Back to GetFilings.com



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended JUNE 30, 2003

OR

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

For the transition period from to

Commission file number 1-1043


BRUNSWICK CORPORATION
(Exact name of registrant as specified in its charter)


DELAWARE 36-0848180
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)


1 N. FIELD CT., LAKE FOREST, ILLINOIS 60045-4811
(Address of principal executive offices) (Zip Code)


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

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 X No

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12-b-2 of the Exchange Act).

YES X No

At AUGUST 8, 2003, there were 90,538,484 shares of common stock ($0.75 par
value) outstanding.




PART I. FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

BRUNSWICK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED JUNE 30
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)

QUARTER SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
------------------------- ------------------------
2003 2002 2003 2002
----------- ------------ ------------ ----------

NET SALES $ 1,071.0 $ 1,017.2 $ 2,005.5 $ 1,883.9
Cost of sales 807.2 777.4 1,532.9 1,452.7
Selling, general and administrative expense 176.6 161.9 347.4 323.0
Litigation charge - - 25.0 -
----------- ------------ ------------ ----------
OPERATING EARNINGS 87.2 77.9 100.2 108.2
Interest expense (10.1) (10.6) (20.8) (21.6)
Other income 5.3 4.7 8.9 6.0
----------- ------------ ------------ ----------
EARNINGS BEFORE INCOME TAXES 82.4 72.0 88.3 92.6
Income tax provision 28.8 25.8 30.9 33.2
----------- ------------ ------------ ----------
EARNINGS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 53.6 46.2 57.4 59.4
Cumulative effect of change in accounting principle, net of tax - - - (25.1)
----------- ------------ ------------ ----------
NET EARNINGS $ 53.6 $ 46.2 $ 57.4 $ 34.3
=========== ============ ============ ==========


BASIC EARNINGS PER COMMON SHARE:
Earnings before cumulative effect of change in accounting principle $ 0.59 $ 0.51 $ 0.63 $ 0.66
Cumulative effect of change in accounting principle - - - (0.28)
----------- ------------ ------------ ----------
Net earnings $ 0.59 $ 0.51 $ 0.63 $ 0.38
=========== ============ ============ ==========


DILUTED EARNINGS PER COMMON SHARE:
Earnings before cumulative effect of change in accounting principle $ 0.59 $ 0.51 $ 0.63 $ 0.66
Cumulative effect of change in accounting principle - - - (0.28)
----------- ------------ ------------ ----------
Net earnings $ 0.59 $ 0.51 $ 0.63 $ 0.38
=========== ============ ============ ==========

AVERAGE SHARES USED FOR COMPUTATION OF:
Basic earnings per share 90.8 90.2 90.7 89.5
Diluted earnings per share 91.3 91.4 91.0 90.6


The notes are an integral part of these consolidated statements.

2


BRUNSWICK CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2003, DECEMBER 31, 2002, AND JUNE 30, 2002
(IN MILLIONS)

JUNE 30, December 31, June 30,
2003 2002 2002
--------------- --------------- --------------
(UNAUDITED) (unaudited)

ASSETS
CURRENT ASSETS
Cash and cash equivalents, at cost,
which approximates market $ 254.1 $ 351.4 $ 334.5
Accounts and notes receivable,
less allowances of $33.7, $31.8 and $27.5 496.7 401.4 484.7
Inventories
Finished goods 310.4 272.5 273.4
Work-in-process 203.5 201.6 199.4
Raw materials 71.0 72.8 54.2
--------------- --------------- --------------
Net inventories 584.9 546.9 527.0
--------------- --------------- --------------
Prepaid income taxes 313.0 305.1 322.1
Prepaid expenses and other 43.1 49.5 26.7
Income tax refunds receivable - 5.9 -
--------------- --------------- --------------
CURRENT ASSETS 1,691.8 1,660.2 1,695.0
--------------- --------------- --------------


PROPERTY
Land 67.0 68.3 65.7
Buildings and improvements 485.4 478.2 475.4
Equipment 1,026.0 998.2 969.4
--------------- --------------- --------------
Total land, buildings and improvements and equipment 1,578.4 1,544.7 1,510.5
Accumulated depreciation (908.1) (871.0) (836.5)
--------------- --------------- --------------
Net land, buildings and improvements and equipment 670.3 673.7 674.0
Unamortized product tooling costs 117.1 119.0 110.4
--------------- --------------- --------------
NET PROPERTY 787.4 792.7 784.4
--------------- --------------- --------------

OTHER ASSETS
Goodwill 486.3 452.8 431.1
Other intangibles 167.1 117.5 124.2
Investments 103.8 95.4 99.8
Other long-term assets 297.4 288.5 269.8
--------------- --------------- --------------
OTHER ASSETS 1,054.6 954.2 924.9
--------------- --------------- --------------

TOTAL ASSETS $ 3,533.8 $ 3,407.1 $ 3,404.3
=============== =============== ==============

The notes are an integral part of these consolidated statements.

3





BRUNSWICK CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2003, DECEMBER 31, 2002, AND JUNE 30, 2002
(IN MILLIONS)



JUNE 30, December 31, June 30,
2003 2002 2002
--------------- ---------------- ---------------
(UNAUDITED) (unaudited)

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt, including
current maturities of long-term debt $ 43.6 $ 28.9 $ 45.8
Accounts payable 308.6 291.2 264.0
Accrued expenses 729.6 685.5 694.9
--------------- ---------------- ---------------
CURRENT LIABILITIES 1,081.8 1,005.6 1,004.7
--------------- ---------------- ---------------

LONG-TERM DEBT
Notes, mortgages and debentures 588.5 589.5 600.9
--------------- ---------------- ---------------


DEFERRED ITEMS
Income taxes 98.2 144.1 205.8
Postretirement and postemployment benefits 400.8 399.3 215.3
Other 187.9 166.8 165.5
--------------- ---------------- ---------------
DEFERRED ITEMS 686.9 710.2 586.6
--------------- ---------------- ---------------


COMMON SHAREHOLDERS' EQUITY
Common stock; authorized: 200,000,000 shares,
$0.75 par value; issued: 102,538,000 shares 76.9 76.9 76.9
Additional paid-in capital 308.6 308.9 309.2
Retained earnings 1,170.1 1,112.7 1,113.7
Treasury stock, at cost 12,192,000,
12,377,000 and 12,454,000 shares (224.3) (228.7) (230.6)
Unamortized ESOP expense and other (17.7) (22.2) (28.4)
Accumulated other comprehensive loss (137.0) (145.8) (28.7)
--------------- ---------------- --------------
COMMON SHAREHOLDERS' EQUITY 1,176.6 1,101.8 1,212.1
--------------- ---------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,533.8 $ 3,407.1 $ 3,404.3
=============== ================ ==============

The notes are an integral part of these consolidated statements.

4




BRUNSWICK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30
(IN MILLIONS)
(UNAUDITED)

2003 2002
---------------- --------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 57.4 $ 34.3
Depreciation and amortization 72.9 75.2
Change in accounting principle, net of tax - 25.1
Changes in noncash current assets and current liabilities (61.9) 11.9
Income taxes (28.9) 55.5
Other, net 21.9 36.6
---------------- --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 61.4 238.6
---------------- --------------

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (52.2) (41.0)
Investments (11.7) (6.7)
Acquisitions of businesses, net of cash acquired (97.4) (8.8)
Other, net 3.3 4.0
---------------- --------------
NET CASH USED FOR INVESTING ACTIVITIES (158.0) (52.5)
---------------- --------------

CASH FLOWS FROM FINANCING ACTIVITIES
Net issuances of commercial paper and other
short-term debt 1.5 18.5
Payments of long-term debt including current maturities (5.0) (18.0)
Stock options exercised 2.8 39.4
---------------- --------------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (0.7) 39.9
---------------- --------------

Net increase (decrease) in cash and cash equivalents (97.3) 226.0
Cash and cash equivalents at January 1 351.4 108.5
---------------- --------------

CASH AND CASH EQUIVALENTS AT JUNE 30 $ 254.1 $ 334.5
================ ==============


The notes are an integral part of these consolidated statements.

5





BRUNSWICK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2003, DECEMBER 31, 2002, AND JUNE 30, 2002
(UNAUDITED)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements. The unaudited financial data of Brunswick
Corporation (the Company) has been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, certain
information and disclosures normally included in financial statements and notes
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. Certain previously reported amounts have been reclassified
to conform with the current-period presentation.

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 the Company's
2002 Annual Report on Form 10-K (the 2002 Form 10-K). These interim results
include, in the opinion of management, all normal and recurring adjustments
necessary to present fairly the results of operations for the periods ended June
30, 2003 and 2002. Due to the seasonality of the Company'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 ending on the Saturday closest
to the end of the period (thirteen-week periods). For ease of reference, all
references to period end dates have been presented as though the period ended on
the last day of the calendar month. The first two quarters of fiscal year 2003
ended on March 29, 2003, and June 28, 2003. The first two quarters of fiscal
year 2002 ended on March 30, 2002, and June 29, 2002.

New Accounting Standards. In November 2002, the Financial Accounting
Standards Board (FASB) issued Interpretation No. 45 (FIN 45), "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others - An Interpretation of FASB Statements No.
5, 57, and 107 and rescission of FASB Interpretation No. 34." This
interpretation clarifies the requirements for a guarantor's accounting for, and
disclosures of, certain guarantees issued and outstanding. FIN 45 also clarifies
the requirements related to the recognition of a liability by a guarantor at the
inception of a guarantee. FIN 45 is effective for guarantees entered into or
modified after December 31, 2002. The adoption of FIN 45 did not have a material
impact on the financial statements. See NOTE 3, COMMITMENTS AND CONTINGENCIES,
for further discussion.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46),
"Consolidation of Variable Interest Entities - An Interpretation of Accounting
Research Bulletin (ARB) No. 51." This interpretation provides guidance on how to
identify variable interest entities and how to determine whether or not those
entities should be consolidated. FIN 46 applies to variable interest entities
created after January 31, 2003. FIN 46 also applies in the first fiscal quarter
or interim period beginning after June 15, 2003, in which the Company holds a
variable interest in an entity that it acquired before February 1, 2003. The
Company is evaluating its interests in entities acquired before February 1,
2003, to determine the impact FIN 46 may have on the financial statements.

Goodwill and Other Intangible Assets. Goodwill and other intangible assets
generally result from business acquisitions. The excess of cost over net assets
of businesses acquired is recorded as goodwill. The Company adopted Statement of
Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible
Assets," which requires that, effective January 1, 2002, goodwill and certain
other intangible assets deemed to have an indefinite useful life are no longer
amortized. While amortization of goodwill and certain other intangible assets is
no longer permitted, these accounts must be reviewed annually for

6




impairment. In the second quarter of 2002, the Company completed its
impairment testing and recorded a one-time, non-cash charge of $29.8 million
pre-tax ($25.1 million after-tax, or $0.28 per diluted share) as a cumulative
effect of a change in accounting principle to reduce the carrying amount of
goodwill. The Company restated the first quarter of 2002 to reflect the
impairment charge effective January 1, 2002, as required under SFAS No. 3,
"Reporting Accounting Changes in Interim Financial Statements."

Stock-based Compensation. As it relates to stock options, the Company
continues to apply the provisions of Accounting Principles Board Opinion (APB)
No. 25, "Accounting for Stock Issued to Employees." Under APB No. 25, the
Company recognizes no compensation cost related to stock options granted in its
Consolidated Statements of Income because the option terms are fixed and the
exercise price equals the market price of the underlying stock on the grant
date. In accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation," the fair value of option grants is estimated on the date of grant
using the Black-Scholes option pricing model for pro forma footnote purposes.
Refer to Notes 1 and 12 to the consolidated financial statements in the 2002
Form 10-K for further detail relating to the Company's stock-based
compensation. The Company will continue to evaluate its accounting for stock
options as additional authoritative guidance is issued.

Effective December 31, 2002, the Company adopted the disclosure provisions
of SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and
Disclosure." The following table illustrates the effect on net income and
earnings per share if the Company had applied the fair value recognition
provisions of SFAS No. 123 to all of its outstanding stock option plans as of
June 30 (in millions, except per share data):

QUARTER ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------------- ------------------------
2003 2002 2003 2002
----------- ------------ ------------ ----------

Earnings before cumulative effect of change
in accounting principle:
As reported $ 53.6 $ 46.2 $ 57.4 $ 59.4
Less: Total stock-based employee compensation expense
determined under fair value based method for all
awards, net of tax 1.3 1.3 2.5 2.7
----------- ------------ ------------ ----------
Pro forma $ 52.3 $ 44.9 $ 54.9 $ 56.7
=========== ============ ============ ==========
Basic earnings per common share before cumulative effect
of change in accounting principle:
As reported $ 0.59 $ 0.51 $ 0.63 $ 0.66
Pro forma 0.58 0.50 0.61 0.63
Diluted earnings per common share before cumulative effect of
change in accounting principle:
As reported $ 0.59 $ 0.51 $ 0.63 $ 0.66
Pro forma 0.57 0.49 0.60 0.63


NOTE 2 - EARNINGS PER COMMON SHARE

The Company calculates earnings per share in accordance with SFAS No. 128,
"Earnings Per Share." Basic earnings per share is calculated by dividing net
earnings by the weighted average number of common shares outstanding during the
period. Diluted earnings per share is calculated similarly, except that it
reflects the dilutive effect of the Company's employee stock option plans. The
decrease in the dilutive effect of stock option plans for the 2003 quarterly and
year-to-date periods was due to a decrease in the Company's average stock price.

Basic and diluted earnings per share for the quarterly and year-to-date
period ending June 30, 2003 and 2002 are calculated as follows (in millions,
except per share data):
7



QUARTER ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- -------------------------
2003 2002 2003 2002
------------- ----------- ----------- ------------

Earnings before cumulative effect of change in accounting principle $ 53.6 $ 46.2 $ 57.4 $ 59.4
Cumulative effect of a change in accounting principle - - - (25.1)
------------- ----------- ----------- ------------
Net earnings $ 53.6 $ 46.2 $ 57.4 $ 34.3
============= =========== =========== ============

Average outstanding shares - basic 90.8 90.2 90.7 89.5
Dilutive effect of stock option plans 0.5 1.2 0.3 1.1
------------- ----------- ----------- ------------
Average outstanding shares - diluted 91.3 91.4 91.0 90.6
============= =========== =========== ============

Basic earnings per share:
Earnings before cumulative effect of change in accounting principle $ 0.59 $ 0.51 $ 0.63 $ 0.66
Cumulative effect of a change in accounting principle - - - (0.28)
------------- ----------- ----------- ------------
Net earnings $ 0.59 $ 0.51 $ 0.63 $ 0.38
============= =========== =========== ============

Diluted earnings per share:
Earnings before cumulative effect of change in accounting principle $ 0.59 $ 0.51 $ 0.63 $ 0.66
Cumulative effect of a change in accounting principle - - - (0.28)
------------- ----------- ----------- ------------
Net earnings $ 0.59 $ 0.51 $ 0.63 $ 0.38
============= =========== =========== ============


Options to purchase 4.3 million and 1.4 million shares of common stock were
outstanding as of June 30, 2003 and 2002, respectively, but were not included in
the computation of diluted earnings per share because the exercise price was
greater than the average market price of the shares and, therefore, the effect
would have been antidilutive.

NOTE 3 - COMMITMENTS AND CONTINGENCIES

Financial Commitments. The Company has entered into agreements, which are
customary in the marine industry, that provide for the repurchase of its
products from a financial institution in the event of repossession upon a
dealer's default. Repurchases and losses incurred under these agreements have
not had a significant effect on the Company's liquidity and results of
operations. The maximum potential repurchase commitments were approximately $188
million at June 30, 2003.

The Company also has various agreements with financial institutions that
provide limited recourse on customer obligations relating to bowling capital
equipment, fitness equipment and marine product sales. Recourse losses have not
had a significant effect on the Company's liquidity and results of operations.
The maximum potential recourse liabilities outstanding under these programs at
June 30, 2003, were approximately $57 million.

The Company had outstanding standby letters of credit, surety bonds and
other financial guarantees of $171.1 million at June 30, 2003, representing
conditional commitments whereby a third party has guaranteed the Company's
ability to satisfy certain liabilities or obligations. Included in this amount
is a $79.8 million surety bond to secure payment of tax deficiencies plus
accrued interest related to the Company's appeal of a United States Tax Court
determination. Refer to Note 14 to the consolidated financial statements of the
2002 Form 10-K for a description of the Company's reserve established in
connection with the Tax Court matter. Also, see NOTE 9, SUBSEQUENT EVENTS, for
further discussion regarding the status of this surety bond. The Company
had $65.0 million of standby letters of credit and surety bonds outstanding as
of June 30, 2003, included in the $171.1 million noted above, primarily in
connection with its self-insured workers' compensation program as required by
its insurance companies and
8


various state agencies. 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 below investment grade, the Company could be required
to post collateral to support the outstanding letters of credit and surety
bonds. The remaining letters of credit, surety bonds and other financial
guarantees are comprised of guarantees of payment for subsidiary debt, certain
performance obligations and other guarantees issued in the ordinary course of
business.

Product Warranties. The Company records a liability for standard 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 reserves
are affected by product failure rates and material usage and labor costs
incurred in correcting a product failure. If these estimated costs differ from
actual product failure rates, and actual material usage and labor costs, a
revision to the warranty reserve would be required.

Additionally, the Company's marine engine customers may purchase a warranty
contract that extends product protection beyond the standard product warranty
period. A deferred liability is recorded based on the amount of contracts sold.
Profit is recognized over the contract period in proportion to the costs
expected to be incurred. The deferred liability is reduced as actual expenses
are incurred and profit is recognized.

The Company recorded the following activity related to product warranty
liabilities at June 30, 2003 and 2002, in Accrued Expenses and Deferred
Items-Other (in millions):

SIX MONTHS ENDED JUNE 30
-----------------------------------
2003 2002
---------------- ----------------

Balance at January 1 $ 168.3 $ 157.5
Provisions for contracts issued 49.5 55.8
Payments made (44.1) (40.0)
Aggregate changes for pre-existing warranties (0.4) 0.1
---------------- ----------------
Balance at June 30 $ 173.3 $ 173.4
================ ================


Legal and Environmental. In the normal course of business, the Company is
subject to claims and litigation, including indemnification of obligations
relating to acquisitions and divestitures. The Company accrues for litigation
exposure based upon its assessment, made in consultation with counsel, of the
likely range of exposure stemming from the claim. In light of existing reserves,
the Company's litigation claims, when finally resolved, will not, in the opinion
of management, have a material adverse effect on the Company's consolidated
financial position. If current estimates for the cost of resolving any specific
claims are later determined to be inadequate, results of operations could be
adversely affected in the period in which additional provisions are required.

In February 2003, the United States Tax Court issued a ruling upholding the
disallowance by the Internal Revenue Service (IRS) of capital losses and other
expenses for 1990 and 1991 related to two partnership investments entered into
by the Company. Refer to Note 14 to the consolidated financial statements of the
2002 Form 10-K for further description of the history and the Company's reserves
associated with this Tax Court matter. The Company intends to appeal the recent
Tax Court decision to the United States Court of Appeals for the District of
Columbia. If the Company does not prevail in its appeal, the Company could owe
approximately $135 million, consisting of $60 million in taxes due plus $75
million of interest, net of tax. The Company has previously settled a number of
other issues with the IRS on open tax years 1989 through 1994 and anticipates
favorable adjustments that would reduce the liability associated with the two
partnership investments to approximately $50 million, consisting of $28 million
in taxes due and $22 million in interest, net of tax. In April 2003, the Company
elected to pay to the IRS $62 million (approximately $50 million after-tax) in
connection with this matter while the appeal is pending. The

9


payment was comprised of $28 million in taxes due and $34 million of
pre-tax interest ($22 million after-tax). The Company elected to make this
payment to avoid future interest costs, if the appeal is ultimately
unsuccessful. No penalties have been formally asserted by the IRS to date. The
Company believes, based on currently available information, that any penalties,
if asserted, and accrued interest, would not have a material adverse effect on
the Company's consolidated financial position or results of operations. See NOTE
9, SUBSEQUENT EVENTS, for further discussion.

The Company's Life Fitness division entered into court-ordered mediation in
an effort to resolve a patent infringement lawsuit with Precor Incorporated
(Precor), a manufacturer of fitness equipment. The lawsuit involves a dispute
over patent rights held by Precor relating to the design of a cross trainer. The
parties have not reached a final settlement of the lawsuit. However, in light of
developments in connection with the mediation, which concluded on May 10, 2003,
and occurred prior to the filing of the Company's first quarter 2003 Form 10-Q
dated May 15, 2003, the Company recorded a $25.0 million charge to operating
earnings in the first quarter of 2003 ($16.0 million after-tax, or $0.18 per
diluted share) in accordance with accounting principles generally accepted in
the United States. Refer to Note 7, to the consolidated financial statements of
the 2002 Form 10-K for further discussion.

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

The Company 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
coordination with third-party experts on an undiscounted basis and do not
consider recoveries from third parties until such recoveries are realized. The
Company has established reserves within a range of current cost estimates for
all known claims. 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 or
results of operations. Refer to Note 7 to the consolidated financial statements
in the 2002 Form 10-K for disclosure of the potential cash requirements of
environmental proceedings and a discussion of other legal matters as of December
31, 2002.
10


NOTE 4 - SEGMENT DATA

The following table sets forth net sales and operating earnings for each of
the Company's reportable segments for the quarters and six months ended June 30,
2003 and 2002 (in millions):

QUARTER ENDED JUNE 30
------------------------------------------------------------------------------
NET SALES OPERATING EARNINGS
------------------------------------ -----------------------------------
2003 2002 2003 2002
-------------- --------------- -------------- ---------------

Marine Engine $ 521.9 $ 505.8 $ 64.2 $ 77.8
Boat 418.9 373.3 32.3 11.0
Marine eliminations (69.0) (61.2) - -
-------------- --------------- -------------- ---------------
Total Marine 871.8 817.9 96.5 88.8
Fitness 105.1 103.6 5.3 4.0
Bowling & Billiards 94.1 95.7 1.9 (1.7)
Corporate/Other - - (16.5) (13.2)
-------------- --------------- -------------- ---------------
Total $ 1,071.0 $ 1,017.2 $ 87.2 $ 77.9
============== =============== ============== ===============


SIX MONTHS ENDED JUNE 30
------------------------------------------------------------------------------
NET SALES OPERATING EARNINGS
------------------------------------ -----------------------------------
2003 2002 2003 2002
-------------- --------------- -------------- ---------------

Marine Engine $ 934.7 $ 876.2 $ 83.5 $ 102.5
Boat 797.5 727.2 46.4 14.3
Marine eliminations (130.2) (114.0) - -
-------------- --------------- -------------- ---------------
Total Marine 1,602.0 1,489.4 129.9 116.8
Fitness (A) 224.3 208.6 (7.2) 12.9
Bowling & Billiards 179.2 185.9 10.3 6.8
Corporate/Other - - (32.8) (28.3)
--------------- --------------- -------------- ---------------
Total $ 2,005.5 $ 1,883.9 $ 100.2 $ 108.2
=============== =============== ============== ===============

(A) Operating earnings for the six months ended June 30, 2003, include a
$25.0 million pre-tax litigation charge discussed in NOTE 3, COMMITMENTS AND
CONTINGENCIES.



11


NOTE 5 - ACQUISITIONS

Cash paid for acquisitions, net of cash acquired, totaled $97.4 million for
three transactions completed in the second quarter of 2003: Valley-Dynamo, LP
(Valley-Dynamo), a manufacturer of commercial and consumer pool, table hockey
and foosball tables; Land 'N' Sea Corporation (Land 'N' Sea), a distributor of
marine parts and accessories; and Navman NZ Limited (Navman), a manufacturer of
marine electronics and global positioning systems.

CASH OTHER TOTAL
DATE COMPANY NAME CONSIDERATION (A) CONSIDERATION CONSIDERATION
- ------------------ ----------------------- --------------------- ------------------- -------------------

6/10/03 Valley-Dynamo $ 34.2 $ - $ 34.2
6/23/03 Land 'N' Sea 30.4 23.4 53.8
6/23/03 Navman 32.8 - 32.8
--------------------- ------------------- -------------------
$ 97.4 $ 23.4 $ 120.8
===================== =================== ===================

(A) Net of cash acquired. Cash consideration includes debt of acquired
entities retired immediately after the close of the transactions.



The Company acquired Valley-Dynamo's net assets, including working capital
and fixed assets for $34.2 million in cash. The Company acquired the outstanding
stock of Land 'N' Sea. The Company funded this acquisition through cash
consideration of $30.4 million, which consisted of a $9.0 million payment and
the assumption and immediate retirement of $21.4 million of Land 'N' Sea debt.
Total consideration of $53.8 million paid for Land 'N' Sea also includes $12.0
million in notes to the seller and a previously held equity interest. The
Company acquired 70 percent of the outstanding stock of Navman. The acquisition
was funded through cash consideration of $32.8 million, which consisted of a
$28.1 million payment and the assumption and immediate retirement of $4.7
million of debt. The Company has an option to acquire half of the remaining
interest in Navman by the end of 2004 and the remainder by the end of 2005. The
results of operations of Valley-Dynamo, Land 'N' Sea and Navman post-acquisition
are included in the Bowling & Billiards, Boat and Marine Engine segments,
respectively.

Cash paid for acquisitions in the first six months of 2002, net of cash
acquired, totaled $8.8 million for two transactions. First, on February 10,
2002, the Company acquired Teignbridge Propellers, Ltd. (Teignbridge), which is
headquartered in Newton Abott, United Kingdom. Teignbridge is a manufacturer of
custom and standard propellers and underwater stern gear for inboard-powered
vessels. Second, the Company paid additional consideration related to the 2001
acquisition of Hatteras Yachts, Inc.

Refer to Note 6 to the consolidated financial statements in the 2002 Form
10-K for further detail relating to the Company's acquisitions.

12


NOTE 6 - COMPREHENSIVE INCOME

Accumulated other comprehensive income includes minimum pension liability
adjustments, cumulative foreign currency translation adjustments, and unrealized
gains and losses on derivatives and investments, all net of tax. Comprehensive
income for the quarters and six months ended June 30, 2003 and 2002, is as
follows (in millions):

QUARTER ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
--------------------------- ---------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------

Net earnings $ 53.6 $ 46.2 $ 57.4 $ 34.3
Other comprehensive income:
Foreign currency cumulative translation
adjustment 8.3 6.7 8.4 9.7
Net change in unrealized gains on
investments 5.7 1.0 2.8 5.7
Net change in accumulated unrealized
derivative gains (losses) (1.9) (0.4) (2.4) 0.6
------------ ------------ ------------ ------------
Total other comprehensive income 12.1 7.3 8.8 16.0
------------ ------------ ------------ ------------
Comprehensive income $ 65.7 $ 53.5 $ 66.2 $ 50.3
============ ============ ============ ============


NOTE 7 - STANDARDIZATION OF VACATION POLICY

The Company has an initiative to standardize benefits across its divisions.
Under that initiative, the Company approved a new policy related to salaried
employee vacation pay during the second quarter of 2003. The new policy was
communicated to employees and became effective June 1, 2003. Eligible employees
now earn vacation pay ratably over the course of the period during which
services are rendered. The new policy provides for certain exceptions for
long-serviced employees approaching retirement age and to comply with state law.

Prior to June 1, 2003, certain divisions of the Company had a policy in
which eligible employees received an annual vacation grant at the beginning of
each year and were able to take vacation immediately to the full extent of the
grant. In the event of an employee's involuntary or voluntary termination, the
employee was entitled to receive cash compensation for vacation time not taken
from the annual grant. As a result, the Company accrued the full vacation
liability as of the beginning of each year as required by SFAS No. 43,
"Accounting for Compensated Absences."

As a result of the change in the vacation policy, $6.1 million pre-tax
($4.0 million after-tax) of the previously recorded vacation liability of $11.6
million, existing as of June 1, 2003, was reversed and reflected as reductions
in both Cost of Sales, and Selling, General, and Administrative expenses in the
second quarter of 2003 Consolidated Statements of Income. The new policy will
not have an impact on the amount of vacation expense recorded by the Company on
an annual basis in the future.

NOTE 8 - INCOME TAXES

In the second quarter of 2003, the Company lowered its annual effective tax
rate to 35 percent from 36 percent, due in part to the prepayment of the United
States Tax Court matter discussed in NOTE 3, COMMITMENTS AND CONTINGENCIES. As a
result of the prepayment, the Company will no longer need to accrue interest
costs associated with the United States Tax Court matter. These costs were
previously included in income tax expense.

13



NOTE 9 - SUBSEQUENT EVENTS

As a result of the Company's payment associated with the United States Tax
Court Matter discussed in NOTE 3, COMMITMENTS AND CONTINGENCIES, on June 30,
2003, the Company was released from its obligation under the $79.8 million
surety bond.

On July 2, 2003, the Company contributed $19.5 million to Brunswick
Acceptance Company, LLC (BAC), a joint venture with Transamerica Distribution
Finance (TDF) to provide financial products and services to customers of the
Company's domestic marine businesses. The contribution increased the Company's
equity ownership in BAC to 49 percent from 15 percent.

Under terms of the joint venture agreement with TDF, BAC will purchase from
the Company and service a portion of Mercury Marine's domestic accounts
receivable relating to its boatbuilder and dealer customers. On July 2, 2003,
the Company made an initial sale of a significant portion of Mercury Marine's
domestic accounts receivables to BAC for $124.1 million in cash, net of
discount. The Company has a retained interest in $37.4 million of the initial
receivables sold, as a result of recourse provisions. In accordance with SFAS
No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," the Company will treat the sale of those
receivables in which the Company retains an interest as a secured obligation.
Under terms of the contractual agreements with BAC, the Company's maximum
recourse exposure on these receivables, included in the initial sale, is limited
to $20.2 million. BAC will continue to purchase and service a portion of Mercury
Marine's domestic accounts receivable on an ongoing basis. Due to the
seasonality of the marine business, the outstanding balance for receivables sold
to BAC is expected to decrease to approximately $90 million to $105 million by
the end of the third quarter of 2003.

On July 15, 2003, the Company purchased a 49 percent equity interest for
$5.5 million in Rayglass Sales and Marketing Limited, a boat manufacturer
located in New Zealand.

14



ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

MATTERS AFFECTING COMPARABILITY

The Company's operating results for 2003 include: the operating results of
Valley-Dynamo, LP (Valley-Dynamo), a manufacturer of commercial and consumer
pool, table hockey and foosball tables; Land 'N' Sea Corporation (Land 'N' Sea),
a distributor of marine parts and accessories; and Navman NZ Limited (Navman), a
manufacturer of marine electronics and global positioning systems; from the
acquisition dates of June 10, 2003, June 23, 2003, and June 23, 2003,
respectively. The acquisition of Valley-Dynamo will add new products and
distribution channels to our billiards operations while the acquisition of Land
'N' Sea provides the Company with the capabilities and infrastructure to develop
a boat parts and accessories business. The acquisition of Navman complements the
Company's expansion into marine-based electronics and integration.

Additionally, the Company's operating results for the first half of 2003
include the financial results of Monolith Corporation/Integrated Dealer Systems,
a leading developer of dealer management systems for dealers of marine products
and recreational vehicles, and Northstar Technologies, Inc., a supplier of
premium marine navigation electronics. These businesses were acquired on October
1, 2002, and December 16, 2002, respectively.

The Company's operating results for 2002 include the financial results of
Teignbridge Propellers, LTD., a manufacturer of custom and standard propellers
and underwater stern gear for inboard-powered vessels, from the acquisition date
of February 10, 2002.

The Company's Life Fitness division entered into court-ordered mediation in
an effort to resolve a patent infringement lawsuit with Precor Incorporated
(Precor), a manufacturer of fitness equipment. The lawsuit involves a dispute
over patent rights held by Precor relating to the design of a cross trainer. The
parties have not reached a final settlement of the lawsuit. However, in light of
developments in connection with the mediation, which concluded on May 10, 2003,
and occurred prior to the filing of the Company's first quarter 2003 Form
10-Q dated May 15, 2003, the Company recorded a $25.0 million charge to
operating earnings in the first quarter of 2003 ($16.0 million after-tax, or
$0.18 per diluted share) in accordance with accounting principles generally
accepted in the United States. Refer to Note 7, to the consolidated financial
statements of the 2002 Form 10-K for further discussion.

15



CONSOLIDATED

The following table sets forth certain amounts, ratios and relationships
calculated from the Consolidated Statements of Income for the quarter and six
months ended June 30, 2003 and 2002 (in millions, except per share data):

QUARTER ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------------- --------------------------------
2003 2002 2003 2002
--------------- --------------- --------------- ---------------

Net sales $ 1,071.0 $ 1,017.2 $ 2,005.5 $ 1,883.9
Operating earnings (A) $ 87.2 $ 77.9 $ 100.2 $ 108.2
Earnings before cumulative effect of change in
accounting principle $ 53.6 $ 46.2 $ 57.4 $ 59.4
Cumulative effect of change in accounting
principle, net of tax (B) - - - (25.1)
--------------- --------------- --------------- ---------------
Net earnings $ 53.6 $ 46.2 $ 57.4 $ 34.3
=============== =============== =============== ===============

Diluted earnings per share from continuing
operations $ 0.59 $ 0.51 $ 0.63 $ 0.66
Cumulative effect per share of change in
accounting principle (B) - - - (0.28)
--------------- --------------- --------------- ---------------
Diluted earnings per share $ 0.59 $ 0.51 $ 0.63 $ 0.38
=============== =============== =============== ===============

EXPRESSED AS A PERCENTAGE OF NET SALES:
Gross margin 24.6% 23.6% 23.6% 22.9%
Selling, general and administrative expense 16.5% 15.9% 18.6% 17.1%
Operating margin 8.1% 7.7% 5.0% 5.7%


(A) Operating Earnings for the six months ended June 30, 2003, include a
$25.0 million pre-tax litigation charge discussed in NOTE 3, COMMITMENTS AND
CONTINGENCIES, to the Consolidated Financial Statements and MATTERS AFFECTING
COMPARABILITY above.
(B) The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 142, "Goodwill and Other Intangible Assets," which requires that, effective
January 1, 2002, goodwill and certain other intangible assets deemed to have an
indefinite useful life are no longer amortized. While amortization of goodwill
and certain other intangible assets is no longer permitted, these accounts must
be reviewed annually for impairment. In the second quarter of 2002, the Company
completed its impairment testing and recorded a one-time, non-cash charge of
$29.8 million pre-tax ($25.1 million after-tax, or $0.28 per diluted share) as a
cumulative effect of a change in accounting principle to reduce the carrying
amount of goodwill. The Company restated the first quarter of 2002 to reflect
the impairment charge effective January 1, 2002, as required under SFAS No. 3,
"Reporting Accounting Changes in Interim Financial Statements."



In the second quarter of 2003, the Company reported net sales of $1,071.0
million, up 5.3 percent from the second quarter of 2002. For the first six
months of 2003, sales increased 6.5 percent to $2,005.5 million when compared
with the same period in 2002. The increase in sales for the quarterly and
year-to-date periods was attributed to an increase in sales from the
Marine Engine, Boat and Fitness segments, partially offset by a decline in sales
in the Bowling & Billiards segment. Marine Engine segment sales increased due to
higher revenues from international markets, driven by favorable currency trends
and additional sales associated with acquisitions completed in 2002, partially
offset by lower domestic revenues. Boat segment sales increased due to higher
shipments and pricing in 2003. Fitness segment sales increased primarily due to
higher sales of commercial fitness equipment in the domestic markets. Bowling &
Billiards segment sales decreased due to a decline in bowling capital equipment
sales and weaker consumer demand for billiards products.

Gross margin percentage in the second quarter of 2003 increased to 24.6
percent from 23.6 percent in the second quarter of 2002. Gross margin percentage
for the first six months of 2003 increased to 23.6 percent

16



from 22.9 percent in the same period last year. The increase in the gross
margin percentage for both the quarterly and year-to-date periods was primarily
due to cost reduction activities across most operations, higher production and
favorable pricing in the Boat segment, and favorable foreign currency trends
from a weakening dollar which benefited the Company's international businesses.
These factors were partially offset by higher pension, healthcare and insurance
costs, and various factors in the Marine Engine segment including lower
production levels of outboard and sterndrive engines resulting in lower
absorption of fixed costs, a mix shift towards sales of lower-horsepower engines
and low-emission outboard engines, which carry lower margins, and reduced sales
of higher margin parts and accessories.

Operating earnings for the second quarter of 2003 totaled $87.2 million
compared with $77.9 million in the same period in 2002. Operating margins
increased 40 basis points to 8.1 percent in the current quarter versus 7.7
percent in the second quarter of 2002. The increase in operating earnings was
primarily attributed to higher shipments from the Boat and Fitness segments,
higher pricing and reduced discounting to Boat segment dealers and the favorable
impact of a weakening dollar which benefited the Company's international
operations. Partially offsetting this increase, were lower sales from the Marine
Engine segment's domestic operations; higher pension, healthcare and insurance
costs; the various factors affecting gross margin in the Marine Engine segment
noted above; and increased investment in new product development across all
reportable segments.

Also, operating earnings in the second quarter of 2003 increased by $6.1
million as the Company standardized its vacation policy across its divisions.
Refer to NOTE 7, STANDARDIZATION OF VACATION POLICY, to the Consolidated
Financial Statements. Offsetting this benefit were $4.1 million of severance and
outplacement charges in the second quarter of 2003, associated with a salaried
workforce reduction at the Company's Mercury Marine division and $0.7 million of
expenses and unfavorable manufacturing variances associated with the closure of
the Fitness segment's Paso Robles, California, facility. The transfer of
production from the Paso Robles plant to an existing facility in Ramsey,
Minnesota, is expected to be completed by early 2004.

Operating earnings for the first six months of 2003 totaled $100.2 million
compared with $108.2 million in the same period in 2002. For the first six
months of 2003, operating margins decreased 70 basis points to 5.0 percent
versus 5.7 percent in the same period in 2002. The decline in operating earnings
and operating margins is primarily attributed to the previously mentioned
litigation charge. Management believes that presentation of operating earnings
excluding this litigation charge provides a more meaningful comparison to prior
period results because it allows for a more customary operating earnings
comparison. Excluding this charge from the year-to-date comparison, operating
earnings totaled $125.2 million compared with $108.2 million, and operating
margins increased 50 basis points to 6.2 percent. The increase in operating
earnings for the first six months of 2003 is largely attributed to the same
factors as in the quarterly comparison.

Interest expense decreased $0.5 million, or 4.7 percent, in the second
quarter of 2003 compared with the same period in 2002. Interest expense
decreased $0.8 million, or 3.7 percent, for the first six months of 2003
compared with the same period in 2002. The decrease in interest expense in both
periods is principally due to a decline in the average level of outstanding
debt.

Other income totaled $5.3 million in the second quarter of 2003 compared
with $4.7 million in the same period of 2002. Other income totaled $8.9 million
for the first six months of 2003 compared with $6.0 million for the same period
last year. The increase in other income for both periods is primarily due to
higher interest income and favorable currency adjustments. The second quarter
and first six months of 2003 also benefited from improved results from
joint venture investments, most notably the Cummins MerCruiser Diesel Marine LLC
joint venture.

Average common shares outstanding used to calculate diluted earnings per
share of 91.3 million for the second quarter of 2003 were comparable to the
second quarter of 2002. Average common shares

17



outstanding used to calculate diluted earnings per share for the first six
months increased to 91.0 million in 2003 from 90.6 million in 2002. This
reflects an increase in average diluted shares outstanding due to the effect of
stock options exercised, partially offset by a decrease in common stock
equivalents related to unexercised employee stock options as a result of a
decrease in the Company's average stock price.

EFFECTS OF THREATENED EUROPEAN COMMUNITIES TARIFF INCREASES. The Commission
of the European Communities has announced its intention to increase tariffs on
certain U.S. exports to the countries comprising the European Communities (EC)
in two trade disputes between the EC and the United States. The first dispute
concerns tax benefits for U.S. exporters under the U.S. Foreign Sales
Corporation/Extraterritorial Income Exclusion (FSC/ETI) tax regimes, which have
been declared in violation of U.S. obligations by the World Trade Organization
(WTO). If the EC's FSC/ETI sanctions become effective, a substantial portion of
the Company's bowling products exported to the EC may be subject to an
additional duty of up to 100 percent ad valorem. The U.S. Congress is presently
considering changes to U.S. tax laws to address the adverse WTO rulings. The EC
has declared that it will impose FSC/ETI sanctions by January 1, 2004, in the
absence of appropriate Congressional action. The Company's sales of
U.S.-produced bowling equipment into the EC during 2002 totaled approximately
$33 million.

The second dispute concerns tariffs proposed by the EC in retaliation for
steel "safeguard" tariffs imposed by the United States. If the EC's tariff
sanctions become effective, a substantial portion of the Company's boats
imported into the EC may be subject to an additional duty of up to 30 percent ad
valorem. A WTO dispute settlement panel has ruled for the EC in this dispute,
but the United States has announced its intention to appeal that adverse ruling
to the WTO Appellate Body. A final ruling is expected by the end of 2003, but
the Company is unable to predict what that ruling may be. Although it is not
possible to determine the likely effects of these EC proposals, the Company is
carefully monitoring developments and will continue to evaluate potential
strategies for mitigating any adverse effects of the proposed tariffs. The
Company's sales of U.S.-produced boats into the EC during 2002 totaled
approximately $50 million.

MARINE ENGINE SEGMENT

The following table sets forth Marine Engine segment results for the
quarter and six months ended June 30, 2003 and 2002 (in millions):

QUARTER ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
--------------------------------- ------------------------------
2003 2002 2003 2002
-------------- -------------- ------------ -------------

Net sales $ 521.9 $ 505.8 $ 934.7 $ 876.2
Operating earnings $ 64.2 $ 77.8 $ 83.5 $ 102.5
Operating margin 12.3% 15.4% 8.9% 11.7%
Capital expenditures $ 14.0 $ 7.4 $ 21.6 $ 10.9


Marine Engine segment sales, which include the Company's Mercury Marine and
Brunswick New Technologies operations, increased $16.1 million, or 3.2 percent,
to $521.9 million in the second quarter of 2003 compared with the second quarter
of 2002. Sales for the first six months of 2003 increased $58.5 million, or 6.7
percent, to $934.7 million when compared with the same period last year. The
primary drivers behind the increase in the second quarter of 2003 were favorable
currency trends from a weakening dollar, higher wholesale shipments of
sterndrive engines in international markets, and additional revenues associated
with acquisitions completed in 2002. This sales increase was partially offset by
a decrease in wholesale shipments of outboard and sterndrive engines in the
domestic market due to weaker marine activity and increased domestic and foreign
competition, and lower domestic parts and accessories sales due in part to
unfavorable weather. Year-to-date sales benefited from factors similar to those
in the second quarter.

18


Operating earnings decreased $13.6 million, or 17.5 percent, to $64.2
million in the second quarter of 2003, compared with $77.8 million in the second
quarter of 2002. Operating margins fell 310 basis points to 12.3 percent in the
second quarter of 2003 when compared with the second quarter of 2002. Operating
earnings decreased $19.0 million, or 18.5 percent, to $83.5 million for the
first six months of 2003, compared with $102.5 million in the same period of
2002. Operating margins fell 280 basis points to 8.9 percent in the first six
months of 2003 when compared with the same period in 2002. For both the second
quarter and year-to-date comparisons, operating earnings benefited from higher
sales, a change in the salaried employee vacation policy discussed in NOTE 7,
STANDARDIZATION OF VACATION POLICY, to the Consolidated Financial Statements,
and lower variable compensation costs. These factors were more than offset by
lower production of outboard and sterndrive engines, which resulted in lower
absorption of fixed costs; higher pension, healthcare and insurance costs; costs
of $4.1 million associated with a salaried workforce reduction; reduced sales of
higher margin parts and accessories due in part to unfavorable weather; and by a
mix shift towards sales of lower-horsepower engines and low-emission outboard
engines, which carry lower margins.


BOAT SEGMENT

The following table sets forth Boat segment results for the quarter and six
months ended June 30, 2003 and 2002 (in millions):

QUARTER ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------------- --------------------------------
2003 2002 2003 2002
-------------- ------------- ------------- -------------

Net sales $ 418.9 $ 373.3 $ 797.5 $ 727.2
Operating earnings $ 32.3 $ 11.0 $ 46.4 $ 14.3
Operating margin 7.7% 2.9% 5.8% 2.0%
Capital expenditures $ 7.4 $ 10.3 $ 13.7 $ 19.5


Boat segment sales increased $45.6 million, or 12.2 percent, to $418.9
million in the second quarter of 2003, compared with $373.3 million in the
second quarter of 2002. Sales for the first six months of 2003 increased $70.3
million, or 9.7 percent, to $797.5 million when compared with the same period
last year. The sales increase in the second quarter and year-to-date periods was
driven by higher wholesale shipments, most notably for smaller boats, as well as
favorable pricing and reduced discounting to dealers. The increase in shipments
is attributed to a change in the rate at which dealers adjusted their
inventories, rather than higher retail sales. In the first half of 2002, dealers
significantly reduced their wholesale purchases to lower their inventory levels.
Reductions in dealer inventories during 2003 occurred at a much lower rate and
reflect more normal seasonal activity.

Operating earnings for the segment increased $21.3 million to $32.3 million
in the second quarter of 2003, compared with the same period in 2002. Operating
margins increased 480 basis points to 7.7 percent in the second quarter of 2003,
compared with the second quarter of 2002. Operating earnings increased $32.1
million to $46.4 million for the first six months of 2003, compared with $14.3
million in the same period of 2002. Operating margins increased 380 basis points
to 5.8 percent in the first six months of 2003 when compared with the same
period in 2002. The increase in operating earnings for the second quarter 2003
was due to the higher sales volume, higher prices, reduced discounting to
dealers, and reduced losses at the segment's US Marine division driven by
operational efficiencies. The increase in operating earnings for the
year-to-date 2003 comparison was due to the higher sales volume, higher prices
and reduced discounting to dealers, and improved absorption of fixed costs due
to higher boat production levels. The increase in operating earnings for both
the quarterly and year-to-date periods was partially offset by an increase in
variable compensation costs.

19



FITNESS SEGMENT

The following table sets forth Fitness segment results for the quarter and
six months ended June 30, 2003 and 2002 (in millions):

QUARTER ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------------- --------------------------------
2003 2002 2003 2002
-------------- -------------- ------------- ---------------

Net sales $ 105.1 $ 103.6 $ 224.3 $ 208.6
Operating earnings (loss) (A) $ 5.3 $ 4.0 $ (7.2) $ 12.9
Operating margin 5.0% 3.9% (3.2)% 6.2%
Capital expenditures $ 3.4 $ 3.3 $ 6.3 $ 4.8


(A) Operating Earnings for the six months ended June 30, 2003, include a
$25.0 million pre-tax litigation charge discussed in NOTE 3, COMMITMENTS AND
CONTINGENCIES, to the Consolidated Financial Statements and MATTERS AFFECTING
COMPARABILITY above.



Fitness segment sales increased $1.5 million, or 1.4 percent, to $105.1
million in the second quarter of 2003, compared with the second quarter of 2002.
Sales for the first six months of 2003 increased $15.7 million, or 7.5 percent,
to $224.3 million when compared with the same period last year. The sales
increase for the second quarter and the first half of 2003 was primarily due to
increased domestic commercial sales to health club chains and the military, and
favorable currency trends from a weakening dollar in international markets. The
increase in second quarter 2003 sales was partially offset by decreased sales of
commercial and consumer products in international markets due to unfavorable
market conditions, specifically in Asia where severe acute respiratory syndrome
(SARS) impacted demand. Sales of commercial and consumer product sales benefited
from share gains attributed to the success of new product and new model
introductions, such as commercial stationary bikes, independent steppers and
home gyms. The sales increase for the quarterly and year-to-date periods was
partially offset by a decline in retail sales at the Company's Omni Fitness
stores due to overall weakness in the domestic economy.

Operating earnings in the second quarter of 2003 increased $1.3 million to
$5.3 million compared with the second quarter of 2002. Operating margins
increased 110 basis points to 5.0 percent in the second quarter of 2003 when
compared to the same period last year. Operating earnings for the first six
months of 2003 decreased to an operating loss of $7.2 million from operating
earnings of $12.9 million in the same period of 2002. Operating margins
decreased to a negative 3.2 percent for the first six months of 2003 when
compared with the same period last year. For the first six months of 2003, the
decline in operating earnings and operating margins is primarily attributed to
the previously mentioned litigation charge. Management believes that
presentation of operating earnings excluding this litigation charge provides a
more meaningful comparison to prior period results because it allows for a more
customary operating earnings comparison. Excluding this charge from the
year-to-date comparison, operating earnings for the segment increased $4.9
million, or 38.0 percent, to $17.8 million. Operating margins for the first six
months of 2003 increased 170 basis points to 7.9 percent when compared with the
same period last year. Operating earnings for the quarterly and year-to-date
periods increased primarily due to higher sales and lower warranty costs
partially offset by increased healthcare and insurance costs. Additionally,
second quarter and year-to-date 2003 operating earnings were negatively affected
by expenses and unfavorable manufacturing variances of $0.7 million and $1.3
million, respectively, associated with the closure of the segment's Paso Robles,
California, facility.

The transfer of production from the Paso Robles plant to an existing
facility in Ramsey, Minnesota, is expected to be completed in early 2004. A
total of approximately $5.0 million in expenses and unfavorable manufacturing
variances associated with this closure are anticipated. Once completed, annual
cost savings from the move are expected to be approximately $5.0 million.

20




BOWLING & BILLIARDS SEGMENT

The following table sets forth Bowling & Billiards segment results for the
quarter and six months ended June 30, 2003 and 2002 (in millions):

QUARTER ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------------- ------------------------------
2003 2002 2003 2002
--------------- ------------- ------------- -------------

Net sales $ 94.1 $ 95.7 $ 179.2 $ 185.9
Operating earnings (loss) $ 1.9 $ (1.7) $ 10.3 $ 6.8
Operating margin 2.0% (1.8)% 5.7% 3.7%
Capital expenditures $ 7.2 $ 3.5 $ 10.1 $ 5.5


Bowling & Billiards segment sales decreased $1.6 million, or 1.7 percent,
to $94.1 million in the second quarter of 2003, compared with the second quarter
of 2002. Sales for the first six months of 2003 decreased $6.7 million, or 3.6
percent, to $179.2 million when compared with the same period last year. The
decrease in sales for the quarterly and year-to-date periods was primarily due
to lower sales volumes of bowling capital equipment in domestic markets and
weaker consumer demand for billiards products. This decrease in sales was
partially offset by an increase in revenues from retail bowling centers and
additional revenues associated with the Valley-Dynamo acquisition, which
occurred late in the second quarter of 2003.

Operating earnings in the second quarter of 2003 were $1.9 million,
compared with an operating loss of $1.7 million in the second quarter of 2002.
Operating margins were 2.0 percent for the second quarter of 2003 when compared
with a negative 1.8 percent for the same period last year. Operating earnings
increased $3.5 million to $10.3 million for the first six months of 2003,
compared with $6.8 million in the same period of 2002. Operating margins
increased 200 basis points to 5.7 percent in the first six months of 2003 when
compared with the same period in 2002. Operating earnings in the quarterly and
year-to-date periods benefited from cost reduction programs and the absence of
impairment charges recorded in the second quarter of 2002 for European retail
bowling centers, partially offset by lower sales and increased research and
development spending.

21




CASH FLOW, LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth an analysis of cash flow for the six-month
periods ended June 30, 2003 and 2002 (in millions):

SIX MONTHS ENDED
JUNE 30
-----------------------------
2003 2002
------------ ------------

Net income $ 57.4 $ 34.3
Interest expense 20.8 21.6
Depreciation & amortization 72.9 75.2
Income tax provision 30.9 33.2
Cumulative effect of a change in accounting principle, net of tax - 25.1
------------ ------------
EBITDA * 182.0 189.4
------------ ------------
Changes in working capital (61.9) 11.9
Interest expense (20.8) (21.6)
Tax (payments) refunds, net (59.8) 22.3
Other 21.9 36.6
------------ ------------
Cash provided by operating activities 61.4 238.6
Cash used for investing activities ** (60.6) (43.7)
------------ ------------
Free cash flow * $ 0.8 $ 194.9
============ ============

* EBITDA is presented to assist in the analysis of cash flow from
operations. Free cash flow is defined as cash flow from operating and
investing activities, excluding acquisitions and financing activities. These
measures are not intended as an alternative measure of operating results or
cash flow from operations, as determined in accordance with generally
accepted accounting principles (GAAP) in the United States. The Company uses
these financial measures, both in presenting its results to stockholders and
the investment community, and in its internal evaluation and management of
its businesses. Management believes that these financial measures, and the
information they provide, are useful to investors because they permit
investors to view the Company's performance using the same tools that
management uses to gauge progress in achieving its stated goals. Management
believes that the non-GAAP financial measure "EBITDA" is also useful to
investors as it is commonly used in financial analysis. Management believes
that the non-GAAP financial measure "Free Cash Flow" is also useful to
investors because it is an indication of cash flow that may be available to
fund further investment in future growth initiatives.
** Comprised principally of capital expenditures and excludes
acquisition activities.



The Company's major sources of funds for investments and dividend payments
are cash generated from operating activities, available cash balances and
selected borrowings.

In the first six months of 2003, net cash provided by operating activities
totaled $61.4 million compared with net cash provided by operating activities of
$238.6 million in the first six months of 2002.

The $177.2 million decrease in net cash used for operating activities in
the first six months of 2003 versus the prior year is attributed to the tax
payment of $62.0 million ($50.0 million after-tax) in 2003 related to the Tax
Court matter (discussed in NOTE 3, COMMITMENTS AND CONTINGENCIES, to the
Consolidated Financial Statements), the absence of tax refunds in 2002 that
resulted from the divestiture of the beverage cooler business completed in late
2001, and an increase in working capital. Cash used for operating activities
included changes in working capital that resulted in a use of cash of $61.9
million in 2003 versus cash provided of $11.9 million in 2002. The use of
cash from working capital in the first six months of 2003 was the result of
variable compensation payments in the first quarter of 2003, and the absence of
cash

22


generated from a reduction in Boat segment inventories in the first half of
2002, partially offset by the reserve established in the first quarter of 2003
for the aforementioned Fitness segment litigation, which has not been paid.

Cash flows from investing activities included capital expenditures of $52.2
million in the first six months of 2003, compared with $41.0 million in the
first six months of 2002. Cash paid for acquisitions, net of cash acquired,
totaled $97.4 million in the first six months of 2003, compared with $8.8
million in the first six months of 2002. See NOTE 5, ACQUISITIONS, to the
Consolidated Financial Statements for further details. The Company invested
$11.7 million during the first six months of 2003 in Bella-Veneet OY, a boat
manufacturer located in Finland, and in Brunswick Acceptance Company LLC, a
financial products and services joint venture discussed below. Investments of
$6.7 million in 2002 were primarily related to the Cummins MerCruiser Diesel
Marine LLC joint venture.

Cash flow from financing activities resulted in a $0.7 million use of cash in
the first six months of 2003, as compared with a cash inflow of $39.9 million in
the prior year period. The Company received $2.8 million from stock options
exercised in the first half of 2003, compared with $39.4 million during the same
period of 2002.

Cash and cash equivalents totaled $254.1 million at June 30, 2003, down
$97.3 million from $351.4 million at December 31, 2002. Total debt at June 30,
2003, increased $13.7 million to $632.1 million, versus $618.4 million at
December 31, 2002, and debt-to-capitalization ratios were 34.9 and 35.9 percent,
respectively. The increase in debt is primarily related to the issuance of notes
associated with the Land 'N' Sea acquisition. The Company has a $350.0 million
long-term revolving credit agreement with a group of banks as described in Note
10 to the consolidated financial statements of the 2002 Form 10-K that serves as
support for commercial paper borrowings. There were no borrowings under the
revolving credit agreement during the first six months of 2003. The Company has
the ability to issue up to $100.0 million in letters of credit under the
revolving credit facility, with $71.5 million in outstanding letters of credit
at June 30, 2003. The Company had borrowing capacity of $278.5 million under the
terms of the revolving credit agreement at June 30, 2003. The Company also has
$600.0 million available under a universal shelf registration statement filed in
2001 with the Securities and Exchange Commission for the issuance of equity
and/or debt securities.

The adverse conditions in equity markets in recent years, along with the
low interest rate environment, have had an unfavorable impact on the funded
status of the Company's domestic qualified defined benefit pension plans. There
was no legal requirement under the Employee Retirement Income Security Act
(ERISA) to fund these plans in 2002 and 2003. Nevertheless, the Company
contributed $45.0 million in cash to the qualified pension plans during 2002 and
funded $8.3 million to cover benefit payments in the unfunded nonqualified
pension plan. The Company made a voluntary cash contribution of $20.0 million to
the pension plans in the second quarter of 2003, and anticipates making
additional contributions of approximately $20 million during the remainder of
2003 to achieve its funding objectives.

The Company established a joint venture in 2002 with Transamerica
Distribution Finance (TDF) to provide financial products and services to
customers of the Company's domestic marine dealers. The venture, Brunswick
Acceptance Company, LLC (BAC), began operating in January of 2003 and provides
secured wholesale floor-plan financing to the Company's boat dealers. Under
terms of the joint venture agreement, BAC purchases and services a portion of
Mercury Marine's domestic accounts receivable relating to its boatbuilder and
dealer customers, and may provide other financial services in the future in
support of the Company's marine businesses. The Company's initial ownership
percentage in BAC was 15 percent. In the first half of 2003, the Company made an
equity investment of $3.3 million in BAC. On July 2, 2003, the Company
contributed an additional $19.5 million to increase the Company's equity
interest in BAC to 49 percent from 15 percent.

23


Under terms of the joint venture agreement with TDF, BAC will purchase and
service a portion of Mercury Marine's domestic accounts receivable for its
boatbuilder and dealer customers. On July 2, 2003, the Company made an initial
sale of a significant portion of Mercury Marine's domestic accounts receivables
to BAC for $124.1 million in cash, net of discount. The Company has a retained
interest in $37.4 million of the initial receivables sold, as a result of
recourse provisions. In accordance with SFAS No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities," the
Company will treat the sale of those receivables in which the Company retains an
interest as a secured obligation. Under terms of the contractual agreements with
BAC, the Company's maximum recourse exposure on these receivables, included in
the initial sale, is limited to $20.2 million. BAC will continue to purchase and
service a portion of Mercury Marine's domestic accounts receivable on an ongoing
basis. Due to the seasonality of the marine business, the outstanding balance
for receivables sold to BAC is expected to decrease to approximately $90 million
to $105 million by the end of the third quarter of 2003.

The Company's financial flexibility and access to capital markets are
supported by its balance sheet position, investment-grade credit ratings and
ability to generate significant cash from operating activities. Management
believes that there are adequate sources of liquidity to meet the Company's
short-term and long-term needs.

LEGAL AND ENVIRONMENTAL

In the normal course of business, the Company is subject to claims and
litigation, including indemnification obligations relating to acquisitions and
divestitures. The Company accrues for litigation exposure based upon its
assessment, made in consultation with counsel, of the likely range of exposure
stemming from the claim. In light of existing reserves, the Company's litigation
claims, when finally resolved, will not, in the opinion of management, have a
material adverse effect on the Company's consolidated financial position. If
current estimates for the cost of resolving any specific claims are later
determined to be inadequate, results of operations could be adversely affected
in the period in which additional provisions are required.

In February 2003, the United States Tax Court issued a ruling upholding the
disallowance by the Internal Revenue Service (IRS) of capital losses and other
expenses for 1990 and 1991 related to two partnership investments entered into
by the Company. Refer to Note 14 to the consolidated financial statements of the
2002 Form 10-K for further description of the history and the Company's reserves
associated with this Tax Court matter. The Company intends to appeal the recent
Tax Court decision to the United States Court of Appeals for the District of
Columbia. If the Company does not prevail in its appeal, the Company could owe
approximately $135 million, consisting of $60 million in taxes due plus $75
million of interest, net of tax. The Company has previously settled a number of
other issues with the IRS on open tax years 1989 through 1994 and anticipates
favorable adjustments that would reduce the liability associated with the two
partnership investments to approximately $50 million, consisting of $28 million
in taxes due and $22 million in interest, net of tax. In April 2003, the Company
elected to pay to the IRS $62 million (approximately $50 million after-tax) in
connection with this matter while the appeal is pending. The payment was
comprised of $28 million in taxes due and $34 million of pre-tax interest ($22
million after-tax). The Company elected to make this payment to avoid future
interest costs, if the appeal is ultimately unsuccessful. No penalties have been
formally asserted by the IRS to date. The Company believes, based on currently
available information, that any penalties, if asserted, and accrued interest,
would not have a material adverse effect on the Company's consolidated financial
position or results of operations. See NOTE 9, SUBSEQUENT EVENTS, to the
Consolidated Financial Statements, for further discussion.

The Company's Life Fitness division entered into court-ordered mediation in
an effort to resolve a patent infringement lawsuit with Precor Incorporated
(Precor), a manufacturer of fitness equipment. The lawsuit involves a dispute
over patent rights held by Precor relating to the design of a cross trainer. The
parties have not reached a final settlement of the lawsuit. However, in light of
developments in connection with the mediation, which concluded on May 10, 2003,
and occurred prior to the filing of the Company's first quarter 2003 Form
10-Q dated May 15, 2003, the Company recorded a $25.0 million charge to
operating

24


earnings in the first quarter of 2003 ($16.0 million after-tax, or $0.18
per diluted share) in accordance with accounting principles generally accepted
in the United States. Refer to Note 7, to the consolidated financial statements
of the 2002 Form 10-K for further discussion.

CRITICAL ACCOUNTING POLICIES

There have been no material changes in the Company's critical accounting
policies since the filing of its 2002 Annual Report on Form 10-K. As discussed
in the annual report, the preparation of the consolidated financial statements
in conformity 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.

FORWARD-LOOKING STATEMENTS

Certain statements in this Form 10-Q are forward looking as defined in the
Private Securities Litigation Reform Act of 1995. These statements involve
certain risks and uncertainties that may cause actual results to differ
materially from expectations as of the date of this filing. These risks include,
but are not limited to, the effect of a weak U.S. economy on consumer confidence
and thus the demand for marine, fitness, billiards and bowling equipment and
products; the impact of interest rates, fuel prices and weather conditions on
demand for marine products; the Company's ability to develop and produce new
products and maintain product quality and service standards; the ability to
successfully integrate acquisitions; the ability to maintain effective
distribution; competitive pricing pressures; inventory adjustments by major
dealers and retailers; the financial strength of dealers and independent boat
builders; the ability to successfully manage pipeline inventories; adverse
foreign economic conditions; shifts in currency exchange rates; the effect of
weak financial markets on pension expense and funding levels; the ability to
complete environmental remediation efforts and resolve claims and litigation at
the cost estimated; the success of marketing and cost-management programs; the
success of global sourcing and supply chain initiatives; new and competing
technologies; imports from Asia and increased competition from Asian
competitors; and possible increases in tariffs on the Company's boat and bowling
equipment sales into Europe. Additional factors are included in the 2002 Form
10-K.


ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in foreign currency
exchange rates, interest rates and commodity prices. 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's risk
management objectives are described in Notes 1 and 8 of the 2002 Form 10-K.

ITEM 4. - DISCLOSURE CONTROLS

The Chief Executive Officer and the Chief Financial Officer of the Company
(its principal executive officer and principal financial officer, respectively)
have evaluated the Company's disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered
by this quarterly report. Based upon that evaluation, the Chief Executive
Officer and Chief Financial Officer have concluded that the Company's disclosure
controls and procedures are effective in timely alerting them to material
information required to be included in the Company's periodic SEC filings
relating to the Company (including its consolidated subsidiaries). There were no
changes that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting during the
second quarter of 2003.

25


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Note 3 to Consolidated Financial Statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations in Part I of this
Quarterly Report are hereby incorporated by reference.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

31.1 Certification of CEO Pursuant to 15 U.S.C. Section 7241, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of CFO Pursuant to 15 U.S.C. Section 7241, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of CEO Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification of CFO Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K.

On April 24, 2003, the Company filed a Current Report on Form 8-K to
disclose, pursuant to item 9 on Form 8-K, a press release announcing
the Company's financial results for the first quarter of the fiscal
year 2003. The information contained in the Form 8-K was intended to be
furnished pursuant to Item 12, "Disclosure of Results of Operations and
Financial Condition," and was included under Item 9 in accordance with
Securities and Exchange Commission Release No. 33-8216.

On May 15, 2003, the Company filed a Current Report on Form 8-K to
disclose, pursuant to item 9 on Form 8-K, a press release announcing
the establishment by the Company of a $25 million litigation reserve in
connection with ongoing negotiations regarding a patent suit. The
information contained in the Form 8-K was intended to be furnished
pursuant to Item 12, "Disclosure of Results of Operations and Financial
Condition," and was included under Item 9 in accordance with Securities
and Exchange Commission Release No. 33-8216.

26



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

BRUNSWICK CORPORATION
(Registrant)

August 12, 2003 By: /s/ PETER G. LEEMPUTTE
---------------------------
Peter G. Leemputte
Vice President and Controller

*Mr. Leemputte is signing this report both as a duly authorized officer and
as the principal accounting officer.

27


Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, George W. Buckley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Brunswick
Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we
have:

a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.


Date: August 12, 2003

/S/ GEORGE W. BUCKLEY
---------------------
George W. Buckley
Chief Executive Officer

28


Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Victoria J. Reich, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Brunswick
Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.

Date: August 12, 2003

/S/ VICTORIA J. REICH
---------------------
Victoria J. Reich
Chief Financial Officer

29



Exhibit 32.1

Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code



I, George W. Buckley, Chief Executive Officer of Brunswick Corporation,
certify that (i) Brunswick Corporation's report on Form 10-Q for the quarterly
period ending June 30, 2003, fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information
contained in Brunswick Corporation's report on Form 10-Q for the quarterly
period ending June 30, 2003, fairly presents, in all material respects, the
financial condition and results of operations of Brunswick Corporation.



/s/ GEORGE W. BUCKLEY
---------------------
George W. Buckley
Chief Executive Officer
August 12, 2003


30


Exhibit 32.2

Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code



I, Victoria J. Reich, Chief Financial Officer of Brunswick Corporation,
certify that (i) Brunswick Corporation's report on Form 10-Q for the quarterly
period ending June 30, 2003, fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information
contained in Brunswick Corporation's report on Form 10-Q for the quarterly
period ending June 30, 2003, fairly presents, in all material respects, the
financial condition and results of operations of Brunswick Corporation.



/s/ VICTORIA J. REICH
---------------------
Victoria J. Reich
Chief Financial Officer
August 12, 2003


31