Brunello Cucinelli

2016
Annual Report

March 22, 2017

DEAR FELLOW SHAREHOLDERS:

(cid:36)(cid:86)(cid:3)(cid:44)(cid:3)(cid:83)(cid:85)(cid:72)(cid:83)(cid:68)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:90)(cid:85)(cid:76)(cid:87)(cid:72)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:79)(cid:72)(cid:87)(cid:87)(cid:72)(cid:85)(cid:15)(cid:3)(cid:44)(cid:3)(cid:85)(cid:72)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:75)(cid:82)(cid:90)(cid:3)(cid:84)(cid:88)(cid:76)(cid:70)(cid:78)(cid:79)(cid:92)(cid:3)(cid:80)(cid:92)(cid:3)(cid:191)(cid:85)(cid:86)(cid:87)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:68)(cid:86)(cid:3)(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:37)(cid:85)(cid:88)(cid:81)(cid:86)(cid:90)(cid:76)(cid:70)(cid:78)(cid:3)
(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:83)(cid:68)(cid:86)(cid:86)(cid:72)(cid:71)(cid:17)(cid:3)(cid:44)(cid:87)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:68)(cid:3)(cid:85)(cid:72)(cid:90)(cid:68)(cid:85)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)
(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:17)(cid:3)

(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:75)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:72)(cid:71) all-time(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)
(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:15)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:22)(cid:17)(cid:23)(cid:27)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:72)(cid:71)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:85)(cid:72)(cid:89)(cid:76)(cid:82)(cid:88)(cid:86)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:22)(cid:17)(cid:21)(cid:24)(cid:15)(cid:3)as adjusted,(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:19)(cid:24)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:70)(cid:75)(cid:76)(cid:72)(cid:89)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)
(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:85)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:7)(cid:23)(cid:17)(cid:24)(cid:3)(cid:69)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:7)(cid:20)(cid:17)(cid:23)(cid:3)(cid:69)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3)(cid:79)(cid:72)(cid:86)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:90)(cid:72)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:19)(cid:24)(cid:17)(cid:3)(cid:44)(cid:81)(cid:3)
(cid:80)(cid:92)(cid:3)(cid:77)(cid:88)(cid:71)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)are(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:71)(cid:68)(cid:92)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:68)(cid:87)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:75)(cid:76)(cid:86)(cid:87)(cid:82)(cid:85)(cid:92)(cid:17)(cid:3)

20 16 B U S I N E S S  R E S U LT S

(cid:58)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:88)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:73)(cid:88)(cid:79)(cid:79)(cid:92)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:3)(cid:69)(cid:82)(cid:87)(cid:75)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:17)(cid:3)(cid:44)(cid:81)(cid:3)(cid:86)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:29)

(cid:116) (cid:38)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:28)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:89)(cid:72)(cid:85)(cid:86)(cid:88)(cid:86)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:30)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:87)(cid:68)(cid:81)(cid:87)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:70)(cid:92)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:20)(cid:19)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:30)(cid:3)

(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:87)(cid:68)(cid:81)(cid:87)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:70)(cid:92)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:24)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3)

(cid:116) A(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:88)(cid:83)(cid:3)(cid:20)(cid:22)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:17)(cid:3)

(cid:116) Free cash(cid:3)(cid:192)(cid:82)(cid:90)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:7)(cid:21)(cid:22)(cid:23)(cid:3)(cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81), which(cid:3)(cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:21)(cid:20)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:89)(cid:72)(cid:85)(cid:86)(cid:88)(cid:86)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:17)

(cid:44)(cid:3)(cid:76)(cid:81)(cid:89)(cid:76)(cid:87)(cid:72)(cid:3)(cid:92)(cid:82)(cid:88)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:89)(cid:76)(cid:72)(cid:90)(cid:3)(cid:73)(cid:88)(cid:85)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:71)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:86)(cid:3)(cid:68)(cid:69)(cid:82)(cid:88)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:20)(cid:19)(cid:16)(cid:46)(cid:17)(cid:3)

O U R S T R AT E G Y

(cid:36)(cid:83)(cid:83)(cid:85)(cid:82)(cid:68)(cid:70)(cid:75)(cid:76)(cid:81)(cid:74)(cid:3)(cid:20)(cid:26)(cid:24)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:15)(cid:3)(cid:37)(cid:85)(cid:88)(cid:81)(cid:86)(cid:90)(cid:76)(cid:70)(cid:78)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:81)(cid:3)(cid:76)(cid:87)(cid:3)(cid:70)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:87)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:71)(cid:68)(cid:83)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:83)(cid:79)(cid:68)(cid:70)(cid:72)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:69)(cid:72)(cid:74)(cid:68)(cid:81)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:20)(cid:27)(cid:23)(cid:24)(cid:3)(cid:80)(cid:68)(cid:81)(cid:88)(cid:73)(cid:68)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:69)(cid:76)(cid:79)(cid:79)(cid:76)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:38)(cid:76)(cid:81)(cid:70)(cid:76)(cid:81)(cid:81)(cid:68)(cid:87)(cid:76)(cid:15)(cid:3)(cid:50)(cid:75)(cid:76)(cid:82)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71) to this day we(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81) a(cid:3)(cid:83)(cid:85)(cid:72)(cid:71)(cid:82)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:56)(cid:17)(cid:54)(cid:17)(cid:3)(cid:80)(cid:68)(cid:81)(cid:88)(cid:73)(cid:68)(cid:70)(cid:87)(cid:88)(cid:85)(cid:72)(cid:85)(cid:17) (cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)
a(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:72)(cid:91)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86), (cid:72)(cid:80)(cid:69)(cid:85)(cid:68)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:82)(cid:88)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:90)(cid:82)(cid:85)(cid:79)(cid:71)(cid:17)(cid:3)

(cid:50)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3)(cid:85)(cid:82)(cid:82)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:3)(cid:83)(cid:76)(cid:79)(cid:79)(cid:68)(cid:85)(cid:86)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:68)(cid:85)(cid:72)(cid:29)

(cid:116) (cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:47)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:177)(cid:3)(cid:58)(cid:72)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:87)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86),(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:82)(cid:79)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:87)(cid:88)(cid:76)(cid:87)(cid:76)(cid:89)(cid:72)(cid:15)(cid:3)(cid:76)(cid:81)(cid:81)(cid:82)(cid:89)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)

(cid:71)(cid:72)(cid:86)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:88)(cid:80)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:68)(cid:3)(cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:73)(cid:68)(cid:86)(cid:87)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:87)(cid:76)(cid:87)(cid:82)(cid:85)(cid:86)(cid:15)

(cid:116) (cid:37)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:37)(cid:72)(cid:86)(cid:87)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:3)(cid:177)(cid:3)(cid:58)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:86)(cid:87)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:87)(cid:68)(cid:78)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)

(cid:116) (cid:43)(cid:68)(cid:89)(cid:72)(cid:3)(cid:68)(cid:3)(cid:58)(cid:76)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:38)(cid:88)(cid:79)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:177)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:87)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:15)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:86)(cid:87)(cid:3)(cid:87)(cid:72)(cid:68)(cid:80)(cid:15)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3)(cid:83)(cid:68)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:72)(cid:68)(cid:80)(cid:90)(cid:82)(cid:85)(cid:78)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:3)(cid:82)(cid:81)(cid:3)

(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:17)

(cid:58)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:72)(cid:89)(cid:82)(cid:79)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:72)(cid:72)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:72)(cid:72)(cid:71)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:71)(cid:92)(cid:81)(cid:68)(cid:80)(cid:76)(cid:70)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:87)(cid:76)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:72)(cid:81)(cid:89)(cid:76)(cid:85)(cid:82)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:86)(cid:82)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:90)(cid:72)(cid:3)(cid:70)(cid:68)(cid:81)(cid:3)(cid:80)(cid:68)(cid:76)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:76)(cid:71)(cid:72)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:76)(cid:81)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:191)(cid:87)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:17)(cid:3)

(cid:36)(cid:79)(cid:82)(cid:81)(cid:74)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:76)(cid:81)(cid:72)(cid:3)(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:15)(cid:3)(cid:69)(cid:82)(cid:68)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:191)(cid:87)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:72)(cid:86)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:88)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:83)(cid:79)(cid:68)(cid:87)(cid:73)(cid:82)(cid:85)(cid:80)(cid:3)(cid:69)(cid:92)(cid:3)(cid:86)(cid:72)(cid:72)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:68)(cid:71)(cid:77)(cid:68)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:86)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)

(cid:41)(cid:82)(cid:85)(cid:3)(cid:72)(cid:91)(cid:68)(cid:80)(cid:83)(cid:79)(cid:72)(cid:15)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:29)

(cid:116) (cid:38)(cid:92)(cid:69)(cid:72)(cid:91)(cid:15)(cid:3)(cid:68)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:80)(cid:68)(cid:81)(cid:88)(cid:73)(cid:68)(cid:70)(cid:87)(cid:88)(cid:85)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:85)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:191)(cid:87)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3)(cid:38)(cid:92)(cid:69)(cid:72)(cid:91)(cid:3)(cid:82)(cid:73)(cid:73)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:3)(cid:73)(cid:88)(cid:79)(cid:79)(cid:3)(cid:79)(cid:76)(cid:81)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:68)(cid:85)(cid:71)(cid:76)(cid:82)(cid:89)(cid:68)(cid:86)(cid:70)(cid:88)(cid:79)(cid:68)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:87)(cid:85)(cid:72)(cid:81)(cid:74)(cid:87)(cid:75)(cid:3)
(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:17)(cid:3) This(cid:3) (cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:76)(cid:86)(cid:3) (cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:41)(cid:76)(cid:87)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3) (cid:86)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:76)(cid:81)(cid:3) (cid:78)(cid:72)(cid:92)(cid:3) (cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:15)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:85)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:191)(cid:87)(cid:81)(cid:72)(cid:86)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:71)(cid:71)s(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:80)(cid:68)(cid:81)(cid:88)(cid:73)(cid:68)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:82)(cid:82)(cid:87)(cid:83)(cid:85)(cid:76)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)(cid:80)(cid:72)(cid:72)(cid:87)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:71)(cid:72)(cid:80)(cid:68)(cid:81)(cid:71)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:83)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)
(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:85)(cid:82)(cid:74)(cid:85)(cid:72)(cid:86)(cid:86)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:74)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:38)(cid:92)(cid:69)(cid:72)(cid:91)(cid:3)(cid:76)(cid:81)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:41)(cid:76)(cid:87)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:39)(cid:76)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:17)

(cid:116)

(cid:44)(cid:81)(cid:71)(cid:82)(cid:82)(cid:85)(cid:3) (cid:38)(cid:92)(cid:70)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3) (cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3) (cid:11)(cid:44)(cid:38)(cid:42)(cid:12)(cid:15)(cid:3) (cid:68)(cid:3) (cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3) (cid:79)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:3) (cid:86)(cid:83)(cid:72)(cid:70)(cid:76)(cid:68)(cid:79)(cid:76)(cid:93)(cid:76)(cid:81)(cid:74)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:76)(cid:81)(cid:71)(cid:82)(cid:82)(cid:85)(cid:3) (cid:70)(cid:92)(cid:70)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3) (cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3) (cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3)
(cid:49)(cid:88)(cid:85)(cid:72)(cid:80)(cid:69)(cid:88)(cid:85)(cid:74)(cid:15)(cid:3) (cid:42)(cid:72)(cid:85)(cid:80)(cid:68)(cid:81)(cid:92)(cid:17)(cid:3) T(cid:75)(cid:72)(cid:3) (cid:44)(cid:38)(cid:42)(cid:3) (cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:76)(cid:86)(cid:3) (cid:86)(cid:87)(cid:85)(cid:72)(cid:81)(cid:74)(cid:87)(cid:75)(cid:72)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:76)(cid:81)(cid:3) (cid:76)(cid:81)(cid:71)(cid:82)(cid:82)(cid:85)(cid:3) (cid:70)(cid:92)(cid:70)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)s(cid:3) (cid:68)(cid:3) (cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)
(cid:73)(cid:82)(cid:88)(cid:81)(cid:71)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3)(cid:74)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)(cid:72)(cid:91)(cid:72)(cid:85)(cid:70)(cid:76)(cid:86)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:17)(cid:3)

(cid:116) (cid:55)(cid:75)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:45)(cid:72)(cid:87)(cid:3)(cid:37)(cid:82)(cid:68)(cid:87)(cid:86)(cid:15)(cid:3)(cid:68)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:69)(cid:88)(cid:76)(cid:79)(cid:71)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:75)(cid:72)(cid:68)(cid:89)(cid:92)(cid:16)(cid:74)(cid:68)(cid:88)(cid:74)(cid:72)(cid:3)(cid:68)(cid:79)(cid:88)(cid:80)(cid:76)(cid:81)(cid:88)(cid:80)(cid:3)(cid:69)(cid:82)(cid:68)(cid:87)(cid:86)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:38)(cid:79)(cid:68)(cid:85)(cid:78)(cid:86)(cid:87)(cid:82)(cid:81)(cid:15)(cid:3)(cid:58)(cid:68)(cid:86)(cid:75)(cid:76)(cid:81)(cid:74)(cid:87)(cid:82)(cid:81)(cid:17)(cid:3)
(cid:55)(cid:75)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:45)(cid:72)(cid:87)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:75)(cid:76)(cid:86)(cid:87)(cid:82)(cid:85)(cid:76)(cid:70)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:75)(cid:68)(cid:71)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:80)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:86)(cid:15)(cid:3)(cid:68)(cid:71)(cid:71)(cid:86)(cid:3)(cid:69)(cid:85)(cid:72)(cid:68)(cid:71)(cid:87)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:83)(cid:87)(cid:75)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:37)(cid:82)(cid:68)(cid:87)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:79)(cid:3)
(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3)(cid:75)(cid:72)(cid:68)(cid:89)(cid:92)(cid:16)(cid:74)(cid:68)(cid:88)(cid:74)(cid:72)(cid:3)(cid:68)(cid:79)(cid:88)(cid:80)(cid:76)(cid:81)(cid:88)(cid:80)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)

(cid:116) (cid:51)(cid:68)(cid:92)(cid:81)(cid:72)(cid:182)(cid:86)(cid:3) (cid:48)(cid:68)(cid:85)(cid:76)(cid:81)(cid:72)(cid:3) (cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:15)(cid:3) (cid:68)(cid:3) (cid:79)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:90)(cid:75)(cid:82)(cid:79)(cid:72)(cid:86)(cid:68)(cid:79)(cid:72)(cid:3) (cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:82)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3) (cid:80)(cid:68)(cid:85)(cid:76)(cid:81)(cid:72)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:68)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:82)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3) (cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:57)(cid:76)(cid:70)(cid:87)(cid:82)(cid:85)(cid:76)(cid:68)(cid:15)(cid:3) (cid:37)(cid:85)(cid:76)(cid:87)(cid:76)(cid:86)(cid:75)(cid:3)
(cid:38)(cid:82)(cid:79)(cid:88)(cid:80)(cid:69)(cid:76)(cid:68)(cid:17)(cid:3)(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:69)(cid:85)(cid:82)(cid:68)(cid:71)(cid:72)(cid:81)s(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:80)(cid:68)(cid:85)(cid:76)(cid:81)(cid:72)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:82)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:81)(cid:72)(cid:87)(cid:90)(cid:82)(cid:85)(cid:78)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:68)(cid:81)(cid:68)(cid:71)(cid:76)(cid:68)(cid:81)(cid:3)
(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:17)

(cid:50)(cid:88)(cid:85)(cid:3)(cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3)(cid:83)(cid:85)(cid:76)(cid:80)(cid:68)(cid:85)(cid:76)(cid:79)(cid:92)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:76)(cid:81)(cid:72)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:82)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:191)(cid:87)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:70)(cid:68)(cid:87)(cid:72)(cid:74)(cid:82)(cid:85)(cid:76)(cid:72)(cid:86)(cid:17)(cid:3)

I N V E S T I N G  F O R G R O W T H

(cid:44)(cid:81)(cid:3)(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:80)(cid:68)(cid:71)(cid:72)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:191)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:85)(cid:72)(cid:86)(cid:72)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:68)(cid:83)(cid:68)(cid:70)(cid:76)(cid:87)(cid:92)(cid:3)
(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:72)(cid:81)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:88)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:73)(cid:88)(cid:79)(cid:79)(cid:92)(cid:3)(cid:70)(cid:68)(cid:83)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:81)(cid:75)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:73)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:17)(cid:3)(cid:44)(cid:81)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)
(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:82)(cid:85)(cid:3)(cid:88)(cid:83)(cid:74)(cid:85)(cid:68)(cid:71)(cid:72)(cid:71)(cid:3)(cid:81)(cid:72)(cid:68)(cid:85)(cid:79)(cid:92)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:22)(cid:20)(cid:3)(cid:80)(cid:68)(cid:77)(cid:82)(cid:85)(cid:3)(cid:80)(cid:68)(cid:81)(cid:88)(cid:73)(cid:68)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)

(cid:38)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:87)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:68)(cid:79)(cid:82)(cid:81)(cid:74)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)healthy(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:85)(cid:72)(cid:86)(cid:72)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:3)(cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:71)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)
(cid:25)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:68)(cid:86)(cid:87)(cid:3)(cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:15)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:27)(cid:19)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:70)(cid:82)(cid:80)(cid:69)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87) directed toward
(cid:81)(cid:72)(cid:90)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:70)(cid:68)(cid:83)(cid:68)(cid:70)(cid:76)(cid:87)(cid:92)(cid:3)(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:17)

(cid:49)(cid:72)(cid:90)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:3)(cid:78)(cid:72)(cid:92)(cid:3)(cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:37)(cid:85)(cid:88)(cid:81)(cid:86)(cid:90)(cid:76)(cid:70)(cid:78)(cid:15)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:3)(cid:83)(cid:76)(cid:79)(cid:79)(cid:68)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:47)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:17)(cid:3)(cid:44)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3)(cid:37)(cid:85)(cid:88)(cid:81)(cid:86)(cid:90)(cid:76)(cid:70)(cid:78)(cid:3)
(cid:86)(cid:83)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:7)(cid:20)(cid:23)(cid:19)(cid:3)(cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:81)(cid:3)(cid:85)(cid:72)(cid:86)(cid:72)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:70)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:15)(cid:3)(cid:68)(cid:69)(cid:82)(cid:88)(cid:87)(cid:3)(cid:22)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:87)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:79)(cid:72)(cid:89)(cid:72)(cid:79)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:17)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3)(cid:72)(cid:73)(cid:73)(cid:82)(cid:85)(cid:87)(cid:86)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:74)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:80)(cid:68)(cid:81)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:72)(cid:86) as we 
(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:87)(cid:83)(cid:68)(cid:70)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:87)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:81)(cid:87)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:79)(cid:79)(cid:3)(cid:68)(cid:86)(cid:3)(cid:86)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:68)(cid:87)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:81)(cid:82)(cid:89)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:76)(cid:72)(cid:86)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:72)(cid:68)(cid:87)(cid:88)(cid:85)(cid:72)(cid:86)(cid:17)

(cid:37)(cid:85)(cid:88)(cid:81)(cid:86)(cid:90)(cid:76)(cid:70)(cid:78)(cid:3)(cid:75)(cid:68)(cid:71)(cid:3)(cid:26)(cid:22)(cid:3)(cid:83)(cid:68)(cid:87)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:87)(cid:90)(cid:76)(cid:70)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:3)(cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:80)(cid:82)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:72)(cid:86)(cid:87)(cid:3)(cid:81)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:68)(cid:70)(cid:75)(cid:76)(cid:72)(cid:89)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:81)(cid:72)(cid:68)(cid:85)(cid:79)(cid:92)(cid:3)(cid:20)(cid:26)(cid:24)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:17)(cid:3)(cid:44)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:15)(cid:3)(cid:37)(cid:85)(cid:88)(cid:81)(cid:86)(cid:90)(cid:76)(cid:70)(cid:78)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:72)(cid:71)(cid:3)(cid:22)(cid:23)(cid:3)(cid:83)(cid:68)(cid:87)(cid:72)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:68)(cid:3)(cid:86)(cid:83)(cid:82)(cid:87)(cid:3)(cid:68)(cid:80)(cid:82)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:87)(cid:82)(cid:83)(cid:3)(cid:21)(cid:24)(cid:3)(cid:44)(cid:79)(cid:79)(cid:76)(cid:81)(cid:82)(cid:76)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:76)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:68)(cid:87)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)Crain’s Chicago Business(cid:17)

O U T L O O K  F O R  201 7

(cid:50)(cid:88)(cid:85)(cid:3) (cid:82)(cid:88)(cid:87)(cid:79)(cid:82)(cid:82)(cid:78)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:21)(cid:19)(cid:20)(cid:26)(cid:3) (cid:76)(cid:86)(cid:3) (cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:87)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:87)(cid:75)(cid:85)(cid:72)(cid:72)(cid:16)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:16)(cid:21)(cid:19)(cid:20)(cid:27)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:86)(cid:3) (cid:68)(cid:81)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3)
(cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:15)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:79)(cid:79)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:192)(cid:82)(cid:90)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:3)(cid:86)(cid:88)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:15)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:90)(cid:72)(cid:79)(cid:79)(cid:16)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:87)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)(cid:16)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81),
(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:90)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:27)(cid:3)(cid:40)(cid:51)(cid:54)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:23)(cid:17)(cid:24)(cid:24)(cid:3)(cid:87)(cid:82)(cid:3)(cid:7)(cid:23)(cid:17)(cid:28)(cid:24)(cid:17)

(cid:58)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:80)(cid:68)(cid:85)(cid:76)(cid:81)(cid:72)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:72)(cid:86)(cid:182)(cid:3)(cid:87)(cid:82)(cid:83)(cid:16)(cid:79)(cid:76)(cid:81)(cid:72)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:191)(cid:87)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:56)(cid:17)(cid:54)(cid:17)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:40)(cid:88)(cid:85)(cid:82)(cid:83)(cid:72)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:70)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:15)(cid:3)(cid:68)(cid:79)(cid:82)(cid:81)(cid:74)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:41)(cid:76)(cid:87)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:86)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
(cid:76)(cid:86)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:191)(cid:87)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:76)(cid:81)(cid:3)(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:85)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:191)(cid:87)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:79)(cid:79)(cid:3)(cid:68)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:15)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:88)(cid:79)(cid:68)(cid:85)(cid:79)(cid:92)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:72)(cid:70)(cid:82)(cid:81)(cid:71)(cid:3)(cid:75)(cid:68)(cid:79)(cid:73)(cid:3)(cid:82)(cid:73)(cid:3)(cid:21)(cid:19)(cid:20)(cid:26)(cid:17)(cid:3)(cid:36)(cid:86)(cid:3)(cid:68)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:15)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:86)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:79)(cid:3)(cid:85)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:26)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:25)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:27)(cid:3)
(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:68)(cid:69)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)(cid:80)(cid:68)(cid:70)(cid:85)(cid:82)(cid:16)(cid:72)(cid:70)(cid:82)(cid:81)(cid:82)(cid:80)(cid:76)(cid:70)(cid:3)(cid:71)(cid:76)(cid:86)(cid:85)(cid:88)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)

(cid:41)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:88)(cid:79)(cid:79)(cid:16)(cid:92)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:81)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:87)(cid:72)(cid:3)(cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:69)(cid:82)(cid:87)(cid:75)(cid:3)(cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:80)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:80)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:86)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:191)(cid:87)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)
(cid:89)(cid:82)(cid:79)(cid:88)(cid:80)(cid:72)(cid:3)(cid:79)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:15)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:73)(cid:191)(cid:70)(cid:76)(cid:72)(cid:81)(cid:70)(cid:92)(cid:3)(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:82)(cid:71)(cid:72)(cid:86)(cid:87)(cid:79)(cid:92)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:80)(cid:76)(cid:91)(cid:3)(cid:73)(cid:68)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:17)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)(cid:3)
(cid:68)(cid:85)(cid:72)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:26)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:73)(cid:88)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:68)(cid:79)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:30)(cid:3)(cid:75)(cid:82)(cid:90)(cid:72)(cid:89)(cid:72)(cid:85)(cid:15)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:16)
(cid:82)(cid:73)(cid:16)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:15)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:3)(cid:68)(cid:87)(cid:3)(cid:86)(cid:79)(cid:76)(cid:74)(cid:75)(cid:87)(cid:79)(cid:92)(cid:3)(cid:79)(cid:82)(cid:90)(cid:72)(cid:85)(cid:3)(cid:79)(cid:72)(cid:89)(cid:72)(cid:79)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:17)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3)(cid:74)(cid:88)(cid:76)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:26)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:86)(cid:3)(cid:68)(cid:3)(cid:71)(cid:76)(cid:79)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:51)(cid:54)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:15)(cid:3)
(cid:85)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:22)(cid:17)(cid:28)(cid:19)(cid:3)(cid:87)(cid:82)(cid:3)(cid:7)(cid:23)(cid:17)(cid:19)(cid:24)(cid:17)(cid:3)

(cid:41)(cid:76)(cid:81)(cid:68)(cid:79)(cid:79)(cid:92)(cid:15)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:88)(cid:79)(cid:79)(cid:16)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:26)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:73)(cid:85)(cid:72)(cid:72)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:192)(cid:82)(cid:90)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:21)(cid:24)(cid:19)(cid:3)(cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3)(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)(cid:73)(cid:85)(cid:72)(cid:72)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:192)(cid:82)(cid:90)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)
(cid:90)(cid:72)(cid:79)(cid:79)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:3)(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:86)(cid:75)(cid:72)(cid:72)(cid:87)(cid:15)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:68)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:82)(cid:73)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:69)(cid:85)(cid:68)(cid:81)(cid:71)(cid:86)(cid:3)
(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:3)(cid:74)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:90)(cid:82)(cid:85)(cid:79)(cid:71)(cid:182)(cid:86)(cid:3)(cid:80)(cid:68)(cid:85)(cid:76)(cid:81)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:191)(cid:87)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:17)(cid:3)(cid:55)(cid:82)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)
(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:83)(cid:85)(cid:82)(cid:77)(cid:72)(cid:70)(cid:87)(cid:86)(cid:15)(cid:3)(cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:86)(cid:72)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:83)(cid:85)(cid:82)(cid:74)(cid:85)(cid:68)(cid:80)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:81)(cid:82)(cid:89)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:72)(cid:89)(cid:72)(cid:85)(cid:92)(cid:3)(cid:86)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:17)

O U R  C O M M I T M E N T

(cid:44)(cid:3) (cid:68)(cid:80)(cid:3) (cid:76)(cid:81)(cid:86)(cid:83)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:75)(cid:68)(cid:85)(cid:71)(cid:3) (cid:90)(cid:82)(cid:85)(cid:78)(cid:15)(cid:3) (cid:71)(cid:72)(cid:71)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:80)(cid:92)(cid:3) (cid:20)(cid:23)(cid:15)(cid:23)(cid:19)(cid:19)(cid:3) (cid:37)(cid:85)(cid:88)(cid:81)(cid:86)(cid:90)(cid:76)(cid:70)(cid:78)(cid:3) (cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:68)(cid:74)(cid:88)(cid:72)(cid:86)(cid:3) (cid:68)(cid:85)(cid:82)(cid:88)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:90)(cid:82)(cid:85)(cid:79)(cid:71)(cid:17)(cid:3) (cid:55)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)
(cid:87)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:88)(cid:68)(cid:79)(cid:86), who are (cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:70)(cid:82)(cid:68)(cid:79)(cid:72)(cid:86)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:87)(cid:72)(cid:68)(cid:80)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)(cid:90)(cid:76)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:88)(cid:79)(cid:87)(cid:88)(cid:85)(cid:72)(cid:15)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:75)(cid:68)(cid:79)(cid:79)(cid:72)(cid:81)(cid:74)(cid:72)(cid:86)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:79)(cid:76)(cid:72)(cid:3)(cid:68)(cid:75)(cid:72)(cid:68)(cid:71)(cid:17)(cid:3)(cid:44)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:3)(cid:87)(cid:72)(cid:68)(cid:80)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:76)(cid:87)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:76)(cid:83)(cid:79)(cid:76)(cid:81)(cid:72)(cid:15)(cid:3)(cid:78)(cid:81)(cid:82)(cid:90)(cid:79)(cid:72)(cid:71)(cid:74)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:86)(cid:68)(cid:89)(cid:89)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:72)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:16)(cid:3)(cid:87)(cid:82)(cid:3)(cid:92)(cid:82)(cid:88)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:73)(cid:72)(cid:79)(cid:79)(cid:82)(cid:90)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)
(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:90)(cid:72)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:88)(cid:71)(cid:79)(cid:92)(cid:3)(cid:70)(cid:68)(cid:79)(cid:79)(cid:3)(cid:75)(cid:82)(cid:80)(cid:72)(cid:17)(cid:3)(cid:55)(cid:75)(cid:68)(cid:81)(cid:78)(cid:3)(cid:92)(cid:82)(cid:88)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:83)(cid:79)(cid:68)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:92)(cid:82)(cid:88)(cid:85)(cid:3)(cid:87)(cid:85)(cid:88)(cid:86)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:81)(cid:191)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:88)(cid:86)(cid:17)(cid:3)

(cid:54)(cid:76)(cid:81)(cid:70)(cid:72)(cid:85)(cid:72)(cid:79)(cid:92)(cid:15)

(cid:48)(cid:68)(cid:85)(cid:78)(cid:3)(cid:39)(cid:17)(cid:3)(cid:54)(cid:70)(cid:75)(cid:90)(cid:68)(cid:69)(cid:72)(cid:85)(cid:82)
(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)
(cid:37)(cid:85)(cid:88)(cid:81)(cid:86)(cid:90)(cid:76)(cid:70)(cid:78)(cid:3)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)

(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:83)(cid:68)(cid:74)(cid:72)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:81)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:79)(cid:72)(cid:73)(cid:87)(cid:3)(cid:69)(cid:79)(cid:68)(cid:81)(cid:78)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2016 
 or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 Commission file number 1-1043
____________

Brunswick Corporation

(Exact name of registrant as specified in its charter)

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

Delaware

36-0848180

1 N. Field Court, Lake Forest, Illinois 60045-4811
(Address of principal executive offices, including zip code)

(847) 735-4700
 (Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class 
Common Stock ($0.75 par value) 

Name of each exchange on which registered
New York Stock Exchange, Chicago Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes 

  No  

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes 

 No 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing 
requirements for the past 90 days.    Yes 

  No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required 
to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period 
that the registrant was required to submit and post such files).  Yes 

  No  

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405) is not contained herein, and will not 
be contained, to the best of registrant's knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 
10-K or any amendment to this Form 10-K. 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. 
See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Non-accelerated filer

  (Do not check if a smaller reporting company)

Smaller reporting company

Accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes 

 No 

As of July 1, 2016, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting stock 
of the registrant held by non-affiliates was $4,174,908,537.  Such number excludes stock beneficially owned by officers and directors. This does not 
constitute an admission that they are affiliates. 

The number of shares of Common Stock ($0.75 par value) of the registrant outstanding as of February 15, 2017 was 89,524,751.

DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Report on Form 10-K incorporates by reference certain information that will be set forth in the Company's definitive Proxy 
Statement for the Annual Meeting of Shareholders scheduled to be held on May 3, 2017.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
BRUNSWICK CORPORATION
INDEX TO ANNUAL REPORT ON FORM 10-K
December 31, 2016 

TABLE OF CONTENTS

Business
Risk Factors

Unresolved Staff Comments
Properties

Legal Proceedings
Mine Safety Disclosures

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 
Securities
Selected Financial Data

Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk

Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information

Directors, Executive Officers and Corporate Governance
Executive Compensation

Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters

Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services

Exhibits and Financial Statement Schedules
Form 10-K Summary

PART I
Item 1.
Item 1A.

Item 1B.
Item 2.

Item 3.
Item 4. 

PART II

Item 5.

Item 6.

Item 7.
Item 7A.

Item 8.
Item 9.
Item 9A.
Item 9B.

PART III

Item 10.
Item 11.

Item 12.

Item 13.
Item 14.

PART IV

Item 15.
Item 16.

Page

1

8
16

16

17
17

19
21

23
40

40
40

41
41

42
42

42
42

42

43
99

 
 
Item 1. Business

PART I

Brunswick Corporation is a Delaware corporation incorporated on December 31, 1907.  We are a leading global designer, 
manufacturer and marketer of recreation products including marine engines, boats, fitness equipment and active recreation products.  
Our engine-related products include: outboard, sterndrive and inboard engines; trolling motors; propellers; engine control systems; 
and marine parts and accessories.  Our boat offerings include: fiberglass pleasure boats; yachts and sport yachts; sport cruisers 
and sport boats; offshore fishing boats; aluminum and fiberglass fishing boats; pontoon boats; utility boats; deck boats; inflatable 
boats; and heavy-gauge aluminum boats. Our fitness products include cardiovascular and strength training equipment for both the 
commercial and consumer markets. We also sell products for active aging, rehabilitation, productive well-being, a complete line 
of billiards tables and other game room tables and accessories.  

     In 2016, we continued the successful execution of our growth strategy, emphasizing product leadership with innovative products 
and advanced features, as well as completing targeted, strategic acquisitions and expanding production capacity. We expect 2017 
will reflect continued focus on growth, including investments in new products, productivity and efficiency initiatives, acquisitions 
and other growth-related investments. In the longer term, our strategy remains consistent: to design, develop and introduce high-
quality products featuring innovative technology and styling; to distribute products through a model that benefits our partners - 
dealers and distributors; to provide world-class service to our customers; to develop and maintain low-cost manufacturing processes 
and to continually improve productivity and efficiency; to manufacture and distribute products globally with local and regional 
styling; to continue implementing our capital strategy, which includes maintaining strong cash and liquidity positions, allocating 
capital to organic growth initiatives and strategic acquisition opportunities, funding pension obligations and continuing to return 
capital  to  shareholders  through  dividends  and  share  repurchases;  and  to  attract  and  retain  skilled  employees. These  strategic 
objectives support our plans to grow by expanding our existing businesses. Our primary objective is to enhance shareholder value 
by achieving returns on investments that exceed our cost of capital.

Refer to Note 6 – Segment Information and Note 2 – Discontinued Operations in the Notes to Consolidated Financial 
Statements for additional information regarding our segments and discontinued operations, including net sales, operating earnings 
and total assets by segment.

Marine Engine Segment

The Marine Engine segment, which had net sales of $2,441.1 million in 2016, consists of the Mercury Marine Group (Mercury 
Marine). We believe our Marine Engine segment is a world leader in the manufacturing and sale of recreational marine engines 
and marine parts and accessories. 

Mercury Marine manufactures and markets a full range of outboard, sterndrive and inboard engine and propulsion systems 
under the Mercury, Mercury MerCruiser, Mariner, Mercury Racing, Mercury Sport Jet, Mercury Jet Drive, Mercury Diesel, Sea 
Pro, Axius and Zeus brand names. In addition, Mercury Marine manufactures and markets marine parts and accessories under the 
Quicksilver,  Mercury  Precision  Parts,  Mercury  Propellers, Attwood,  Garelick, Whale,  Land  'N'  Sea,  Kellogg  Marine  Supply, 
Payne's  Marine  Group,  BLA,  Seachoice  and  MotorGuide  brand  names,  including  marine  electronics  and  control  integration 
systems, steering systems, instruments, controls, propellers, trolling motors, fuel systems, service parts and lubricants. Mercury 
Marine  also  supplies  integrated,  high-speed  diesel  propulsion  systems  to  the  worldwide  recreational  and  commercial  marine 
markets.

Mercury Marine's outboard, sterndrive and inboard engines are sold to independent boat builders, local, state and foreign 
governments and to Brunswick's Boat segment. In addition, Mercury Marine sells outboard engines through a global network of 
more than 6,000 marine dealers and distributors, specialty marine retailers and marine service centers.  White River Marine Group, 
LLC and its subsidiaries (including Tracker Boats) is Mercury Marine’s most significant external customer.

Mercury Marine manufactures four-stroke outboard engine models ranging from 2.5 to 400 horsepower and two-stroke OptiMax 
outboard engines, all of which feature Mercury's direct fuel injection (DFI) technology, ranging from 150 to 300 horsepower.  All 
of these low-emission engines are in compliance with applicable U.S. Environmental Protection Agency (EPA) requirements.  
Mercury Marine's four-stroke outboard engines include Verado, a collection of supercharged outboards ranging from 175 to 400 
horsepower, and Mercury Marine's naturally aspirated four-stroke outboards, ranging from 2.5 to 150 horsepower, including the 
75 to 115 horsepower FourStroke, introduced in 2014, which has become known for its light weight, fuel efficiency and performance. 
Mercury Marine also manufactures two-stroke, non-DFI engines for certain markets outside the United States.  In addition, most 
of Mercury's sterndrive and inboard engines are now available with catalyst exhaust treatment and monitoring systems, and all 
1

 
 
 
are compliant with applicable U.S. state and federal environmental regulations.  Mercury also makes engines that comply with 
global emissions and noise regulations.

Mercury Marine and Mercury Racing manufacture inboard and sterndrive engine models ranging from 115 to 1,650 horsepower.  
In  2016,  Mercury  Racing  debuted  the  32-valve  DOHC  SB4  7.0  automotive  aftermarket  crate  engine,  which  adapts  a  high 
performance valve train to a customized LS based engine and produces 775 naturally aspirated horsepower, significantly improved 
performance and durability.

To promote advanced propulsion systems with improved handling, performance and efficiency, Mercury Marine manufactures 
and markets advanced boat steering and engine control systems under the brand names of Mercury, Zeus and Axius.  In 2016, 
Mercury  officially  launched  Active  Trim,  an  auto-trimming  device  that  simplifies  boat  operation  while  improving  engine 
performance and fuel efficiency.

Mercury Marine produces its gasoline sterndrive and outboard engines domestically in Fond du Lac, Wisconsin, with outboard 
engines also produced internationally in China and Japan.  Mercury Marine manufactures 40, 50 and 60 horsepower four-stroke 
outboard engines in a facility in China, and produces smaller outboard engines in Japan pursuant to a joint venture with its partner, 
Tohatsu Corporation. Mercury Marine sources engine components from a global supply base and manufactures additional engine 
component parts at its Fond du Lac facility and plants in Florida and Mexico.  Mercury Marine also operates a remanufacturing 
business for engines and service parts in Wisconsin.  In addition, Mercury Marine has an equity ownership interest in Bella-Veneet 
Oy, which manufactures boats under the brand names Bella, Flipper and Aquador in Finland.  

In March 2016, Mercury introduced VesselView Mobile, unveiling a digital application that instantly provides users access to 
their boat’s SmartCraft® digital data. VesselView Mobile, along with Mercury's Electronic Steering Helm (introduced in February 
2016), each earned Innovation Awards at the 2016 International Boatbuilders Exhibition and Conference. Mercury also earned 
“Green Master” designation from the Wisconsin Sustainable Business Council for the sixth consecutive year, a program measuring 
a broad range of sustainability issues ranging from energy and water conservation to waste management, community outreach 
and education.

On  November  18,  2016,  Brunswick  acquired  substantially  all  of  the  assets  of  Payne's  Marine  Group  (Payne's),  based  in 
Victoria, British Columbia, Canada.  Payne's is a leading wholesale distributor of marine parts and accessories in Canada.  We 
believe this acquisition will broaden the reach of our marine parts and accessories distribution network in the Canadian market. 

Our parts and accessories distribution and products businesses include: Land 'N' Sea, Kellogg Marine Supply, BLA, Payne's, 
Attwood Marine, Garelick Mfg. Co. and Whale. These businesses are leading manufacturers and distributors of marine parts and 
accessories throughout North America, Europe and Asia-Pacific, offering same-day or next-day delivery service to a broad array 
of marine service facilities. 

Intercompany sales to Brunswick's Boat segment represented approximately 12 percent of Mercury Marine's sales in 2016. 
Domestic demand for the Marine Engine segment's products is seasonal, with sales generally highest in the second calendar quarter 
of the year.

Boat Segment

The Boat segment consists of the Brunswick Boat Group (Boat Group), which manufactures and markets: fiberglass pleasure 
boats; yachts and sport yachts; sport cruisers and sport boats; offshore fishing boats; aluminum and fiberglass fishing boats; pontoon 
boats; utility boats; deck boats; inflatable boats; and heavy-gauge aluminum boats. We believe that the Boat Group, which had 
net sales of $1,369.9 million during 2016, is a world leader in the manufacturing and sale of pleasure motorboats.

The  Boat  Group  manages  Brunswick's  boat  brands;  evaluates  and optimizes  the  Boat  segment's  boat  portfolio;  promotes 
recreational boating services and activities to enhance the consumer experience and dealer profitability; and speeds the introduction 
of new technologies into boat manufacturing and design processes.

The Boat Group includes the following boat brands: Sea Ray L-Class yachts, yachts, sport yachts, sport cruisers and sport 
boats; Bayliner sport cruisers, runabouts and Heyday wake boats; Meridian yachts; Boston Whaler and Lund fiberglass fishing 
boats; Crestliner, Cypress Cay, Harris, Lowe, Lund and Princecraft aluminum fishing, utility, pontoon boats and deck boats; and 
Thunder Jet heavy-gauge aluminum boats. The Boat Group also includes a commercial and governmental sales unit that sells 
products to commercial customers, as well as to the United States government and state, local and foreign governments. The Boat 
Group procures most of its outboard engines, gasoline sterndrive engines and gasoline inboard engines from Brunswick's Marine 
Engine segment.  

2

 
 
 
 
 
The Boat Group also includes several Brunswick boat brands based in Europe and Asia-Pacific, such as Quicksilver, Uttern 
and Rayglass (including Protector and Legend), which are typically equipped with Mercury Marine engines and often include 
other parts and accessories supplied by Mercury Marine.

The Boat Group operates manufacturing facilities in Florida, Indiana, Minnesota, Missouri, Tennessee, Washington, Brazil, 
Canada, Mexico, New Zealand and Portugal, and owns an inactive manufacturing facility in North Carolina. The Boat Group 
utilizes contract manufacturing facilities in Poland. 

On July 1, 2016, Brunswick acquired substantially all of the assets of privately held Thunder Jet Boats, Inc. (Thunder Jet), 
which is based in Clarkston, Washington.  Thunder Jet is a designer and builder of heavy-gauge aluminum boats.  We believe this 
acquisition  will  add  breadth  and  depth  to  the  Boat  Group's  overall  product  portfolio,  including  in  the  growing  heavy-gauge 
aluminum market.  Thunder Jet is managed within the Boat Group.  

The Boat Group sells its products through a global network of approximately 3,000 dealer and distributor locations, which 
may carry more than one of Brunswick's boat brands. Sales to the Boat Group's largest dealer, MarineMax, Inc., which has multiple 
locations and carries a number of the Boat Group's product lines, represented approximately 24 percent of Boat Group sales in 
2016. Domestic demand for pleasure boats is seasonal, with sales generally highest in the second calendar quarter of the year.

Fitness Segment

Our Fitness segment is comprised of the Fitness division (Fitness), which designs, manufactures and markets a full line of 
reliable, high-quality cardiovascular fitness equipment (including treadmills, total body cross-trainers, stair climbers and stationary 
exercise bicycles) and strength-training equipment under the Life Fitness, Hammer Strength, Cybex, Indoor Cycling Group and 
SCIFIT brands.  The Fitness segment also includes InMovement products for productive well-being and our active recreation 
business, including billiards tables, accessories and game room furniture. 

We believe that our Fitness segment, which had net sales of $980.4 million during 2016, is the world's largest manufacturer 
of commercial fitness equipment and a leading manufacturer of high-quality consumer fitness equipment.  Fitness' commercial 
customers include health clubs, corporations, schools and universities, hotels, professional and collegiate sports teams, retirement 
and assisted living facilities and the military and governmental agencies. Planet Fitness Inc. is the segment's most significant 
customer. Fitness makes commercial sales through its direct sales force, domestic dealers and international distributors.  Consumer 
products are available at specialty retailers, select mass merchants, sporting goods stores, through international distributors and 
on the Life Fitness website.

The billiards business was established in 1845 and is Brunswick's heritage business.  The billiards business designs and markets 
billiards  tables,  table  tennis  tables  and Air  Hockey  tables,  as  well  as  game  room  furniture  and  related  accessories,  under  the 
Brunswick and Contender brands.  InMovement is a business dedicated to addressing workplace inactivity and combating the 
harmful effects of a sedentary lifestyle by offering products designed to incorporate subtle movement into employee work habits.  

On January 20, 2016, we acquired 100 percent of privately held Cybex International, Inc. (Cybex), a leading manufacturer of 
commercial fitness equipment, which is currently based in Medway, Massachusetts.  Cybex offers a full line of cardiovascular 
and  strength  products.   We  believe  the  acquisition  will  expand  the  Fitness  segment's  participation  in  key  markets,  including 
commercial fitness, and add to our manufacturing footprint to meet current and future demand more effectively.  On August 31, 
2016, we acquired 100 percent of Indoor Cycling Group (ICG), a market leader specializing in the design of indoor cycling 
equipment, based in Nuremburg, Germany.  We believe the ICG acquisition will strengthen our position in indoor cycling and 
provide a strong foundation to expand in the growing group exercise market.  Cybex and ICG are managed within the Fitness 
segment.

The Fitness segment's principal manufacturing facilities are located in Illinois, Kentucky, Massachusetts, Minnesota, Oklahoma, 
Wisconsin and Hungary, with principal third party contract manufacturing partners in China and Taiwan. Fitness distributes its 
products  worldwide  from  regional  warehouses  and  production  facilities.  Demand  for  Fitness  products  is  seasonal,  with  sales 
generally highest in the fourth quarter of the year.

Discontinued Operations

On July 17, 2014, we entered into an agreement to sell our retail bowling business to AMF Bowling Centers, Inc. (AMF).  In 
connection with our decision to sell the bowling centers, we also announced our intention to divest our bowling products business.  
The billiards business, which was previously reported in the Bowling & Billiards segment, remains part of the Company and is 

3

 
being reported in the Fitness segment for all periods presented.  On September 18, 2014, we completed the sale of our retail 
bowling  business  to AMF.  On  May  22,  2015,  we  completed  the  sale  of  our  bowling  products  business  to  BlueArc  Capital 
Management L.L.C.  As a result of these actions, these businesses, which were previously recorded in the Bowling & Billiards 
segment, are reported as discontinued operations in the Consolidated Statements of Operations for all periods presented.  We do 
not have or anticipate having any significant continuing involvement or continuing cash flows associated with these businesses. 
Refer to Note 2 – Discontinued Operations in the Notes to Consolidated Financial Statements for additional information regarding 
discontinued operations.

Financial Services

Through our Brunswick Financial Services Corporation subsidiary, we own a 49 percent interest in a joint venture, Brunswick 
Acceptance Company, LLC (BAC). Under the terms of the joint venture agreement, BAC provides secured wholesale inventory 
floorplan financing to our boat and engine dealers.  Prior to March 1, 2016, CDF Ventures, LLC (CDFV), a subsidiary of GE 
Capital Corporation (GECC), owned the remaining 51 percent. On March 1, 2016, GECC sold its Commercial Distribution Finance 
business, including CDFV and its interest in the BAC joint venture, to Wells Fargo & Company. The transaction did not have a 
material effect on BAC.

Effective July 31, 2015, the joint venture was extended through December 31, 2019.  The joint venture agreement contains 
provisions allowing for the renewal of the agreement or purchase of the other party's interest in the joint venture at the end of its 
term. Alternatively, either partner may terminate the agreement at the end of its term.  In June 2016, the parties amended the joint 
venture agreement to adjust a financial covenant that was conformed to the maximum leverage ratio test contained in our revolving 
credit facility described in Note 16 – Debt in the Notes to Consolidated Financial Statements.

Additionally, we offer financial services through Brunswick Product Protection Corporation, which provides marine dealers 
the opportunity to offer extended product warranties to retail customers, and through Blue Water Dealer Services, Inc., which 
provides retail financial services to marine dealers. Each company allows us to offer a more complete line of financial services to 
our boat and marine engine dealers and their customers.

Refer to Note 10 – Financial Services in the Notes to Consolidated Financial Statements for more information about our 

financial services.

Distribution

We utilize distributors, dealers and retailers (Dealers) for the majority of our boat sales and significant portions of our sales 
of marine engine, fitness and billiards products. We have over 16,000 Dealers serving our business segments worldwide. Our 
marine Dealers typically carry one or more of the following product categories - boats, engines and related parts and accessories.

We own Land 'N' Sea, Kellogg Marine Supply and Payne's Marine Group, which comprise the primary parts and accessories 
distribution platforms for our Marine Engine segment in North America. We believe that these businesses, collectively, are the 
leading distributors of marine parts and accessories throughout North America, with 20  distribution warehouses located throughout 
the United States and Canada offering same-day or next-day delivery service to a broad array of marine service facilities and 
Dealers. We also believe we are the leading parts and accessories distributor in the Asia-Pacific region.

Our Dealers are independent companies or proprietors that range in size from small, family-owned businesses to a large, 
publicly-traded corporation with substantial revenues and multiple locations. Some Dealers sell our products exclusively, while 
a majority also carry competitors' and complementary products. We partner with our boat dealer network to improve quality, 
service, distribution and delivery of parts and accessories to enhance the boating customer's experience.

Demand for a significant portion of our products is seasonal, and a number of our Dealers are relatively small and/or highly-
leveraged. As a result, many dealers secure floor plan financing from BAC or other third party finance companies, enabling them 
to provide stable channels for our products. In addition to the financing BAC offers, we may also provide our Dealers with incentive 
programs,  loan  guarantees,  inventory  repurchase  commitments  and  financing  receivable  arrangements,  under  which  we  are 
obligated to repurchase inventory or receivables from a finance company in the event of a Dealer's default. We believe that these 
arrangements are in our best interest; however, these arrangements expose us to credit and business risk. Our business units, along 
with BAC, maintain active credit operations to manage this financial exposure, and we continually seek opportunities to sustain 
and improve the financial health of our various distribution channel partners. Refer to Note 8 – Financing Receivables and Note 
13  –  Commitments  and  Contingencies  in  the  Notes  to  Consolidated  Financial  Statements  for  further  discussion  of  these 
arrangements.

4

 
 
 
 
 
International Operations

Our sales to customers in markets other than the United States were $1,457.0 million (32 percent of net sales), $1,377.9 million
(33 percent of net sales) and $1,438.7 million (37 percent of net sales) in 2016, 2015 and 2014, respectively. We transact a portion 
of our sales in non-U.S. markets in local currencies, while a meaningful portion of our product costs are denominated in U.S. 
dollars as a result of our U.S. manufacturing operations. As a result, the strengthening or weakening of the U.S. dollar affects the 
financial results of our non-U.S. operations. 

Non-U.S. sales are set forth in Note 6 – Segment Information in the Notes to Consolidated Financial Statements and are 

also included in the table below, which details our non-U.S. sales by region:

(in millions)
Europe
Canada
Asia-Pacific
Latin America
Africa & Middle East
Total

2016

2015

2014

569.2
284.6
363.1
151.2
88.9
1,457.0

$

$

506.0
282.9
307.9
183.2
97.9
1,377.9

$

$

533.5
302.4
286.0
219.0
97.8
1,438.7

$

$

Marine Engine segment non-U.S. sales represented approximately 47 percent of our non-U.S. sales in 2016. The segment's 

principal non-U.S. operations include the following:

• 

• 
• 
• 
• 
• 

Distribution, sales, service and applications engineering offices in Australia, Belgium, Brazil, Canada, China, Malaysia, 
New Zealand and Singapore; 
Sales or representative offices in Dubai, Finland, France, Italy, Japan, Norway, Russia, Sweden and Switzerland; 

  A component manufacturing facility in Mexico;

An outboard engine assembly plant in Suzhou, China; 

  An outboard engine assembly plant operated by a joint venture in Japan; and
   A parts and accessories manufacturing facility in Northern Ireland.

Boat segment non-U.S. sales comprised approximately 23 percent of our non-U.S. sales in 2016.  The Boat Group manufactures 
or assembles a portion of its products in Brazil, Canada, Mexico, New Zealand and Portugal, as well as in boat plants owned and 
operated by third parties in Poland that perform contract manufacturing for us, and are sold worldwide through Dealers. The Boat 
Group has sales or import offices in Belgium, Brazil, Canada, France, Italy, the Netherlands, New Zealand, Norway, Poland and 
Sweden.

Fitness segment non-U.S. sales comprised approximately 30 percent of our non-U.S. sales in 2016. Life Fitness sells its 
products worldwide and has sales and distribution centers in Brazil, Germany, Hong Kong, Japan, the Netherlands, Spain and the 
United Kingdom. The Fitness segment manufactures strength-training equipment and select lines of cardiovascular equipment in 
Hungary for its international markets, and has relationships with third party contract manufacturing partners in China and Taiwan.

Raw Materials and Supplies

We purchase a wide variety of raw materials from our supplier base, including aluminum, resins, oil and steel, as well as 
product parts and components, such as engine blocks and boat windshields. The prices for these raw materials, parts and components 
fluctuate depending on market conditions. Significant increases in the cost of such materials would raise our production costs, 
which could reduce profitability if we did not recoup the increased costs through higher product prices.

As our manufacturing operations continued to raise production levels in 2016, our need for raw materials and supplies increased.  
During  2016,  we  experienced  some  shortages  or  delayed  delivery  of  certain  materials,  parts  and  supplies  essential  to  our 
manufacturing operations.  We have addressed and will continue to address this issue by identifying alternative suppliers, working 
to secure adequate inventories of critical supplies and continually monitoring the capabilities of our supplier base. In 2017, we 
anticipate our suppliers will need to increase their manufacturing operations to meet the rising demand for their products and, in 
many cases, may need to hire additional workers in order to fulfill the orders placed by us and other customers. 

We also continue to expand our global procurement operations to better leverage purchasing power across our divisions and 
to improve supply chain and cost efficiencies. We mitigate commodity price risk on certain raw material purchases by entering 
into fixed priced contracts to mitigate exposure related to changes in commodity prices.

5

 
 
 
Intellectual Property

We have, and continue to obtain, patent rights covering certain features of our products and processes. By law, our patent 
rights, which consist of patents and patent licenses, have limited lives and expire periodically. We believe that our patent rights 
are important to our competitive position in all of our business segments.  Our trademark rights have indefinite lives, and many 
are well known to the public and are considered to be valuable assets. Most of our intellectual property is owned by U.S. entities. 

In the Marine Engine segment, patent rights principally relate to features of outboard engines and inboard-outboard drives, 
hybrid  drives  and  pod  drives,  including:  die-cast  powerheads;  cooling  and  exhaust  systems;  drivetrain,  clutch  and  gearshift 
mechanisms; boat/engine mountings; shock-absorbing tilt mechanisms; ignition systems; propellers; marine vessel control systems; 
fuel and oil injection systems; supercharged engines; outboard mid-section structures; segmented cowls; hydraulic trim, tilt and 
steering; screw compressor charge air cooling systems; a range of proprietary metal alloys; and airflow silencers.

In the Boat segment, patent rights principally relate to processes for manufacturing fiberglass hulls, decks and components 

for boat products, as well as patent rights related to interiors and other boat features and components.

In the Fitness segment, patent rights principally relate to fitness equipment designs and components, including patents covering 
internal processes, programming functions, displays, design features and styling, as well as billiards table designs and components 
and active workplace furniture and equipment.

The following are our principal trademarks: 

Marine Engine Segment:  Attwood, Axius, Garelick, Kellogg Marine Supply, Land 'N' Sea, Mariner, MerCruiser, Mercury, 
Mercury Marine, Mercury Precision Parts, Mercury Propellers, Mercury Racing, MotorGuide, OptiMax, Quicksilver, Seachoice, 
SeaPro, SmartCraft, Sport-Jet, Swivl-Eze, Valiant, Verado, Whale and Zeus.

Boat Segment:  Bayliner, Boston Whaler, Crestliner, Cypress Cay, Harris, Heyday, Lowe, Lund, Master Dealer, Meridian, 

Princecraft, Protector, Quicksilver, Rayglass, Sea Ray, Thunder Jet and Uttern.

Fitness Segment:  Air Hockey, Brunswick, Contender, Cybex, Flex Deck, Gold Crown, Hammer Strength, Indoor Cycling 

Group, InMovement, Lifecycle, Life Fitness and SCIFIT.

Competitive Conditions and Position

We believe that we have a reputation for quality in each of our highly competitive lines of business. We compete in various 
markets by: utilizing efficient production techniques; developing and strengthening our leading brands; developing and promoting 
innovative technological advancements; undertaking effective marketing, advertising and sales efforts; providing high-quality, 
innovative products at competitive prices; and offering extensive aftermarket products.

Strong competition exists in each of our product groups, but no single enterprise competes with us in all product groups. In 
each product area, competitors range in size from large, highly-diversified companies to small, single-product businesses. We also 
indirectly compete with businesses that offer alternative leisure products or activities.

 The following summarizes our competitive position in each segment:

Marine Engine Segment:  We believe the Marine Engine segment is a world leader in the manufacture and sale of recreational 
and commercial marine engines and marine parts and accessories.  The marine engine market is highly competitive among several 
major international companies that comprise the majority of the market, including Japanese-based outboard engine manufacturers, 
as well as several smaller companies including Chinese manufacturers. Competitive advantage in this segment is a function of 
product features, technological leadership, quality, service, pricing, performance and durability, along with effective promotion 
and distribution.

Boat Segment:  We believe that the Boat segment is a world leader in the manufacture and sale of pleasure motorboats.  There 
are  several  major  manufacturers  of  pleasure  and  offshore  fishing  boats,  along  with  hundreds  of  smaller  manufacturers. 
Consequently, this business is both highly competitive and highly fragmented. We believe that we have the broadest range of boat 
product offerings in the world, with boats ranging in size from 10 to 65 feet. In all of our boat operations, we compete on the basis 
of product features, technology, quality, brand strength, dealer service, pricing, performance, value, durability and styling, along 
with effective promotion and distribution.

6

 
 
 
 
 
 
 
 
 Fitness  Segment:  We  believe  we  are  the  world's  largest  manufacturer  of  commercial  fitness  equipment  and  a  leading 
manufacturer of high-quality consumer fitness equipment and billiards tables. The fitness equipment industry is highly competitive 
among several major international companies that comprise the majority of the market, as well as many smaller manufacturers, 
which creates a highly fragmented, competitive landscape. Many of our fitness equipment offerings include industry-leading 
product features, and we place significant emphasis on introducing innovative fitness equipment to the market. Competitive focus 
is also placed on product quality, technology, service, pricing, state-of-the-art biomechanics and effective promotional activities.  
The billiards industry continues to experience competitive pressure from low-cost billiards manufacturers outside the United 
States, and InMovement products also face competition, primarily from furniture manufacturers and distributors. 

Research and Development

We strive to improve our competitive position in all of our segments by continuously investing in research and development 
to  drive  innovation  in  our  products  and  manufacturing  technologies.  Our  research  and  development  investments  support  the 
introduction of new products and enhancements to existing products. Research and development expenses were 3.1 percent of net 
sales in 2016, 2015 and 2014. Research and development expenses by segment are discussed in Note 6 – Segment Information. 

The number of employees worldwide is shown below by segment: 

Number of Employees

Marine Engine (A)
Boat
Fitness
Corporate (B)
Total (C)

December 31, 2016

December 31, 2015

Total

6,112
5,071
2,893
339
14,415

Union
(domestic)
1,926
—
139
—
2,065

Total

5,686
4,539
2,209
311
12,745

Union
(domestic)
1,803
—
143
—
1,946

(A) The number of Marine Engine employees as of December 31, 2015 has been adjusted from the amount reported on the 2015 Form 10-K due to the 
exclusion of certain employees related to an acquisition completed in the latter part of 2015.
(B) Corporate numbers include certain information technology employees and shared services. 
(C)  All employee numbers exclude temporary employees.

The Company believes that the relationships between its employees, any labor unions and the Company remain stable.

Environmental Requirements

Refer to Note 13 – Commitments and Contingencies in the Notes to Consolidated Financial Statements for a description 

of certain environmental proceedings.

Available Information

Brunswick maintains an Internet website at http://www.brunswick.com that includes links to our Annual Report on Form 10-
K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports, and proxy statements 
(SEC Filings). The SEC Filings are available without charge as soon as reasonably practicable following the time that they are 
filed with, or furnished to, the SEC. Shareholders and other interested parties may request email notification of the posting of 
these documents through the Investors section of our website. 

7

  
 
 Item 1A.  Risk Factors

The Company's operations and financial results are subject to certain risks and uncertainties, including those described below, 
which could adversely affect our business, financial condition, results of operations, cash flows and the trading price of our common 
stock.

Worldwide economic conditions have hurt our industries, businesses and results of operations and may continue to do so.

In times of economic uncertainty and contraction, consumers tend to have less discretionary income and to defer expenditures 
for discretionary items, which adversely affects our financial performance, especially in the marine businesses.   Although we 
have worked to expand the portions of our portfolio that are less susceptible to economic cycles, a portion of the business remains 
cyclical and sensitive to personal spending levels.  In addition, general economic conditions in certain international markets, 
including Latin America, Africa and the Middle East and Canada, continue to be challenging with respect to weak currencies, 
commodity market impacts and corresponding weak economic conditions.

Deterioration in general economic conditions that in turn diminishes consumer confidence or discretionary income may reduce 
our sales, or we may decide to lower pricing for our products, thus adversely affecting our financial results, including increasing 
the  potential  for  future  impairment  charges.    Further,  most  of  our  products  are  used  for  recreation,  and  consumers’  limited 
discretionary income in times of economic hardship may be diverted to other activities that occupy their time, such as other forms 
of recreation, religious, cultural or community activities.  We cannot predict the timing or strength of economic recovery, either 
worldwide or in the specific markets in which we compete.  

Changes in currency exchange rates can adversely affect our results.

Some of our sales are denominated in a currency other than the U.S. dollar. Consequently, a strong U.S. dollar may adversely 
affect reported revenues. We have hedging programs in place to reduce our risk to currency fluctuations; however, we cannot 
hedge against all currency risks, especially over the long term.  We maintain a portion of our cost structure in currencies other 
than the U.S. dollar, which partially mitigates the impact of a strengthening U.S. dollar.  This includes manufacturing operations 
for boats in Europe and Canada, fitness equipment in Europe, and smaller outboard engines manufactured and purchased from 
our joint venture in Japan.  We also continue to evaluate the supply chain and cost structure for opportunities to further mitigate 
foreign currency risks.  

We sell products manufactured in the U.S. into certain international markets in U.S. dollars, including to Canada, Europe and 
Latin America.    Demand  for  our  products  in  these  markets  may  be  diminished  by  a  strengthening  U.S.  dollar.    Some  of  our 
competitors with cost positions based outside the U.S., including Asian-based outboard engine and fitness equipment manufacturers, 
European-based large fiberglass boat manufacturers and a European-based fitness equipment manufacturer, may have an improved 
cost position due to a strengthening U.S. dollar, which could result in pricing pressures on our products.  These factors existed 
throughout 2015 and 2016, but we do not believe they resulted in any material change in our competitive position.

An inability to make targeted acquisitions or failure to successfully integrate newly acquired businesses could negatively 
impact financial results.

Our growth initiatives include making strategic acquisitions, which depend on the availability of suitable targets at acceptable 
terms and our ability to complete the deals.  In order to manage our acquisition strategy, we conduct rigorous due diligence, involve 
various functions and continually review our strategy and target acquisitions, all of which we believe mitigates our acquisition 
risks.    However,  we  cannot  assure  that  acquisitions  will  be  consummated  or  that,  if  consummated,  they  will  be  successful.  
Acquisitions pose risks such as our ability to project and evaluate market demand, maximize potential synergies and cost savings; 
make  accurate  accounting  estimates;  and  achieve  anticipated  business  objectives.   As  we  continue  to  grow,  in  part,  through 
acquisitions, our success depends on our ability to anticipate and effectively manage these risks.  If acquired businesses do not 
achieve projected results, our growth may be limited and our results adversely affected.  

In addition, acquisitions present integration risks, including that the acquisition may:

• 
• 
• 
• 
• 
• 

disrupt operations in core, adjacent or acquired businesses; 
require more time than anticipated to be fully integrated into Company operations and systems; 
create more costs than projected; 
divert management attention; 
create the potential of losing customer, supplier or other critical business relationships; and 
pose difficulties retaining employees.  

8

If we fail to timely and successfully integrate new businesses into existing operations, we may see higher production costs, 

lost sales or otherwise diminished earnings and financial results.

Failure to successfully implement our strategic plan and growth initiatives could have a material adverse effect on our 
business and financial condition.

Our ability to continue generating strong cash flow and profits depends partly on the sustained successful execution of our 
strategic plan and growth initiatives, including making acquisitions and expanding into new adjacent markets and customers.  To 
address risks associated with our plan and growth initiatives, we have established processes to regularly review, manage and 
modify our plans, and we believe we have appropriate oversight to monitor initiatives and their impact. Our strategic plan and 
growth initiatives require significant capital investment and management attention, however, which could result in the diversion 
of these resources from the core business and other business issues and opportunities.  Additionally, any new initiative is subject 
to certain risks, including customer acceptance, competition, the ability to manufacture products on schedule and to specification, 
the ability to create the necessary supply chain and/or the ability to attract and retain qualified management and other personnel.  
There is no assurance that we will be able to develop and successfully implement our strategic plan and growth initiatives to a 
point at which they will become profitable or generate positive cash flow.

Fiscal concerns may negatively impact worldwide credit conditions and adversely affect our industries, businesses and 
financial condition.

Fiscal policy could have a material adverse impact on worldwide economic conditions, the financial markets and availability 
of credit and, consequently, may negatively affect our industries, businesses and overall financial condition.  Customers often 
finance purchases of our products, particularly boats. Credit market conditions continued to improve in 2016, but remained less 
favorable overall than those in existence prior to the decline in marine retail demand beginning in 2007.  While interest rates are 
generally  lower,  there  continue  to  be  fewer  lenders,  tighter  underwriting  and  loan  approval  criteria,  greater  down  payment 
requirements and negative loan equity, particularly in larger products.  If credit conditions worsen, and adversely affect the ability 
of customers to finance potential purchases at acceptable terms and interest rates, it could result in a decrease in sales or delay 
improvement in sales.

Dealer or distributor inability to secure adequate access to capital could adversely affect our sales.

Our dealers require adequate liquidity to finance their operations, including purchasing our products.  Dealers are subject to 
numerous risks and uncertainties that could unfavorably affect their liquidity positions, including, among other things, continued 
access to adequate financing sources on a timely basis on reasonable terms.  These financing sources are vital to our ability to sell 
products through our distribution network, particularly to boat and engine dealers.  Entities affiliated with Wells Fargo & Company, 
including BAC, the Company’s 49 percent owned joint venture, finance a significant portion of our boat and engine sales to dealers 
through floorplan financing to marine dealers. 

Many factors continue to influence the availability and terms of financing that our dealer floorplan financing providers offer, 

including: 

• 

• 
• 
• 

their ability to access certain capital markets, such as the securitization and the commercial paper markets, and to fund 
their operations in a cost effective manner; 
the performance of their overall credit portfolios; 
their willingness to accept the risks associated with lending to marine dealers; and 
the overall creditworthiness of those dealers.  

Our sales could be adversely affected if financing terms change unfavorably or if BAC were to be terminated.  This could 
require dealers to find alternative sources of financing, including our direct financing to dealers, which could require additional 
capital to fund the associated receivables.

Our financial results could be adversely affected if we are unable to maintain effective distribution.

We  rely  on  third-party  dealers  and  distributors  to  sell  the  majority  of  our  products,  particularly  in  the  marine 
businesses.  Maintaining a reliable network of dealers is essential to our success.  We face competition from other manufacturers 
in attracting and retaining distributors and independent boat dealers. A significant deterioration in the number or effectiveness of 
our dealers and distributors could have a material adverse effect on our financial results.

Although at present we believe dealer health to be generally favorable, weakening demand for marine products could hurt 
our dealers’ financial performance.  In particular, reduced cash flow from decreases in sales and tightening credit markets may 

9

impair dealers' ability to fund operations.  Inability to fund operations can force dealers to cease business, and we may be unable 
to obtain alternate distribution in the vacated market.  An inability to obtain alternate distribution could unfavorably affect our net 
sales through reduced market presence.  If economic conditions deteriorate, we anticipate that dealer failures or voluntary market 
exits would increase, especially if overall retail demand materially declines. 

Finally, labor disruption at major ports and shipping hubs around the world may adversely affect our ability to transport raw 
materials to our facilities and products to our distributors and end-use customers, potentially resulting in increased transportation 
costs and lost sales.

Adverse economic, credit and capital market conditions could have a negative impact on our financial results.

We do not frequently rely on short-term capital markets to meet our working capital requirements, fund capital expenditures, 
pay dividends or fund employee benefit programs; however, we do maintain short-term borrowing facilities that can be used to 
meet these capital requirements.  In addition, over the long term, we may determine that it is necessary to access the capital markets 
to refinance existing long-term indebtedness or for other initiatives.

Adverse global economic conditions, market volatility and regulatory uncertainty could lead to volatility and disruptions in 
the capital and credit markets.  This could adversely affect our ability to access capital and credit markets or increase the cost to 
do so, which could have a negative impact on our business, financial results and competitive position.

Inventory reductions by major dealers, retailers and independent boat builders could adversely affect our financial results.

The Company and our dealers, retailers and other distributors could decide to reduce the number of units they hold, particularly 
if demand trails forecasted levels or if new product introductions are expected to replace older products.  Such efforts tend to result 
in wholesale sales reductions in excess of retail sales reductions and would likely result in lower production levels of our products, 
causing lower rates of absorption of fixed costs in our manufacturing facilities and lower margins. While we continue to work to 
keep dealer inventories at appropriate levels, potential inventory reductions remain a risk to our future sales and results of operations.

We may be required to repurchase inventory or accounts of certain dealers.

We have agreements with certain third-party finance companies to provide financing to our customers, enabling them to purchase 
our products.  In connection with these agreements, we may either have obligations to repurchase our products from the finance 
company, or may have recourse obligations to the finance company on the dealer’s receivables.  These obligations may be triggered 
if our dealers default on their debt obligations to the finance companies.

Our maximum contingent obligation to repurchase inventory and our maximum contingent recourse obligations on customer 
receivables are less than the total balances of dealer financings outstanding under these programs, because our obligations under 
certain of these arrangements are subject to caps, or are limited based on the age of product.  Our risk related to these arrangements 
is mitigated by the proceeds we receive on the resale of repurchased product to other dealers, or by recoveries on receivables 
purchased under the recourse obligations.

Our inventory repurchase obligations relate primarily to the inventory floorplan credit facilities of our boat and engine dealers. 
Our actual historical repurchase experience related to these arrangements has been substantially less than our maximum contractual 
obligations. If dealers file for bankruptcy or cease operations, however, we could incur losses associated with the repurchase of 
our products.  In addition, as the repurchases may be triggered by dealer bankruptcies, our net sales and earnings may be unfavorably 
affected as a result of reduced market coverage and the associated decline in sales.

Declines in marine industry demand could cause an increase in future repurchase activity, or could require us to incur losses 
in excess of established reserves.  In addition, our cash flow and loss experience could be adversely affected if repurchased inventory 
is not successfully distributed to other dealers in a timely manner, or if the recovery rate on the resale of the product declines.  The 
finance  companies  could  require  changes  in  repurchase  or  recourse  terms  that  would  result  in  an  increase  in  our  contractual 
contingent obligations.

Loss of key customers could harm our business.

In each segment, we have important relationships with key customers.  If we lost such a key customer, our business could be 
adversely effected.  In addition, certain customers could try to negotiate more favorable pricing of our products, which could 
depress earnings.  In an effort to mitigate the risk associated with reliance on key customer accounts, we continually monitor such 
relationships and maintain a complete and competitive product lineup. 

10

Our success depends upon the continued strength of our brands.

We believe that our brands, including Mercury, Life Fitness, Sea Ray, Boston Whaler and Lund, significantly contribute to 
our success, and that maintaining and enhancing these brands is important to expanding our customer base.  A failure to adequately 
promote and protect our brands could adversely affect our business and results of operations.  Further, in connection with the 
divestiture of the bowling businesses, we licensed certain trademarks and servicemarks, including use of the name “Brunswick,” 
to the acquiring companies.  Our reputation may be adversely affected by the purchasers' inappropriate use of the marks or of the 
name Brunswick, including potential negative publicity, loss of confidence or other damage to our image due to this licensed use.  

We have a fixed cost base that can affect our profitability in a declining sales environment.

The fixed cost levels of operating production facilities can put pressure on profit margins when sales and production decline.  
We have maintained discipline over our fixed cost base during the economic recovery; however, our profitability is dependent, in 
part, on our ability to spread fixed costs over an increasing number of products sold and shipped, and if we are required to reduce 
our rate of production, gross margins could be negatively affected if we are unable to lower fixed costs accordingly.  Consequently, 
decreased demand or the need to reduce inventories can lower our ability to absorb fixed costs and materially impact our results.

Successfully managing the expansion of our manufacturing footprint is critical to our operating and financial results.

Over the past four years, we have made strategic capital investments in capacity expansion activities that will enable our 
businesses  to  successfully  capture  growth  opportunities  and  enhance  product  offerings.    Recently,  we  initiated  or  completed 
expansion activities at our facilities in Edgewater, Florida; Ramsey and Owatonna, Minnesota; Fond du Lac, Wisconsin; and Petit-
Rechain, Belgium.  We must carefully manage these capital improvement projects and expansions to ensure they meet cost targets, 
comply with applicable environmental, safety and other regulations and uphold high-quality workmanship.  

Moving  production  to  a  different  plant  or  expanding  capacity  at  an  existing  facility  involves  risks,  including  difficulties 
initiating production within the cost and timeframe estimated, supplying product to customers when expected, integrating new 
products and attracting sufficient skilled workers to handle additional production demands.  If we fail to meet these objectives, it 
could adversely affect our ability to meet customer demand for products and increase the cost of production versus projections, 
both of which could result in a significant adverse impact on operating and financial results.  Additionally, plants experiencing 
demand increases may face manufacturing inefficiencies; additional expenses, including higher wages; and cost inefficiencies, 
which could exceed projections and negatively impact financial results.

Our financial results may be adversely affected by increased costs, disruption of supply or defects in raw materials, parts 
and product components we buy from third-party suppliers.

We rely on third-parties to supply raw materials used in the manufacturing process, including oil, aluminum, copper, steel 
and resins, as well as product parts and components.  The prices for these raw materials, parts and components fluctuate depending 
on market conditions and, in some instances, commodity prices.  Substantial increases in the prices of raw materials, parts and 
components would increase our operating costs, and could reduce our profitability if we could not recoup the increased costs 
through higher product prices.  Similarly, if a critical supplier were to close its operations, cease manufacturing or otherwise fail 
to  deliver  an  essential  component  necessary  to  our  manufacturing  operations,  that  could  detrimentally  affect  our  ability  to 
manufacture and sell our products, resulting in an interruption in business operations and/or a loss of sales. 

In addition, some components used in our manufacturing processes, including certain engine components, furniture, upholstery 
and boat windshields, are available from a sole supplier or a limited number of suppliers.  Operational and financial difficulties 
that these or other suppliers may face in the future could adversely affect their ability to supply us with the parts and components 
we need, which could significantly disrupt our operations.  It may be difficult to find a replacement supplier for a limited or sole 
source raw material, part or component without significant delay or on commercially reasonable terms.  In addition, an uncorrected 
defect or supplier's variation in a raw material, part or component, either unknown to us or incompatible with our manufacturing 
process, could jeopardize our ability to manufacture products.  

Some additional supply risks that could disrupt our operations, impair our ability to deliver products to customers and negatively 

affect our financial results include: 

• 
• 
• 

financial pressures on our suppliers due to a weakening economy or unfavorable conditions in other end markets; 
a deterioration of our relationships with suppliers; or 
events such as natural disasters, power outages or labor strikes.  

11

These risks are exacerbated in the case of single-source suppliers, and the exclusive supplier of a key component potentially could 
exert significant bargaining power over price, quality, warranty claims or other terms.

We continue to increase production; consequently, our need for raw materials and supplies continues to increase.  Our suppliers 
must be prepared to ramp up operations and, in many cases, hire additional workers and/or expand capacity in order to fulfill our 
orders and those of other customers.  Cost increases, defects or sustained interruptions in the supply of raw materials, parts or 
components due to delayed start-up periods our suppliers experience as they increase production efforts create risks to our operations 
and financial results.  The Company experienced periodic supply shortages in 2016.  We continue to address these issues by 
identifying alternative suppliers for key materials and components, working to secure adequate inventories of critical supplies and 
continually monitoring the capabilities of our supplier base.  In the future, however, we may experience shortages, delayed delivery 
and/or increased prices for key materials, parts and supplies that are essential to our manufacturing operations.

Our pension funding requirements and expenses are affected by certain factors outside our control.

Our funding obligations and pension expense for our four U.S. qualified pension plans are driven by the performance of assets 
set aside in trusts for these plans, the discount rate used to value the plans’ liabilities, actuarial data and experience and legal and 
regulatory funding requirements.  Changes in these factors could have an adverse impact on our results of operations, liquidity or 
shareholders’ equity.  In addition, a small portion of our pension plan assets are invested in equity securities, which can experience 
significant declines if economic conditions or financial markets weaken.  The level of the Company's funding of our qualified 
pension  plan  liabilities  was  approximately  78  percent  as  of  December  31,  2016.  Our  future  pension  expense  and  funding 
requirements could increase due to the effect of adverse changes in the discount rate and asset levels along with a decline in the 
estimated return on plan assets.  In addition, changes to legal regulations could require us to make increased contributions to the 
pension plans; these contributions could be material and negatively affect cash flow.

We are currently mitigating these risks by maintaing an asset allocation with a high percentage of fixed income investments 

and by lowering plan liabilities by transferring obligations to a third party through annuity purchases. 

The timing and amount of our share repurchases are subject to a number of uncertainties.

During the fourth quarter of 2014, the Company announced that the Board of Directors had authorized the discretionary 
repurchase of up to $200 million of our outstanding common stock, to be systematically completed in the open market or through 
privately negotiated transactions.  In February 2016, the Board increased our existing share repurchase authorization by $300 
million.  The remaining authorization under these programs is $240 million. The amount and timing of share repurchases are based 
on a variety of factors.  Important considerations that could cause us to limit, suspend or delay stock repurchases include:

• 
• 
• 
• 

unfavorable market conditions;
the trading price of the Company's common stock;
the nature of other investment opportunities available to us from time to time; and
the availability of cash.  

Delaying, limiting or suspending our stock repurchase program may negatively affect our stock price and earnings per share.

Higher energy and fuel costs can affect our results.

Higher energy and fuel costs increase operating expenses at our manufacturing facilities and the cost of shipping products to 
customers.  In addition, increases in energy costs can adversely affect the pricing and availability of petroleum-based raw materials 
such as resins and foam that are used in many of our marine products.  Higher fuel prices may also have an adverse effect on 
demand for marine retail products, as they increase the cost of boat ownership and possibly affect product use.

Our profitability may suffer as a result of competitive pricing and other pressures.

The introduction of lower-priced alternative products or services by other companies can hurt our competitive position in all 
of our businesses.  We are constantly subject to competitive pressures in which predominantly international manufacturers may 
pursue a strategy of aggressive pricing, particularly during periods when their local currency weakens versus the U.S. dollar.  Such 
pricing pressure may limit our ability to increase prices for our products in response to raw material and other cost increases and 
negatively affect our profit margins.

In addition, international boat builders continue to expand distribution in U.S. markets, mainly in the large fiberglass boat 
segment, thereby introducing additional product options into a market in which we believe we are a market leader.  The market 

12

for large boats grew slightly in 2016, and could expand, but as new entrants introduce potentially lower cost product alternatives, 
demand could be diverted away from our premium products. 

Finally,  our  independent  boat  builder  customers  may  react  negatively  to  potential  competition  for  their  products  from 
Brunswick’s own boat brands, which can lead them to purchase marine engines and marine engine supplies from competing marine 
engine manufacturers and may negatively affect demand for our products.

Our ability to remain competitive depends on successfully introducing new products and meeting customer expectations.

We believe that our customers look for and expect quality, innovation and advanced features when evaluating products and 
making purchasing decisions.  Our ability to remain competitive and meet our growth objectives may be adversely affected by 
difficulties or delays in product development, such as an inability to develop viable new products, gain market acceptance of new 
products, generate sufficient capital to fund new product development or obtain adequate intellectual property protection for new 
products. To meet ever-changing consumer demands, both timing of market entry and pricing of new products are critical.  As a 
result,  we  may  not  be  able  to  introduce  new  products  that  are  necessary  to  remain  competitive  in  all  markets  that  we 
serve.  Furthermore, we must continue to meet or exceed customers' expectations regarding product quality and after-sales service.

Our business operations could be negatively impacted by an outage or breach of our information technology systems.

We manage our global business operations through a variety of information technology (IT) systems which we continually 
enhance to increase efficiency and security.  We depend on these systems for commercial transactions, customer interactions, 
manufacturing, branding, employee tracking and other applications.  Some of the systems are based on legacy technology and 
operate with a minimal level of available support, and recent acquisitions using other systems have added to the complexity of 
our IT infrastructure.  We are working to upgrade, streamline and integrate these systems and have invested in strategies to prevent 
a failure or breach but, like those of other companies, our systems are susceptible to outages due to natural disasters, power loss, 
computer viruses, security breaches and similar events.  If a legacy system or another of the Company's key IT systems were to 
fail or if our IT systems were unable to communicate effectively, this could result in missed or delayed sales or lost opportunities 
for cost reduction or efficient cash management.  

We exchange information with hundreds of trading partners across all aspects of our commercial operations.  A breakdown, 
outage, malicious intrusion, random attack or other disruption of communications could result in erroneous transactions or loss 
of reputation and confidence.  We have numerous e-commerce and e-marketing portals and our systems may contain personal 
information in connection with human resources, financial services or other business operations; therefore, we must continue to 
be diligent in protecting against malicious cyber attacks.  A successful breach could result in a disruption of services, fraudulent 
transactions or disclosure of confidential information.  This could negatively affect our relationships with customers or trading 
partners, lead to potential claims against the Company and damage our image and reputation.

We manufacture and sell products that create exposure to potential claims and litigation.

Our manufacturing footprint expansions and the products we produce could result in product quality, warranty, personal injury, 
property damage and other issues, thereby increasing the risk of litigation and potential liability. To address this risk, we have 
established a global, enterprise-wide program charged with the responsibility for addressing, reviewing and reporting on product 
integrity issues.  Historically, the resolution of such claims has not had a materially adverse effect on our business, and we maintain 
what we believe to be adequate insurance coverage to mitigate a portion of these risks.  However, we may experience material 
losses in the future, incur significant costs to defend claims or issue product recalls, or experience claims in excess of our insurance 
coverage or that are not covered by insurance.  Furthermore, our reputation may be adversely affected by such claims, whether or 
not successful, including potential negative publicity about our products.  We record reserves for known potential liabilities, but 
there is the possibility that actual losses may exceed these reserves and therefore negatively impact earnings.

If our intellectual property protection is inadequate, others may be able to use our technologies and impair our ability to 
compete, which could have a material adverse effect on our financial condition and results of operations.

We regard much of the technology underlying our products as proprietary.  We rely on a combination of patents, trademark, 
copyright and trade secret laws; employee and third-party non-disclosure agreements; and other contracts to establish and protect 
our technology and other intellectual property rights. However, we remain subject to risks, including:

the steps we take to protect our proprietary technology may be inadequate to prevent misappropriation of our technology;
third parties may independently develop similar technology;
agreements containing protections may be breached or terminated;

• 
• 
• 
•  we may not have adequate remedies for breaches; 

13

existing patent, trademark, copyright and trade secret laws may afford limited protection;
a third party could copy or otherwise obtain and use our products or technology without authorization;

• 
• 
•  we may be required to litigate to defend against infringement claims or to protect our intellectual property rights; and
•  we may not prevail in intellectual property litigation.

Policing unauthorized use of our intellectual property is difficult, particularly outside the U.S., and litigating intellectual 
property claims may result in substantial cost and divert management’s attention.  Further, we may not prevail in litigation, forcing 
us to seek licenses or royalty arrangements from third parties, which we may not be able to obtain on reasonable terms, or an order 
or requirement to stop manufacturing, using, selling or distributing products that included challenged intellectual property, which 
could harm our business.

Compliance with environmental, zoning and other laws and regulations may increase costs and reduce demand for our products.

We are subject to federal, state, local and foreign laws and regulations, including product safety, environmental, health and 
safety and other regulations.  While we believe that we maintain the requisite licenses and permits and that we are in material 
compliance with applicable laws and regulations, a failure to satisfy these and other regulatory requirements could result in fines 
or penalties, and compliance could increase the cost of operations.  The adoption of additional laws, rules and regulations, including 
higher emissions standards, could increase our manufacturing costs, increase consumer pricing and reduce consumer demand for 
our products.  In addition, we are unable to predict with any reasonable degree of certainty whether reforms or repeal of current 
laws, rules or regulations under a new administration will positively or negatively affect our operations or financial results.   

Environmental restrictions, boat plant emission restrictions and permitting and zoning requirements can limit production 
capacity, access to water for boating, marina and storage space.  While future licensing requirements, including any licenses 
imposed on recreational boating, are not expected to be unduly restrictive, they may deter potential customers, thereby reducing 
our sales.  Furthermore, regulations allowing the sale of fuel containing higher levels of ethanol for automobiles, which is not 
appropriate or intended for use in marine engines, may nonetheless result in increased warranty, service costs, product dissatisfaction 
and other claims against the Company if boaters mistakenly use this fuel in marine engines, causing damage to and the degradation 
of components in their marine engines.

Our manufacturing processes involve the use, handling, storage and contracting for recycling or disposal of hazardous or toxic 
substances or wastes.  Accordingly, we are subject to regulations regarding these substances, and the misuse or mishandling of 
such substances could expose us to liabilities, including claims for property, personal injury or natural resources damages, or 
fines.  We are also subject to laws requiring the cleanup of contaminated property, including cleanup efforts currently underway.  If 
a release of hazardous substances occurs at or from one of our current or former properties or another location where we have 
disposed of hazardous materials, we may be held liable for the contamination, regardless of knowledge or whether we were at 
fault, and the amount of such liability could be material.

Additionally, we are subject to laws governing our relationships with employees, including, but not limited to, employment 
obligations as a federal contractor and employee wage, hour and benefit issues, such as pension funding and health care benefits.  
Changes to legislation or regulations governing employment obligations could increase the cost of our operations.

Changes in income tax laws or enforcement could have a material adverse impact on our financial results.

Changes in domestic and international tax laws could positively or negatively impact our tax provision, cash flow and/or tax 
related balance sheet amounts, including our deferred tax asset values. As a result of the administration change in the United States, 
the likelihood that changes may occur has increased. We are currently unable to predict with a reasonable degree of certainty what 
the legal changes will be and the potential outcome on our financial statements. Any changes in law will likely have broader 
implications, including impacts to the economy, currency markets, inflation environment, consumer behavior and/or competitive 
dynamics, which may positively or negatively impact the Company.

An impairment in the carrying value of goodwill, trade names and other long-lived assets could negatively affect our consolidated 
results of operations and net worth.

Goodwill and indefinite-lived intangible assets, such as our trade names, are recorded at fair value at the time of acquisition 
and are not amortized, but are reviewed for impairment at least annually or more frequently if impairment indicators arise.  In 
evaluating the potential for impairment of goodwill and trade names, we make assumptions regarding future operating performance, 
business trends and market and economic conditions.  Such analyses further require us to make certain assumptions about sales, 
operating margins, growth rates and discount rates.  Uncertainties are inherent in evaluating and applying these factors to the 
assessment of goodwill and trade name recoverability.  We could be required to evaluate the recoverability of goodwill or trade 

14

names prior to the annual assessment if we experience business disruptions, unexpected significant declines in operating results, 
a divestiture of a significant component of our business or declines in market capitalization.

We also continually evaluate whether events or circumstances have occurred that indicate the remaining estimated useful lives 
of our definite-lived intangible assets and other long-lived assets may warrant revision or whether the remaining balance of such 
assets may not be recoverable.  We use an estimate of the related undiscounted cash flow over the remaining life of the asset in 
measuring whether the asset is recoverable.

If the future operating performance of the Company's reporting units is not sufficient, we could be required to record non-
cash impairment charges.  Impairment charges could substantially affect our reported earnings in the periods such charges are 
recorded.  In addition, impairment charges could indicate a reduction in business value which could limit our ability to obtain 
adequate financing in the future.  As of December 31, 2016, goodwill was approximately 13 percent of total assets and included 
$387 million of goodwill related to the Life Fitness segment, $25 million of goodwill related to the Marine Engine segment and 
$2 million of goodwill related to the Boat segment.

Some of our operations are conducted by joint ventures that are not operated solely for our benefit.

We share ownership and management responsibilities with jointly owned companies such as BAC, Bella and Tohatsu Marine 
Corporation. These joint ventures may not have the same goals, strategies, priorities or resources as the Company because they 
are intended to be operated for the benefit of all co-owners, rather than for our exclusive benefit. If such a conflict occurred, it 
could negatively impact or sales or financial results. 

A significant portion of our revenue is derived from international sources, which creates additional uncertainty.

We intend to continue to expand our international operations and customer base as part of our growth strategy.  Sales outside 
the United States, especially in emerging markets, are subject to various risks, including government embargoes or foreign trade 
restrictions,  foreign  currency  effects,  tariffs,  customs  duties,  inflation, difficulties  in  enforcing  agreements  and  collecting 
receivables through foreign legal systems, compliance with international laws, treaties and regulations and unexpected changes 
in regulatory environments, disruptions in distribution, dependence on foreign personnel and unions, as well as economic and 
social instability.  In addition, there may be tax inefficiencies in repatriating cash from non-U.S. subsidiaries, or tax laws that affect 
this process may change.  

Instability, including, but not limited to, political events, civil unrest and an increase in criminal activity, in locations where 
we maintain a significant presence could adversely impact our manufacturing and business operations.  Decreased stability poses 
a risk of business interruption and delays in shipments of materials, components and finished goods, as well as a risk of decreased 
local retail demand for our products.  

In addition, global political and economic uncertainty and shifts, such as the U.K.’s referendum on membership in the European 
Union, pose risks of volatility in global markets, which could affect our operations and financial results.  Changes in U.S. policy 
regarding foreign trade or manufacturing may create negative sentiment about the U.S. among non-U.S. customers, employees or 
prospective employees, which could adversely affect our business, sales, hiring and employee retention.  If we continue to expand 
our business globally, our success will depend, in part, on our ability to anticipate and effectively manage these and other risks, 
which could materially impact international operations or the business as a whole.

Our operations are dependent on our ability to attract and retain key contributors and on the successful implementation of our 
succession plans.

Much of our future success depends on, among other factors, our ability to attract and retain qualified personnel, including 
executives and skilled labor.  If we are not successful in these efforts, we may be unable to meet our operating goals and plans, 
which may impact our financial results.  In order to manage this risk, we perform an annual review of management succession 
plans with the Board of Directors, including reviewing executive officer and other important positions.  We believe this helps to 
substantially mitigate the risk associated with key contributor transitions.  In addition, we continuously develop and improve 
recruiting and training programs to attract and retain an experienced and skilled workforce.

Adverse weather conditions and climate events can have a negative effect on marine revenues.

Changes in seasonal weather conditions can have a significant effect on our operating and financial results, especially in the 
marine businesses.  Sales of our marine products are typically stronger just before and during spring and summer, and favorable 
weather during these months generally has had a positive effect on consumer demand.  Conversely, unseasonably cool weather, 
excessive rainfall or drought conditions during these periods can reduce demand.   Additionally, climate changes, regardless of 

15

the  cause,  resulting  in  environmental  changes  including,  but  not  limited  to,  severe  weather,  changing  sea  levels,  poor  water 
conditions or reduced access to water, could disrupt or negatively affect our business.

Catastrophic events, including natural and environmental disasters, could have a negative effect on our operations and financial 
results.

Hurricanes, floods, earthquakes, storms and catastrophic natural or environmental disasters could disrupt our distribution 
channel, operations or supply chain and decrease consumer demand.  If a catastrophic event takes place in one of our major sales 
markets, our sales could be diminished.  Additionally, if such an event occurs near our business, manufacturing facilities or key 
suppliers'  facilities,  business  operations  and/or  operating  systems  could  be  interrupted.   We  could  be  uniquely  affected  by  a 
catastrophic event due to the location of certain of our boat facilities in coastal Florida and the size of the manufacturing operation 
in Fond du Lac, Wisconsin.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our headquarters are in Lake Forest, Illinois. We have numerous manufacturing plants, distribution warehouses, sales offices 

and product test sites around the world. Research and development facilities are primarily located at manufacturing sites.

We believe our facilities are suitable and adequate for our current needs and are well maintained and in good operating condition. 
Most plants and warehouses are of modern, single-story construction, providing efficient manufacturing and distribution operations. 
We believe our manufacturing facilities have the capacity, or we are investing to increase capacity, to meet current and anticipated 
demand. We  own  our  Lake  Forest,  Illinois  headquarters  and  most  of  our  principal  plants.    Refer  to  Note  3  –Restructuring, 
Integration and Impairment Activities in the Notes to Consolidated Financial Statements regarding our decision to put the 
corporate headquarters facility up for sale.

The principal facilities used in our operations are in the following locations:

Marine Engine Segment
Leased facilities include:  Fresno, California; Old Lyme, Connecticut; Largo, Miramar and Pompano Beach, Florida; Lowell, 
Michigan; St. Paul Park, Minnesota; Brisbane and Melbourne, Australia; Toronto, Ontario, Canada; Kuala Lumpur, Malaysia; 
Auckland, New Zealand; Bangor, Northern Ireland; and Singapore.

Owned  facilities  include:    Panama  City  and  St.  Cloud,  Florida; Atlanta,  Georgia;  Brookfield,  Fond  du  Lac  and  Oshkosh, 
Wisconsin;  Petit  Rechain,  Belgium; Victoria  and  Burnaby,  British  Columbia,  Canada;  Milton  and  Oakville  Ontario,  Canada; 
Suzhou, China; and Juarez, Mexico.

Boat Segment
Leased  facilities  include:    Santa  Catarina,  Brazil; Auckland,  New  Zealand;  and  Brunswick  Commercial  and  Government 

Products in Edgewater, Florida.

Owned facilities include:  Edgewater, Merritt Island (Sykes Creek) and Palm Coast, Florida; Fort Wayne, Indiana; New York 
Mills, Minnesota; Lebanon, Missouri; Vonore, Tennessee; Clarkston, Washington; Petit Rechain, Belgium; Princeville, Quebec, 
Canada; Reynosa, Mexico; and Vila Nova de Cerveira, Portugal. 

Fitness Segment
Leased facilities include:  Rosemont, Illinois; a portion of the Franklin Park, Illinois facility; Tulsa, Oklahoma; Nuremberg, 

Germany.

Owned  facilities  include:    a  portion  of  the  Franklin  Park,  Illinois  facility;  Falmouth,  Kentucky;  Medway,  Massachusetts; 

Owatonna and Ramsey, Minnesota; Bristol and Delavan, Wisconsin; and Kiskoros, Hungary. 

16

 
 
 
 
 
Item 3. Legal Proceedings

Refer to Note 13 – Commitments and Contingencies in the Notes to Consolidated Financial Statements for information 

about the Company's legal proceedings.

Item 4. Mine Safety Disclosures

Not applicable.

17

Executive Officers of the Registrant

Brunswick's Executive Officers are listed in the following table: 

Officer

Mark D. Schwabero
William L. Metzger
Huw S. Bower
Christopher F. Dekker
Jaime A. Irick
John C. Pfeifer
Brenna Preisser
Daniel J. Tanner

Present Position

Chairman and Chief Executive Officer
Senior Vice President and Chief Financial Officer
Vice President and President - Brunswick Boat Group
Vice President, General Counsel and Secretary
Vice President and President - Fitness
Vice President and President - Mercury Marine
Vice President and Chief Human Resources Officer
Vice President and Controller

Age
64
55
42
48
42
51
39
59

Mark D. Schwabero was named Chairman and Chief Executive Officer of Brunswick in February 2016. He served as President 
and Chief Operating Officer of Brunswick from 2014 to 2016 and as Vice President and President - Mercury Marine from December 
2008 to May 2014.  Previously, Mr. Schwabero was President - Mercury Outboards from 2004 to 2008.

William L. Metzger was named Senior Vice President and Chief Financial Officer of Brunswick in March 2013.  Previously, 
he served as Vice President and Treasurer of Brunswick from 2001 to 2013 and in a number of positions of increasing responsibility 
since his employment with Brunswick began in 1987.

Huw S. Bower was named Vice President and President - Brunswick Boat Group in April 2016.  Previously, he served as 
President - Boston Whaler Group from 2013 to 2016, as President - Lowe Boats from 2010 to 2013 and in positions of increasing 
responsibility since he started with Brunswick in 2006.

Christopher F. Dekker was named Vice President, General Counsel and Secretary of Brunswick in October 2014. Prior to his 
appointment, Mr. Dekker served as Brunswick's Associate General Counsel, with responsibilities for litigation, employment and 
compliance matters, from 2010 to 2014. 

Jaime A. Irick was named Vice President and President - Fitness in January 2017. Prior to his appointment, Mr. Irick served 
as Chief Commercial Officer for Current, Powered by GE, a digital power service enabling real-time decisions regarding energy 
use.  Mr. Irick was employed by General Electric for 14 years, in several business units, serving in a variety of roles of increasing 
responsibility.

John C. Pfeifer was named Vice President and President - Mercury Marine in May 2014.  Prior to his appointment, he was 
Vice President - Global Operations for Mercury Marine from 2012 to 2014.  He had previously been President of Brunswick 
Marine in EMEA (Europe, Middle East and Africa) from 2008 to 2014 after joining Brunswick in 2006 as President of the Brunswick 
Asia Pacific Group.

Brenna Preisser was named Vice President and Chief Human Resources Officer of Brunswick in March 2016.  Previously, 
Ms. Preisser served as Senior Director – Human Resources for Brunswick from 2015 to 2016 and as Vice President – Human 
Resources for Life Fitness from 2013 to 2015.  Ms. Preisser held a number of positions of increasing responsibility since she began 
her employment with Brunswick in 2004.

Daniel J. Tanner was named Vice President and Controller of Brunswick in February 2016.  Previously, he served as Assistant 
Vice President - Finance from 2015 to 2016, as Group Financial Officer for Life Fitness from 2003 to 2015 and as Director – 
Financial Planning and Analysis for Brunswick from 2001 to 2003.

18

 
 
 
   
 
PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Brunswick's common stock is traded on the New York and Chicago Stock Exchanges. Quarterly information with respect to 
the high and low prices for the common stock and the dividends declared on the common stock is set forth in Note 22 – Quarterly 
Data (unaudited) in the Notes to Consolidated Financial Statements. As of February 15, 2017, there were 8,627 shareholders of 
record of the Company's common stock.

In the first, second, third and fourth quarter of 2016, Brunswick paid quarterly dividends on its common stock of $0.15, $0.15, 
$0.15 and $0.165 per share, respectively. In the first, second, third and fourth quarter of 2015, Brunswick paid quarterly dividends 
on its common stock of $0.125, $0.125, $0.125 and $0.15 per share, respectively. Brunswick expects to continue to pay quarterly 
dividends at the discretion of the Board of Directors, subject to continued capital availability and a determination that cash dividends 
continue to be in the best interest of the Company's shareholders. 

Brunswick's dividend and share repurchase policies may be affected by, among other things, the Company's views on future 

liquidity, potential future capital requirements and restrictions contained in certain credit agreements.

Performance Graph

Comparison of Five-Year Cumulative Total Shareholder Return among Brunswick, S&P 500 Index and S&P 500 Global 
Industry Classification Standard (GICS) Consumer Discretionary Index

Brunswick
S&P 500 GICS Consumer Discretionary Index
S&P 500 Index

2011
100.00
100.00
100.00

2012
161.42
123.62
115.95

2013
256.26
177.17
153.11

2014
287.83
194.20
173.87

2015
286.54
213.85
176.32

2016
313.03
226.60
197.17

The basis of comparison is a $100 investment at December 31, 2011 in each of: (i) Brunswick, (ii) the S&P 500 Index and 
(iii) the S&P 500 GICS Consumer Discretionary Index. All dividends are assumed to be reinvested. The S&P 500 GICS Consumer 
Discretionary  Index  encompasses  industries  including  automotive,  household  durable  goods,  textiles  and  apparel  and  leisure 
equipment. Brunswick believes the companies included in this index provide the most representative sample of enterprises that 
are in primary lines of business that are similar to Brunswick's.

19

Issuer Purchases of Equity Securities

The Company has executed share repurchases against authorization approved by the Board of Directors in 2014 and 2016. 
In 2016, the Company repurchased $120 million of stock under these authorizations and as of December 31, 2016, the remaining 
authorization was $240 million.

During the three months ended December 31, 2016, the Company repurchased the following shares of its common stock:

Total Number of
Shares
Purchased

Weighted
Average Price
Paid per Share

Total Number of
Shares
Purchased as
Part of Publicly
Announced
Program

Maximum
Amount of
Dollars that May
Yet Be Used to
Purchase Shares
Under the
Program

202,968
389,983

61,965
654,916

$

$

47.63
43.65

53.24
45.79

202,968
389,983

61,965
654,916

$

239,794,299

Period

October 2 to October 29
October 30 to November 26

November 27 to December 31
Total

20

Item 6. Selected Financial Data

The selected historical financial data presented below as of and for the years ended December 31, 2016, 2015 and 2014 has 
been  derived  from,  and  should  be  read  in  conjunction  with,  the  historical  consolidated  financial  statements  of  the  Company, 
including  the  notes  thereto,  and  Item  7  of  this  report,  including  the  Matters Affecting  Comparability  section. The  selected 
historical financial data presented below as of and for the years ended December 31, 2013 and 2012 has been derived from the 
consolidated financial statements of the Company for those years and are not included in this Annual Report Form 10-K.

(in millions, except per share data)
Results of operations data

Net sales
Operating earnings (A) (B)
Earnings before interest, loss on early extinguishment of 

debt and income taxes (A) (B) (C)
Earnings before income taxes (A) (B) (C)
Net earnings from continuing operations (A) (B) (C) (F)

Discontinued operations
Net earnings (loss) from discontinued operations, net of 

tax (D) (E)

Net earnings (A) (B) (C) (D) (E) (F)

Basic earnings (loss) per common share
Earnings from continuing operations (A) (B) (C) (F)
Net earnings (loss) from discontinued operations, net of 

tax (D) (E)

Net earnings (A) (B) (C) (D) (E) (F)

Average shares used for computation of basic earnings

(loss) per share

Diluted earnings (loss) per common share
Earnings from continuing operations (A) (B) (C) (F)
Net earnings (loss) from discontinued operations, net of 

tax (D) (E)

Net earnings (A) (B) (C) (D) (E) (F)

2016

2015

2014

2013

2012

$

$

4,488.5
409.0

$

4,105.7
331.7

$

3,838.7
328.5

$

3,599.7
281.8

3,416.8
237.2

415.4
389.7

274.4

340.8
315.2

227.4

316.6
287.9

194.9

282.1
208.9

756.8

1.6

14.0

50.8

12.4

276.0

$

241.4

$

245.7

$

769.2

$

235.7
156.0

124.6

(74.6)
50.0

3.01

$

2.45

$

2.08

$

8.30

$

1.39

0.02
3.03

$

0.15
2.60

$

0.55
2.63

$

0.13
8.43

$

(0.83)
0.56

91.2

93.0

93.6

91.2

89.8

2.98

$

2.41

$

2.05

$

8.07

$

1.35

0.02
3.00

$

0.15
2.56

$

0.53
2.58

$

0.13
8.20

$

(0.81)
0.54

$

$

$

$

$

Average shares used for computation of diluted earnings

(loss) per share

92.0

94.3

95.1

93.8

92.4

(A)  2016, 2015 and 2014 results include $55.1 million, $82.3 million and $27.9 million, respectively, of pension settlement charges as discussed in 

Note 17 – Postretirement Benefits in the Notes to Consolidated Financial Statements.

(B)  2016, 2015, 2014, 2013 and 2012 results include $15.6 million, $12.4 million, $4.2 million, $16.5 million and $25.4 million of pretax restructuring, 

integration and impairment charges, respectively.

(C)  2014 results include a $20.2 million charge related to the impairment of a marine equity method investment as discussed in Note 9 – Investments

in the Notes to Consolidated Financial Statements.

(D)  Net earnings (loss) from discontinued operations, net of tax in 2015 includes a pre-tax and after-tax Gain on disposal of discontinued operations of 
$12.8 million. Net earnings (loss) from discontinued operations, net of tax in 2014 includes a Gain on disposal of discontinued operations, net of 
tax of $52.6 million (a pre-tax gain of $65.6 million and a net tax provision of $13.0 million). Net earnings (loss) from discontinued operations in 
2013 includes a Gain on disposal of discontinued operations, net of tax of $1.6 million (a pre-tax loss of $1.4 million and a net tax benefit of $3.0 
million). Net earnings (loss) from discontinued operations in 2012 includes an impairment charge on assets held for sale, net of tax of $53.2 million
($52.7 million pre-tax). See Note 2 – Discontinued Operations in the Notes to Consolidated Financial Statements for further discussion. 

(E)  Net earnings (loss) from discontinued operations includes restructuring, integration and impairment charges, net of tax of $4.9 million and $14.9 

million in 2013 and 2012, respectively.

(F)  Net earnings from continuing operations includes an income tax benefit of $599.5 million from the reversal of deferred tax valuation allowance 

reserves in 2013. 

21

(in millions, except per share and other data)
Balance sheet data

Total assets of continuing operations
Debt

Short-term
Long-term

Total debt
Common shareholders' equity (A)
Total capitalization 

2016

2015

2014

2013

2012

$ 3,284.7

$ 3,152.5

$ 3,087.9

$ 2,670.3

$ 2,156.7

$

5.9
436.5
442.4
1,440.1
$ 1,882.5

$

6.0
442.5
448.5
1,281.3
$ 1,729.8

$

5.5
446.3
451.8
1,171.5
$ 1,623.3

$

6.4
449.0
455.4
1,038.4
$ 1,493.8

Cash flow data

Net cash provided by operating activities of

continuing operations

$

Depreciation and amortization
Capital expenditures
Investments
Cash dividends paid

Other data

Dividends declared per share
Book value per share (A)
Return on beginning shareholders' equity (A)
Effective tax rate from continuing operations
Debt-to-capitalization rate (A)
Number of employees (B)
Number of shareholders of record
Common stock price (NYSE)

  High

  Low

  Close (last trading day)

NM = Not meaningful

425.7
103.9
193.9
5.1
55.4

$

338.3
88.9
132.5
0.9
48.3

$

246.9
81.2
124.8
0.2
41.7

$

172.2
71.4
126.5
(1.5)
9.1

$

0.615

15.77

$

0.525

14.11

$

0.45

$

0.10

$

0.05

12.64

11.24

21.5%

29.6%

23.5%

14,415

8,683

$

$

56.30

36.05

54.54

20.6%

27.9%

25.9%

23.7%

32.3%

27.8%

NM

NM

30.5%

12,745

9,009

56.63

46.08

50.51

12,165

9,488

51.94

38.95

51.26

$

15,701

10,243

46.48

30.42

46.06

$

$

$

$

8.2
557.2
565.4
77.7
643.1

144.1
72.9
97.9
1.7
4.5

0.87
161.8%

20.1%

87.9%

16,177

10,900

$

29.09

18.49

29.09

(A)  The Company recorded an income tax benefit of $599.5 million for the year ending December 31, 2013, from the reversal of deferred tax valuation 

allowance reserves. 

(B)  The number of employees as of December 31, 2015, has been adjusted from the amount reported on the 2015 Form 10-K due to the exclusion of 

certain employees related to an acquisition completed in the latter part of 2015.

The Notes to Consolidated Financial Statements should be read in conjunction with the above summary.

22

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations

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

The Company includes certain non-GAAP financial measures in Management’s Discussion and Analysis, as Brunswick’s 
management believes that these measures and the information they provide are useful to investors because they permit investors 
to view Brunswick’s performance using the same tools that management uses and to better evaluate the Company’s ongoing 
business performance. Brunswick does not provide forward-looking guidance for certain financial measures on a GAAP basis 
because it is unable to predict certain items contained in the GAAP measures without unreasonable efforts. These items may include 
pension settlement charges, restructuring and integration costs, special tax items and certain other unusual adjustments.

Certain statements in Management’s Discussion and Analysis are forward-looking as defined in the Private Securities Litigation 
Reform Act of 1995. Forward-looking statements are based on current expectations, estimates and projections about Brunswick’s 
business and by their nature address matters that are, to different degrees, uncertain.  Words such as “may,” “could,” “expect,” 
“intend,” “target,” “plan,” “seek,” “estimate,” “believe,” “predict,” “outlook” and similar expressions are intended to identify 
forward-looking statements. Such statements are not guarantees of future performance and involve certain risks and uncertainties 
that may cause actual results to differ materially from expectations as of the date of this filing. These risks include, but are not 
limited to, those set forth under Item 1A of this Annual Report on Form 10-K. Forward-looking statements speak only as of the 
date on which they are made and Brunswick does not undertake any obligation to update them to reflect events or circumstances 
after the date of this Annual Report.

Overview and Outlook

General

The Company's 2016 results represent the seventh consecutive year of strong improvements in operating performance. The 

Company looked to achieve the following financial objectives in 2016:

•  Deliver revenue growth; 

• 

Increase earnings before income taxes, as well as deliver slight improvements in both gross margin and operating 
margin percentages; and

•  Continue to generate strong free cash flow and execute against the Company's capital strategy.

Achievements against the Company's financial objectives in 2016 were as follows:

Deliver revenue growth:

•  Ended the year with a 9 percent increase in net sales when compared with 2015 on a GAAP basis and 10 percent on a 

constant currency basis, due to the following: 

•  Benefits from the Company's acquisition strategy, particularly in the Fitness segment;

• 

Strong growth rates in fiberglass outboard boats and marine parts and accessories, as well as solid performances in 
aluminum boats, outboard engines and fiberglass sterndrive/inboard boats;

23

•  The Marine Engine and Boat segments benefited from solid fundamentals and growth in the U.S. marine market, 
which was supported by stable boating participation, favorable replacement cycle dynamics and innovative products 
introduced throughout the marketplace;

•  Continued market share gains and mix benefits in both the Marine Engine and Boat segments including benefits 

from recent product introductions;

• 

• 

Fitness segment net sales benefited from solid demand, particularly in overall global commercial fitness markets; 

International sales for the Company increased 6 percent in 2016 when compared with 2015 on a GAAP basis. On a 
constant currency basis, international net sales increased 7 percent, primarily due to increased sales in European and 
Asia-Pacific markets, partially offset by weak demand in certain markets such as Latin America and the Middle East 
and Africa.

Experience an increase in earnings before income taxes, as well as a slight improvements in both gross margin and operating 
margin percentages:

•  Reported earnings before income taxes of $389.7 million in 2016 compared with earnings before income taxes of $315.2 

million in 2015;

• 

Improved gross margin by 20 basis points when compared with 2015, driven by benefits from volume increases and cost 
reductions, including benefits from efficiency and sourcing initiatives as well as lower commodity costs, partially offset 
by the unfavorable impact from foreign exchange; and

•  Operating margin improved by 100 basis points when compared with the prior year and benefited from decreased pension 
settlement charges, partially offset by increased restructuring, integration and impairment charges compared with the 
prior year.

Continue to generate strong free cash flow and execute against the Company's capital strategy: 

•  Generated strong free cash flow of $233.8 million in 2016, an increase of $41.2 million compared to 2015, enabling the 

Company to continue executing its capital strategy as follows:

• 

Funded investments in growth: 

•  Through acquisitions, including the $276.1 million invested in the Fitness, Boat and Marine Engine segments 

during 2016;

•  Organically  through  capital  expenditures,  which  included  investments  in  new  products  as  well  as  capacity 

expansions focused in the engine and fitness businesses;

•  Contributed $74.6 million to the Company's defined benefit pension plans; and

•  Enhanced  shareholder  returns  by  repurchasing  $120.3  million  of  common  stock  under  the  Company’s  share 

repurchase program and increased cash dividends paid to shareholders to $55.4 million.

•  Ended the year with $458.2 million of cash and marketable securities, a net decrease of $210.6 million from the prior 
year, primarily due to the acquisitions and shareholder return expenditures discussed above, partially offset by strong 
free cash flow.

Net earnings increased to $274.4 million in 2016 from $227.4 million in 2015. The 2016 results include an income tax provision 
of $115.3 million, which included an income tax charge of $1.1 million, primarily associated with the impact of recent changes 
in tax laws partially offset by the reassessment of tax reserves and favorable valuation allowance adjustments. The 2015 results 
reflect an income tax provision of $87.8 million, which includes a net tax benefit of $12.1 million primarily associated with the 
internal restructuring of foreign entities and settling prior year audits.

24

Discontinued Operations

The Company completed the sale of its retail bowling and bowling products businesses on May 22, 2015 and September 18, 
2014,  respectively.  Refer  to  Note  2  –  Discontinued  Operations  for  further  information.  The  Billiards  business,  which  was 
previously reported in the former Bowling & Billiards segment, remains part of the Company and is being reported in the Fitness 
segment for all periods presented. The Company's results for all periods presented, as discussed in Management's Discussion and 
Analysis, reflect continuing operations only, unless otherwise noted. 

Outlook for 2017 

The Company expects 2017 to be another year of outstanding earnings growth with excellent free cash flow generation. The 
Company is targeting 6 percent to 8 percent sales growth when compared with 2016, which includes the continuation of solid 
market growth in the U.S. and Europe and improving market conditions in certain international markets. Additionally, sales growth 
is expected to benefit from the success of new products, market share gains and the impact of completed acquisitions, which are 
expected to account for about 1 percent of growth. The Company expects growth in both outboard and inboard/sterndrive boats 
as well as growth in the outboard engine and marine parts and accessories businesses, reflecting a stable pricing environment for 
larger horsepower engines and market share gains in targeted areas. The Company also anticipates growth in the Boat segment 
will  also  benefit  from  recently  introduced  products  and  higher  average  selling  prices.  In  the  Fitness  segment,  the  Company 
anticipates continued growth in global commercial fitness markets, as well as contributions from new products, particularly in the 
second half of 2017.

The Company expects to have higher earnings before income taxes in 2017 resulting from increased revenue and improvements 
in both gross margin and operating margin levels due to benefits from volume leverage, cost reductions related to efficiency 
initiatives and modest positive product mix factors. The Company projects operating expenses to increase in 2017 including 
incremental investments to support growth; however, on a percentage of sales basis, are expected to be slightly lower than 2016.

The Company is planning for its effective tax rate in 2017 to be approximately 31 percent based on existing tax law.

25

Restructuring, Integration and Impairment Activities

Restructuring, integration and impairment charges recorded in the Consolidated Statements of Operations during 2016, 2015

and 2014 by reportable segment are summarized below: 

(in millions)
Boat
Fitness
Corporate
Total

2016

2015

2014

$

$

0.6
12.7
2.3
15.6

$

$

7.7
—
4.7
12.4

$

$

1.5
—
2.7
4.2

In 2016, the Company recognized restructuring and integration charges within the Fitness segment, primarily related to the 

acquisitions of Cybex International, Inc. (Cybex) and Indoor Cycling Group GmbH (ICG).

In the fourth quarters of  2016 and 2015, the Company recognized impairment charges within the Corporate segment, primarily 

in connection with its decision to sell its corporate headquarters facility in Lake Forest, Illinois.

In the fourth quarter of 2016, the Company also recorded restructuring charges related to the realignment of certain executive 
positions within the Boat segment. The Company plans to achieve annual savings of approximately $1 million related to this 
action,  with  the  full  benefit  being  realized  in  2018.  Future  cost  savings  will  primarily  be  reflected  in  Selling,  general  and 
administrative expense as reported in the Company's Consolidated Statements of Operations.

In 2015, the Company recorded impairment charges for certain long-lived assets in Brazil as a result of unfavorable market 

conditions and declining currency values.

In the fourth quarter of 2015, the Company recorded charges related to the restructuring of personnel, primarily within the 
Boat segment and IT organizations. The Company did not incur additional charges in 2016 related to these actions and achieved 
annual savings of approximately $3 million. Cost savings are reflected in Selling, general and administrative expense as reported 
in the Company's Consolidated Statements of Operations.

See Note 3 – Restructuring, Integration and Impairment Activities in the Notes to Consolidated Financial Statements for 

further details. 

On January 18, 2017, the Company announced the appointment of Jaime Irick as the president of the Fitness segment. In 
2017, the Company anticipates it will incur restructuring and integration charges of approximately $11 million to $13 million 
within the Fitness segment as a result of the integration of Cybex and the management transition discussed above.

26

Matters Affecting Comparability

Certain events occurred during 2016, 2015 and 2014 that the Company believes affect the comparability of the results of 
operations. The tables below summarize the impact of changes in currency exchange rates as well as the impact of recent acquisitions 
on the Company's net sales:

Net Sales

(in millions)

2016

2015

2014

GAAP

Marine Engine

$

2,441.1

$

2,314.3

$

2,189.4

Boat

1,369.9

1,274.6

1,135.8

5%

7%

Marine eliminations

(302.9)

(277.8)

(255.8)

Total Marine

3,508.1

3,311.1

3,069.4

6%

Fitness

Total

980.4

794.6

769.3

$

4,488.5

$

4,105.7

$

3,838.7

23%

9%

2016 vs. 2015
% Change

Constant
Currency

Acquisition
Contribution

6%

8%

6%

24%

10%

1%

1%

1%

19%

5%

2015 vs. 2014
% Change

Constant
Currency

Acquisition
Contribution

10%

16%

12%

7%

11%

4%

—%

2%

1%

2%

GAAP

6%

12%

8%

3%

7%

Changes in foreign currency rates. Percentage changes in net sales expressed in constant currency reflect the impact that 
changes in currency exchange rates had on comparisons of net sales. To determine this information, net sales transacted in currencies 
other  than  U.S.  dollars  have  been  translated  to  U.S.  dollars  using  the  average  exchange  rates  that  were  in  effect  during  the 
comparative period. The percentage change in net sales expressed on a constant currency basis better reflects the changes in the 
underlying  business  trends,  excluding  the  impact  of  translation  arising  from  foreign  currency  exchange  rate  fluctuations. 
Approximately 20 percent of the Company's annual net sales are transacted in a currency other than the U.S. dollar. The Company's 
most material exposures include sales in Euros, Canadian dollars, Australian dollars, British pounds and Brazilian reais.

Additionally,  operating  earnings  comparisons  were  negatively  affected  by  foreign  exchange  rates  by  approximately  $14 
million, or 4 percent, in 2016 when compared with 2015, and were negatively affected by foreign exchange rates by approximately 
$28 million, or 8 percent, in 2015 when compared with 2014. These estimates include the impact of translation on all sales and 
costs transacted in a currency other than the U.S. dollar, benefits from hedging activities of $3 million and $12 million for 2016 
and 2015, respectively, and pricing actions in certain international markets in response to the strengthening U.S. dollar.

Acquisitions. The Company completed acquisitions during 2016, 2015 and 2014 that affect the comparability of net sales. 
The impacts on consolidated and segment sales comparisons are reflected above. Refer to Note 4 – Acquisitions in the Notes to 
Consolidated Financial Statements for further information. 

Pension settlement charges.  In the fourth quarters of 2016, 2015 and 2014, the Company recognized $55.1 million, $82.3 
million and $27.9 million of charges, respectively, related to actions taken to settle a portion of its pension obligations. These 
actions included transferring certain plan obligations to a third party by purchasing annuities on behalf of plan participants in 2016 
and 2015 and making lump-sum payments directly to certain plan participants in 2015 and 2014. These costs are reflected in 
Pension settlement charge on the Consolidated Statements of Operations. See Note 17 – Postretirement Benefits in the Notes to 
Consolidated Financial Statements for further details.

Restructuring,  integration  and  impairment  charges.   During  2016,  the  Company  recorded  restructuring,  integration  and 
impairment charges of $15.6 million, compared with charges of $12.4 million in 2015 and $4.2 million in 2014. See Note 3 –
Restructuring, Integration and Impairment Activities in the Notes to Consolidated Financial Statements for further details. 

Impairment of equity method investment.  In the fourth quarter of 2014, the Company recorded a $20.2 million impairment 
charge for an equity method investment in order to reflect the fair value of the Company’s equity method investment in a Finnish 
boat manufacturer as discussed in Note 9 – Investments in the Notes to Consolidated Financial Statements.  The charge is reported 
as Impairment of equity method investment in the Consolidated Statement of Operations. 

Tax items. The Company recognized an income tax provision in 2016 of $115.3 million, which included a net charge of $1.1 
million primarily associated with the impact of recent changes in tax law, partially offset by the reassessment of tax reserves and 
favorable valuation allowance adjustments. The Company recognized an income tax provision of $87.8 million in 2015, which 
included a net tax benefit of $12.1 million, primarily associated with the internal restructuring of foreign entities and settling prior 

27

year audits. The Company recognized an income tax provision in 2014 of $93.0 million, which included a net benefit of $6.4 
million primarily associated with the reversal of tax valuation allowance reserves.

 See Note 12 – Income Taxes in Notes to Consolidated Financial Statements for further details.

Results of Operations

Consolidated

The  following  table  sets  forth  certain  amounts,  ratios  and  relationships  calculated  from  the  Consolidated  Statements  of 

Operations for the years ended December 31, 2016, 2015 and 2014:

2016 vs. 2015
Increase/(Decrease)

2015 vs. 2014
Increase/(Decrease)

2016

2015

2014

 $

%

 $

%

$

4,488.5

$

4,105.7

$

3,838.7

$

1,225.1

55.1

15.6

409.0

274.4

1,114.6

82.3

12.4

331.7

227.4

1,036.8

27.9

4.2

328.5

194.9

382.8

110.5

(27.2)

3.2

77.3

47.0

9.3 % $

9.9 %

(33.0)%

25.8 %

23.3 %

20.7 %

267.0

77.8

54.4

8.2

3.2

32.5

7.0%

7.5%

NM

NM

1.0%

16.7%

$

2.98

$

2.41

$

2.05

$

0.57

23.7 % $

0.36

17.6%

(in millions, except per
share data)

Net sales
Gross margin (A)

Pension settlement charge

Restructuring, integration and
impairment charges

Operating earnings

Net earnings from continuing    

operations(B)

Diluted earnings per common 

share from continuing 
operations (B)

Expressed as a percentage
of Net sales:

Gross margin

Selling, general and

27.3%

27.1%

27.0%

administrative expense

13.5%

13.7%

14.5%

Research and development
expense

Operating margin

__________

NM = not meaningful
bpts = basis points

3.1%

9.1%

3.1%

8.1%

3.1%

8.6%

20 bpts

(20) bpts

0 bpts

100 bpts

10 bpts

(80) bpts

(0) bpts

(50) bpts

(A)  Gross margin is defined as Net sales less Cost of sales as presented in the Consolidated Statements of Operations.
(B)  Net earnings from continuing operations in 2014 includes a $20.2 million charge for an impairment of an equity method investment.

2016 vs. 2015 

Net sales increased during 2016 when compared with 2015 due to increases across all segments. Marine Engine segment net 
sales increased due to strong growth in the marine parts and accessories businesses as well as solid growth in outboard engines. 
Both of these categories benefited from favorable market conditions and market share gains while sterndrive engines declined, 
reflecting unfavorable demand trends. Boat segment net sales increased due to strong growth rates in fiberglass outboard boats as 
well as solid growth rates in aluminum boats and fiberglass sterndrive and inboard boats. Fitness segment net sales increased, 
reflecting the benefit of recent acquisitions and growth in international markets while revenues in the U.S. increased modestly. 
International net sales for the Company increased 6 percent in 2016 on a GAAP basis when compared with 2015. On a constant 
currency basis, international net sales increased 7 percent in 2016 driven by strong increases in European and Asia-Pacific markets, 
partially offset by decreases in Latin America, especially Brazil, and Africa and the Middle East.

Gross margin percentage increased slightly in 2016 when compared with the same prior year period related to benefits from 
volume increases and cost reductions, including benefits from efficiency and sourcing initiatives as well as lower commodity 
costs, partially offset by the unfavorable impact from foreign exchange.

28

 
 
 
 
 
 
 
 
 
Selling, general and administrative expense decreased as a percentage of net sales during 2016 when compared with 2015, 

mainly due to higher net sales partially offset by increases related to acquisitions and investments to support growth.

Research and development expense increased in 2016 when compared with 2015 as the Company continued to increase its 

funding of investments in new products, but remained flat as a percentage of net sales.

In 2016 and 2015, the Company recorded $55.1 million and $82.3 million, respectively, of charges related to pension settlement 

payments as discussed in Note 17 – Postretirement Benefits in the Notes to Consolidated Financial Statements.

During 2016, the Company recorded restructuring, integration and impairment charges of $15.6 million compared with $12.4 
million in 2015. See Note 3 – Restructuring, Integration and Impairment Activities in the Notes to Consolidated Financial 
Statements for further details.

The Company recognized equity earnings of $4.3 million and $3.7 million in 2016 and 2015, respectively, which were mainly 
related  to  the  Company's  marine  joint  ventures. The  Company  recognized  $2.1  million  and  $5.4  million  in  2016  and  2015, 
respectively, in Other income, net, which includes unfavorable foreign exchange adjustments in 2016 and the amortization of 
deferred income related to a trademark licensing agreement with AMF Bowling Centers, Inc (AMF) in both periods. See Note 2 
– Discontinued Operations for discussion of the trademark agreement with AMF.

Net interest expense increased slightly in 2016 compared with 2015.

The Company recognized an income tax provision in 2016 of $115.3 million, which included a net charge of $1.1 million 
primarily associated with the impact of recent changes in tax law partially offset by the reassessment of tax reserves and favorable 
valuation allowance adjustments. The Company recognized an income tax provision of $87.8 million in 2015, which included a 
net tax benefit of $12.1 million, primarily associated with the internal restructuring of foreign entities and settling prior year audits.
The effective tax rate, which is calculated as the income tax benefit or provision as a percentage of pre-tax income, was 29.6 
percent and 27.9 percent for 2016 and 2015, respectively. See Note 12 – Income Taxes in the Notes to Consolidated Financial 
Statements for further details.

Operating  earnings,  Net  earnings  from  continuing  operations  and  Diluted  earnings  per  common  share  from  continuing 
operations increased in 2016 when compared with 2015, primarily due to the factors discussed in the preceding paragraphs. Diluted 
earnings per common share from continuing operations also benefited from the impact of common stock repurchases.

Diluted earnings from continuing operations per common share, as adjusted  – defined as Diluted earnings from continuing 
operations  per  common  share,  excluding  the  earnings  or  loss  per  share  impact  for  Pension  settlement  charge,  Restructuring, 
integration and impairment charges and special tax items – increased by $0.55 per share, or 19 percent, to $3.48 per share for 2016 
when compared with $2.93 per share for 2015.  For 2016, Pension settlement charge was $0.38 per share, Restructuring, integration 
and impairment charges were $0.11 per share and special tax items were a net charge of $0.01 per share. In 2015, Pension settlement 
charge was $0.54 per share, Restructuring, integration and impairment charges were $0.11 per share and special tax items were a 
net benefit of $0.13 per share.

2015 vs. 2014 

Net sales increased during 2015 when compared with 2014 on both a GAAP basis and a constant currency basis due to 
increases across all segments, all of which benefited from the success of new products. Marine Engine segment net sales increased 
due to solid growth in the marine parts and accessories businesses, which benefited from acquisitions, as well as solid increases 
in outboard engines, which benefited from market share gains, partially offset by declines in sterndrive engines. Boat segment net 
sales increased due to strong growth rates in fiberglass outboard boats and fiberglass sterndrive and inboard boats, as well as solid 
gains in the sales of aluminum boats. The Boat segment's net sales also reflected higher average selling prices resulting from a 
favorable shift in mix and growth in wholesale unit shipments. Fitness segment net sales included growth in the U.S. to health 
clubs, local and federal governments and hospitality customers. Fitness segment net sales also benefited from an acquisition in 
the third quarter of 2015. International net sales for the Company decreased 4 percent in 2015 on a GAAP basis when compared 
with 2014. On a constant currency basis, international net sales increased 7 percent in 2015 driven by strong increases in European 
and Asia-Pacific markets, partially offset by decreases in Latin America, especially Brazil.

Gross margin percentage increased slightly in 2015 when compared with the same prior year period related to benefits from 
lower commodity costs and sourcing initiatives along with a more favorable product mix and volume increases, mostly offset by 

29

 
the unfavorable impact from foreign exchange, planned manufacturing costs associated with new product introductions, capacity 
expansions and production ramp-ups, as well as less favorable warranty adjustments compared with 2014.

Selling, general and administrative expense decreased as a percentage of net sales during 2015 when compared with 2014 as 
operating expenses benefited from focused expense management as well as a favorable impact from foreign exchange. Partially 
offsetting these factors was an increase in expenses related to acquired businesses.

Research  and  development  expense  increased  in  2015  when  compared  with  2014  as  the  Company  increased  investment 

spending to support long-term growth initiatives.

In 2015 and 2014, the Company recorded an $82.3 million and $27.9 million, respectively, charge related to pension settlement 

payments as discussed in Note 17 – Postretirement Benefits in the Notes to Consolidated Financial Statements.

During 2015, the Company recorded restructuring charges of $12.4 million compared with $4.2 million in 2014.  See Note 
3 – Restructuring, Integration and Impairment Activities in the Notes to Consolidated Financial Statements for further details.

In 2014, the Company recorded a $20.2 million impairment charge for an equity method investment as discussed in Note 9 

– Investments in the Notes to Consolidated Financial Statements. 

The Company recognized equity earnings of $3.7 million and $1.8 million in 2015 and 2014, respectively, which were mainly 
related  to  the  Company's  marine  joint  ventures. The  Company  recognized  $5.4  million  and  $6.5  million  in  2015  and  2014, 
respectively, in Other income, net, which includes the amortization of deferred income related to a trademark licensing agreement 
with AMF Bowling Centers, Inc as discussed in Note 2 – Discontinued Operations.

Interest expense decreased $2.0 million in 2015 compared with 2014, due primarily to benefits from fixed-to-floating interest 

rate swaps entered into during 2014.

The Company recognized an income tax provision of $87.8 million, which included a net tax benefit of $12.1 million, primarily 
associated with the internal restructuring of foreign entities and settling prior year audits. The Company recognized an income 
tax provision of $93.0 million for 2014, which included a net tax benefit of $6.4 million, primarily associated with the reversal of 
tax valuation allowance reserves. The effective tax rate, which is calculated as the income tax benefit or provision as a percentage 
of pre-tax income, was 27.9 percent and 32.3 percent for 2015 and 2014, respectively. See Note 12 – Income Taxes in the Notes 
to Consolidated Financial Statements for further details.

Operating  earnings,  Net  earnings  from  continuing  operations  and  Diluted  earnings  per  common  share  from  continuing 
operations increased in 2015 when compared with 2014, primarily due to the factors discussed in the preceding paragraphs. Diluted 
earnings per common share from continuing operations also benefited from the impact of common stock repurchases.

Diluted earnings from continuing operations per common share, as adjusted – defined as Diluted earnings from continuing 
operations  per  common  share,  excluding  the  earnings  or  loss  per  share  impact  for  Pension  settlement  charge,  Restructuring, 
integration and impairment charges, Impairment of equity method investment and special tax items – increased by $0.51 per share, 
or 21 percent, to $2.93 per share for 2015 when compared with $2.42 per share for 2014.  For 2015, Pension settlement charge 
was $0.54 per share, Restructuring, integration and impairment charges were $0.11 per share and special tax items were a net 
benefit of $0.13 per share. In 2014, Pension settlement charge was $0.19 per share, Restructuring, integration and impairment 
charges were $0.04 per share, Impairment charge for an equity investment was $0.21 per share and special tax items were a net 
benefit of $0.07 per share.

The Company completed the sale of its bowling products business in the second quarter of 2015 and recorded an after-tax 
gain of $10.3 million. The Company completed the sale of its retail bowling business in the third quarter of 2014 and recorded an 
after-tax gain of $55.1 million. In 2015, sales from discontinued operations were $37.5 million, pre-tax earnings from discontinued 
operations were $14.3 million and the income tax provision from discontinued operations was $0.3 million. In 2014, sales from 
discontinued operations were $236.0 million, pre-tax earnings from discontinued operations were $61.8 million and the income 
tax provision from discontinued operations was $11.0 million. 

Segments

The Company operates in three operating and reportable segments: Marine Engine, Boat and Fitness. Refer to Note 6 –

Segment Information in the Notes to Consolidated Financial Statements for details on the segment operations.

30

 
Marine Engine Segment

The following table sets forth Marine Engine segment results for the years ended December 31, 2016, 2015 and 2014:

2016 vs. 2015
Increase/(Decrease)

2015 vs. 2014
Increase/(Decrease)

2016

2015

2014

 $

%

 $

%

$

2,441.1

$

2,314.3

$

2,189.4

$

378.0

15.5%

350.4

15.1%

309.1

14.1%

126.8

27.6

5.5% $

7.9%

124.9

41.3

40 bpts

5.7%

13.4%

100 bpts

(in millions)

Net sales

Operating earnings

Operating margin

__________

bpts = basis points

2016 vs. 2015 

Net sales for the Marine Engine segment increased in 2016 when compared with 2015. The increase was mainly due to strong 
growth in the marine parts and accessories businesses, which included benefits from favorable market trends, market share gains, 
acquisitions during 2016 and 2015 and new product launches. The segment also experienced a solid increase in outboard engine 
net  sales,  driven  by  continued  favorable  retail  demand  trends  in  overall  U.S.  and  European  markets  and  market  share  gains, 
reflecting benefits from recently launched products. The segment reported a decrease in sterndrive engine net sales due to the 
continuing shift to outboards and unfavorable global retail demand trends. Acquisitions completed in 2016 and 2015 accounted 
for 1 percentage point of the Marine Engine segment's overall revenue growth rate in 2016. International net sales were 32 percent 
of the segment's net sales in 2016, and increased 4 percent from the prior year on a GAAP basis. On a constant currency basis, 
international net sales increased 5 percent in 2016, which included gains in Europe, Asia-Pacific and Canada, partially offset by 
declines in Africa and the Middle East and Latin America.

Marine Engine segment operating earnings increased in 2016 as a result of higher net sales and cost reductions, including 
benefits from efficiency and sourcing initiatives as well as lower commodity costs. Partially offsetting these factors were an 
unfavorable impact from foreign exchange and growth-related investments including new product development activities.

2015 vs. 2014 

Net sales for the Marine Engine segment increased in 2015 when compared with 2014. The increase was mainly due to solid 
growth in net sales in the marine parts and accessories businesses, which benefited from acquisitions completed in 2015 and 2014, 
new product launches and market share gains. The segment also experienced a solid increase in outboard engine net sales, driven 
by continued favorable retail demand trends and the success of recently launched new products. Partially offsetting these factors 
was an unfavorable impact from foreign exchange and a decrease in sterndrive engine net sales due to continuing unfavorable 
global retail demand trends. Acquisitions completed in 2015 and 2014 accounted for 4 percentage points of the Marine Engine 
segment's overall revenue growth rate in 2015. International net sales were 37 percent of the segment's net sales in 2015, a decrease 
of 5 percent from the prior year on a GAAP basis. On a constant currency basis, international net sales increased 10 percent in 
2015, which included increases in most international regions, which more than offset weakness in Russia and Latin America, 
especially Brazil.

Marine Engine segment operating earnings increased in 2015 as a result of higher net sales, a favorable product mix including 
benefits from recently launched outboard products, and cost reductions, including benefits from plant efficiencies, lower commodity 
costs and savings related to sourcing initiatives. Partially offsetting these factors were the unfavorable effects of foreign exchange.

31

 
 
Boat Segment

The following table sets forth Boat segment results for the years ended December 31, 2016, 2015 and 2014:

2016

2015

2014

 $

%

 $

%

$

1,369.9

$

1,274.6

$

1,135.8

$

95.3

7.5% $

138.8

12.2%

2016 vs. 2015
Increase/(Decrease)

2015 vs. 2014
Increase/(Decrease)

0.6

60.8

4.4%

7.7

37.6

2.9%

1.5

17.2

1.5%

(7.1)

23.2

NM

61.7%

150 bpts

6.2

20.4

NM

NM

140 bpts

(in millions)

Net sales

Restructuring, integration and 
impairment charges (A)

Operating earnings

Operating margin

__________

NM = not meaningful
bpts = basis points

(A) See Note 3 – Restructuring, Integration and Impairment Activities in the Notes to Consolidated Financial Statements for further details.

2016 vs. 2015 

Boat segment net sales increased in 2016 when compared with 2015 due to growth in fiberglass outboard boats, aluminum 
boats and fiberglass sterndrive and inboard boats. Net sales growth benefited from higher average selling prices, resulting from a 
favorable shift in mix as well as a slight increase in global wholesale unit shipments; however, the increase was slightly below 
global retail unit growth for the year. Additionally, net sales benefited from recently introduced new products and market share 
gains. An acquisition accounted for 1 percentage point of the Boat segment's overall revenue growth rate in 2016. International 
net sales were 25 percent of the segment's net sales in 2016, a decrease of 4 percent from the prior year on a GAAP basis. On a 
constant currency basis, international net sales decreased 3 percent when compared with the same prior year period, mainly due 
to net sales decreases in Latin America, especially Brazil, Canada and Africa and the Middle East, partially offset by increases in 
the Europe and Asia-Pacific regions.

Boat segment operating earnings increased in 2016 when compared with 2015 due to lower restructuring and impairment 
charges, higher net sales and benefits from lower commodity costs and savings related to sourcing initiatives. These factors were 
partially offset by increases in revenue and profit-enhancing investments.

2015 vs. 2014 

Boat segment net sales increased in 2015 when compared with 2014, due to strong growth rates for fiberglass outboard boats 
and fiberglass sterndrive and inboard boats as well as solid gains in aluminum boats. Segment net sales also reflected higher 
average selling prices resulting from a favorable shift in mix and an increase in global wholesale unit shipments, both of which 
reflected the success of new products. International net sales were 28 percent of the segment's net sales in 2015, a decrease of 8 
percent from the prior year on a GAAP basis. On a constant currency basis, international net sales increased 2 percent when 
compared with the same prior year period due to increases in Europe and Latin America excluding Brazil, partially offset by 
decreases in Canada and Asia-Pacific.

The Boat segment operating earnings increased in 2015 when compared with 2014 due to higher net sales and a more favorable 
product mix, as well as lower commodity costs and savings related to sourcing initiatives and cost reductions, partially offset by 
higher restructuring and impairment charges, planned manufacturing cost increases associated with new product integrations, plant 
capacity expansions and production ramp-ups. 

32

 
Fitness Segment

The following table sets forth Fitness segment results for the years ended December 31, 2016, 2015 and 2014:

2016 vs. 2015
Increase/(Decrease)

2015 vs. 2014
Increase/(Decrease)

2016

2015

2014

 $

%

 $

%

$

980.4

$

794.6

$

769.3

$

185.8

23.4% $

25.3

12.7

117.3

—

116.5

—

115.3

12.7

0.8

NM

0.7%

—

1.2

3.3%

—%

1.0%

12.0%

14.7%

15.0%

(270) bpts

(30) bpts

(in millions)

Net sales

Restructuring, integration and 
impairment charges (A)

Operating earnings

Operating margin

__________

NM = not meaningful
bpts = basis points

(A) See Note 3 – Restructuring, Integration and Impairment Activities in the Notes to Consolidated Financial Statements for further details.

2016 vs. 2015 

Fitness segment net sales increased in 2016 when compared with 2015. Acquisitions completed in 2016 and 2015 contributed 
19  percentage  points  to  the  Fitness  segment's  revenue  growth  rate  in  2016.  Net  sales  also  benefited  from  overall  growth  in 
international markets as well as growth in the U.S., reflecting increased sales to commercial fitness customers including the impact 
of declines in sales to local and federal governments. International net sales were 45 percent of the segment's net sales in 2016 
and increased 19 percent compared with the prior year on a GAAP basis. On a constant currency basis and excluding acquisitions, 
the segment's international net sales increased 7 percent when compared with the prior year due to strength in Asia-Pacific and 
Europe, partially offset by slight declines in other international markets. 

Fitness segment operating earnings increased slightly in 2016 when compared with the prior year. The increase was primarily 
due to higher net sales, mostly offset by increased restructuring and integration costs, increases in growth-related investments, a 
net unfavorable impact of sales mix and purchase accounting adjustments related to the three acquisitions completed since 2015.

2015 vs. 2014 

Fitness segment net sales increased in 2015 when compared with 2014 on both a GAAP basis and a constant currency basis, 
reflecting higher sales in the U.S. to health clubs, local and federal governments and hospitality customers. The acquisition of 
SCIFIT accounted for 1 percentage point of the Fitness segment's overall revenue growth rate in 2015. Net sales in all regions 
benefited from recently introduced successful new products. International net sales were 46 percent of the segment's net sales in 
2015 and decreased 2 percent compared with the same prior year period on a GAAP basis. On a constant currency basis the 
segment's international net sales increased 7 percent when compared with the same prior year period due to net sales increases in 
certain regions including Asia-Pacific, Europe and the Middle East.

Fitness segment operating earnings increased slightly in 2015 compared with 2014 due to higher net sales, cost reductions 
and savings related to sourcing initiatives, partially offset by an unfavorable impact from foreign exchange, the absence of a 
favorable warranty adjustment in the first quarter of 2014 and transaction costs associated with the segment's acquisition strategy.

33

 
Corporate/Other

The following table sets forth Corporate/Other results for the years ended December 31, 2016, 2015 and 2014:

(in millions)

2016

2015

2014

 $

%

 $

%

Restructuring, integration and 
impairment charges (A)

$

2.3

$

4.7

$

2.7

$

Operating loss

(77.3)

(78.8)

(70.4)

(2.4)

(1.5)

(51.1)% $

(1.9)%

2.0

8.4

74.1%

11.9%

2016 vs. 2015
Increase/(Decrease)

2015 vs. 2014
Increase/(Decrease)

(A) See Note 3 – Restructuring, Integration and Impairment Activities in the Notes to Consolidated Financial Statements for further details.

Corporate operating expenses decreased in 2016 compared with 2015 due mostly to the decline in restructuring and impairment 

charges.

Corporate  operating  expenses  increased  in  2015  compared  with  2014  due  to  increased  charges  relating  to  share-based 

compensation expense and higher restructuring and impairment charges.

Cash Flow, Liquidity and Capital Resources

The following table sets forth an analysis of free cash flow for the years ended December 31, 2015, 2014 and 2013:

(in millions)
Net cash provided by operating activities of continuing operations

2016

2015

2014

$

425.7

$

338.3

$

246.9

Net cash provided by (used for):

Capital expenditures

Proceeds from the sale of property, plant and equipment

Effect of exchange rate changes on cash and cash equivalents

Total free cash flow from continuing operations (A)

(193.9)
1.9

0.1

$

233.8

$

(132.5)
2.4
(15.6)
192.6

$

(124.8)
5.8
(11.6)
116.3

(A) The Company defines Free cash flow from continuing operations as cash flow from operating and investing activities of continuing operations (excluding 
cash provided by or used for acquisitions and investments, transfers to/reductions in restricted cash, purchases or sales/maturities of marketable securities and 
other investing activities) and the effect of exchange rate changes on cash and cash equivalents. Free cash flow from continuing operations is not intended as 
an alternative measure of cash flow from operations, as determined in accordance with generally accepted accounting principles (GAAP) in the United 
States. The Company uses this financial measure, both in presenting its results to shareholders and the investment community and in its internal evaluation 
and management of its businesses.  Management believes that this financial measure and the information it provides are useful to investors because it permits 
investors to view Brunswick’s performance using the same tool that management uses to gauge progress in achieving its goals. Management believes that the 
non-GAAP financial measure Free cash flow from continuing operations is also useful to investors because it is an indication of cash flow that may be available 
to fund investments in future growth initiatives.

Brunswick’s major sources of funds for investments, acquisitions, dividend payments and share repurchase programs are cash 
generated from operating activities, available cash and marketable securities balances and selected borrowings.  The Company 
evaluates potential acquisitions, divestitures and joint ventures in the ordinary course of business.

2016 Cash Flow

In 2016, net cash provided by operating activities of continuing operations totaled $425.7 million. The primary driver of the 
cash provided by operating activities was net earnings from continuing operations net of non-cash expense items. An increase in 
working capital had a negative effect on net cash provided by operating activities. Working capital is defined as Accounts and 
notes receivable, Inventories and Prepaid expenses and other, net of Accounts payable and Accrued expenses as presented in the 
Consolidated Balance Sheets excluding the impact of acquisitions and non-cash adjustments. Net inventories increased by $48.2 
million due to increases in production to support higher sales volumes. Accrued expenses decreased $20.8 million which included 
the  impact  of  the  payments  of  deferred  compensation  in  connection  with  recent  executive  management  transitions.  Partially 
offsetting these items was an increase in Accounts payable of $39.2 million, which was partially due to the timing of payments.

Net cash used for investing activities of continuing operations during 2016 totaled $484.5 million, which included capital 
expenditures of $193.9 million. The Company's capital spending is focused on new product introductions, capacity expansion 

34

 
 
 
projects in all segments and other high priority, profit-enhancing projects. Cash paid for acquisitions, net of cash acquired, totaled 
$276.1 million. See Note 4 – Acquisitions in the Notes to Consolidated Financial Statements for further details on the Company's 
acquisitions. Additionally, the Company had net purchases of marketable securities of $24.3 million during the year. See Note 9 
– Investments in the Notes to Consolidated Financial Statements for further details on the Company's investments.

Cash flows used for financing activities of continuing operations were $172.4 million during 2016. The cash outflow was 

primarily the result of common stock repurchases and cash dividends paid to common stock shareholders. 

2015 Cash Flow

In 2015, net cash provided by operating activities of continuing operations totaled $338.3 million. The primary driver of the 
cash provided by operating activities was net earnings from continuing operations net of non-cash expense items. An increase in 
working capital had a negative effect on net cash provided by operating activities. Accrued expenses decreased $34.2 million 
during 2015, primarily driven by a reduction in insurance reserves related to the settlement of a product liability matter that was 
mostly offset by a related reduction in accounts receivable reflecting the impact of insurance proceeds, as well as a reduction in 
accrued payroll costs due to timing of payrolls.

Net inventories increased $15.2 million due to increases in production to support higher sales volumes and new product 
introductions; however, increases were at a lower rate than the prior year. Accounts and notes receivable increased $12.3 million, 
primarily driven by higher fourth quarter sales across all segments.

Net cash used for investing activities of continuing operations during 2015 totaled $84.3 million, which included capital 
expenditures of $132.5 million. The Company's capital spending was focused on new product introductions, capacity expansion 
projects in all segments, and other high priority, profit-enhancing projects. Cash paid for the acquisitions of BLA, SCIFIT and
Garelick net of cash acquired, totaled $29.7 million. See Note 4 – Acquisitions in the Notes to Consolidated Financial Statements 
for further details on the Company's acquisitions. The Company had net proceeds from marketable securities of $71.7 million in 
2015. See Note 9 – Investments in the Notes to Consolidated Financial Statements for further details on the Company's investments.

Cash flows used for financing activities of continuing operations were $168.8 million during 2015. The cash outflow was 

primarily the result of common stock repurchases and cash dividends paid to common stock shareholders. 

2014 Cash Flow

In 2014, net cash provided by operating activities of continuing operations totaled $246.9 million. The primary driver of the 
cash provided by operating activities was net earnings from continuing operations net of non-cash expense items. An increase in 
working capital had a negative effect on net cash provided by operating activities. Net inventories increased $57.1 million due to 
increases in production and finished goods to support successful new product introductions and to meet seasonal requirements in 
advance of the 2015 marine selling season. Accounts and notes receivable increased $24.0 million, primarily driven by higher 
fourth quarter sales across all segments. Partially offsetting these items was an increase in Accounts payable of $13.0 million, 
which was a result of increased production. 

Net cash used for investing activities of continuing operations during 2014 totaled $239.9 million, which included capital 
expenditures of $124.8 million.  The Company's capital spending was focused on new product introductions and growth initiatives, 
capacity expansion projects in all segments, and high priority, profit-maintaining capital and investments targeting operating cost 
reductions. The Company also had net purchases of marketable securities of $70.5 million in 2014. Cash paid for the acquisitions 
of Whale and Bell, net of cash acquired, totaled $41.5 million in 2014. The Company also transferred $9.1 million to restricted 
cash in 2014. Partially offsetting these items were $5.8 million in proceeds from the sale of property, plant and equipment in the 
normal course of business mainly in the Company's Boat segment. 

Cash flows used for financing activities of continuing operations were $60.7 million during 2014. The cash outflow was 

primarily the result of cash dividends paid to common stock shareholders and common stock repurchases.

35

Liquidity and Capital Resources

The Company views its highly liquid assets as of December 31, 2016 and 2015 as: 

(in millions)
Cash and cash equivalents
Short-term investments in marketable securities
Total cash, cash equivalents and marketable securities

2016

2015

$

$

422.4
35.8
458.2

$

$

$

$

657.3
11.5
668.8

2015

668.8
296.2
965.0

The following table sets forth an analysis of Total liquidity as of December 31, 2016 and 2015:

(in millions)
Cash, cash equivalents and marketable securities
Amounts available under lending facilities(A)
Total liquidity (B)

2016

458.2
295.7
753.9

$

$

(A) In June 2016, the Company amended and restated its existing credit agreement, dated as of March 2011, as amended and restated as of June 2014. See Note 

16 – Debt in the Notes to Consolidated Financial Statements for further details on the Company's lending facility.

(B) The Company defines Total liquidity as Cash and cash equivalents and Short-term investments in marketable securities as presented in the Consolidated 
Balance Sheets, plus amounts available for borrowing under its lending facilities. Total liquidity is not intended as an alternative measure to Cash and cash 
equivalents and Short-term investments in marketable securities as determined in accordance with GAAP in the United States. The Company uses this financial 
measure,  both  in  presenting  its  results  to  shareholders  and  the  investment  community  and  in  its  internal  evaluation  and  management  of  its 
businesses. Management believes that this financial measure and the information it provides are useful to investors because it permits investors to view the 
Company’s performance using the same metric that management uses to gauge progress in achieving its goals. Management believes that the non-GAAP 
financial measure Total liquidity is also useful to investors because it is an indication of the Company’s available highly liquid assets and immediate sources 
of financing.

Cash, cash equivalents and marketable securities totaled $458.2 million as of December 31, 2016, a decrease of $210.6 million 
from $668.8 million as of December 31, 2015.  Total debt as of December 31, 2016 and December 31, 2015 was $442.4 million
and $448.5 million, respectively.  The Company's debt-to-capitalization ratio improved to 23.5 percent as of December 31, 2016, 
from 25.9 percent as of December 31, 2015.

Management believes that the Company has adequate sources of liquidity to meet the Company's short-term and long-term 

needs. The next significant long-term debt maturity is not until 2021.

The Company has executed share repurchases against authorization approved by the Board of Directors in 2014 and 2016. 
In 2016, the Company repurchased $120 million of stock under these authorizations and as of December 31, 2016, the remaining 
authorization was $240 million. The Company plans to repurchase approximately $100 million of shares in 2017.

Quarterly dividend payments in 2017 are expected to be consistent with 2016 levels.

The Company's plan assumes an increase in net earnings in 2017 when compared with 2016. The Company plans to make 
cash contributions to its defined benefit pension plans of approximately $75 million in 2017. Net activity in working capital is 
projected to reflect a usage of cash in 2017 in the range of $30 million to $50 million. Additionally, the Company is planning for 
capital expenditures of approximately $185 million to $195 million, reflecting substantial new product investments in the outboard 
engine and fitness businesses and continued capacity investments to support new products and growth. Including these factors, 
the Company plans to generate free cash flow in 2017 in excess of $250 million.

The  aggregate  funded  status  of  the  Company's  qualified  defined  benefit  pension  plans,  measured  as  a  percentage  of  the 
projected benefit obligation, was approximately 78 percent at December 31, 2016 compared with approximately 74 percent at 
December 31, 2015. As of December 31, 2016, the Company's qualified defined benefit pension plans were underfunded on an 
aggregate projected benefit obligation basis by $199.1 million which represented a $63.3 million improvement from 2015. This 
improvement was due to contributions of $70 million and strong asset returns, partially offset by a decrease in the discount rate. 
See Note 17 – Postretirement Benefits in the Notes to Consolidated Financial Statements for more details.

The Company contributed $70.0 million to its qualified defined benefit pension plans both in 2016 and 2015. The Company 
also contributed $4.6 million and $3.6 million to fund benefit payments in its nonqualified defined benefit pension plan in 2016 

36

and 2015, respectively. Planned Company contributions for 2017 are subject to change based on market conditions, pension funding 
regulations and Company discretion.

Financial Services

Refer to Note 10 – Financial Services in the Notes to Consolidated Financial Statements for more information about the 

Company's financial services.

Off-Balance Sheet Arrangements 

Guarantees. The Company has reserves to cover potential losses associated with guarantees and repurchase obligations based 
on  historical  experience  and  current  facts  and  circumstances.  Historical  cash  requirements  and  losses  associated  with  these 
obligations have not been significant. See Note 13 – Commitments and Contingencies in the Notes to Consolidated Financial 
Statements for a description of these arrangements.

Contractual Obligations

The following table sets forth a summary of the Company's contractual cash obligations as of December 31, 2016:

(in millions)
Contractual Obligations
Debt (A)
Interest payments on long-term debt
Operating leases (B)
Purchase obligations (C)
Deferred management compensation (D)
Other long-term liabilities (E)
  Total contractual obligations

Payments due by period

Total

Less than
1 year

1-3 years

3-5 years

More than
5 years

$

449.7

$

5.9

$

216.1

151.3
224.3

44.8
165.5

26.2

37.6
222.5

5.1
23.1

11.4

52.4

56.0
1.8

2.0
85.8

$

158.2

$

274.2

52.4

24.5
—

2.0
33.8

85.1

33.2
—

35.7
22.8

$

1,251.7

$

320.4

$

209.4

$

270.9

$

451.0

(A)  See Note 16 – Debt in the Notes to Consolidated Financial Statements for additional information on the Company's debt. “Debt” refers to future cash 
principal payments. Debt also includes the Company's capital leases as discussed in Note 21 – Leases in the Notes to Consolidated Financial Statements.

(B)  See Note 21 – Leases in the Notes to Consolidated Financial Statements for additional information.
(C)  Purchase obligations represent agreements with suppliers and vendors at the end of 2016 for raw materials and other supplies as part of the normal 

course of business.

(D)  Amounts primarily represent long-term deferred compensation plans for Company management. Payments are assumed to be equal to the remaining 

liability.

(E)  Other long-term liabilities include amounts recorded as secured obligations for lease and other long-term receivables originated by the Company and 
assigned to third parties where the transfer of assets do not meet the conditions for a sale as a result of the Company's contingent obligation to repurchase 
the receivables in the event of customer non-payment. Amounts above also include obligations under deferred revenue arrangements and future projected 
payments related to the Company's nonqualified pension plans. The Company is not required to make any contributions to the qualified pension plan 
in 2017; however, $4.1 million of scheduled retiree health care and life insurance benefit plan payments due within one year are included in other long-
term liabilities. Due to the high degree of uncertainty regarding the potential future cash outflows associated with these plans, the Company is unable 
to provide a reasonably reliable estimate of the amounts and periods in which any additional liabilities might be paid beyond 2017.

Legal Proceedings

See Note 13 – Commitments and Contingencies in the Notes to Consolidated Financial Statements for disclosure related to 

certain legal and environmental proceedings.

37

Environmental Regulation

In its Marine Engine segment, Brunswick continues to develop engine technologies to reduce engine emissions to comply 
with current and future emissions requirements. The Boat segment continues to pursue fiberglass boat manufacturing technologies 
and techniques to reduce air emissions at its boat manufacturing facilities. The costs associated with these activities may have an 
adverse effect on segment operating margins and may affect short-term operating results. Environmental regulatory bodies in the 
United States and other countries may impose higher emissions standards and/or other environmental regulatory requirements 
than are currently in effect. The Company complies with current regulations and expects to comply fully with any new regulations; 
compliance will increase the cost of these products for the Company and the industry, but is not expected to have a material adverse 
effect on Brunswick's competitive position.

Critical Accounting Policies

The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the 
United  States  requires  management  to  make  certain  estimates  and  assumptions  that  affect  the  amount  of  reported  assets  and 
liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and revenues and 
expenses during the periods reported. Actual results may differ from those estimates. If current estimates for the cost of resolving 
any specific matters are later determined to be inadequate, results of operations could be adversely affected in the period in which 
additional provisions are required. The Company has discussed the development and selection of the critical accounting policies 
with the Audit Committee of the Board of Directors and believes the following are the most critical accounting policies that could 
have an effect on Brunswick's reported results.

Revenue Recognition and Sales Incentives. Brunswick's revenue is derived primarily from the sale of boats, marine engines, 
marine parts and accessories, fitness equipment and active recreation products. Revenue is recognized in accordance with the 
terms of the sale, primarily upon shipment to customers, once the sales price is fixed or determinable and collectability is reasonably 
assured. Brunswick offers discounts and sales incentives that include retail promotions and rebates that are recorded as reductions 
of revenues in Net sales in the Consolidated Statements of Operations. The estimated liability and reduction in revenues for sales 
incentives is recorded at the later of when the program has been communicated to the customer or at the time of sale. Revenues 
from freight are included as a part of Net sales in the Consolidated Statements of Operations, whereas shipping, freight and handling 
costs are included in Cost of sales. 

In May 2014, the FASB issued a final standard on revenue recognition that will supersede most current revenue recognition 

guidance. Refer to Note 1 – Significant Accounting Policies for further discussion of the new revenue recognition standard.

Warranty Reserves. The Company records a liability for product warranties at the time revenue is recognized. The liability is 
estimated  using  historical  warranty  experience,  projected  claim  rates  and  expected  costs  per  claim. The  Company  adjusts  its 
liability for specific warranty matters when they become known and the exposure can be estimated. The Company's warranty 
liabilities are affected by product failure rates as well as material usage and labor costs incurred in correcting a product failure. If 
actual costs differ from estimated costs, the Company must make a revision to the warranty liability. 

Goodwill and Other Intangibles.  Goodwill and other intangible assets primarily result from business acquisitions. The excess 
of cost over net assets of businesses acquired is recorded as goodwill. The Company reviews these assets for impairment at least 
annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. All three of 
the Company's reporting units have a goodwill balance.

For both 2016 and 2015, the Company determined through qualitative assessment that it was not “more likely than not” that 
the fair values of its reporting units are less than their carrying values;  as a result, the Company was not required to perform the 
two-step impairment test in either year. The Company did not record any goodwill impairments in 2016, 2015 or 2014.

The Company calculated the fair value of its reporting units considering both the income approach and the guideline public 
company method.  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, which the Company believes reasonably approximate 
market  participant  assumptions,  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. Fair value under the guideline public company 
method is determined by applying market multiples for that reporting unit’s comparable public companies to the unit’s financial 
results. The key uncertainties in these calculations are the assumptions used in a reporting unit’s forecasted future performance, 
including  revenue  growth  and  operating  margins,  as  well  as  the  perceived  risk  associated  with  those  forecasts,  and  selecting 
representative market multiples.

38

The Company's primary intangible assets are customer relationships and trade names acquired in business combinations.  The 
costs of amortizable intangible assets are amortized over their expected useful lives, typically between three and fifteen years, 
using the straight-line method.  Intangible assets that are subject to amortization are evaluated for impairment using a process 
similar to that used to evaluate long-lived assets described below. Intangible assets not subject to amortization are assessed for 
impairment  at  least  annually  and  whenever  events  or  changes  in  circumstances  indicate  that  the  carrying  value  may  not  be 
recoverable. The impairment test for indefinite-lived intangible assets consists of a comparison of the fair value of the intangible 
asset with its carrying amount. An impairment loss is recognized for the amount by which the carrying value exceeds the fair value 
of the asset. The fair value of trade names is measured using a relief-from-royalty approach, which assumes the value of the trade 
name is the discounted cash flows of the amount that would be paid to third parties had the Company not owned the trade name 
and  instead  licensed  the  trade  name  from  another  company.  Higher  royalty  rates  are  assigned  to  premium  brands  within  the 
marketplace based on name recognition and profitability, while other brands receive lower royalty rates. The basis for future cash 
flow projections is internal revenue forecasts by brand, which the Company believes represent reasonable market participant 
assumptions, to which the selected royalty rate is applied. These future cash flows are discounted using the applicable Discount 
Rate as well as any potential risk premium to reflect the inherent risk of holding a standalone intangible asset.  The key uncertainties 
in this calculation are the selection of an appropriate royalty rate and assumptions used in developing internal revenue growth 
forecasts, as well as the perceived risk associated with those forecasts in developing the Discount Rate. 

The Company did not record any intangible asset impairments during 2016, 2015 or 2014.

Long-Lived Assets.  The Company continually evaluates whether events and circumstances have occurred that indicate the 
remaining estimated useful lives of its definite-lived intangible assets--excluding goodwill and indefinite-lived trade names--and 
other long-lived assets may warrant revision or that the remaining balance of such assets may not be recoverable. Once an impairment 
indicator is identified, the Company tests for recoverability of the related asset group using an estimate of undiscounted cash flows 
over the remaining asset group's life. If an asset group's carrying value is not recoverable, the Company records an impairment 
loss based on the excess of the carrying value of the asset group over the long-lived asset group's fair value.  Fair value is determined 
using observable inputs, including the use of appraisals from independent third parties, when available, and, when observable 
inputs are not available, based on the Company's assumptions of the data that market participants would use in pricing the asset 
or liability, based on the best information available in the circumstances. Specifically, the Company uses discounted cash flows 
to determine the fair value of the asset when observable inputs are unavailable. The Company tested its long-lived asset balances 
for impairment as indicators presented themselves during 2016, 2015 or 2014, resulting in impairment charges of $2.4 million, 
$11.9  million  and  $1.5  million,  respectively,  which  are  recognized  in  Restructuring,  integration  and  impairment  charges  and 
Selling, general and administrative expense in the Consolidated Statements of Operations.

Litigation. In the normal course of business, the Company is subject to claims and litigation, including obligations assumed 
or retained as part of acquisitions and divestitures. The Company accrues for litigation exposure based upon its assessment, made 
in consultation with counsel, of the likely range of exposure stemming from the claim. In light of existing reserves, the Company's 
litigation claims, when finally resolved, will not, in the opinion of management, have a material adverse effect on the Company's 
consolidated financial position, results of operations or cash flows.

Environmental. The Company accrues for environmental remediation-related activities for which commitments or clean-up 
plans  have  been  developed  and  for  which  costs  can  be  reasonably  estimated. Accrued  amounts  are  generally  determined  in 
coordination with third-party experts on an undiscounted basis and do not consider recoveries from third parties until such recoveries 
are realized. In light of existing reserves, the Company's environmental claims, when finally resolved, will not, in the opinion of 
management, have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows.

Postretirement  Benefit  Reserves.  Postretirement  costs  and  obligations  are  actuarially  determined  and  are  affected  by 
assumptions, including the discount rate, the estimated future return on plan assets, the increase in costs of health care benefits, 
mortality assumptions and other factors. The Company evaluates assumptions used on a periodic basis and makes adjustments to 
these liabilities as necessary.  

Income Taxes. Deferred taxes are recognized for the future tax effects of temporary differences between financial and income 
tax reporting using tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the 
realizability of net deferred tax assets and, as necessary, records valuation allowances against them. The Company estimates its 
tax obligations based on historical experience and current tax laws and litigation. The judgments made at any point in time may 
change based on the outcome of tax audits and settlements of tax litigation, as well as changes due to new tax laws and regulations 
and the Company's application of those laws and regulations. These factors may cause the Company's tax rate and deferred tax 
balances to increase or decrease. 

39

Recent Accounting Pronouncements

See Note 1 – Significant Accounting Policies in the Notes to Consolidated Financial Statements for the recent accounting 

pronouncements that have been adopted during the year ended December 31, 2016, or will be adopted in future periods. 

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk from changes in foreign currency exchange rates, commodity prices and interest 
rates. The Company enters into various hedging transactions to mitigate these risks in accordance with guidelines established by 
the Company's management. The Company does not use financial instruments for trading or speculative purposes.

The  Company  uses  foreign  currency  forward  and  option  contracts  to  manage  foreign  exchange  rate  exposure  related  to 
anticipated transactions, and assets and liabilities that are subject to risk from foreign currency rate changes. The Company's 
principal currency exposures relate to the Euro, Japanese yen, Canadian dollar, Australian dollar, British pound and Brazilian real. 
The Company hedges certain anticipated transactions with financial instruments whose maturity date, along with the realized gain 
or loss, occurs on or near the execution of the anticipated transaction. The Company manages foreign currency exposure of certain 
assets or liabilities through the use of derivative financial instruments such that the gain or loss on the derivative financial instrument 
offsets the loss or gain recognized on the asset or liability, respectively.

Certain raw materials the Company uses are exposed to the effect of changing commodity prices. Accordingly, the Company 
may use commodity swap agreements, futures contracts and supplier agreements to manage fluctuations in prices of anticipated 
purchases of certain raw materials, including aluminum, copper and natural gas. 

From time-to-time, the Company enters into forward-starting interest rate swaps to hedge the interest rate risk associated with 
the future issuance of long-term debt. There were no forward-starting interest rate swaps outstanding at December 31, 2016 and 
2015. The Company uses fixed-to-floating interest rate swaps to convert a portion of the Company's long-term debt from fixed-
to-floating rate debt. An interest rate swap is entered into with the expectation that the change in the fair value of the interest rate 
swap will offset the change in the fair value of the debt instrument attributable to changes in the benchmark interest rate. Each 
period, the change in the fair value of the interest rate swap asset or liability is recorded as a change in the fair value of the 
corresponding debt instrument. 

The following analyses provide quantitative information regarding the Company's exposure to foreign currency exchange 
rate risk, commodity price risk and interest rate risk as it relates to its derivative financial instruments. The Company uses a model 
to evaluate the sensitivity of the fair value of financial instruments with exposure to market risk that assumes instantaneous, parallel 
shifts in exchange rates and commodity prices. For options and instruments with nonlinear returns, models appropriate to the 
instrument are utilized to determine the impact of market shifts. There are certain shortcomings inherent in the sensitivity analyses 
presented, primarily due to the assumption that exchange rates change in a parallel fashion. 

The amounts shown below represent the estimated reduction in fair market value that the Company would incur on its derivative 

financial instruments from a 10 percent adverse change in quoted foreign currency rates, commodity prices and interest rates. 

(in millions)
Risk Category

Foreign exchange
Commodity prices (A)
Interest rates

2016

2015

$

$

36.1
—
1.8

34.1
0.7
1.8

(A)  As of December 31, 2016, there were no outstanding derivative financial instruments related to commodities.

Item 8. Financial Statements and Supplementary Data

See Index to Financial Statements and Financial Statement Schedule on page 44.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

40

Item 9A. Controls and Procedures 

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of the Company's management, including the Chief Executive Officer and 
the  Chief  Financial  Officer  of  the  Company  (its  principal  executive  officer  and  principal  financial  officer,  respectively),  the 
Company has evaluated its disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a -15(e) and 15d 
-15(e)) as of the end of the period covered by this Annual Report on Form 10-K. Based upon that evaluation, the Chief Executive 
Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures are effective. 

Management's Report on Internal Control Over Financial Reporting

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, the Company included a report of management's assessment of 
the effectiveness of its internal control over financial reporting as part of this Annual Report on Form 10-K for the fiscal year 
ended  December 31,  2016.  Management's  report  is  included  in  the  Company's  2016  Financial  Statements  under  the  captions 
entitled “Report of Management on Internal Control Over Financial Reporting” and is incorporated herein by reference.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company's internal control over financial reporting during the quarter ended December 31, 
2016, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial 
reporting. 

Item 9B.  Other Information

None.

41

Item 10. Directors, Executive Officers and Corporate Governance

PART III

Information pursuant to this Item with respect to our Directors, the Company's Audit Committee and the Company's code of 
ethics is incorporated by reference from the discussion under the headings Proposal No. 1: Election of Directors and Corporate 
Governance in the Company's Proxy Statement for the Annual Meeting of Shareholders to be held on May 3, 2017 (Proxy Statement).  
Information  pursuant  to  this  Item  with  respect  to  compliance  with  Section  16(a)  of  the  Securities  Exchange Act  of  1934  is 
incorporated by reference from the discussion under the heading Section 16(a) Beneficial Ownership Reporting Compliance in 
the Proxy Statement. 

The information required by Item 401 of Regulation S-K regarding executive officers is included under “Executive Officers 

of the Registrant” following Item 4 in Part I of this Annual Report.

Item 11. Executive Compensation

Information pursuant to this Item with respect to compensation paid to our Directors is incorporated by reference from the 
discussion under the heading Director Compensation in the Proxy Statement. Information pursuant to this Item with respect to 
executive compensation is incorporated by reference from the discussion under the heading Executive Compensation in the Proxy 
Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information pursuant to this Item with respect to the securities of the Company owned by the Directors and certain officers 
of the Company, by the Directors and officers of the Company as a group and by the persons known to the Company to own 
beneficially more than 5 percent of the outstanding voting securities of the Company is incorporated by reference from the discussion 
under the heading Stock Held by Directors, Executive Officers and Principal Shareholders in the Proxy Statement. Information 
pursuant to this Item with respect to securities authorized for issuance under the Company's equity compensation plans is hereby 
incorporated by reference from the discussion under the heading Equity Compensation Plan Information in the Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information  pursuant  to  this  Item  with  respect  to  certain  relationships  and  related  transactions  is  incorporated  from  the 

discussion under the headings Proposal No. 1: Election of Directors and Corporate Governance in the Proxy Statement. 

Item 14. Principal Accounting Fees and Services

Information  pursuant  to  this  Item  with  respect  to  fees  for  professional  services  rendered  by  the  Company's  independent 
registered public accounting firm and the Audit Committee's policy on pre-approval of audit and permissible non-audit services 
of the Company's independent registered public accounting firm is incorporated by reference from the discussion in the Proxy 
Statement under the heading Proposal No. 3:  Ratification of the Appointment of Independent Registered Public Accounting Firm.

42

Item 15. Exhibits and Financial Statement Schedules

PART IV

The financial statements and schedule filed as part of this Annual Report on Form 10-K are listed in the accompanying Index 
to Financial Statements and Financial Statement Schedule on page 44. The exhibits filed as a part of this Annual Report are listed 
in the accompanying Exhibit Index on page 101.

43

Index to Financial Statements and Financial Statement Schedule

Brunswick Corporation

Financial Statements:

Report of Management on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm 

Consolidated Statements of Operations for the Years Ended December 31, 2016, 2015 and 2014
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2016, 2015 and 2014

Consolidated Balance Sheets as of December 31, 2016 and 2015

Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014
Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2016, 2015 and 2014
Notes to Consolidated Financial Statements

Financial Statement Schedule:

Schedule II - Valuation and Qualifying Accounts

Page

45
46
47

48
49

50

52
53
54

99

44

BRUNSWICK CORPORATION

REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING  

The Company's management is responsible for the preparation, integrity and objectivity of the financial statements and other 
financial information presented in this Annual Report. The financial statements have been prepared in conformity with accounting 
principles generally accepted in the United States and reflect the effects of certain estimates and judgments made by management.

The Company's management is also responsible for establishing and maintaining adequate internal control over financial reporting, 
as  defined  in  Securities  Exchange Act  Rule  13a-15(f).  Under  the  supervision  and  with  the  participation  of  the  Company's 
management, including the Chief Executive Officer and the Chief Financial Officer, the Company conducted an evaluation of the 
effectiveness of its internal control over financial reporting based on the framework in Internal Control - Integrated Framework 
issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). 

Based on the Company's evaluation under the framework in Internal Control - Integrated Framework, management concluded that 
internal control over financial reporting was effective as of December 31, 2016. The effectiveness of internal control over financial 
reporting as of December 31, 2016 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, 
as stated in its attestation report, which is included herein.

Brunswick Corporation 
Lake Forest, Illinois
February 17, 2017 

45

BRUNSWICK CORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

To the Board of Directors and Shareholders of Brunswick Corporation
Lake Forest, Illinois 

We have audited the internal control over financial reporting of Brunswick Corporation and subsidiaries (the "Company") as of 
December 31, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of 
Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective 
internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, 
included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express 
an opinion on the Company's internal control over financial reporting based on our audit. 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). 
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control 
over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control 
over  financial  reporting,  assessing  the  risk  that  a  material  weakness  exists,  testing  and  evaluating  the  design  and  operating 
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in 
the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal 
executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, 
management, and other personnel 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. A company's internal 
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in 
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable 
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally 
accepted  accounting  principles,  and  that  receipts  and  expenditures  of  the  company  are  being  made  only  in  accordance  with 
authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely 
detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial 
statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper 
management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. 
Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject 
to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the 
policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 
31, 2016, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring 
Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 
consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2016 of the Company 
and our report dated February 17, 2017 expressed an unqualified opinion on those financial statements and financial statement 
schedule.

/s/ DELOITTE & TOUCHE LLP

Chicago, Illinois 
February 17, 2017 

46

BRUNSWICK CORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Brunswick Corporation
Lake Forest, Illinois

We have audited the accompanying consolidated balance sheets of Brunswick Corporation and subsidiaries (the "Company") as 
of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income, shareholders' 
equity, and cash flows for each of the three years in the period ended December 31, 2016.  Our audits also included the financial 
statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility 
of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement 
schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures 
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by 
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable 
basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Brunswick 
Corporation and subsidiaries at December 31, 2016 and 2015, and the results of their operations and their cash flows for each of 
the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United 
States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated 
financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. 

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 
Company's internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal Control 
- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report 
dated February 17, 2017 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ DELOITTE AND TOUCHE LLP

Chicago, Illinois
February 17, 2017 

47

BRUNSWICK CORPORATION
Consolidated Statements of Operations

(in millions, except per share data)
Net sales
Cost of sales
Selling, general and administrative expense
Research and development expense
Pension settlement charge
Restructuring, integration and impairment charges

Operating earnings

Impairment of equity method investment
Equity earnings
Other income, net

Earnings before interest and income taxes

Interest expense
Interest income

Earnings before income taxes

Income tax provision

Net earnings from continuing operations

Discontinued operations:

Earnings (loss) from discontinued operations, net of tax
Gain on disposal of discontinued operations, net of tax

Net earnings from discontinued operations, net of tax

Net earnings

Earnings per common share:

Basic

Earnings from continuing operations
Earnings from discontinued operations
Net earnings

Diluted

Earnings from continuing operations
Earnings from discontinued operations
Net earnings

Weighted average shares used for computation of:

Basic earnings per common share
Diluted earnings per common share

$

$

$

$

$

$

For the Years Ended December 31

$

$

$

$

$

$

2016
4,488.5
3,263.4
606.2
139.2
55.1
15.6
409.0
—
4.3
2.1
415.4
(27.5)
1.8
389.7
115.3
274.4

1.6
—
1.6
276.0

3.01
0.02
3.03

2.98
0.02
3.00

91.2
92.0

$

$

$

$

$

$

2015
4,105.7
2,991.1
562.3
125.9
82.3
12.4
331.7
—
3.7
5.4
340.8
(27.8)
2.2
315.2
87.8
227.4

1.2
12.8
14.0
241.4

2.45
0.15
2.60

2.41
0.15
2.56

93.0
94.3

2014
3,838.7
2,801.9
556.6
119.6
27.9
4.2
328.5
(20.2)
1.8
6.5
316.6
(29.9)
1.2
287.9
93.0
194.9

(1.8)
52.6
50.8
245.7

2.08
0.55
2.63

2.05
0.53
2.58

93.6
95.1

Cash dividends declared per common share

$

0.615

$

0.525

$

0.45

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

48

 
 
 
 
 
 
BRUNSWICK CORPORATION
Consolidated Statements of Comprehensive Income

(in millions)
Net earnings

Other comprehensive income (loss), net of tax:

Foreign currency translation:

Foreign currency translation adjustments arising during period (A)
Less: reclassification of foreign currency translation included in 
    Net earnings (B)

Net foreign currency translation

Defined benefit plans:

Net actuarial losses arising during period (A)
Less: amortization of prior service credits included in Net earnings (B)
Less: amortization of net actuarial losses included in Net earnings (B)

Net defined benefit plans

Derivatives:

Net gains on derivatives arising during period (A)
Less: reclassification adjustment included in Net earnings (B)

Net unrealized gains (losses) on derivatives

Other comprehensive income (loss)

Comprehensive income

For the Years Ended December 31

2016

2015

2014

$

276.0

$

241.4

$

245.7

4.5

—
4.5

(10.2)
(0.4)
45.3
34.7

2.1
(1.8)
0.3

39.5

(41.9)

—
(41.9)

(14.1)
(0.8)
63.6
48.7

8.4
(8.8)
(0.4)
6.4

$

315.5

$

247.8

$

(26.2)

0.7
(25.5)

(83.7)
(1.3)
25.7
(59.3)

4.4
1.4

5.8
(79.0)
166.7

(A) The tax effects for the year ended December 31, 2016 were $(7.9) million for foreign currency translation, $5.4 million for net actuarial losses arising 
during the period and $(0.8) million for derivatives. The tax effects for the year ended December 31, 2015 were $(10.6) million for foreign currency 
translation, $10.4 million for net actuarial losses arising during the period and $(3.6) million for derivatives. The tax effects for the year ended December 31, 
2014 were $8.9 million for foreign currency translation, $53.2 million for net actuarial losses arising during the period and $(2.1) million for derivatives. 

(B) See Note 19 – Comprehensive Income for the tax effects for the years ended December 31, 2016, December 31, 2015 and December 31, 2014.

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

49

 
BRUNSWICK CORPORATION
Consolidated Balance Sheets

As of December 31

2016

2015

(in millions)

Assets

Current assets

Cash and cash equivalents, at cost, which approximates fair value

$

422.4

$

Short-term investments in marketable securities

Total cash, cash equivalents and short-term investments in marketable securities

Restricted cash

Accounts and notes receivable, less allowances of $12.8 and $13.8

Inventories

Finished goods

Work-in-process

Raw materials

Net inventories

Prepaid expenses and other

Current assets

Property

Land

Buildings and improvements

Equipment

Total land, buildings and improvements and equipment

Accumulated depreciation

Net land, buildings and improvements and equipment

Unamortized product tooling costs

Net property

Other assets

Goodwill

Other intangibles, net

Equity investments

Deferred income tax asset

Other long-term assets

Other assets

Total assets

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

50

35.8

458.2

11.2

417.3

502.7

91.1

168.3

762.1

39.7

657.3

11.5

668.8

12.7

398.1

444.4

88.4

152.2

685.0

39.8

1,688.5

1,804.4

24.3

406.4

979.2

24.2

351.8

886.8

1,409.9

1,262.8

(892.3)

(861.4)

517.6

127.7

645.3

413.8

164.8

20.7

307.8

43.8

950.9

401.4

103.8

505.2

298.7

55.1

21.5

420.2

47.4

842.9

$

3,284.7

$

3,152.5

 
 
 
 
 
 
 
 
 
 
BRUNSWICK CORPORATION
Consolidated Balance Sheets

(in millions)

Liabilities and shareholders’ equity

Current liabilities

Current maturities of long-term debt

Accounts payable

Accrued expenses

Current liabilities

Long-term liabilities

Debt

Deferred income tax liability

Postretirement benefits

Other

Long-term liabilities

Shareholders’ equity

Common stock; authorized: 200,000,000 shares, $0.75 par value; issued: 102,538,000 shares;

outstanding: 89,317,000 and 90,813,000 shares

Additional paid-in capital

Retained earnings

Treasury stock, at cost: 13,221,000, and 11,725,000 shares

Accumulated other comprehensive loss, net of tax:

     Foreign currency translation

     Defined benefit plans:

       Prior service credits

       Net actuarial losses

     Unrealized losses on derivatives

Total accumulated other comprehensive loss, net of tax

Shareholders’ equity

As of December 31

2016

2015

$

5.9

$

392.7

566.3

964.9

436.5

2.5

276.3

164.4

879.7

6.0

339.1

563.0

908.1

442.5

12.3

347.5

160.8

963.1

76.9

382.0

76.9

408.0

1,881.0

1,660.4

(465.2)

(389.9)

(51.9)

(56.4)

(5.1)

(4.7)

(372.0)

(407.1)

(5.6)

(5.9)

(434.6)

(474.1)

1,440.1

1,281.3

Total liabilities and shareholders’ equity

$

3,284.7

$

3,152.5

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

51

 
 
 
 
 
 
 
 
BRUNSWICK CORPORATION
Consolidated Statements of Cash Flows

(in millions)
Cash flows from operating activities

Net earnings
Less: earnings from discontinued operations, net of tax
Net earnings from continuing operations
Depreciation and amortization
Pension (funding), net of expense
Other long-lived asset impairment charges
Deferred income taxes
Income taxes
Excess tax benefits from share-based compensation
Equity in earnings of unconsolidated affiliates
Impairment of equity method investment
Changes in certain current assets and current liabilities

Change in accounts and notes receivable
Change in inventory
Change in prepaid expenses and other
Change in accounts payable
Change in accrued expenses

Other, net
Net cash provided by operating activities of continuing operations
Net cash provided by (used for) operating activities of discontinued operations
Net cash provided by operating activities

Cash flows from investing activities

Capital expenditures
Purchases of marketable securities
Sales or maturities of marketable securities
Reductions in (transfers to) restricted cash
Investments
Acquisition of businesses, net of cash acquired
Proceeds from the sale of property, plant and equipment
Other, net
Net cash used for investing activities of continuing operations
Net cash provided by investing activities of discontinued operations
Net cash provided by (used for) investing activities

Cash flows from financing activities

Net proceeds from issuances of long-term debt
Payments of long-term debt including current maturities
Common stock repurchases
Cash dividends paid
Excess tax benefits from share-based compensation
Proceeds from share-based compensation activity
Tax withholding associated with shares issued for share-based compensation
Other, net
Net cash used for financing activities of continuing operations
Net cash provided by financing activities of discontinued operations
Net cash used for financing activities

Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental cash flow disclosures:

Interest paid
Income taxes paid, net

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

52

For the Years Ended December 31
2014
2015
2016

$

276.0
1.6
274.4
103.9
(4.8)
1.0
62.5
20.2
(13.4)
(4.3)
—

(1.1)
(48.2)
0.5
39.2
(20.8)
16.6
425.7
(3.8)
421.9

(193.9)
(35.0)
10.7
1.5
5.1
(276.1)
1.9
1.3
(484.5)
—
(484.5)

1.0
(3.2)
(120.3)
(55.4)
13.4
14.9
(20.9)
(1.9)
(172.4)
—
(172.4)

0.1
(234.9)
657.3

$

241.4
14.0
227.4
88.9
20.4
13.0
43.6
11.4
(7.0)
(3.7)
—

(12.3)
(15.2)
(3.1)
1.1
(34.2)
8.0
338.3
(14.8)
323.5

(132.5)
(47.6)
119.3
2.9
0.9
(29.7)
2.4
—
(84.3)
44.5
(39.8)

0.1
(3.4)
(120.0)
(48.3)
7.0
4.5
(8.7)
—
(168.8)
5.3
(163.5)

(15.6)
104.6
552.7

245.7
50.8
194.9
81.2
(31.1)
0.2
48.3
(0.8)
(8.4)
(1.8)
20.2

(24.0)
(57.1)
(4.3)
13.0
5.7
10.9
246.9
1.3
248.2

(124.8)
(82.4)
11.9
(9.1)
0.2
(41.5)
5.8
—
(239.9)
260.2
20.3

0.5
(5.3)
(20.0)
(41.7)
8.4
10.7
(11.0)
(2.3)
(60.7)
—
(60.7)

(11.6)
196.2
356.5

422.4

$

657.3

$

552.7

30.1
32.6

$
$

28.5
32.8

$
$

31.1
45.5

$

$

$
$

                                                                                                                       
BRUNSWICK CORPORATION
Consolidated Statements of Shareholders' Equity

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Treasury
Stock

Accumulated
Other
Comprehensive
Income (Loss)

(in millions, except per share data)
Balance, December 31, 2013

$

Net earnings
Other comprehensive loss
Dividends ($0.45 per common share)
Compensation plans and other
Common stock repurchases
Balance, December 31, 2014

Net earnings
Other comprehensive income
Dividends ($0.525 per common share)
Compensation plans and other
Common stock repurchases
Balance, December 31, 2015

Net earnings

Other comprehensive income

Dividends ($0.615 per common share)

Compensation plans and other

Common stock repurchases
Balance, December 31, 2016

$

76.9
—
—
—
—
—
76.9
—
—
—
—
—

76.9

—

—

—

—

—

$

$

393.0
—
—
—
2.0
—
395.0
—
—
—
13.0
—

408.0

—

—

—
(26.0)
—

1,263.3
245.7
—
(41.7)
—
—
1,467.3
241.4
—
(48.3)
—
—

1,660.4

276.0

—
(55.4)
—

—

$

76.9

$

382.0

$

1,881.0

$

(293.3) $
—
—
—
26.1
(20.0)
(287.2)
—
—
—
17.3
(120.0)
(389.9)
—

—

—

45.0
(120.3)
(465.2) $

(401.5) $
—
(79.0)
—
—
—
(480.5)
—
6.4
—
—
—
(474.1)
—

39.5

—

—

—
(434.6) $

Total
1,038.4
245.7
(79.0)
(41.7)
28.1
(20.0)
1,171.5
241.4
6.4
(48.3)
30.3
(120.0)
1,281.3

276.0

39.5
(55.4)
19.0
(120.3)
1,440.1

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

53

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 1 – Significant Accounting Policies 

Basis of Presentation.  Brunswick Corporation (Brunswick or the Company) has prepared its consolidated financial statements 
pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). As stated in Note 2 – Discontinued 
Operations, Brunswick's results as discussed in the financial statements reflect continuing operations only, unless otherwise noted. 

Principles of Consolidation.  Brunswick's consolidated financial statements include the accounts of all majority owned and 

controlled domestic and foreign subsidiaries. Intercompany balances and transactions have been eliminated.

Use of Estimates.  The preparation of the consolidated financial statements in accordance with accounting principles generally 
accepted in the United States (GAAP) requires management to make certain estimates. Actual results could differ materially from 
those estimates. These estimates affect:

•  The reported amounts of assets and liabilities at the date of the financial statements; 
•  The disclosure of contingent assets and liabilities at the date of the financial statements; and
•  The reported amounts of revenues and expenses during the reporting periods.

Estimates in these consolidated financial statements include, but are not limited to:

•  Allowances for doubtful accounts; 
• 
Inventory valuation reserves; 
•  Reserves for dealer allowances; 
•  Reserves related to repurchase and recourse obligations;
•  Warranty related reserves; 
•  Losses on litigation and other contingencies; 
•  Environmental reserves; 
• 
Insurance reserves; 
•  Valuation of goodwill and other intangible assets;
• 
•  Reserves related to restructuring and integration activities;
• 
•  Valuation allowances on deferred tax assets; and
• 

Impairments of long-lived assets;

Postretirement benefit liabilities;

Income tax reserves.

Cash and Cash Equivalents.  The Company considers all highly liquid investments with a maturity of three months or less 
when purchased to be cash equivalents. These investments include, but are not limited to, investments in money market funds, 
bank deposits, federal government and agency debt securities and commercial paper.

Investments in Marketable Securities.  The Company classifies investments in debt securities that are not considered to be 
cash equivalents as Short-term investments in marketable securities as discussed in Note 9 – Investments. Short-term investments 
in marketable securities have a stated maturity of twelve months or less from the balance sheet date. These securities are considered 
as available-for-sale and are reported at fair value. Unrealized gains and losses would be recorded net of tax as a component of 
Accumulated other comprehensive loss in Unrealized investment losses within Shareholders' equity. Declines in market value 
from the original cost deemed to be "other-than-temporary" are charged to Other income, net, in the period in which the loss occurs.  
The Company considers both the duration for which a decline in value has occurred and the extent of the decline in its determination 
of whether a decline in value has been “other than temporary.” Realized gains and losses are calculated based on the specific 
identification method and are included in Other income, net, in the Consolidated Statements of Operations.

Restricted Cash.  The Company considers the cash deposited in a trust that is pledged as collateral against certain workers' 
compensation-related obligations to be restricted cash. Refer to Note 13 – Commitments and Contingencies for more information.

Accounts and Notes Receivable and Allowance for Doubtful Accounts.  The Company carries its accounts and notes receivable 
at their face amounts less an allowance for doubtful accounts. On a regular basis, the Company records an allowance for uncollectible 
receivables based upon known bad debt risks and past loss history, customer payment practices and economic conditions. Actual 
collection experience may differ from the current estimate of net receivables. A change to the allowance for doubtful accounts 

54

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

may be required if a future event or other change in circumstances results in a change in the estimate of the ultimate collectability 
of a specific account. 

The Company treats the sale of receivables in which the Company retains an interest as a secured obligation. Accordingly, 
the short-term portion of the receivables sold that are subject to recourse is recorded in Accounts and notes receivable and Accrued 
expenses in the Consolidated Balance Sheets.

Inventories.  Inventories are valued at the lower of cost or market, with market based on replacement cost or net realizable 
value. Approximately 53 percent and 49 percent of the Company's inventories were determined by the first-in, first-out method 
(FIFO) at December 31, 2016 and December 31, 2015, respectively. Remaining inventories valued at the last-in, first-out method 
(LIFO) were $123.0 million and $123.8 million lower than the FIFO cost of inventories at December 31, 2016 and 2015, respectively. 
Inventory cost includes material, labor and manufacturing overhead. There were no liquidations of LIFO inventory layers in 2016, 
2015 or 2014.

Property.    Property,  including  major  improvements  and  product  tooling  costs,  is  recorded  at  cost.  Product  tooling  costs 
principally comprise the cost to acquire and construct various long-lived molds, dies and other tooling the Company uses in its 
manufacturing  processes.  Design  and  prototype  development  costs  associated  with  product  tooling  are  expensed  as  incurred. 
Maintenance and repair costs are also expensed as incurred. Depreciation is recorded over the estimated service lives of the related 
assets, principally using the straight-line method. Buildings and improvements are depreciated over a useful life of five to forty
years. Equipment is depreciated over a useful life of two to twenty years. Product tooling costs are amortized over the shorter of 
the useful life of the tooling or the anticipated life of the applicable product, for a period not to exceed eight years. The Company 
capitalizes interest on qualifying assets during the construction period and capitalized $2.6 million and $0.7 million in 2016 and 
2015, respectively. The Company presents capital expenditures on a cash basis within the Consolidated Statements of Cash Flows. 
There were $35.8 million and $26.6 million of unpaid capital expenditures within Accounts payable and Accrued expenses as of 
December 31, 2016 and 2015, respectively. The Company includes gains and losses recognized on the sale and disposal of property 
in either Selling, general and administrative expenses or Restructuring, integration and impairment charges as appropriate. The 
amount of gains and losses for the years ended December 31 were as follows:

(in millions)
Gains on the sale of property
Losses on the sale and disposal of property
Net gains (losses) on sale and disposal of property

2016

2015

2014

$

$

$

0.5
(0.6)
(0.1) $

$

1.1
(2.0)
(0.9) $

1.8
(0.5)
1.3

As of December 31, 2016 and 2015, the Company had $13.2 million and $14.2 million, respectively, of net assets classified 

as held-for-sale within Net property in the Consolidated Balance Sheets.

Software Development Costs.  The Company expenses all software development and implementation costs incurred until the 
Company has determined that the software will result in probable future economic benefit and management has committed to 
funding the project. Once this is determined, external direct costs of material and services, payroll-related costs of employees 
working on the project and related interest costs incurred during the application development stage are capitalized. These capitalized 
costs are amortized over three to seven years. All other related costs, including training costs and costs to re-engineer business 
processes, are expensed as incurred.

Goodwill  and  Other  Intangibles.    Goodwill  and  other  intangible  assets  primarily  result  from  business  acquisitions.  The 
Company  records  the  excess  of  cost  over  net  assets  of  businesses  acquired  as  goodwill. The  Company  reviews  goodwill  for 
impairment  at  least  annually  and  whenever  events  or  changes  in  circumstances  indicate  that  the  carrying  value  may  not  be 
recoverable.

For 2016 and 2015, the Company determined through qualitative assessment that the fair values of its reporting units were 
“more likely than not” greater than their carrying values. As a result, the Company was not required to perform the two-step 
impairment test. The Company did not record any goodwill impairments in 2016, 2015 or 2014.

The Company's primary intangible assets are customer relationships, trade names and patents and proprietary technology 
acquired  in  business  combinations. The  costs  of  amortizable  intangible  assets  are  amortized  over  their  expected  useful  lives, 
typically between three and sixteen years, using the straight-line method. Intangible assets that are subject to amortization are 
evaluated for impairment using a process similar to that used to evaluate long-lived assets described below. Intangible assets not 

55

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

subject to amortization, including trade names, are assessed for impairment at least annually and whenever events or changes in 
circumstances indicate that the carrying value may not be fully recoverable. The impairment test for indefinite-lived intangible 
assets consists of a comparison of the fair value of the intangible asset with its carrying amount. An impairment loss is recognized 
for the amount by which the carrying value exceeds the fair value of the asset. The fair value of trade names is measured using a 
relief-from-royalty approach, which assumes the value of the trade name is the discounted cash flows of the amount that would 
be paid to third parties had the Company not owned the trade name and instead licensed the trade name from another company. 
Higher royalty rates are assigned to premium brands within the marketplace based on name recognition and profitability, while 
other brands receive lower royalty rates. The basis for future cash flow projections is internal revenue forecasts by brand, which 
the Company believes represent reasonable market participant assumptions, to which the selected royalty rate is applied. These 
future cash flows are discounted using an applicable Discount Rate as well as any potential risk premium to reflect the inherent 
risk of holding a standalone intangible asset. The Company did not record any indefinite-lived intangible asset impairments during 
2016, 2015 or 2014.

Refer to Note 11 – Goodwill and Other Intangibles for more information.

Equity Investments.  For investments in which Brunswick owns or controls from 20 percent to 50 percent of the voting shares, 
the Company uses the equity method of accounting.  The Company's share of net earnings or losses from equity method investments 
is included in the Consolidated Statements of Operations. The Company accounts for other investments, over which the Company 
does not have the ability to exercise significant influence, under the cost method of accounting. The Company periodically evaluates 
the carrying value of its investments. 

Long-Lived Assets.  The Company continually evaluates whether events and circumstances have occurred that indicate the 
remaining estimated useful lives of its definite-lived intangible assets and other long-lived assets may warrant revision or that the 
remaining  balance  of  such  assets  may  not  be  recoverable.  Once  an  impairment  indicator  is  identified,  the  Company  tests  for 
recoverability of the related asset group using an estimate of undiscounted cash flows over the remaining asset group's life. If an 
asset group's carrying value is not recoverable, the Company records an impairment loss based on the excess of the carrying value 
of the asset group over the long-lived asset group's fair value.  Fair value is determined using observable inputs, including the use 
of appraisals from independent third parties, when available, and, when observable inputs are not available, based on the Company's 
assumptions of the data that market participants would use in pricing the asset, based on the best information available in the 
circumstances. Specifically, the Company uses discounted cash flows to determine the fair value of the asset when observable 
inputs are unavailable. The Company tested its long-lived asset balances for impairment as indicators presented themselves during 
2016, 2015 and 2014, resulting in impairment charges of $2.4 million, $11.9 million and $1.5 million, respectively, which are 
recognized in Restructuring, integration and impairment charges and Selling, general and administrative expense in the Consolidated 
Statements of Operations.

Other Long-Term Assets.  Other long-term assets are mainly long-term receivables originated by the Company and assigned 
to third parties, long-term derivative assets and other long-term notes receivable. As of December 31, 2016 and 2015, amounts 
assigned to third parties totaled $29.0 million and $23.7 million, respectively. The assignment of these instruments does not meet 
sale criteria as a result of the Company's contingent obligation to repurchase the receivables in the event of customer non-payment 
and therefore is treated as a secured obligation. Accordingly, these amounts were recorded in the Consolidated Balance Sheets 
under Other long-term assets and Long-term liabilities – Other.

Revenue Recognition.  Brunswick's revenue is derived primarily from the sale of boats, marine engines, marine parts and 
accessories, fitness equipment and active recreation products. Revenue is recognized in accordance with the terms of the sale, 
primarily  upon  shipment  to  customers,  once  the  sales  price  is  fixed  or  determinable  and  collectability  is  reasonably  assured. 
Brunswick  offers  discounts  and  sales  incentives  that  include  retail  promotions  and  rebates  that  are  recorded  as  reductions  of 
revenues in Net sales in the Consolidated Statements of Operations. The estimated liability and reduction in revenue for sales 
incentives is recorded at the later of when the program has been communicated to the customer or at the time of sale. Revenues 
from freight are included as a part of Net sales in the Consolidated Statements of Operations, whereas shipping, freight and handling 
costs are included in Cost of sales.

Advertising Costs.  The Company records advertising and promotion costs in Selling, general and administrative expense in 
the Consolidated Statements of Operations in the period when the advertising first takes place. Advertising and promotion costs 
were $27.1 million, $28.7 million and $31.2 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Foreign  Currency.    The  functional  currency  for  the  majority  of  Brunswick's  operations  is  the  U.S.  dollar. All  assets  and 
liabilities of operations with a functional currency other than the U.S. dollar are translated at period end current rates. The resulting 

56

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

translation adjustments are recorded in Accumulated other comprehensive loss, net of tax. Revenues and expenses of operations 
with a functional currency other than the U.S. dollar are translated at the average exchange rates for the period. Transaction gains 
and  losses  resulting  from  changes  in  foreign  currency  exchange  rates  are  recorded  in  Other  income,  net  in  the  Consolidated 
Statements of Operations.

Share-Based Compensation.  The Company records amounts for all share-based compensation, including grants of stock 
options and stock appreciation rights (SARs), non-vested stock awards, performance-based share awards and the compensatory 
elements of employee stock purchase plans over the vesting period in the Consolidated Statements of Operations based upon their 
fair  values  at  the  date  of  the  grant.  Share-based  compensation  costs  are  recognized  as  a  component  of  Selling,  general  and 
administrative expense in the Consolidated Statements of Operations. See Note 18 – Stock Plans and Management Compensation
for a description of the Company's accounting for share-based compensation plans.

Research and Development.  Research and development costs are expensed as incurred. 

Derivatives.  The Company uses derivative financial instruments to manage its risk associated with movements in foreign 
currency exchange rates, interest rates and commodity prices. These instruments are used in accordance with guidelines established 
by the Company's management and are not used for trading or speculative purposes. The Company records all derivatives on the 
Consolidated Balance Sheets at fair value. See Note 14 – Financial Instruments for further discussion.

Recent Accounting Pronouncements.  The following recent accounting pronouncements have been adopted during 2016 or 

will be adopted in future periods.

Restricted Cash: In November 2016, the Financial Accounting Standards Board (FASB) amended the Accounting Standards 
Codification (ASC) to address diversity in practice related to the cash flow classification of restricted cash. Under the amendment, 
an entity should include restricted cash within cash and cash-equivalents on the Consolidated Statements of Cash Flows and provide 
a reconciliation to cash and cash-equivalents on the Consolidated Balance Sheets. The amendment is to be applied retrospectively 
and is effective for fiscal years, and the interim periods within those years, beginning after December 15, 2017, with early adoption 
permitted. The Company is currently evaluating the approach it will use to apply the new standard, but does not expect it will have 
a material impact on the Company's Consolidated Statements of Cash Flows.

Statements of Cash Flows Classifications: In August 2016, the FASB amended the ASC to add and/or clarify guidance on the 
classification of certain transactions in the statement of cash flows. The amendment is to be applied retrospectively and is effective 
for fiscal years, and the interim periods within those years, beginning after December 15, 2017, with early adoption permitted. 
The Company is currently evaluating the approach it will use to apply the new standard and the impact it will have on the Company's 
Consolidated Statements of Cash Flows.

Share-Based Compensation: In March 2016, the FASB amended the ASC to simplify the accounting for employee share-
based payment transactions. Amendments related to minimum statutory withholding requirements and forfeitures will be applied 
using a modified retrospective approach through a cumulative adjustment to equity as of the beginning of the period of adoption, 
and  are  not  expected  to  have  a  material  impact  on  the  Company's  consolidated  financial  statements. Amendments  to  certain 
classifications on the statement of cash flows may be applied either prospectively or retrospectively, and amendments requiring 
the recognition of excess tax benefits and tax deficiencies in the income statement are to be applied prospectively. These amendments 
are to be applied for fiscal years, and interim periods within those years, beginning after December 15, 2016, with early adoption 
permitted. The Company is currently evaluating the approach it will use to apply the new standard and the impact that the adoption 
of the new standard will have on the Company's consolidated financial statements. 

Recognition of Leases: In February 2016, the FASB amended the ASC to require lessees to recognize assets and liabilities on 
the balance sheet for all leases with terms greater than twelve months. Lessees will recognize expenses similar to current lease 
accounting. The amendment is to be applied using a modified retrospective method with certain practical expedients, and is effective 
for fiscal years and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The 
Company is currently evaluating the approach it will use to apply the new standard and the impact that the adoption of the new 
standard will have on the Company's consolidated financial statements. 

57

 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Classification of Deferred Income Taxes: In November 2015, the FASB amended the ASC to require that deferred tax assets 
and liabilities be classified as non-current on the Consolidated Balance Sheets for all periods presented. The Company early adopted 
this ASC amendment during the first quarter of 2016 which caused the Company to change its method of presentation for current 
deferred income taxes in the Consolidated Balance Sheets for all periods presented. Current deferred income tax assets of $180.5 
million as of December 31, 2015 were reclassified to long-term.

Measurement of Inventory: In July 2015, the FASB issued final guidance to simplify the subsequent measurement of inventories 
by replacing the lower of cost or market test with a lower of cost and net realizable value test. The guidance applies to inventories 
for  which  cost  is  determined  by  methods  other  than  LIFO  and  the  retail  inventory  method. The  amendment  is  to  be  applied 
prospectively and is effective for fiscal years, and the interim periods within those years, beginning after December 15, 2016, with 
early adoption permitted. The Company is currently evaluating the impact of adopting this ASC amendment, but does not expect 
it will have a material impact on the Company's consolidated financial statements.

Fair Value Disclosure: In May 2015, the FASB amended the ASC to update the presentation of certain investments measured 
at net asset value within the fair value hierarchy. The amendment requires these investments to be removed from the fair value 
hierarchy categorization and presented as a single reconciling line item between the fair value of investments reported on the 
Consolidated Balance Sheets and the amounts reported in the fair value hierarchy table. The Company adopted this amendment 
in 2016 and it did not have a material impact on the Company’s consolidated financial statements.

Debt  Issuance  Costs:  In April  2015,  the  FASB  amended  the ASC  to  change  the  presentation  of  debt  issuance  costs. The 
amendment requires debt issuance costs be presented on the balance sheet as a direct reduction from the carrying amount of the 
related debt liability rather than as an asset. The Company early adopted this ASC amendment during the second quarter of 2015 
which caused the Company to change its method of presentation for debt issuance costs in the Consolidated Balance Sheets for 
all periods presented. 

Consolidation: In February 2015, the FASB amended the ASC to update certain requirements for determining whether a 
variable  interest  entity  must  be  consolidated. The  amendment  is  effective  for  fiscal  years,  and  the  interim  periods  thereafter, 
beginning after December 15, 2015, with early adoption permitted. The Company adopted this amendment in 2016 and it did not 
have a material impact on the Company’s consolidated financial statements.

Revenue  Recognition:  In  May  2014,  the  FASB  issued  a  final  standard  on  revenue  recognition  which  outlines  a  single 
comprehensive  model  for  entities  to  use  in  accounting  for  revenue  arising  from  contracts  with  customers. This  standard  will 
supersede most current revenue recognition guidance. Under the new standard, entities are required to identify the contract with 
a customer; identify the separate performance obligations in the contract; determine the transaction price; allocate the transaction 
price to the separate performance obligations in the contract; and recognize the appropriate amount of revenue when (or as) the 
entity satisfies each performance obligation. In August 2015, the FASB amended the ASC to delay the effective date to fiscal years, 
and the interim periods within those years, beginning on or after January 1, 2018, from the original effective date of January 1, 
2017, with early adoption permitted no earlier than January 1, 2017. Entities have the option of using either retrospective transition 
or a modified approach in applying the new standard. 

The Company plans to use the modified retrospective approach in applying the new standard. While the Company continues 
to assess the impact of the adoption of the new standard on the consolidated financial statements, the most significant impacts are 
expected to be in the Boat and Fitness segments. In the Boat segment, certain customers are offered retail promotions that are 
currently recorded at the later of when the program has been communicated to the customer or at the time of sale. Under the new 
standard, these promotions will now be recognized at the time of sale, primarily upon shipment to customers. In the Fitness segment, 
certain customer contracts include product rebates recorded in cost of sales at the time of sale. Under the new standard, the Company 
will no longer record the rebate at the time of sale; however a portion of revenue will be deferred and not recognized until such 
time that the rebate is redeemed.

As a result, the Company expects a change in the timing of when certain promotions and rebates are recorded; however 

does not expect a change in the total amount of cumulative revenue recognized for each transaction.

Note 2 – Discontinued Operations 

On July 17, 2014, the Company entered into an agreement to sell its retail bowling business to AMF Bowling Centers, Inc. 
In connection with its decision to sell its bowling centers, the Company also announced its intention to divest its bowling products 
business. As a result of these actions, these businesses, which were previously recorded in the Company's Bowling & Billiards 

58

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

segment were reported as discontinued operations in the Consolidated Statements of Operations for all periods presented.  The 
Company does not have any significant continuing involvement or continuing cash flows associated with these businesses. 

On September 18, 2014, the Company completed the sale of its retail bowling business to AMF Bowling Centers, Inc. and in 
separate transactions, completed the sale of two retail bowling centers in California. The sales resulted in net cash proceeds of 
$272.1 million and resulted in an after-tax gain of $55.1 million. In connection with the sale of its retail bowling business, the 
Company entered into a trademark licensing agreement allowing AMF Bowling Centers, Inc. to use the Company's bowling retail 
related trademarks and trade names over a five year period from the date of acquisition. As a result, the Company recorded deferred 
income of $20.7 million related to this agreement, which will be recognized as Other income in the Consolidated Statements of 
Operations over five years. In connection with the sale of its retail bowling business, the Company has retained certain liabilities 
and provided guarantees on the leases of certain bowling centers. 

On May 22, 2015, the Company completed the sale of its bowling products business which resulted in net cash proceeds of 
$42.2 million and an after-tax gain of $10.3 million. In connection with the sale of its bowling products business, the Company 
has retained certain liabilities.

 The following table discloses the results of operations of the businesses reported as discontinued operations for the years 

ended December 31, 2016, 2015 and 2014, respectively:

(in millions)
Net sales

Earnings (loss) from discontinued operations before income taxes
Income tax provision (benefit)
Earnings (loss) from discontinued operations, net of tax
Gain on disposal of discontinued operations, net of tax (A)
Net earnings from discontinued operations, net of tax

2016

2015

— $

37.5

2.6
1.0
1.6
—
1.6

$

$

1.5
0.3
1.2
12.8
14.0

$

$

$

2014

236.0

(3.8)
(2.0)
(1.8)
52.6
50.8

$

$

$

(A) The Gain on disposal of discontinued operations, net of tax for 2015 includes a pre-tax and after-tax gain of $12.8 million. The Gain on disposal of 

discontinued operations, net of tax for 2014 includes a pre-tax gain of $65.6 million and a net tax provision of $13.0 million. 

There were no assets or liabilities related to discontinued operations recorded as held-for-sale as of December 31, 2016 or 

December 31, 2015.

Note 3 – Restructuring, Integration and Impairment Activities 

The Company has announced and implemented a number of initiatives designed to improve the Company’s cost structure, 
better  utilize  overall  capacity,  improve  general  operating  efficiencies  and  consolidate  the  operations  of  recently  acquired 
businesses. These initiatives resulted in the recognition of restructuring, integration and impairment charges in the Consolidated 
Statements of Operations during 2016, 2015 and 2014.

The costs incurred under these initiatives include:

•  Restructuring Activities – These amounts relate to:

•  Employee termination and other benefits
•  Costs to retain and relocate employees
•  Consulting costs
•  Consolidation of manufacturing footprint
•  Facility shutdown costs

• 

Integration Activities  –  These  amounts  relate  to  professional  fees  for  systems  integration  and  deal  costs,  employee 

termination and benefits and other charges associated with integrating the operations of recently acquired businesses.

•  Asset Disposition and Impairment Actions – These amounts relate to sales and impairments of assets. Impairments of 
assets are recognized when the carrying amount of the asset is not expected to be fully recoverable. The impairments recognized 

59

  
  
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

were  equal  to  the  difference  between  the  carrying  amount  of  the  asset  and  the  estimated  fair  value  of  the  asset,  which  was 
determined using observable inputs, including appraisals from independent third parties when available. When observable inputs 
were  not  available,  estimated  fair  value  was  determined  using  the  Company’s  assumptions,  including  the  data  that  market 
participants would use in pricing the asset, based on the best information available in the circumstances. Specifically, the Company 
used discounted cash flows to determine the fair value of the asset when observable inputs were unavailable.

The Company has reported restructuring and integration activities based on the specific driver of the cost and reflected the 
expense in the accounting period when the Company has committed to or incurred the cost, as appropriate. The following table is 
a summary of the net expense associated with the restructuring, integration and impairment activities for 2016, 2015 and 2014. The 
2016 charges related to actions initiated in 2016 and 2015. The 2015 charges related to actions initiated in 2015. The 2014 charges 
related to actions initiated in 2014 and prior years.

(in millions)
Restructuring activities:

Employee termination and other benefits
Current asset write-downs
Transformation costs:

Consolidation of manufacturing footprint

Retention and relocation costs

Asset disposition and impairment actions:

Definite-lived and other asset impairments and (gains) on disposal

Integration activities:

Employee termination and other benefits

Professional fees

Other

2016

2015

2014

$

$

1.0
—

—

—

2.3

4.0

5.9

2.4

$

1.4
—

—

0.3

2.9
0.5

1.0

0.3

10.7

(0.5)

—

—

—

—

—

—

4.2

Total restructuring, integration and impairment charges

$

15.6

$

12.4

$

Reductions in demand for the Company’s products, further refinement of its product portfolio, further opportunities to reduce 
costs or the cost of integrating future acquisitions may result in additional restructuring, integration or impairment charges in future 
periods. 

Actions Initiated in 2016

The Company acquired Cybex International, Inc. (Cybex) and Indoor Cycling Group GmbH (ICG) in the first and third quarters 
of  2016,  respectively,  as  discussed  in  Note  4  –  Acquisitions.  During  2016,  the  Company  executed  certain  restructuring  and 
integration activities within the Fitness segment primarily related to these acquisitions, resulting in the recognition of restructuring 
and  integration  charges  in  the  Consolidated  Statements  of  Operations.  In  the  fourth  quarter  of  2016,  the  Company  recorded 
restructuring charges related to the realignment of certain executive positions within the Boat segment as well as an asset impairment 
charge recorded within the Corporate segment.

The following table is a summary of the expense associated with the restructuring and integration activities for the year ended 

December 31, 2016 and related actions initiated in 2016:

60

 
 
 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

1.0

1.4

4.0
5.9
2.4
14.7

1.4

0.3

10.7

(in millions)
Restructuring activities:

Employee termination and other benefits
Asset disposition and impairment actions:

Definite-lived and other asset impairments and (gains) on disposal

Integration activities:

Employee termination and other benefits
Professional fees
Other

Total restructuring, integration and impairment charges

$

Actions Initiated in 2015

Fitness

Boat

Corporate

Total

$

0.4

$

0.6

$

— $

—

4.0
5.9
2.4
12.7

$

—

—
—
—
0.6

$

1.4

—
—
—
1.4

$

In the fourth quarter of 2015, the Company recorded impairment charges for certain long-lived assets in Brazil as a result of 
unfavorable market conditions and declining currency values. The Company used estimated future cash flows, a Level 3 input, to 
assess the fair value of the long-lived assets. The Company also recorded impairment charges in the fourth quarters of 2016 and 
2015 in connection with its decision to sell its corporate headquarters facility in Lake Forest, Illinois. The Company used an 
independent market appraisal report, a Level 2 input, to assess the fair value of its corporate headquarters facility. Additionally, 
the Company recorded charges related to the restructuring of personnel, primarily within the Boat segment product development 
and engineering organizations. 

The following table is a summary of the expense associated with the restructuring activities and impairment charges for the 

year ended December 31, 2016 and 2015 and related actions initiated in 2015:

(in millions)
Restructuring activities:

2016

Corporate

Total

Boat

2015
Corporate

Total

Employee termination and other benefits

$

— $

— $

0.8

$

0.6

$

Transformation costs:

Retention and relocation costs

Asset disposition and impairment actions:

Definite-lived and other asset impairments and
(gains) on disposal

Total restructuring, integration and impairment
charges

—

0.9

—

0.9

0.3

6.6

—

4.1

$

0.9

$

0.9

$

7.7

$

4.7

$

12.4

During 2016, the Company made cash payments of $10.2 million relating to all restructuring and integration activities, including 
payments  related  to  prior  period  restructuring  activities. As  of  December 31,  2016,  accruals  remaining  for  restructuring  and 
integration activities totaled $4.6 million which are expected to be paid during 2017.

61

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 4 – Acquisitions 

2016 Acquisitions

On November 18, 2016, the Company acquired substantially all of the assets of Payne's Marine Group (Payne's), a leading 
wholesale distributor of marine parts and accessories in Canada, which is based in Victoria, British Columbia. The addition of 
Payne's broadens the reach of the Company's marine parts and accessories distribution network in the Canadian market. Payne's 
is managed within the Marine Engine segment.

On August 31, 2016, the Company acquired 100 percent of ICG, a market leader specializing in the design of indoor cycling 
equipment, which is based in Nuremburg, Germany. The addition of ICG strengthens the Company's position in indoor cycling 
and provides a strong foundation to expand in the growing group exercise market. ICG is managed as part of the Company's Fitness 
segment.

The  Company  acquired  ICG  for  total  consideration  of  $54.1  million,  including  $51.7  million  of  cash  paid  in  2016. The 
preliminary recording of the fair value of the assets acquired and liabilities assumed resulted in $20.4 million of identifiable 
intangible assets, including customer relationships, trade names and patents and proprietary technology for $11.2 million, $6.0 
million and $3.2 million, respectively, along with $28.6 million for goodwill which is not deductible for tax purposes. The amounts 
assigned to ICG's customer relationships and patents and proprietary technology will be amortized over the estimated useful life 
of approximately 11 years and 5 years, respectively. These amounts recorded are preliminary and are subject to change within the 
measurement period as the Company finalizes its fair value estimates.

On July 1, 2016, the Company acquired substantially all of the assets of privately held Thunder Jet Boats, Inc. (Thunder Jet), 
a designer and builder of heavy-gauge aluminum boats, which is based in Clarkston, Washington. Thunder Jet offers a lineup of 
18 models ranging in length from 18-26 feet and adds breadth and depth to the Company's overall product portfolio. Thunder Jet 
is managed within the Company's Boat segment. 

On January 20, 2016, the Company acquired 100 percent of privately held Cybex, a leading manufacturer of commercial 
fitness equipment. Cybex offers a full line of cardiovascular and strength products and had unaudited sales in 2015 of approximately 
$169 million. The addition of Cybex expands the Fitness segment's participation in key markets, including commercial fitness, 
and adds to the Company's manufacturing footprint to meet current and future demand more effectively. Cybex also increases the 
breadth and depth of the segment's product portfolio. Cybex is managed within the Company's Fitness segment.

62

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

The following table is a summary of the assets acquired, liabilities assumed and net cash consideration paid for the Cybex 

acquisition during 2016:

(in millions)
Accounts and notes receivable
Inventory
Goodwill(A)
Trade names
Customer relationships
Patents and proprietary technology
Property and equipment
Other assets
Total assets acquired
Total liabilities assumed
Net cash consideration paid(B)

Fair
Value

Useful
Life

Indefinite
16 years
5 years

$

$

22.0
13.9
88.4
38.6
43.7
3.1
35.2
3.7
248.6
51.7
196.9

(A) The goodwill recorded for the acquisition of Cybex is not deductible for tax purposes.
(B) Net cash consideration paid includes a purchase price adjustment of $1.9 million in 2016.

2015 Acquisitions

On November 6, 2015, the Company acquired 100 percent of privately held Garelick Mfg. Co. (Garelick), which is based in 
St. Paul Park, Minnesota. Garelick is a leading manufacturer of premium seating, table hardware and other marine products. The 
Company believes this acquisition will expand the Company's marine parts and accessories business and add depth and breadth 
to its product portfolio. Garelick is managed within the Marine Engine segment. 

On July 8, 2015, the Company acquired 100 percent of privately held SCIFIT Systems, Inc. (SCIFIT), which is based in Tulsa, 
Oklahoma. SCIFIT is a provider of fitness equipment designed for active aging seniors, medical wellness and rehabilitation markets. 
The Company believes this acquisition will expand the Fitness segment's product portfolio and enable entry into these growing 
adjacent markets. SCIFIT is managed within the Fitness segment.

63

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

On April 27, 2015, the Company acquired 100 percent of privately held BLA, which is based in Brisbane, Australia. BLA is 
Australia's largest provider of marine products and has an extensive dealer network throughout Australia and New Zealand. The 
Company believes this acquisition will strengthen Brunswick's marine parts and accessories presence in this region. BLA is managed 
within the Marine Engine segment.

The following table is a summary of the net cash consideration paid and the goodwill and intangible assets acquired during 

the years ended December 31, 2016 and 2015:

(in millions)

Year
2016 (A)

Net Cash
Consideration Paid
276.1
$

Fair Value of Identifiable Intangible Assets Acquired

Goodwill(B)

Total

Intangible Asset

$

119.2

$ 118.7 Trade names

Customer relationships
Patents and proprietary technology

2015

29.7

3.5

13.4 Trade names

Customer relationships
Patents and proprietary technology

$ 50.9
61.5
6.3
6.5
6.1
0.8

Useful Life
Indefinite
11 - 16 years
5 years
Indefinite
7 years
5 years

(A) Due to the timing of certain acquisitions, these amounts are preliminary and are subject to change within the measurement period as the Company finalizes 

its fair value estimates.

(B) The goodwill recorded for the acquisitions of ICG, Cybex and SCIFIT is not deductible for tax purposes, but is deductible for Thunder Jet.

These acquisitions are not material to the Company's net sales, results of operations or total assets during any period presented. 
Accordingly, the Company's consolidated results from operations do not differ materially from historical performance as a result 
of these acquisitions and, therefore, pro forma results are not presented. 

64

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 5 – Earnings per Common Share 

Basic earnings per common share is calculated by dividing Net earnings by the weighted average number of common shares 
outstanding as well as certain vested, unissued equity awards during the period. Diluted earnings per common share is calculated 
similarly, except that the calculation includes the dilutive effect of stock-settled SARs, non-vested stock awards and performance 
awards. 

Basic and diluted earnings per common share for the years ended December 31, 2016, 2015 and 2014 were calculated as 

follows:

(in millions, except per share data)
Net earnings from continuing operations
Net earnings from discontinued operations, net of tax
Net earnings

Weighted average outstanding shares-basic
Dilutive effect of common stock equivalents

Weighted average outstanding shares-diluted

Basic earnings per common share:

Continuing operations

Discontinued operations

Net earnings

Diluted earnings per common share:

Continuing operations

Discontinued operations

Net earnings

2016

2015

2014

274.4
1.6
276.0

$

$

227.4
14.0
241.4

$

$

194.9
50.8
245.7

91.2
0.8

92.0

3.01

0.02

3.03

2.98

0.02

3.00

$

$

$

$

93.0
1.3

94.3

2.45

0.15

2.60

2.41

0.15

2.56

$

$

$

$

93.6
1.5

95.1

2.08

0.55

2.63

2.05

0.53

2.58

$

$

$

$

$

$

Shares of SARs that were not included in the computation of diluted earnings per share for the periods ended December 31, 

2016, 2015 and 2014 because their inclusion was anti-dilutive were 0.0 million, 0.0 million and 0.2 million, respectively.

Note 6 – Segment Information 

Brunswick is a manufacturer and marketer of leading consumer brands and has three operating and reportable segments: 
Marine  Engine,  Boat  and  Fitness. The  Company’s  segments  are  defined  by  management’s  reporting  structure  and  operating 
activities.

The Marine Engine segment manufactures and markets a full range of outboard engines, sterndrive engines, inboard engines 
and marine parts and accessories, which are principally sold directly to boat builders, including Brunswick's Boat segment, or 
through marine retail dealers and distributors worldwide. The Company's engine manufacturing plants are located mainly in the 
United States, China and Japan, with sales mainly to markets in the Americas, Europe and Asia-Pacific.

The Boat segment designs, manufactures and markets fiberglass pleasure boats, yachts and sport yachts, sport cruisers and 
sport boats, offshore fishing boats, aluminum and fiberglass fishing boats, pontoon boats, utility boats, deck boats, inflatable boats 
and heavy-gauge aluminum boats. The Boat segment's products are manufactured mainly in the United States, Europe, Mexico 
and South America and sold through a global network of dealer and distributor locations, primarily in the Americas and Europe.

The Fitness segment designs, manufactures and markets a full line of cardiovascular fitness equipment including treadmills, 
total body cross-trainers, stair climbers, stationary exercise bicycles and strength-training equipment. The Fitness segment also 
includes InMovement products and services for productive well-being and our active recreation business, including billiards tables, 
accessories and game room furniture. These products are manufactured mainly in the United States and Hungary or are sourced 

65

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

from international suppliers. Fitness equipment is sold mainly in the Americas, Europe and Asia to health club, corporate, university, 
hospitality, military and government facilities, and to consumers through selected mass merchants, specialty retail dealers and 
through the Company's website. Consumer active recreation equipment is predominantly sold in the United States and distributed 
primarily through dealers.

The  Company  evaluates  performance  based  on  business  segment  operating  earnings. Segment  operating  earnings  do  not 
include  the  expenses  of  corporate  administration,  pension  costs,  pension  settlement  charges,  impairments  of  equity  method 
investments, earnings from unconsolidated equity affiliates, other expenses and income of a non-operating nature, interest expense 
and income or provisions for income taxes. 

Corporate/Other results include items such as corporate staff and administrative costs. Corporate/Other total assets consist of 
mainly cash, cash equivalents and investments in marketable securities, restricted cash, income tax balances and investments in 
unconsolidated affiliates. Marine eliminations adjust for sales between the Marine Engine and Boat segments, primarily for the 
sale of engines and parts and accessories to various boat brands, which are consummated at established arm’s length transfer prices 
as the intersegment pricing for these engines and parts and accessories are based upon and consistent with selling prices to third 
party customers. 

Information about the operations of Brunswick's operating segments is set forth below:

Operating Segments

(in millions)
Marine Engine

Boat

Net Sales
2015

2016

2014

Operating Earnings (Loss)
2014
2015
2016

Total Assets

2016

2015

$ 2,441.1

$ 2,314.3

$ 2,189.4

$

378.0

$

350.4

$

309.1

$ 1,079.5

$

1,369.9

1,274.6

Marine eliminations

(302.9)

(277.8)

Total Marine

3,508.1

3,311.1

1,135.8
(255.8)
3,069.4

Fitness

Pension costs

Corporate/Other

Total

980.4

794.6

769.3

—

—

—

—

—

—

$ 4,488.5

$ 4,105.7

$ 3,838.7

$

60.8

—

438.8

117.3
(69.8)
(77.3)
409.0

$

37.6

—

388.0

116.5
(94.0)
(78.8)
331.7

$

17.2

—

326.3

115.3
(42.7)
(70.4)
328.5

425.2

—

981.8

379.7

—

1,504.7

1,361.5

947.5

—

625.1

—

832.5

1,165.9

$ 3,284.7

$ 3,152.5

(in millions)
Marine Engine
Boat
Fitness
Corporate/Other

Total

(in millions)
Marine Engine
Boat

Fitness

Corporate/Other

Total

Depreciation
2015

2016

2014

2016

Amortization
2015

2014

$

$

48.4

29.3
15.9
3.5

97.1

$

$

47.4
26.6
9.1
2.8

85.9

$

$

44.3
24.9
6.9
2.2

78.3

$

$

1.8

0.8
4.2
—

6.8

$

$

2.1
0.7
0.2
—

3.0

$

$

2.2
0.7
—
—

2.9

Capital Expenditures
2015

2014

2016

Research & Development Expense
2015

2014

2016

$

112.4

$

44.5

35.7

1.3

$

77.4
37.7

16.9

0.5

$

57.9
46.6

19.6

0.7

$

85.6

20.2

33.4

—

$

78.9
22.3

24.7

—

72.5
23.8

23.3

—

$

193.9

$

132.5

$

124.8

$

139.2

$

125.9

$

119.6

66

 
 
 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

2016
$ 3,031.5
1,457.0
—
$ 4,488.5

Net Sales
2015

$ 2,727.8
1,377.9
—
$ 4,105.7

2014

$ 2,400.0
1,438.7
—
$ 3,838.7

$

$

Long-Lived Assets

2016

2015

564.5
66.7
14.1
645.3

$

$

429.3
62.7
13.2
505.2

Geographic Segments

(in millions)
United States
International
Corporate/Other

Total

Note 7 – Fair Value Measurements 

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in 
the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the 
measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the 
use of unobservable inputs. There is a fair value hierarchy based on three levels of inputs, of which the first two are considered 
observable and the last unobservable.

•  Level 1 - Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time 

quotes for transactions in active exchange markets involving identical assets or liabilities.

•  Level 2 - Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either 
directly or indirectly. These are typically obtained from readily available pricing sources for comparable instruments. 

•  Level 3 - Unobservable inputs, for which there is little or no market activity for the asset or liability. These inputs reflect 
the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based 
on the best information available in the circumstances.

67

 
 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

The following table summarizes Brunswick’s financial assets and liabilities measured at fair value on a recurring basis as of 

December 31, 2016: 

(in millions)
Assets:

Cash equivalents
Short-term investments in marketable securities
Restricted cash
Derivatives

Total assets

Liabilities:

Derivatives
Deferred compensation
Total liabilities at fair value
Liabilities measured at net asset value

Total liabilities

Level 1

Level 2

Total

$

$

$

$

4.6
0.8
11.2
—
16.6

$

$

— $
4.2
4.2

$

14.3
35.0
—
11.2
60.5

4.8
28.1
32.9

$

$

$

$

$

18.9
35.8
11.2
11.2
77.1

4.8
32.3
37.1
11.6

48.7

The following table summarizes Brunswick’s financial assets and liabilities measured at fair value on a recurring basis as of 

December 31, 2015:

(in millions)
Assets:

Cash equivalents

Short-term investments in marketable securities

Restricted cash

Derivatives

Total assets

Liabilities:

Derivatives

Deferred compensation

Total liabilities at fair value
Liabilities measured at net asset value
Total liabilities

Level 1

Level 2

Total

$

131.3

$

138.9

$

270.2

0.8

12.7

—

10.7

—

13.5

11.5

12.7

13.5

144.8

$

163.1

$

307.9

— $

3.8

3.8

$

5.6

34.6

40.2

$

$

$

5.6

38.4

44.0

11.3
55.3

$

$

$

Refer to Note 14 – Financial Instruments for additional information related to the fair value of derivative assets and liabilities 
by class. In addition to the items shown in the tables above, see Note 17 – Postretirement Benefits for further discussion regarding 
the fair value measurements associated with the Company’s postretirement benefit plans.

68

 
 
 
 
 
 
 
 
 
 
 
 
 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 8 – Financing Receivables 

The Company has recorded financing receivables, which are defined as a contractual right to receive money, as assets on its 
Consolidated Balance Sheets as of December 31, 2016 and 2015. Substantially all of the Company’s financing receivables are for 
commercial customers, which includes receivables sold to third-party finance companies (Third-Party Receivables) and customer 
notes and other (Other Receivables). Third-Party Receivables are accounts that have been sold to third-party finance companies, 
but do not meet the definition of a true sale, and are therefore recorded as an asset with an offsetting balance recorded as a secured 
obligation in Accrued expenses and Other long-term liabilities as discussed in Note 1 –Significant Accounting Policies. Other 
Receivables  are  mostly  comprised  of  notes  from  customers,  which  are  originated  by  the  Company  in  the  normal  course  of 
business. Financing receivables are carried at their face amounts less an allowance for doubtful accounts.

The Company sells a broad range of recreational products to a worldwide customer base and extends credit to its customers 
based upon an ongoing credit evaluation program. The Company’s business units maintain credit organizations to manage financial 
exposure and perform credit risk assessments on an individual account basis. Accounts are not aggregated into categories for credit 
risk determinations. Due to the composition of the account portfolio, the Company does not believe that the credit risk posed by 
the Company’s financing receivables is significant to its operations, financial condition or cash flows. There were no significant 
troubled debt restructurings during the years ended December 31, 2016, 2015 or 2014.

The following are the Company’s financing receivables, excluding trade accounts receivable contractually due within one 

year as of December 31, 2016 and December 31, 2015:

(in millions)
Third-Party Receivables:

Short-term

Long-term

Total

Other Receivables:

Short-term

Long-term

Allowance for credit loss

Total

Total Financing Receivables

December 31,
2016

December 31,
2015

22.0

29.0

51.0

6.2

0.6
(0.1)
6.7

22.5

23.7

46.2

8.0

1.7
(0.2)
9.5

$

57.7

$

55.7

The activity related to the allowance for credit loss on financing receivables during the years ended December 31, 2016 and 

December 31, 2015 was not significant.

69

 
 
 
 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 9 – Investments 

Investments in Marketable Securities

The Company invests a portion of its cash reserves in marketable debt securities. These investments are reported in Short-

term investments in marketable securities on the Consolidated Balance Sheets. 

The following is a summary of the fair values, which were equal to the amortized costs, of the Company’s available-for-sale 

securities, all due in one year or less, as of December 31, 2016 and 2015:

(in millions)
Agency Bonds
Corporate Bonds
Commercial Paper
U.S. Treasury Bills

Total available-for-sale securities

2016

2015

— $
—
35.0
0.8
35.8

$

2.5
8.2
—
0.8
11.5

$

$

The Company had $10.7 million in redemptions of available-for-sale securities during 2016. The Company had $109.8 million

in redemptions and $9.5 million in sales of available-for-sale securities during 2015.

At each reporting date, management reviews the debt securities to determine if any loss in the value of a security below its 
amortized cost should be considered “other-than-temporary.”  For the evaluation, management determines whether it intends to 
sell, or if it is more likely than not that it will be required to sell, the securities. This determination considers current and forecasted 
liquidity requirements, regulatory and capital requirements and the strategy for managing the Company’s securities portfolio. For 
all impaired debt securities for which there was no intent or expected requirement to sell, the evaluation considers all available 
evidence to assess whether it is likely the amortized cost value will be recovered. The Company also considers the nature of the 
securities, the credit rating or financial condition of the issuer, the extent and duration of the unrealized loss and market conditions.  
As of December 31, 2016 and 2015, there were no unrealized losses related to debt securities that required management evaluation.

Equity Investments

The Company has certain unconsolidated international and domestic affiliates that are accounted for using the equity method.    

The equity method is applied in situations in which the Company has the ability to exercise significant influence, but not control, 
over the investees. Management reviews equity investments for impairment whenever indicators are present suggesting that the 
carrying value of an investment is not recoverable. The following items are examples of impairment indicators: significant, sustained 
declines in an investee’s revenue, earnings, and cash flow trends; adverse market conditions of the investee’s industry or geographic 
area; the investee’s inability to execute its operating plan; the investee’s ability to continue operations measured by several items, 
including liquidity; and other factors. Once an impairment indicator is identified, management uses considerable judgment to 
determine if the decline in value is other than temporary, in which case the equity investment is written down to its estimated fair 
value, which could negatively impact reported results of operations. 

In the fourth quarter of 2014, the Company determined that the fair value of its 36 percent investment in Bella-Veneet Oy 
(Bella), a Finnish boat manufacturer, had declined significantly as a result of the inability of the business to achieve profitability 
due to weak market conditions for its products, which has led to significant declines in revenue. The Company calculates fair value 
using the income approach described in the Goodwill and Other Intangibles section of Note 1 – Significant Accounting Policies. 
As a result of performing its analysis, the Company determined that the book value of its investment exceeded its fair value and 
concluded that this decline in value was other than temporary. The Company used estimated future cash flows, a Level 3 input, to 
assess the fair value of the long-lived assets. The Company recorded a $20.2 million charge during the fourth quarter of 2014 in 
order to reflect the fair value of the Company’s investment in Bella of $1.1 million. This charge was reported as Impairment of 
equity method investment in the Consolidated Statements of Operations.

The remaining equity investments are not individually material to the Consolidated Financial Statements. Refer to Note 10 –

Financial Services for more details on the Company’s Brunswick Acceptance Company, LLC joint venture. 

Brunswick did not receive any dividends from its unconsolidated affiliates in 2016, 2015 or 2014.

70

 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

 Note 10 – Financial Services 

The Company, through its Brunswick Financial Services Corporation (BFS) subsidiary, owns a 49 percent interest in a joint 
venture, Brunswick Acceptance Company, LLC (BAC). Prior to March 1, 2016, CDF Ventures, LLC (CDFV), a subsidiary of GE 
Capital Corporation (GECC), owned the remaining 51 percent. On March 1, 2016, GECC completed the sale of its Commercial 
Distribution Finance business, including CDFV and its interest in the BAC joint venture, to Wells Fargo & Company. The transaction 
did not have a material effect on BAC.

In  June  2016,  the  parties  amended  the  joint  venture  agreement  to  adjust  a  financial  covenant  that  was  conformed  to  the 
maximum leverage ratio test contained in the Credit Facility; as of December 31, 2016, the Company was in compliance with the 
leverage ratio covenant under both the joint venture agreement and the Credit Facility as described in Note 16 – Debt. In July 
2015, the parties extended the term of the BAC joint venture through December 31, 2019. The joint venture agreement contains 
provisions allowing for the renewal of the agreement or the purchase of the other party’s interest in the joint venture at the end of 
its term. Alternatively, either partner may terminate the agreement at the end of its term.

BAC is funded in part through a $1.0 billion secured borrowing facility from Wells Fargo Commercial Distribution Finance, 
LLC (WFCDF), which is in place through the term of the joint venture, and with equity contributions from both partners.  BAC 
also sells a portion of its receivables to a securitization facility, the Wells Fargo Dealer Floorplan Master Note Trust, which is 
arranged by Wells Fargo. The sales of these receivables meet the requirements of a “true sale” and are therefore not retained on 
the financial statements of BAC. Neither the Company nor any of its subsidiaries guarantee the indebtedness of BAC. In addition, 
BAC is not responsible for any continuing servicing costs or obligations with respect to the securitized receivables. Through June 
28, 2014, BFS and CDFV had an income sharing arrangement related to income generated from the receivables sold by BAC to 
the securitization facility. The Company recorded this income in Other income, net, in the Consolidated Statements of Operations.  
Beginning July 1, 2014, BAC began recognizing all income related to securitized receivables at the time of sale to conform with 
a change in the structure of the securitization facility. The income sharing arrangement remained in place through December 31, 
2014 for assets securitized prior to July 1, 2014.

The Company considers BFS’s investment in BAC as an investment in a variable interest entity of which the Company is not 
the primary beneficiary. To be considered the primary beneficiary, the Company must have the power to direct the activities of 
BAC that most significantly impact BAC’s economic performance and the Company must have the obligation to absorb losses or 
the right to receive benefits from BAC that could be potentially significant to BAC. Based on the Company's qualitative analysis, 
BFS did not meet the definition of a primary beneficiary. As a result, the Company accounts for BFS’s investment in BAC under 
the equity method and records it as a component of Equity investments in its Consolidated Balance Sheets. The Company records 
BFS’s share of income or loss in BAC based on its ownership percentage in the joint venture in Equity earnings in its Consolidated 
Statements of Operations. BFS’s equity investment is adjusted monthly to maintain a 49 percent interest in accordance with the 
capital provisions of the joint venture agreement. The Company funds its investment in BAC through cash contributions and 
reinvested earnings. BFS’s total investment in BAC at December 31, 2016 and December 31, 2015 was $16.9 million and $14.0 
million, respectively.

The Company’s maximum loss exposure relating to BAC is detailed as follows:

(in millions)
Investment
Repurchase and recourse obligations (A)
Liabilities (B)
Total maximum loss exposure

December 31,
2016

December 31,
2015

$

$

16.9
36.8
(1.2)
52.5

$

$

14.0
36.8
(1.4)
49.4

(A)  Repurchase and recourse obligations are off-balance sheet obligations provided by the Company for the Boat and Marine Engine segments, respectively, 
and are included within the Maximum Potential Obligations disclosed in Note 13 – Commitments and Contingencies. Repurchase and recourse 
obligations include a North American repurchase agreement with WFCDF and could be reduced by repurchase activity occurring under other similar 
agreements with WFCDF and affiliates. The Company’s risk under these repurchase arrangements is partially mitigated by the value of the products 
repurchased as part of the transaction. Amounts above exclude any potential recoveries from the value of the repurchased product.  

(B)  Represents accrued amounts for potential losses related to recourse exposure and the Company’s expected losses on obligations to repurchase products, 

after giving effect to proceeds anticipated to be received from the resale of these products to alternative dealers.

71

 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

BFS recorded income related to the operations of BAC of $4.8 million, $4.6 million and $6.0 million for the years ended 
December 31, 2016, 2015 and 2014, respectively. This income includes amounts BFS earned under the aforementioned income 
sharing agreement. 

Note 11 – Goodwill and Other Intangibles 

Changes in the Company's goodwill during the period ended December 31, 2016, by segment, are summarized below:

(in millions)
Marine Engine
Boat
Fitness
Total

2015

26.2
—
272.5
298.7

$

$

Acquisitions
$

— $
2.2
117.0
119.2

$

Impairments

Adjustments

2016

— $
—
—
— $

(1.1) $
—
(3.0)
(4.1) $

25.1
2.2
386.5
413.8

Changes in the Company's goodwill during the period ended December 31, 2015, by segment, are summarized below:

(in millions)
Marine Engine
Fitness
Total

2014

28.0
268.9
296.9

$

$

Acquisitions
$

— $
3.5
3.5

$

Impairments

Adjustments

2015

— $
—
— $

(1.8) $
0.1
(1.7) $

26.2
272.5
298.7

$

$

Adjustments in 2016 and 2015 relate to the effect of foreign currency translation on goodwill denominated in currencies other 

than the U.S. dollar. See Note 4 – Acquisitions for further details on the Company's acquisitions.

As of December 31 2016 and 2015, the Company had no accumulated impairment loss.

The Company's intangible assets, included within Other intangibles, net on the Consolidated Balance Sheets as of December 31, 

2016 and 2015, are summarized below:

(in millions)
Intangible assets:
  Customer relationships

Trade names

  Other
     Total

2016

2015

Gross 
Amount

Accumulated 
Amortization

Gross 
Amount

Accumulated 
Amortization

$

$

300.1
88.1
22.4
410.6

$

$

(231.1) $
—
(14.7)
(245.8) $

240.4
37.7
16.3
294.4

$

$

(225.9)
—
(13.4)
(239.3)

Other intangible assets primarily consist of patents. See Note 4 – Acquisitions for further details on intangibles acquired 
during 2016 and 2015.  Gross amounts and related accumulated amortization amounts include adjustments related to the impact 
of foreign currency translation.  Aggregate amortization expense for intangibles was $6.8 million, $3.0 million and $2.9 million
for the years ended December 31, 2016, 2015 and 2014, respectively. Estimated amortization expense for intangible assets is $8.2 
million for the year ending December 31, 2017, $8.2 million in 2018, $7.6 million in 2019, $7.2 million in 2020, and $6.3 million
in 2021.

72

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 12 – Income Taxes 

The sources of Earnings before income taxes were as follows: 

(in millions)
United States
Foreign

Earnings before income taxes

The Income tax provision consisted of the following:

(in millions)
Current tax expense:

U.S. Federal
State and local
Foreign

Total current

Deferred tax expense:

U.S. Federal
State and local
Foreign

Total deferred

Income tax provision

2016

2015

2014

$

$

$

$

$

$

308.0
81.7
389.7

2016

25.0
4.6
23.2
52.8

56.1
6.6
(0.2)
62.5

261.0
54.2
315.2

2015

24.7
2.5
17.0
44.2

40.7
3.2
(0.3)
43.6

$

$

$

242.9
45.0
287.9

2014

18.2
2.6
23.9
44.7

42.4
5.7
0.2
48.3

$

115.3

$

87.8

$

93.0

73

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Temporary differences and carryforwards giving rise to deferred tax assets and liabilities at December 31, 2016 and 2015, are 

summarized in the table below:

(in millions)
Deferred tax assets:
Pension
Loss carryforwards
Tax credit carryforwards
Product warranties
Sales incentives and discounts
Deferred revenue
Equity compensation
Compensation and benefits
Deferred compensation
Postretirement and postemployment benefits
Depreciation and amortization
Other

Gross deferred tax assets

Valuation allowance

Deferred tax assets

Deferred tax liabilities:
Depreciation and amortization
State and Local income taxes
Other

Deferred tax liabilities

Total net deferred tax assets

2016

2015

86.2
71.7
47.3
41.9
32.0
23.2
23.2
22.2
21.7
20.2
—
82.9
472.5
(78.1)
394.4

$

$

(45.5) $
(34.9)
(8.7)
(89.1) $

110.6
61.5
57.0
39.4
26.8
23.1
26.4
24.0
29.3
21.3
35.0
78.0
532.4
(70.6)
461.8

—
(38.6)
(15.3)
(53.9)

305.3

$

407.9

$

$

$

$

$

During the third quarter of 2014, the Company completed the sale of its retail bowling business. This transaction generated 
capital gains for tax purposes allowing the Company to utilize all of its capital loss carryforwards. Therefore, during the third 
quarter of 2014, the Company recorded a $9.5 million reversal of its deferred tax asset valuation allowance reserves related to 
capital loss carryforwards, which has been reflected as a tax benefit reported in Note 2 – Discontinued Operations. 

At December 31, 2016, the Company had a total valuation allowance against its deferred tax assets of $78.1 million. The 
remaining realizable value of deferred tax assets at  December 31, 2016 was determined by evaluating the potential to recover the 
value of these assets through the utilization of tax loss and credit carrybacks, the reversal of existing taxable temporary differences 
and carryforwards, certain tax planning strategies and future taxable income exclusive of reversing temporary differences and 
carryforwards.  At December 31, 2016, the Company retained valuation allowance reserves of $58.1 million against deferred tax 
assets in the U.S. primarily related to non-amortizable intangibles and various state operating loss carryforwards and state tax 
credits that are subject to restrictive rules for future utilization, and valuation allowances of $20.0 million for deferred tax assets 
related to foreign jurisdictions, primarily Brazil.

At December 31, 2016, the tax benefit of loss carryforwards totaling $71.8 million was available to reduce future tax liabilities.   

This deferred tax asset was comprised of $4.2 million for the tax benefit of federal net operating loss (NOL) carryforwards,  $47.3 
million for the tax benefit of state NOL carryforwards and $20.3 million for the tax benefit of foreign NOL carryforwards. NOL 
carryforwards of $51.6 million expire at various intervals between the years 2017 and 2036, while $20.2 million have an unlimited 
life.

At December 31, 2016, tax credit carryforwards totaling $49.5 million were available to reduce future tax liabilities. This 
deferred tax asset was comprised of $11.1 million related to general business credits and other miscellaneous federal credits, and 
$38.4 million of various state tax credits related to research and development, capital investment and job incentives.  Tax credit 

74

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

carryforwards of $49.3 million expire at various intervals between the years 2017 and 2036, while $0.2 million have an unlimited 
life.

The Company provides deferred taxes for the presumed ultimate repatriation to the U.S. of earnings from certain of its non-
U.S. subsidiaries and unconsolidated affiliates. Through December 31, 2014 the indefinite reinvestment criteria had been applied 
to certain entities and allowed the Company to overcome that presumption to the extent the earnings were to be indefinitely 
reinvested outside the United States. As a result of the Company's internal restructuring of its foreign entities that was initiated in 
the second quarter of 2015, the Company determined that the indefinite reinvestment assertion should be expanded to include 
additional non-U.S. subsidiaries. As a result of the 2015 actions, the Company recorded a discrete net tax benefit in the second 
quarter of 2015 which includes the benefit of applying the indefinite reinvestment assertion to the foreign entities reorganized 
under a new European holding company. No deferred income taxes have been provided as of December 31, 2016 on the applicable 
undistributed earnings of the non-U.S. subsidiaries where the indefinite reinvestment assertion has been applied. The Company 
had undistributed earnings of foreign subsidiaries of $286.7 million and $214.1 million at December 31, 2016 and 2015, respectively, 
for  which  deferred  taxes  have  not  been  provided  as  such  earnings  are  presumed  to  be  indefinitely  reinvested  in  the  foreign 
subsidiaries. It is not practical to determine the amount of deferred income taxes not provided on these earnings. 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 and other 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 December 31, 2016, 2015 and 2014 the Company had $3.5 million, $4.8 million and $5.1 million of gross unrecognized 
tax benefits, including interest, respectively. Substantially all of these amounts, if recognized, would impact the Company's tax 
provision and the effective tax rate.

 The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.  As of December 

31, 2016, 2015 and 2014, the amounts accrued for interest and penalties were not significant.

The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties for the 

2016 and 2015 annual reporting periods:

(in millions)
Balance at January 1
Gross increases - tax positions prior periods
Gross decreases - tax positions prior periods
Gross increases - current period tax positions
Decreases - settlements with taxing authorities
Reductions - lapse of statute of limitations
Other
Balance at December 31

2016

2015

2014

$

$

4.7
0.3
(0.4)
0.5
—
(1.7)
—
3.4

$

$

4.8
0.4
(0.1)
0.5
(0.6)
—
(0.3)
4.7

$

$

6.0
0.5
(0.4)
0.7
(0.7)
(1.2)
(0.1)
4.8

The Company believes it is reasonably possible that the total amount of gross unrecognized tax benefits as of December 31, 
2016 could decrease by approximately $1.1 million in 2017 due to settlements with taxing authorities or lapses in applicable 
statutes of limitation. 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 2017, but the amount cannot be estimated.

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 2012 tax year and all open issues have been 
resolved.  The Company is currently open to tax examinations by the IRS for the 2013 through 2015 tax years and the 2014 tax 
year is currently under examination. 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 2011 taxable 
year. Following the completion in the fourth quarter of 2015 of the 2008 through 2012 Germany tax audit, the Company is no 
longer subject to income tax examinations by any major foreign tax jurisdiction for years prior to 2013.

The difference between the actual income tax provision (benefit) and the tax provision computed by applying the statutory 

Federal income tax rate to Earnings before income taxes is attributable to the following:

75

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

(in millions)
Income tax provision at 35 percent
State and local income taxes, net of Federal income tax effect
Deferred tax asset valuation allowance
Income attributable to domestic production activities
Impairment of equity method investment
Change in estimates related to prior years and prior years amended tax return filings
Federal and state tax credits
Taxes related to foreign income, net of credits
Taxes related to unremitted earnings
Tax reserve reassessment
Deferred tax reassessment
Tax law changes
Other

Actual income tax provision

Effective tax rate

2016
136.4
8.3
3.4
(6.3)
—
(0.2)
(10.2)
(20.6)
(1.1)
(1.4)
1.5
5.4
0.1
115.3

$

$

$

$

2015

2014

110.3
7.3
5.3
(9.2)
—
(4.2)
(8.9)
(6.7)
(11.4)
0.6
3.0
—
1.7
87.8

$

$

100.7
6.4
(7.6)
(8.8)
4.0
(1.4)
(7.6)
5.2
(5.5)
(0.3)
3.5
—
4.4
93.0

29.6%

27.9%

32.3%

Income tax provision allocated to continuing operations and discontinued operations for the years ended December 31 was 

as follows:

(in millions)
Continuing operations
Discontinued operations
Total tax provision

Note 13 – Commitments and Contingencies 

Financial Commitments

2016

2015

2014

$

$

115.3
1.0
116.3

$

$

87.8
0.3
88.1

$

$

93.0
11.0
104.0

The Company has entered into guarantees of indebtedness of third parties, primarily in connection with customer financing 
programs. Under these arrangements, the Company has guaranteed customer obligations to the financial institutions in the event 
of customer default, generally subject to a maximum amount that is less than the total outstanding obligations. The Company has 
also extended guarantees to third parties that have purchased customer receivables from Brunswick and, in certain instances, has 
guaranteed secured term financing of its customers. Potential payments in connection with these customer financing arrangements 
generally  extend  over  several  years.  The  single  year  potential  cash  obligations  associated  with  these  customer  financing 
arrangements as of December 31, 2016 and December 31, 2015 were $31.5 million and $30.7 million, respectively. The maximum 
potential cash obligations associated with these customer financing arrangements as of December 31, 2016 and December 31, 
2015 were $39.6 million and $36.8 million, respectively. 

In  most  instances,  upon  repurchase  of  the  receivable  or  note,  the  Company  receives  rights  to  the  collateral  securing  the 
financing. The  Company’s  risk  under  these  arrangements  is  partially  mitigated  by  the  value  of  the  collateral  that  secures  the 
financing. The Company had $1.2 million and $1.1 million accrued for potential losses related to recourse exposure at December 31, 
2016 and December 31, 2015, respectively.

The Company has accounts receivable sale arrangements with third parties which are included in the guarantee arrangements 
discussed above. The Company treats the sale of receivables in which the Company retains an interest as a secured obligation as 
the transfers of the receivables under these arrangements do not meet the requirements of a “true sale.” Accordingly, the current 
portion of receivables underlying these arrangements of $22.0 million and $22.5 million was recorded in Accounts and notes 
receivable and Accrued expenses as of December 31, 2016 and December 31, 2015, respectively. Further, the long-term portion 
of these arrangements of $29.0 million and $23.7 million as of December 31, 2016 and December 31, 2015, respectively, was 
recorded in Other long-term assets and Other long-term liabilities.

76

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

The Company has also entered into arrangements with third-party lenders in which it has agreed, in the event of a customer 
default, to repurchase from the third-party lender those Brunswick products repossessed from the customer. These arrangements 
are typically subject to a maximum repurchase amount. The single year and maximum potential cash payments the Company could 
be required to make to repurchase collateral as of December 31, 2016 and December 31, 2015 were $59.9 million and $57.9 million, 
respectively. 

The Company’s risk under these repurchase arrangements is partially mitigated by the value of the products repurchased as 
part  of  the  transaction.  The  Company  had  $1.1  million  accrued  for  potential  losses  related  to  repurchase  exposure  at  both 
December 31, 2016 and December 31, 2015. The Company’s repurchase accrual represents the expected losses that could result 
from obligations to repurchase products, after giving effect to proceeds anticipated to be received from the resale of those products 
to alternative dealers.

The Company has recorded its estimated net liability associated with losses from these guarantee and repurchase obligations 
on its Consolidated Balance Sheets based on historical experience and current facts and circumstances. Historical cash requirements 
and  losses  associated  with  these  obligations  have  not  been  significant,  but  could  increase  if  dealer  defaults  exceed  current 
expectations.

Financial institutions have issued standby letters of credit and surety bonds conditionally guaranteeing obligations on behalf 
of the Company totaling $6.5 million and $12.1 million, respectively, as of December 31, 2016. A large portion of these standby 
letters of credit and surety bonds are related to the Company’s self-insured workers’ compensation program as required by its 
insurance companies and various state agencies. The Company has recorded reserves to cover the anticipated liabilities associated 
with these programs. Under certain circumstances, such as an event of default under the Company’s revolving credit facility, or, 
in the case of surety bonds, a ratings downgrade, the Company could be required to post collateral to support the outstanding letters 
of  credit  and  surety  bonds. The  Company  was  not  required  to  post  letters  of  credit  as  collateral  against  surety  bonds  as  of 
December 31, 2016.

The Company has a collateral trust arrangement with insurance carriers and a trustee bank. The trust is owned by the Company, 
but  the  assets  are  pledged  as  collateral  against  workers’  compensation  related  obligations  in  lieu  of  other  forms  of  collateral 
including letters of credit. In connection with this arrangement, the Company had $11.2 million and $12.7 million of cash in the 
trust  at  December 31,  2016  and  December 31,  2015,  respectively,  which  was  classified  as  Restricted  cash  in  the  Company's 
Consolidated Balance Sheets. In both 2016 and 2015, insurance carriers reduced the required collateral amount, which resulted in 
a $1.5 million and $2.9 million, respectively, transfer out of the trust.    

77

 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Product Warranties

The Company records a liability for product warranties at the time revenue is recognized. The liability is estimated using 
historical warranty experience, projected claim rates and expected costs per claim. The Company adjusts its liability for specific 
warranty matters when they become known and the exposure can be estimated. Product failure rates as well as material usage and 
labor costs incurred in correcting a product failure affect the Company's warranty liabilities. If actual costs differ from estimated 
costs, the Company must make a revision to the warranty liability. Changes in the Company's warranty liabilities resulting from 
the Company's experience and adjustments related to changes in estimates are included as Aggregate changes for preexisting 
warranties presented in the table below.

The  following  activity  related  to  product  warranty  liabilities  was  recorded  in Accrued  expenses  during  the  years  ended 

December 31, 2016 and December 31, 2015:

(in millions)
Balance at beginning of period
Payments made
Provisions/additions for contracts issued/sold
Aggregate changes for preexisting warranties

Foreign currency translation

Acquisitions

Other

Balance at end of period

$

2016

2015

$

106.3
(67.3)
74.9
(10.4)
(0.3)
7.1

2.3

110.6
(59.1)
67.8
(9.6)
(3.4)
—

—

$

112.6

$

106.3

Additionally, end users of the Company's products may purchase a contract from the Company that extends product warranty 
beyond the standard period. For certain extended warranty contracts in which the  Company retains the warranty or administration 
obligation, a deferred liability is recorded based on the aggregate sales price for contracts sold. The deferred liability is reduced 
and revenue is recognized on a straight-line basis over the contract period during which costs are expected to be incurred. 

The following activity related to deferred revenue for extended product warranty contracts was recorded in Accrued expenses 

and Other long-term liabilities during the years ended December 31, 2016 and December 31, 2015:

(in millions)
Balance at beginning of period

Extended warranty contracts sold

Revenue recognized on existing extended warranty contracts

Foreign currency translation
Balance at end of period

Legal and Environmental

2016

2015

$

$

78.3

$

55.0
(42.0)
(0.7)
90.6

$

72.5

45.5
(38.3)
(1.4)
78.3

The Company accrues for litigation exposure when it is probable that future costs will be incurred and such costs can be 
reasonably estimated. Adjustments to estimates are recorded in the period they are identified. Management does not believe that 
there is a reasonable possibility that a material loss exceeding the amounts already recognized for the Company’s litigation claims 
and matters, if any, has been incurred. In light of existing reserves, the Company's litigation claims, when finally resolved, are not 
expected, in the opinion of management, to have a material adverse effect on the Company's consolidated financial position, results 
of operations and cash flows.

The Company is involved in certain legal and administrative proceedings under the Comprehensive Environmental Response, 
Compensation and Liability Act of 1980 and other federal and state legislation governing the generation and disposal of certain 
hazardous wastes. These proceedings, which involve both on- and off-site waste disposal or other contamination, in many instances 
seek compensation or remedial action from the Company as a waste generator under Superfund legislation, which authorizes action 
regardless of fault, legality of original disposition or ownership of a disposal site. The Company has established reserves based 
on a range of cost estimates for all known claims.

78

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

The environmental remediation and clean-up projects in which the Company is involved have an aggregate estimated range 
of exposure of approximately $35.0 million to $57.3 million as of December 31, 2016. At December 31, 2016 and 2015, the 
Company had reserves for environmental liabilities of $35.0 million and $40.0 million, respectively, reflected in Accrued expenses
and Other long-term liabilities in the Consolidated Balance Sheets. The Company recorded environmental provisions of $0.7 
million, $1.4 million and $1.0 million for the years ended December 31, 2016, 2015 and 2014, respectively.

The Company accrues for environmental remediation-related activities for which commitments or clean-up plans have been 
developed and for which costs can be reasonably estimated. All accrued amounts are generally determined in consultation with 
third-party experts on an undiscounted basis and do not consider recoveries from third parties until such recoveries are realized.  
In light of existing reserves, the Company's environmental claims, when finally resolved, are not expected, in the opinion of 
management, to have a material adverse effect on the Company's consolidated financial position, results of operations or cash 
flows.

Note 14 – Financial Instruments 

The Company operates globally with manufacturing and sales facilities in various locations 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.

Derivative Financial Instruments.  The Company uses derivative financial instruments to manage its risks associated with 
movements in foreign currency exchange rates, interest rates and commodity prices. Derivative instruments are not used for trading 
or  speculative  purposes.  The  Company  formally  documents  its  hedge  relationships,  including  identification  of  the  hedging 
instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction. 
This process includes linking derivatives that are designated as hedges to specific forecasted transactions. The Company also 
assesses, both at the hedge’s inception and monthly thereafter, whether the derivatives used in hedging transactions are highly 
effective in offsetting the changes in the anticipated cash flows of the hedged item. If the hedging relationship ceases to be highly 
effective, or it becomes probable that a forecasted transaction is no longer expected to occur, the Company discontinues hedge 
accounting prospectively and immediately recognizes the gains and losses associated with those hedges. There were no material 
adjustments as a result of ineffectiveness to the results of operations for the years ended December 31, 2016, 2015 and 2014. The 
fair value of derivative financial instruments is determined through market-based valuations and may not be representative of the 
actual gains or losses that will be recorded when these instruments mature due to future fluctuations in the markets in which they 
are traded. The effects of derivative financial instruments are not expected to be material to the Company’s financial position or 
results of operations when considered together with the underlying exposure being hedged. Use of derivative financial instruments 
exposes the Company to credit risk with its counterparties when the fair value of a derivative contract is an asset. The Company 
mitigates this risk by entering into derivative contracts with highly rated counterparties. The maximum amount of loss due to 
counterparty credit risk is limited to the asset value of derivative financial instruments.

Cash Flow Hedges.  The Company enters into certain derivative instruments that are designated and qualify as cash flow 
hedges.  The Company executes both forward and option contracts, based on forecasted transactions, to manage foreign currency 
exchange  exposure  mainly  related  to  inventory  purchase  and  sales  transactions. From  time-to-time,  the  Company  enters  into 
commodity swap agreements based on anticipated purchases of copper and natural gas to manage risk related to price changes. 
Additionally, the Company may enter into forward-starting interest rate swaps to hedge the interest rate risk associated with the 
anticipated issuance of debt.

A cash flow hedge requires that as changes in the fair value of derivatives occur, the portion of the change deemed to be 
effective is recorded temporarily in Accumulated other comprehensive loss, an equity account, and reclassified into earnings in 
the same period or periods during which the hedged transaction affects earnings. As of December 31, 2016, the term of derivative 
instruments hedging forecasted transactions ranged from one to 15 months. 

79

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

The following activity related to cash flow hedges was recorded in Accumulated other comprehensive loss as of December 

31:

(in millions)
Beginning balance
Net change in value of outstanding hedges
Net amount recognized into earnings
Ending balance

Accumulated Unrealized Derivative
Gains (Losses)

2016

2015

Pretax

After-tax

Pretax

After-tax

$

$

0.4
2.9
(2.2)
1.1

$

$

(5.9) $
2.1
(1.8)
(5.6) $

1.2
12.0
(12.8)
0.4

$

$

(5.5)
8.4
(8.8)
(5.9)

Fair Value Hedges.  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. An interest rate swap is entered into with the expectation that the change in the fair value 
of the interest rate swap will offset the change in the fair value of the debt instrument attributable to changes in the benchmark 
interest rate. Each period, the change in the fair value of the interest rate swap asset or liability is recorded in debt and the difference 
between the fixed interest payment and floating interest receipts is recorded as a net adjustment to interest expense.

Other Hedging Activity.   The Company has entered into certain foreign currency forward contracts that have not been designated 
as a hedge for accounting purposes. These contracts are used to manage foreign currency exposure related to changes in the value 
of assets or liabilities caused by changes in foreign exchange rates. The change in the fair value of the foreign currency derivative 
contract and the corresponding change in the fair value of the asset or liability of the Company are both recorded through earnings, 
each period as incurred. From time-to-time, the Company enters into commodity swap agreements that are used to hedge purchases 
of  aluminum. These  hedges  do  not  qualify  for  hedge  accounting. The  commodity  swap  agreements  are  based  on  anticipated 
purchases of aluminum and are used to manage risk related to price changes. The change in the fair value of the aluminum derivative 
contract is recorded through earnings, each period as incurred.

Foreign Currency.  The Company enters into forward and option contracts to manage foreign exchange exposure related to 
forecasted transactions and assets and liabilities that are subject to risk from foreign currency rate changes. These exposures include: 
product costs; revenues and expenses; associated receivables and payables; intercompany obligations and receivables and other 
related cash flows.

Forward exchange contracts outstanding at December 31, 2016 and December 31, 2015 had notional contract values of $263.7 
million and $273.5 million, respectively. Option contracts outstanding at December 31, 2016 and December 31, 2015, had notional 
contract values of $30.4 million and $51.0 million, respectively. The forward and options contracts outstanding at December 31, 
2016, mature during 2017 and 2018 and mainly relate to the Euro, Japanese Yen, Australian dollar, Canadian dollar, Swedish krona, 
Brazilian real, British pound, Norwegian krone, Mexican peso, Hungarian forint and New Zealand dollar. As of December 31, 
2016, the Company estimates that during the next 12 months, it will reclassify approximately $5.4 million of net gains (based on 
current rates) from Accumulated other comprehensive loss to Cost of sales.

Interest Rate.  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 December 31, 2016 and December 31, 2015, 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 discussed in Note 16 – Debt.

The Company may also enter into forward-starting interest rate swaps to hedge the interest rate risk associated with anticipated 

debt issuances. There were no forward-starting interest rate swaps outstanding at December 31, 2016 or December 31, 2015. 

As of December 31, 2016 and December 31, 2015, the Company had $4.5 million and $5.1 million, respectively, of net deferred 
losses associated with all settled forward-starting interest rate swaps, which were included in Accumulated other comprehensive 
loss. As of December 31, 2016, the Company estimates that during the next 12 months, it will reclassify approximately $1.1 million
of net losses resulting from settled forward-starting interest rate swaps from Accumulated other comprehensive loss to Interest 
expense.

80

 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Commodity Price.  From time-to-time, the Company uses commodity swaps to hedge anticipated purchases of aluminum, 
copper and natural gas. There were no commodity swap contracts outstanding at December 31, 2016. As of December 31, 2015
the notional value of commodity swap contracts outstanding was $10.8 million. The amount of gain or loss associated with the 
change in fair value of these instruments is either recorded through earnings each period as incurred or, if designated as cash flow 
hedges, deferred in Accumulated other comprehensive loss and recognized in Cost of sales in the same period or periods during 
which the hedged transaction affects earnings.

As of December 31, 2016 and December 31, 2015, the fair values of the Company’s derivative instruments were:

(in millions)

Instrument

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivative Assets

Derivative Liabilities

2016

2015

2016

2015

Derivatives Designated as Cash Flow Hedges
Foreign exchange contracts
Commodity contracts

Prepaid expenses and other
Prepaid expenses and other

Total

Derivatives Designated as Fair Value Hedges
Interest rate contracts

Prepaid expenses and other

Interest rate contracts

Other long-term assets

Total

Other Hedging Activity
Foreign exchange contracts

Prepaid expenses and other

Commodity contracts

Prepaid expenses and other

Total

$

$

$

$

$

$

7.2
—
7.2

2.1

0.7

2.8

1.2

—

1.2

$

$

$

$

$

$

Accrued expenses
Accrued expenses

5.9
—
5.9

2.1

Accrued expenses

4.0 Other long-term liabilities

6.1

1.5

—

1.5

Accrued expenses

Accrued expenses

$

$

$

$

$

$

2.6
—
2.6

1.7

0.2

1.9

0.3

—

0.3

$

$

$

$

$

$

1.3
0.5
1.8

1.4

—

1.4

0.2

2.2

2.4

The effect of derivative instruments on the Consolidated Statements of Operations for the years ended December 31, 2016

and December 31, 2015 was: 

(in millions)

Derivatives Designated as Cash
Flow Hedging Instruments

Amount of Gain (Loss) on
Derivatives Recognized in
Accumulated Other Comprehensive
Loss (Effective Portion)
2016
2015

Location of Gain (Loss)
Reclassified from
Accumulated Other
Comprehensive Loss into
Earnings (Effective Portion)

Interest rate contracts

Foreign exchange contracts
Commodity contracts

Total

$

$

— $
2.9
0.0

2.9

$

—

12.9
(0.9)
12.0

Interest expense

Cost of sales
Cost of sales

Amount of Gain (Loss) Reclassified 
from Accumulated Other 
Comprehensive Loss into Earnings 
(Effective Portion)

2016

2015

$

$

(0.6) $
3.3
(0.5)
2.2

$

(0.1)
12.2
0.9

13.0

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

2016

2015

Interest rate contracts

Interest expense

$

2.9

$

4.3

81

 
 
 
 
 
 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Other Hedging Activity

Foreign exchange contracts
Foreign exchange contracts
Commodity contracts
Total

Location of Gain (Loss) on Derivatives
Recognized in Earnings 

Amount of Gain (Loss) on
Derivatives Recognized in Earnings

Cost of sales
Other income, net
Cost of sales

2016

2015

$

$

(5.7) $
2.0
0.3
(3.4) $

8.7
(0.3)
(5.9)
2.5

Fair Value of Other Financial Instruments.  The carrying values of the Company’s short-term financial instruments, including 
cash and cash equivalents, accounts and notes receivable and short-term debt approximate their fair values because of the short 
maturity of these instruments. At December 31, 2016 and December 31, 2015, the fair value of the Company’s long-term debt was 
approximately $498.5 million and $454.7 million, respectively, and was determined using Level 1 and Level 2 inputs described 
in Note 7 – Fair Value Measurements, including quoted market prices or discounted cash flows based on quoted market rates 
for similar types of debt. The carrying value of long-term debt, including current maturities, was $444.6 million and $448.5 million 
as of December 31, 2016 and December 31, 2015, respectively.

Note 15 – Accrued Expenses 

Accrued Expenses at December 31, 2016 and 2015 were as follows: 

(in millions)
Compensation and benefit plans
Product warranties
Sales incentives and discounts
Deferred revenue and customer deposits
Insurance reserves 
Secured obligations, repurchase and recourse
Environmental reserves 
Interest
Real, personal and other non-income taxes
Derivatives
Other

Total accrued expenses

2016

2015

$

$

146.0
112.6
104.4
64.2
21.5
24.3
23.7
8.4
7.0
4.6
49.6
566.3

$

$

162.7
106.3
87.4
57.2
26.6
24.7
25.4
8.4
7.2
5.6
51.5
563.0

82

 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 16 – Debt 

Long-term debt at December 31, 2016 and December 31, 2015 consisted of the following:

(in millions)
Notes, 7.125% due 2027, net of discount of $0.4 and $0.4 and debt issuance costs of $0.5 and $0.6 $
Senior notes, currently 4.625%, due 2021, net of debt issuances costs of $1.9 and $2.3 (A)
Debentures, 7.375% due 2023, net of discount of $0.2 and $0.2 and debt issuance costs of $0.2 
and $0.3 (A)
Loan with Fond du Lac County Economic Development Corporation, 2.0% due 2021, net of
discount of $3.8 and $4.5 and debt issuance costs of $0.1 and $0.1
Notes, various up to 5.892% payable through 2027, net of discount of $0.2 in 2016
Total long-term debt
Current maturities of long-term debt
Long-term debt, net of current maturities

$

2016

2015

$

162.3
147.8

103.4

23.8
5.1
442.4
(5.9)
436.5

$

162.2
149.6

104.7

28.1
3.9
448.5
(6.0)
442.5

(A) Included in Senior notes, 4.625% due 2021 and Debentures, 7.375% due 2023 at December 31, 2016 and December 31, 2015, are the aggregate fair 

values related to the fixed-to-floating interest rate swaps as discussed in Note 14 – Financial Instruments.

Scheduled maturities, net:

(in millions)
2017

2018

2019

2020

2021

Thereafter

Total long-term debt including current maturities

The Company did not repurchase debt during 2016 or 2015.

$

$

5.9

5.7

5.7

5.8

152.4

266.9

442.4

The 2021, 2023 and 2027 notes are unsecured and do not contain subsidiary guarantees. Interest on the Company's notes is 
due semi-annually. The Company's 2021 and 2027 notes are subject to redemption at any time at the Company's discretion, in 
whole or in part, at redemption prices specified in the respective agreements, plus any accrued and unpaid interest. The Company's 
2023 notes are not redeemable. The Company may be required to repurchase the 2021 notes in the event of a change of control, 
subject to certain circumstances, for an amount equal to 101% of the outstanding principal plus any accrued and unpaid interest 
at the time of the change of control.

In June 2016, the Company entered into an Amended and Restated Credit Agreement (Credit Facility). The Credit Facility 
amends and restates the Company's existing credit agreement, dated as of March 2011, as amended and restated as of June 2014. 
The Credit Facility provides for $300 million of borrowing capacity and is in effect through June 2021. No borrowings were 
outstanding as of December 31, 2016 or during 2016, and available borrowing capacity totaled $295.7 million, net of $4.3 million
of letters of credit outstanding under the Credit Facility. The Credit Facility includes provisions to add an additional $100 million
of capacity and extend the facility for two additional one-year terms, subject to lender approval. The Company currently pays a 
facility fee of 20 basis points per annum. The facility fee per annum will be within a range of 12.5 to 35 basis points based on the 
Company's credit rating. Under the terms of the Credit Facility, the Company has two borrowing options: borrowing at a rate tied 
to adjusted LIBOR plus a spread of 130 basis points or a base rate plus a margin of 30.0 basis points. The rates are determined by 
the Company's credit ratings, with spreads ranging from 100 to 190 basis points for LIBOR rate borrowings and 0 to 90 basis 
points for base rate borrowings. The Company is required to maintain compliance with two financial covenants included in the 
Credit Facility: a minimum interest coverage ratio and a maximum leverage ratio. The minimum interest coverage ratio, as defined 
in the agreement, is not permitted to be less than 3.00 to 1.00. The maximum leverage ratio, as defined in the agreement, is not 
permitted to be more than 3.50 to 1.00. As of December 31, 2016, the Company was in compliance with the financial covenants 
in the Credit Facility.

83

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

As provided under the terms of its loan agreement with the Fond du Lac County Economic Development Corporation, which 
is secured by the Company's property located in Fond du Lac, Wisconsin, up to a maximum of 43 percent of the principal due 
annually can be forgiven if the Company achieves certain employment targets as outlined in the agreement. The amount of loan 
forgiveness is based on average employment levels at the end of the previous four quarters. Total loan forgiveness for the year 
ended December 31, 2016 was $2.1 million or 43 percent of the principal due. Total loan forgiveness for the year ended December 31, 
2015 was $2.0 million or 41 percent of the principal due. 

Note 17 – Postretirement Benefits 

Overview.  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.  The expense related to the defined contribution 
plans was $46.3 million, $46.3 million and $38.9 million in 2016, 2015 and 2014, respectively.

 The Company's domestic pension and retiree health care and life insurance benefit plans, which are discussed below, provide 
benefits based on years of service and, for some plans, average compensation prior to retirement.  Benefit accruals are frozen for 
all plan participants. The Company uses a December 31 measurement date for these plans.  The Company's foreign postretirement 
benefit plans are not significant individually or in the aggregate.

Plan Developments.  During 2016, total settlement payments of $125.2 million were made from the Brunswick Pension Plan 
For Hourly Bargaining Unit Employees (Hourly Bargaining Plan) and the Brunswick Pension Plan For Salaried Employees (Salaried 
Plan) to purchase  group annuity contracts to cover future benefit payments. The annuity contract unconditionally and irrevocably 
guarantees the full payment of all future annuity payments to the affected participants. The insurance company assumed all risk 
associated with the assets and obligations that were transferred. The Company recognized a pretax settlement loss of $55.1 million 
in the fourth quarter of 2016 relating to this action.

The  Company  also  took  actions  to  terminate  the  Brunswick  Pension  Plan  For  Hourly  Employees  (Hourly  Plan)  and  the 
Brunswick  Pension  Plan  For  Hourly Wage  Employees  (Muskegon  Plan)  at  the  Muskegon,  Michigan  Factory,  effective  as  of 
December 31, 2016. All benefits are expected to be paid during 2017, either through a lump-sum payment or annuity offerings. As 
a result, the unfunded liabilities for both plans are currently recorded in Accrued expenses within the Company’s Consolidated 
Balance Sheets.

During 2015, total settlement payments of $191.8 million were made from the Brunswick Pension Plan For Selected Current 
And Former Employees and the Salaried Plan, consisting of lump-sum pension distributions of $61.7 million and the purchase of 
group  annuity  contracts  totaling  $130.1  million  to  cover  future  benefit  payments.  The  annuity  contract  unconditionally  and 
irrevocably guarantees the full payment of all future annuity payments to the affected participants. The insurance company assumed 
all risk associated with the assets and obligations that were transferred. The Company recognized a pretax settlement loss of $82.3 
million in the fourth quarter of 2015 related to these actions.

During 2014, the Company offered a voluntary lump-sum pension payment opportunity to certain terminated vested Salaried 
Plan, Hourly Bargaining Plan and Muskegon Plan participants. Total lump-sum payments of $80.7 million, of which $71.9 million
were considered settlement payments, for those participants electing to receive lump sums were made in 2014 using pension plan 
assets. The Company recognized pretax settlement losses of $27.9 million in the fourth quarter of 2014 for those plans where the 
settlement payment exceeded the sum of the plans' service and interest costs.  

84

   
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Costs.  Pension and other postretirement benefit costs included the following components for 2016, 2015 and 2014:

(in millions)
Interest cost
Expected return on plan assets
Amortization of prior service credits
Amortization of net actuarial losses
Settlement charges

$

Net pension and other benefit costs

$

Pension Benefits
2015

2016

2014

Other Postretirement Benefits
2015

2014

2016

35.8
(38.5)
—
17.4
55.1
69.8

$

$

47.9
(55.7)
—
19.5
82.3
94.0

$

$

58.6
(58.8)
—
15.0
27.9
42.7

$

$

1.4
—
(0.7)
—
—
0.7

$

$

1.8
—
(0.7)
1.3
—
2.4

$

$

2.0
—
(0.9)
—
—
1.1

Portions of Net pension and other benefit costs are recorded in Selling, general and administrative expenses as well as capitalized 
into inventory. Costs capitalized into inventory are eventually realized through Cost of sales in the Consolidated Statements of 
Operations. 

Pension expense in 2016 includes the impact of a change in methodology used to calculate the interest cost component of 
pension expense. In 2015 and prior years, the Company used a single-weighted average discount rate to calculate pension and 
postretirement interest costs. Beginning in 2016, the Company is utilizing a "spot rate approach" in the calculation of pension and 
postretirement interest costs to provide a more accurate measurement of interest costs. The spot rate approach applies separate 
discount rates for each projected benefit payment in the calculation of pension and postretirement interest costs. This calculation 
change is considered to be a change in accounting estimate and is being applied prospectively in 2016. The discount rates used to 
measure the 2016 interest costs are 3.58% and 3.30% for pensions and other postretirement benefits, respectively. The previous 
method would have used a discount rate for interest costs of 4.40% for pensions and 4.23% for other postretirement benefits, 
respectively. The  decreased  interest  costs  for  the  12  months  ended  December 31,  2016,  for  pension  and  other  postretirement 
benefits, was approximately $8.2 million and $0.4 million, respectively, compared with the previous method. 

Additionally, pension expense in 2016 includes the impact of a decline in the assumed rate of return on plan assets to 5.25%
in 2016 compared with 6.00% in 2015, primarily due to shifts in asset allocations toward fixed income investments. For the year 
ended December 31, 2016, pension expense increased by $5.6 million as a result of the lower assumed rate of return on plan assets.

85

 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Benefit Obligations and Funded Status.  A reconciliation of the changes in the benefit obligations and fair value of assets over 
the  two-year  period  ending  December 31,  2016,  and  a  statement  of  the  funded  status  at  December  31  for  these  years  for  the 
Company's pension and other postretirement benefit plans follow:

(in millions)
Reconciliation of benefit obligation:

Benefit obligation at previous December 31
Interest cost
Participant contributions
Actuarial (gains) losses 
Benefit payments
Settlement payments

Benefit obligation at December 31

Reconciliation of fair value of plan assets:

Fair value of plan assets at previous December 31
Actual return on plan assets
Employer contributions
Participant contributions
Benefit payments
Settlement payments

Fair value of plan assets at December 31

Pension Benefits

2016

2015

Other Postretirement
Benefits

2016

2015

$

$ 1,035.5
35.8
—
49.0
(73.6)
(125.2)
921.5

$ 1,315.4
47.9
—
(56.8)
(79.2)
(191.8)
1,035.5

736.4
75.7
74.6
—
(73.6)
(125.2)
687.9

965.9
(32.1)
73.6
—
(79.2)
(191.8)
736.4

$

43.5
1.4
0.5
(0.9)
(3.9)
—
40.6

—
—
3.4
0.5
(3.9)
—
—

49.5
1.8
0.7
(4.1)
(4.4)
—
43.5

—
—
3.7
0.7
(4.4)
—
—

Funded status at December 31
Funded percentage (A)

$

(233.6)

$

75%

$

(299.1)
71%

(40.6) $
NA

(43.5)
NA

(A) As all of the Company's plans are frozen, the projected benefit obligation and the accumulated benefit obligation are equal. As of December 31, 2016

and 2015, the projected and accumulated benefit obligations for all of the Company's pension plans were in excess of plan assets.

The  funded  status  of  these  pension  plans  includes  the  projected  and  accumulated  benefit  obligations  for  the  Company's 
nonqualified  pension  plan  of  $34.5  million  and  $36.7  million  at  December  31,  2016  and  2015,  respectively. The  Company's 
nonqualified pension plan and other postretirement benefit plans are not funded.

The amounts included in the Company's Consolidated Balance Sheets as of December 31, 2016 and 2015, were as follows:

(in millions)
Accrued expenses
Postretirement benefit liabilities

Net amount recognized

Pension Benefits

2016

2015

Other Postretirement
Benefits

2016

2015

$

$

10.5
223.1
233.6

$

$

3.8
295.3
299.1

$

$

4.1
36.5
40.6

$

$

4.4
39.1
43.5

86

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Accumulated Other Comprehensive Loss. The following pretax activity related to pensions and other postretirement benefits 

was recorded in Accumulated other comprehensive loss as of December 31:

(in millions)
Prior service credits
Beginning balance
Amount recognized as component of net benefit costs

Ending balance

Net actuarial losses
Beginning balance
Actuarial (gains) losses arising during the period
Amount recognized as component of net benefit costs

Ending balance

Total

Pension Benefits

Other Postretirement
Benefits

2016

2015

2016

2015

$

— $
—
—

— $
—
—

(10.9) $
0.7
(10.2)

(11.6)
0.7
(10.9)

457.8
11.8
(72.5)
397.1

528.6
31.0
(101.8)
457.8

1.9
(0.9)
—
1.0

7.3
(4.1)
(1.3)
1.9

$

397.1

$

457.8

$

(9.2) $

(9.0)

The  estimated  pretax  net  actuarial  loss  in Accumulated  other  comprehensive  loss  at  December 31,  2016,  expected  to  be 
recognized as a component of net periodic benefit cost in 2017 for the Company's pension plans, is $14.4 million. The estimated 
pretax prior service credit and net actuarial loss in Accumulated other comprehensive loss at December 31, 2016, expected to be 
recognized as components of net periodic benefit cost in 2017 for the Company's other postretirement benefit plans, are $0.7 
million and $0.0 million, respectively.  

Prior service costs and credits associated with other postretirement benefits are being amortized on a straight-line basis over 
the  average  future  working  lifetime  to  full  eligibility  for  active  hourly  plan  participants  and  over  the  average  remaining  life 
expectancy for those plans' participants who are fully eligible for benefits.  Actuarial gains and losses in excess of 10 percent of 
the greater of the benefit obligation or the market value of assets are amortized over the remaining service period of active plan 
participants and over the average remaining life expectancy of inactive plan participants.  

Other Postretirement Benefits.  Once participants eligible for other postretirement benefits turn 65 years old, the health care 
benefits  become  a  flat  dollar  amount  based  on  age  and  years  of  service.  The  assumed  health  care  cost  trend  rate  for  other 
postretirement benefits for pre-age 65 benefits as of December 31 was as follows:

Health care cost trend rate for next year
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
Year rate reaches the ultimate trend rate

Pre-age 65 Benefits
2015
2016

5.7%
4.5%
2037

5.8%
4.5%
2037

The health care cost trend rate assumption has an effect on the amounts reported. A one percent change in the assumed health 

care trend rate at December 31, 2016 would not have a material impact on the accumulated postretirement benefit obligation.

The Company monitors the cost of health care and life insurance benefit plans and reserves the right to make additional changes 

or terminate these benefits in the future.

87

  
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Assumptions.  In October 2014, the Society of Actuaries (SOA) issued updated mortality tables (RP-2014) and a mortality 
improvement scale (MP-2014), which reflect longer life expectancies than previously projected. Since then, the SOA has issued 
updated mortality improvement scales, (MP-2015 and MP-2016) which include actual mortality improvement data from the Social 
Security Administration for years 2011 through 2014. The actual mortality data showed higher rates of mortality than anticipated, 
and thus updated projections show a slight decrease in life expectancies compared to the original MP-2014 projection scale. This 
information was considered in developing the Company's updated mortality assumptions for pension and postretirement benefit 
obligations recorded at December 31, 2016. The updated mortality assumptions resulted in a decrease of approximately $10.5 
million and $0.3 million in the Company's pension and postretirement benefit obligations, respectively, at December 31, 2016.

Weighted average assumptions used to determine pension and other postretirement benefit obligations at December 31 were 

as follows: 

Discount rate

Pension Benefits

Other Postretirement
Benefits

2016

2015

2016

2015

4.00%

4.40%

3.93%

4.23%

Weighted  average  assumptions  used  to  determine  net  pension  and  other  postretirement  benefit  costs  for  the  years  ended 

December 31 were as follows:

Discount rate for pension benefits

Discount rate for other postretirement benefits

Long-term rate of return on plan assets

2016

3.58%

3.30%

5.25%

2015

3.95%

3.75%

6.00%

2014

4.85%

4.40%

6.25%

The Company utilizes a yield curve analysis to calculate the discount rates used to determine pension and other postretirement 
benefit obligations.  The yield curve analysis matches the cash flows of the Company's benefit obligations. The yield curve consisted 
of spot interest rates at half year increments for each of the next 30 years and was developed based on pricing and yield information 
for high quality corporate bonds rated Aa by either Moody's or Standard & Poor's, private placement bonds that are traded in 
reliance with Rule 144A and are at least two years from date of issuance, bonds with make-whole provisions and bonds issued by 
foreign corporations that are denominated in U.S. dollars, excluding callable bonds and bonds less than a minimum size and other 
filtering criteria. Additionally, the Company's yield curve methodology includes bonds having a yield that is greater than the 
regression mean yield curve as the Company believes this methodology represents an appropriate estimate of the rates at which 
the Company could effectively settle its pension obligations.  

The Company evaluates its assumption regarding the estimated long-term rate of return on plan assets based on historical 
experience, future expectations of investment returns, asset allocations, investment strategies and views of investment professionals.  
The Company's long-term rate of return on assets assumptions of 5.25 percent for 2016, 6.00 percent for 2015, and 6.25 percent 
for 2014, reflect expectations of projected weighted average market returns for the plans' assets.  These changes in expected returns 
also reflected adjustments to the Company's targeted asset allocation.

Master Trust Investments.  Assets of the Company's Master Pension Trust (Trust) are invested solely in the interest of the plan 
participants for the purpose of providing benefits to participants and their beneficiaries. Investment decisions within the Trust are 
made after giving appropriate consideration to the prevailing facts and circumstances that a prudent person acting in a like capacity 
would use in a similar situation, and follow the guidelines and objectives established within the investment policy statement for 
the Trust. In general, the Trust's investment strategy is to invest in a diversified portfolio of assets that will generate returns equal 
to or in excess of the change in liabilities resulting from interest costs and discount rate fluctuations. The excess returns generated 
from this strategy will contribute to improving the funded position of the plan. In order for returns to achieve this objective, the 
Trust will invest in fixed income investments and equities. These asset classes have historically been reasonably correlated to 
changes in plan liabilities resulting from changes in the discount rate. All investments are continually monitored and reviewed, 
with a focus on asset allocation, investment vehicles and performance of the individual investment managers, as well as overall 
Trust performance. Over time, the Company has shifted a greater percentage of the Trust's assets into long-term fixed-income 
securities, with an objective of achieving an improved matching of asset returns with changes in liabilities. The Company will 
consider future changes in asset allocation based on a number of factors including improvements in the plans' funded position, 
performance of equity investments and changes in the discount rate used to measure plan liabilities. 

88

 
 
 
 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

The Trust asset allocation at December 31, 2016 and 2015, and target allocation for 2017 are as follows:

Equity securities:
United States
International

Fixed-income securities
Short-term investments
Total

2016

2015

19%
3%
75%
3%
100%

17%
3%
77%
3%
100%

Target
Allocation 
for 2017

17%
3%
80%
—
100%

The fair values of the Trust's pension assets at December 31, 2016, by asset class were as follows:

(in millions)

Investments at fair value
Short-term investments
Fixed-income securities:
Government securities (C)
Corporate securities (D)
Other investments (F) 

Total investments at fair value

Investments at net asset value

Short-term investments
Equity securities (B)
United States
International
Fixed-income securities:
Commingled funds (E)
Total investments at net asset value
Other liabilities (G)
Total pension plan net assets

Fair Value Measurements at December 31, 2016 (A)

Quoted Prices
in Active
Markets for
Identical Assets

Total

(Level 1)

Significant
Observable
Inputs

(Level 2)

1.9

$

1.9

$

—

—
—
(0.4)
1.5

$

141.5
382.1
8.9
532.5

$

141.5
382.1
8.5
534.0

46.8

132.8
17.6

15.3
212.5
(58.6)
687.9

$

$

$

(A) See Note 7 – Fair Value Measurements for a description of levels within the fair value hierarchy.  The level in the fair value hierarchy within which 
the fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measurement in its entirety.  A 
description of the valuation methodologies is provided following these tables.  There were no transfers in and/or out of Level 1, Level 2 and Level 3 in 
2016.

(B)  The equity assets are invested in two indexed funds based on the Russell 3000 Index (U.S.) and the MSCI EAFE Equity Index (International). The Trust 

did not directly own any of the Company's common stock as of December 31, 2016.

(C)  Government securities are comprised of U.S. Treasury bonds and other government securities.
(D) Corporate securities consist primarily of a diversified portfolio of investment grade bonds issued by companies.
(E)  This class includes commingled funds that primarily invest in investment grade corporate securities and government-related securities.  This class also 

includes investments in non-agency collateralized mortgage obligations and mortgage-backed securities, futures and options.

(F)  Other investments consist primarily of interest rate swaps used to manage the average duration of the fixed income portfolio and credit default swaps to 

manage credit risk exposure.

(G) This class includes interest receivable and receivables/payables for securities sold/purchased.

89

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

The fair values of the Trust's pension assets at December 31, 2015, by asset class were as follows:

(in millions)

Investments at fair value
Short-term investments
Fixed-income securities:
Government securities (C)
Corporate securities (D)
Other investments (F)

Total investments at fair value

Investments at net asset value

Short-term investments
Equity securities (B)
United States
International
Fixed-income securities:
Commingled funds (E)
Total investments at net asset value
Other liabilities (G)
Total pension plan net assets

Fair Value Measurements at December 31, 2015 (A)

Quoted Prices
in Active
Markets for
Identical Assets

Total

(Level 1)

Significant
Observable
Inputs

(Level 2)

0.5

$

0.5

$

—

—
—
—
0.5

$

124.8
415.8
(1.0)
539.6

124.8
415.8
(1.0)
540.1

$

26.2

129.1
21.0

37.3
213.6
(17.3)
736.4

$

$

$

(A) See Note 7 – Fair Value Measurements for a description of levels within the fair value hierarchy.  The level in the fair value hierarchy within which 
the fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measurement in its entirety.  A 
description of the valuation methodologies is provided following these tables.  There were no transfers in and/or out of Level 1, Level 2 and Level 3 in 
2015.

(B)  The equity assets are invested in two indexed funds based on the Russell 3000 Index (U.S.) and the MSCI EAFE Equity Index (International). The Trust 

did not directly own any of the Company's common stock as of December 31, 2015.

(C)  Government securities are comprised of U.S. Treasury bonds and other government securities.
(D) Corporate securities consist primarily of a diversified portfolio of investment grade bonds issued by companies.
(E)  This class includes commingled funds that primarily invest in investment grade corporate securities and government-related securities.  This class also 

includes investments in non-agency collateralized mortgage obligations and mortgage-backed securities, futures and options.
(F)  Other investments consist primarily of interest rate swaps used to manage the average duration of the fixed income portfolio.
(G) This class includes interest receivable and receivables/payables for securities sold/purchased.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value. See Note 
7  –  Fair  Value  Measurements  for  further  description  of  the  procedures  the  Company  performs  with  respect  to  its  Level  2 
measurements:

Equity securities:  The indexed equity funds are valued at the net asset value (NAV) provided by the investment managers. 
The NAV is based on the quoted market value of the underlying assets owned by the fund, minus its liabilities, divided by the 
number of units outstanding. The indexed equity funds are invested in portfolios of equity securities with the goal of matching 
returns to specific indices. Investments in United States equity securities are invested in an index fund that tracks the Russell 3000 
index, which is an all cap market index. International equities are invested in an index fund that tracks the MSCI EAFE index, 
which is an index that tracks international equity markets of developed countries worldwide. Withdrawal from the United States 
equity fund is  permitted with a one-day notice prior to the trade date with subsequent settlement three days after the trade date. 
Withdrawal from the international equity fund is permitted daily with a two-day notice prior to the trade date with subsequent 
settlement three days after the trade date.

Corporate debt securities:  Corporate debt securities are valued based on prices provided by third-party pricing sources, which 

are based on estimated prices at which a dealer would pay for or sell a security.

90

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Government debt securities: U.S. Treasury bonds are valued using quoted market prices in active markets. Other agency 
securities are valued based on prices provided by third-party pricing sources, which are based on estimated prices at which a dealer 
would pay for or sell a security. 

Short-term investments, commingled funds:  Short-term investments and commingled funds are valued at the NAV provided 
by the investment managers. The NAV is based on the quoted market value of the underlying assets owned by the fund, minus its 
liabilities, divided by the number of units outstanding.  Investments in fixed income commingled funds include long-duration 
corporate bonds and government-related securities with the goal of preserving capital and maximizing total return consistent with 
prudent investment management.

Other investments:  Exchange-traded derivative instruments are valued using market indices.  The fair value of derivatives 

that are not traded on an exchange are based on valuation models using observable market data as of the measurement date.

There were no pension plan assets using significant unobservable inputs (Level 3) for the years ended December 31, 2016

and December 31, 2015.

Expected Cash Flows.  The expected cash flows for the Company's pension and other postretirement benefit plans follow:

(in millions)
Company contributions expected to be made in 2017 (A)
Expected benefit payments:
2017 (B)
2018
2019
2020
2021
2022-2026

Pension
Benefits

Other
Postretirement
Benefits

$

73.8

$

158.7
56.8
56.9
56.6
56.0
270.0

4.1

4.1
3.9
3.7
3.4
3.1
13.2

(A) The Company anticipates contributing approximately $70.0 million to fund the qualified pension plans and approximately $3.8 million to cover benefit 
payments in the unfunded, nonqualified pension plan in 2017. Company contributions are subject to change based on market conditions or Company 
discretion. 

(B) Expected benefit payments in 2017 include payments in connection with the Hourly Plan and Muskegon Plan terminations.

Note 18 – Stock Plans and Management Compensation 

Under the Brunswick Corporation 2014 Stock Incentive Plan, the Company may grant stock options, stock appreciation rights 
(SARs), non-vested stock awards and performance awards to executives, other employees and non-employee directors, with 5.0 
million shares 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; or (ii) shares not issued upon the net settlement of SARs; (iii) shares delivered to or 
withheld by the Company to pay the withholding taxes related to awards. As of December 31, 2016, 5.5 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. Non-vested stock units and 
awards  have  vesting  periods  of  three  or  four  years.  Non-vested  stock  units  and  awards  are  eligible  for  dividends,  which  are 
reinvested, and are non-voting. All non-vested units and awards have restrictions on the sale or transfer of such awards during the 
vesting period. 

Generally, grants of non-vested stock units and awards are forfeited if employment is terminated prior to vesting. Non-vested 
stock units and awards vest pro rata over one year if (i) the grantee has attained the age of 62, or (ii) the grantee's age plus total 
years of service equals 70 or more.

91

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

The Company recognizes the cost of non-vested stock units and awards on a straight-line basis over the requisite service 
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 December 31, 2016, 2015 and 2014, the Company 
charged $10.8 million, $13.6 million and $10.5 million, respectively, to compensation expense for non-vested stock units and 
awards. The  related  income  tax  benefit  recognized  in  2016,  2015  and  2014  was  $4.1  million,  $5.2  million  and  $4.0  million, 
respectively. The fair value of shares vested during 2016, 2015 and 2014 was $13.8 million, $20.4 million and $14.1 million, 
respectively. 

The weighted average price per Non-vested stock award at grant date was $40.01, $53.77 and $40.41 for awards granted in 

2016, 2015 and 2014, respectively. Non-vested stock award activity for the year ended December 31, 2016 was as follows:

(in thousands, except grant date fair value)
Non-vested awards, unvested at January 1
Awarded
Forfeited
Vested
Non-vested awards, unvested at December 31

Non-vested
Stock Award
Activity

Weighted
Average
Grant Date
Fair Value

322
332
(22)
(253)
379

$

$

44.46
40.01
42.11
40.48
43.35

As of December 31, 2016, there was $6.5 million of total unrecognized compensation expense related to non-vested stock 

awards. The Company expects this expense to be recognized over a weighted average period of 1.3 years.

Stock Options and SARs

Through 2004, the Company issued stock options, and between 2005 and 2012, the Company issued stock-settled SARs.   
Generally, stock options and SARs are exercisable over a period of 10 years, or as otherwise determined by management and the 
Human Resources and Compensation Committee of the Board of Directors, and subject to vesting periods of generally 4 years. 
However, with respect to stock options and SARs, all grants vest immediately: (i) in the event of a change in control; (ii) upon 
death or disability of the grantee; or (iii) with respect to awards granted prior to 2008, upon the sale or divestiture of the business 
unit to which the grantee is assigned.

In addition, grantees continue to vest in accordance with the vesting schedule even upon termination if (i) the grantee has 
attained the age of 62, or (ii) the grantee's age plus total years of service equals 70 or more. An additional provision applies that 
prorates the grant in the event of termination prior to the first anniversary of the date of grant, provided the participant had met 
the appropriate retirement age definition of rule of 70 or age 62. 

SARs and stock option activity for all plans for the years ended December 31, 2016, 2015 and 2014, was as follows:

(in thousands,
except exercise
price and terms)

SARs/Stock
Options
Outstanding

2016

Weighted
Average
Exercise
Price

Weighted
Average
Remaining 
Contractual 
Term

Aggregate 
Intrinsic 
Value

SARs/Stock
Options
Outstanding

2015

Weighted
Average
Exercise
Price

Aggregate 
Intrinsic 
Value

SARs/Stock
Options
Outstanding

2014

Weighted
Average
Exercise
Price

Aggregate 
Intrinsic 
Value

Outstanding on 
January 1

Exercised

Forfeited

Outstanding on 
December 31

Exercisable on 
December 31

Vested and 
expected to vest 
on December 31

2,234

$ 15.78

(1,252) $ 16.76

(4) $ 38.42

2,705

$ 16.91

3,825

$ 19.09

$ 32,096

(464) $ 22.15

$ 14,615

(1,084) $ 24.02

$ 23,611

(7) $ 29.99

(36) $ 35.10

978

$ 14.43

3.2 years

$ 39,228

2,234

$ 15.78

$ 77,580

2,705

$ 16.91

$ 92,908

978

$ 14.43

3.2 years

$ 39,228

2,151

$ 15.47

$ 75,372

2,294

$ 16.03

$ 80,809

978

$ 14.43

3.2 years

$ 39,288

2,234

$ 15.78

$ 77,580

2,705

$ 16.91

$ 92,908

92

 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

The following table summarizes information about SARs and stock options outstanding as of December 31, 2016:

Outstanding

Weighted
Average 
Remaining 
Years of
Contractual
Life

Weighted
Average
Exercise
Price

2.3 years $
3.1 years $
4.0 years $

5.24
12.54
22.45

Number
(in thousands)
237
379
362

Exercisable

Weighted
Average 
Remaining 
Years of
Contractual
Life

Weighted
Average
Exercise
Price

2.3 years $
3.1 years $
4.0 years $

5.24
12.54
22.45

Range of Exercise
Price

$3.37 to $5.99
$6.00 to $19.90
$19.91 to $39.56

Number
(in thousands)
237
379
362

Total stock option and SARs expense for the year ended December 31, 2016 was nominal. Total stock option and SARs 

expense for the years ended December 31, 2015 and 2014 was $0.3 million and $1.3 million, respectively.

Performance Awards

In February 2016, 2015 and 2014, the Company granted performance shares to certain senior executives. The 2016 and 2015 
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. The 2014 share awards are based on a CFROI measure and a TSR 
modifier. Performance shares are earned based on a three-year performance period, except for the CFROI measure for the 2014 
awards which is based on a one-year performance period. Performance periods commence at the beginning of the calendar year 
of each grant. The performance shares are then subject to a TSR modifier based on stock returns measured against stock returns 
of a predefined comparator group over the three-year performance period. Additionally, in February 2016, 2015 and 2014, the 
Company granted 37,430, 22,990, and 24,600 performance shares, respectively, to certain officers and certain senior managers 
based on the respective measures and performance periods described above but excluding a TSR modifier. 

The fair values of the senior executives' performance share award grants with a TSR modifier at the grant date in 2016, 2015
and  2014  were  $38.54,  $56.17  and  $41.38,  respectively,  which  were  estimated  using  the  Monte  Carlo  valuation  model,  and 
incorporated the following assumptions:

Risk-free interest rate

Dividend yield

Volatility factor

Expected life of award

2016

2015

2014

0.8%

1.0%

40.8%

1.0%

0.9%

39.2%

0.6%

1.0%

43.7%

2.9 years

2.9 years

2.9 years

The fair value of certain officers' and certain senior managers' performance awards granted based solely on the CFROI and 
OM performance factors, as applicable, was $37.76, $52.39 and $40.44, which was equal to the stock price on the date of grant 
in 2016, 2015 and 2014, respectively, less the present value of dividend payments over the vesting period.

The Company recorded compensation expense related to performance awards of $6.1 million, $8.0 million and $6.5 million 
in 2016, 2015 and 2014, respectively. The related income tax benefit recognized in 2016, 2015 and 2014 was $2.3 million, $3.0 
million and $2.5 million, respectively. The fair value of awards vested during 2016, 2015 and 2014 was $9.1 million, $7.5 million
and $7.4 million, respectively. 

93

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Performance award activity for the year ended December 31, 2016 was as follows:

(in thousands, except grant date fair value)
Performance awards, unvested at January 1
Awarded
Forfeited
Vested
Performance awards, unvested at December 31

Performance
Awards

50
217
(9)
(167)
91

Weighted
Average
Grant Date
Fair Value
49.39
$
37.99
38.49
38.15
43.91

$

As of December 31, 2016, the Company had $2.2 million of total unrecognized compensation expense related to performance 

awards. The Company expects this expense to be recognized over a weighted average period of 1.6 years.

Excess Tax Benefits

For tax purposes, share-based compensation expense is deductible in the year of exercise or release based on the intrinsic 
value of the award on the date of exercise or release. For financial reporting purposes, share-based compensation expense is based 
upon grant-date fair value, which is amortized over the vesting period. Excess or "windfall" tax benefits represent the excess tax 
deduction received by the Company resulting from the difference between the share-based compensation expense deductible for 
tax purposes and the share-based compensation expense recognized for financial reporting purposes. Windfall tax benefits are 
recorded directly to Additional paid-in capital in Shareholders' equity on the Company's Consolidated Balance Sheets. Windfall 
tax benefits for the years ended December 31, 2016, 2015 and 2014 were $13.4 million, $7.0 million and $8.4 million, respectively, 
and are netted out of cash from operating activities and are reflected as a cash inflow from financing activities in the Consolidated 
Statements of Cash Flows. 

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 units with a 20 percent premium.

94

 
BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 19 – Comprehensive Income 

The following table presents reclassification adjustments out of Accumulated other comprehensive loss during the years ended 

December 31, 2016, 2015 and 2014: 

(in millions)

Twelve Months Ended

Details about Accumulated other
comprehensive loss components
Amount of loss reclassified into
earnings on foreign currency:

Foreign currency cumulative
translation adjustment

Amortization of defined benefit

items:

Prior service credits

Net actuarial losses

Amount of gain (loss) reclassified

into earnings on derivative
contracts:

Interest rate contracts

Foreign exchange contracts
Commodity contracts

$

$

$

$

$

$

December 31,
2016

December 31,
2015

December 31,
2014

Affected line item in the statement where
net income is presented

— $
—
—
— $

— $
—
—
— $

Loss on disposal of discontinued
operations, net of tax

(1.2)
(1.2) Total before tax
0.5 Tax benefit
(0.7) Net of tax

0.7

$

(73.1)

(72.4)

27.5
(44.9) $

$

1.3
(103.8)
(102.5)
39.7
(62.8) $

(A)

(A)

2.2
(43.3)
(41.1) Total before tax
16.7 Tax benefit
(24.4) Net of tax

(0.6) $
3.3
(0.5)

2.2
(0.4)

1.8

$

(0.1) $
12.2
0.7
12.8
(4.0)
8.8

$

Interest expense

(0.1)
(0.2) Cost of sales
(1.9) Cost of sales
(2.2) Total before tax
0.8 Tax (provision) benefit
(1.4) Net of tax

(A) These Accumulated other comprehensive income (loss) components are included in the computation of net pension and other benefit costs. See Note 17 

– Postretirement Benefits for additional details. 

Note 20 – Treasury and Preferred Stock 

The Company has executed share repurchases against authorization approved by the Board of Directors in 2014 and 2016. In 
2016, the Company repurchased $120 million of stock under these authorizations and as of December 31, 2016, the remaining 
authorization was $240 million.

Treasury stock activity for the years ended December 31, 2016, 2015 and 2014, was as follows:

(Shares in thousands)
Balance at January 1

Compensation plans and other

Share repurchases

Balance at December 31

2016

2015

2014

11,725
(1,199)
2,695

13,221

9,844
(458)
2,339

11,725

10,129
(697)
412

9,844

95

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 21 – Leases 

Operating Leases.  The Company has lease agreements for offices, branches, factories, distribution and service facilities and 
certain personal property. The longest of these obligations extends through 2032.  Most leases contain renewal options and escalation 
clauses,  and  some  contain  purchase  options  or  contingent  rentals.  No  leases  contain  restrictions  on  the  Company's  activities 
concerning dividends or incurring additional debt.  

Rent expense consisted of the following:

(in millions)
Basic expense
Contingent expense
Sublease income
Rent expense, net

2016

2015

2014

$

$

37.2
2.0
(0.2)
39.0

$

$

31.6
2.8
(0.3)
34.1

$

$

27.8
1.9
(0.2)
29.5

Future minimum rental payments at December 31, 2016, under agreements classified as operating leases with non-cancelable 

terms in excess of one year, were as follows:

(in millions)
2017
2018
2019
2020
2021
Thereafter

Total (not reduced by minimum sublease income of $0.3)

$

$

37.6
31.5
24.5
14.0
10.5
33.2
151.3

96

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 22 – Quarterly Data (unaudited) 

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 three 
quarters of fiscal year 2016 ended on April 2, 2016, July 2, 2016, and October 1, 2016, and the first three quarters of fiscal year 
2015 ended on April 4, 2015, July 4, 2015, and October 3, 2015.

$

(in millions, except per share data)
Net sales
Gross margin (A)
Pension settlement charge (B)
Restructuring, integration and impairment charges (C)
Net earnings from continuing operations
Net earnings (loss) from discontinued operations, net 
of tax (D)
Net earnings
Basic earnings (loss) per common share:
   Net earnings from continuing operations
$
   Net earnings (loss) from discontinued operations (D) $
      Net earnings
$
Diluted earnings (loss) per common share:
   Net earnings from continuing operations
$
   Net earnings (loss) from discontinued operations (D) $
$
      Net earnings
Dividends declared
$
Common stock price (NYSE symbol: BC):
High
Low

$
$

Quarter Ended

July 2,
2016
1,242.2
353.3
—
2.6
108.1
(0.0)
108.1

$

October 1,
2016
1,093.0
309.7
—
2.4
85.3
0.1
85.4

$

December 31,
2016
1,083.0
280.0
55.1
6.8
17.8
(0.1)
17.7

$

Year Ended
December 31,
2016
4,488.5
1,225.1
55.1
15.6
274.4
1.6
276.0

1.18
$
(0.00) $
$
1.18

1.17
$
(0.00) $
$
1.17
$
0.15

0.94
0.00
0.94

0.93
0.00
0.93
0.15

51.59
41.19

$
$

50.96
44.10

$
$
$

$
$
$
$

$
$

0.20
$
(0.00) $
$
0.20

0.19
$
(0.00) $
$
0.19
$
0.165

56.30
42.02

$
$

3.01
0.02
3.03

2.98
0.02
3.00
0.615

56.30
36.05

April 2,
2016
1,070.3
282.1
—
3.8
63.2
1.6
64.8

0.69
0.02
0.71

0.68
0.02
0.70
0.15

50.31
36.05

$

$
$
$

$
$
$
$

$
$

97

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Quarter Ended

$

(in millions, except per share data)
Net sales
Gross margin (A)
Pension settlement charge (B)
Restructuring, integration and impairment charges (C)
Net earnings (loss) from continuing operations
Net earnings (loss) from discontinued operations, net 
of tax (D)
Net earnings (loss)
Basic earnings (loss) per common share:
   Net earnings (loss) from continuing operations
$
   Net earnings (loss) from discontinued operations (D) $
      Net earnings (loss)
$
Diluted earnings (loss) per common share:
$
   Net earnings (loss) from continuing operations
   Net earnings (loss) from discontinued operations (D) $
$
      Net earnings (loss)
Dividends declared
$
Common stock price (NYSE symbol: BC):
High
Low

$
$

April 4,
2015

985.7
258.8
—
—
56.6
0.4
57.0

0.60
0.01
0.61

0.59
0.01
0.60
0.125

56.63
50.03

July 4,
2015
1,142.0
324.4
—
—
107.6
10.2
117.8

1.15
0.11
1.26

1.14
0.11
1.25
0.125

56.03
49.79

$

$
$
$

$
$
$
$

$
$

$

$
$
$

$
$
$
$

$
$

October 3,
2015

December 31,
2015

$

Year Ended
December 31,
2015
4,105.7
1,114.6
82.3
12.4
227.4
14.0
241.4

986.1
249.7
82.3
12.4
(9.0)
(0.3)
(9.3)

(0.10) $
(0.00) $
(0.10) $

(0.10) $
(0.00) $
(0.10) $
$
0.15

55.65
47.51

$
$

2.45
0.15
2.60

2.41
0.15
2.56
0.525

56.63
46.08

991.9
281.7
—
—
72.2
3.7
75.9

0.78
0.04
0.82

0.77
0.04
0.81
0.125

55.76
46.08

$

$
$
$

$
$
$
$

$
$

(A) Gross margin is defined as Net sales less Cost of sales as presented in the Consolidated Statements of Operations.
(B) Pension settlement charges are discussed in Note 17 – Postretirement Benefits in the Notes to Consolidated Financial Statements.
(C) Restructuring, integration and impairment charges are discussed in Note 3 – Restructuring, Integration and Impairment Activities in the Notes to 

Consolidated Financial Statements.

(D) Certain quarterly earnings and earnings per share numbers include gains on the disposal of the bowling products business in 2015. Refer to Note 2 –

Discontinued Operations in the Notes to Consolidated Financial Statements.

Note 23 – Subsequent Events 

On February 16, 2017, the Company's Board of Directors declared a quarterly dividend on its common stock of $0.165 per 

share. The dividend will be payable March 15, 2017 to shareholders of record on February 28, 2017.

98

BRUNSWICK CORPORATION
Schedule II - Valuation and Qualifying Accounts

(in millions)

Allowances for
Losses on 
Receivables
2016

Balance at
Beginning
of Year

Charges to
Profit and
Loss

Write-offs Recoveries Acquisitions

Other

Balance at
End of 
Year

$

13.8

$

(0.5) $

(2.3) $

0.3

$

1.4

$

0.1

$

12.8

2015

2014

16.3

16.8

3.8

—

(4.7)

(4.8)

0.3

0.3

—

—

(1.9)

4.0

13.8

16.3

Deferred Tax Asset
Valuation Allowance

Balance at
Beginning
of Year

Charges to
Profit and 
Loss(A)

Write-offs Recoveries

Other(A)

Balance at
End of 
Year

2016

2015

2014

$

70.6

$

3.4

$

— $

— $

4.1

$

78.1

69.0

88.2

5.3

(7.6)

—

—

—

—

(3.7)

(11.6)

70.6

69.0

(A) For the year ended December 31, 2016 and 2015, the deferred tax asset valuation allowance increased mainly as a result of additional tax losses in foreign 
jurisdictions. For the year ended December 31, 2014, the deferred tax asset valuation allowance decreased mainly as a result of tax loss carryforwards 
being utilized.

Item 16.  Form 10-K Summary

None.

99

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly 

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

February 17, 2017

BRUNSWICK CORPORATION

By:

/S/ DANIEL J. TANNER

Daniel J. Tanner
Vice President and Controller

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following 

persons on behalf of the registrant and in the capacities and on the date indicated.

February 17, 2017

February 17, 2017

February 17, 2017

By:

/S/ MARK D. SCHWABERO
Mark D. Schwabero
Chairman and Chief Executive Officer
(Principal Executive Officer)

By:

/s/ WILLIAM L. METZGER

William L. Metzger

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

By:

/s/ DANIEL J. TANNER

Daniel J. Tanner

Vice President and Controller

(Principal Accounting Officer)

This report has been signed by the following directors, constituting the remainder of the Board of Directors, by William L. 

Metzger, as Attorney-in-Fact.

Nolan D. Archibald
Nancy E. Cooper
David C. Everitt
Manuel A. Fernandez
Mark D. Schwabero
David V. Singer
Ralph C. Stayer
Jane L. Warner
J. Steven Whisler
Roger J. Wood

February 17, 2017

By:

/s/ WILLIAM L. METZGER

William L. Metzger

Attorney-in-Fact

100

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exhibit No.
3.1

3.2

3.3

4.1

4.2

4.3

4.4

4.5

4.6

4.7

10.1

10.2*

10.3*

10.4*

10.5*

EXHIBIT INDEX

Description
Restated Certificate of Incorporation of the Company, dated July 22, 1987, filed as Exhibit 19.2 to
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1987, as filed with
the Securities and Exchange Commission, and hereby incorporated by reference.
Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock,
filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for 1995 as filed with the
Securities and Exchange Commission on March 23, 1995, and hereby incorporated by reference.
Amended By-Laws of the Company, filed as Exhibit 3.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended April 2, 2016 as filed with the Securities and Exchange
Commission on May 5, 2016, and hereby incorporated by reference.
Indenture dated as of March 15, 1987, between the Company and Continental Illinois National
Bank and Trust Company of Chicago, filed as Exhibit 4.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1987, and hereby incorporated by reference.
Officers' Certificate setting forth terms of the Company's $125,000,000 principal amount of 7 3/8%
Debentures due September 1, 2023, filed as Exhibit 4.3 to the Company's Annual Report on Form
10-K for 1993 as filed with the Securities and Exchange Commission on March 29, 1994, and
hereby incorporated by reference.
Form of the Company's $200,000,000 principal amount of 7 1/8% Notes due August 1, 2027, filed
as Exhibit 4.1 to the Company's Current Report on Form 8-K as filed with the Securities and
Exchange Commission on August 21, 1997, and hereby incorporated by reference.
The Company's agreement to furnish additional debt instruments upon request by the Securities
and Exchange Commission, filed as Exhibit 4.10 to the Company's Annual Report on Form 10-K
for 1980, and hereby incorporated by reference.
Indenture, dated as of May 13, 2013, between the Company, the subsidiary guarantors party thereto
and U.S. Bank National Association, as trustee as filed as Exhibit 4.1 to the Company's Current
Report on Form 8-K as filed with the Securities and Exchange Commission on May 13, 2013 and
hereby incorporated by reference.
Form of the Company's 4.625% Senior notes due 2021, filed as Exhibit 4.2 (included in Exhibit
4.1) to the Company's Current Report on Form 8-K as filed with the Securities and Exchange
Commission on May 13, 2013 and hereby incorporated by reference.

First Supplemental Indenture, dated May 22, 2014, to the Indenture between the Company, the
subsidiary guarantors party thereto and U.S. Bank National Association, as trustee dated May 13,
2013, filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 28, 2014, as filed with the Securities and Exchange Commission on July 31, 2014 and hereby
incorporated by reference.

Amended and Restated Credit Agreement dated as of March 21, 2011, as Amended and Restated as
of June 26, 2014, as further amended and restated as of June 30, 2016, among Brunswick
Corporation, the subsidiary borrowers party thereto, the guarantors party thereto, the lenders party
thereto and JPMorgan Chase Bank, N.A., as administrative agent, J.P. Morgan Chase Bank, N.A.,
Merill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, as joint lead
arrangers and joint bookrunners, Bank of America, N.A. and Wells Fargo Bank, N.A., as
syndication agents, and SunTrust Bank, U.S. Bank National Association and Citizens Bank N.A.,
as documentation agents, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q
for the quarter ended June 2, 2016, as filed with the Securities and Exchange Commission on
August 3, 2016 and hereby incorporated by reference.

Form of Officer Terms and Conditions of Employment, reflecting amendments through January 1,
2014.
Brunswick Corporation Supplemental Pension Plan as amended and restated effective February 3,
2009, filed as Exhibit 10.8 to the Company's Annual Report on Form 10-K for 2008 as filed with
the Securities and Exchange Commission on February 24, 2009, and hereby incorporated by
reference.
Form of Non-Employee Director Indemnification Agreement, filed as Exhibit 10.5 to the
Company's Annual Report on Form 10-K for 2006 as filed with the Securities and Exchange
Commission on February 23, 2007, and hereby incorporated by reference.
Brunswick Corporation 2003 Stock Incentive Plan, as amended and restated, filed as Exhibit 10.2
to the Company's Quarterly Report on Form 10-Q for the quarter ended April 3, 2010, as filed with
the Securities and Exchange Commission on May 7, 2010, and hereby incorporated by reference.

101

10.6*

10.7*

10.8*

10.9*

10.10*

10.11*

10.12*

10.13*

10.14*

10.15*

10.16*

10.17*

10.18*

10.19*

10.20*

10.21*

1997 Stock Plan for Non-Employee Directors, filed as Exhibit 10.3 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1998, as filed with the Securities and
Exchange Commission on November 13, 1998, and hereby incorporated by reference.
Brunswick Corporation 2005 Elective Deferred Compensation Plan as amended and restated
effective January 1, 2013, filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 2012, as filed with the Securities and Exchange Commission on
August 3, 2012, and hereby incorporated by reference.
Brunswick Corporation 2005 Automatic Deferred Compensation Plan as amended and restated
effective January 1, 2014, filed as Exhibit 10.8 to the Company's Annual Report on Form 10-K for
2014 as filed with the Securities and Exchange Commission on February 20, 2015 and hereby
incorporated by reference.

Brunswick Restoration Plan, as amended and restated effective January 1, 2013, filed as Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, as filed
with the Securities and Exchange Commission on August 3, 2012, and hereby incorporated by
reference.
Brunswick Corporation Senior Management Incentive Plan, filed as Exhibit 10.9 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 30, 2013, as filed with the Securities
and Exchange Commission on May 1, 2013, and hereby incorporated by reference.

2014 Performance Share Grant Terms and Conditions Pursuant to the Brunswick Corporation 2003
Stock Incentive Plan, filed as Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 29, 2014, as filed with the Securities and Exchange Commission on April
30, 2014, and hereby incorporated by reference.

2014 Performance Share Grant Terms and Conditions Pursuant to the Brunswick Corporation 2003
Stock Incentive Plan - TSR Participants, filed as Exhibit 10.5 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 29, 2014, as filed with the Securities and Exchange
Commission on April 30, 2014, and hereby incorporated by reference.

2014 Cash-Settled Restricted Stock Unit Grant Terms and Conditions Pursuant to the Brunswick
Corporation 2003 Stock Incentive Plan, filed as Exhibit 10.7 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 29, 2014, as filed with the Securities and Exchange
Commission on April 30, 2014, and hereby incorporated by reference.

2014 Stock-Settled Restricted Stock Unit Grant Terms and Conditions Pursuant to the Brunswick
Corporation 2003 Stock Incentive Plan, filed as Exhibit 10.8 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 29, 2014, as filed with the Securities and Exchange
Commission on April 30, 2014, and hereby incorporated by reference.

Brunswick Corporation 2014 Stock Incentive Plan, filed as Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 28, 2014, as filed with the Securities
and Exchange Commission on July 31, 2014 and hereby incorporated by reference.

2015 Stock-Settled Restricted Stock Unit Grant Terms and Conditions Pursuant to the Brunswick
Corporation 2014 Stock Incentive Plan, filed as Exhibit 10.4 to the Company's Quarterly Report on
Form 10-Q for the quarter ended April 4, 2015, as filed with the Securities and Exchange
Commission on May 7, 2015, and hereby incorporated by reference.

2015 Cash-Settled Restricted Stock Unit Grant Terms and Conditions Pursuant to the Brunswick
Corporation 2014 Stock Incentive Plan, filed as Exhibit 10.5 to the Company's Quarterly Report on
Form 10-Q for the quarter ended April 4, 2015, as filed with the Securities and Exchange
Commission on May 7, 2015, and hereby incorporated by reference.

2015 Performance Share Grant Terms and Conditions Pursuant to the Brunswick Corporation 2014
Stock Incentive Plan, filed as Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for
the quarter ended April 4, 2015, as filed with the Securities and Exchange Commission on May 7,
2015, and hereby incorporated by reference.

2015 Performance Share Grant Terms and Conditions Pursuant to the Brunswick Corporation 2014
Stock Incentive Plan - TSR Participants, filed as Exhibit 10.8 to the Company's Quarterly Report
on Form 10-Q for the quarter ended April 4, 2015, as filed with the Securities and Exchange
Commission on May 7, 2015, and hereby incorporated by reference.
2016 Brunswick Performance Plan, filed as Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended April 2, 2016, as filed with the Securities and Exchange
Commission on May 5, 2016, and hereby incorporated by reference.

2016 Brunswick Performance Plan - Senior Management Incentive Plan Participants, filed as
Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended April 2, 2016,
as filed with the Securities and Exchange Commission on May 5, 2016, and hereby incorporated by
reference.

102

10.22*

10.23*

10.24*

10.25*

10.26*

10.27*

10.28*

12.1
21.1
23.1
24.1
31.1

31.2
32.1

32.2
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE

2016 Brunswick Performance Plan - Performance Share Plan Participants, filed as Exhibit 10.3 to
the Company's Quarterly Report on Form 10-Q for the quarter ended April 2, 2016, as filed with
the Securities and Exchange Commission on May 5, 2016, and hereby incorporated by reference.

Terms and Conditions of Employment agreement for Mark D. Schwabero, effective February 11,
2016, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, as filed with the
Securities and Exchange Commission on February 12, 2016, and hereby incorporated by reference.

2016 Stock-Settled Restricted Stock Unit Grant Terms and Conditions Pursuant to the Brunswick
Corporation 2014 Stock Incentive Plan, filed as Exhibit 10.4 to the Company's Quarterly Report on
Form 10-Q for the quarter ended April 2, 2016, as filed with the Securities and Exchange
Commission on May 5, 2016, and hereby incorporated by reference.

2016 Cash-Settled Restricted Stock Unit Grant Terms and Conditions Pursuant to the Brunswick
Corporation 2014 Stock Incentive Plan, filed as Exhibit 10.5 to the Company's Quarterly Report on
Form 10-Q for the quarter ended April 2, 2016, as filed with the Securities and Exchange
Commission on May 5, 2016, and hereby incorporated by reference.
2016 Stock-Settled Stock Appreciation Right Grant Terms and Conditions Pursuant to the
Brunswick Corporation 2014 Stock Incentive Plan, filed as Exhibit 10.6 to the Company's
Quarterly Report of Form 10-Q for the quarter ended April 2, 2016, as filed with the Securities and
Exchange Commission on May 5, 2016, and hereby incorporated by reference.

2016 Performance Share Grant Terms and Conditions Pursuant to the Brunswick Corporation 2014 
Stock Incentive Plan, filed as Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for 
the quarter ended April 2, 2016, as filed with the Securities and Exchange Commission on May 5, 
2016, and hereby incorporated by reference.

2016 Performance Share Grant Terms and Conditions Pursuant to the Brunswick Corporation 2014 
Stock Incentive Plan - TSR Participants, filed as Exhibit 10.8 to the Company's Quarterly Report 
on Form 10-Q for the quarter ended April 2, 2016, as filed with the Securities and Exchange 
Commission on May 5, 2016, and hereby incorporated by reference.

Statement regarding computation of ratios.
Subsidiaries of the Company.
Consent of Independent Registered Public Accounting Firm.
Power of Attorney.
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Definition Linkbase Document
XBRL Taxonomy Extension Label Linkbase Document
XBRL Taxonomy Extension Presentation Linkbase Document

*  Management contract or compensatory plan or arrangement.

103

B O A R D O F D I R E C T O R S

N O L A N D. A R C H I B A L D
Retired Executive Chairman
Stanley Black & Decker, Inc.
Director since 1995 

N A N C Y E. C O O P E R
Retired Executive Vice President 
(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)
CA Technologies, Inc.
Director since 2013

D AV I D C. E V E R I T T
Retired President, 
Agricultural and Turf 
Division – North America, 
Asia, Australia, and 
Sub–Saharan and 
South Africa, and Global Tractor 
and Turf Products
Deere & Company
Director since 2012

M A N U E L A. F E R N A N D E Z
Retired Executive Chairman
Sysco Corporation
Director since 1997 

M A R K D. S C H WA B E R O
(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)
Brunswick Corporation
Director since 2014
Employed by Brunswick Corporation

D AV I D V. S I N G E R
(cid:53)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)
Snyder’s-Lance, Inc.
Director since 2013

R A L P H C. S TAY E R
Chairman, Retired President and 
(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)
Johnsonville Sausage, LLC
Director since 2002

J A N E L. W A R N E R
Retired Executive Vice President - Decorative 
Surfaces and Finishing Systems
Illinois Tool Works Inc.
Director since 2015

J. S T E V E N W H I S L E R
Retired Chairman and 
(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)
Phelps Dodge Corporation
Director since 2007

R O G E R J .  W O O D
Retired President and Chief 
(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)
Dana Holding Corporation
Director since 2012

BOARD COMMITTEES

AUDIT COMMITTEE

Nancy E. Cooper*
David V. Singer
Ralph C. Stayer
Roger J. Wood

FINANCE COMMITTEE

Nolan D. Archibald*
David V. Singer
Ralph C. Stayer
Jane L. Warner
Roger J. Wood

HUMAN RESOURCES AND COMPENSATION COMMITTEE

J. Steven Whisler*
David C. Everitt
Manuel A. Fernandez

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

Manuel A. Fernandez*
David C. Everitt
Jane L. Warner
J. Steven Whisler

QUALIFIED LEGAL COMPLIANCE COMMITTEE

Manuel A. Fernandez*
Nancy E. Cooper
David C. Everitt
Jane L. Warner
J. Steven Whisler

*  Committee Chair

O F F I C E R S O F T H E C O M PA N Y

M A R K D. S C H WA B E R O
(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)

W I L L I A M L. M E T Z G E R
(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)

R A N D A L L S. A LT M A N
Vice President and Treasurer

J E F F RY K. B E H A N
Vice President – Corporate Strategy

H U W S. B O W E R
Vice President and President – Brunswick Boat Group

D A N I E L L E B R O W N
(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:177)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:44)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)

B R E N T G.  D A H L
Vice President – Internal Audit

C H R I S T O P H E R F. D E K K E R
Vice President, General Counsel and Secretary

D AV I D M. F O U L K E S
(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:55)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)

W I L L I A M  J. G R E S S
Vice President and President – South America – Mercury Marine

K E V I N S. G R O D Z K I
Vice President – Communications and Public Affairs

P H I L L I P C. H A A N
Vice President – Investor Relations

J A I M E A. I R I C K
Vice President and President – Fitness

J O H N C. P F E I F E R
Vice President and President – Mercury Marine

B R E N N A P R E I S S E R
(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:43)(cid:88)(cid:80)(cid:68)(cid:81)(cid:3)(cid:53)(cid:72)(cid:86)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:86)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)

D A N I E L  J .  T A N N E R
Vice President and Controller

J U D I T H P. Z E L I S K O
Vice President – Tax

CORPORATE INFORMATION

C O R P O R AT E O F F I C E S

Brunswick Corporation
1 North Field Court
Lake Forest, Illinois 60045–4811
Phone: (847) 735–4700
Fax: (847) 735–4765
www.brunswick.com

S T O C K E X C H A N G E L I S T I N G S

Brunswick  common  stock  is  listed  and  traded  on  the  New 
York and Chicago Stock Exchanges under the ticker symbol 
BC.

C E RT I F I C AT I O N

(cid:37)(cid:85)(cid:88)(cid:81)(cid:86)(cid:90)(cid:76)(cid:70)(cid:78)(cid:182)(cid:86)(cid:3) (cid:70)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:82)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)(cid:3) (cid:75)(cid:68)(cid:86)(cid:3) (cid:191)(cid:79)(cid:72)(cid:71)(cid:3) (cid:68)(cid:3) (cid:70)(cid:72)(cid:85)(cid:87)(cid:76)(cid:191)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
with  the  New  York  Stock  Exchange  stating  that  he  is  not 
aware of any violation by the Company of NYSE Corporate 
Governance  listing  standards.  That  document  was  most 
(cid:85)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:191)(cid:79)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81) May 6, 2016.

A N N U A L M E E T I N G O F S H A R E H O L D E R S

Brunswick’s annual meeting of shareholders will be held on 
May 3, 2017. Details are included in the Proxy Statement.

I N V E S T O R A N D M E D I A I N Q U I R I E S

analysts, 

investors 

institutional 

Securities 
and  media 
representatives requesting information about the Company should 
(cid:70)(cid:82)(cid:81)(cid:87)(cid:68)(cid:70)(cid:87)(cid:3) (cid:44)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:3) (cid:53)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:69)(cid:92)(cid:3) (cid:80)(cid:68)(cid:76)(cid:79)(cid:3) (cid:68)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3) (cid:82)(cid:73)(cid:191)(cid:70)(cid:72)(cid:86)(cid:15)(cid:3) (cid:69)(cid:92)(cid:3)
phone at (847) 735–4374, by fax at (847) 735–4750 or by e-mail at
services@brunswick.com.

T R A N S F E R A G E N T A N D R E G I S T R A R

Shareholders  requesting  information  on  electronic  dividend 
deposits,  transfers,  address  or  ownership  changes,  account 
consolidation  or  the  investment  plan  should  contact  the 
transfer agent and registrar at:

Computershare Investor Services

P. O. Box 30170
College Station, TX 77842-3170
Shareholder online inquiries
https://www-us.computershare.com/investor/contact
(800) 546-9420 - Toll free within the United States, Canada 
and Puerto Rico
+1 (781) 575-4313 - Outside the United States, Canada and 
Puerto Rico
www.computershare.com/investor

D I V I D E N D S

Dividends are paid on a quarterly basis, subject to approval 
by  the  Board  of  Directors,  generally  in  March,  June, 
September  and  December.  Shareholders  are  welcome  to 
participate  in  Brunswick’s  Investor  Plan  by  contacting  the 
plan  administrator,  Computershare  Investor  Services.  The 
plan  provides  for  automatic  reinvestment  of  dividends  into 
shares  of  Brunswick  common  stock  and  allows  for  initial 
and additional stock purchases. Shareholders can also choose 
to  have  their  dividends  directly  deposited  into  their  bank 
accounts.  Brochures  and  enrollment  forms  are  available 
on  Computershare’s  website  at  www.computershare.com/
investor/or by contacting Computershare.

E L E C T R O N I C R E C E I P T O F P R O X Y M AT E R I A L S
A N D P R O X Y V O T I N G

If  you  are  a  shareholder  and  would  like  to  receive  this 
Annual  Report  and  Proxy  Statement  via  the  Internet,  you 
will  need  to  complete  an  online  consent  form  available 
through  the  Brunswick  website  at  www.brunswick.com/
investors/shareholderservices/electronicdelivery.php.  If  you 
have  any  questions,  please  contact  Shareholder  Services 
(cid:69)(cid:92)(cid:3) (cid:80)(cid:68)(cid:76)(cid:79)(cid:3) (cid:68)(cid:87)(cid:3) (cid:37)(cid:85)(cid:88)(cid:81)(cid:86)(cid:90)(cid:76)(cid:70)(cid:78)(cid:182)(cid:86)(cid:3) (cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3) (cid:82)(cid:73)(cid:191)(cid:70)(cid:72)(cid:86)(cid:15)(cid:3) (cid:69)(cid:92)(cid:3) (cid:83)(cid:75)(cid:82)(cid:81)(cid:72)(cid:3) (cid:68)(cid:87)(cid:3)
(847)  735–4294,  by  fax  at  (847)  735–4671  or  by  e-mail  at 
services@brunswick.com.

I N D E P E N D E N T A U D I T O R S

Deloitte & Touche LLP 
Chicago, Illinois

N O N - G A A P F I N A N C I A L M E A S U R E S

(cid:38)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:81)(cid:82)(cid:81)(cid:16)(cid:42)(cid:36)(cid:36)(cid:51)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
measures.  GAAP  refers  to  generally  accepted  accounting 
(cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:79)(cid:72)(cid:86)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3) (cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:17)(cid:3) (cid:36)(cid:3) (cid:179)(cid:81)(cid:82)(cid:81)(cid:16)(cid:42)(cid:36)(cid:36)(cid:51)(cid:3) (cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
measure”  is  a  numerical  measure  of  a  company’s  historical 
(cid:82)(cid:85)(cid:3) (cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3) (cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:15)(cid:3) (cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:85)(cid:3) (cid:70)(cid:68)(cid:86)(cid:75)(cid:3)
(cid:192)(cid:82)(cid:90)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:76)(cid:86)(cid:3)(cid:86)(cid:88)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)
have the effect of excluding amounts, that are included in the 
most  directly  comparable  measure  calculated  and  presented 
in  accordance  with  GAAP  in  the  statement  of  operations, 
(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:86)(cid:75)(cid:72)(cid:72)(cid:87)(cid:3)(cid:82)(cid:85)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:192)(cid:82)(cid:90)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:30)(cid:3)(cid:82)(cid:85)(cid:3)
includes amounts, or is subject to adjustments that have the 
effect of including amounts, that are excluded from the most 
directly  comparable  measure  so  calculated  and  presented. 
Operating  and  statistical  measures  are  not  non-GAAP 
(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:17)

Brunswick’s  management  believes 
that  non-GAAP 
(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:92)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:3)
are  useful  to  investors  because  they  permit  investors  to 
view  our  performance  using  the  same  tools  that  we  use 
and  to  better  evaluate  our  ongoing  business  performance. 
Diluted  earnings  per  common  share,  as  adjusted,  refers  to 
diluted  earnings  (loss)  per  common  share  from  continuing 
operations,  excluding  the  earnings  per  share  impact  of 
pension  settlement  charges,  restructuring,  exit,  integration 
and impairment charges, impairment charges for an equity 
method  investment,  loss  on  early  extinguishment  of  debt, 
special tax items and the results of discontinued operations. 
Adjusted  operating  earnings  refers  to  operating  earnings, 
excluding  the  earnings  impact  of  pension  settlement 
charges and restructuring, exit, integration and impairment 

charges. Adjusted  pretax  earnings  refers  to  earnings  (loss) 
before  income  taxes,  excluding  the  earnings  impact  of 
pension  settlement  charges,  restructuring,  exit,  integration 
and impairment charges, impairment charges for an equity 
method investment and the loss on early extinguishment of 
debt. 

(cid:41)(cid:85)(cid:72)(cid:72)(cid:3) (cid:70)(cid:68)(cid:86)(cid:75)(cid:3) (cid:192)(cid:82)(cid:90)(cid:3) (cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:70)(cid:68)(cid:86)(cid:75)(cid:3) (cid:192)(cid:82)(cid:90)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3)
investing  activities  (excluding  cash  provided  by  or  used 
for  acquisitions,  investments,  reductions  in  or  transfers  to 
restricted  cash,  purchases  or  sales/maturities  of  marketable 
securities and other investing activities). Percentage changes 
in net sales expressed in constant currency are presented to 
(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:70)(cid:92)(cid:3)(cid:72)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:75)(cid:68)(cid:71)(cid:3)
on net sales. To present this information, net sales transacted 
in  currencies  other  than  U.S.  dollars  are  translated  to  U.S. 
dollars using 2015 exchange rates for the comparative period, 
using the average exchange rates in effect during that period. 

F O RWA R D -L O O K I N G S TAT E M E N T S

Certain statements in this Annual Report are forward looking 
(cid:68)(cid:86)(cid:3) (cid:71)(cid:72)(cid:191)(cid:81)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:47)(cid:76)(cid:87)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:53)(cid:72)(cid:73)(cid:82)(cid:85)(cid:80)(cid:3) (cid:36)(cid:70)(cid:87)(cid:3)
of 1995. Such statements are based on current expectations, 
estimates  and  projections  about  our  business.  Forward-
looking  statements  by  their  nature  address  matters  that  are, 
to  different  degrees,  uncertain  and  often  contain  words 
such  as  “may,”  “could,”  “expect,”  “intend,”  “plan,”  “seek,” 
“estimate,”  “believe,”  “predict,”  “potential”  or  “continue.” 
These  statements  are  not  guarantees  of  future  performance 
and  involve  certain  risks  and  uncertainties  that  may  cause 
actual results to differ materially from expectations as of the 
date  of  this  report.  For  a  description  of  these  risks,  see  the 
Risk Factors section and forward-looking statements section 
in the Management’s Discussion and Analysis in the attached 
(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3) (cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:82)(cid:81)(cid:3) (cid:41)(cid:82)(cid:85)(cid:80)(cid:3) (cid:20)(cid:19)(cid:16)(cid:46)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:191)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)
December 31, 2016.

Brunswick Corporation
1 N. Field Court
Lake Forest, IL 60045-4811
Telephone 847.735.4700