Good morning, and welcome to Brunswick Corporation’s 2011 second quarter earnings conference call. All participants will be in a listen-only mode, until the question-and-answer period. Today's meeting will be recorded, if you have any objections you may disconnect at this time. I would now like to introduce Bruce Byots, Vice President of Corporate and Investor Relations. Please proceed.

Good morning and thank you for joining us. On the call this morning is Dusty McCoy, Brunswick's Chairman and CEO and Peter Hamilton, our CFO. Before we begin with our prepared remarks, I would like to remind everyone that during this call, our comments will include certain forward-looking statements about future results. Please keep in my mind that our actual results could differ materially from these expectations. For the details on the factors to consider, please refer to our recent SEC filings and today's press release. All these documents are available on our website at brunswick.com. At this point, I would like to turn the call over to Dusty.

Thank you Bruce, good morning everyone. By now I am sure you had the opportunity to review our second quarter earnings release. Our strong performance in the second quarter reflected higher marine wholesale shipments compared to the prior year. Our boat and engine segments continued to perform well across most of their product offerings. In addition, Life Fitness experienced strong revenue and earnings growth, and consistent with the previous five quarters, our consolidated results continue to demonstrate strong operating leverage. Our results in the quarter reflect revenue growth of 8% and net earnings of $0.75 per share including a $0.02 per share benefit from special tax items. This compares to net earnings of $0.15 per share in the prior year which included $0.26 per share of restructuring charges and a $0.02 per share of expense from special tax items. Operating earnings excluding restructuring exit impairment charges were $108 million in the quarter, an improvement of $28 million as compared to the prior year period. Our GAAP operating margin was just under 10%. This represents our highest second quarter consolidated operating margin since 2005. In addition to higher sales levels, our earnings benefited from increased fixed cost absorption, improved operating efficiencies, lower restructuring charges and company-wide cost reductions. Partially, offsetting these items were higher material costs and variable compensation expense. SG&A remained relatively consistent, benefiting in the quarter from lower bad debt expenses. SG&A decreased as a percentage of net sales. Our cash and marketable securities totaled $677 million and net debt at quarter end was $110 million. Peter will comment in his remarks on the key drivers of our strong cash flow during the first half as well as provide you with a perspective on our 2011 targets, supporting our objective of generating substantial free cash flow for the remainder…

Thanks Dusty. I do want to begin by clarifying a portion of the balance sheet schedule included as part of our press release this morning. Total inventory in this schedule is properly stated at $527.3 million flat with year end 2010. However, the schedule overstates our finished goods balance and understates our work-in-process balance by approximately $110 million. We are in the process of correcting the schedule on wire and our 10K will obviously contain the correct information. I will move now to an overview of certain items included in our second quarter P&L and we will also comment on certain forward-looking data points. Let me start with restructuring, exit and impairment charges, which actually reflected a net gain of approximately $300,000 in the quarter. Ongoing restructuring actions at our Marine operations and the charges pertaining to them of approximately $5 million were more than offset by gains associated with the sale of the few of our idle marine properties. Our current estimate for full year restructuring charges is between $6 million and $10 million. Net interest expense, which includes interest expense, interest income and debt extinguishment losses was 21 million in the quarter, a decrease of $6 million versus the same period in 2010. During the first quarter of 2011, we recorded a debt extinguishment loss of about 900,000 on debt retirements of 25 million. These debt retirements included a portion of the 2013, 2016 and 2027 notes. A debt extinguishment loss of 4.1 million was recorded in the second quarter of 2010. In addition to 44 million of debt retirements completed in the first half of 2011, we have thus for retired 23 million of debt in the third quarter resulting in a debt extinguishment loss of approximately $6 million. Including the impact of debt retirement action we’ve…

Thanks Peter. I’ll conclude our call today by reviewing our 2011 outlook. As you can see from our first half performance, we continue to remain disciplined to generate substantial free cash flow, perform better than the market and demonstrate outstanding operating leverage. As I said in my opening comments our plan for a flat 2011 marine market is unfolding generally as we discussed with you in January and April. It also continues to be our view that smaller boats as in 2010 will continue to outperform larger boats. Under our view the marine market demand has not changed, we are now planning for a higher single digit consolidated Brunswick revenue growth. This increase in our targeted top-line growth is based on our ongoing efforts as relative seamless experience thus far to improve market share in all of our business segments. Our 2011 net income should also benefit from our previously announced marine plant consolidations, as well as some of the items Peter has already discussed with you; lower restructuring cost, along with reduced net interest, pension and depreciation expenses as well as the lower tax provision. Our forecasted third quarter SG&A will continue to reflect comparable levels of operating expenses that were accrued in the previous two quarters, with the exception of a gain on sale of a distribution facility recorded in the first quarter and the bad debt reduction experienced in the second quarter. Also, I would like to remind you that the SG&A in the third quarter 2010 included a favorable adjustment to variable compensation expense. After taking all these factors into consideration, we currently expect our 2011 earnings per share to be in the range of $0.60 per share to $0.75 per share. As a result of seasonal factors that affect our marine businesses as well as…

(Operator Instructions) Your first question comes from the line of Ed Aaron from RBC Capital Markets. Please proceed.

I guess I wanted to talk with the full year guidance change and its sound like a portion of it’s operating and a portion of it’s non-operating. Can you maybe just help breakdown between those two things by giving us a sense of a change in your restructuring expense outlook and tax rate outlook and how much those two things combined account for the increase in full year EPS guidance.

Ed, its Peter. A we look at our guidance increase, we see about $0.05 a share of it associated with restructuring reduction which is not a reduction as I said in expense, but we have had offsets from gains and about $0.03 a share generally from a reduced view of taxes. So maybe $0.08 of the $0.25 spread in the top end of the range would be associated with what we would call non-operating points.

The tax comparison versus our kind of model for this quarter was a much bigger benefit than that. So that I guess that would have seen to imply maybe even a higher tax rate in the back half than what we and perhaps others have been modeling for, is that the right way to read it?

Well the reason we have said are 24% year-to-date and we had previously said we would be operating 32%. So we are down from 32% and the 24% rate is going to be more representative.

Okay. And then Dusty just to get a little bit more perspective on the marketing, I wanted to ask you specifically about kind of the trade up segment, because that's obviously where there's been the most pressure you know the decline is moderated in Q2 which is encouraging, but it doesn't seem to be a whole lot of signs of life there and when I look at kind of that part of the market it seems like a lot of those customers are kind of in a similar financial position with respect to their boats and to the extent that they are still under water. And we just kind of step to me that we could at some point see a real step change in that market, in that segment’s growth rate. But there's not a whole lot of visibility in our end as to when that might happen and I just love to get a little bit of perspective from you on that segment of the market in particular.

I think you accurately described what our feeling is. There's a real opportunity for a step change and we don't know when it’s going to happen, Ed. My own view is that we need a couple of things to come into play. Let's say three things, one of which I believe has occurred, two which are still to come. The one which has occurred is the general decline in availability of (inaudible) boats. Now, I think the next two things that need to happen for us is first that we need the value of homes in the housing market to improve because some portion of these buyers because you believe that, the statistics that 30% of homeowners are underwater on their mortgage. Some percentage of those, that maybe a lot percentage would also be applicable to people who own boats. Until they can work their way through that, they’re not going to be willing to take any risk on our trade of a boat or go upside down in any way on a trade. And then the next name that has to happen for us is unemployment does need to improve because again, if we think real unemployment, not stated unemployment is nearing 20%. Some portion of those folks are also boat owners and if we extrapolate the same percentage in the boat ownership, those folks are also not in a position to take risk on a trade. And until the economy improves, dealers, and I applaud them for this for not willing to take any risk on trades. So all this in my judgment is on a rise and beginning to get better as the economy improves, but we’re not seeing it yet.

Fair enough. The only thing I’d kind of add is that it’s a confusing industry to cover sometimes because the changes, you know, the unit trends and the dollar trends can be a lot different. So to that extent, it would be helpful to the extent if you can to may be give us some disclosure where possible about the underlying drivers of your business in terms of units versus dollars and small boats versus big boats, I don’t know. How much of that you can give, but any help there would be great.

That surely is something that we can work on. We have a good view of it.

Your next question comes from the line of Jimmy Baker from B. Riley and Company. Please proceed. Jimmy Baker - B. Riley & Company: You know first I was hoping we could actually touch on the unsung hero of your business segment, the Fitness group. Another quarter of strong growth there and impressive operating leverage. Can you maybe drill down a little on what channels and geographies are driving the growth and may be comment on its sustainability and what you see as a potential kind of multi-year growth rate for that business?

We are seeing what we call the vertical segment which includes hotels et cetera continue to do well and in fact improving and we are capturing a nice part of that market. And then global sales on this business are 53% of their total sales and global sales are doing very well. So, this is a business, that with a great product, an absolutely fabulous sales force and distribution mechanism that is attacking the market all over the world, wherever there is some opportunities and it shouldn’t feel like they are missing many opportunities right now. They are doing a great job. And we think demographic, cultural and other issues that we look at in the future business bode very well for this business. Jimmy Baker - B. Riley & Company:

We are not satisfied at all which is sitting and going with the market. And in fact, we are working on some innovative product and you will begin to see that for the Fort Lauderdale Miami Boat Show, Jimmy. Jimmy Baker - B. Riley & Company: Okay. I mean it’s great to see the boat group positive at the operating line, you know, kind of across industry volumes. But assuming a flat mix, what type of industry-wide unit sales do you think we would need to be at for the boat group to breakeven on an annual basis, maybe 155,000 units, is that about where you are at.

We can breakeven lower than that. We’ve been relatively open about this and we will go ahead and state it. Fundamentally, our sterndrive and inboard businesses and our outboard business are profitable. We have a couple of brands that are going through significant difficulty caused by other global conditions, the state of our product in the market place or perhaps even how people are looking at certain segments. We are working very hard to fix those businesses and if we don’t believe we can get them fixed then we need to take some other action. But we don’t need the market once we take care of those issues, to be at a 155 to 160 to be profitable on our boat business, we can be profitable , once we fix those issues and want to be clear at lower levels. Jimmy Baker - B. Riley & Company: That’s helpful. And you know as the marine industry stabilizes and you continue to see an improvement in your business, do we start to see some improvement in the efficiency of the Cap structure by reviewing some of the cash on the balance sheet for debt pay down?

Absolutely, and I think that’s what we signaled here in this call as you look at second half. We will be opportunistically and this got to be the right deal for us looking at transactions that are come in the door for us, take care of debt and what we are signaling is if we do, do some of that, we will have debt extinguishment cost that will impact our earnings in the second half and we factored the potential for that into our guidance. Jimmy Baker - B. Riley & Company: Okay, great. And just lastly could you, may be give the weeks of dealer inventory at the end of the quarter?

31.5.

Your next question comes from the line of James Hardiman from Longbow Research. Please proceed.

Hi good morning and thanks for taking my call and congratulations on another really strong quarter. A couple of questions, I was hoping you could and it sounds like you are not going to quantify sort of the market share but I was hoping just may be qualitatively you can have us wrap our brains around the magnitude of the market share gain that you are seeing in the boat business especially in light of [re-max] reporting same-store sales this morning up 33% and the comment that new boat sales are up even more than that. Now, obviously there are lot of reason why they might be outperforming the rest of your dealer base geography begin one big reason but they are, I think 20% of business or some where in that neighborhood. So can you sort of walk us through maybe the magnitude of the type of market share gains that you are seeing?

I lay awake last night, I wondered how the heck I was going to answer this question.

So did I.

First, a new one to how wide our dealer network which is getting these market share gains for us and sort of your line and bring Max who has done an absolutely outstanding job with the brands of ours so they carry all across United States. But all of our dealers are happy to get these share gains.

I think it has…

I’ll say this depending upon how one measures the market, the segment we’re competing are in NMMA category. In the second quarter we captured more than a [four] point across the entire of market share and as we look at the year-to-date something less than 1% and we were going to just keep driving for the rest of year. Is that helpful to you?

It is, I believe I guess the other number you then need is through what the generally market share is and if you looking at mid-teens sort of market share you picked up a point that would be about 6% to 7% of our performance versus the industry, is that generally how I should think about things, I mean I guess depending on..

Your math is pretty good.

Okay, accurate. And then sort of along those same lines although I think you did a great job of answering that question. You talked in the first quarter about how you shipped a little bit more into the channel versus what shipped out from a seasonal perspective in that but second quarter would be the reverse of that, was that still the case in the second quarter, boat sales looked like they were up pretty nicely but can you just sort of speak to the ship in versus ship out in the second quarter.

Yeah we shipped a little more than we shipped out and then again as I tried to call out James it was all small boats. Fiberglass boats under 24 feet and aluminum boats and for the larger stuff they go the other way and in fact our pipelines are at record low levels and there are three things going on here that I don't want to make sure how like. Buried down in the numbers and this is a statistic we have given that I am going to cut at one more level. You know, I have said across the industry we believe that dealer count had been taken down through this downturn by about 30% but then our store front count was flat. But remember we cut about 30% of our brand out during this time and therefore our store front count has actually gone up in our continuing brands. So as we've added dealers and these continuing brands we needed to stock those dealers up. So there are at minimum stocking levels and what they believe is consistent with the marketplace and there has been some portion of this increase in our pipeline and the increase is that is increase dealers in what we’re calling internally are continuing brands. That’s number one. And number two, the growth in the market has been in small boats and we were fairly open in 2010 that we lost share in 2010 for two reasons. First, we believe there were folks that we have done in that and just counting their rate of boats and we’re not going to chase those discounts. Secondly, we were fairly open that we didn’t ramp up at the dealer network with alike and the market which has given us this opportunity early in ‘10 and therefore our dealers were a bit hurt in the smaller boat sales where the customer comes in ready to do the transactions and there needs to be a boat there. So as we worked through the minimum dealer, the minimum stocking levels with our dealers has become apparent to us as we’re gaining share, the market has flattened we stop the decline in this market it had been prior to this year. We needed in our dealer account, we needed more boats, and with our dealers and initiatives this small boats. So that’s what we’ve been doing. It’s responding to dealer goals. And overtime, obviously this has always got to work out, wholesales got to equal retail but they’re going to answers around season and we see the market or our position in the market change.

Very helpful and then sort of this last question, our market share and I’ll get back in the queue. Can you just speak, it sounds like you’ve done a phenomenal job so far this year, can you just speak to may be the sustainability of those market share gains, both this year and beyond sort of what initiatives do you have here in the Q that will allow you to gain longer term market share and how much market share is there to get back to the historical levels? Is that a big opportunity in, in of itself? Thanks.

First, I do want the job that we are lining on. We are talking about the boat market share but remember boat sales in 2010 were hardly 25% of our sales. Our engine sales were 50% of our sales and over on the engine side we have seen really nice steady improvement in market share in our outboard business boats highly competitive then in our sterndrive business it has been even a bit more impressive even though the sterndrive market is down more than we’ve been able to say its flat in our sterndrive gasoline business. And that is driven by the fact that there is a large competitor there and it is certain gasoline (inaudible) with 4.3 liters et cetera. But our engine business across the globe and particularly in the United States has been steadily gaining share now for several quarter and that is real important piece of our revenue increases and our market share gains. And it is still important to understand the Life Fitness is a little harder to measure and its harder to find statistics there, but we clearly believe as we see new clouds opening, our association with the vertical market and the number of units there and that business is also taking share. As we step back, we tried to communicate that we are going to do wonderfully as the market improves. But now we are not going to sit around and wait for the market to improve and we got to start generating growth. The first thing we could do is get focused on market share because we have leading brands and leading products and leading distribution network. We just have to get going. We will continue there but we also believe and I mentioned in my concluding comments, there are several many numerous or any word you just want to describe it. Organic growth opportunities is available to this company and we are hard it work now on positioning ourselves to go capture them. I don’t think we can get from market share alone, get our sales back to previous session levels, that there would be some impossible market share. So, we are just continuing to dig away in a market that we have but as importantly and overtime more importantly, we are going to be looking at other organic growth opportunities.

Your next question comes from the line of Tim Conder from Wells Fargo. Please proceed.

Dusty, seeing on the market share gain opportunity, first of all, you are alluding to gain share versus a competitor Volvo that’s walked away from a couple pieces of the gas market. When does that anniversary largely, I guess that’s the first part of the question and then in outboard, if you could kind of give us a little more color, granularity, how much do you think gaining share was maybe due to a little bit of shortage of availability from competitors with the disruptions in Japan versus you said before and your alluding to here, also I believe that you really haven’t taken on some of your outboard competitors and especially some other geographic market. So just some color on those market share gains?

Clearly some of the share gains we got was inability of some of the Japanese suppliers to getting them into the market. Tim, I can’t with accurate belief tell you what percentage of our market share gain has been caused by that. But even before that we were seeing a share gain globally.

Okay.

But I do want to be clear. Some portion of that, that we have got here towards the end of first quarter and certainly in the second quarter, has been assisted. We have had a little wind on our back because of the Japanese problem. As we look globally the one thing that as we put people on the ground all around the globe and establish real working offices with our employees and begin to work more closely with distribution network, as there has been kind of awakening on our part of additional commercial and government opportunities, especially in the outboard business and we have been hard at work capturing those. And we are continuing to understand those markets on a global basis and are getting more focus on them and for those providers, an interesting opportunity. We also, I think, are doing a real good job of getting a little more than our first year of fast emerging markets, Brazil as an example. We have been in those markets for a long time. We have been focused on recreation and as recreation of some of these markets have improved our longstanding nature and many of these markets has given us a real opportunity to do a little better. So we see lots of opportunity, we just got to stay after it and continue to put the right people in the right place and work with the right distribution. I didn’t quite…

And then, I am sorry.

I didn’t quite understand the question on this sterndrives gravity and can you help me with that.

Yes, so your comments there were all out-board correct?

That’s correct.

Okay. And then on the sterndrives, the question is you know clearly you are gaining share again from global because and walking away some part of the market. When is that, when does that sort of fully anniversary I mean you were able to pick up share because they walked away is that or you pretty well done with gaining share due to that here in the first half of the year or should that continue to the balance of your investment?

I think that there will be at least some more to gain because while we have credits and they can continue to build some of the non-catalyzed product, I don’t think that they’ll be doing it in three way, I think its four, three and a couple of others. So they still got to build for and use up all the credits so we’ve not gotten on the share, we’ll be able to get yes.

Okay. Okay. And then before I think you throw it out in response to another earlier question on the breakeven level post fixing you said some brands potentially or not being able to and changing them. Can you just again remind us of that, is that around 130, 135,000 units for the industry?

Yeah, that has been on the company, on a Brunswick basis, but yes, 130, 132, 135 pick a number, this company can be breakeven.

Okay. Okay. And then, and I apologize if I missed this in other call, right before you ran over tad bit. The cadence of your retail sales across the quarter April through and then maybe through July here, can you just sort of give us an update there as to how that trended especially in the developed markets?

No, no. With any number or any view that I would be comfortable talking about July, but April was a nice month, May was not a nice month and June was a nice month. And I alluded to that in my comments that even within quarters it’s been fairly lumpy. But the second quarter overall, two out of three were good.

Okay. Okay. And then from a more of a let’s call it a congressional standpoint a lot of fluid pieces in watching in these days, but there has been some proposals to eliminate the second home mortgage interest deduction and rates of both, yet not are these are literally homes. Can you talk about anything current where that stand from your standpoint and the potential impact more so for the industry or Brunswick in particular, how are you looking at that planning for that, should that come about?

First, I have no good information and about which I can update you on the present status. It will obviously have an impact, but our view is that it will not materially impact us.

Okay. Okay. And just a little bit more color as to why are you taking that view exactly?

Just looking at the profile of our buyers.

Okay. Okay. Okay. And then, and general dealers continue to remain cautious and talks about some areas are a little too much inventory in the channel of the larger boat or that is you’re a little bit under; how is your receptivity over the quarter here, has it gotten a little bit better the willingness to take inventory or not and then how do you feel about that?

I want to make sure that on the first part of our statement before we go to the questions, I have kind of the view that we have too much inventory anywhere and that leads me then to answer your question. Generally, if you mop over comments from our dealer network is that they need a few more boats.

Okay.

And we just work with them on a day-to-day basis around that and one of the great things our manufacturing footprint now it gives us the opportunity to do as we can, I don’t want say turn on down, but we can turn and have a football field where before it took us that miles and like production judgment and we’re getting pretty good at that.

Your next question comes from the line of Rommel Dionisio from Wedbush Securities. Please proceed.

Yeah, thank you. Dusty I wonder if you can just comment briefly on used boat pricing, some of the trends you’re seeing both at the lower on the aluminum, the boat and may be compare that with the higher and fiberglass, larger fiberglass boats?

Stabilized, not to free downturn level, but certainly not continuing to fall and generally since the beginning of the downturn where they dipped dramatically have probably risen and are now stabilized.

Okay. And one last question, with regards to dealer health, I imagine that the Bayliner, and the Cypress Cay you know those dealer brands are doing pretty well – dealers of those brands are doing pretty well, but what about your Hatteras, your Meridian. I mean, obviously this has been several years now for the continued difficulty on the higher and larger fiberglass boats and are you seeing the attrition or might you expect to see some attrition among dealers of those higher end-brands?

If we do with Meridian first; Meridian is generally and fundamentally sold through the Sea Ray distribution network and therefore there is absolutely no issue with the dealer network for Meridian. Our largest dealer for the Hatteras brand is MarineMax and obviously they are doing quite well. We have had some smaller dealers, we work to position them so that they no longer need to stock the big expenses of Hatteras product, but they continue to act as dealers for us in all of the good markets. So we are comfortable with their position.

Your next question comes from the line of Joe Hovorka from Raymond James. Please proceed.

Thanks guys. Just a couple of quick questions, I think you said that weeks inventory was 31.5, but earlier you said it was at 10%?

Yes.

And did -- a year ago and I think it was 27, did that change?

Did the 27 change?

Yeah. I know we have done some adjustments for brands going at now.

I am looking out some real quick, Joe.

Its 31.5 from 27 about….

31.1 versus 27.1, I think the exact number.

Got it, okay. Just wanted to confirm nothing changed, yeah could you state what your retail was up in the quarter?

Our retail was up in the quarter?

Yeah. I know you kind of gave the industry numbers broken out by each of the segments. But how much was your retail up in 2Q?

It was up 7%.

Okay. And was there a geographical…

And then I want to answer that that’s in units.

That’s a units okay.

Not globally, yeah. As Peter just reminded me, it’s a good point.

That’s global?

Yes.

Okay. Was very any variance of geographically in the states; one region stronger than the other, all regions out there any reason…..

I got you. It’s almost night and day on a regional basis in United States. If we look across outboards, we see states like Minnesota, Michigan, Ohio, we all know eventually Arkansas, Louisiana all but we can also look at a whole various states that are down. When we look at the sterndrive inboard market you know the West Coast is really, really down. It is but – it’s an absolutely difficult market in every place out there. We have some great dealers who have done a very good of improving market share, but these are really tough markets. On and we see places like Florida and Michigan where things are getting better and when we are positioned with our data network to take advantage of that.

Okay. That’s all I have, thanks guys.

Thank you Joe.

At this time, I would like to turn the call back to Dusty McCoy for closing or concluding remarks.

Thanks everyone for being on the call. As always, we appreciate the great questions. I want to make sure that I have got a – I have wobbled around a couple of questions I want to make sure I am very precise in my answer. At today’s market and we said we’re thinking marine market is flat, it’s going to be flat and that’s 130,000 some probably on the hard side of 130,000. And we’re obviously much better than breakeven in all the guidance we’ve been giving. And after we fix the brands that we’re working hard on and are having difficulty right now. The boat segment in our view will be breakeven at the markets that we’re at today. I just want to make sure I clarified all that because I wandered around it a couple of times. Thank you for attending our call. Thanks for the great questions and we’re going to go back to work and if you have more detailed questions obviously Bruce is always available to everyone. Thank you very much.

Ladies and gentlemen, that concludes today’s conference. Thank you for your participation you may now disconnect. Have a great day.