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Rating Action: Moody’s assigns Baa2 to Brunswick’s proposed notes; outlook is stableGlobal Credit Research – 22 Mar 2022New York, March 22, 2022 — Moody’s Investors Service (“Moody’s”) assigned Baa2 ratings to Brunswick Corporation’s (“Brunswick”) proposed new 10-year and 30-year senior unsecured notes. All other ratings for the company including the Baa2 senior unsecured notes and Prime-2 commercial paper ratings remain unchanged. The rating outlook is stable.Proceeds from the notes will be used for general corporate purposes, including any possible tuck-in acquisitions that may arise during the year and to pre-fund the refinancing of existing debt. Brunswick has approximately $1 billion of debt that is pre-payable in the next 12 to 24 months.Moody’s expects Brunswick’s credit metrics to remain relatively stable over the next 12-18 months as demand in the leisure marine industry remains stable with depleted inventory at dealerships, which will take some time to back-fill, thus maintaining strong demand of marine products through the summer 2022 selling season. However, some pressure may arise if inflationary headwinds persist and are exacerbated by the Russia/Ukraine conflict or consumers postpone purchases of boats as this industry is highly discretionary. Offsetting these potential pressures is the company’s large and growing aftermarket parts and accessories segment that is more stable with higher margin and sales relative to Brunswick’s other business segments that are dependent on new boat sales. Aftermarket revenue helps to mitigate downward earnings pressures during weak economic cycles when new boat sales tend to decline.As a result of this issuance, Moody’s estimates that Brunswick’s pro-forma adjusted debt/EBITDA leverage will increase temporarily to approximately 2.6x, from 1.9x as of December 31, 2021. Despite this increase, Brunswick’s ratings will not be impacted because its financial leverage will decline as debt is repaid over the next two years using the proceeds from this issuance. Moody’s expects debt/EBITDA leverage will improve to under 2.0x over the next 12-18 months, driven by both stable earnings and planned debt reduction. Brunswick will continue to maintain strong liquidity with cash on hand of $1.1 billion as of December 31, 2021 (inclusive of the new issuance) and $500 million of borrowing capacity under its committed revolver that expires in July 2026.The following ratings/assessments are affected by today’s action:New Assignments:..Issuer: Brunswick Corporation….Senior Unsecured Notes, Assigned Baa2RATINGS RATIONALEBrunswick’s Baa2 senior unsecured rating reflects its strong position in the marine industry, the stability provided by its marine parts & accessories business, and the very strong credit metrics that provide good capacity to absorb volatility in earnings during economic downturns. The company also benefits from increased boating participation trends due to the coronavirus outbreak and the demand in boating created from the inability for consumers to vacation given travel restrictions caused by the pandemic. Moody’s expect these trends will moderate in 2022 as travel opens more broadly but order volumes remain healthy and low inventory levels at dealerships remain will limit the effect on Brunswick. Moody’s expects new marine product demand will moderate over the next year because travel restrictions are diminishing, but that the benefits of increased boat ownership will persist through higher aftermarket parts & accessory sales. Brunswick’s credit profile is constrained by the traditionally cyclical nature of leisure boat demand during economic downturns due to the discretionary nature of boats and Brunswick’s need for continual reinvestment in product development and technology to maintain a competitive edge. The company is also acquisitive, and this poses integration related risks and periodic leverage increases.With respect to ESG, Brunswick’s manufacturing plants and end-products produce emissions. However, the company manages potential environmental risk in part through product innovation of quieter and more fuel-efficient boat engines, innovation such as Active Trim that provide fuel efficiency to boats, and by seeking ways to reduce emissions from its manufacturing facilities. Positive social considerations include the company’s focus on passenger safety (with products such as its 1st Mate System), and boats in general providing outdoor activities that allow for social distancing necessitated by the coronavirus. From a governance perspective, the company has a moderate financial policy, which is balanced among growing its business through acquisitions, shareholder distributions, and debt repayment.The coronavirus outbreak and the government measures put in place to contain it continue to disrupt economies and credit markets across sectors and regions. Although an economic recovery is underway, it is tenuous, and its continuation will be closely tied to containment of the virus. As a result, there is uncertainty around Moody’s forecasts. Moody’s regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The consumer durables industry is one of the sectors most meaningfully affected by the coronavirus because of exposure to discretionary spending.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSThe stable outlook reflects Moody’s expectation that the company will maintain good operating performance, liquidity, and credit metrics over the next 12-18 months. Further, the stable outlook reflects Moody’s view that good demand for Brunswick’s marine products will persist as the effects of the coronavirus linger.An upgrade would be considered longer term if Brunswick can materially increase its revenues and further diversify its business away from more volatile OEM boat segments. Moody’s would also need to have a view that Brunswick can maintain solid earnings and free cash flow in the face of economic uncertainties. In addition, Brunswick would need to sustain debt/EBITDA below 1.5x before Moody’s would consider an upgrade.A downgrade would be considered if there is a significant and lasting negative change in boating participation or boat ownership, if operating performance materially weakens, if Moody’s adjusted debt-to-EBITDA leverage is sustained over 2.5x, or if free cash flow weakens.The principal methodology used in these ratings was Consumer Durables published in September 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1276767. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.Brunswick, headquartered in Mettawa, Illinois, is a global designer, manufacturer, and marketer of marine engines, boats, and marine accessories. Revenues for the publicly-traded company are approximately $5.8 billion as of December 31, 2021.REGULATORY DISCLOSURESFor further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody’s Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody’s general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1288235.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the UK and is endorsed by Moody’s Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Maria Iarriccio Vice President – Senior Analyst Corporate Finance Group Moody’s Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. 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