Brunswick Corp. Reports Operating Results (10-K)

Brunswick Corp. (NYSE:BC) filed Annual Report for the period ended 2011-12-31.

Brunswick Corp has a market cap of $2.18 billion; its shares were traded at around $23.36 with a P/E ratio of 22.1 and P/S ratio of 0.6. The dividend yield of Brunswick Corp stocks is 0.2%.

Highlight of Business Operations:

Operating earnings, excluding restructuring, exit and impairment charges, were $215.1 million and $78.6 million in 2011 and 2010, respectively. This increase of $136.5 million was realized on an increase in sales of $344.7 million in 2011.

Sales improved $344.7 million or 10 percent during 2011. The Company experienced an increase in sales at each of its operating segments. The Marine Engine, Boat, Fitness and Bowling & Billiards segments reported sales increases of 10 percent, 11 percent, 17 percent and 1 percent, respectively; and

In 2009, net cash provided by operating activities totaled $125.5 million. The most significant source of cash provided by operating activities was from a reduction in certain current assets and current liabilities of $400.8 million. Inventory balances decreased primarily due to decreased production and procurement across the Company, especially in the Marine Engine and Boat segments, which produced less inventory than was sold at wholesale. Decreases in accounts receivable of $159.9 million resulted from lower sales and continued collection activities on outstanding receivables. Accrued expenses and accounts payable decreased primarily as a result of the reduced level of the Company s business activities in 2009 compared with 2008. The Company also received net tax refunds of $90.6 million during the year, primarily related to its 2008 taxable losses. Partially offsetting these factors were the Company s net loss from operations adjusted for non-cash charges and the Company s repurchase of $84.2 million of accounts receivable from Brunswick Acceptance Company, LLC in May 2009, in connection with a new asset-based lending facility (Mercury Receivable ABL Facility). See Note 8 – Financial Services in the Notes to Consolidated Financial Statements for more details on the Company s sale of accounts receivable program and Mercury Receivables ABL Facility, respectively.

Cash, cash equivalents and marketable securities totaled $507.8 million as of December 31, 2011, a decrease of $149.3 million from $657.1 million as of December 31, 2010. Total debt as of December 31, 2011 and December 31, 2010, was $692.8 million and $830.6 million, respectively. As a result, the Company s Net debt increased $11.5 million in 2011 to $185.0 million from $173.5 million in 2010. Brunswick s debt-to-capitalization ratio increased to 95.7 percent as of December 31, 2011, from 92.2 percent as of December 31, 2010, mainly resulting from a decline in shareholders equity caused by increased Accumulated other comprehensive losses from remeasurement of the Company s defined benefit plan obligations at December 31, 2011, partially offset by current year net earnings and reduced debt levels.

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 as 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 potentially be significant to BAC. Based on a qualitative analysis performed by the Company, BFS did not meet the definition of a primary beneficiary. As a result, BFS s investment in BAC is accounted for by the Company under the equity method and is recorded 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 loss in its Consolidated Statements of Operations. BFS s equity investment is adjusted monthly to maintain a 49 percent interest in accordance with the capital provisions of the joint venture agreement. The Company funds its investment in BAC through cash contributions and reinvested earnings. BFS s total investment in BAC at December 31, 2011 and 2010 was $10.6 million and $10.3 million, respectively.

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