BRUNSWICK CORP

Item 1. Condensed Consolidated Financial Statements

Condensed Consolidated Statements of Operations

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Cash Flows

Brunswick Corporation

Condensed Consolidated Statements of Shareholders' Equity

Note 1 – Significant Accounting Policies

Interim Financial Statements

Brunswick's unaudited interim condensed consolidated financial statements have been prepared pursuant to Securities and Exchange Commission (SEC) rules and regulations. Therefore, certain information and disclosures normally included in financial statements and related notes prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted.

These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included in Brunswick's Annual Report on Form 10-K for the year ended December 31, 2025 (the 2025 Form 10-K). These results include, in management's opinion, all normal and recurring adjustments that are necessary to present fairly Brunswick's financial position, results of operations, and cash flows. Due to the seasonality of Brunswick's businesses, the interim results are not necessarily indicative of the results that may be expected for the remainder of the year.

The Company maintains its financial records on the basis of a fiscal year ending on December 31, with the fiscal quarters spanning approximately thirteen weeks. The first quarter ends on the Saturday closest to the end of the first thirteen-week period. The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The third quarter of fiscal year 2026 ended on October 3, 2026, and the third quarter of fiscal year 2025 ended on September 27, 2025.

Recently Issued Accounting Standards

Income Statement: In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This guidance requires disclosures about significant expense categories, including but not limited to, inventory purchases, employee compensation, depreciation, amortization, and selling expenses. ASU 2024-03 is effective for financial statements for annual periods beginning after December 15, 2026. We are currently evaluating the impact of adopting this guidance on the consolidated financial statements.

Note 2 –Revenue Recognition

The following tables present the Company's revenue in categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors:

During 2025, Navico Group realigned its business unit structure to align product portfolios and management structure. During the third quarter of 2025, the Company changed the presentation of major product lines for the Navico Group segment to disaggregate the previous Navico Group product line into Electronic Solutions, Power Solutions, and Performance Solutions to conform to Navico Group's new organizational structure. Prior period amounts have been reclassified to conform to the current period presentation.

As of December 31, 2025,$194.0 million of contract liabilities associated with extended warranties, deferred revenue and customer deposits were reported in Accrued expenses and Other long-term liabilities, of which $53.4 million was recognized as revenue during the nine months ended October 3, 2026. As of October 3, 2026, total contract liabilities were $217.5 million. The total amount of the transaction price allocated to unsatisfied performance obligations as of October 3, 2026, was $212.8 million for contracts greater than one year, which primarily relates to extended warranties. The Company expects to recognize $26.9 million of this amount in 2026, $62.2 million in 2027, and $123.7 million thereafter.

Note 3 –Restructuring, Exit, and Impairment Activities

During the three and nine months ended October 3, 2026, and September 27, 2025, the Company recorded restructuring charges related to headcount reductions and related costs associated with streamlining the enterprise-wide cost structure and improving operating efficiencies. The Company also incurred charges related to the rationalization of its manufacturing footprint, including the decision in the third quarter of 2025 to rationalize its fiberglass boat manufacturing footprint and exit its facilities in Reynosa, Mexico and Flagler Beach, Florida and consolidate production from those facilities into existing U.S. facilities. Any gain or loss associated with the sale of these facilities is included in Selling, general and administrative expense.

The following table is a summary of these expenses for the three months ended October 3, 2026:

(A) Includes impairment charges of $17.8 million associated with an impairment of the Fliteboard reporting unit's goodwill and trade names during the three months ended October 3, 2026. See further discussion at Note 8 – Goodwill and Other Intangibles.

The following table is a summary of these expenses for the three months ended September 27, 2025:

(A) Includes $0.9 million of benefit associated with pension plan adjustments included within Other expense, net in the Condensed Consolidated Statements of Operations during the three months ended September 27, 2025.

(B) Includes impairment charges of $322.8 million associated with an impairment of the Navico Group reporting unit's goodwill and trade names during the three months ended September 27, 2025.

The following table is a summary of these expenses for the nine months ended October 3, 2026:

(A) Includes impairment charges of $17.8 million associated with an impairment of the Fliteboard reporting unit's goodwill and trade names during the nine months ended October 3, 2026. See further discussion at Note 8 – Goodwill and Other Intangibles.

The following table is a summary of these expenses for the nine months ended September 27, 2025:

(A) Includes $0.9 million of benefit associated with pension plan adjustments included within Other expense, net in the Condensed Consolidated Statements of Operations during the nine months ended September 27, 2025.

(B) Includes impairment charges of $322.8 million associated with an impairment of the Navico Group reporting unit's goodwill and trade names during the nine months ended September 27, 2025.

Cash payments for the respective periods above include payments related to prior period charges. Restructuring, exit, and impairment charges accrued as of October 3, 2026, are expected to be paid in the next twelve months.

Note 4 –Acquisitions

2026 Acquisitions

During 2026, the Company acquired multiple Freedom Boat Club franchise operations and territories. These acquisitions are expected to create operational efficiencies while providing members with access to additional boating destinations, and are included as part of the Company's Boat Segment.

The Company paid net cash consideration of $32.5 million for these acquisitions, and total deferred compensation of $8.4 million due within one year from the acquisition date. The opening balance sheet, which is preliminary and subject to change in the measurement period as the Company finalizes the purchase price allocation and fair value estimates, includes $22.2 million of goodwill and $3.7 million of customer relationships. The amount assigned to customer relationships will be amortized over the estimated useful life of 10 years. Transaction costs associated with these acquisitions were not material to the Company's consolidated results of operations.

Note 5 –Financial Instruments

The Company operates globally with manufacturing and sales facilities around the world. Due to the Company’s global operations, the Company engages in activities involving both financial and market risks. The Company utilizes normal operating and financing activities, along with derivative financial instruments, to minimize these risks. See Note 12 in the Notes to Consolidated Financial Statements in the 2025 Form 10-K for further details regarding the Company's financial instruments and hedging policies.

The following table summarizes the notional values of the Company's derivative instruments as of October 3, 2026, December 31, 2025, and September 27, 2025:

(A) Commodity contracts outstanding as of October 3, 2026 mature through 2028.

(B) The amount of gain or loss that is expected to be reclassified from Accumulated other comprehensive loss to earnings in the next twelve months is immaterial.

(C) Forward contracts outstanding as of October 3, 2026 mature through 2028 and mainly relate to the Euro, Australian dollar, Japanese yen, and Norwegian krone.

As of October 3, 2026, December 31, 2025, and September 27, 2025, the fair values of the Company’s derivative instruments were:

As of October 3, 2026, December 31, 2025, and September 27, 2025, asset derivatives are included within Prepaid expenses and other and Other long-term assets, and liability derivatives are included within Accrued expenses and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

The effect of derivative instruments on the Condensed Consolidated Statements of Operations for the three and nine months ended October 3, 2026, and September 27, 2025, is shown in the tables below.

The amount of gain (loss) on derivatives recognized in Accumulated other comprehensive loss was as follows:

The amount of gain (loss) reclassified from Accumulated other comprehensive loss into earnings was as follows:

The amount of gain (loss) on derivatives recognized directly into earnings was as follows:

Note 6 –Fair Value Measurements

The following table summarizes the Company's financial assets and liabilities measured at fair value on a recurring basis:

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. The fair value of the Company's long-term debt, including current maturities, and short-term debt is determined using Level 1 and Level 2 inputs described in Note 6 to Notes to Consolidated Financial Statements in the 2025 Form 10-K. The fair value and carrying value of long-term debt, including current maturities, and short-term debt as of October 3, 2026, December 31, 2025, and September 27, 2025 was as follows:

Note 7 –Commitments and Contingencies

Product Warranties

The following activity related to product warranty liabilities was recorded in Accrued expenses during the nine months ended October 3, 2026 and September 27, 2025:

Extended Product Warranties

The following activity related to deferred revenue for extended product warranty contracts was recorded in Accrued expenses and Other long-term liabilities during the nine months ended October 3, 2026 and September 27, 2025:

Note 8 –Goodwill and Other Intangibles

Changes in the Company's goodwill during the nine months ended October 3, 2026 and September 27, 2025, by reportable segment, are summarized below:

The Company tests goodwill annually in the fourth quarter and whenever a triggering event indicates a reporting unit's carrying value may exceed its fair value. As a result of changes to the financial projections, the Company identified a triggering event for the Fliteboard reporting unit and performed an interim test in the third quarter. Due to the changes in the projections and unfavorable movements in the underlying inputs impacting the discount rate, the test showed the carrying value exceeded fair value, and the Company recorded a $13.0 million goodwill impairment charge in the Propulsion segment for the three months ended October 3, 2026, which is included as a component of Restructuring, exit and impairment charges in the Condensed Consolidated Statements of Operations. Following the charge, Fliteboard's fair value approximates its carrying value. Fliteboard was acquired in 2023 and is a leader in eFoiling technology, which combines advanced hydrofoils and electric propulsion on the water. The Company calculated the fair value of Fliteboard considering both the income approach and the guideline public company method.

The Company recorded a total impairment charge of $305.8 million during the three months ended September 27, 2025, related to Navico Group goodwill, which is included as a component of Restructuring, exit and impairment charges on the Condensed Consolidated Statements of Operations.

Adjustments in both periods include the effect of foreign currency translation on goodwill denominated in currencies other than the U.S. dollar. The Company's accumulated impairment loss on goodwill was $398.8 million as of October 3, 2026 and $385.8 million as of both December 31, 2025, and September 27, 2025.

The Company's intangible assets, included within Other intangibles, net on the Condensed Consolidated Balance Sheets as of October 3, 2026, December 31, 2025, and September 27, 2025, are summarized by intangible asset type below:

Other intangible assets primarily consist of software, patents, and franchise agreements. Gross amounts and related accumulated amortization amounts include adjustments related to the impact of foreign currency translation. Aggregate amortization expense for intangibles was $19.9 million and $58.7 million for the three and nine months ended October 3, 2026, respectively. Aggregate amortization expense for intangibles was $19.7 million and $59.0 million for the three and nine months ended September 27, 2025, respectively.

The Company tests its intangible assets for impairment during the fourth quarter of each year, or whenever a change in events and circumstances (triggering event) occurs that indicates the fair value of intangible assets may be below their carrying values. The Company recorded an impairment charge of $4.8 million during the three months ended October 3, 2026, related to the Fliteboard trade name, which is included as a component of Restructuring, exit and impairment charges on the Condensed Consolidated Statements of Operations. The Company recorded a total impairment charge of $17.0 million during the three months ended September 27, 2025, related to various Navico Group trade names, which is included as a component of Restructuring, exit and impairment charges on the Condensed Consolidated Statements of Operations.

Note 9 –Segment Information

The accounting policies for transactions between the Company’s segments are consistent with Note 1 – Significant Accounting Policies. Segment operating earnings (loss) includes profit on intersegment sales when the product is ultimately sold to an external customer. Segment eliminations adjust for sales between the Company's reportable segments and primarily relate to 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 is based upon and consistent with selling prices to third-party customers. Information about the operations of Brunswick's reportable and geographic segments is set forth below:

(B) Includes Selling, general and administrative expense, Research and development expense and Restructuring, exit, and impairment charges.

(C) 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.

(C) 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.

(C) 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.

(C) 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.

Note 10 – Comprehensive Income

The following table presents the changes in Accumulated other comprehensive loss, net of tax, by component for the three months ended October 3, 2026:

(A) The tax effect for the three months ended October 3, 2026 was $0.8 million for foreign currency translation and $(2.3) million for derivatives.

(B) The tax effect for the three months ended October 3, 2026 was $1.0 million for derivatives.

(C) The reclassification adjustments from Accumulated other comprehensive loss and associated tax effects related to defined benefit items were not material for the three months ended October 3, 2026. Refer to Note 5 – Financial Instruments for the reclassification adjustments from Accumulated other comprehensive loss, net of tax related to derivatives.

The following table presents the changes in Accumulated other comprehensive loss, net of tax, by component for the three months ended September 27, 2025:

(A) The tax effect for the three months ended September 27, 2025 was $1.3 million for foreign currency translation and $(2.0) million for derivatives.

(B) The tax effect for the three months ended September 27, 2025 was $0.0 million for derivatives.

(C) The reclassification adjustments from Accumulated other comprehensive loss and associated tax effects related to defined benefit items were not material for the three months ended September 27, 2025. Refer to Note 5 – Financial Instruments for the reclassification adjustments from Accumulated other comprehensive loss, net of tax related to derivatives.

The following table presents the changes in Accumulated other comprehensive loss, net of tax, by component for the nine months ended October 3, 2026:

(A) The tax effect for the nine months ended October 3, 2026 was $1.7 million for foreign currency translation and $(6.9) million for derivatives.

(B) The tax effect for the nine months ended October 3, 2026 was $1.9 million for derivatives.

(C) The reclassification adjustments from Accumulated other comprehensive loss and associated tax effects related to defined benefit items were not material for the nine months ended October 3, 2026. Refer to Note 5 – Financial Instruments for the reclassification adjustments from Accumulated other comprehensive loss, net of tax related to derivatives.

The following table presents the changes in Accumulated other comprehensive loss, net of tax, by component for the nine months ended September 27, 2025:

(A) The tax effect for the nine months ended September 27, 2025 was $(10.5) million for foreign currency translation and $12.9 million for derivatives.

(B) The tax effect for the nine months ended September 27, 2025 was $0.9 million for derivatives.

(C) The reclassification adjustments from Accumulated other comprehensive loss and associated tax effects related to defined benefit items were not material for the nine months ended September 27, 2025. Refer to Note 5 – Financial Instruments for the reclassification adjustments from Accumulated other comprehensive loss, net of tax related to derivatives.

Note 11 –Debt

The following table provides the changes in the Company's debt for the nine months ended October 3, 2026:

(A) During the nine months ended October 3, 2026, the Company had short-term borrowings and repayments under its unsecured commercial paper program.

Credit Facility

The Company maintains a Revolving Credit Agreement (Credit Facility). During the nine months ended October 3, 2026, and September 27, 2025, there were no borrowings under the Credit Facility. As of October 3, 2026, available borrowing capacity totaled $984.2 million, net of $15.8 million of letters of credit outstanding under the Credit Facility. As of September 27, 2025, available borrowing capacity totaled $997.0 million, net of $3.0 million of letters of credit outstanding under the Credit Facility. Refer to Note 14 in the Notes to Consolidated Financial Statements in the 2025 Form 10-K for details regarding Brunswick's Credit Facility.

Commercial Paper

The Company maintains an unsecured commercial paper program (CP Program) pursuant to which the Company may issue short-term, unsecured commercial paper notes. During the nine months ended October 3, 2026, borrowings under the CP Program totaled $650.0 million. As of October 3, 2026, the Company had $190.0 million of borrowings outstanding under the CP Program with a weighted average interest rate of 4.55%. During the nine months ended October 3, 2026, the maximum amount utilized under the CP Program was $540.0 million. During the nine months ended September 27, 2025, borrowings under the CP Program totaled $704.4 million. As of September 27, 2025, the Company had $90.0 million of borrowings outstanding under the CP Program. During the nine months ended September 27, 2025, the maximum amount utilized under the CP Program was $445.5 million. Refer to Note 14 in the Notes to Consolidated Financial Statements in the 2025 Form 10-K for details regarding Brunswick's CP Program.

Note 12 –Supplier Finance Program Obligations

As of October 3, 2026, December 31, 2025, and September 27, 2025, the Company had $12.7 million, $6.2 million, and $8.1 million confirmed invoices under the supplier finance program, respectively, which were included in Accounts payable on the Condensed Consolidated Balance Sheets.