Brunello Cucinelli Annual Report 2017

FY2017 Annual Report · Brunello Cucinelli

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ANNUAL REPORT

March 22, 2018

Dear Fellow Shareholders:

On behalf of our Board of Directors and the more than 15,000 employees around the world whom I am privileged to lead, thank you
for your investment and continued confidence in Brunswick Corporation. Our story dates back nearly 175 years, and we all contribute
to a long legacy of product leadership. Our team works hard every day to enhance that legacy. We are humbled and gratified by the
work.

2017 FINANCIAL PERFORMANCE

2017 marked Brunswick’s eighth consecutive year of growth, primarily resulting from strong operating performance from our marine
businesses. Highlights include the following:

•

Consolidated net sales of approximately $4.5 billion increased 9 percent versus 2016, and 8 percent on a constant currency
basis. This was due to strong growth from our outboard engine business and in all three primary boat categories, along with solid
growth in our marine parts & accessories (P&A) businesses.

• On a GAAP basis, operating earnings decreased 13 percent versus the prior year, while adjusted operating earnings were up

5 percent versus 2016.

•

Strong cash flow of $243.1 million enabled the Company to continue executing its capital strategy, which included investments
in new products as well as capacity expansions across all segments. We also completed the Lankhorst Taselaar acquisition to
expand and enhance our European marine P&A operations.

• We also enhanced shareholder returns by repurchasing $130 million of Brunswick common stock, and increased quarterly

cash dividends paid to shareholders by 15 percent in 2017.

Beyond these achievements, Brunswick continued to demonstrate its product leadership in marine and fitness markets by introducing
a variety of new products and features. In early 2018, a completely redesigned platform of V6 outboard engines was introduced by
Mercury Marine; Boston Whaler’s new 350 Realm and Lund Boats’ Impact XS aluminum fishing boats were each awarded the 2018
Innovation Award from the National Marine Manufacturers Association; and the Sea Ray SLX 400 was chosen Boating Magazine’s Boat
of the Year.

Our Fitness segment introduced a new Integrity Series cardio equipment line, including a treadmill, elliptical cross-trainer, and
upright and recumbent Lifecycle exercise bikes, as well as continuing its development and adoption of new technologies, such as
cardio equipment that pairs seamlessly and wirelessly with devices like the Apple Watch®1, so exercisers can measure and track their
performance to achieve their fitness goals and help club operators more effectively manage their facilities.

STRATEGY

In 2017, we continued to successfully execute our growth strategy, fortified by investments in new products as well as productivity,
capacity, and efficiency initiatives. We will continue our focus on growth in 2018, emphasizing enhanced product leadership, targeted
acquisitions, and growth-related investments, including initiatives that advance the integration of digital technology in new products
such as our recently introduced NAUTIC-ON, a smart-boating platform that improves the boat ownership experience through
connectivity and service, to further enhance our customers’ experience and satisfaction.

For the longer term, our strategy remains consistent: to design, develop, and introduce high-quality product solutions featuring
innovative technology and styling. To this end, in 2017 Brunswick continued to bolster its development and application of new
technologies. During the year, Brunswick was awarded a company record of nearly 100 new patents. It also established an innovation
laboratory in the prestigious Research Park at the University of Illinois at Urbana-Champaign as well as participated in the development
of autonomous boating at the Massachusetts Institute of Technology. The Company also formed a joint venture with Chicago-based
TechNexus Venture Collaborative to invest in transformative new technologies and unlock growth opportunities in both the marine
and fitness industries.

OUTLOOK FOR 2018

We project that 2018 will be another year of strong revenue and earnings growth with improved free cash fl ow generation. We are
targeting 5 percent to 7 percent annual sales growth, which includes benefi ts from continued solid growth in global marine markets
and successful new product launches. We are forecasting higher earnings before income taxes, due in part to increased revenue and
improvements in both gross margin and operating margin levels.

Further, we believe recently enacted U.S. tax reform should enhance the ability of companies like ours that have substantial U.S.
operations to compete globally on a more equal footing and provide incremental opportunities for us to reinvest in our business,
including accelerating several operational, growth, and important technology initiatives as we continue to advance our capital strategy.

PORTFOLIO ADJUSTMENTS

We recently announced structural changes intended to optimize our portfolio of businesses and enhance shareholder value. As part of
regular business portfolio reviews with management, your Board of Directors chose to pursue the sale of Sea Ray boats and the spin-off
of the Fitness business. These separate actions offer the best options to maximize the value of both our Marine and Fitness businesses.
The Fitness spin-off results in the creation of two, stand-alone public companies enabling you to invest in either or both businesses.

Following the separation of these businesses, Brunswick will remain a leader in the marine industry with our boat brands continuing
to be important elements of a robust, balanced marine portfolio along with our market-leading marine engines and marine P&A
businesses. Mercury Marine is among a handful of major manufacturers serving the global engine market with the industry’s broadest
line-up of engines, including a wide variety of class-leading outboard engines, which are gaining popularity. Coupled with marine
P&A businesses that continue to grow in size and scope, our engine business will account for approximately two-thirds of Company
revenue and earnings going forward.

We believe a spin-off of the Fitness business will be the most effective way to optimize its value to Brunswick shareholders. We
are confident that the fundamentals in the Fitness industry are strong, and with our global portfolio of great brands and leading
market position, the business has a bright future. Similarly, our portfolio of Marine businesses is well-positioned to continue to deliver
innovative new products and improved profitability as we execute our strategy. At Brunswick, we have a proud history of building
leading businesses and positioning those businesses to deliver maximum value for customers and shareholders. We are confident
that separating Marine and Fitness will build on that tradition. Once separated, both companies are poised and focused for success.
Likewise, investors will have a clearer view of both companies’ profiles, markets, and opportunities.

This is an exciting time for Brunswick with change and boundless opportunities ahead. I hope that you share our enthusiasm and
confi dence for the future. We are in growing and fundamentally sound markets with market-leading products and strong share
positions thanks to the skills and energy of Brunswick employees around the world. It is a privilege to direct their efforts. It is their
drive, creativity, and expertise, in which we invest both our treasure and trust, that will propel our Company and ultimately determine
Brunswick’s success. Thank you for your support and confi dence in Brunswick.

Sincerely,

Mark D. Schwabero
Chairman and Chief Executive Offi cer
Brunswick Corporation

1 Apple Watch is a registered trademark of Apple, Inc.

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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, 2017
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)

Delaware
(State or other jurisdiction of incorporation or organization)

36-0848180
(I.R.S. Employer Identification No.)

26125 N. Riverwoods Boulevard, Mettawa, Illinois 60045-3420
(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

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

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

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

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, a smaller reporting company, or
an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth
company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer
Non-accelerated filer
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Accelerated filer
Smaller reporting company

(Do not check if a smaller reporting company)

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

As of June 30, 2017, 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 $5,529,598,814. 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 16, 2018 was 87,557,279.

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 2, 2018.

BRUNSWICK CORPORATION
INDEX TO ANNUAL REPORT ON FORM 10-K
December 31, 2017

TABLE OF CONTENTS

PART I
Item 1.

Business

Item 1A.

Risk Factors

Item 1B.

Unresolved Staff Comments

Item 2.

Item 3.

Properties

Legal Proceedings

Item 4.

Mine Safety Disclosures

PART II

Item 5.

Item 6.
Item 7.

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

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Item 8.

Item 9.

Financial Statements and Supplementary Data

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.

Controls and Procedures

Item 9B.

Other Information

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

Item 11.

Item 12.

Item 13.

Item 14.

PART IV

Item 15.

Item 16.

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

Page

101

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. We make fiberglass pleasure, sport cruiser, sport fishing and center-console, offshore
fishing, aluminum and fiberglass fishing, pontoon, utility, deck, inflatable, 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 and rehabilitation, a complete line of billiards tables, and other game room tables and accessories.

In 2017, we continued to successfully execute our growth strategy, investing in new products as well as productivity and
efficiency initiatives. We expect to continue our focus on growth in 2018, emphasizing continued product leadership, targeted
acquisitions, and other growth-related investments, including using digital technology to improve service offerings. 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 $2,631.8 million in 2017, 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, among other brand names, the Mercury, Mercury MerCruiser, Mariner, Mercury Racing, and Mercury Diesel brands. In
addition, Mercury Marine manufactures and markets parts and accessories under the Quicksilver, Mercury Precision Parts, Mercury
Propellers, Attwood, Garelick, Whale, BLA, FulTyme RV, Talamex, Besto, 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 supplies integrated, high-speed diesel propulsion systems to the worldwide
recreational and commercial marine markets. To promote advanced propulsion systems with improved handling, performance,
and efficiency, Mercury Marine also manufactures and markets advanced boat steering and engine control systems.

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 and Ranger 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. Mercury Marine
and Mercury Racing manufacture inboard and sterndrive engine models ranging from 115 to 1,750 horsepower. 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 are compliant
with applicable U.S. state and federal environmental regulations. Mercury also makes engines that comply with global emissions
and noise regulations.

Mercury continues to develop and integrate innovative technology to enhance the boating experience, including through
Mercury VesselView and VesselView Mobile, a connected propulsion system and mobile application that allow customers to
display engine information, speed, trim, and more, joystick controls for multi-engine boats, and Active Trim, an intuitive, hands-
free system that continually adjusts engine trim based on changes in boat speed to improve performance, fuel economy, and ease
of operation.

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.

For the seventh consecutive year, the Wisconsin Sustainable Business Council awarded Mercury a “Green Masters” designation,
a program measuring a broad range of sustainability issues ranging from energy and water conservation to waste management,
community outreach, and education. The designation highlights Mercury's commitment to sustainability as discussed in its 2017
Sustainability Report, detailing specific goals related to energy, environment, products, and people, all of which goals Mercury
has met or exceeded. In addition to its fuel-efficient products, water, and energy conservation programs, Mercury installed a new
solar panel roof at its European headquarters located in Petit-Rechain, Belgium, in 2017.

Mercury's parts and accessories distribution and products businesses include: Land 'N' Sea, Kellogg Marine Supply, Lankhorst
Taselaar, Payne's Marine, BLA, Attwood, 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.

On September 1, 2017, Brunswick acquired 100 percent of Lankhorst Taselaar B.V. (Lankhorst Taselaar), a leading marine
parts and accessories distribution company based in the Netherlands and Germany. The acquisition augments the marine parts and
accessories businesses through a broader product line and an expanded distribution network.

Intercompany sales to Brunswick's Boat segment represented approximately 10 percent of Mercury Marine's sales in 2017.
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 the following types
of boats: fiberglass pleasure, sport cruiser, sport fishing and center-console, offshore fishing, aluminum and fiberglass fishing,
pontoon, utility, deck, inflatable, and heavy-gauge aluminum. We believe that the Boat Group, which had net sales of $1,103.0
million during 2017, 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: Bayliner sport cruisers, runabouts, and Heyday wake boats; Boston Whaler
fiberglass offshore boats; 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.

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, Washington, Canada, Mexico,
New Zealand, and Portugal, and owns an inactive manufacturing facility in North Carolina. The Boat Group utilizes several

contract manufacturing facilities in Poland and Croatia.

The Boat Group sells its products through a global network of more than 2,000 dealers and distributors, with some dealer
locations carrying 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 16 percent of Boat Group
sales in 2017. 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 our active recreation business, including billiards tables, accessories, and game
room furniture.

We believe that our Fitness segment, which had net sales of $1,033.7 million during 2017, 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.

The Fitness segment's principal manufacturing facilities are located in Illinois, Kentucky, 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
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. A subsidiary of Wells Fargo & Company owns the remaining 51 percent.

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 independent 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.

Technology

As part of our continuing effort to provide customer value, Brunswick has invested in a variety of technology solutions to
further improve customer interaction with our products. In 2017, we entered into a joint venture with TechNexus Holdings, LLC
to identify and incubate innovative start-up ventures with strategic marine and fitness applications to help drive long-term growth.
In addition, in 2018 we launched Nautic-ON, a smart technology and service system that helps boaters stay connected with their
boats remotely, monitoring engine status, battery and bilge pump, and other advanced features.

Fitness is focused on allowing digital partners to become a key part of the fitness ecosystem, as well as the development of
digital solutions focused on driving improved customer outcomes and creating business intelligence, personalized experiences,
4

and commercial impact. Technology within the Fitness segment includes the LFconnect mobile application, which allows smart
devices to interact with compatible Life Fitness equipment and track progress, personalize workouts, and provide motivation and
engagement.

International 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
Asia-Pacific
Canada
Latin America
Africa & Middle East
Total
Total International Sales as a Percentage of Net Sales

2017
591.8
398.6
293.0
159.6
94.1
$ 1,537.1

2016

555.0
352.7
255.5
144.0
84.5
$ 1,391.7

2015

490.7
302.5
253.3
169.3
89.6
$ 1,305.4

34%

35%

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.

Marine Engine segment non-U.S. sales represented approximately 50 percent of our non-U.S. sales in 2017. The segment's

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

•

•
•
•
•
•

Distribution, sales, service, and applications engineering offices in Australia, Belgium, Brazil, Canada, China, the
Netherlands, 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 19 percent of our non-U.S. sales in 2017. The Boat Group manufactures
or assembles a portion of its products in Canada, Mexico, New Zealand, and Portugal, as well as in boat plants owned and operated
by third parties in Croatia and Poland that perform contract manufacturing for us, which are sold mostly in international markets
through Dealers. The Boat Group has sales or import offices in Belgium, Canada, France, Germany, Italy, the Netherlands, New
Zealand, Norway, Poland, and Sweden.

Fitness segment non-U.S. sales comprised approximately 31 percent of our non-U.S. sales in 2017. 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 commodities such as 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 2017, our need for raw materials and supplies also
increased. During 2017, we experienced some shortages or delayed delivery of certain materials, parts, and supplies essential to
our manufacturing operations, although such shortages did not materially impact 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 2018, we anticipate our suppliers will need to increase their manufacturing
capacity and investments 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 or derivatives to mitigate exposure related to changes in commodity prices.

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 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.

The following are our principal trademarks:

Marine Engine Segment: Attwood, Axius, FulTyme RV, 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, Talamex, 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, 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, manufacturing capabilities, depth of product
portfolio, intuitive product controls, 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. 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.

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, connectivity and customer solutions,
and effective promotional activities. The billiards industry continues to experience competitive pressure from low-cost billiards
manufacturers outside the United States.

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, 3.2
percent and 3.0 percent of net sales in 2017, 2016 and 2015, respectively. 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
Boat
Fitness
Corporate (A)
Total (B)

December 31, 2017

December 31, 2016

Total

6,541
5,365
2,854
356
15,116

Union
(domestic)
2,078
—
166
—
2,244

Total

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

Union
(domestic)
1,926
—
139
—
2,065

(A) Corporate numbers include certain information technology employees and shared service employees.
(B) All employee numbers exclude temporary employees.

We believe that the relationships between our employees, applicable labor unions, and the Company remain stable. Mercury
Marine and its largest union, the International Association of Machinists and Aerospace Workers (IAM) Lodge 1947, agreed to a
new collective bargaining agreement in February 2018 which will remain in place through August 26, 2023.

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

of certain environmental proceedings.

Environmental Requirements

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.

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 significantly affect our industries and businesses, and economic decline can materially
impact our financial results.

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
expanded 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. Although general economic conditions in certain international markets, including Latin
America and Canada, are improving, they continue to be challenging with respect to weak currencies and commodity market
impacts.

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 continued strength of global economies,
either worldwide or in the specific markets in which we compete.

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 optimizing our business portfolio, 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 in a manner that achieves our strategic objectives.

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:

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•
•
•
•

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.

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.

There can be no assurance that strategic divestitures will provide business benefits.

As part of our strategy, we continuously evaluate our portfolio of businesses. We have previously and may in the future make
changes to our portfolio, which may be material. For example, on December 5, 2017, the Company announced our intention to
sell the Sea Ray businesses, including the Meridian brand. Divestitures involve risks, including difficulties in the separation of
operations, services, products and personnel, disruption in our operations or businesses, finding a suitable purchaser, the diversion
of management's attention from our other businesses, the potential loss of key employees, adverse effects on relationships with
our dealer or supplier partners or their businesses, the erosion of employee morale or customer confidence, and the retention of
contingent liabilities related to the divested business. If we do not successfully manage the risks associated with divestitures, our
business, financial condition, and results of operations could be adversely affected as the potential strategic benefits may not be
realized or may take longer to realize than expected.

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, or we may need
to lower prices to remain competitive. 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 2016 and 2017, but we do not believe they resulted in a
material change in our competitive position.

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, while improved, are still less favorable overall
than those in existence prior to the global recession in 2008. While interest rates remain relatively low and credit availability is
adequate to support demand, there are fewer lenders, tighter underwriting and loan approval criteria, and greater down payment
requirements. 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:

•

•
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•

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 most 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
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.

Loss of key customers could harm our business.

In each segment, we have important relationships with key customers. From time to time, contracts with these customers
come up for renewal, including a contract with a large Fitness segment customer in the first half of 2018. We cannot be certain
we will renew such contracts, or renew them on favorable terms. If we lose a key customer, or a significant portion of its business,
we could be adversely affected. 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.

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.

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

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. With unemployment rates at low levels in many of the geographic areas in which we
manufacture or distribute goods, availability of skilled hourly workers is critical to our operations. In order to manage this risk,
we continuously monitor and make improvements to wages and benefit programs, as well as develop and improve recruiting and
training programs to attract and retain an experienced and skilled workforce. In addition, we perform an annual review of
management succession plans with the Board of Directors, including reviewing executive officer and other important positions to
substantially mitigate the risk associated with key contributor transitions.

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 are unable to 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:

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•

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

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 2017. 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.

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 our marine parts and accessories businesses, as they increase the cost of boat ownership and possibly affect product
use.

Our success depends upon the continued strength of our brands.

We believe that our brands, including Mercury Marine, Life Fitness, 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.

Either inadequate intellectual property protection that could allow others to use our technologies and impair our ability to
compete, or failure to successfully defend against patent infringement claims 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;
•
•
• we may be required to litigate to enforce our intellectual property rights, and we may not be successful.

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; or

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.

In addition, we may be required to defend our products against patent or other intellectual property infringement claims or
litigation. In addition to defense expenses and costs, we may not prevail in such cases, forcing us to seek licenses or royalty
arrangements from third parties, which we may not be able to obtain on reasonable terms, or subjecting us to an order or requirement
to stop manufacturing, using, selling, or distributing products that included challenged intellectual property, which could harm
our business and financial results.

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 five years, we have made strategic capital investments in capacity expansion activities to successfully capture
growth opportunities and enhance product offerings. Recently, we initiated or completed expansion activities at our facilities in
Edgewater, Florida; Lebanon, Missouri; Owatonna, Minnesota; Fond du Lac, Wisconsin; and Vila Nova de Cerveira, Portugal.
12

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

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, hardware or software vulnerabilities, and similar events. If a legacy system or another of the
Company's key 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 of customers or employees; therefore, we must continue to be diligent in protecting against malicious cyber attacks.
If our security measures are breached or fail, unauthorized persons may be able to obtain access to or acquire personal data.
Depending on the nature of the information compromised, we may also have obligations to notify consumers and/or employees
about the incident, and we may need to provide some form of remedy, such as a subscription to a credit monitoring service, for
the individuals affected by the incident.

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.

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

Our funding obligations and pension expense for our two 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 80 percent as of December 31, 2017. Although we have attempted to minimize this risk
through pension de-risking actions, including moving investments to fixed income from equities and reducing liabilities through
lump sum and annuity offerings, 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 negatively affect
cash flow.

We are currently mitigating these risks by maintaining 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.

The Board of Directors has authorized the Company’s discretionary repurchase of outstanding common stock, to be
systematically completed in the open market or through privately negotiated transactions. The remaining authorization under
these programs is $110 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 performance versus

earnings per share targets.

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, 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 services that meet customer
expectations.

We believe that our customers look for and expect quality, innovation, and advanced features when evaluating and making
purchasing decisions about products and services in the marketplace. 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 or customer solutions, 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.

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

Our manufacturing operations 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, as well as regulatory fines. 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, be subjected to fines
or penalties, 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 accruals for known potential liabilities, but there is the possibility that actual losses may exceed these accruals
and therefore negatively impact earnings.

Compliance with environmental, zoning, data protection, 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, privacy, 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 stricter emissions standards, could increase our manufacturing costs, increase consumer pricing, and reduce consumer
demand for our products.

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.

We are subject to various data protection and privacy laws and regulations in the foreign countries where we operate because
we collect, store, process, and use personal information, and we rely on third parties that are not directly under our control to do
so as well. The European Union has finalized a General Data Protection Regulation (GDPR) that will become effective in May
2018 and will impose an even greater compliance burden with respect to privacy and data security. The GDPR and a growing
number of legislative and regulatory bodies elsewhere in the world have adopted consumer notification requirements in the event
of unauthorized access to or acquisition of certain types of personal data. These breach notification laws continue to evolve and
may be inconsistent from one jurisdiction to another. Complying with these obligations could cause us to incur substantial costs
and could increase negative publicity surrounding any incident that compromises personal data.

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 benefits issues, such as pension funding and health care benefits.
Compliance with these rules and regulations, and compliance with any changes to current regulations, could increase the cost of
our operations.

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

Although domestic tax reform legislation in the form of the Tax Cuts and Jobs Act (TCJA), signed into law on December 22,
2017, should have an overall positive impact on our financial statements, our current estimates of the impact of the legislation
could change as we analyze and apply additional regulations or guidance issued by the government. In addition, other changes in
international and domestic tax laws, including the reaction by states to the corporate tax changes in the TCJA, and changes in tax
law enforcement, could negatively impact our tax provision, cash flow, and/or tax related balance sheet amounts, including our
deferred tax asset values. Changes in U.S. tax law will likely have broader implications, including impacts to the economy, currency
markets, inflation environment, consumer behavior, and/or competitive dynamics, which it is difficult to predict, and may positively
or negatively impact the Company and our results.

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
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, 2017, goodwill was approximately 13 percent of total assets and included
$391 million of goodwill related to the Fitness segment, $32 million of goodwill related to the Marine Engine segment, and $2
million of goodwill related to the Boat segment.

Certain activist shareholder actions could cause us to incur expense and hinder execution of our strategy.

We actively engage in discussions with our shareholders regarding further strengthening our Company and creating long-
term shareholder value. This ongoing dialogue can include certain divisive activist tactics, which can take many forms. Some
shareholder activism, including potential proxy contests, could result in substantial costs, such as legal fees and expenses, and
divert management’s and our Board’s attention and resources from our businesses and strategic plans. Additionally, public
shareholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with dealers,
distributors, or customers, make it more difficult to attract and retain qualified personnel, and cause our stock price to fluctuate
based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals
and prospects of our business. These risks could adversely affect our business and operating results.

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, and 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 ongoing negotiations to determine the future
terms of the U.K.’s relationship with the EU (Brexit), 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.

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 or change the timing of demand. Additionally, climate
changes, regardless of 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 Mettawa, 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 most of our principal plants.

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; Heerenveen, Netherlands; 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: Greeneville, Tennessee; 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; Owatonna and Ramsey,

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

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.

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 Division
Vice President and President - Mercury Marine
Vice President and Chief Human Resources Officer
Vice President and Controller

Age
65
56
43

49
43
52
40
60

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 Division 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 13 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.

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 16, 2018, there were 8,193 shareholders of
record of the Company's common stock.

In the first, second, third and fourth quarters of 2017, Brunswick paid quarterly dividends on its common stock of $0.165,
$0.165, $0.165 and $0.19 per share, respectively. In the first, second, third and fourth quarters of 2016, Brunswick paid quarterly
dividends on its common stock of $0.15, $0.15, $0.15 and $0.165 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

2012
100.00
100.00
100.00

2013
158.76
143.31
132.05

2014
178.31
157.09
149.96

2015
177.52
172.98
152.07

2016
193.93
183.30
170.05

2017
198.79
225.16
206.92

The basis of comparison is a $100 investment at December 31, 2012 in each of: (i) Brunswick, (ii) the S&P 500 GICS Consumer
Discretionary Index and (iii) the S&P 500 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.

Issuer Purchases of Equity Securities

During the three months ended December 31, 2017, the Company repurchased the following shares of its common stock:

Period

October 1 to October 28

October 29 to November 25

November 26 to December 31

Total

Total Number of
Shares
Purchased

Weighted
Average Price
Paid per Share

— $

—

180,284

—

55.46

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

—

180,284

109,797,304

Item 6. Selected Financial Data

The selected historical financial data presented below as of and for the years ended December 31, 2017, 2016 and 2015 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, 2014 and 2013 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) (G)
Earnings before interest, loss on early extinguishment of

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

Discontinued operations

Net earnings (loss) from discontinued operations, net of

tax (D) (E)

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

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

tax (D) (E)

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

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

tax (D) (E)

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

2017

2016

2015

2014

2013

4,510.0

4,153.9

3,780.2

3,590.0

3,381.7

354.9

367.1

343.3

187.3

(40.9)
146.4

406.9

331.3

329.2

304.7

414.4

389.0

272.6

340.3

314.8

230.9

317.5

289.0

195.5

3.4

10.5

50.2

276.0

241.4

245.7

305.1

232.2

779.0

(9.8)
769.2

2.10

2.99

2.49

2.09

8.54

(0.46)
1.64

0.04

3.03

0.11

2.60

0.54

2.63

(0.11)
8.43

89.4

91.2

93.0

93.6

91.2

2.08

2.96

2.45

2.06

8.30

(0.46)
1.62

0.04

3.00

0.11

2.56

0.52

2.58

(0.10)
8.20

Average shares used for computation of diluted earnings

(loss) per share

90.1

92.0

94.3

95.1

93.8

(A) 2017, 2016, 2015 and 2014 results include $96.6 million, $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) 2017, 2016, 2015, 2014 and 2013 results include $36.6 million, $15.2 million, $4.7 million, $1.8 million and $3.2 million of pretax restructuring,

exit, integration and impairment charges, respectively.

(C) 2014 results include a $20.2 million charge related to an impairment of a marine equity method investment.
(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). See Note 2 – Discontinued Operations in the Notes to Consolidated Financial Statements for further discussion.

(E) Net earnings (loss) from discontinued operations includes restructuring, exit, integration and impairment charges, net of tax of $6.5 million, $0.2

million, $7.2 million, $2.6 million and $17.8 million in 2017, 2016, 2015, 2014 and 2013, 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.

(G) 2017 results include a $13.5 million charge for costs related to field campaigns pertaining to certain Cybex International, Inc. products designed

prior to the acquisition. Refer to Note 13 – Commitments and Contingencies for further details.

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

2017

2016

2015

2014

2013

Total assets of continuing operations

$ 3,255.5

$ 3,145.0

$ 3,023.6

$ 2,960.6

$ 2,557.7

Debt

Short-term

Long-term

Total debt
Common shareholders' equity (A)
Total capitalization

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

Number of shareholders of record
Common stock price (NYSE)

High

Low

Close (last trading day)

5.6

5.1

431.8

437.4

433.8

439.4

440.5

445.6

442.2

447.3

5.9

443.9

449.8

1,482.9

1,440.1

1,281.3

1,171.5

1,038.4

$ 1,920.3

$ 1,879.5

$ 1,726.9

$ 1,618.8

$ 1,488.2

417.2

423.5

340.2

249.3

219.4

98.2

189.3

(3.2)

60.6

91.0

172.5

5.1

55.4

77.1

114.1

0.9

48.3

69.9

107.1

0.2

41.7

0.45

12.64

23.7%

32.4%

27.6%

12,165

9,488

0.685

16.95

0.615

16.13

0.525

14.11

10.2%

45.4%

22.8%

15,116

8,247

63.82

48.04

55.22

21.5%

29.9%

23.4%

20.6%

26.7%

25.8%

14,415

8,683

56.30

36.05

54.54

12,745

9,009

56.63

46.08

50.51

51.94

38.95

51.26

46.48

30.42

46.06

61.7

112.3
(1.5)
9.1

0.10

11.24

30.2%

15,701

10,243

NM = Not meaningful
(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.

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

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; the discussion of the Company's earnings includes a presentation of operating
earnings and operating margin excluding pension settlement charges, restructuring, exit, integration and impairment charges and
certain product field campaigns charges; gross margin excluding certain product field campaigns 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 management
believes that these measures and the information they provide are useful to investors because they permit investors to view
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, exit, integration and impairment charges, special tax items, charges for certain product field campaigns 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,” “goal,” “seek,” “estimate,” “believe,” “predict,” “outlook,” “anticipates” 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 presentation. 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 2017 results represent the eighth consecutive year of growth, primarily resulting from strong operating

performance from our marine businesses. The Company looked to achieve the following financial objectives in 2017:

• Deliver revenue growth;

•

Increase earnings before income taxes, as well as deliver 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 2017 were as follows:

Deliver revenue growth:

• Ended the year with a 9 percent increase in net sales when compared with 2016 on a GAAP basis and 8 percent on a

constant currency basis, due to the following:

•

Strong growth in all three primary boat categories and the outboard engine business, along with solid growth in the
marine parts and accessories businesses;

• The Marine Engine and Boat segments benefited from strong global market demand, as domestic markets continued
to grow and international markets benefited from gains in Europe, Canada and Asia-Pacific, as well as improving
conditions in other regions;

• Additionally, the Marine Engine and Boat segments sales were aided by successful product launches, continued

strong market share and execution of our acquisition strategy;

•

Fitness segment net sales reflected growth in international markets, including the impacts of the Indoor Cycling
Group acquisition completed in 2016, while domestic market demand was flat;

International sales for the Company increased 10 percent in 2017 when compared with 2016 on both a GAAP basis
and on a constant currency basis due to increased sales across all international markets, especially Asia-Pacific,
Europe and Canada.

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

• Reported earnings before income taxes of $343.3 million in 2017 compared with earnings before income taxes of $389.0
million in 2016; adjusted earnings before income taxes were $490.0 million in 2017 versus $459.3 million in 2016;

• Gross margin declined 100 basis points when compared with 2016, driven mainly by declines in the Fitness segment due
to higher costs, particularly product field campaigns costs for certain Cybex products designed prior to the acquisition
as well as freight costs in the fourth quarter, challenging pricing dynamics in certain international markets and unfavorable
changes in sales mix; gross margin, as adjusted, declined 80 basis points when compared with 2016;

• Operating margin declined by 190 basis points when compared with the prior year, due in part to increased pension
settlement charges, restructuring, exit, integration and impairment charges, field campaigns charges in the Fitness segment
and the impact of planned investments in growth initiatives compared with the prior year; operating margin, as adjusted,
declined 40 basis points versus 2016.

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

• Generated strong free cash flow of $243.1 million in 2017, enabling the Company to continue executing its capital strategy

as follows:

•

Funded investments in growth:

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

expansions across all segments;

• Through acquisitions, including the $15.5 million invested in the Marine Engine segment during 2017;

• Contributed $73.7 million to the Company's qualified and nonqualified defined benefit pension plans; and

• Enhanced shareholder returns in 2017 by repurchasing $130.0 million of common stock under the Company’s share

repurchase program and increased cash dividends paid to shareholders to $60.6 million.

• Ended the year with $459.0 million of cash and marketable securities.

Net earnings from continuing operations decreased to $187.3 million in 2017 from $272.6 million in 2016. The 2017 results
include an income tax provision of $156.0 million, which included net charges of $61.8 million primarily relating to the impact
of U.S. tax reform, including the impact on deferred tax balances from the reduction in the statutory rate from 35 percent to 21
percent, along with an estimate of taxes payable on deemed unrepatriated foreign earnings. The 2016 results reflect an income tax
provision of $116.4 million, which included a net income tax charge of $1.1 million, primarily associated with the impact of
changes in tax laws partially offset by the reassessment of tax reserves and favorable valuation allowance adjustments.

Discontinued Operations

On December 5, 2017, the Board of Directors authorized the Company to exit its Sea Ray businesses, including the Meridian
brand, as a result of, among other things, a shift in strategic direction and a review of the expected future cash flows, market
conditions and business trends. On May 22, 2015, and September 18, 2014, the Company completed the sale of its bowling products
and retail bowling businesses, respectively.

As a result, these businesses are being reported as discontinued operations in the Consolidated Statements of Operations for
all periods presented. 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, are presented on a
continuing operations basis, unless otherwise noted. Refer to Note 2 – Discontinued Operations in the Notes to Consolidated
Financial Statements for further information.

Outlook for 2018

The Company is projecting 2018 to be another year of strong revenue and earnings growth with improved free cash flow
generation. The Company is targeting 5 percent to 7 percent sales growth versus 2017, which includes benefits from the continuation
of solid global growth in the marine markets, the success of new products, completed acquisitions and favorable movements in
foreign exchange rates. The Company anticipates sales growth in the Marine Engine segment will exceed the market due to
contributions from new products as well as expanded and enhanced manufacturing and distribution capabilities. In the Boat
segment, the Company expects growth in the fiberglass and aluminum outboard boat markets, including strong demand in the
pontoon business. The Fitness segment is expected to report slight revenue growth resulting from the introduction of new products,
enhanced digital offerings and a focus on strengthening key customer relationships.

The Company is planning to have higher earnings before income taxes in 2018 resulting from increased revenue and
improvements in both gross margin and operating margin levels. Operating margin gains include benefits from new products,
volume leverage, cost reductions related to efficiency initiatives, modestly positive product mix factors and a favorable impact
from foreign exchange rates. The Company projects operating expenses to increase in 2018 as we continue to fund incremental
investments to support growth; however, on a percentage of sales basis, they are expected to be slightly lower than 2017.

The Company is planning for its effective tax rate in 2018 to be approximately 23 percent to 24 percent based on the Tax Cuts

and Jobs Act (TCJA), which was signed into law on December 22, 2017.

Restructuring, Exit, Integration and Impairment Activities

Restructuring, exit, integration and impairment charges recorded in the Consolidated Statements of Operations during 2017,

2016 and 2015 by reportable segment are summarized below:

(in millions)
Cash charges:
Boat
Fitness
Corporate
Total cash charges
Non-cash charges:
Boat
Fitness
Corporate
Total non-cash charges
Total restructuring, exit, integration and impairment charges

2017

2016

2015

1.7
13.7
1.6
17.0

2.2
16.6
0.8
19.6
36.6

0.2
12.7
—
12.9

—
—
2.3
2.3
15.2

—
—
0.6
0.6

—
—
4.1
4.1
4.7

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

for further details on charges and initiatives.

As a result of Restructuring, exit, integration and impairment activities, the Company anticipates future cost savings of
approximately $4 million in the Fitness segment, with the full impact realized in 2018. Future cost savings will primarily be
reflected in the Selling, general and administrative expense as reported on the Company's Consolidated Statements of Operations.

The Company anticipates it will incur restructuring, exit, integration and impairment charges of approximately $3 million in

2018.

Matters Affecting Comparability

Certain events occurred during 2017, 2016 and 2015 that the Company believes affect the comparability of the results of
operations. The table below summarizes the impact of changes in currency exchange rates and the impact of recent acquisitions
on the Company's net sales:

Net Sales

2017 vs. 2016

2016 vs. 2015

(in millions)

2017

2016

2015

GAAP

Marine Engine

2,631.8

2,441.1

2,314.3

7.8%

Boat

1,103.0

963.7

879.1

14.5%

Marine eliminations

(258.5)

(231.3)

(207.8)

Constant
Currency

Acquisition
Contribution

7.6%

14.3%

1.0%

GAAP

5.5%

9.6%

Constant
Currency

Acquisition
Contribution

6.0%

10.0%

1.1%

0.9%

Total Marine

3,476.3

3,173.5

2,985.6

9.5%

9.3%

1.0%

6.3%

6.8%

1.1%

Fitness

Total

1,033.7

980.4

794.6

4,510.0

4,153.9

3,780.2

5.4%

8.6%

5.5%

8.4%

3.2%

1.5%

23.4%

9.9%

24.0%

10.4%

19.0%

4.9%

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, Brazilian reais and British pounds.

Additionally, operating earnings comparisons were positively affected by foreign exchange rates by approximately $1 million
in 2017 when compared with 2016, and were negatively affected by foreign exchange rates by approximately $14 million in 2016
when compared with 2015. These estimates include the impact of translation on all sales and costs transacted in a currency other
than the U.S. dollar, the impact of hedging activities and pricing actions in certain international markets in response to the changes
in the exchange rate between the local currency and the U.S. dollar.

Acquisitions. The Company completed acquisitions during 2017, 2016 and 2015 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 2017, 2016 and 2015, the Company recognized $96.6 million, $55.1
million and $82.3 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 and
making lump-sum payments directly to certain plan participants, as applicable. 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, exit, integration and impairment charges. During 2017, the Company recorded restructuring, exit, integration
and impairment charges of $36.6 million, compared with charges of $15.2 million in 2016 and $4.7 million in 2015. See Note 3
– Restructuring, Exit, Integration and Impairment Activities in the Notes to Consolidated Financial Statements for further
details.

Product field campaigns charge. In the fourth quarter of 2017, the Company recorded a $13.5 million charge for costs related
to field campaigns pertaining to certain Cybex products designed prior to the acquisition. The charge consisted of $8.4 million
and $5.1 million within Cost of sales and Selling, general and administrative expense, respectively. There were no comparable
costs in the prior year periods. See Note 13 – Commitments and Contingencies for further details.

Tax items. The Company recorded an income tax provision of $156.0 million, which included net charges of $61.8 million,
primarily relating to the impact of U.S. tax reform under the TCJA, including the unfavorable impact on deferred tax balances
caused by the reduction in the U.S. statutory rate from 35 percent to 21 percent, along with an estimate of taxes payable on deemed
unrepatriated foreign earnings. The 2016 results reflect an income tax provision of $116.4 million, which included a net income
tax charge of $1.1 million, primarily associated with the impact of changes in tax laws partially offset by the reassessment of tax
reserves and favorable valuation allowance adjustments.

See Note 12 – Income Taxes in the 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, 2017, 2016 and 2015:

(in millions, except per share data)

2017

2016

2015

2017 vs. 2016

2016 vs. 2015

Net sales
Gross margin (A) (B)

Pension settlement charge

Restructuring, exit, integration and

impairment charges

Operating earnings (B)
Net earnings from continuing operations (B)

Diluted earnings per common share from

continuing operations

Expressed as a percentage of Net sales:

Gross margin

Selling, general and administrative expense

Research and development expense

Operating margin

__________

NM = not meaningful
bpts = basis points

4,510.0

4,153.9

3,780.2

356.1

8.6 % $

1,234.7

96.6

36.6

354.9

187.3

1,180.3

55.1

15.2

406.9

272.6

1,060.0

82.3

4.7

331.3

230.9

54.4

41.5

21.4

(52.0)

(85.3)

4.6 %

75.3 %

(12.8)%

(31.3)%

373.7

120.3

(27.2)

10.5

75.6

41.7

9.9 %

11.3 %

(33.0)%

22.8 %

18.1 %

2.08

2.96

2.45

(0.88)

(29.7)% $

0.51

20.8 %

27.4%

13.5%

3.1%

7.9%

28.4%

13.8%

3.2%

9.8%

28.0%

14.0%

3.0%

8.8%

(100) bpts

(30) bpts

(10) bpts

(190) bpts

40 bpts

(20) bpts

20 bpts

100 bpts

(A) Gross margin is defined as Net sales less Cost of sales as presented in the Consolidated Statements of Operations.
(B) 2017 Gross margin includes $8.4 million of charges; and 2017 Operating earnings and Net earnings from continuing operations include $13.5 million of

charges, respectively, for costs related to field campaigns pertaining to certain Cybex products designed prior to the acquisition.

2017 vs. 2016

Net sales increased during 2017 when compared with 2016 due to increases across all segments. Marine Engine segment net
sales increased due to strong growth in both outboard engines as well as the marine parts and accessories businesses. Outboard
engines benefited from a favorable market environment, particularly for higher horsepower engines, and continued benefits from
new product launches and market share gains. The marine parts and accessories businesses benefited from several factors, including

the successful execution of the Company's international growth strategy, recent acquisitions and new product launches. Boat
segment net sales reflected strong growth in the aluminum and fiberglass outboard boat businesses. Fitness segment net sales
increased modestly reflecting growth in international markets while domestic demand was flat. International net sales for the
Company increased 10 percent in 2017 on both a GAAP basis and on a constant currency basis when compared with 2016, driven
by strong sales increases in Asia-Pacific, Europe and Canada as well as solid increases in other international markets.

Gross margin percentage decreased in 2017 when compared with 2016 driven by declines in the Fitness segment, as a result
of several factors, including higher costs, particularly product field campaigns costs for certain Cybex products designed prior to
the acquisition as well as higher freight costs, particularly in the fourth quarter, challenging pricing dynamics in certain international
markets and unfavorable changes in sales mix.

Selling, general and administrative expense and Research and development expense line items increased during 2017 when
compared with 2016, but decreased as a percentage of net sales. Both line items reflected increased funding to support investments
in new products and growth initiatives, partially offset by cost reduction efforts.

In 2017 and 2016, the Company recorded $96.6 million and $55.1 million, respectively, of charges related to pension settlement

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

During 2017, the Company recorded restructuring, exit, integration and impairment charges of $36.6 million compared with
$15.2 million in 2016. See Note 3 – Restructuring, Exit, Integration and Impairment Activities in the Notes to Consolidated
Financial Statements for further details.

The Company recognized equity earnings of $6.1 million and $4.3 million in 2017 and 2016, respectively, which were mainly
related to the Company's marine joint ventures. The Company recognized $6.1 million and $3.2 million in 2017 and 2016,
respectively, in Other income, net, which includes the amortization of deferred income related to a trademark licensing agreement
with AMF Bowling Centers, Inc (AMF) in both periods, as well as favorable foreign exchange adjustments in 2017 compared
with 2016. See Note 1 – Significant Accounting Policies in the Notes to Consolidated Financial Statements for discussion of the
trademark agreement with AMF.

Net interest expense decreased slightly in 2017 compared with 2016.

The Company recorded an income tax provision of $156.0 million, which included net charges of $61.8 million primarily
relating to the impact of U.S. tax reform, including the unfavorable impact on deferred tax balances caused by the reduction in
the U.S. statutory rate from 35 percent to 21 percent, along with an estimate of taxes payable on deemed unrepatriated foreign
earnings. The 2016 results reflect an income tax provision of $116.4 million, which included a net income tax charge of $1.1
million, primarily associated with the impact of changes in tax laws partially offset by the reassessment of tax reserves and favorable
valuation allowance adjustments. The effective tax rate for 2017 and 2016 was 45.4 percent and 29.9 percent, respectively.

The Company's effective tax rate in both periods also reflects the benefit of having earnings from foreign entities in jurisdictions
that have lower statutory tax rates than the U.S. This includes entities in Hungary, China, Poland and the United Kingdom which
have applicable statutory tax rates of 9 percent, 15 percent, 19 percent and 19 percent, respectively.

See Note 12 – Income Taxes in the Notes to Consolidated Financial Statements for further details on the impacts of the TCJA

as well as a reconciliation of the Company's effective tax rate and statutory Federal income tax rate.

Operating earnings, Net earnings from continuing operations and Diluted earnings per common share from continuing
operations decreased in 2017 when compared with 2016, primarily due to the factors discussed in the preceding paragraphs. The
decrease in Diluted earnings per common share from continuing operations was partially offset by benefits from common stock
repurchases.

Diluted earnings from continuing operations per common share, as adjusted, increased by $0.43 per share, or 12 percent, to
$3.89 per share for 2017 when compared with $3.46 per share for 2016, and included adjustments for the following items in 2017:
a net charge for special tax items of $0.76 per share, Pension settlement charge of $0.69 per share, Restructuring, exit, integration
and impairment charges of $0.26 per share and product field campaigns charges of $0.10 per share. In 2016, Diluted earnings
from continuing operations per common share included: Pension settlement charge of $0.38 per share, Restructuring, exit,
integration and impairment charges of $0.10 per share and a net charge for special tax items of $0.02 per share.

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. 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
10 percent in 2016 on both a GAAP basis and on a constant currency basis when compared with 2015, 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.

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 as a percentage of sales in 2016 when compared with 2015 as the Company

continued to increase its funding of investments in new products.

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 $15.2 million compared with $4.7
million in 2015. See Note 3 – Restructuring, Exit, 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 recorded income of $3.2 million and $5.3 million in 2016 and 2015,
respectively, in Other income, net, which includes the amortization of deferred income related to a trademark licensing agreement
with AMF in both periods and unfavorable foreign exchange adjustments in 2016.

Net interest expense decreased slightly in 2016 compared with 2015.

The Company recognized an income tax provision in 2016 of $116.4 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 $83.9 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 29.9
percent and 26.7 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, increased by $0.57 per share, or 20 percent, to
$3.46 per share for 2016 when compared with $2.89 per share for 2015, and included adjustments for the following items in 2016:
Pension settlement charge of $0.38 per share, Restructuring, exit, integration and impairment charges of $0.10 per share and a net
charge for special tax items of $0.02 per share. In 2015, Diluted earnings from continuing operations per common share included:
Pension settlement charge of $0.54 per share, Restructuring, integration and impairment charges of $0.03 per share and a net
benefit for special tax items of $0.13 per share.

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.

Marine Engine Segment

The following table sets forth Marine Engine segment results for the years ended December 31, 2017, 2016 and 2015:

2017 vs. 2016

2016 vs. 2015

2017

2016

2015

2,631.8

2,441.1

2,314.3

407.0

15.5%

377.1

15.4%

348.0

15.0%

190.7

29.9

7.8% $

7.9%

126.8

29.1

10 bpts

5.5%

8.4%

40 bpts

(in millions)

Net sales

Operating earnings

Operating margin

__________

bpts = basis points

2017 vs. 2016

Marine Engine segment net sales increased in 2017 versus 2016 due to strong growth in both outboard engines and the marine
parts and accessories businesses. Outboard engines benefited from a favorable market environment, particularly for higher
horsepower engines, and continued benefits from market share gains, including benefits from recently launched products. The
marine parts and accessories businesses benefited from the successful execution of the Company's international growth strategy,
recent acquisitions and new product launches. Partially offsetting these factors was a decrease in sterndrive engine net sales due
to the continuing shift to outboards which is contributing to unfavorable global retail demand trends. Acquisitions completed in
2017 and 2016 accounted for 1 percentage point of the Marine Engine segment's overall revenue growth rate in 2017. International
net sales were 30 percent of the segment's net sales in 2017, and increased 10 percent from the prior year on a GAAP basis. On a
constant currency basis, international net sales increased 9 percent in 2017, which included gains in all international markets, with
the strongest increases in Canada, Europe and Asia-Pacific.

Marine Engine segment operating earnings increased in 2017 as a result of higher net sales and favorable changes in product
mix, partially offset by planned increases in growth investments in advance of new product introductions and the resolution of
litigation in the fourth quarter of 2017.

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,
including benefits from recently launched products. The segment reported a decrease in sterndrive engine net sales due mostly 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.

Boat Segment

The following table sets forth Boat segment results for the years ended December 31, 2017, 2016 and 2015:

2017

2016

2015

2017 vs. 2016

2016 vs. 2015

1,103.0

963.7

879.1

139.3

14.5% $

3.9

71.1

6.4%

0.2

59.4

6.2%

—

38.5

4.4%

3.7

11.7

19.7%

20 bpts

84.6

0.2

20.9

9.6%

54.3%

180 bpts

(in millions)

Net sales

Restructuring, exit, integration
and impairment charges (A)

Operating earnings

Operating margin

__________

NM = not meaningful
bpts = basis points

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

2017 vs. 2016

Boat segment net sales increased in 2017 versus 2016 as a result of strong growth in the aluminum and fiberglass outboard
boat businesses and growth in both domestic and international markets. Net sales benefited from increased global wholesale unit
shipments as well as higher average selling prices, as customers continued to migrate to boats with more content and higher
horsepower engines. An acquisition completed in 2016 accounted for 1 percentage point of the Boat segment's overall revenue
growth rate in 2017. International net sales were 27 percent of the segment's net sales in 2017, an increase of 14 percent from the
prior year on a GAAP basis. On a constant currency basis, international net sales increased 13 percent when compared with the
same prior year period, mainly due to net sales increases in Canada, Europe, Latin America and Asia-Pacific.

Boat segment operating earnings increased in 2017 when compared with 2016 due to higher sales and margin gains partially
stemming from improved operating efficiencies, partly offset by increased restructuring, exit, integration and impairment charges
mostly associated with the closure of the manufacturing facility in Brazil.

2016 vs. 2015

Boat segment net sales increased in 2016 when compared with 2015 due to growth in fiberglass outboard and aluminum 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, which 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 completed in 2016 accounted for 1 percentage point
of the Boat segment's overall revenue growth rate in 2016. International net sales were 27 percent of the segment's net sales in
2016, a decrease of 3 percent from the prior year on a GAAP basis. On a constant currency basis, international net sales decreased
2 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 as a result of higher net sales and benefits from
a favorable shift in sales mix, lower commodity costs and savings related to sourcing initiatives. These factors were partially offset
by increases in revenue and profit-enhancing investments.

Fitness Segment

The following table sets forth Fitness segment results for the years ended December 31, 2017, 2016 and 2015:

2017

2016

2015

1,033.7

980.4

794.6

53.3

5.4 % $

185.8

23.4%

2017 vs. 2016

2016 vs. 2015

30.3

64.1

12.7

117.3

—

116.5

6.2%

12.0%

14.7%

17.6

(53.2)

(45.4)%

(580) bpts

12.7

0.8

0.7%

(270) bpts

(in millions)

Net sales

Restructuring, exit, integration
and impairment charges (A)

Operating earnings (B)

Operating margin

__________

NM = not meaningful
bpts = basis points

(A) See Note 3 – Restructuring, Exit, Integration and Impairment Activities in the Notes to Consolidated Financial Statements for further details.
(B) Operating earnings includes a $13.5 million charge for costs related to field campaigns pertaining to certain Cybex products designed prior to the acquisition.

2017 vs. 2016

Fitness segment net sales increased in 2017 when compared with 2016 due primarily to growth in international markets
including benefits from the ICG acquisition. Growth in sales to value-oriented franchise clubs continues to be offset by declines
in sales to traditional clubs and certain vertical markets. Acquisitions completed in 2016 accounted for 3 percentage points of
growth in 2017. International net sales were 46 percent of the segment's net sales in 2017 and increased 9 percent compared with
the prior year on both a GAAP basis and on a constant currency basis due to strength across most international markets, especially
Asia-Pacific and Europe, partially offset by slight declines in Canada.

Fitness segment operating earnings decreased in 2017 when compared with the prior year resulting from lower margins,
reflecting several factors, including higher restructuring, exit, integration and impairment charges, costs associated with product
field campaigns for certain Cybex products, higher costs including freight, particularly in the fourth quarter, the impact of planned
costs associated with capacity expansions and new products, more challenging competitive dynamics in certain international
markets and unfavorable changes in sales mix, partially offset by higher sales and cost reduction initiatives.

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 modest 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 and completed acquisitions in 2016, 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.

Corporate/Other

The following table sets forth Corporate/Other results for the years ended December 31, 2017, 2016 and 2015:

(in millions)

2017

2016

2015

Restructuring, exit, integration

and impairment charges (A) $

2.4

2.3

4.7

Operating loss

(81.4)

(77.1)

(77.7)

0.1

4.3

4.3% $

5.6%

(2.4)

(0.6)

(51.1)%

(0.8)%

2017 vs. 2016

2016 vs. 2015

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

Corporate operating expenses increased in 2017 compared with 2016 and increased in 2016 compared with 2015 primarily
due to project and other growth initiative related spending, including investments in technology solutions and IT enhancements.

Cash Flow, Liquidity and Capital Resources

The following table sets forth an analysis of free cash flow for the years ended December 31, 2017, 2016 and 2015:

(in millions)

2017

2016

2015

Net cash provided by operating activities of continuing operations

417.2

423.5

340.2

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)

(189.3)
8.3

6.9

(172.5)
1.9

0.1

243.1

253.0

(114.1)
2.4
(15.6)
212.9

(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, investments, 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 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 tools 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 capital investments, acquisitions, share repurchase programs and dividend payments
are cash generated from operating activities, available cash and marketable securities balances and potential borrowings. The
Company evaluates potential acquisitions, divestitures and joint ventures in the ordinary course of business.

2017 Cash Flow

In 2017, net cash provided by operating activities of continuing operations totaled $417.2 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. Net inventories increased by $65.6 million to support higher
sales volumes and Accounts receivable increased by $58.1 million as a result of strong sales in the fourth quarter. Partially offsetting
these items were increases in Accrued expenses of $47.0 million and Accounts payable of $34.7 due to higher expenditure levels
and timing of payments.

Net cash used for investing activities of continuing operations during 2017 totaled $165.2 million, which included capital
expenditures of $189.3 million. The Company's capital spending was focused on new product introductions, capacity expansion
and other profit enhancing projects in all segments. Cash paid for the acquisition of Lankhorst Taselaar, net of cash acquired, was
$15.5 million. See Note 4 – Acquisitions in the Notes to Consolidated Financial Statements for further details on the Company's
acquisitions. Net cash used for investing activities also included $35.0 million of maturities of marketable securities and Proceeds
from the sale of Property, plant and equipment of $8.3 million. 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 totaled $202.2 million during 2017 and included common

stock repurchases and cash dividends paid to common stock shareholders.

2016 Cash Flow

In 2016, net cash provided by operating activities of continuing operations totaled $423.5 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 by $40.4 million due
to increases in production to support higher sales volumes. Accrued expenses decreased $17.3 million which included the impact
of the payments of deferred compensation in connection with executive management transitions. Partially offsetting these items
was an increase in Accounts payable of $34.8 million, which was partially due to the timing of payments.

Net cash used for investing activities of continuing operations during 2016 totaled $464.6 million, which included capital
expenditures of $172.5 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 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 $185.4 million during 2016 and included 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 $340.2 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 $31.9 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 receipt of insurance proceeds, as well as a reduction in
accrued payroll costs due to timing of payrolls. Accounts and notes receivable increased $11.4 million, primarily driven by higher
fourth quarter sales across all segments. Net inventories increased $9.6 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.

Net cash used for investing activities of continuing operations during 2015 totaled $68.8 million, which included capital
expenditures of $114.1 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 acquisitions 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 $175.5 million during 2015 and included common

stock repurchases and cash dividends paid to common stock shareholders.

Liquidity and Capital Resources

The Company views its highly liquid assets as of December 31, 2017 and 2016 as:

(in millions)

Cash and cash equivalents

Short-term investments in marketable securities

Total cash, cash equivalents and marketable securities

2017

2016

448.8

0.8

449.6

422.4

35.8

458.2

2016

458.2

295.7

753.9

The following table sets forth an analysis of Total liquidity as of December 31, 2017 and 2016:

(in millions)

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

2017

449.6

295.7

745.3

(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 Condensed
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 $449.6 million as of December 31, 2017, a decrease of $8.6 million
from $458.2 million as of December 31, 2016. Total debt as of December 31, 2017 and December 31, 2016 was $437.4 million
and $439.4 million, respectively. The Company's debt-to-capitalization ratio improved to 22.8 percent as of December 31, 2017,
from 23.4 percent as of December 31, 2016.

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 authorizations approved by the Board of Directors in 2014 and 2016.
In 2017, the Company repurchased $130 million of stock under these authorizations and as of December 31, 2017, the remaining
authorization was $110 million. The Company plans to repurchase approximately $100 million of shares in 2018, which may be
adjusted based on available cash and other investment opportunities.

Quarterly dividend payments included in the 2018 plan are consistent with current levels. However, the Company may increase

these levels as earnings and cash flows improve, consistent with its capital strategy.

The Company is projecting an increase in net earnings in 2018 when compared with 2017. Net activity in working capital is
projected to reflect a usage of cash in 2018 in the range of $20 million to $40 million. Additionally, the Company is planning for
capital expenditures of approximately $215 million to $225 million, reflecting increased investments in capacity to support growth,
continued investments in product leadership as well as our decision to increase investment as a result of cash benefits from U.S.
tax reform. Including these and other factors, the Company plans to generate free cash flow in 2018 in excess of $275 million.

Included in the cash flow projections are contributions to the defined benefit pension plans of approximately $70 million to
$75 million in 2018. These amounts may be adjusted for several factors, including actions to accelerate our de-risking activities,
increasing contributions to generate higher deductions at a more favorable statutory rate as a result of U.S. tax reform, market
conditions, pension funding regulations and Company discretion. The Company contributed $70.0 million to its qualified defined
benefit pension plans both in 2017 and 2016. The Company also contributed $3.7 million and $4.6 million to fund benefit payments
from its nonqualified defined benefit pension plan in 2017 and 2016, respectively.

The aggregate funded status of the Company's qualified defined benefit pension plans, measured as a percentage of the
projected benefit obligation, was approximately 80 percent at December 31, 2017 compared with approximately 78 percent at

December 31, 2016. As of December 31, 2017, the Company's qualified defined benefit pension plans were underfunded on an
aggregate projected benefit obligation basis by $137.6 million which represented a $61.5 million improvement from 2016. This
improvement was due to strong asset returns and contributions of $70 million, which more than outpaced the impact of interest
on plan liabilities. See Note 17 – Postretirement Benefits in the Notes to Consolidated Financial Statements for more details.

Income Taxes

The Company expects its cash tax rate to be in the high-single digit percentage range in 2018, reflecting the recently enacted
Tax Cuts and Jobs Act (TCJA) which reduced the U.S federal statutory rate from 35 percent to 21 percent. The estimated 2018
cash tax rate also includes the impacts of an anticipated refund resulting from over-payments in 2017.

Additionally, as a result of the TCJA, specifically the imposition of a one-time deemed repatriation tax on certain unremitted
earnings of foreign subsidiaries, the Company reevaluated its indefinite assertion as of December 31, 2017. The Company is
considering remitting cash back to the U.S. in 2018 from non-U.S. subsidiaries and as such, the Company will no longer assert
that it is permanently reinvested in any non-U.S. subsidiaries as of December 31, 2017. These remittances would be considered
dividends and under changes made by the TCJA these dividends would be subject to a 100 percent dividend received deduction
and would not result in any U.S. federal tax liability. The Company is continuing to analyze the effects of the TCJA including
the impact on future repatriations and any related withholding taxes from non-U.S. subsidiaries. Future repatriations could result
in additional funds to execute the Company's capital strategy.

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, 2017:

(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

443.4
189.9

152.4

230.3

43.9

165.3

5.6
26.2

37.6

228.6

4.8

16.8

11.7
52.4

55.4

1.2

2.0

95.3

153.6
45.4

27.2

0.5

2.0

32.7

272.5
65.9

32.2

—

35.1

20.5

1,225.2

319.6

218.0

261.4

426.2

(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 2017 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, $3.7 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.

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 more stringent emissions standards and/or other environmental regulatory
requirements than are currently in effect. Using its environmental management system processes, the Company complies with
current regulations and expects to comply fully with any new regulations; compliance will most likely 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 marine engines, marine
parts and accessories, boats, 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 in the Notes to Consolidated Financial Statements for further
discussion of the new revenue recognition standard which will be effective beginning January 1, 2018.

Warranty Reserves. The Company records an estimated 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 goodwill for impairment annually
and whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying value.
All three of the Company's reporting units have a goodwill balance.

For 2017, the impairment test for goodwill was a two-step process. The first step compares the fair value of a reporting unit
with its carrying amount. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not
considered impaired. If the carrying amount of the reporting unit exceeds its fair value, the second step is performed to measure
the amount of the impairment loss, if any. In this second step, the implied fair value of the reporting unit’s goodwill is compared
with the carrying amount of the goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value
of that goodwill, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the
goodwill.

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 2017, 2016 or 2015.

The Company calculates 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 for each unit by applying market multiples for comparable public companies to the unit’s financial results. The
key uncertainties in these calculations are the assumptions used in determining the reporting unit’s forecasted future performance,
including revenue growth and operating margins, as well as the perceived risk associated with those forecasts, along with selecting
representative market multiples.

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 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 subject to amortization are assessed for
impairment at least annually and whenever events or changes in circumstances indicate that it is more likely than not that an asset
may be impaired. The impairment test for indefinite-lived intangible assets consists of a comparison of the fair value of the
intangible asset with its carrying amount. An impairment loss is recognized for the amount by which the carrying value exceeds
the fair value of the asset. The 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 are based on 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 determining the Discount Rate.

The Company recorded a $13.9 million indefinite-lived intangible asset impairment during 2017 related to the Cybex trade
name. Refer to Note 3 – Restructuring, Exit, Integration and Impairment Activities in the Notes to Consolidated Financial
Statements for further details. The Company did not record impairments for indefinite-lived intangible assets in 2016 and 2015.

Refer to Note 11 – Goodwill and Other Intangibles in the Notes to Consolidated Financial Statements for more information.

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 arose during 2017, 2016 or 2015, resulting in impairment charges of $0.1 million, $2.4 million and
$4.7 million, respectively, which are recognized in either Restructuring, integration and impairment charges or 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 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. The Company's income tax provision included net charges of $71.8 million as a result of U.S.
tax reform. See Note 12 – Income Taxes in Notes to Consolidated Financial Statements for further details.

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, 2017, 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, Canadian dollar, Japanese yen, 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 underlying 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, natural gas and steel. As of December 31, 2017 and 2016, there
were no outstanding derivative financial instruments related to commodities.

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, 2017 and
2016. 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 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. 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 and interest rates.

(in millions)
Risk Category

Foreign exchange
Interest rates

2017

2016

47.8
1.5

36.1
1.8

Item 8. Financial Statements and Supplementary Data

See Index to Financial Statements and Financial Statement Schedule on page 45.

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

None.

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, 2017. Management's report is included in the Company's 2017 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,
2017, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial
reporting.

Item 9B. Other Information

None.

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 2, 2018 (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.

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 45. The exhibits filed as a part of this Annual Report are listed
in the Exhibit Index below.

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*

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.

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.

10.5*

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*

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.

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.

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.
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.

10.21*

10.22*

10.23*

10.24*

10.25*

10.26*

10.27*

10.28*

10.29*

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 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.
2017 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 1, 2017, as filed with the Securities and Exchange Commission on May 4,
2017, and hereby incorporated by reference.
2017 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 1, 2017, as filed with the Securities and Exchange
Commission on May 4, 2017, and hereby incorporated by reference.
2017 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 1, 2017, as filed with the Securities and Exchange
Commission on May 4, 2017, and hereby incorporated by reference.
2017 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 1, 2017 as filed with the Securities and Exchange
Commission on May 4, 2017 and hereby incorporated by reference.
2017 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 1, 2017, as filed with the Securities and
Exchange Commission on May 4, 2017, and hereby incorporated by reference.
2017 Brunswick Performance Plan, filed as Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended April 1, 2017, as filed with the Securities and Exchange
Commission on May 4, 2017, and hereby incorporated by reference.

2017 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 1, 2017,
as filed with the Securities and Exchange Commission on May 4, 2017, and hereby incorporated by
reference.
2017 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 1, 2017, as filed with
the Securities and Exchange Commission on May 4, 2017, 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.

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

101

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, 2017. The effectiveness of internal control over financial
reporting as of December 31, 2017 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
Mettawa, Illinois
February 20, 2018

BRUNSWICK CORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Brunswick Corporation
Mettawa, Illinois

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Brunswick Corporation and subsidiaries (the "Company") as of
December 31, 2017, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-
Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended December 31, 2017, of the Company and our report
dated February 20, 2018, expressed an unqualified opinion on those financial statements.

Basis for Opinion

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 are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed 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 its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

Chicago, Illinois
February 20, 2018

BRUNSWICK CORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Brunswick Corporation
Mettawa, Illinois

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Brunswick Corporation and subsidiaries (the "Company") as
of December 31, 2017 and 2016, 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, 2017, and the related notes and the schedule listed
in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting
principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in
Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
and our report dated February 20, 2018, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ DELOITTE AND TOUCHE LLP

Chicago, Illinois
February 20, 2018

We have served as the Company's auditor since 2014.

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, exit, integration and impairment charges

Operating earnings

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

Earnings (loss) per common share:

Basic

Earnings from continuing operations
Earnings (loss) from discontinued operations
Net earnings

Diluted

Earnings from continuing operations
Earnings (loss) 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
2015
2016
2017

4,510.0
3,275.3
608.1
138.5
96.6
36.6
354.9
6.1
6.1
367.1
(26.4)
2.6
343.3
156.0
187.3

(40.9)
—
(40.9)
146.4

2.10
(0.46)
1.64

2.08
(0.46)
1.62

89.4
90.1

4,153.9
2,973.6
572.1
131.0
55.1
15.2
406.9
4.3
3.2
414.4
(27.2)
1.8
389.0
116.4
272.6

3.4
—
3.4
276.0

2.99
0.04
3.03

2.96
0.04
3.00

91.2
92.0

3,780.2
2,720.2
527.8
113.9
82.3
4.7
331.3
3.7
5.3
340.3
(27.7)
2.2
314.8
83.9
230.9

(2.3)
12.8
10.5
241.4

2.49
0.11
2.60

2.45
0.11
2.56

93.0
94.3

Cash dividends declared per common share

0.685

0.615

0.525

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

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 (A)

Net foreign currency translation

Defined benefit plans:

Net actuarial losses (A)
Amortization of prior service credits (B)
Amortization of net actuarial losses (B)

Net defined benefit plans

Derivatives:

Net deferred gains (losses) on derivatives (A)
Net gains (losses) reclassified into earnings (B)
Net deferred gains (losses) on derivatives

Other comprehensive income

Comprehensive income

For the Years Ended December 31

2017

2016

2015

146.4

276.0

241.4

20.3

(8.1)
(0.5)
69.3

60.7

(7.5)
1.3
(6.2)
74.8

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

221.2

315.5

247.8

(A) The tax effects for the year ended December 31, 2017 were $(4.1) million for foreign currency translation, $5.4 million for net actuarial losses arising
during the period and $3.4 million for derivatives. 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.
(B) See Note 19 – Comprehensive Income (Loss) for the tax effects for the years ended December 31, 2017, December 31, 2016 and December 31, 2015.

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

BRUNSWICK CORPORATION
Consolidated Balance Sheets

As of December 31

2017

2016

(in millions)

Assets

Current assets

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

448.8

422.4

Restricted cash

Short-term investments in marketable securities

Total cash and short-term investments in marketable securities

Accounts and notes receivable, less allowances of $9.1 and $12.7

Inventories

Finished goods

Work-in-process

Raw materials

Net inventories

Prepaid expenses and other

Current assets held for sale

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

Long-term assets held for sale

Other assets

Total assets

9.4

0.8

459.0

480.2

506.9

96.8

161.9

765.6

73.1

68.8

11.2

35.8

469.4

411.5

488.8

68.3

141.9

699.0

37.1

71.5

1,846.7

1,688.5

19.9

340.6

991.9

17.9

307.7

923.8

1,352.4

1,249.4

(812.5)

(777.1)

539.9

119.6

659.5

425.3

144.4

25.0

165.6

45.1

46.6

472.3

96.7

569.0

413.8

160.1

20.7

307.8

43.4

81.4

852.0

1,027.2

3,358.2

3,284.7

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 held for sale

Current liabilities

Long-term liabilities

Debt

Postretirement benefits

Other

Long-term liabilities held for sale

Long-term liabilities

Shareholders’ equity

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

outstanding: 87,537,000 and 89,317,000 shares

Additional paid-in capital

Retained earnings

Treasury stock, at cost: 15,001,000 and 13,221,000 shares

Accumulated other comprehensive loss, net of tax:

Foreign currency translation

Defined benefit plans:

Prior service credits

Net actuarial losses

Unrealized losses on derivatives

Accumulated other comprehensive loss, net of tax

Shareholders’ equity

As of December 31

2017

2016

5.6

409.7

563.6

56.2

1,035.1

431.8

220.8

184.9

2.7

840.2

5.6

378.2

521.3

59.8

964.9

433.8

276.3

162.9

6.7

879.7

76.9

374.4

76.9

382.0

1,966.8

1,881.0

(575.4)

(465.2)

(31.6)

(51.9)

(5.6)

(310.8)

(11.8)

(359.8)

(5.1)

(372.0)

(5.6)

(434.6)

1,482.9

1,440.1

Total liabilities and shareholders’ equity

3,358.2

3,284.7

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

BRUNSWICK CORPORATION
Consolidated Statements of Cash Flows

(in millions)
Cash flows from operating activities

Net earnings
Less: earnings (loss) from discontinued operations, net of tax
Net earnings from continuing operations
Depreciation and amortization
Stock compensation expense
Pension expense including settlement charges, net of (funding)
Asset impairment charges
Deferred income taxes
Changes in certain current assets and current liabilities

Change in accounts and notes receivable
Change in inventory
Change in prepaid expenses and other, excluding income taxes
Change in accounts payable
Change in accrued expenses

Long-term extended warranty contracts and other deferred revenue
Income taxes
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
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 (used for) investing activities of discontinued operations
Net cash 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
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 (used for) financing activities of discontinued operations
Net cash used for financing activities

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

Cash and cash equivalents and Restricted cash at end of period
Less: Restricted cash
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.

For the Years Ended December 31
2015
2016
2017

$
$

146.4
(40.9)
187.3
98.2
17.8
32.2
18.7
118.4

(58.1)
(65.6)
3.5
34.7
47.0
17.1
(35.9)
1.9
417.2
(16.9)
400.3

(189.3)
—
35.0
(3.2)
(15.5)
8.3
(0.5)
(165.2)
(13.7)
(178.9)

—
(3.0)
(130.0)
(60.6)
6.2
(14.8)
—
(202.2)
(1.5)
(203.7)

6.9
24.6
433.6

458.2
9.4
448.8

33.0
73.5

$
$

276.0
3.4
272.6
91.0
16.1
(4.8)
2.4
62.7

(3.8)
(40.4)
(0.9)
34.8
(17.3)
10.3
21.1
(20.3)
423.5
11.8
435.3

(172.5)
(35.0)
10.7
5.1
(276.1)
1.9
1.3
(464.6)
(21.4)
(486.0)

1.0
(2.8)
(120.3)
(55.4)
14.9
(20.9)
(1.9)
(185.4)
(0.4)
(185.8)

0.1
(236.4)
670.0

433.6
11.2
422.4

30.1
32.6

$
$

241.4
10.5
230.9
77.1
20.8
20.4
4.7
43.3

(11.4)
(9.6)
(3.1)
5.3
(31.9)
4.0
7.8
(18.1)
340.2
(9.7)
330.5

(114.1)
(47.6)
119.3
0.9
(29.7)
2.4
—
(68.8)
26.1
(42.7)

0.1
(3.1)
(120.0)
(48.3)
4.5
(8.7)
—
(175.5)
5.0
(170.5)

(15.6)
101.7
568.3

670.0
12.7
657.3

28.5
32.8

BRUNSWICK CORPORATION
Consolidated Statements of Shareholders' Equity

(in millions, except per share data)
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

Net earnings

Other comprehensive income

Dividends ($0.685 per common share)

Compensation plans and other

Common stock repurchases
Balance, December 31, 2017

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Treasury
Stock

Accumulated
Other
Comprehensive
Income (Loss)

76.9

395.0

1,467.3

—

76.9

—

—
76.9

—

13.0

—

408.0

—

—
(26.0)
—
382.0

—

—
(7.6)
—

241.4

—
(48.3)
—

—

1,660.4

276.0

—
(55.4)
—

—
1,881.0

146.4

—
(60.6)
—

—

76.9

374.4

1,966.8

(287.2) $
—

(480.5) $
—

—

17.3
(120.0)
(389.9)
—

—

45.0
(120.3)
(465.2)
—

—

19.8
(130.0)
(575.4) $

6.4

—

—
(474.1)
—

39.5

—

—
(434.6)
—

74.8

—

—
(359.8) $

Total

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

146.4

74.8
(60.6)
12.2
(130.0)
1,482.9

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

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). Certain previously reported amounts
have been reclassified to conform with current period presentation. 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;
Impairments of long-lived assets;
Reserves related to restructuring, exit and integration activities;
Postretirement benefit liabilities;
Valuation allowances on deferred tax assets; and
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

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 net realizable value, with net realizable value equal to the estimated
selling price less the estimated costs to transact. Approximately 54 percent and 51 percent of the Company's inventories were
determined by the first-in, first-out method (FIFO) at December 31, 2017 and December 31, 2016, respectively. Remaining
inventories valued at the last-in, first-out method (LIFO) were $124.9 million and $123.0 million lower than the FIFO cost of
inventories at December 31, 2017 and 2016, respectively. Inventory cost includes material, labor and manufacturing overhead.
There were no liquidations of LIFO inventory layers in 2017, 2016 or 2015.

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 up to eight years. The Company capitalizes
interest on qualifying assets during the construction period and capitalized $4.6 million and $2.6 million in 2017 and 2016,
respectively. The Company presents capital expenditures on a cash basis within the Consolidated Statements of Cash Flows. There
were $31.0 million and $35.8 million of unpaid capital expenditures within Accounts payable as of December 31, 2017 and 2016,
respectively. The Company includes gains and losses recognized on the sale and disposal of property in either Selling, general and
administrative expenses or Restructuring, exit, 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 losses on sale and disposal of property

2017

2016

2015

0.7
(2.3)
(1.6) $

0.4
(0.5)
(0.1) $

1.1
(2.0)
(0.9)

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 annually and whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below
its carrying value.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

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, and considers 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 for each unit by applying market multiples for 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.

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 2017, 2016 or 2015.

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 recognized 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
subject to amortization, including trade names, are assessed for impairment at least annually and whenever events or changes in
circumstances indicate that it is more likely than not that an asset may be impaired. The impairment test for indefinite-lived
intangible assets consists of a comparison of the fair value of the intangible asset with its carrying amount. An impairment loss is
recognized for the amount by which the carrying value exceeds the fair value of the asset. The 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 sales projections is internal revenue forecasts by brand, which
the Company believes represent reasonable market participant assumptions, to which the selected royalty rate is applied. The
resulting cash flows are discounted using an applicable Discount Rate which includes any potential risk premium to reflect the
inherent risk of holding a standalone intangible asset.

The Company recorded a $13.9 million indefinite-lived intangible asset impairment during 2017 related to the Cybex trade
name. Refer to Note 3 – Restructuring, Exit, Integration and Impairment Activities for further details. The Company did not
record impairments for indefinite-lived intangible assets in 2016 and 2015.

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

Equity Investments. For investments in which the Company 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. See Note 9 – Investments for further details about the Company's
evaluation of the fair 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 asset group's remaining 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 arose during 2017, 2016
and 2015, resulting in impairment charges of $0.1 million, $2.4 million and $4.7 million, respectively, which are recognized either
in Restructuring, exit, integration and impairment charges or Selling, general and administrative expense in the Consolidated
Statements of Operations.

Other Long-Term Assets. Other long-term assets consists mainly of long-term receivables originated by the Company and
assigned to third parties, long-term pension assets and other long-term receivables and deposits. As of December 31, 2017 and

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

2016, amounts assigned to third parties totaled $30.2 million and $29.0 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 $29.9 million, $26.5 million and $28.1 million for the years ended December 31, 2017, 2016 and 2015, 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
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 either Cost of sales or Other income, net in
the Consolidated Statements of Operations.

Trademark Licensing Agreement. On September 18, 2014, the Company completed the sale of its retail bowling business to
AMF Bowling Centers, Inc. (AMF) and entered into a trademark licensing agreement, allowing AMF to use the Company's retail
trademarks and trade names over a five year period from the date of sale. As a result, the Company recorded deferred income of
$20.7 million related to this agreement, which will be recognized as Other income, net in the Consolidated Statements of Operations
over five years.

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 and performance-based share awards 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 included in 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 2017 or

will be adopted in future periods.

Hedge Accounting: In August 2017, the Financial Accounting Standards Board (FASB) amended the Accounting Standards
Codification (ASC) to simplify the application of hedge accounting and to better align an entity's risk management activities with
the financial reporting of hedging relationships. The amendment is effective for interim and annual periods beginning after
December 15, 2018, 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 its consolidated financial statements.

Presentation of Benefit Costs: In March 2017, the FASB amended the ASC related to the income statement presentation of
the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. The
amendments require entities to present the current-service-cost component with other current compensation costs in the income
statement and present the other components outside of income from operations. The amendment is effective for interim and annual

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

periods beginning after December 15, 2017, 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 its consolidated financial statements.

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 impact it will have on its 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. The Company adopted this amendment during the first quarter of 2017, and recognized $7.9 million
of net excess tax benefits related to share-based payments in the income tax provision for the year ended December 31, 2017.
These net excess tax benefits were historically recorded in additional paid-in capital when recognized. Additionally, the Company
adopted the amendment retrospectively for presentation of net excess tax benefits on the Consolidated Statements of Cash Flows,
resulting in an increase of $13.4 million and $7.0 million in both Net cash provided by operating activities and Net cash used for
financing activities for the years ended December 31, 2016 and 2015, respectively. The Company also elected to recognize forfeitures
of share-based awards as they occur. The remaining amendments, including those related to statutory withholding requirements,
did not have a material impact.

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 continue to 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 impact that the adoption of the new standard will have on its 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 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 retrospective approach in applying the new standard.

The Company will use the modified retrospective approach in applying the new standard. There are no significant
implementation matters that have yet to be addressed. The Company determined that the standard does not have a material impact
on its consolidated financial statements. The cumulative net adjustment to the 2018 beginning Retained earnings balance is expected
to be less than $35 million. The most meaningful changes will be in the Fitness and Boat 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 estimated and 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 the rebate is redeemed. As a result, there are changes in
the timing of recording certain promotions and rebates, including but not limited to those described above, however, there are no
changes in the total amount of cumulative revenue recognized for each transaction.

Note 2 – Discontinued Operations

On December 5, 2017, the Board of Directors authorized the Company to exit its Sea Ray businesses, including the Meridian
brand, as a result of, among other things, a change in strategic direction and a review of the expected future cash flows, market
conditions and business trends. The Company considered both quantitative and qualitative factors in reaching its decision to report
these businesses as discontinued operations, with key factors including: the exit is part of the Company's strategic shift to focus
on outboard boat categories; represents a material portfolio shift and reduction in the boat segment revenues; and represents the
exit from substantially all of its boat brands participating in the inboard/sterndrive boat category, particularly large and premium
offerings. In addition, the Company has determined that exiting the Sea Ray business represents a material strategic shift, with

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

commensurate impacts on Brunswick’s operations and financial results. The Company commenced its process to sell the Sea Ray
business in December 2017 and is targeting completion of the sales process in the first half of 2018.

As a result, the Company reclassified the assets and liabilities of these businesses as held for sale on the Consolidated Balance
Sheets for all periods presented. Additionally, these businesses, which were previously reported in the Company's Boat segment,
are being reported as discontinued operations in the Consolidated Statements of Operations for all periods presented. General
allocations of corporate overhead and Boat segment shared services costs are not included in these results.

In conjunction with the decision to classify the Sea Ray assets and liabilities as held for sale, the Company evaluated the
disposal group's fair value, less costs to sell, and compared that to its carrying value. The fair value of the disposal group, which
was determined using market data for a similar transaction (a Level 3 input) as well as a discounted cash flow analysis (a Level 3
input), was determined to be less than its carrying value. As a result, the Company recorded a charge of $36.0 million, $23.8 million
after-tax, primarily related to an impairment of long-lived assets in the fourth quarter of 2017. This charge is based on estimated
proceeds from the sale which may differ from actual proceeds.

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 were reported as discontinued operations in the Consolidated Statements
of Operations for the years ended December 31, 2016 and 2015. The Company does not have any significant continuing involvement
or continuing cash flows associated with these businesses.

On May 22, 2015, the Company completed the sale of its bowling products business which yielded net cash proceeds of $42.2

million and an after-tax gain of $10.3 million.

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

ended December 31, 2017, 2016 and 2015, 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 (B)
Gain on disposal of discontinued operations, net of tax (A)
Net earnings (loss) from discontinued operations, net of tax (B)

2017

2016

387.6

406.2

(62.1) $
(21.2)
(40.9)
—
(40.9) $

3.4
(0.0)
3.4
—
3.4

2015

432.9

1.9
4.2
(2.3)
12.8
10.5

(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.
(B) Net earnings (loss) from discontinued operations includes a charge of $36.0 million, $23.8 million after-tax, as discussed above in 2017 and other
restructuring, exit, integration and impairment charges, net of tax of $6.5 million, $0.2 million and $7.2 million in 2017, 2016 and 2015, respectively.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

The following table reflects the summary of assets and liabilities held for sale as of December 31, 2017 and December 31,

2016 for the Sea Ray businesses included in discontinued operations:

(in millions)
Accounts and notes receivable, net
Net inventory
Prepaid expenses and other
Current assets held for sale

Net property (A)
Other intangibles, net
Other long-term assets (B)
Long-term assets held for sale (C)

Assets held for sale

Accounts payable
Accrued expenses
Current liabilities held for sale

Other liabilities
Long-term liabilities held for sale
Liabilities held for sale

2017

2016

5.0
62.1
1.7
68.8

33.8
4.7
(4.6)
33.9
102.7

10.8
45.4
56.2

2.7
2.7
58.9

5.8
63.1
2.6
71.5

63.1
4.7
0.4
68.2
139.7

14.5
45.3
59.8

6.7
6.7
66.5

(A) Net property held for sale at December 31, 2017 reflects an impairment of $31.0 million.
(B) Includes a $5.0 million valuation allowance on the disposal group at December 31, 2017.
(C) As of December 31, 2017 and 2016, the Company had $12.7 million and $13.2 million, respectively, of net long-term assets classified as held for sale

that were not related to businesses reported as discontinued operations.

Note 3 – Restructuring, Exit, Integration and Impairment Activities

The Company has announced and implemented a number of initiatives designed to improve its 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, exit, integration and impairment charges in the Consolidated Statements of
Operations during 2017, 2016 and 2015.

The costs incurred under these initiatives include:

• Restructuring and Exit 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

• 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
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.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

•

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.

•

Intangible Asset Impairments – These amounts relate to impairments of intangible assets recognized as a result of the
Company's periodic impairment testing. Goodwill and indefinite-lived intangible assets are evaluated for impairment annually,
and all intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the fair value
of an intangible asset may be below its carrying value. Refer to Note 1 – Significant Accounting Policies for further details
about the Company's impairment testing procedures. In the fourth quarter of 2017, the Company recorded an impairment charge
for the Cybex trade name as a result of declining sales and operating performance. The Company used a relief-from-royalty
analysis, a Level 3 input, to assess the fair value of the Cybex trade name. The impairment charge was recorded within the Fitness
segment.

The Company has reported restructuring, exit, integration and impairment 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, exit, integration and impairment activities for
2017, 2016 and 2015. The 2017 charges related to actions initiated in 2017 and 2016. The 2016 charges related to actions initiated
in 2016 and 2015. The 2015 charges related to actions initiated in 2015.

(in millions)

Restructuring and exit activities:

Employee termination and other benefits

Current asset write-downs

Professional fees

Other

Asset disposition and impairment actions:

Definite-lived and other asset impairments

Intangible asset impairments:

Trade name impairment

Integration activities:

Employee termination and other benefits

Professional fees

Other

Total restructuring, exit, integration and impairment charges

Total cash payments for restructuring, exit, integration and impairment charges (A)
Accrued charges at end of the period (B)

2017

2016

2015

7.2

4.9

0.2

0.9

—

13.9

2.5

5.2

1.8

36.6

16.2

5.4

0.6

—

2.3

—

4.0

5.9

2.4

15.2

10.2

4.6

0.6

—

4.1

—

4.7

0.4

1.5

(A) Total cash payments include payments related to prior period charges.
(B) Restructuring, exit, integration and impairment charges accrued as of December 31, 2017 are expected to be paid during 2018.

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, exit, integration and impairment charges
in future periods.

Actions Initiated in 2017

During 2017, the Company executed certain restructuring and exit activities within the Fitness, Boat and Corporate segments,
resulting in the recognition of restructuring, exit, integration and impairment charges within the Consolidated Statements of
Operations.

In the third quarter of 2017, the Company recorded restructuring charges within the Fitness segment for the write-down of

inventory and tooling related to the exit of the InMovement product line.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

In the second, third and fourth quarters of 2017, the Company implemented headcount reductions in the Fitness and Boat

segments aimed at improving general operating efficiencies.

In the first quarter of 2017, the Company announced the closure of its boat manufacturing facility in Joinville, Santa Catarina,
Brazil, as a result of continued market weakness due partially to unfavorable foreign currency impacts in the region. As a result,
the Company recorded restructuring, exit and impairment charges including the write-down of inventory. The facility manufactured
certain Bayliner and Sea Ray boat models for the Latin American market. The long-lived assets at this facility were previously
fully impaired.

In the first quarter of 2017, the Company also recorded restructuring charges within Corporate related to the transition of

certain corporate officers.

The following table is a summary of the expense associated with the restructuring, exit, integration and impairment activities

for the year ended December 31, 2017 and related actions initiated in 2017:

(in millions)

Restructuring and exit activities:

Employee termination and other benefits

Current asset write-downs

Professional fees

Other

Intangible asset impairments:

Trade name impairment

Total restructuring, exit, integration and impairment charges

Actions Initiated in 2016

Fitness

Boat

Corporate

Total

3.8

2.7

—

0.4

13.9

20.8

1.0

2.2

0.2

0.5

—

3.9

2.4

—

2.4

7.2

4.9

0.2

0.9

13.9

27.1

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.

The following table is a summary of the expense associated with the restructuring, exit, integration and impairment activities

for the year ended December 31, 2017 and 2016 and related actions initiated in 2016:

(in millions)

Fitness

Total

Fitness

Boat

Corporate

Total

2017

2016

Restructuring and exit activities:

Employee termination and other
benefits

Asset disposition and impairment
actions:

Definite-lived and other asset
impairments

Integration activities:

Employee termination and other
benefits

Professional fees

Other

Total restructuring, exit, integration
and impairment charges

— $

0.4

0.2

— $

0.6

—

2.5

5.2

1.8

—

2.5

5.2

1.8

—

4.0

5.9

2.4

—

1.4

—

1.4

4.0

5.9

2.4

9.5

12.7

0.2

1.4

14.3

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Actions Initiated in 2015

The Company recorded impairment charges of $0.9 million and $4.1 million in the fourth quarters of 2016 and 2015,
respectively, 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.

Note 4 – Acquisitions

2017 Acquisitions

On September 1, 2017, the Company acquired 100 percent of Lankhorst Taselaar B.V. (Lankhorst Taselaar), a leading marine
parts and accessories distribution company based in the Netherlands and Germany. The acquisition augments the marine parts and
accessories businesses through a broader product line and an expanded distribution network. Lankhorst Taselaar is managed as
part of the Company's Marine Engine segment.

The net cash consideration the Company paid to acquire Lankhorst Taselaar was $15.5 million. The preliminary opening
balance sheet included $4.6 million of identifiable intangible assets, including customer relationships and trade names for $3.2
million and $1.4 million, respectively, along with $5.5 million for goodwill which is not deductible for tax purposes. The amount
assigned to Lankhorst Taselaar's customer relationships will be amortized over its estimated useful life of approximately 15 years.
These amounts recorded are preliminary and are subject to change within the measurement period as the Company finalizes its
fair value estimates.

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, which is based in Nuremburg, Germany, and is a market
leader specializing in the design of indoor cycling equipment. 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 opening
balance sheet reflected $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.

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 manufacturer of commercial fitness
equipment. Cybex offers a full line of cardiovascular and strength products. 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.

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
Trade names
Customer relationships
Patents and proprietary technology
Property and equipment
Other assets
Total assets acquired
Total liabilities assumed
Net cash consideration paid

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

In the fourth quarter of 2017, the Company recorded an impairment charge for the Cybex trade name. See Note 3 –

Restructuring, Exit, Integration and Impairment Activities for further details.

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, 2017 and 2016:

(in millions)

Year

Net Cash
Consideration Paid

Fair Value of Identifiable Intangible Assets Acquired

Goodwill

Total

Intangible Asset

2017

15.5

5.5

4.6 Trade names

2016

276.1

119.2

118.7 Trade names

Customer relationships

Patents and proprietary technology

1.4

3.2

50.9

61.5

6.3

Useful Life

Indefinite

15 years

Indefinite

11 - 16 years

5 years

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.

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 outstanding shares which
includes 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, 2017, 2016 and 2015 were calculated as

follows:

(in millions, except per share data)

Net earnings from continuing operations

Earnings (loss) 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 (loss) per common share:

Continuing operations

Discontinued operations

Net earnings

Diluted earnings (loss) per common share:

Continuing operations

Discontinued operations

Net earnings

2017

2016

2015

187.3
(40.9)
146.4

272.6

3.4

276.0

230.9

10.5

241.4

89.4

0.7

90.1

2.10
(0.46)
1.64

2.08
(0.46)
1.62

91.2

0.8

92.0

2.99

0.04

3.03

2.96

0.04

3.00

93.0

1.3

94.3

2.49

0.11

2.60

2.45

0.11

2.56

Share awards that were not included in the computation of diluted earnings per share because their inclusion was anti-dilutive

were immaterial for all periods presented.

Note 6 – Segment Information

Brunswick is a manufacturer and marketer of leading consumer brands and has three 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 the following types of boats: fiberglass pleasure, sport cruiser, sport
fishing and center-console, offshore fishing, aluminum and fiberglass fishing, pontoon, utility, deck, inflatable, and heavy-gauge
aluminum. The Boat segment's products are manufactured mainly in the United States, Europe and Mexico and sold through a
global network of dealer and distributor locations, primarily in North America 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 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 from international suppliers. Fitness equipment is sold
mainly in the Americas, Europe and Asia to health clubs, corporate, university, hospitality, military and government facilities, and

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

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, investments in technology solutions,
business development and other growth-related expenses, including IT enhancements. 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 within continuing
operations, 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 reportable segments is set forth below:

Operating Segments

(in millions)

Marine Engine

Boat

Marine eliminations

Total Marine

Fitness

Pension costs

Corporate/Other

Total

Net Sales
2016

2017

2015

Operating Earnings (Loss)
2015
2016
2017

Total Assets (A)
2016
2017

$ 2,631.8

$ 2,441.1

$ 2,314.3

407.0

377.1

348.0

$ 1,205.0

$ 1,079.5

1,103.0

963.7

(258.5)

(231.3)

3,476.3

1,033.7

3,173.5

980.4

—

879.1
(207.8)
2,985.6

794.6

—

$ 4,510.0

$ 4,153.9

$ 3,780.2

71.1

—

478.1

64.1
(105.9)
(81.4)
354.9

59.4

—

436.5

117.3
(69.8)
(77.1)
406.9

38.5

—

386.5

116.5
(94.0)
(77.7)
331.3

308.9

—

1,513.9

1,012.8

—

728.8

285.8

—

1,365.3

947.5

—

832.2

$ 3,255.5

$ 3,145.0

(A) As of December 31, 2017 and 2016, the Company had $102.7 million and $139.7 million, respectively, of net assets classified as held for sale in the
Consolidated Balance Sheets relating to discontinued operations. See Note 2 – Discontinued Operations for further details.

(in millions)

Marine Engine

Boat

Fitness

Corporate/Other

Total

(in millions)

Marine Engine

Boat
Fitness

Corporate/Other

Total

Depreciation
2016

2017

2015

2017

Amortization
2016

2015

48.8

19.2

18.0

3.8

48.4

16.4

15.9

3.5

47.4

14.8

9.1

2.8

89.8

84.2

74.1

1.7

1.0

5.7

—

8.4

1.8

0.8

4.2

—

6.8

2.1

0.7

0.2

—

3.0

Capital Expenditures
2016

2015

2017

Research & Development Expense
2016

2015

2017

111.1

112.4

41.5

24.3

12.4

23.1
35.7

1.3

77.4

19.3
16.9

0.5

90.5

13.2

34.8

—

85.6

12.0
33.4

—

78.9

10.3
24.7

—

189.3

172.5

114.1

138.5

131.0

113.9

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

2017

Net Sales
2016

2015

2017

2016

Net property

$ 2,972.9

$ 2,762.2

$ 2,474.9

569.8

1,537.1

1,391.7

1,305.3

—

74.5

15.2

$ 4,510.0

$ 4,153.9

$ 3,780.2

659.5

489.7

65.2

14.1

569.0

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.

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

December 31, 2017:

(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

34.4

0.8

9.4

—

44.6

— $

4.0

— $
—

—

6.0

7.7

28.6

36.3

34.4

0.8

9.4

6.0

50.6

7.7

32.6

40.3

10.5

50.8

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

— $

4.1

14.3

35.0

—

11.2

60.5

4.7

25.6

30.3

18.9

35.8

11.2

77.1

4.7

29.7

34.4

10.3

44.7

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.

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, 2017 and 2016. 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 credit losses.

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, 2017, 2016 or 2015.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

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

year as of December 31, 2017 and December 31, 2016:

(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,
2017

December 31,
2016

23.7

30.2

53.9

11.7

1.1
(0.2)
12.6

22.0

29.0

51.0

6.2

0.6
(0.1)
6.7

66.5

57.7

The activity related to the allowance for credit loss on financing receivables during the years ended December 31, 2017 and

December 31, 2016 was not significant.

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, 2017 and 2016:

(in millions)

Commercial Paper

U.S. Treasury Bills

Total available-for-sale securities

2017

2016

— $
0.8

0.8

35.0

0.8

35.8

The Company had $35.0 million, $10.7 million and $109.8 million in maturities of available-for-sale securities during 2017,
2016 and 2015, respectively. The Company had no sales of available-for-sale securities during 2017 and 2016, and had $9.5 million
of 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, 2017 and 2016, there were no unrealized losses related to debt securities that required management evaluation.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

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.

Refer to Note 10 – Financial Services for more details on the Company’s Brunswick Acceptance Company, LLC joint venture.

In 2017, the Company contributed $2.1 million to fund a part ownership of TN-BC Holdings, LLC (TN-BC), a joint venture
with TechNexus Holdings, LLC. Contributions to TN-BC are strategically invested in targeted growth opportunities determined
by the joint venture's investment committee.

The Company also contributed $1.6 million, $1.0 million and $0.6 million in 2017, 2016 and 2015, respectively, to fund a
part ownership of Mercury Finance, a joint venture between Brunswick's Mercury Marine division and Allied Credit, an Australian-
based finance company.

Brunswick received $0.4 million in dividends from its unconsolidated affiliates in 2017 and did not receive any dividends

from its unconsolidated affiliates in 2016 or 2015.

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). CDF Ventures, LLC (CDFV), a subsidiary Wells Fargo and Company,
owns the remaining 51 percent. Prior to March 1, 2016, GE Capital Corporation (GECC) owned CDFV. 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, 2017, 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.

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

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

reinvested earnings. BFS’s total investment in BAC at December 31, 2017 and December 31, 2016 was $17.8 million and $16.9
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,
2017

December 31,
2016

17.8

39.9
(0.9)
56.8

16.9

36.8
(1.0)
52.7

(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.

BFS recorded income related to the operations of BAC of $6.0 million, $4.8 million and $4.6 million for the years ended

December 31, 2017, 2016 and 2015, respectively.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 11 – Goodwill and Other Intangibles

Changes in the Company's goodwill during the period ended December 31, 2017, by segment, are summarized below:

(in millions)
Marine Engine
Boat
Fitness
Total

2016

25.1
2.2
386.5
413.8

Acquisitions
5.5
$
—
—
5.5

Impairments
$

Adjustments
1.1
—
4.9
6.0

— $
—
—
— $

2017

31.7
2.2
391.4
425.3

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

Adjustments in 2017 and 2016 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 2017 and 2016, 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,

2017 and 2016, are summarized by intangible asset type below:

(in millions)
Intangible assets:
Customer relationships

Trade names

Other
Total

2017

2016

Gross
Amount

Accumulated
Amortization

Gross
Amount

Accumulated
Amortization

126.7
71.2
22.5
220.4

(59.4) $
—
(16.6)
(76.0) $

121.4
83.4
22.4
227.2

(52.4)
—
(14.7)
(67.1)

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

2017 and 2016, are summarized by segment below:

(in millions)
Intangible assets:
Marine Engine

Boat
Fitness
Total

2017

2016

Gross
Amount

Accumulated
Amortization

Gross
Amount

Accumulated
Amortization

78.3
39.9
102.2
220.4

(38.5) $
(24.1)
(13.4)
(76.0) $

72.8
39.9
114.5
227.2

(36.7)
(23.0)
(7.4)
(67.1)

In the fourth quarter of 2017, the Company recorded an impairment charge relating to the Cybex trade name. Refer to Note

3 – Restructuring, Exit, Integration and Impairment Activities for further details.

Other intangible assets primarily consist of patents. See Note 4 – Acquisitions for further details on intangibles acquired
during 2017 and 2016. Gross amounts and related accumulated amortization amounts include adjustments related to the impact
of foreign currency translation. Aggregate amortization expense for intangibles was $8.4 million, $6.8 million and $3.0 million
for the years ended December 31, 2017, 2016 and 2015, respectively. Estimated amortization expense for intangible assets is $8.6

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

million for the year ending December 31, 2018, $8.0 million in 2019, $7.6 million in 2020, $6.7 million in 2021, and $5.8 million
in 2022.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 12 – Income Taxes

On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law. The TCJA makes significant changes to the
U.S. tax code effective for 2018, although certain provisions affected the Company’s 2017 financial results. The changes impacting
2017 include, but are not limited to, the write-down of net deferred tax assets resulting from the reduction in the U.S. federal
corporate income tax rate from 35 percent to 21 percent, imposing a one-time deemed repatriation tax on certain unremitted earnings
of foreign subsidiaries, and bonus depreciation that will allow for immediate full expensing of qualified property. The TCJA also
establishes new corporate tax laws that will be effective in 2018 but do not impact the Company’s 2017 financial results. These
changes include, but are not limited to, lowering the U.S. federal corporate income tax rate, a general elimination of U.S. federal
income taxes on income and dividends from foreign subsidiaries, a new tax on global intangible low-taxed income (GILTI) net of
allowable foreign tax credits, a new deduction for foreign derived intangible income (FDII), the repeal of the domestic production
activity deduction, new limitations on the deductibility of certain executive compensation and interest expense, and limitations on
the use of foreign tax credits to reduce the U.S. federal income tax liability.

Due to the complexities involved in accounting for the enactment of the TCJA, the SEC staff issued Staff Accounting Bulletin
(SAB) 118 which provides guidance on accounting for the income tax effects of the TCJA. SAB 118 provides a measurement
period that should not extend beyond one year from the TCJA enactment date to complete the accounting for the impact of the
TCJA. SAB 118 allows the Company to provide provisional estimates of the impact of the TCJA in our financial statements for
the year ended December 31, 2017. Accordingly, based on information and IRS guidance currently available, we have recorded a
discrete net tax expense of $71.8 million for the year ended December 31, 2017. This consists primarily of a net charge of $56.5
million for the write down of our net deferred tax balances due to the U.S. corporate income tax rate reduction and a net expense
of $15.3 million for the one-time deemed repatriation tax. The Company has not completed its accounting for the income tax
effects of the TCJA and the provisional amounts will be refined as needed during the measurement period allowed by SAB 118.
While the Company has made reasonable estimates of the impact of the U.S. corporate income tax rate reduction and the one-time
deemed repatriation tax on unremitted earnings of foreign subsidiaries, these estimates could change as the Company continues
to analyze the TCJA and refines its calculations which could potentially affect the remeasurement of deferred tax balances, refines
its calculations of earnings and profits which could impact the repatriation tax calculation, and analyzes new IRS guidance related
to the TCJA.

The TCJA creates a new requirement that certain income (i.e. GILTI) earned by controlled foreign corporations (CFC’s) must
be included currently in the gross income of the CFC’s U.S. shareholder. Because of the complexity of the new GILTI tax rules
we are continuing to evaluate this provision of the TCJA. Under U.S. GAAP, we are allowed to make an accounting policy choice
of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when
incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the
“deferred method”). Our selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing
our global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI and, if so,
what the impact is expected to be. Because whether we expect to have future U.S. inclusions in taxable income related to GILTI
depends not only on our current structure and estimated future results of global operations but also our intent and ability to modify
our structure and/or our business, we are not yet able to reasonably estimate the effect of this provision of the TCJA. Therefore,
the Company has not made any adjustments related to potential GILTI tax in its financial statements for the period ended December
31, 2017, and we have not made a policy choice regarding whether to record deferred taxes on GILTI.

The Company will continue to analyze the effects of the TCJA on its financial statements. Additional impacts from the

enactment of the TCJA will be recorded as they are identified during the measurement period as allowed in SAB 118.

The sources of Earnings before income taxes were as follows:

(in millions)
United States
Foreign

Earnings before income taxes

2017

2016

2015

265.5
77.8
343.3

304.9
84.1
389.0

246.9
67.9
314.8

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

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

2017

2016

2015

11.0
6.0
20.6
37.6

25.6
4.7
23.4
53.7

118.5
1.8
(1.9)
118.4

56.2
6.7
(0.2)
62.7

21.3
2.2
17.1
40.6

40.4
3.2
(0.3)
43.3

156.0

116.4

83.9

Temporary differences and carryforwards giving rise to deferred tax assets and liabilities at December 31, 2017 and 2016 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
Sale of business
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

2017

2016

25.0
75.9
43.8
31.3
25.0
19.2
15.1
4.0
15.4
12.6
14.4
48.1
329.8
(81.4)
248.4

(57.8) $
(21.1)
(8.7)
(87.6) $

86.2
71.7
47.3
41.9
32.0
23.2
23.2
22.2
21.7
20.2
10.2
72.7
472.5
(78.1)
394.4

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

160.8

305.3

The Company's total net deferred tax asset as of December 31, 2017 reflects the impact of the U.S. federal corporate tax rate
reduction from 35 percent to 21 percent that was part of the TCJA. The Company was required to write down the value of its net
deferred tax balance to reflect the new lower tax rate.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

At December 31, 2017, the Company had a total valuation allowance against its deferred tax assets of $81.4 million. The
remaining realizable value of deferred tax assets at December 31, 2017 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, 2017, the Company retained valuation allowance reserves of $53.7 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 $27.7 million for deferred tax assets
related to foreign jurisdictions, primarily Brazil.

At December 31, 2017, the tax benefit of loss carryforwards totaling $75.9 million was available to reduce future tax liabilities.
This deferred tax asset was comprised of $2.1 million for the tax benefit of federal net operating loss (NOL) carryforwards, $45.8
million for the tax benefit of state NOL carryforwards and $28.0 million for the tax benefit of foreign NOL carryforwards. NOL
carryforwards of $49.5 million expire at various intervals between the years 2018 and 2037, while $26.4 million have an unlimited
life.

At December 31, 2017, tax credit carryforwards totaling $43.8 million were available to reduce future tax liabilities. This
deferred tax asset was comprised of $2.4 million related to general business credits and other miscellaneous federal credits, and
$41.4 million of various state tax credits related to research and development, capital investment and job incentives. Tax credit
carryforwards of $43.6 million expire at various intervals between the years 2018 and 2037, while $0.2 million have an unlimited
life.

The Company has historically provided 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 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 2015 which includes
the benefit of applying the indefinite reinvestment assertion to the foreign entities reorganized under a new European holding
company. As a result of the TCJA, specifically the imposition of a one-time deemed repatriation tax on certain unremitted earnings
of foreign subsidiaries, the Company reevaluated its indefinite assertion as of December 31, 2017. The Company is considering
remitting cash back to the U.S. in 2018 from non-U.S. subsidiaries and as such, the Company will no longer assert that it is
permanently reinvested in any non-U.S. subsidiaries as of December 31, 2017. These remittances would be considered dividends
and under changes made by the TCJA these dividends would be subject to a 100 percent dividend received deduction and would
not result in any U.S. federal tax liability. As of December 31, 2017 the Company has provided deferred taxes for jurisdictions
where dividends would be subject to withholding taxes. The Company is continuing to analyze the effects of the TCJA including
the impact on future repatriations and any related withholding taxes from non-U.S. subsidiaries.

As of December 31, 2017, 2016 and 2015 the Company had $2.3 million, $3.5 million and $4.8 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, 2017, 2016 and 2015, the amounts accrued for interest and penalties were not significant.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

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

2017, 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

2017

2016

2015

3.4
0.1
(0.2)
0.4
(0.5)
(1.1)
—
2.1

4.7
0.3
(0.4)
0.5
—
(1.7)
0.0
3.4

4.8
0.4
(0.1)
0.5
(0.6)
—
(0.3)
4.7

The Company believes it is reasonably possible that the total amount of gross unrecognized tax benefits as of December 31,
2017 could decrease by approximately $0.7 million in 2018 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 2018, but the amount cannot be estimated at this time.

The Company is regularly audited by federal, state and foreign tax authorities. The Internal Revenue Service (IRS) has
completed its field examination and has issued its Revenue Agents Report through the 2012 tax year and all open issues have been
resolved. The Company is currently open to tax examinations by the IRS for the 2014 through 2016 tax years and the IRS field
examination of the 2014 tax year is completed. The Company is awaiting the Revenue Agents Report for 2014 and does not expect
any material adjustments. Primarily as a result of filing amended returns, which were generated by the closing of federal income
tax audits, the Company is still open to state and local tax audits in major tax jurisdictions dating back to the 2012 taxable year.
The Company is no longer subject to income tax examinations by any major foreign tax jurisdiction for years prior to 2013.

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:

(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
Equity compensation
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

2017
120.2
7.4
4.7
(8.2)
(7.7)

1.4
(10.3)
(25.4)
—
(1.1)
2.1
71.8
1.1
156.0

2016

2015

136.2
8.3
2.9
(6.1)
—
(0.2)
(9.1)
(20.1)
(1.1)
(1.4)
1.6
5.4
—
116.4

110.2
7.1
0.7
(8.8)
—
(4.2)
(8.0)
(6.8)
(11.4)
0.5
3.0
—
1.6
83.9

45.4%

29.9%

26.7%

The Company's effective tax rate also reflects the benefit of having earnings from foreign entities that are in jurisdictions that
have lower statutory tax rates than the U.S. This includes entities in Hungary, China, Poland and the United Kingdom which have
applicable statutory tax rates of 9 percent, 15 percent, 19 percent and 19 percent, respectively.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

In addition, the Company's effective tax rate includes the utilization of excess foreign tax credits in connection with the

repatriation of foreign earnings.

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

2017

2016

2015

156.0
(21.2)
134.8

116.4
(0.0)
116.4

83.9
4.2
88.1

In the fourth quarter of 2017, the Company recorded a $13.5 million charge for costs related to field campaigns pertaining to
certain Cybex products designed prior to the acquisition. The charge consisted of $8.4 million and $5.1 million within Cost of
sales and Selling, general and administrative expense, respectively. The Company has made indemnification claims against the
seller for recovery that includes these amounts, but has not yet recorded an offsetting receivable in the financial statements.

Upon the Company’s acquisition of the Cybex business on January 20, 2016, Cybex was subject to an ongoing investigation
by the Consumer Product Safety Commission (CPSC) regarding the timeliness of a recall of the Cybex arm curl product. The
purchase agreement contained specific language providing that the seller will fully indemnify and hold harmless the Company for
all losses related to the CPSC’s investigation of the arm curl product. In the third quarter of 2017, the CPSC concluded its
investigation and issued a letter to Cybex offering to settle the arm curl investigation for a civil penalty in the amount of $6.3
million. The Company accrued this amount and fully offset it with an indemnification receivable from the seller and continues to
negotiate a final settlement amount with the CPSC.

On January 21, 2015, Cobalt Boats, LLC (Cobalt) filed a patent infringement lawsuit against the Company alleging that certain
of the Company’s Sea Ray branded boats include a feature that infringes a Cobalt patent relating to a submersible swim step. On
October 31, 2017, the U.S. District Court in the Eastern District of Virginia entered an amended judgment on the jury verdict
awarding total damages, including enhanced damages, in the amount of $5.4 million plus attorneys' fees of $2.5 million and
applicable interest. The Company believes it has meritorious defenses and is pursuing an appeal. Charges and expenses related to
the Cobalt case are included in discontinued operations in the Company's consolidated financial statements.

Financial Commitments

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, 2017 and December 31, 2016 were $41.4 million and $31.5 million, respectively. The maximum
potential cash obligations associated with these customer financing arrangements as of December 31, 2017 and December 31,
2016 were $49.2 million and $39.6 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 $1.1 million and $1.2 million accrued for potential losses related to recourse exposure at December 31,
2017 and December 31, 2016, 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 $23.7 million and $22.0 million was recorded in Accounts and notes
receivable and Accrued expenses as of December 31, 2017 and December 31, 2016, respectively. Further, the long-term portion

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

of these arrangements of $30.2 million and $29.0 million as of December 31, 2017 and December 31, 2016, respectively, was
recorded in Other long-term assets and Other long-term liabilities.

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, 2017 and December 31, 2016 were $53.6 million and $59.9 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 $0.8 million and $0.9 million accrued for potential losses related to repurchase exposure
as of December 31, 2017 and December 31, 2016, respectively. 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 $5.3 million and $15.3 million, respectively, as of December 31, 2017. 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, 2017.

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 $9.4 million and $11.2 million of cash in the
trust at December 31, 2017 and December 31, 2016, respectively, which was classified as Restricted cash in the Company's
Consolidated Balance Sheets. In both 2017 and 2016, insurance carriers reduced the required collateral amount, which resulted in
a $1.8 million and $1.5 million, respectively, transferred out of the trust.

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, 2017 and December 31, 2016:

(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

2017

2016

100.2
(57.9)
62.3

5.5
1.8

—
(0.6)
111.3

93.3
(55.9)
63.6
(9.8)
(0.4)
7.1

2.3

100.2

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 revenue liability is recorded based on the aggregate sales price for contracts sold. The liability is reduced
and revenue is recognized on a straight-line basis over the contract period during which corresponding costs are expected to be
incurred. The Company updated certain amounts to properly reflect the activity within the prior year extended warranty contracts
sold and revenue recognized on existing extended warranty contracts captions, as outlined in the table below.

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, 2017 and December 31, 2016:

(in millions)

Balance at beginning of period

Extended warranty contracts sold

Revenue recognized on existing extended warranty contracts
Foreign currency translation

Acquisitions

Balance at end of period

Legal and Environmental

2017

2016

90.6

51.8
(31.1)
0.8

—

112.1

78.3

39.7
(29.3)
(0.7)
2.6

90.6

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 accruals, 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 or 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

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

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 accruals based
on a range of cost estimates for all known claims.

The environmental remediation and clean-up projects in which the Company is involved have an aggregate estimated range
of exposure of approximately $21.0 million to $39.2 million as of December 31, 2017. At December 31, 2017 and 2016, the
Company had accruals for environmental liabilities of $21.0 million and $33.0 million , respectively, reflected in Accrued expenses
and Other long-term liabilities in the Consolidated Balance Sheets. The Company recorded environmental provisions of $0.0
million, $0.3 million and $0.9 million for the years ended December 31, 2017, 2016 and 2015, 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 accruals, 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 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, 2017, 2016 and 2015. 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 aluminum, 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 and reclassified into earnings in the same period or
periods during which the hedged transaction affects earnings. As of December 31, 2017, the term of derivative instruments hedging
forecasted transactions ranged up to 18 months.

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)

2017

2016

Pretax

After-tax

Pretax

After-tax

1.1
(10.9)
2.0
(7.8) $

(5.6) $
(7.5)
1.3
(11.8) $

0.4
2.9
(2.2)
1.1

(5.9)
2.1
(1.8)
(5.6)

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.

Foreign Currency Derivatives. 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, 2017 and December 31, 2016 had notional contract values of $312.6
million and $255.0 million, respectively. Option contracts outstanding at December 31, 2017 and December 31, 2016, had notional
contract values of $18.0 million and $30.4 million, respectively. The forward and options contracts outstanding at December 31,
2017, mature during 2018 and 2019 and mainly relate to the Euro, Japanese yen, Canadian dollar, Australian dollar, Swedish krona,
British pound, Norwegian krone, Brazilian real, Mexican peso, New Zealand dollar, Hungarian forint and Taiwan dollar. As of
December 31, 2017, the Company estimates that during the next 12 months, it will reclassify approximately $4.3 million of net
losses (based on current rates) from Accumulated other comprehensive loss to Cost of sales.

Interest Rate Derivatives. The Company enters into fixed-to-floating interest rate swaps to convert a portion of the Company's
long-term debt from fixed to floating rate debt. As of December 31, 2017 and December 31, 2016, 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, 2017 or December 31, 2016.

As of December 31, 2017 and December 31, 2016, the Company had $3.4 million and $4.5 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, 2017, the Company estimates that during the next 12 months, it will reclassify approximately $0.9 million
of net losses resulting from settled forward-starting interest rate swaps from Accumulated other comprehensive loss to Interest
expense.

Commodity Price Derivatives. 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, 2017 and December 31,
2016.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

As of December 31, 2017 and December 31, 2016, 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

2017

2016

2017

2016

Derivatives Designated as Cash Flow Hedges

Foreign exchange contracts

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

Total

2.5

2.1

0.7

2.8

0.7

Accrued expenses

7.2

2.1

Accrued expenses

0.7 Other long-term liabilities

2.8

1.2

Accrued expenses

5.5

1.8

0.3

2.1

0.1

2.5

1.7

0.2

1.9

0.3

The effect of derivative instruments on the Consolidated Statements of Operations for the years ended December 31, 2017

and December 31, 2016 was:

(in millions)

Derivatives Designated as Cash
Flow Hedging Instruments

Amount of Gain (Loss) on
Derivatives Recognized in
Accumulated Other Comprehensive
Loss (Effective Portion)
2017
2016

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

Interest rate contracts

Foreign exchange contracts

Commodity contracts

Total

— $

(10.9)

—
(10.9) $

—

2.9

0.0

2.9

Interest expense

Cost of sales

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

2017

2016

(1.1) $
(0.9)
(0.0)
(2.0) $

(0.6)
3.3
(0.5)
2.2

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

2017

2016

Interest rate contracts

Interest expense

2.0

2.9

Other Hedging Activity

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

2017

2016

(9.9) $
(1.8)
—
(11.7) $

(3.4)
2.0

0.3
(1.1)

Fair Value of Other Financial Instruments. The carrying values of the Company’s short-term financial instruments, including
cash and cash equivalents and accounts and notes receivable approximate their fair values because of the short maturity of these
instruments. At December 31, 2017 and December 31, 2016, the fair value of the Company’s long-term debt was approximately

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

$492.1 million and $495.7 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 $439.1 million and $441.6 million as of December 31,
2017 and December 31, 2016, respectively.

Note 15 – Accrued Expenses

Accrued Expenses at December 31, 2017 and 2016 were as follows:

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

Total accrued expenses

2017

2016

131.7
111.3
109.8
65.2
25.7
19.5
11.5
8.4
6.4
7.4
66.7
563.6

134.8
100.2
91.2
62.3
24.1
18.7
21.7
8.4
6.8
4.5
48.6
521.3

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Note 16 – Debt

Long-term debt at December 31, 2017 and December 31, 2016 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 $0.4 and $0.5 $
Senior notes, currently 4.625%, due 2021, net of debt issuances costs of $1.5 and $1.9 (A)
Debentures, 7.375% due 2023, net of discount of $0.2 and $0.2 and debt issuance costs of $0.2
and $0.2 (A)
Loan with Fond du Lac County Economic Development Corporation, 2.0% due 2021, net of
discount of $3.0 and $3.8 and debt issuance costs of $0.1 and $0.1

Notes, various up to 5.8% payable through 2027, net of discount of $0.2 and $0.2

Total long-term debt

Current maturities of long-term debt

Long-term debt, net of current maturities

2017

2016

162.4

148.2

103.4

19.6

3.8

437.4
(5.6)
431.8

162.3

147.8

103.4

23.8

2.1

439.4
(5.6)
433.8

(A) Included in Senior notes, 4.625 percent due 2021 and Debentures, 7.375 percent due 2023 at December 31, 2017 and December 31, 2016, 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)

2018

2019

2020

2021

2022

Thereafter

Total long-term debt including current maturities

5.6

5.9

5.8

153.3

0.3

266.5

437.4

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 subject to redemption provisions. 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 percent 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
amended and restated the Company's existing credit agreement, dated as of March 2011, as amended and restated as of June 2014.
The Credit Facility provides for $300.0 million of borrowing capacity and is in effect through June 2021. No borrowings were
outstanding as of December 31, 2017 or during 2017 or 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 $100.0
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, 2017, the Company was in compliance with the financial
covenants in the Credit Facility.

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 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 in both 2017 and 2016 was
$2.1 million or 43 percent of the principal due, and total loan forgiveness in 2015 was $2.0 million, or 41 percent of the principal
due.

Note 17 – Postretirement Benefits

Overview. The Company has defined contribution plans and makes contributions including 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 $52.1 million in 2017 and $46.3
million in both 2016 and 2015.

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.

The Company historically maintained four qualified defined benefit plans: the Brunswick Pension Plan for Salaried Employees
(Salaried Plan), the Brunswick Pension Plan for Hourly Bargaining Unit Employees (Bargaining Plan), the Brunswick Pension
Plan For Hourly Employees (Hourly Plan) and the Brunswick Pension Plan For Hourly Wage Employees (Muskegon Plan). The
Company took actions to terminate the Hourly Plan and the Muskegon Plan, effective as of December 31, 2016, and all benefits
were paid during 2017 as described below.

During 2017, total settlement payments of $132.7 million were made from the Bargaining Plan and Salaried Plan to purchase
group annuity contracts to cover future benefit payments. In addition, settlement payments totaling $101.7 million were made
from the Hourly Plan and the Muskegon Plan in connection with plan terminations. The settlement payments included group
annuity contracts to cover future benefit payments as well as lump-sum benefit payments to certain participants.

The annuity contracts unconditionally and irrevocably guarantee the full payment of all future annuity payments to the
participants. The insurance company assumed all investment risk associated with the assets and obligations that were transferred.
The Company recognized a pretax settlement loss of $96.6 million at December 31, 2017 related to these actions.

During 2016, total settlement payments of $125.2 million were made from the Bargaining Plan and the 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.

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.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

Costs. Pension and other postretirement benefit costs included the following components for 2017, 2016 and 2015:

Pension Benefits
2016

2017

2015

Other Postretirement
Benefits

2017

2016

921.5
28.4
—
58.0
(56.6)
(234.4)
716.9

687.9
75.5
73.7
—
(56.6)
(234.4)
546.1

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

736.4
75.7
74.6
—
(73.6)
(125.2)
687.9

40.6
1.2
0.5
0.0
(3.6)
—
38.7

—
—
3.1
0.5
(3.6)
—
—

43.5
1.4
0.5
(0.9)
(3.9)
—
40.6

—
—
3.4
0.5
(3.9)
—
—

Funded status at December 31
Funded percentage (A)

(170.8)

76%

(233.6)
75%

(38.7) $
NA

(40.6)
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, 2017

and 2016, 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 $33.2 million and $34.5 million at December 31, 2017 and 2016, respectively. The Company's
nonqualified pension plan and other postretirement benefit plans are not funded.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

The amounts included in the Company's Consolidated Balance Sheets as of December 31, 2017 and 2016, were as follows:

(in millions)
Accounts and notes receivable

Assets recognized

Accrued expenses
Postretirement benefit liabilities

Liabilities recognized

Pension Benefits

2017

2016

3.5
3.5

3.8
170.5
174.3

— $
—

10.5
223.1
233.6

Other Postretirement
Benefits

2017

2016

— $
—

3.7
35.0
38.7

—
—

4.1
36.5
40.6

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

2017

2016

2017

2016

— $
—
—

(10.2) $
0.7
(9.5)

(10.9)
0.7
(10.2)

397.1
16.0
(111.0)
302.1

457.8
11.8
(72.5)
397.1

1.0
0.0
—
1.0

1.9
(0.9)
—
1.0

302.1

397.1

(8.5) $

(9.2)

The estimated pretax net actuarial loss in Accumulated other comprehensive loss at December 31, 2017, expected to be
recognized as a component of net periodic benefit cost in 2018 for the Company's pension plans, is $9.9 million. The estimated
pretax prior service credit and net actuarial loss in Accumulated other comprehensive loss at December 31, 2017, expected to be
recognized as components of net periodic benefit cost in 2018 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.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

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
2016
2017

5.6%

4.5%

2037

5.7%

4.5%

2037

A one percent change in the assumed health care trend rate at December 31, 2017 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.

Assumptions. 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

2017

2016

2017

2016

3.63%

4.00%

3.51%

3.93%

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 (A) (B)
Discount rate for other postretirement benefits (A) (B)
Long-term rate of return on plan assets (C)

2017

3.40%

3.17%

4.75%

2016

3.58%

3.30%

5.25%

2015

3.95%

3.75%

6.00%

(A) 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.

(B) Pension expense in 2017 and 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 starting in 2016.

(C) 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.

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

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

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.

The Trust asset allocation at December 31, 2017 and 2016, and target allocation for 2018 are as follows:

Equity securities:

United States

International

Fixed-income securities

Short-term investments

Total

2017

2016

89%

19%

75%

Target
Allocation
for 2018

95%

—%

100%

The fair values of the Trust's pension assets at December 31, 2017, 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, 2017 (A)

Quoted Prices
in Active
Markets for
Identical Assets

(Level 1)

Significant
Observable
Inputs

(Level 2)

Total

15.2

— $

15.2

—
—
—
15.2

114.1
324.0
9.2
447.3

114.1
324.0
9.2
462.5

25.0

23.9
5.6

65.2
119.7
(36.1)
546.1

(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 and Level 2 in 2017.
(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, 2017.

(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.

BRUNSWICK CORPORATION
Notes to Consolidated Financial Statements

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

Fair Value Measurements at December 31, 2016 (A)

Quoted Prices
in Active
Markets for
Identical Assets

(Level 1)

Significant
Observable
Inputs

(Level 2)

Total

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 and Level 2 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.

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.

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.

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, asset-backed securities and other short-term, fixed-income 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, 2017

and December 31, 2016.

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 2018 (A)
Expected benefit payments:
2018
2019
2020
2021
2022
2023-2027

Pension
Benefits