net
cash used for investing activities of discontinued
operations
|
(4.8
|
)
|
(12.8
|
)
|
|||
Net
cash used for investing activities
|
(206.3
|
)
|
(215.9
|
)
|
|||
Cash
flows from financing activities
|
|||||||
Net
(repayments) issuances of commercial paper and other short-term
debt
|
(0.2
|
)
|
4.4
|
||||
Net
proceeds from issuance of long-term debt
|
250.0
|
-
|
|||||
Payments
of long-term debt including current maturities
|
(0.8
|
)
|
(3.8
|
)
|
|||
Stock
repurchases
|
(163.1
|
)
|
(15.7
|
)
|
|||
Stock
options exercised
|
14.4
|
14.4
|
|||||
Net
cash provided by (used for) financing activities of continuing
operations
|
100.3
|
(0.7
|
)
|
||||
Net
cash provided by (used for) financing activities of discontinued
operations
|
-
|
-
|
|||||
Net
cash provided by (used for) financing activities
|
100.3
|
(0.7
|
)
|
||||
Net
increase in cash and cash equivalents
|
71.8
|
36.1
|
|||||
Cash
and cash equivalents at beginning of period
|
487.7
|
499.8
|
|||||
Cash
and cash equivalents at end of period
|
$
|
559.5
|
$
|
535.9
|
|||
The Notes to Consolidated Financial Statements are an integral part of these consolidated statements. |
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
October
1,
|
September
30,
|
October
1,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(in
millions)
|
|||||||||||||
Net
sales
|
$
|
75.6
|
$
|
85.3
|
$
|
193.0
|
$
|
215.1
|
|||||
Pre-tax
earnings (loss)
|
$
|
(13.2
|
)
|
$
|
3.8
|
$
|
(47.7
|
)
|
$
|
7.6
|
September
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(in
millions)
|
|||||||
Accounts
receivable
|
$
|
51.8
|
$
|
50.8
|
|||
Inventory
|
57.5
|
57.7
|
|||||
Other
current assets
|
2.0
|
5.2
|
|||||
Total
current assets
|
111.3
|
113.7
|
|||||
Goodwill
and intangible assets
|
74.3
|
74.0
|
|||||
Investments
|
-
|
2.2
|
|||||
Property,
plant and equipment
|
19.9
|
16.8
|
|||||
Total
assets
|
205.5
|
206.7
|
|||||
Accounts
payable
|
35.7
|
40.5
|
|||||
Accrued
expenses
|
34.0
|
28.1
|
|||||
Total
current liabilities
|
69.7
|
68.6
|
|||||
Long-term
liabilities
|
8.1
|
5.7
|
|||||
Total
liabilities
|
77.8
|
74.3
|
|||||
Net
assets
|
$
|
127.7
|
$
|
132.4
|
Three
Months Ended
|
Nine
Months Ended
|
||||||
October
1,
|
October
1,
|
||||||
2005
|
2005
|
||||||
(in
millions, except per share data)
|
|||||||
Net
earnings from continuing operations, as reported
|
$
|
82.4
|
$
|
287.4
|
|||
Add:
Share-based employee compensation
included in reported earnings, net of tax
|
0.9
|
2.9
|
|||||
Less:
Total share-based employee compensation
expense under fair value-based method for
all awards, net of tax
|
1.8
|
9.0
|
|||||
Net
earnings from continuing operations, pro forma
|
$
|
81.5
|
$
|
281.3
|
|||
Basic
earnings from continuing operations per common share:
|
|||||||
As
reported
|
$
|
0.84
|
$
|
2.93
|
|||
Pro
forma
|
$
|
0.83
|
$
|
2.87
|
|||
Diluted
earnings from continuing operations per common share:
|
|||||||
As
reported
|
$
|
0.83
|
$
|
2.90
|
|||
Pro
forma
|
$
|
0.82
|
$
|
2.84
|
Stock
Options
Outstanding
(in
thousands)
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value
(in
thousands)
|
||||
Outstanding
on January 1
|
3,844
|
$
29.91
|
|||||
Granted
|
904
|
$
39.08
|
|||||
Exercised
|
(492)
|
$
21.51
|
$
8,004
|
||||
Forfeited
|
(149)
|
$
38.73
|
|||||
|
|||||||
Outstanding
on September 30
|
4,107
|
$
32.62
|
6.5
years
|
$
16,700
|
|||
Exercisable
on September 30
|
2,392
|
$
26.70
|
5.0
years
|
$
16,093
|
Range
of
Exercise
Price
|
Number
Outstanding
(in
thousands)
|
Weighted
Average
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
(in
thousands)
|
Weighted
Average
Exercise
Price
|
|||||
$17.38
to $20.00
|
670
|
3.9
years
|
$
19.64
|
668
|
$
19.64
|
|||||
$20.01
to $30.00
|
1,179
|
5.1
years
|
$
23.59
|
1,100
|
$
23.58
|
|||||
$30.01
to $40.00
|
1,382
|
7.9
years
|
$
38.13
|
378
|
$
35.77
|
|||||
$40.01
to $49.27
|
876
|
8.3
years
|
$
45.97
|
246
|
$
45.89
|
|
2006
|
2005
|
|||||
Risk-free
interest rate
|
4.4
|
%
|
3.7
|
%
|
|||
Dividend
yield
|
1.5
|
%
|
1.4
|
%
|
|||
Volatility
factor
|
31.2
|
%
|
34.1
|
%
|
|||
Weighted
average expected life
|
4.8 - 6.1 years
|
5.0
years
|
Nonvested
Stock
Outstanding
|
||
(in
thousands)
|
||
Outstanding
at January 1
|
519
|
|
Granted
|
314
|
|
Released
|
(224)
|
|
Forfeited
|
(61)
|
|
Outstanding
at September 30
|
548
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
October
1,
|
September
30,
|
October
1,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(in
millions, except per share data)
|
|||||||||||||
Net
earnings from continuing operations
|
$
|
50.4
|
$
|
82.4
|
$
|
219.0
|
$
|
287.4
|
|||||
Net
earnings (loss) from discontinued operations, net
of tax
|
(13.9 | ) |
6.0
|
(31.9
|
)
|
9.7
|
|||||||
Net
earnings
|
$
|
36.5
|
$
|
88.4
|
$
|
187.1
|
$
|
297.1
|
|||||
Average
outstanding shares - basic
|
93.2 |
98.1
|
94.5
|
97.9
|
|||||||||
Dilutive
effect of common stock equivalents
|
0.5 |
1.2
|
0.8
|
1.3
|
|||||||||
Average
outstanding shares - diluted
|
93.7 |
99.3
|
95.3
|
99.2
|
|||||||||
Basic
earnings per share
|
|||||||||||||
Earnings
from continuing operations
|
$
|
0.54
|
$
|
0.84
|
$
|
2.32
|
$
|
2.93
|
|||||
Earnings
(loss) from discontinued operations
|
(0.15 | ) |
0.06
|
(0.34
|
)
|
0.10
|
|||||||
Net
earnings
|
$
|
0.39
|
$
|
0.90
|
$
|
1.98
|
$
|
3.03
|
|||||
Diluted
earnings per share
|
|||||||||||||
Earnings
from continuing operations
|
$
|
0.54
|
$
|
0.83
|
$
|
2.30
|
$
|
2.90
|
|||||
Earnings
(loss) from discontinued operations
|
(0.15 | ) |
0.06
|
(0.34
|
)
|
0.10
|
|||||||
Net
earnings
|
$
|
0.39
|
$
|
0.89
|
$
|
1.96
|
$
|
3.00
|
2006
|
||||
(in
millions)
|
||||
Balance
at January 1
|
$
|
155.3
|
||
Payments
made
|
(86.9
|
)
|
||
Provisions/additions
for contracts issued/sold
|
87.9
|
|||
Aggregate
changes for preexisting warranties
|
0.7
|
|||
Balance
at September 30
|
$
|
157.0
|
Net
Sales
|
Operating
Earnings
|
||||||||||||
September
30,
|
October
1,
|
September
30,
|
October
1,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(in
millions)
|
|||||||||||||
Boat
|
$
|
679.2
|
$
|
685.5
|
$
|
24.8
|
$
|
37.9
|
|||||
Marine
Engine
|
536.5
|
555.0
|
50.4
|
61.2
|
|||||||||
Marine
eliminations
|
(127.8
|
)
|
(128.7
|
)
|
-
|
-
|
|||||||
Total
Marine
|
1,087.9
|
1,111.8
|
75.2
|
99.1
|
|||||||||
Fitness
|
136.6
|
127.4
|
12.6
|
14.2
|
|||||||||
Bowling
& Billiards
|
113.4
|
111.9
|
3.1
|
5.7
|
|||||||||
Eliminations
|
(0.1
|
)
|
-
|
-
|
-
|
||||||||
Corporate/Other
|
-
|
-
|
(16.6
|
)
|
(16.9
|
)
|
|||||||
Total
|
$
|
1,337.8
|
$
|
1,351.1
|
$
|
74.3
|
$
|
102.1
|
Net
Sales
|
Operating
Earnings
|
||||||||||||
September
30,
|
October
1,
|
September
30,
|
October
1,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(in
millions)
|
|||||||||||||
Boat
|
$
|
2,199.9
|
$
|
2,111.7
|
$
|
126.3
|
$
|
161.9
|
|||||
Marine
Engine
|
1,760.0
|
1,780.8
|
190.0
|
216.7
|
|||||||||
Marine
eliminations
|
(404.0
|
)
|
(379.6
|
)
|
-
|
-
|
|||||||
Total
Marine
|
3,555.9
|
3,512.9
|
316.3
|
378.6
|
|||||||||
Fitness
|
400.3
|
375.3
|
28.9
|
25.7
|
|||||||||
Bowling
& Billiards
|
338.2
|
338.3
|
16.5
|
22.0
|
|||||||||
Eliminations
|
(0.2
|
)
|
(1.3
|
)
|
-
|
-
|
|||||||
Corporate/Other
|
-
|
-
|
(51.0
|
)
|
(57.2
|
)
|
|||||||
Total
|
$
|
4,294.2
|
$
|
4,225.2
|
$
|
310.7
|
$
|
369.1
|
(in
millions)
|
||||
Date
|
Description
|
Net
Cash
Consideration
(A)
|
||
2/16/06
|
Cabo
Yachts, Inc.
|
$ 60.6
|
||
3/24/06
|
Marine
Innovations Warranty Corporation
|
2.3
|
||
4/26/06
|
Diversified
Marine Products, L.P.
|
14.2
|
||
9/20/06
|
Protokon
LLC (13.3 percent)
|
5.6
|
||
$ 82.7
|
(in
millions)
|
||||||||
Date
|
Description
|
Net
Cash
Consideration
(A)
|
Other
Consideration
|
Total
Consideration
|
||||
2/7/05
|
Benrock,
Inc.
|
$ 4.2
|
$
-
|
$
4.2
|
||||
2/28/05
|
Albemarle
Boats, Inc.
|
9.2
|
-
|
9.2
|
||||
4/21/05
|
Sea
Pro, Sea Boss and Palmetto boats
|
1.0
|
-
|
1.0
|
||||
5/27/05
|
Triton
Boat Company
|
58.4
|
4.4
|
62.8
|
||||
6/20/05
|
Supra-Industria
Textil, Lda. (51 percent)
|
7.8
|
0.9
|
8.7
|
||||
6/27/05
|
Marine
Innovations Warranty Corporation
|
2.3
|
-
|
2.3
|
||||
7/7/05
|
Kellogg
Marine, Inc.
|
39.7
|
-
|
39.7
|
||||
9/16/05
|
Harris
Kayot Marine, LLC
|
4.8
|
-
|
4.8
|
||||
$ 127.4
|
$
5.3
|
$ 132.7
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
October
1,
|
September
30,
|
October
1,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(in
millions)
|
|||||||||||||
Net
earnings
|
$
|
36.5
|
$
|
88.4
|
$
|
187.1
|
$
|
297.1
|
|||||
Other
comprehensive income:
|
|||||||||||||
Foreign
currency cumulative translation adjustment
|
4.7
|
(1.1
|
)
|
12.6
|
(15.1
|
)
|
|||||||
Net
change in unrealized gains (losses) on investments
|
(0.7
|
)
|
(0.4
|
)
|
0.5
|
(23.2
|
)
|
||||||
Net
change in accumulated unrealized derivative
gains (losses)
|
(4.7
|
)
|
2.1
|
(2.7
|
)
|
14.0
|
|||||||
Total
other comprehensive income (loss)
|
(0.7
|
)
|
0.6
|
10.4
|
(24.3
|
)
|
|||||||
Comprehensive
income
|
$
|
35.8
|
$
|
89.0
|
$
|
197.5
|
$
|
272.8
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
October
1,
|
September
30,
|
October
1,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(in
millions)
|
|||||||||||||
Receivables
sold
|
$
|
197.4
|
$
|
221.6
|
$
|
670.4
|
$
|
710.6
|
|||||
Discounts
|
2.0
|
1.6
|
6.1
|
5.3
|
|||||||||
Cash
received
|
$
|
195.4
|
$
|
220.0
|
$
|
664.3
|
$
|
705.3
|
Pension
Benefits
|
Other
Postretirement
Benefits
|
||||||||||||
September
30,
|
October
1,
|
September
30,
|
October
1,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(in
millions)
|
|||||||||||||
Service
cost
|
$
|
4.6
|
$
|
4.6
|
$
|
0.8
|
$
|
0.7
|
|||||
Interest
cost
|
14.7
|
14.6
|
1.4
|
1.4
|
|||||||||
Expected
return on plan assets
|
(19.5
|
)
|
(18.2
|
)
|
-
|
-
|
|||||||
Amortization
of prior service costs
|
1.7
|
1.8
|
(0.6
|
)
|
(0.5
|
)
|
|||||||
Amortization
of net actuarial loss
|
2.6
|
3.5
|
0.3
|
0.2
|
|||||||||
Net
pension and other benefit costs
|
$
|
4.1
|
$
|
6.3
|
$
|
1.9
|
$
|
1.8
|
Pension
Benefits
|
Other
Postretirement
Benefits
|
||||||||||||
September
30,
|
October
1,
|
September
30,
|
October
1,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(in
millions)
|
|||||||||||||
Service
cost
|
$
|
13.9
|
$
|
14.0
|
$
|
2.2
|
$
|
2.0
|
|||||
Interest
cost
|
44.1
|
43.8
|
4.4
|
4.3
|
|||||||||
Expected
return on plan assets
|
(58.7
|
)
|
(54.5
|
)
|
-
|
-
|
|||||||
Amortization
of prior service costs
|
5.1
|
5.5
|
(1.6
|
)
|
(1.5
|
)
|
|||||||
Amortization
of net actuarial loss
|
7.8
|
10.1
|
0.9
|
0.6
|
|||||||||
Curtailment
loss
|
-
|
0.8
|
-
|
-
|
|||||||||
Net
pension and other benefit costs
|
$
|
12.2
|
$
|
19.7
|
$
|
5.9
|
$
|
5.4
|
Date
|
Description
|
Segment
|
||
2/28/05
|
Albemarle
Boats, Inc. (Albemarle)
|
Boat
|
||
5/27/05
|
Triton
Boat Company, L.P. (Triton)
|
Boat
|
||
6/20/05
|
Supra-Industria
Textil, Lda. (Valiant) - 51 percent
|
Marine
Engine
|
||
7/07/05
|
Kellogg
Marine, Inc. (Kellogg)
|
Boat
|
||
9/16/05
|
Harris
Kayot Marine, LLC (Harris Kayot)
|
Boat
|
||
2/16/06
|
Cabo
Yachts, Inc. (Cabo)
|
Boat
|
||
4/26/06
|
Diversified
Marine Products, L.P. (Diversified)
|
Boat
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
October
1,
|
September
30,
|
October
1,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(in
millions)
|
|||||||||||||
Net
earnings from continuing operations
per
diluted share - as reported
|
$
|
0.54
|
$
|
0.83
|
$
|
2.30
|
$
|
2.90
|
|||||
Investment
sale gain
|
-
|
-
|
-
|
(0.32
|
)
|
||||||||
Tax
items
|
(0.06
|
)
|
(0.14
|
)
|
(0.25
|
)
|
(0.14
|
)
|
|||||
Net
earnings from continuing operations
per
diluted share - as adjusted
|
$
|
0.48
|
$
|
0.69
|
$
|
2.05
|
$
|
2.44
|
•
|
Investment
Sale Gain:
On
February 23, 2005, the Company sold its investment of 1,861,200 shares
in
MarineMax, Inc. (MarineMax), its largest boat dealer, for $56.8 million,
net of $4.1 million of selling costs, which included $1.1 million
of
accrued expenses. The sale was made pursuant to a registered public
offering by MarineMax. As a result of this sale, the Company recorded
an
after-tax gain of $31.5 million ($0.32 per diluted share) after utilizing
previously unrecognized capital loss carryforwards.
|
•
|
Tax
Items:
During 2006, the Company reduced its tax provision primarily due
to
benefits from $19.3 million of tax reserve reassessments of underlying
exposures, of
which $1.1 million was recognized in the third quarter,
and the initial recognition of a $4.1 million interest receivable
in the
third quarter of 2006 related to prior taxable years. Refer to
Note
5 - Commitments and Contingencies
in
the Notes to Consolidated Financial Statements for further detail.
In the
third quarter of 2005, the Company recognized $13.9 million of
non-recurring tax benefits arising from a change in assertions on
indefinitely reinvested earnings in selected international operations,
refined tax planning strategies for research and foreign export tax
benefits and increased foreign earnings in tax jurisdictions with
lower
effective tax rates. Refer to Note
11 - Income Taxes
in
the Notes to Consolidated Financial Statements for further detail.
|
Increase/(Decrease)
|
|||||||||||||
Three
Months Ended
|
vs.
2005
|
||||||||||||
September
30,
|
October
1,
|
||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(in
millions)
|
|||||||||||||
Net
sales
|
$
|
1,337.8
|
$
|
1,351.1
|
$
|
(13.3
|
)
|
(1.0)
|
%
|
||||
Gross
margin (A)
|
$
|
288.9
|
$
|
305.5
|
$
|
(16.6
|
)
|
(5.4)
|
%
|
||||
Operating
earnings
|
$
|
74.3
|
$
|
102.1
|
$
|
(27.8
|
)
|
(27.2)
|
%
|
||||
Net
earnings
|
$
|
50.4
|
$
|
82.4
|
$
|
(32.0
|
)
|
(38.8)
|
%
|
||||
Diluted
earnings per share
|
$
|
0.54
|
$
|
0.83
|
$
|
(0.29
|
)
|
(34.9)
|
%
|
||||
Expressed
as a percentage of net sales (B):
|
|||||||||||||
Gross
margin
|
21.6
|
%
|
22.6
|
%
|
(100)
bpts
|
||||||||
Selling,
general and administrative expense
|
13.6
|
%
|
12.8
|
%
|
800
bpts
|
||||||||
Operating
margin
|
5.6
|
%
|
7.6
|
%
|
(200)
bpts
|
(A)
|
Gross
margin is defined as Net sales less Cost of sales as presented
in the
Consolidated Statements of
Income.
|
(B)
|
Percentages
are determined by using the following numerators expressed as a percentage
of Net sales: Gross margin as defined in (A), Selling, general and
administrative expense and Operating earnings as presented in the
Consolidated Statements of Income.
|
Increase/(Decrease)
|
|||||||||||||
Nine
Months Ended
|
vs.
2005
|
||||||||||||
September 30, |
October
1,
|
||||||||||||
2006
|
2005
|
$
|
%
|
||||||||||
(in
millions)
|
|||||||||||||
Net
sales
|
$
|
4,294.2
|
$
|
4,225.2
|
$
|
69.0
|
1.6
|
%
|
|||||
Gross
margin (A)
|
$
|
957.1
|
$
|
1,013.3
|
$
|
(56.2
|
)
|
(5.5)
|
%
|
||||