BRUNSWICK CORP — Call Transcript 2026

Good morning and welcome to Brunswick Corporation's Fourth Quarter and Full Year 2025 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 Stephen Weiland, Senior Vice President and Deputy Chief Financial Officer of Brunswick Corporation. Please go ahead. Good morning and thank you for joining us. With me on the call this morning are David Foulkes, Brunswick's Chairman and CEO, and Ryan Gwillim, Brunswick's 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 mind that our actual results could differ materially from these expectations. For details on the factors to consider, please refer to our recent SEC filings and today's press release. All of these documents are available on our website at brunswick.com. During our presentation, we will be referring to certain non-GAAP financial information. Reconciliations of GAAP to non-GAAP financial measures are provided in the appendix to this presentation and the reconciliation sections of the unaudited consolidated financial statements accompanying today's results. I will now turn the call over to David. Thank you, Steve. We finished 2025 ahead of recent expectations, with all our businesses reporting sales and earnings growth in the quarter, leading to full-year net sales growth for the first time in three years and significantly higher free cash flow generation, all supported by strengthening boat market in the second half of the year. In addition to improved retail conditions, our performance was underpinned by solid boating participation, driving stability in our recurring revenue businesses and outstanding operational execution across the enterprise. Retail demand stabilized in the second half of the year following a challenging second quarter, primarily caused by tariff-induced economic uncertainty. While the U.S. retail boat market finished the year down approximately 9% in units, Brunswick's leading boat brands outperformed the U.S. industry, and Brunswick Global retail unit sales were down only 5%, driven by weakness in value product. Dealer inventories remain at very low levels and with a high percentage of recent model year product. Despite the volatile first half of the year, we delivered $5.4 billion in net sales, up 2% over prior year. Our adjusted earnings per share of $3.27 were impacted by the anticipated tariff headwinds, which had a substantial impact on the fourth quarter. Comprehensive cost containment actions throughout the year, along with robust capital strategy execution and diligent working capital management, resulted in exceptional free cash flow generation for the year of $442 million, which provided us with the financial flexibility to continue to invest in the business, repurchase $80 million of shares, increase our dividend, and retire approximately $240 million of debt to further improve our strong balance sheet. Strong early season retail and falling interest rates, combined with a stabilized retail environment, currently support our initial expectations for improved market conditions in 2026. In 2025, boat and engine retail sales significantly outpaced wholesale, which positions Brunswick for revenue growth in 2026 in a range of flat to improving retail scenarios. Turning to some segment highlights, I'm pleased to report that for the second quarter in a row, all segments grew revenue over the prior year quarter. Operating margin also expanded across our businesses, except for Engine P&A, where it was down slightly due to strong performance in the lower margin distribution side of the business. Our propulsion segment had an outstanding fourth quarter, increasing revenues and earnings versus prior year in each of its three business lines: outboard, sterndrive, and controlled rigging and propellers. Mercury continues to be the outboard market share leader in the U.S., Canada, and Europe and is increasing its investment in groundbreaking new products. Recently, at the Consumer Electronics Show in Las Vegas, Mercury unveiled its 808 outboard engine concept, signaling the future direction of ultra-high horsepower outboard propulsion. Mercury's commercial traction continues to accelerate, as highlighted by the recently announced exclusive agreements with Axopar, Saxdor, and De Antonio Yachts, adding to the more than 100 new or renewed OEM agreements in the last 12 months. Our recurring revenue, high margin engine parts and accessories business delivered higher sales and earnings in the fourth quarter versus prior year in both its products and distribution business lines, fueled by higher boating participation and our growing share in marine distribution. Our market-leading U.S. distribution business gained 210 basis points of share in 2025. Navico Group increased both revenue and operating margin in the fourth quarter versus prior year, reflecting the steadily increasing benefits of our continued focus on a refreshed product portfolio and operational, commercial, and financial improvement actions. Navico Group launched connected solutions, including integration with mobile apps and Simrad multifunction displays, enabling onboard and offboard real-time monitoring and control of vessels. The introduction of our Simrad AutoCaptain autonomous boating system was another example of Brunswick's unique ability to deliver seamlessly integrated system solutions co-developed by Navico Group, Mercury Marine, and Brunswick Boat Group. Finally, this quarter, our boat business capitalized on the continued improvement in the retail market, which drove sales growth and significantly expanded margins versus the prior year quarter. Discounting levels in 2025 also improved approximately 100 basis points year-over-year. Our premium and core brands experienced continued strength, highlighted by 15% overall revenue growth across our premium brands at the Fort Lauderdale Boat Show. Our value brands also recovered some momentum. Lastly, Freedom Boat Club had another strong quarter, growing to 442 global locations and with member trips finishing the year at over 640,000, up 5% over 2024. Moving on to external factors, the U.S. Fed cut rates by 75 basis points over the latter part of 2025, with additional rate cuts anticipated in 2026. While the cuts have reduced financing costs for both dealers and consumers, they came too late in the season to have a material impact on 2025 but will be a tailwind for the 2026 season. Additionally, while the geopolitical and trade environment remains very dynamic, continued equity market strength and the moderating inflation trend are also expected to create a more constructive environment. Our tariff mitigation actions in 2025 were extremely successful, offsetting over half of our gross dollar exposure and resulting in approximately $75 million of net incremental tariff impact. While a Supreme Court decision regarding the APA tariffs remains pending, U.S. import tariffs on Mercury's Japanese competitors are projected to remain in effect in any scenario, representing a potential long-term structural advantage for Brunswick as the only domestic manufacturer of outboard engines. Notwithstanding the outstanding APA decision, with U.S. import tariffs anticipated to be in effect for the full year of 2026 versus a partial year in 2025, we expect to incur further incremental tariff costs of approximately $35-$45 million in 2026, net of continuing mitigation actions. OEM, dealer, and customer sentiment is improving, with healthy pipelines and increasing boater participation benefiting all our businesses. We were particularly pleased to see Navico Group's marine OEM sales pick up in the fourth quarter, supported by well-received new products. Looking now at industry retail performance, the latest SSI reporting for December showed U.S. industry retail units down about 9% for the year, with Brunswick internal U.S. retail outperforming the market. As I noted earlier, Brunswick retail boat sales stabilized in the second half of the year, resulting in overall flat second-half performance compared to prior year and with acceleration through year-end. In addition to solid performance from our historically strong premium and core brands, we also experienced some recovery in value products. Mercury Marine's leading U.S. retail outboard share remained stable, although during the year, share was temporarily impacted by tariff-related dynamics. Mercury finished the year with approximately 47% share, gaining 70 basis points overall in the second half of the year and with large gains in higher horsepower engines. Mercury also remains the clear leader in Canada, Europe, and many countries around the world. Consistent with its strong outboard share performance at recent boat shows, Mercury's wholesale market share also accelerated through the fourth quarter and was up over 400 basis points in the quarter and 900 basis points in December versus prior year. As previously noted, our boat and engine pipelines are at extremely low levels, the result of deliberate action over the last two years. Global boat pipelines are down approximately 2,200 units from a year ago and U.S. outboard pipelines down by approximately 10%, with retail sales significantly outpacing wholesale. In addition, as of year-end, our global boat order backlog was 79% of our first quarter wholesale forecast, up 13 percentage points from the same time last year. Brunswick delivered outstanding Free Cash Flow of $442 million in 2025, with continued benefits from our recurring revenue businesses that represented approximately 60% of our earnings this year and continued operational and working capital discipline. Our cash performance has enabled us to support planned investments in industry-leading products and technology, return capital to shareholders, and efficiently retire more debt than previously planned. Our investment-grade balance sheet was further strengthened by the retirement of approximately $240 million of debt this year, exceeding our guidance and commitments and putting us firmly on track towards our 2x net leverage target. We're progressing towards this goal while maintaining significant financial flexibility. At year-end, we had $1.3 billion in liquidity, including full access to our undrawn revolving credit facility. In December, we converted $300 million of long-term debt into rate-advantaged commercial paper, reducing interest expense and setting up additional debt retirement in 2026, supported by continued strong free cash flow generation. A series of thoughtful capital strategy actions initiated at the end of 2024 will reduce our expected 2026 interest expense by approximately $40 million, including the benefits of an additional $160 million or more of anticipated debt retirement this year, while still allowing us to make our planned new product, AI, and other investments, as well as return capital to shareholders. I'll now turn the call over to Ryan to provide additional comments on our 2025 financial performance and our initial outlook for 2026. Thank you, Dave, and good morning, everyone. Brunswick's fourth quarter performance came in ahead of expectations, with sales and earnings in each of our segments exceeding fourth quarter 2024. On a consolidated basis, sales were up 16%, reflecting improved market conditions, increased wholesale shipments to our channel partners, pricing actions taken earlier in the year, a lower discounting environment, and continued solid boating participation driving growth in our P&A and aftermarket businesses. It's also worth noting that this growth was not only broad-based across all segments in the quarter but also across all global regions. Q4 earnings improved 41% versus prior year as the impact of higher sales, along with increased absorption from comparatively higher production levels and operational improvements, more than offset the enterprise headwinds of incremental tariffs and the restatement of variable compensation, which affected each business. Lastly, we generated $88 million of free cash flow in the fourth quarter, wrapping up a tremendous year of cash generation. As expected, free cash flow was down from the unseasonably high fourth quarter of 2024, reflecting a more normalized working capital environment and higher production levels across our businesses. On a full-year basis, sales increased 2%, driven by improved second-half market conditions and resulting stronger wholesale orders, together with strong P&A and aftermarket performance, helping to overcome the impacts of the challenging first-half retail environment. Full-year adjusted operating earnings and diluted EPS ended slightly above expectations but below the prior year, mainly reflecting the impact of incremental tariffs and the reinstated variable compensation. Outside of these two impacts, we would have shown strong adjusted earnings growth for the year. The earnings impacts of the sales growth, inclusive of pricing and improved discounting levels, together with tariff mitigation efforts, helped partially offset these earnings headwinds. We generated $442 million of free cash flow in the year, up 56% year-over-year, and exceeded our increased guidance from the last quarter. In one of the most challenging years for the industry since the GFC, we generated the third highest full-year free cash flow in Brunswick's history. Now, we'll look at each reporting segment's performance for the quarter, starting with our propulsion business, which grew sales for the third consecutive quarter. Sales were up 23%, with double-digit increases in all product categories, resulting primarily from strong OEM orders heading into the early 2026 retail season. Segment-adjusted operating earnings and margin also increased significantly compared to prior year due to the impacts of increased sales and higher absorption from increased production levels, offsetting the incremental tariff impact and the reinstatement of variable compensation. Our aftermarket recurring revenue engine parts and accessories business also grew sales for the third consecutive quarter, with fourth-quarter sales up 15% versus prior year. Sales growth accelerated from the third quarter for both products and distribution, reflecting strong boater participation, favorable weather in many regions in the back half of the year, and continued share gains in our distribution business. Q4 adjusted operating earnings increased 7%, with slightly lower margins due primarily to the mixed impact from the stronger growth in distribution sales. Despite the compensation and tariff headwinds, a sluggish first-half retail environment, and a slight mix shift towards our distribution business, our full-year adjusted operating earnings for the P&A business were essentially flat to 2024. Continuing to validate the prioritizing recurring aftermarket revenue is essential to driving performance through the cycle from our differentiated balanced business model. Navico Group grew sales for the second quarter in a row, increasing 4% over the prior year, driven by solid OEM orders and steady aftermarket performance during the important holiday selling season. Improving Navico Group's financial performance remains a critical focus for our entire team, and we are seeing the results of strategic actions, including continued investment into new product, product portfolio optimization, and operational measures. While many new exciting products are still to come, we believe that we are now seeing the early benefits of our recently developed and launched competitively priced new products winning in the market, especially in our electronics portfolio. The Navico Group's outstanding operational performance in the quarter helped translate the sales growth into strong adjusted operating earnings and margins, which are up 180 basis points from the prior year, as benefits from higher sales, new product investments, portfolio optimization, and cost control measures more than offset the enterprise headwinds. Finally, our boat segment had a strong quarter, reporting an 11% sales increase over the prior year, with growth from both boat sales and the business acceleration portfolio. Our boat group sales were led by increases in our recreational fiberglass and aluminum boat brands, while Freedom Boat Club continued its growth journey with network-wide increases in trips, members, and locations during the quarter. Note that the boat group increased sales in each of the premium, core, and value categories, continuing the success from the third quarter. Segment-adjusted operating earnings and margin were both up significantly. Adjusted operating margin expanded 290 basis points, benefiting from the impact of higher sales, including annual model year pricing actions and improved discounting levels, along with increased production driving improved absorption, which handily offset headwinds from the enterprise factors. As Dave mentioned earlier, we finished the year with very healthy dealer pipelines, with retail sales outpacing wholesale, setting us up favorably for 2026 in a variety of market scenarios. Moving to our outlook, as we enter 2026, Brunswick is extremely well-positioned to benefit from the building market tailwinds that were evident in the retail market stabilization experienced in the second half of 2025. Given the very dynamic geopolitical and trade backdrop, we plan to continue to relentlessly drive operating efficiencies and are encouraged by the strong reception for our many new and exciting products, our low and fresh boat and engine field pipelines, the improving sentiment across our network, and the market's anticipation of further interest rate cuts during the year. Our guidance assumes a flat to slightly up U.S. retail boat market, with anticipated wholesale sales to more closely match retail throughout our businesses, along with continued stable boating participation. It also assumes the recent relative macro environment stability continues through the year. These assumptions translate into guidance you see on this page, with anticipated revenue of between $5.6-$5.8 billion, adjusted operating margins between 7.5%-8%, and adjusted EPS in the range of $3.80-$4.40. We continue to expect strong free cash flow in excess of $350 million, representing at least 125% free cash flow conversion, as benefits from earnings growth and continued net working capital management help offset the over $100 million cash impact of the reinstatement of variable compensation earned in 2025 and paid in the first half of 2026. We anticipate improvement in wholesale ordering patterns in Q1, given early season retail strength, including steady boat show performance and low dealer pipelines. Directional guidance for Q1 reflects growth in net sales versus the first quarter of 2025, with adjusted EPS between $0.35 and $0.45 being burdened by a majority of the full-year incremental tariff costs, as 2025 tariffs did not materially begin until April, together with increased investments in the first quarter on critical product programs. Next, we'll take a closer look at the components of our guided $4.10 adjusted EPS guidance midpoint, which reflects approximately 25% growth over 2025, consistent with the initial 2026 thoughts that we shared last quarter. The main driver of the earnings improvement is the impact of the anticipated sales increases, which should carry incremental earnings north of 20%. Included in the sales increase are benefits from annual pricing actions and a lower discounting environment, continued mixed benefits toward more premium products and higher content, and volume increases as we better match retail and wholesale throughout the year. We also anticipate favorable earnings impacts from currency, capital strategy, and continued cost reduction programs across the enterprise, mainly improving gross margins. In part to drive the sales improvements, we do anticipate an increase in full-year operating expenses but believe OpEx spending will remain consistent with 2025 on a percentage of sales basis. The large majority of the OpEx increase relates to growth investments in critical product and technology programs, sales and marketing efforts to drive demand, and necessary systems and infrastructure upgrades. The only other anticipated EPS headwind would be the continued impact of incremental tariffs, which under the current legislation we estimate to be between $35-$45 million, or approximately $0.60 of EPS. This is a net tariff headwind resulting from the full-year impact of the tariffs instituted in 2025 and assumes that we will continue to be successful in our aggressive tariff mitigation strategies as we continue to use self-developed AI tools, sourcing optimization, value engineering, trade provisions, and other methods to reduce tariff impacts. As you can see, we remain quite bullish about our opportunities for success in 2026. I'll end my prepared remarks this morning with a quick review on other P&L and cash flow assumptions underlying our annual guidance. We believe that our capital expenditure spending and annual depreciation expense will be similar to 2025 levels as we remain in harvest phase for most of our recent capital initiatives and believe that we have sufficient capacity available for a multi-year growth vector. We plan to generate approximately $50 million of working capital as we drive continued inventory and balance sheet improvement, even with anticipated stronger production. Finally, as Dave mentioned earlier, we anticipate retiring no less than $160 million of debt throughout the year, resulting in a total of $400 million of debt retirement between 2025 and 2026, which will leave us with net debt leverage of 2.5x or lower by the end of the year. Returning capital to shareholders through dividends and share repurchases is always a priority, and our plan anticipates a slight dividend increase later this quarter while continuing our systematic share repurchase program with approximately $50 million of repurchases planned for the year, while remaining opportunistic should cash flow and valuations continue to be supportive. Lastly, please see the appendix for segment-level guidance and other assumptions. I will now pass the call back over to Dave for concluding remarks. Thanks, Ryan. As we wrap up the call, I'd like to highlight some exciting events, new product launches, and awards from a very busy January. At the beginning of the month, Brunswick again exhibited at the Consumer Electronics Show in Las Vegas, where we leveraged this unique global technology stage to showcase our full portfolio of industry-leading products and technology, including our ACES and boating intelligence solutions. We launched the all-new Sea Ray SLX 360, our first-ever boat launch at CES, which is packed with Mercury Marine and Navico Group technology and was fitted with Simrad's AutoCaptain autonomous boating system. We also debuted the Flite Race eFoil, a collaboration between Fliteboard and Mercury Racing. Capable of speeds over 30 miles per hour, this product sets a new industry performance benchmark for electric watercraft. In addition, we debuted the Mercury 808 Concept based on the current, very capable, and expandable 600-horsepower V12 outboard platform, which provides a vision for the future of ultra-high-horsepower outboard propulsion. Brunswick was recognized with several awards at CES. Simrad AutoCaptain was honored with a CES Pick Award. Our overall exhibit was recognized as a top 10 best booth experience, and Brunswick is a finalist for the Best of Show Awards, which recognizes the best experiential exhibits. Moving on to recent boat shows, we're encouraged by the high levels of engagement and positive customer sentiment observed at recent major shows. This was reflected in our performance at the Fort Lauderdale Show, where our premium boat brands delivered 15% overall revenue growth versus the prior year's show, and Mercury had a record-breaking 61% overall outboard share. At the world's largest boat show in Düsseldorf, Germany, we debuted the Navan C30 model, and our premium fiberglass brands recorded year-over-year sales growth. Mercury had more than 50% share of all outboards at the show, almost triple the nearest competitor, and added to its recent run of signing multi-year exclusive supply agreements with some of Europe's largest and fastest-growing boat OEMs. We were also proud to receive award recognition at these various boat shows. Our Navan S30 model won Motorboat of the Year, and our Sea Ray SDX 270 Surf model was awarded European Powerboat of the Year in their respective classes. At the Minneapolis Boat Show, Princecraft earned its second consecutive NMMA Innovation Award for the all-new Platinum 190 model, which was recognized for its premium engineering and class-leading fishing features. Finally, as you all know, we pride ourselves on being an employer of choice, an innovator in our space, and a responsible and trustworthy company. For the fourth consecutive year, we surpassed 100 awards for our people, our culture, our products, and our innovation. Notably, many of these awards are national awards from media outlets such as Newsweek, USA Today, Time, and Forbes that we've received for multiple years. However, for the first time in 2026, Brunswick was named to Forbes' America's Best Companies list. Thank you again to all our talented Brunswick employees who make this recognition possible. Before I finish, I'd like to remind you of our investor and analyst event during the upcoming Miami Boat Show, which will include a tour of Brunswick's many exhibits and products at the show, followed by a cocktail hour at the Ritz-Carlton on South Beach. We look forward to offering you the opportunity to see our exciting products and technologies, as well as meet with members of our management team. Thank you for your attention. We'll now open the line for questions. Thank you. We'll now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question is from James Hardiman with Citi. Hey, good morning. Thanks for taking my question. So I think given your track record, I think most investors have a high degree of confidence that you can deliver given sort of whatever the retail assumptions are. I think the retail assumptions are ultimately what so many investors struggle to underwrite at this point. And so maybe, I guess, to start, what specifically was the retail performance in the fourth quarter? Obviously, we get some of this SSI data, which showed certainly November and December down. You talked about flat for the second half, but I'm curious specifically sort of how you finished the year. As you carry that forward to 2026, what gives you confidence that flat to up is the right way to think about the full year? Thanks. Yeah. Hi, James. Yeah. As you mentioned, on a unit basis, we were flat, basically within 10 units or something. It was particularly flat, if you like. And as we noted, I think we saw continued strength in premium and core, obviously. That's about 75% of our portfolio and about 90% of our gross margin. So that is a tailwind for us. We did, though, see some recovery in the value part of the business, which was nice to see. As you know, that had been the major source of weakness in the first half of the year. That is a more economically sensitive customer, I would say, and probably a bit more unsettled by some of the events in the first half of the year. But in terms of tailwinds into 2026, in the latter part of 2025, as you know, we got about 75 basis points of rate cuts, but they all really occurred too late in the season to be very material for 2025. But they will affect 2026. I think there's some uncertainty over the timing for the rate cuts, but I think they are likely to come. So probably through the season, we'll end up with at least 100 basis points of year-over-year rate improvement, which is helpful for our end consumers. We've clearly seen retail financing rates respond to this, and retail rates are down around 7.5% now versus 9%-10% at the peak. That is very helpful for our dealers as well. Equity markets remain strong, which is helpful for our premium buyers. Then we did see somewhat of an acceleration, I guess, as you went through the quarter. That is, retailers continue, as you know, we're always very cautious about quoting numbers when the volumes are so low at this time of the year. But retailers are up double digits so far this year, despite the inclement weather and a few other things going on around the country. So I think overall, material tailwinds and evidence on a small scale, at least so far in the year, that that is translating to solid to positive retail. Got it. That's really helpful. Just to clarify, I think you just said, just to underscore, retail up double digits so far in January. I just want to make sure that that's sort of on the record here. And then that is right. Okay. And then as we think about inventories, obviously, Goodwork bringing down global pipelines, I think 2,200 units in 2025. How should we think about that number for 2026? Is that a zero in 2026, i.e., wholesale equals retail, or do we expect a little bit more of a reduction? Obviously, one of your big, if not biggest, customers is speaking to stubbornly high inventories, at least around the industry, with maybe one more quarter remaining. Maybe square that with how you're thinking about things. Yeah, James, I'll take that. Good morning. So we have taken pipeline units out each of the last several years. I would say in 2026, we expect that to be probably flat to maybe taking out a couple hundred units at most. I mean, our goal really is to match wholesale and retail this year, which would mean wholesale growth, obviously, year-over-year versus last year. And as it relates to maybe your last comment, I would say I think our biggest distributor would say that our inventory in their hands is quite fresh and in very good level. So the pockets that maybe were mentioned, we don't believe are Brunswick inventory. And in fact, Sea Ray and Boston Whaler, specifically in their hands, are in really good shape and lean to start the season. Got it. And if I could just squeeze in one more, obviously, your specific brands aren't all that matters for you, right? Given your propulsion business, your P&A business, do you think sort of competitive or, I guess, a better way to put it, industry inventory levels needing to come down is at all a headwind as we think about some of those other segments? I don't think so. I mean, in terms of flow through to us, we've seen very solid ordering. We mentioned on the call that our wholesale orders so far satisfy close to 80% of our Q1 production, which is up 13 points versus last year. So thus far, in terms of dealer pull, we are not seeing any evidence that they are holding back on orders kind of on a year-over-year basis. Perfect. Appreciate the color. Thanks, guys. Our next question is from Craig Kennison with Baird. Hey, good morning. Thanks for taking my question. I'm trying to understand the dynamics that might push retail back to, or at least closer to, historical trends. What can you tell us about, I guess, repeat buyer behavior and any deferred trade-up cycle that could eventually be released based on any consumer data you have? Yeah. Hi, Craig. Yeah, thanks for the question. Yeah, as you know, I mean, we still have a huge gap between industry new boat sales and replacement rates. And we think the natural replacement rate in the fleet is probably in the 225,000-plus range. And this year, 2025, we'll be in the 130-something range. So that is a kind of natural pull, I think. I also think that there are some deferred purchases from the depressed kind of overall industry sales in the past few years, where people have waited for the right buying conditions to re-enter the market. Generally, we continue to see new boaters come in around the historical pace, I would say, of 25-ish% of new boat sales. But if you think about the shocks that we've experienced over the last several years, certainly on the interest rate side, conditions have not been positive and constructive. We are beginning to see that normalize. I think you look at inflation, obviously, the Fed would like it to be 2%, but compared to where it was two or three years ago, we're in a much more normalized situation. So I think that based on depressed sales over the last few years, we likely have some buyers waiting for the right point to come back into the market. We will see the full effect of those 75-100 basis points of rate cuts this year. And we have a kind of replacement, we're well below replacement rates. So I think all of those suggest pull forces for retail. But of course, if that happens, that will be great. But at the moment, we're forecasting at least some uplift in the market. I would also add, Craig, that we've been very thoughtful, us and really the industry, about pricing over the last handful of years. And now you're seeing a more balanced dynamic between trade-in values for people that bought around 2020 or 2021 and what they can purchase today. So I think people are getting a little bit more value for their trade-in. They've held it for a little bit longer, so their ability to trade up and trade back in is greatly improved now over maybe where it was two or three years ago. Good point. That's very helpful. Thank you both. Our next question is from Gerrick Johnson with Seaport Research. Hey, good morning. I wanted to ask you about propulsion. Outboard was up 26%. Your boat business was up 11%. So I'm just going to infer here that your sales to OEM customers really expanded nicely. Can you talk about that, your business to OEM customers and how much of your growth there is coming from existing customers and how much from new wins? Yeah. Hey, Gerrick. Good question. So Brunswick's boat brands are performing very well in the marketplace. In fact, we're gaining share. But we focus a lot on the U.S. market, and we chose to add a few more details on Europe in particular this time, where Mercury is gaining share in a lot of markets, a lot of parts of the E.U. So I think we signed multi-year agreements with some of the biggest and fastest-growing OEMs in Europe recently. In fact, some of these are five-year agreements, which is quite unusual. So if you think about Mercury's strategy, obviously, it's to get best products and technology in the marketplace, advance share, but then fortify that share by putting in place multi-year agreements. And so I think the implications of those five-year agreements are these large and fast-growing OEMs, not just in the U.S., but in Europe, are putting that trust that Mercury is going to be the leader for a long time. And they have seen some of our new product plans, so I think that trust is extremely well placed. So yeah, I think that we are growing share with new customers. We've gone exclusive with a number of customers now that we weren't exclusive with before. And we're signing longer agreements that fortify our position. Connecting what you just discussed a bit with some of the kind of strategic spending that we referred to, clearly, a significant portion of that is in Mercury. We hired 60 new Mercury engineers in 2025. So despite the fact that we were continuing to watch our spending, we are loading up for another product blitz in Mercury. We have five new outboard programs going. Obviously, we shared some details of those with some of those customers. So I think that, yeah, we're getting more customers. Our existing customers are signing long-term agreements with us. And a number of customers who are not exclusive to us are going exclusive. All of those effects will be positive, I think. Then, Gerrick, as it relates to just kind of the near-term Q4 and as we move into 2026, engine pipelines, which we talk a lot about boat pipelines and the ability to put more wholesale into the field when pipelines are lean, our engine pipelines, so engines that are sitting both with our dealer network and with our OEMs, are kind of at historical lean levels. We took mid-20,000 engines out in the U.S. alone in 2024. Of the pipelines, it's about 17%. And last year, we took another 10% out just in the U.S. alone. And so you're seeing build rates with our OEMs remain pretty static, if not improving a little bit. And their need to buy engines follows that trend. So you have the share gains, and you have the benefit of low pipeline inventory sitting at the OEM leads to a pretty nice outlook that you've seen. Okay. Very, very thorough. Thank you. I have more, but I'll get back in queue. Thank you. Our next question is from Anna Glaessgen with B. Riley Securities. Good morning. Thanks for taking my question. I'd like to continue along the track of talking about pipeline and expectations for retail versus wholesale. We're expecting flattish, flat to slightly up retail, getting a little bit of a break on interest rates. I guess, what would you think it would take to see some pipeline replenishment for wholesale to exceed retail? Or do you think we're at kind of a new normal of lower inventory versus pre-COVID? Thanks. Hey, Anna, thank you for the question. Yeah, I don't think that we're at kind of new normal as such. I mean, clearly, there are a lot of things in the last few years that have caused our channel partners to be cautious about ordering. But I would say you see a sentiment across OEMs, dealers, and customers continuing to improve and confidence to build. One of the things that's helpful for our channel partners about just holding inventory is the double effect, if you like, of interest rate reductions. The carrying cost is lower because floor plan is lower, and the margins tend to be higher because discounting is lower. So I think that as either our OEMs or channel partners calculate the carrying cost or marginal benefit, if you like, of inventory, those positive effects on both ends, the carrying cost and the demand, are both constructive at the moment. So yeah, I think it's nice to see that we are getting strong pull-through from our channel partners in this early point of the year, as evidence, as I mentioned earlier, by a stronger fill rate, if you like, than at this point last year. So it's a case of gradually building confidence, and I think that confidence certainly is building at the moment. Great. Thanks, Dave. And Ryan, one on the tariff math, I guess, for the full year in 2025, which was partial because we didn't have Q1 impact, it was a $75 million net impact. And then for 2026, it's an incremental $35 million-$45 million with a majority of Q1. I guess that implies kind of a step up in that quarterly rate, if I'm thinking about that correctly. I guess, is that a function of mix with propulsion expected to grow more in 2026, which carries more tariff impact? Just any help there? Thanks. Yeah. I wish it was really straightforward, Anna, but the upshot is Q1 takes the brunt because there was basically no tariffs in Q1 of last year. And then if you remember, the ACES rates kind of bounced around a little bit. And then we got the 232 incremental impact in August, which impacted the back half of the year only. Remember, there is balance sheet and capitalized variance. There's some kind of accounting math that plays into this as well. And there's some of that impact in Q1. But really, if you think about it, the first half is going to take all of the incremental tariff costs, call it half to two-thirds of that in the first quarter, which is really that combined with accelerated product spending, which we want to do really in the quarter. That can be a $30-ish million number in total. So if you normalize Q1 just for those two items, you're at an EPS growth of 25%+, which looks similar to the rest of the year. So yeah, that's the tariff math. It's really the continuation of what happened in 2025 with a little bit of accounting treatment roll off given the inventory valuations. Okay. Great. Super helpful. Thanks, that. Our next question is from Scott Stember with Roth Capital. Good morning, and thanks for taking my questions. Hey, morning, Scott. Can we talk about the IEEPA tariffs? Obviously, we're going to get some kind of ruling in the coming days from the Supreme Court. Just trying to get a sense of how much of a benefit you could get if they get eliminated. Can you just size up how much of your tariffs are IEEPA-driven? Yeah, Scott, I'll take this one as well. Yes. I mean, if you look at a full year of IEEPA, call it $20 million-$25 million is the impact. And so again, that's a full-year impact. You don't know when it would be effective or when it would, if there'd be a look back and all of the above. So it would be a material good guy for us, but it's only a portion of the tariffs given all the reciprocal 232 and other impacts that we're facing. Got it. And then, Dave, just following up on your comments about interest rates, financing rates for the consumer, you said about 7.5% currently. Can you just maybe frame out how much rates have actually gone down as of late, given the 75 basis points of cuts from the Fed? Just trying to get a sense of how much relief we're talking about in the actual financing rates for the consumer versus six months ago. Yeah. So maybe I'll start a bit further back, Scott. So if you looked in 2019 at what the financing rate would be, it would be in the kind of 5.5%-6% range. It peaked in 2024 at about 10%, and now it's down to about 7.5%. So very material improvements versus peak rates. Still 150 basis points above kind of pre-pandemic levels. But that is overall still a tailwind versus the last couple of years, certainly. And on top of that, as Ryan mentioned, there are a couple of other tailwinds, including the fact that our price increases over the last couple of years and this year will be pretty modest. And the trading values are beginning to normalize versus some of the kind of peak prices that people paid in COVID. So they have more equity in their existing product, which is encouraging in terms of the ability to trade up. But yeah, I think we've got a couple of tailwinds there. Gotcha. That's all I have. Thank you. Thank you. Our next question is from Xian Siew with BNP Paribas. Hi, guys. Thanks for the question. Maybe given the competitive advantage of Mercury on the tariff front versus maybe the Japanese OEMs and the recent momentum, I mean, how are you thinking about market share opportunities into 2026? What's kind of baked into the expectations for propulsion? Thanks. Yeah. Thank you, Xian. I think it's difficult to know at the moment. The reality is we think we have a long-term structural advantage here. But in terms of what happens in the market, it depends on what the pricing policy to some extent of the competitors turns out to be, how much pain they're willing to take on margins. We have a pretty dynamic situation with the yen as well. We did see that, obviously, they took some pain on margins in the back half of 2025. So I think we will see a steady march on share. I do think that will be supercharged in certain segments as we begin to introduce new products. We have a very exciting product plan at the moment, I think. And so I think we see selective gain. Some of that is targeted at what we've come to refer to as ultra-high horsepower. Some of it is more refresh and upgrades to more mid-horsepower engines as well, which, although not quite as glamorous, do represent high volume for us. So yeah, we have a very solid product plan. A lot of products coming to the market over the next couple of years. And then I think we'll see this steady march as OEMs continue to move towards us and, in some cases, become exclusive. The other factor, just yeah, just real quick, the other factor, we've had really strong wholesale share here the last several months. So that's a good prediction, really, of where we think the 2026 share will continue to grow. Makes sense. Then maybe just as a follow-up, 2026 guidance, I think, implies something like 20% incremental margins, which is inclusive of, I guess, the incremental tariffs. So underlying, if we kind of set that aside, quite strong incremental margins. I guess, how do you think about the potential for incremental margins and flow-through as you kind of continue to recover from here? Yeah, you're exactly right. Your math is correct. So nothing's really changed. Even in a tariff-impact environment, we think we can deliver north of 20% incrementals. That's obviously going to be a little bit higher in propulsion and PNA and pretty strong in Navico as well. I mean, we haven't talked a lot about Navico, but what a great fourth quarter and really year that Navico had here in 2025 and to start 2026, just because their product and variable margins are the highest in the company. And the boat group's taken all the right steps to take costs out and deliver on their margin targets as well. So north of 20% is always the goal. But as you've seen in past years, with volume comes some supercharged incrementals. And we think that 2026 and beyond is going to be a period where we have more volume, and you're going to see things improve and increase. Great. Thank you, guys, and good luck. Thank you. Our next question is from Jaime Katz with Morningstar. Hey, good morning, guys. I just want to stay on that margin topic. And I think in our model at least, absorption isn't really benefiting the PNA as much as we thought it would be, right? You're looking at 7.5%-8% operating margins in the year ahead. So will you guys talk about, I guess, outside of tariffs, what's the biggest sort of cost headwind holding that adjusted operating margin back? And then maybe where the top opportunity for upside resides in the cost structure. Thanks. Is really the accelerated spending on investments necessary to grow the top line. We believe that we're in a spot where the industry is probably primed to grow and increase, and we want to be there with the right product consumers. And so you've seen on the bridge that we showed kind of a big chunk of OpEx increase. I mean, most of that is strategic investment in product, in growth initiatives that will support us moving forward, inclusive of things like sales and marketing, IT, and necessary systems that will enable us to service our customers even better. So the good news is there's no year-over-year wonkiness with comp, right? Because that'll be kind of a zero factor year-over-year. So think of it really as just growth initiative spending, which we're happy to do to continue to drive our market share and our leading products. Yeah. Jaime, I'll just add to that. I think, I mean, obviously, as a management team in a business, we're thinking about 2026, but we're also thinking about 2027 and 2028. How do we grow the business long-term? We think that we're at an inflection point at the moment. So we took the decision to accelerate investment in certain areas that we think are going to grow us not just in 2026, but well beyond. And that is new products, to some extent AI. And I don't throw that out there lightly. I know it's a very kind of topic of the year, but AI can be a big influence on efficiencies in our business and also strongly influence and improve our kind of products and overall go-to-market. So there's just some spending. But as you know, we offset a lot of that by really laser-focused on operating efficiency. You know about the footprint reduction actions that we're taking. So we're very balanced. But I think the strong cash flow and through cycle performance that we have allows us to make investments maybe ahead of where other people might be able to make them. This is not just about growth in 2026. It's about long-term growth, medium-term growth as well. We think we are well-positioned to achieve that. Very helpful. Thanks. Thank you. This concludes our question-and-answer session. I would like to hand the floor back over to Dave for any closing remarks. Yeah. Thank you all for the great questions, as usual. This is another very encouraging quarter for us with improving retail revenue up across all our businesses and global regions, very solid earnings, and continued exceptional free cash flow generation. Full-year revenue being up over prior year for the first time in three years is very nice. A real, I think, a tangible signal of an inflection point. Early 2026 retail is strong, and wholesale orders are also strong from our dealers. So that's really encouraging. We continue, though, to be laser-focused, as I mentioned, on structural cost reduction actions, but we are and have accelerated some investments in new products and technology, notably in propulsion. We tend to focus on big picture things, but don't overlook the fact that we won the two big awards in the European Boat Shows early this year: European Powerboat of the Year, Motor Boat of the Year. We don't just win because of scale and technology. We win because we have the best products. And we will continue to do that. And on that note, we'll be introducing quite a few new products at the Miami Boat Show. So I'm excited about that. Please join us if you can. We will be launching and debuting more new products across the businesses than I can remember for quite some time. Look forward to seeing many of you at that investor and analyst event on February 12th. Please make the time. We'd love to see you. Thank you.

Speaker 7: Good morning and welcome to Brunswick Corporation's Fourth Quarter and Full Year 2025 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 Stephen Weiland, Senior Vice President and Deputy Chief Financial Officer of Brunswick Corporation. Please go ahead. Good morning and welcome to Brunswick Corporation's Fourth Quarter and Full Year 2025 Earnings Conference Call. good morning and welcome to brunswick corporation's fourth quarter and full year 2025 earnings conference call All participants will be in a listen-only mode until the question and answer period. all participants will be in a listen-only mode until the question and answer period Today's meeting will be recorded. today's meeting will be recorded If you have any objections, you may disconnect at this time. if you have any objections you may disconnect at this time I would now like to introduce Stephen Weiland, Senior Vice President and Deputy Chief Financial Officer of Brunswick Corporation. i would now like to introduce stephen weiland senior vice president and deputy chief financial officer of brunswick corporation Please go ahead. please go ahead

Speaker 10: Good morning and thank you for joining us. With me on the call this morning are David Foulkes, Brunswick's Chairman and CEO, and Ryan Gwillim, Brunswick's 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 mind that our actual results could differ materially from these expectations. For details on the factors to consider, please refer to our recent SEC filings and today's press release. All of these documents are available on our website at brunswick.com. During our presentation, we will be referring to certain non-GAAP financial information. Reconciliations of GAAP to non-GAAP financial measures are provided in the appendix to this presentation and the reconciliation sections of the unaudited consolidated financial statements accompanying today's results. I will now turn the call over to David. Good morning and thank you for joining us. good morning and thank you for joining us With me on the call this morning are David Foulkes, Brunswick's Chairman and CEO, and Ryan Gwillim, Brunswick's CFO. with me on the call this morning are david foulkes brunswick's chairman and ceo and ryan gwillim brunswick's 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. 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 mind that our actual results could differ materially from these expectations. please keep in mind that our actual results could differ materially from these expectations For details on the factors to consider, please refer to our recent SEC filings and today's press release. for details on the factors to consider please refer to our recent sec filings and today's press release All of these documents are available on our website at brunswick.com. all of these documents are available on our website at brunswick.com During our presentation, we will be referring to certain non-GAAP financial information. during our presentation we will be referring to certain non-gaap financial information Reconciliations of GAAP to non-GAAP financial measures are provided in the appendix to this presentation and the reconciliation sections of the unaudited consolidated financial statements accompanying today's results. reconciliations of gaap to non-gaap financial measures are provided in the appendix to this presentation and the reconciliation sections of the unaudited consolidated financial statements accompanying today's results I will now turn the call over to David. i will now turn the call over to david

Speaker 3: Thank you, Steve. We finished 2025 ahead of recent expectations, with all our businesses reporting sales and earnings growth in the quarter, leading to full-year net sales growth for the first time in three years and significantly higher free cash flow generation, all supported by strengthening boat market in the second half of the year. In addition to improved retail conditions, our performance was underpinned by solid boating participation, driving stability in our recurring revenue businesses and outstanding operational execution across the enterprise. Retail demand stabilized in the second half of the year following a challenging second quarter, primarily caused by tariff-induced economic uncertainty. While the U.S. retail boat market finished the year down approximately 9% in units, Brunswick's leading boat brands outperformed the U.S. industry, and Brunswick Global retail unit sales were down only 5%, driven by weakness in value product. Thank you, Steve. thank you steve We finished 2025 ahead of recent expectations, with all our businesses reporting sales and earnings growth in the quarter, leading to full-year net sales growth for the first time in three years and significantly higher free cash flow generation, all supported by strengthening boat market in the second half of the year. we finished 2025 ahead of recent expectations with all our businesses reporting sales and earnings growth in the quarter leading to full-year net sales growth for the first time in three years and significantly higher free cash flow generation all supported by strengthening boat market in the second half of the year In addition to improved retail conditions, our performance was underpinned by solid boating participation, driving stability in our recurring revenue businesses and outstanding operational execution across the enterprise. in addition to improved retail conditions our performance was underpinned by solid boating participation driving stability in our recurring revenue businesses and outstanding operational execution across the enterprise Retail demand stabilized in the second half of the year following a challenging second quarter, primarily caused by tariff-induced economic uncertainty. retail demand stabilized in the second half of the year following a challenging second quarter primarily caused by tariff-induced economic uncertainty While the U.S. retail boat market finished the year down approximately 9% in units, Brunswick's leading boat brands outperformed the U.S. industry, and Brunswick Global retail unit sales were down only 5%, driven by weakness in value product. while the u.s retail boat market finished the year down approximately 9% in units brunswick's leading boat brands outperformed the u.s industry and brunswick global retail unit sales were down only 5% driven by weakness in value product Dealer inventories remain at very low levels and with a high percentage of recent model year product. Despite the volatile first half of the year, we delivered $5.4 billion in net sales, up 2% over prior year. Our adjusted earnings per share of $3.27 were impacted by the anticipated tariff headwinds, which had a substantial impact on the fourth quarter. Comprehensive cost containment actions throughout the year, along with robust capital strategy execution and diligent working capital management, resulted in exceptional free cash flow generation for the year of $442 million, which provided us with the financial flexibility to continue to invest in the business, repurchase $80 million of shares, increase our dividend, and retire approximately $240 million of debt to further improve our strong balance sheet. Dealer inventories remain at very low levels and with a high percentage of recent model year product. dealer inventories remain at very low levels and with a high percentage of recent model year product Despite the volatile first half of the year, we delivered $5.4 billion in net sales, up 2% over prior year. despite the volatile first half of the year we delivered $5.4 billion in net sales up 2% over prior year Our adjusted earnings per share of $3.27 were impacted by the anticipated tariff headwinds, which had a substantial impact on the fourth quarter. our adjusted earnings per share of $3.27 were impacted by the anticipated tariff headwinds which had a substantial impact on the fourth quarter Comprehensive cost containment actions throughout the year, along with robust capital strategy execution and diligent working capital management, resulted in exceptional free cash flow generation for the year of $442 million, which provided us with the financial flexibility to continue to invest in the business, repurchase $80 million of shares, increase our dividend, and retire approximately $240 million of debt to further improve our strong balance sheet. comprehensive cost containment actions throughout the year along with robust capital strategy execution and diligent working capital management resulted in exceptional free cash flow generation for the year of $442 million which provided us with the financial flexibility to continue to invest in the business repurchase $80 million of shares increase our dividend and retire approximately $240 million of debt to further improve our strong balance sheet Strong early season retail and falling interest rates, combined with a stabilized retail environment, currently support our initial expectations for improved market conditions in 2026. In 2025, boat and engine retail sales significantly outpaced wholesale, which positions Brunswick for revenue growth in 2026 in a range of flat to improving retail scenarios. Turning to some segment highlights, I'm pleased to report that for the second quarter in a row, all segments grew revenue over the prior year quarter. Operating margin also expanded across our businesses, except for Engine P&A, where it was down slightly due to strong performance in the lower margin distribution side of the business. Our propulsion segment had an outstanding fourth quarter, increasing revenues and earnings versus prior year in each of its three business lines: outboard, sterndrive, and controlled rigging and propellers. Strong early season retail and falling interest rates, combined with a stabilized retail environment, currently support our initial expectations for improved market conditions in 2026. strong early season retail and falling interest rates combined with a stabilized retail environment currently support our initial expectations for improved market conditions in 2026 In 2025, boat and engine retail sales significantly outpaced wholesale, which positions Brunswick for revenue growth in 2026 in a range of flat to improving retail scenarios. in 2025 boat and engine retail sales significantly outpaced wholesale which positions brunswick for revenue growth in 2026 in a range of flat to improving retail scenarios Turning to some segment highlights, I'm pleased to report that for the second quarter in a row, all segments grew revenue over the prior year quarter. turning to some segment highlights i'm pleased to report that for the second quarter in a row all segments grew revenue over the prior year quarter Operating margin also expanded across our businesses, except for Engine P&A, where it was down slightly due to strong performance in the lower margin distribution side of the business. operating margin also expanded across our businesses except for engine p&a where it was down slightly due to strong performance in the lower margin distribution side of the business Our propulsion segment had an outstanding fourth quarter, increasing revenues and earnings versus prior year in each of its three business lines: outboard, sterndrive, and controlled rigging and propellers. our propulsion segment had an outstanding fourth quarter increasing revenues and earnings versus prior year in each of its three business lines outboard sterndrive and controlled rigging and propellers Mercury continues to be the outboard market share leader in the U.S., Canada, and Europe and is increasing its investment in groundbreaking new products. Recently, at the Consumer Electronics Show in Las Vegas, Mercury unveiled its 808 outboard engine concept, signaling the future direction of ultra-high horsepower outboard propulsion. Mercury's commercial traction continues to accelerate, as highlighted by the recently announced exclusive agreements with Axopar, Saxdor, and De Antonio Yachts, adding to the more than 100 new or renewed OEM agreements in the last 12 months. Our recurring revenue, high margin engine parts and accessories business delivered higher sales and earnings in the fourth quarter versus prior year in both its products and distribution business lines, fueled by higher boating participation and our growing share in marine distribution. Our market-leading U.S. distribution business gained 210 basis points of share in 2025. Mercury continues to be the outboard market share leader in the U.S., Canada, and Europe and is increasing its investment in groundbreaking new products. mercury continues to be the outboard market share leader in the u.s canada and europe and is increasing its investment in groundbreaking new products Recently, at the Consumer Electronics Show in Las Vegas, Mercury unveiled its 808 outboard engine concept, signaling the future direction of ultra-high horsepower outboard propulsion. recently at the consumer electronics show in las vegas mercury unveiled its 808 outboard engine concept signaling the future direction of ultra-high horsepower outboard propulsion Mercury's commercial traction continues to accelerate, as highlighted by the recently announced exclusive agreements with Axopar, Saxdor, and De Antonio Yachts, adding to the more than 100 new or renewed OEM agreements in the last 12 months. mercury's commercial traction continues to accelerate as highlighted by the recently announced exclusive agreements with axopar saxdor and de antonio yachts adding to the more than 100 new or renewed oem agreements in the last 12 months Our recurring revenue, high margin engine parts and accessories business delivered higher sales and earnings in the fourth quarter versus prior year in both its products and distribution business lines, fueled by higher boating participation and our growing share in marine distribution. our recurring revenue high margin engine parts and accessories business delivered higher sales and earnings in the fourth quarter versus prior year in both its products and distribution business lines fueled by higher boating participation and our growing share in marine distribution Our market-leading U.S. distribution business gained 210 basis points of share in 2025. our market-leading u.s distribution business gained 210 basis points of share in 2025 Navico Group increased both revenue and operating margin in the fourth quarter versus prior year, reflecting the steadily increasing benefits of our continued focus on a refreshed product portfolio and operational, commercial, and financial improvement actions. Navico Group launched connected solutions, including integration with mobile apps and Simrad multifunction displays, enabling onboard and offboard real-time monitoring and control of vessels. The introduction of our Simrad AutoCaptain autonomous boating system was another example of Brunswick's unique ability to deliver seamlessly integrated system solutions co-developed by Navico Group, Mercury Marine, and Brunswick Boat Group. Finally, this quarter, our boat business capitalized on the continued improvement in the retail market, which drove sales growth and significantly expanded margins versus the prior year quarter. Discounting levels in 2025 also improved approximately 100 basis points year-over-year. Navico Group increased both revenue and operating margin in the fourth quarter versus prior year, reflecting the steadily increasing benefits of our continued focus on a refreshed product portfolio and operational, commercial, and financial improvement actions. navico group increased both revenue and operating margin in the fourth quarter versus prior year reflecting the steadily increasing benefits of our continued focus on a refreshed product portfolio and operational commercial and financial improvement actions Navico Group launched connected solutions, including integration with mobile apps and Simrad multifunction displays, enabling onboard and offboard real-time monitoring and control of vessels. navico group launched connected solutions including integration with mobile apps and simrad multifunction displays enabling onboard and offboard real-time monitoring and control of vessels The introduction of our Simrad AutoCaptain autonomous boating system was another example of Brunswick's unique ability to deliver seamlessly integrated system solutions co-developed by Navico Group, Mercury Marine, and Brunswick Boat Group. the introduction of our simrad autocaptain autonomous boating system was another example of brunswick's unique ability to deliver seamlessly integrated system solutions co-developed by navico group mercury marine and brunswick boat group Finally, this quarter, our boat business capitalized on the continued improvement in the retail market, which drove sales growth and significantly expanded margins versus the prior year quarter. finally this quarter our boat business capitalized on the continued improvement in the retail market which drove sales growth and significantly expanded margins versus the prior year quarter Discounting levels in 2025 also improved approximately 100 basis points year-over-year. discounting levels in 2025 also improved approximately 100 basis points year-over-year Our premium and core brands experienced continued strength, highlighted by 15% overall revenue growth across our premium brands at the Fort Lauderdale Boat Show. Our value brands also recovered some momentum. Lastly, Freedom Boat Club had another strong quarter, growing to 442 global locations and with member trips finishing the year at over 640,000, up 5% over 2024. Moving on to external factors, the U.S. Fed cut rates by 75 basis points over the latter part of 2025, with additional rate cuts anticipated in 2026. While the cuts have reduced financing costs for both dealers and consumers, they came too late in the season to have a material impact on 2025 but will be a tailwind for the 2026 season. Additionally, while the geopolitical and trade environment remains very dynamic, continued equity market strength and the moderating inflation trend are also expected to create a more constructive environment. Our premium and core brands experienced continued strength, highlighted by 15% overall revenue growth across our premium brands at the Fort Lauderdale Boat Show. our premium and core brands experienced continued strength highlighted by 15% overall revenue growth across our premium brands at the fort lauderdale boat show Our value brands also recovered some momentum. our value brands also recovered some momentum Lastly, Freedom Boat Club had another strong quarter, growing to 442 global locations and with member trips finishing the year at over 640,000, up 5% over 2024. lastly freedom boat club had another strong quarter growing to 442 global locations and with member trips finishing the year at over 640,000 up 5% over 2024 Moving on to external factors, the U.S. moving on to external factors the u.s Fed cut rates by 75 basis points over the latter part of 2025, with additional rate cuts anticipated in 2026. fed cut rates by 75 basis points over the latter part of 2025 with additional rate cuts anticipated in 2026 While the cuts have reduced financing costs for both dealers and consumers, they came too late in the season to have a material impact on 2025 but will be a tailwind for the 2026 season. while the cuts have reduced financing costs for both dealers and consumers they came too late in the season to have a material impact on 2025 but will be a tailwind for the 2026 season Additionally, while the geopolitical and trade environment remains very dynamic, continued equity market strength and the moderating inflation trend are also expected to create a more constructive environment. additionally while the geopolitical and trade environment remains very dynamic continued equity market strength and the moderating inflation trend are also expected to create a more constructive environment Our tariff mitigation actions in 2025 were extremely successful, offsetting over half of our gross dollar exposure and resulting in approximately $75 million of net incremental tariff impact. While a Supreme Court decision regarding the APA tariffs remains pending, U.S. import tariffs on Mercury's Japanese competitors are projected to remain in effect in any scenario, representing a potential long-term structural advantage for Brunswick as the only domestic manufacturer of outboard engines. Notwithstanding the outstanding APA decision, with U.S. import tariffs anticipated to be in effect for the full year of 2026 versus a partial year in 2025, we expect to incur further incremental tariff costs of approximately $35-$45 million in 2026, net of continuing mitigation actions. OEM, dealer, and customer sentiment is improving, with healthy pipelines and increasing boater participation benefiting all our businesses. Our tariff mitigation actions in 2025 were extremely successful, offsetting over half of our gross dollar exposure and resulting in approximately $75 million of net incremental tariff impact. our tariff mitigation actions in 2025 were extremely successful offsetting over half of our gross dollar exposure and resulting in approximately $75 million of net incremental tariff impact While a Supreme Court decision regarding the APA tariffs remains pending, U.S. import tariffs on Mercury's Japanese competitors are projected to remain in effect in any scenario, representing a potential long-term structural advantage for Brunswick as the only domestic manufacturer of outboard engines. while a supreme court decision regarding the apa tariffs remains pending u.s import tariffs on mercury's japanese competitors are projected to remain in effect in any scenario representing a potential long-term structural advantage for brunswick as the only domestic manufacturer of outboard engines Notwithstanding the outstanding APA decision, with U.S. import tariffs anticipated to be in effect for the full year of 2026 versus a partial year in 2025, we expect to incur further incremental tariff costs of approximately $35-$45 million in 2026, net of continuing mitigation actions. notwithstanding the outstanding apa decision with u.s import tariffs anticipated to be in effect for the full year of 2026 versus a partial year in 2025 we expect to incur further incremental tariff costs of approximately $35-$45 million in 2026 net of continuing mitigation actions OEM, dealer, and customer sentiment is improving, with healthy pipelines and increasing boater participation benefiting all our businesses. oem dealer and customer sentiment is improving with healthy pipelines and increasing boater participation benefiting all our businesses We were particularly pleased to see Navico Group's marine OEM sales pick up in the fourth quarter, supported by well-received new products. Looking now at industry retail performance, the latest SSI reporting for December showed U.S. industry retail units down about 9% for the year, with Brunswick internal U.S. retail outperforming the market. As I noted earlier, Brunswick retail boat sales stabilized in the second half of the year, resulting in overall flat second-half performance compared to prior year and with acceleration through year-end. In addition to solid performance from our historically strong premium and core brands, we also experienced some recovery in value products. Mercury Marine's leading U.S. retail outboard share remained stable, although during the year, share was temporarily impacted by tariff-related dynamics. We were particularly pleased to see Navico Group's marine OEM sales pick up in the fourth quarter, supported by well-received new products. we were particularly pleased to see navico group's marine oem sales pick up in the fourth quarter supported by well-received new products Looking now at industry retail performance, the latest SSI reporting for December showed U.S. industry retail units down about 9% for the year, with Brunswick internal U.S. retail outperforming the market. looking now at industry retail performance the latest ssi reporting for december showed u.s industry retail units down about 9% for the year with brunswick internal u.s retail outperforming the market As I noted earlier, Brunswick retail boat sales stabilized in the second half of the year, resulting in overall flat second-half performance compared to prior year and with acceleration through year-end. as i noted earlier brunswick retail boat sales stabilized in the second half of the year resulting in overall flat second-half performance compared to prior year and with acceleration through year-end In addition to solid performance from our historically strong premium and core brands, we also experienced some recovery in value products. in addition to solid performance from our historically strong premium and core brands we also experienced some recovery in value products Mercury Marine's leading U.S. retail outboard share remained stable, although during the year, share was temporarily impacted by tariff-related dynamics. mercury marine's leading u.s retail outboard share remained stable although during the year share was temporarily impacted by tariff-related dynamics Mercury finished the year with approximately 47% share, gaining 70 basis points overall in the second half of the year and with large gains in higher horsepower engines. Mercury also remains the clear leader in Canada, Europe, and many countries around the world. Consistent with its strong outboard share performance at recent boat shows, Mercury's wholesale market share also accelerated through the fourth quarter and was up over 400 basis points in the quarter and 900 basis points in December versus prior year. As previously noted, our boat and engine pipelines are at extremely low levels, the result of deliberate action over the last two years. Global boat pipelines are down approximately 2,200 units from a year ago and U.S. outboard pipelines down by approximately 10%, with retail sales significantly outpacing wholesale. Mercury finished the year with approximately 47% share, gaining 70 basis points overall in the second half of the year and with large gains in higher horsepower engines. mercury finished the year with approximately 47% share gaining 70 basis points overall in the second half of the year and with large gains in higher horsepower engines Mercury also remains the clear leader in Canada, Europe, and many countries around the world. mercury also remains the clear leader in canada europe and many countries around the world Consistent with its strong outboard share performance at recent boat shows, Mercury's wholesale market share also accelerated through the fourth quarter and was up over 400 basis points in the quarter and 900 basis points in December versus prior year. consistent with its strong outboard share performance at recent boat shows mercury's wholesale market share also accelerated through the fourth quarter and was up over 400 basis points in the quarter and 900 basis points in december versus prior year As previously noted, our boat and engine pipelines are at extremely low levels, the result of deliberate action over the last two years. as previously noted our boat and engine pipelines are at extremely low levels the result of deliberate action over the last two years Global boat pipelines are down approximately 2,200 units from a year ago and U.S. outboard pipelines down by approximately 10%, with retail sales significantly outpacing wholesale. global boat pipelines are down approximately 2,200 units from a year ago and u.s outboard pipelines down by approximately 10% with retail sales significantly outpacing wholesale In addition, as of year-end, our global boat order backlog was 79% of our first quarter wholesale forecast, up 13 percentage points from the same time last year. Brunswick delivered outstanding Free Cash Flow of $442 million in 2025, with continued benefits from our recurring revenue businesses that represented approximately 60% of our earnings this year and continued operational and working capital discipline. Our cash performance has enabled us to support planned investments in industry-leading products and technology, return capital to shareholders, and efficiently retire more debt than previously planned. Our investment-grade balance sheet was further strengthened by the retirement of approximately $240 million of debt this year, exceeding our guidance and commitments and putting us firmly on track towards our 2x net leverage target. We're progressing towards this goal while maintaining significant financial flexibility. In addition, as of year-end, our global boat order backlog was 79% of our first quarter wholesale forecast, up 13 percentage points from the same time last year. in addition as of year-end our global boat order backlog was 79% of our first quarter wholesale forecast up 13 percentage points from the same time last year Brunswick delivered outstanding Free Cash Flow of $442 million in 2025, with continued benefits from our recurring revenue businesses that represented approximately 60% of our earnings this year and continued operational and working capital discipline. brunswick delivered outstanding free cash flow of $442 million in 2025 with continued benefits from our recurring revenue businesses that represented approximately 60% of our earnings this year and continued operational and working capital discipline Our cash performance has enabled us to support planned investments in industry-leading products and technology, return capital to shareholders, and efficiently retire more debt than previously planned. our cash performance has enabled us to support planned investments in industry-leading products and technology return capital to shareholders and efficiently retire more debt than previously planned Our investment-grade balance sheet was further strengthened by the retirement of approximately $240 million of debt this year, exceeding our guidance and commitments and putting us firmly on track towards our 2x net leverage target. our investment-grade balance sheet was further strengthened by the retirement of approximately $240 million of debt this year exceeding our guidance and commitments and putting us firmly on track towards our 2x net leverage target We're progressing towards this goal while maintaining significant financial flexibility. we're progressing towards this goal while maintaining significant financial flexibility At year-end, we had $1.3 billion in liquidity, including full access to our undrawn revolving credit facility. In December, we converted $300 million of long-term debt into rate-advantaged commercial paper, reducing interest expense and setting up additional debt retirement in 2026, supported by continued strong free cash flow generation. A series of thoughtful capital strategy actions initiated at the end of 2024 will reduce our expected 2026 interest expense by approximately $40 million, including the benefits of an additional $160 million or more of anticipated debt retirement this year, while still allowing us to make our planned new product, AI, and other investments, as well as return capital to shareholders. I'll now turn the call over to Ryan to provide additional comments on our 2025 financial performance and our initial outlook for 2026. At year-end, we had $1.3 billion in liquidity, including full access to our undrawn revolving credit facility. at year-end we had $1.3 billion in liquidity including full access to our undrawn revolving credit facility In December, we converted $300 million of long-term debt into rate-advantaged commercial paper, reducing interest expense and setting up additional debt retirement in 2026, supported by continued strong free cash flow generation. in december we converted $300 million of long-term debt into rate-advantaged commercial paper reducing interest expense and setting up additional debt retirement in 2026 supported by continued strong free cash flow generation A series of thoughtful capital strategy actions initiated at the end of 2024 will reduce our expected 2026 interest expense by approximately $40 million, including the benefits of an additional $160 million or more of anticipated debt retirement this year, while still allowing us to make our planned new product, AI, and other investments, as well as return capital to shareholders. a series of thoughtful capital strategy actions initiated at the end of 2024 will reduce our expected 2026 interest expense by approximately $40 million including the benefits of an additional $160 million or more of anticipated debt retirement this year while still allowing us to make our planned new product ai and other investments as well as return capital to shareholders I'll now turn the call over to Ryan to provide additional comments on our 2025 financial performance and our initial outlook for 2026. i'll now turn the call over to ryan to provide additional comments on our 2025 financial performance and our initial outlook for 2026

Speaker 8: Thank you, Dave, and good morning, everyone. Thank you, Dave, and good morning, everyone. thank you dave and good morning everyone Brunswick's fourth quarter performance came in ahead of expectations, with sales and earnings in each of our segments exceeding fourth quarter 2024. On a consolidated basis, sales were up 16%, reflecting improved market conditions, increased wholesale shipments to our channel partners, pricing actions taken earlier in the year, a lower discounting environment, and continued solid boating participation driving growth in our P&A and aftermarket businesses. It's also worth noting that this growth was not only broad-based across all segments in the quarter but also across all global regions. Q4 earnings improved 41% versus prior year as the impact of higher sales, along with increased absorption from comparatively higher production levels and operational improvements, more than offset the enterprise headwinds of incremental tariffs and the restatement of variable compensation, which affected each business. Brunswick's fourth quarter performance came in ahead of expectations, with sales and earnings in each of our segments exceeding fourth quarter 2024. brunswick's fourth quarter performance came in ahead of expectations with sales and earnings in each of our segments exceeding fourth quarter 2024 On a consolidated basis, sales were up 16%, reflecting improved market conditions, increased wholesale shipments to our channel partners, pricing actions taken earlier in the year, a lower discounting environment, and continued solid boating participation driving growth in our P&A and aftermarket businesses. on a consolidated basis sales were up 16% reflecting improved market conditions increased wholesale shipments to our channel partners pricing actions taken earlier in the year a lower discounting environment and continued solid boating participation driving growth in our p&a and aftermarket businesses It's also worth noting that this growth was not only broad-based across all segments in the quarter but also across all global regions. it's also worth noting that this growth was not only broad-based across all segments in the quarter but also across all global regions Q4 earnings improved 41% versus prior year as the impact of higher sales, along with increased absorption from comparatively higher production levels and operational improvements, more than offset the enterprise headwinds of incremental tariffs and the restatement of variable compensation, which affected each business. q4 earnings improved 41% versus prior year as the impact of higher sales along with increased absorption from comparatively higher production levels and operational improvements more than offset the enterprise headwinds of incremental tariffs and the restatement of variable compensation which affected each business Lastly, we generated $88 million of free cash flow in the fourth quarter, wrapping up a tremendous year of cash generation. As expected, free cash flow was down from the unseasonably high fourth quarter of 2024, reflecting a more normalized working capital environment and higher production levels across our businesses. On a full-year basis, sales increased 2%, driven by improved second-half market conditions and resulting stronger wholesale orders, together with strong P&A and aftermarket performance, helping to overcome the impacts of the challenging first-half retail environment. Full-year adjusted operating earnings and diluted EPS ended slightly above expectations but below the prior year, mainly reflecting the impact of incremental tariffs and the reinstated variable compensation. Outside of these two impacts, we would have shown strong adjusted earnings growth for the year. Lastly, we generated $88 million of free cash flow in the fourth quarter, wrapping up a tremendous year of cash generation. lastly we generated $88 million of free cash flow in the fourth quarter wrapping up a tremendous year of cash generation As expected, free cash flow was down from the unseasonably high fourth quarter of 2024, reflecting a more normalized working capital environment and higher production levels across our businesses. as expected free cash flow was down from the unseasonably high fourth quarter of 2024 reflecting a more normalized working capital environment and higher production levels across our businesses On a full-year basis, sales increased 2%, driven by improved second-half market conditions and resulting stronger wholesale orders, together with strong P&A and aftermarket performance, helping to overcome the impacts of the challenging first-half retail environment. on a full-year basis sales increased 2% driven by improved second-half market conditions and resulting stronger wholesale orders together with strong p&a and aftermarket performance helping to overcome the impacts of the challenging first-half retail environment Full-year adjusted operating earnings and diluted EPS ended slightly above expectations but below the prior year, mainly reflecting the impact of incremental tariffs and the reinstated variable compensation. full-year adjusted operating earnings and diluted eps ended slightly above expectations but below the prior year mainly reflecting the impact of incremental tariffs and the reinstated variable compensation Outside of these two impacts, we would have shown strong adjusted earnings growth for the year. outside of these two impacts we would have shown strong adjusted earnings growth for the year The earnings impacts of the sales growth, inclusive of pricing and improved discounting levels, together with tariff mitigation efforts, helped partially offset these earnings headwinds. We generated $442 million of free cash flow in the year, up 56% year-over-year, and exceeded our increased guidance from the last quarter. In one of the most challenging years for the industry since the GFC, we generated the third highest full-year free cash flow in Brunswick's history. Now, we'll look at each reporting segment's performance for the quarter, starting with our propulsion business, which grew sales for the third consecutive quarter. Sales were up 23%, with double-digit increases in all product categories, resulting primarily from strong OEM orders heading into the early 2026 retail season. The earnings impacts of the sales growth, inclusive of pricing and improved discounting levels, together with tariff mitigation efforts, helped partially offset these earnings headwinds. the earnings impacts of the sales growth inclusive of pricing and improved discounting levels together with tariff mitigation efforts helped partially offset these earnings headwinds We generated $442 million of free cash flow in the year, up 56% year-over-year, and exceeded our increased guidance from the last quarter. we generated $442 million of free cash flow in the year up 56% year-over-year and exceeded our increased guidance from the last quarter In one of the most challenging years for the industry since the GFC, we generated the third highest full-year free cash flow in Brunswick's history. in one of the most challenging years for the industry since the gfc we generated the third highest full-year free cash flow in brunswick's history Now, we'll look at each reporting segment's performance for the quarter, starting with our propulsion business, which grew sales for the third consecutive quarter. now we'll look at each reporting segment's performance for the quarter starting with our propulsion business which grew sales for the third consecutive quarter Sales were up 23%, with double-digit increases in all product categories, resulting primarily from strong OEM orders heading into the early 2026 retail season. sales were up 23% with double-digit increases in all product categories resulting primarily from strong oem orders heading into the early 2026 retail season Segment-adjusted operating earnings and margin also increased significantly compared to prior year due to the impacts of increased sales and higher absorption from increased production levels, offsetting the incremental tariff impact and the reinstatement of variable compensation. Our aftermarket recurring revenue engine parts and accessories business also grew sales for the third consecutive quarter, with fourth-quarter sales up 15% versus prior year. Sales growth accelerated from the third quarter for both products and distribution, reflecting strong boater participation, favorable weather in many regions in the back half of the year, and continued share gains in our distribution business. Q4 adjusted operating earnings increased 7%, with slightly lower margins due primarily to the mixed impact from the stronger growth in distribution sales. Segment-adjusted operating earnings and margin also increased significantly compared to prior year due to the impacts of increased sales and higher absorption from increased production levels, offsetting the incremental tariff impact and the reinstatement of variable compensation. segment-adjusted operating earnings and margin also increased significantly compared to prior year due to the impacts of increased sales and higher absorption from increased production levels offsetting the incremental tariff impact and the reinstatement of variable compensation Our aftermarket recurring revenue engine parts and accessories business also grew sales for the third consecutive quarter, with fourth-quarter sales up 15% versus prior year. our aftermarket recurring revenue engine parts and accessories business also grew sales for the third consecutive quarter with fourth-quarter sales up 15% versus prior year Sales growth accelerated from the third quarter for both products and distribution, reflecting strong boater participation, favorable weather in many regions in the back half of the year, and continued share gains in our distribution business. sales growth accelerated from the third quarter for both products and distribution reflecting strong boater participation favorable weather in many regions in the back half of the year and continued share gains in our distribution business Q4 adjusted operating earnings increased 7%, with slightly lower margins due primarily to the mixed impact from the stronger growth in distribution sales. q4 adjusted operating earnings increased 7% with slightly lower margins due primarily to the mixed impact from the stronger growth in distribution sales Despite the compensation and tariff headwinds, a sluggish first-half retail environment, and a slight mix shift towards our distribution business, our full-year adjusted operating earnings for the P&A business were essentially flat to 2024. Continuing to validate the prioritizing recurring aftermarket revenue is essential to driving performance through the cycle from our differentiated balanced business model. Navico Group grew sales for the second quarter in a row, increasing 4% over the prior year, driven by solid OEM orders and steady aftermarket performance during the important holiday selling season. Improving Navico Group's financial performance remains a critical focus for our entire team, and we are seeing the results of strategic actions, including continued investment into new product, product portfolio optimization, and operational measures. Despite the compensation and tariff headwinds, a sluggish first-half retail environment, and a slight mix shift towards our distribution business, our full-year adjusted operating earnings for the P&A business were essentially flat to 2024. despite the compensation and tariff headwinds a sluggish first-half retail environment and a slight mix shift towards our distribution business our full-year adjusted operating earnings for the p&a business were essentially flat to 2024 Continuing to validate the prioritizing recurring aftermarket revenue is essential to driving performance through the cycle from our differentiated balanced business model. continuing to validate the prioritizing recurring aftermarket revenue is essential to driving performance through the cycle from our differentiated balanced business model Navico Group grew sales for the second quarter in a row, increasing 4% over the prior year, driven by solid OEM orders and steady aftermarket performance during the important holiday selling season. navico group grew sales for the second quarter in a row increasing 4% over the prior year driven by solid oem orders and steady aftermarket performance during the important holiday selling season Improving Navico Group's financial performance remains a critical focus for our entire team, and we are seeing the results of strategic actions, including continued investment into new product, product portfolio optimization, and operational measures. improving navico group's financial performance remains a critical focus for our entire team and we are seeing the results of strategic actions including continued investment into new product product portfolio optimization and operational measures While many new exciting products are still to come, we believe that we are now seeing the early benefits of our recently developed and launched competitively priced new products winning in the market, especially in our electronics portfolio. The Navico Group's outstanding operational performance in the quarter helped translate the sales growth into strong adjusted operating earnings and margins, which are up 180 basis points from the prior year, as benefits from higher sales, new product investments, portfolio optimization, and cost control measures more than offset the enterprise headwinds. Finally, our boat segment had a strong quarter, reporting an 11% sales increase over the prior year, with growth from both boat sales and the business acceleration portfolio. While many new exciting products are still to come, we believe that we are now seeing the early benefits of our recently developed and launched competitively priced new products winning in the market, especially in our electronics portfolio. while many new exciting products are still to come we believe that we are now seeing the early benefits of our recently developed and launched competitively priced new products winning in the market especially in our electronics portfolio The Navico Group's outstanding operational performance in the quarter helped translate the sales growth into strong adjusted operating earnings and margins, which are up 180 basis points from the prior year, as benefits from higher sales, new product investments, portfolio optimization, and cost control measures more than offset the enterprise headwinds. the navico group's outstanding operational performance in the quarter helped translate the sales growth into strong adjusted operating earnings and margins which are up 180 basis points from the prior year as benefits from higher sales new product investments portfolio optimization and cost control measures more than offset the enterprise headwinds Finally, our boat segment had a strong quarter, reporting an 11% sales increase over the prior year, with growth from both boat sales and the business acceleration portfolio. finally our boat segment had a strong quarter reporting an 11% sales increase over the prior year with growth from both boat sales and the business acceleration portfolio Our boat group sales were led by increases in our recreational fiberglass and aluminum boat brands, while Freedom Boat Club continued its growth journey with network-wide increases in trips, members, and locations during the quarter. Note that the boat group increased sales in each of the premium, core, and value categories, continuing the success from the third quarter. Segment-adjusted operating earnings and margin were both up significantly. Adjusted operating margin expanded 290 basis points, benefiting from the impact of higher sales, including annual model year pricing actions and improved discounting levels, along with increased production driving improved absorption, which handily offset headwinds from the enterprise factors. As Dave mentioned earlier, we finished the year with very healthy dealer pipelines, with retail sales outpacing wholesale, setting us up favorably for 2026 in a variety of market scenarios. Our boat group sales were led by increases in our recreational fiberglass and aluminum boat brands, while Freedom Boat Club continued its growth journey with network-wide increases in trips, members, and locations during the quarter. our boat group sales were led by increases in our recreational fiberglass and aluminum boat brands while freedom boat club continued its growth journey with network-wide increases in trips members and locations during the quarter Note that the boat group increased sales in each of the premium, core, and value categories, continuing the success from the third quarter. note that the boat group increased sales in each of the premium core and value categories continuing the success from the third quarter Segment-adjusted operating earnings and margin were both up significantly. segment-adjusted operating earnings and margin were both up significantly Adjusted operating margin expanded 290 basis points, benefiting from the impact of higher sales, including annual model year pricing actions and improved discounting levels, along with increased production driving improved absorption, which handily offset headwinds from the enterprise factors. adjusted operating margin expanded 290 basis points benefiting from the impact of higher sales including annual model year pricing actions and improved discounting levels along with increased production driving improved absorption which handily offset headwinds from the enterprise factors As Dave mentioned earlier, we finished the year with very healthy dealer pipelines, with retail sales outpacing wholesale, setting us up favorably for 2026 in a variety of market scenarios. as dave mentioned earlier we finished the year with very healthy dealer pipelines with retail sales outpacing wholesale setting us up favorably for 2026 in a variety of market scenarios Moving to our outlook, as we enter 2026, Brunswick is extremely well-positioned to benefit from the building market tailwinds that were evident in the retail market stabilization experienced in the second half of 2025. Given the very dynamic geopolitical and trade backdrop, we plan to continue to relentlessly drive operating efficiencies and are encouraged by the strong reception for our many new and exciting products, our low and fresh boat and engine field pipelines, the improving sentiment across our network, and the market's anticipation of further interest rate cuts during the year. Our guidance assumes a flat to slightly up U.S. retail boat market, with anticipated wholesale sales to more closely match retail throughout our businesses, along with continued stable boating participation. It also assumes the recent relative macro environment stability continues through the year. Moving to our outlook, as we enter 2026, Brunswick is extremely well-positioned to benefit from the building market tailwinds that were evident in the retail market stabilization experienced in the second half of 2025. moving to our outlook as we enter 2026 brunswick is extremely well-positioned to benefit from the building market tailwinds that were evident in the retail market stabilization experienced in the second half of 2025 Given the very dynamic geopolitical and trade backdrop, we plan to continue to relentlessly drive operating efficiencies and are encouraged by the strong reception for our many new and exciting products, our low and fresh boat and engine field pipelines, the improving sentiment across our network, and the market's anticipation of further interest rate cuts during the year. given the very dynamic geopolitical and trade backdrop we plan to continue to relentlessly drive operating efficiencies and are encouraged by the strong reception for our many new and exciting products our low and fresh boat and engine field pipelines the improving sentiment across our network and the market's anticipation of further interest rate cuts during the year Our guidance assumes a flat to slightly up U.S. retail boat market, with anticipated wholesale sales to more closely match retail throughout our businesses, along with continued stable boating participation. our guidance assumes a flat to slightly up u.s retail boat market with anticipated wholesale sales to more closely match retail throughout our businesses along with continued stable boating participation It also assumes the recent relative macro environment stability continues through the year. it also assumes the recent relative macro environment stability continues through the year These assumptions translate into guidance you see on this page, with anticipated revenue of between $5.6-$5.8 billion, adjusted operating margins between 7.5%-8%, and adjusted EPS in the range of $3.80-$4.40. We continue to expect strong free cash flow in excess of $350 million, representing at least 125% free cash flow conversion, as benefits from earnings growth and continued net working capital management help offset the over $100 million cash impact of the reinstatement of variable compensation earned in 2025 and paid in the first half of 2026. We anticipate improvement in wholesale ordering patterns in Q1, given early season retail strength, including steady boat show performance and low dealer pipelines. These assumptions translate into guidance you see on this page, with anticipated revenue of between $5.6-$5.8 billion, adjusted operating margins between 7.5%-8%, and adjusted EPS in the range of $3.80-$4.40. these assumptions translate into guidance you see on this page with anticipated revenue of between $5.6-$5.8 billion adjusted operating margins between 7.5%-8% and adjusted eps in the range of $3.80-$4.40 We continue to expect strong free cash flow in excess of $350 million, representing at least 125% free cash flow conversion, as benefits from earnings growth and continued net working capital management help offset the over $100 million cash impact of the reinstatement of variable compensation earned in 2025 and paid in the first half of 2026. we continue to expect strong free cash flow in excess of $350 million representing at least 125% free cash flow conversion as benefits from earnings growth and continued net working capital management help offset the over $100 million cash impact of the reinstatement of variable compensation earned in 2025 and paid in the first half of 2026 We anticipate improvement in wholesale ordering patterns in Q1, given early season retail strength, including steady boat show performance and low dealer pipelines. we anticipate improvement in wholesale ordering patterns in q1 given early season retail strength including steady boat show performance and low dealer pipelines Directional guidance for Q1 reflects growth in net sales versus the first quarter of 2025, with adjusted EPS between $0.35 and $0.45 being burdened by a majority of the full-year incremental tariff costs, as 2025 tariffs did not materially begin until April, together with increased investments in the first quarter on critical product programs. Next, we'll take a closer look at the components of our guided $4.10 adjusted EPS guidance midpoint, which reflects approximately 25% growth over 2025, consistent with the initial 2026 thoughts that we shared last quarter. The main driver of the earnings improvement is the impact of the anticipated sales increases, which should carry incremental earnings north of 20%. Directional guidance for Q1 reflects growth in net sales versus the first quarter of 2025, with adjusted EPS between $0.35 and $0.45 being burdened by a majority of the full-year incremental tariff costs, as 2025 tariffs did not materially begin until April, together with increased investments in the first quarter on critical product programs. directional guidance for q1 reflects growth in net sales versus the first quarter of 2025 with adjusted eps between $0.35 and $0.45 being burdened by a majority of the full-year incremental tariff costs as 2025 tariffs did not materially begin until april together with increased investments in the first quarter on critical product programs Next, we'll take a closer look at the components of our guided $4.10 adjusted EPS guidance midpoint, which reflects approximately 25% growth over 2025, consistent with the initial 2026 thoughts that we shared last quarter. next we'll take a closer look at the components of our guided $4.10 adjusted eps guidance midpoint which reflects approximately 25% growth over 2025 consistent with the initial 2026 thoughts that we shared last quarter The main driver of the earnings improvement is the impact of the anticipated sales increases, which should carry incremental earnings north of 20%. the main driver of the earnings improvement is the impact of the anticipated sales increases which should carry incremental earnings north of 20% Included in the sales increase are benefits from annual pricing actions and a lower discounting environment, continued mixed benefits toward more premium products and higher content, and volume increases as we better match retail and wholesale throughout the year. We also anticipate favorable earnings impacts from currency, capital strategy, and continued cost reduction programs across the enterprise, mainly improving gross margins. In part to drive the sales improvements, we do anticipate an increase in full-year operating expenses but believe OpEx spending will remain consistent with 2025 on a percentage of sales basis. The large majority of the OpEx increase relates to growth investments in critical product and technology programs, sales and marketing efforts to drive demand, and necessary systems and infrastructure upgrades. Included in the sales increase are benefits from annual pricing actions and a lower discounting environment, continued mixed benefits toward more premium products and higher content, and volume increases as we better match retail and wholesale throughout the year. included in the sales increase are benefits from annual pricing actions and a lower discounting environment continued mixed benefits toward more premium products and higher content and volume increases as we better match retail and wholesale throughout the year We also anticipate favorable earnings impacts from currency, capital strategy, and continued cost reduction programs across the enterprise, mainly improving gross margins. we also anticipate favorable earnings impacts from currency capital strategy and continued cost reduction programs across the enterprise mainly improving gross margins In part to drive the sales improvements, we do anticipate an increase in full-year operating expenses but believe OpEx spending will remain consistent with 2025 on a percentage of sales basis. in part to drive the sales improvements we do anticipate an increase in full-year operating expenses but believe opex spending will remain consistent with 2025 on a percentage of sales basis The large majority of the OpEx increase relates to growth investments in critical product and technology programs, sales and marketing efforts to drive demand, and necessary systems and infrastructure upgrades. the large majority of the opex increase relates to growth investments in critical product and technology programs sales and marketing efforts to drive demand and necessary systems and infrastructure upgrades The only other anticipated EPS headwind would be the continued impact of incremental tariffs, which under the current legislation we estimate to be between $35-$45 million, or approximately $0.60 of EPS. This is a net tariff headwind resulting from the full-year impact of the tariffs instituted in 2025 and assumes that we will continue to be successful in our aggressive tariff mitigation strategies as we continue to use self-developed AI tools, sourcing optimization, value engineering, trade provisions, and other methods to reduce tariff impacts. As you can see, we remain quite bullish about our opportunities for success in 2026. I'll end my prepared remarks this morning with a quick review on other P&L and cash flow assumptions underlying our annual guidance. The only other anticipated EPS headwind would be the continued impact of incremental tariffs, which under the current legislation we estimate to be between $35-$45 million, or approximately $0.60 of EPS. the only other anticipated eps headwind would be the continued impact of incremental tariffs which under the current legislation we estimate to be between $35-$45 million or approximately $0.60 of eps This is a net tariff headwind resulting from the full-year impact of the tariffs instituted in 2025 and assumes that we will continue to be successful in our aggressive tariff mitigation strategies as we continue to use self-developed AI tools, sourcing optimization, value engineering, trade provisions, and other methods to reduce tariff impacts. this is a net tariff headwind resulting from the full-year impact of the tariffs instituted in 2025 and assumes that we will continue to be successful in our aggressive tariff mitigation strategies as we continue to use self-developed ai tools sourcing optimization value engineering trade provisions and other methods to reduce tariff impacts As you can see, we remain quite bullish about our opportunities for success in 2026. as you can see we remain quite bullish about our opportunities for success in 2026 I'll end my prepared remarks this morning with a quick review on other P&L and cash flow assumptions underlying our annual guidance. i'll end my prepared remarks this morning with a quick review on other p&l and cash flow assumptions underlying our annual guidance We believe that our capital expenditure spending and annual depreciation expense will be similar to 2025 levels as we remain in harvest phase for most of our recent capital initiatives and believe that we have sufficient capacity available for a multi-year growth vector. We plan to generate approximately $50 million of working capital as we drive continued inventory and balance sheet improvement, even with anticipated stronger production. Finally, as Dave mentioned earlier, we anticipate retiring no less than $160 million of debt throughout the year, resulting in a total of $400 million of debt retirement between 2025 and 2026, which will leave us with net debt leverage of 2.5x or lower by the end of the year. We believe that our capital expenditure spending and annual depreciation expense will be similar to 2025 levels as we remain in harvest phase for most of our recent capital initiatives and believe that we have sufficient capacity available for a multi-year growth vector. we believe that our capital expenditure spending and annual depreciation expense will be similar to 2025 levels as we remain in harvest phase for most of our recent capital initiatives and believe that we have sufficient capacity available for a multi-year growth vector We plan to generate approximately $50 million of working capital as we drive continued inventory and balance sheet improvement, even with anticipated stronger production. we plan to generate approximately $50 million of working capital as we drive continued inventory and balance sheet improvement even with anticipated stronger production Finally, as Dave mentioned earlier, we anticipate retiring no less than $160 million of debt throughout the year, resulting in a total of $400 million of debt retirement between 2025 and 2026, which will leave us with net debt leverage of 2.5x or lower by the end of the year. finally as dave mentioned earlier we anticipate retiring no less than $160 million of debt throughout the year resulting in a total of $400 million of debt retirement between 2025 and 2026 which will leave us with net debt leverage of 2.5x or lower by the end of the year Returning capital to shareholders through dividends and share repurchases is always a priority, and our plan anticipates a slight dividend increase later this quarter while continuing our systematic share repurchase program with approximately $50 million of repurchases planned for the year, while remaining opportunistic should cash flow and valuations continue to be supportive. Lastly, please see the appendix for segment-level guidance and other assumptions. I will now pass the call back over to Dave for concluding remarks. Returning capital to shareholders through dividends and share repurchases is always a priority, and our plan anticipates a slight dividend increase later this quarter while continuing our systematic share repurchase program with approximately $50 million of repurchases planned for the year, while remaining opportunistic should cash flow and valuations continue to be supportive. returning capital to shareholders through dividends and share repurchases is always a priority and our plan anticipates a slight dividend increase later this quarter while continuing our systematic share repurchase program with approximately $50 million of repurchases planned for the year while remaining opportunistic should cash flow and valuations continue to be supportive Lastly, please see the appendix for segment-level guidance and other assumptions. lastly please see the appendix for segment-level guidance and other assumptions I will now pass the call back over to Dave for concluding remarks. i will now pass the call back over to dave for concluding remarks

Speaker 3: Thanks, Ryan. As we wrap up the call, I'd like to highlight some exciting events, new product launches, and awards from a very busy January. At the beginning of the month, Brunswick again exhibited at the Consumer Electronics Show in Las Vegas, where we leveraged this unique global technology stage to showcase our full portfolio of industry-leading products and technology, including our ACES and boating intelligence solutions. Thanks, Ryan. thanks ryan As we wrap up the call, I'd like to highlight some exciting events, new product launches, and awards from a very busy January. as we wrap up the call i'd like to highlight some exciting events new product launches and awards from a very busy january At the beginning of the month, Brunswick again exhibited at the Consumer Electronics Show in Las Vegas, where we leveraged this unique global technology stage to showcase our full portfolio of industry-leading products and technology, including our ACES and boating intelligence solutions. at the beginning of the month brunswick again exhibited at the consumer electronics show in las vegas where we leveraged this unique global technology stage to showcase our full portfolio of industry-leading products and technology including our aces and boating intelligence solutions We launched the all-new Sea Ray SLX 360, our first-ever boat launch at CES, which is packed with Mercury Marine and Navico Group technology and was fitted with Simrad's AutoCaptain autonomous boating system. We also debuted the Flite Race eFoil, a collaboration between Fliteboard and Mercury Racing. Capable of speeds over 30 miles per hour, this product sets a new industry performance benchmark for electric watercraft. In addition, we debuted the Mercury 808 Concept based on the current, very capable, and expandable 600-horsepower V12 outboard platform, which provides a vision for the future of ultra-high-horsepower outboard propulsion. Brunswick was recognized with several awards at CES. Simrad AutoCaptain was honored with a CES Pick Award. Our overall exhibit was recognized as a top 10 best booth experience, and Brunswick is a finalist for the Best of Show Awards, which recognizes the best experiential exhibits. We launched the all-new Sea Ray SLX 360, our first-ever boat launch at CES, which is packed with Mercury Marine and Navico Group technology and was fitted with Simrad's AutoCaptain autonomous boating system. we launched the all-new sea ray slx 360 our first-ever boat launch at ces which is packed with mercury marine and navico group technology and was fitted with simrad's autocaptain autonomous boating system We also debuted the Flite Race eFoil, a collaboration between Fliteboard and Mercury Racing. we also debuted the flite race efoil a collaboration between fliteboard and mercury racing Capable of speeds over 30 miles per hour, this product sets a new industry performance benchmark for electric watercraft. capable of speeds over 30 miles per hour this product sets a new industry performance benchmark for electric watercraft In addition, we debuted the Mercury 808 Concept based on the current, very capable, and expandable 600-horsepower V12 outboard platform, which provides a vision for the future of ultra-high-horsepower outboard propulsion. in addition we debuted the mercury 808 concept based on the current very capable and expandable 600-horsepower v12 outboard platform which provides a vision for the future of ultra-high-horsepower outboard propulsion Brunswick was recognized with several awards at CES. brunswick was recognized with several awards at ces Simrad AutoCaptain was honored with a CES Pick Award. simrad autocaptain was honored with a ces pick award Our overall exhibit was recognized as a top 10 best booth experience, and Brunswick is a finalist for the Best of Show Awards, which recognizes the best experiential exhibits. our overall exhibit was recognized as a top 10 best booth experience and brunswick is a finalist for the best of show awards which recognizes the best experiential exhibits Moving on to recent boat shows, we're encouraged by the high levels of engagement and positive customer sentiment observed at recent major shows. This was reflected in our performance at the Fort Lauderdale Show, where our premium boat brands delivered 15% overall revenue growth versus the prior year's show, and Mercury had a record-breaking 61% overall outboard share. At the world's largest boat show in Düsseldorf, Germany, we debuted the Navan C30 model, and our premium fiberglass brands recorded year-over-year sales growth. Mercury had more than 50% share of all outboards at the show, almost triple the nearest competitor, and added to its recent run of signing multi-year exclusive supply agreements with some of Europe's largest and fastest-growing boat OEMs. We were also proud to receive award recognition at these various boat shows. Moving on to recent boat shows, we're encouraged by the high levels of engagement and positive customer sentiment observed at recent major shows. moving on to recent boat shows we're encouraged by the high levels of engagement and positive customer sentiment observed at recent major shows This was reflected in our performance at the Fort Lauderdale Show, where our premium boat brands delivered 15% overall revenue growth versus the prior year's show, and Mercury had a record-breaking 61% overall outboard share. this was reflected in our performance at the fort lauderdale show where our premium boat brands delivered 15% overall revenue growth versus the prior year's show and mercury had a record-breaking 61% overall outboard share At the world's largest boat show in Düsseldorf, Germany, we debuted the Navan C30 model, and our premium fiberglass brands recorded year-over-year sales growth. at the world's largest boat show in düsseldorf germany we debuted the navan c30 model and our premium fiberglass brands recorded year-over-year sales growth Mercury had more than 50% share of all outboards at the show, almost triple the nearest competitor, and added to its recent run of signing multi-year exclusive supply agreements with some of Europe's largest and fastest-growing boat OEMs. mercury had more than 50% share of all outboards at the show almost triple the nearest competitor and added to its recent run of signing multi-year exclusive supply agreements with some of europe's largest and fastest-growing boat oems We were also proud to receive award recognition at these various boat shows. we were also proud to receive award recognition at these various boat shows Our Navan S30 model won Motorboat of the Year, and our Sea Ray SDX 270 Surf model was awarded European Powerboat of the Year in their respective classes. At the Minneapolis Boat Show, Princecraft earned its second consecutive NMMA Innovation Award for the all-new Platinum 190 model, which was recognized for its premium engineering and class-leading fishing features. Finally, as you all know, we pride ourselves on being an employer of choice, an innovator in our space, and a responsible and trustworthy company. For the fourth consecutive year, we surpassed 100 awards for our people, our culture, our products, and our innovation. Notably, many of these awards are national awards from media outlets such as Newsweek, USA Today, Time, and Forbes that we've received for multiple years. However, for the first time in 2026, Brunswick was named to Forbes' America's Best Companies list. Our Navan S30 model won Motorboat of the Year, and our Sea Ray SDX 270 Surf model was awarded European Powerboat of the Year in their respective classes. our navan s30 model won motorboat of the year and our sea ray sdx 270 surf model was awarded european powerboat of the year in their respective classes At the Minneapolis Boat Show, Princecraft earned its second consecutive NMMA Innovation Award for the all-new Platinum 190 model, which was recognized for its premium engineering and class-leading fishing features. at the minneapolis boat show princecraft earned its second consecutive nmma innovation award for the all-new platinum 190 model which was recognized for its premium engineering and class-leading fishing features Finally, as you all know, we pride ourselves on being an employer of choice, an innovator in our space, and a responsible and trustworthy company. finally as you all know we pride ourselves on being an employer of choice an innovator in our space and a responsible and trustworthy company For the fourth consecutive year, we surpassed 100 awards for our people, our culture, our products, and our innovation. for the fourth consecutive year we surpassed 100 awards for our people our culture our products and our innovation Notably, many of these awards are national awards from media outlets such as Newsweek, USA Today, Time, and Forbes that we've received for multiple years. notably many of these awards are national awards from media outlets such as newsweek usa today time and forbes that we've received for multiple years However, for the first time in 2026, Brunswick was named to Forbes' America's Best Companies list. however for the first time in 2026 brunswick was named to forbes' america's best companies list Thank you again to all our talented Brunswick employees who make this recognition possible. Before I finish, I'd like to remind you of our investor and analyst event during the upcoming Miami Boat Show, which will include a tour of Brunswick's many exhibits and products at the show, followed by a cocktail hour at the Ritz-Carlton on South Beach. We look forward to offering you the opportunity to see our exciting products and technologies, as well as meet with members of our management team. Thank you for your attention. We'll now open the line for questions. Thank you again to all our talented Brunswick employees who make this recognition possible. thank you again to all our talented brunswick employees who make this recognition possible Before I finish, I'd like to remind you of our investor and analyst event during the upcoming Miami Boat Show, which will include a tour of Brunswick's many exhibits and products at the show, followed by a cocktail hour at the Ritz-Carlton on South Beach. before i finish i'd like to remind you of our investor and analyst event during the upcoming miami boat show which will include a tour of brunswick's many exhibits and products at the show followed by a cocktail hour at the ritz-carlton on south beach We look forward to offering you the opportunity to see our exciting products and technologies, as well as meet with members of our management team. we look forward to offering you the opportunity to see our exciting products and technologies as well as meet with members of our management team Thank you for your attention. thank you for your attention We'll now open the line for questions. we'll now open the line for questions

Speaker 7: Thank you. We'll now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. Thank you. thank you We'll now be conducting a question-and-answer session. we'll now be conducting a question-and-answer session If you would like to ask a question, please press star one on your telephone keypad. if you would like to ask a question please press star one on your telephone keypad A confirmation tone will indicate your line is in the question queue. a confirmation tone will indicate your line is in the question queue You may press star two to remove your question from the queue. you may press star two to remove your question from the queue For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question is from James Hardiman with Citi. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. for participants using speaker equipment it may be necessary to pick up the handset before pressing the star keys One moment, please, while we pull for questions. one moment please while we pull for questions Thank you. thank you Our first question is from James Hardiman with Citi. our first question is from james hardiman with citi

Speaker 6: Hey, good morning. Thanks for taking my question. So I think given your track record, I think most investors have a high degree of confidence that you can deliver given sort of whatever the retail assumptions are. I think the retail assumptions are ultimately what so many investors struggle to underwrite at this point. And so maybe, I guess, to start, what specifically was the retail performance in the fourth quarter? Obviously, we get some of this SSI data, which showed certainly November and December down. You talked about flat for the second half, but I'm curious specifically sort of how you finished the year. Hey, good morning. hey good morning Thanks for taking my question. thanks for taking my question So I think given your track record, I think most investors have a high degree of confidence that you can deliver given sort of whatever the retail assumptions are. so i think given your track record i think most investors have a high degree of confidence that you can deliver given sort of whatever the retail assumptions are I think the retail assumptions are ultimately what so many investors struggle to underwrite at this point. i think the retail assumptions are ultimately what so many investors struggle to underwrite at this point And so maybe, I guess, to start, what specifically was the retail performance in the fourth quarter? and so maybe i guess to start what specifically was the retail performance in the fourth quarter Obviously, we get some of this SSI data, which showed certainly November and December down. obviously we get some of this ssi data which showed certainly november and december down You talked about flat for the second half, but I'm curious specifically sort of how you finished the year. you talked about flat for the second half but i'm curious specifically sort of how you finished the year As you carry that forward to 2026, what gives you confidence that flat to up is the right way to think about the full year? Thanks. As you carry that forward to 2026, what gives you confidence that flat to up is the right way to think about the full year? as you carry that forward to 2026 what gives you confidence that flat to up is the right way to think about the full year Thanks. thanks

Speaker 3: Yeah. Hi, James. Yeah. As you mentioned, on a unit basis, we were flat, basically within 10 units or something. It was particularly flat, if you like. And as we noted, I think we saw continued strength in premium and core, obviously. That's about 75% of our portfolio and about 90% of our gross margin. So that is a tailwind for us. We did, though, see some recovery in the value part of the business, which was nice to see. As you know, that had been the major source of weakness in the first half of the year. Yeah. yeah Hi, James. hi james Yeah. yeah As you mentioned, on a unit basis, we were flat, basically within 10 units or something. as you mentioned on a unit basis we were flat basically within 10 units or something It was particularly flat, if you like. it was particularly flat if you like And as we noted, I think we saw continued strength in premium and core, obviously. and as we noted i think we saw continued strength in premium and core obviously That's about 75% of our portfolio and about 90% of our gross margin. that's about 75% of our portfolio and about 90% of our gross margin So that is a tailwind for us. so that is a tailwind for us We did, though, see some recovery in the value part of the business, which was nice to see. we did though see some recovery in the value part of the business which was nice to see As you know, that had been the major source of weakness in the first half of the year. as you know that had been the major source of weakness in the first half of the year That is a more economically sensitive customer, I would say, and probably a bit more unsettled by some of the events in the first half of the year. But in terms of tailwinds into 2026, in the latter part of 2025, as you know, we got about 75 basis points of rate cuts, but they all really occurred too late in the season to be very material for 2025. But they will affect 2026. I think there's some uncertainty over the timing for the rate cuts, but I think they are likely to come. So probably through the season, we'll end up with at least 100 basis points of year-over-year rate improvement, which is helpful for our end consumers. We've clearly seen retail financing rates respond to this, and retail rates are down around 7.5% now versus 9%-10% at the peak. That is a more economically sensitive customer, I would say, and probably a bit more unsettled by some of the events in the first half of the year. that is a more economically sensitive customer i would say and probably a bit more unsettled by some of the events in the first half of the year But in terms of tailwinds into 2026, in the latter part of 2025, as you know, we got about 75 basis points of rate cuts, but they all really occurred too late in the season to be very material for 2025. but in terms of tailwinds into 2026 in the latter part of 2025 as you know we got about 75 basis points of rate cuts but they all really occurred too late in the season to be very material for 2025 But they will affect 2026. but they will affect 2026 i I think there's some uncertainty over the timing for the rate cuts, but I think they are likely to come. i think there's some uncertainty over the timing for the rate cuts but i think they are likely to come So probably through the season, we'll end up with at least 100 basis points of year-over-year rate improvement, which is helpful for our end consumers. so probably through the season we'll end up with at least 100 basis points of year-over-year rate improvement which is helpful for our end consumers We've clearly seen retail financing rates respond to this, and retail rates are down around 7.5% now versus 9%-10% at the peak. we've clearly seen retail financing rates respond to this and retail rates are down around 7.5% now versus 9%-10% at the peak That is very helpful for our dealers as well. Equity markets remain strong, which is helpful for our premium buyers. Then we did see somewhat of an acceleration, I guess, as you went through the quarter. That is, retailers continue, as you know, we're always very cautious about quoting numbers when the volumes are so low at this time of the year. But retailers are up double digits so far this year, despite the inclement weather and a few other things going on around the country. So I think overall, material tailwinds and evidence on a small scale, at least so far in the year, that that is translating to solid to positive retail. That is very helpful for our dealers as well. that is very helpful for our dealers as well Equity markets remain strong, which is helpful for our premium buyers. equity markets remain strong which is helpful for our premium buyers Then we did see somewhat of an acceleration, I guess, as you went through the quarter. then we did see somewhat of an acceleration i guess as you went through the quarter That is, retailers continue, as you know, we're always very cautious about quoting numbers when the volumes are so low at this time of the year. that is retailers continue as you know we're always very cautious about quoting numbers when the volumes are so low at this time of the year But retailers are up double digits so far this year, despite the inclement weather and a few other things going on around the country. but retailers are up double digits so far this year despite the inclement weather and a few other things going on around the country So I think overall, material tailwinds and evidence on a small scale, at least so far in the year, that that is translating to solid to positive retail. so i think overall material tailwinds and evidence on a small scale at least so far in the year that that is translating to solid to positive retail

Speaker 6: Got it. That's really helpful. Just to clarify, I think you just said, just to underscore, retail up double digits so far in January. Got it. got it That's really helpful. that's really helpful Just to clarify, I think you just said, just to underscore, retail up double digits so far in January. just to clarify i think you just said just to underscore retail up double digits so far in january I just want to make sure that that's sort of on the record here. And then that is right. Okay. And then as we think about inventories, obviously, Goodwork bringing down global pipelines, I think 2,200 units in 2025. How should we think about that number for 2026? Is that a zero in 2026, i.e., wholesale equals retail, or do we expect a little bit more of a reduction? Obviously, one of your big, if not biggest, customers is speaking to stubbornly high inventories, at least around the industry, with maybe one more quarter remaining. Maybe square that with how you're thinking about things. I just want to make sure that that's sort of on the record here. i just want to make sure that that's sort of on the record here And then that is right. and then that is right Okay. okay And then as we think about inventories, obviously, Goodwork bringing down global pipelines, I think 2,200 units in 2025. and then as we think about inventories obviously goodwork bringing down global pipelines i think 2,200 units in 2025 How should we think about that number for 2026? how should we think about that number for 2026 Is that a zero in 2026, i.e., wholesale equals retail, or do we expect a little bit more of a reduction? is that a zero in 2026 i.e wholesale equals retail or do we expect a little bit more of a reduction Obviously, one of your big, if not biggest, customers is speaking to stubbornly high inventories, at least around the industry, with maybe one more quarter remaining. obviously one of your big if not biggest customers is speaking to stubbornly high inventories at least around the industry with maybe one more quarter remaining Maybe square that with how you're thinking about things. maybe square that with how you're thinking about things

Speaker 8: Yeah, James, I'll take that. Good morning. So we have taken pipeline units out each of the last several years. I would say in 2026, we expect that to be probably flat to maybe taking out a couple hundred units at most. Yeah, James, I'll take that. yeah james i'll take that Good morning. good morning So we have taken pipeline units out each of the last several years. so we have taken pipeline units out each of the last several years I would say in 2026, we expect that to be probably flat to maybe taking out a couple hundred units at most. i would say in 2026 we expect that to be probably flat to maybe taking out a couple hundred units at most I mean, our goal really is to match wholesale and retail this year, which would mean wholesale growth, obviously, year-over-year versus last year. And as it relates to maybe your last comment, I would say I think our biggest distributor would say that our inventory in their hands is quite fresh and in very good level. So the pockets that maybe were mentioned, we don't believe are Brunswick inventory. And in fact, Sea Ray and Boston Whaler, specifically in their hands, are in really good shape and lean to start the season. I mean, our goal really is to match wholesale and retail this year, which would mean wholesale growth, obviously, year- over- year versus last year. i mean our goal really is to match wholesale and retail this year which would mean wholesale growth obviously year- over- year versus last year And as it relates to maybe your last comment, I would say I think our biggest distributor would say that our inventory in their hands is quite fresh and in very good level. and as it relates to maybe your last comment i would say i think our biggest distributor would say that our inventory in their hands is quite fresh and in very good level So the pockets that maybe were mentioned, we don't believe are Brunswick inventory. so the pockets that maybe were mentioned we don't believe are brunswick inventory And in fact, Sea Ray and Boston Whaler, specifically in their hands, are in really good shape and lean to start the season. and in fact, sea ray and boston whaler specifically in their hands are in really good shape and lean to start the season

Speaker 6: Got it. And if I could just squeeze in one more, obviously, your specific brands aren't all that matters for you, right? Got it. got it And if I could just squeeze in one more, obviously, your specific brands aren't all that matters for you, right? and if i could just squeeze in one more obviously your specific brands aren't all that matters for you right Given your propulsion business, your P&A business, do you think sort of competitive or, I guess, a better way to put it, industry inventory levels needing to come down is at all a headwind as we think about some of those other segments? Given your propulsion business, your P&A business, do you think sort of competitive or, I guess, a better way to put it, industry inventory levels needing to come down is at all a headwind as we think about some of those other segments? given your propulsion business your p&a business do you think sort of competitive or i guess a better way to put it industry inventory levels needing to come down is at all a headwind as we think about some of those other segments

Speaker 3: I don't think so. I mean, in terms of flow through to us, we've seen very solid ordering. We mentioned on the call that our wholesale orders so far satisfy close to 80% of our Q1 production, which is up 13 points versus last year. So thus far, in terms of dealer pull, we are not seeing any evidence that they are holding back on orders kind of on a year-over-year basis. I don't think so. i don't think so I mean, in terms of flow through to us, we've seen very solid ordering. i mean in terms of flow through to us we've seen very solid ordering We mentioned on the call that our wholesale orders so far satisfy close to 80% of our Q1 production, which is up 13 points versus last year. we mentioned on the call that our wholesale orders so far satisfy close to 80% of our q1 production which is up 13 points versus last year So thus far, in terms of dealer pull, we are not seeing any evidence that they are holding back on orders kind of on a year-over-year basis. so thus far in terms of dealer pull we are not seeing any evidence that they are holding back on orders kind of on a year-over-year basis

Speaker 6: Perfect. Appreciate the color. Thanks, guys. Perfect. perfect Appreciate the color. appreciate the color Thanks, guys. thanks guys

Speaker 7: Our next question is from Craig Kennison with Baird. Our next question is from Craig Kennison with Baird. our next question is from craig kennison with baird

Speaker 2: Hey, good morning. Thanks for taking my question. Hey, good morning. hey good morning Thanks for taking my question. thanks for taking my question I'm trying to understand the dynamics that might push retail back to, or at least closer to, historical trends. What can you tell us about, I guess, repeat buyer behavior and any deferred trade-up cycle that could eventually be released based on any consumer data you have? I'm trying to understand the dynamics that might push retail back to, or at least closer to, historical trends. i'm trying to understand the dynamics that might push retail back to or at least closer to historical trends What can you tell us about, I guess, repeat buyer behavior and any deferred trade-up cycle that could eventually be released based on any consumer data you have? what can you tell us about i guess repeat buyer behavior and any deferred trade-up cycle that could eventually be released based on any consumer data you have

Speaker 3: Yeah. Hi, Craig. Yeah, thanks for the question. Yeah, as you know, I mean, we still have a huge gap between industry new boat sales and replacement rates. And we think the natural replacement rate in the fleet is probably in the 225,000-plus range. And this year, 2025, we'll be in the 130-something range. So that is a kind of natural pull, I think. I also think that there are some deferred purchases from the depressed kind of overall industry sales in the past few years, where people have waited for the right buying conditions to re-enter the market. Yeah. yeah Hi, Craig. hi craig Yeah, thanks for the question. yeah thanks for the question Yeah, as you know, I mean, we still have a huge gap between industry new boat sales and replacement rates. yeah as you know i mean we still have a huge gap between industry new boat sales and replacement rates And we think the natural replacement rate in the fleet is probably in the 225,000-plus range. and we think the natural replacement rate in the fleet is probably in the 225,000-plus range And this year, 2025, we'll be in the 130-something range. and this year 2025 we'll be in the 130-something range So that is a kind of natural pull, I think. so that is a kind of natural pull i think I also think that there are some deferred purchases from the depressed kind of overall industry sales in the past few years, where people have waited for the right buying conditions to re-enter the market. i also think that there are some deferred purchases from the depressed kind of overall industry sales in the past few years where people have waited for the right buying conditions to re-enter the market Generally, we continue to see new boaters come in around the historical pace, I would say, of 25-ish% of new boat sales. But if you think about the shocks that we've experienced over the last several years, certainly on the interest rate side, conditions have not been positive and constructive. We are beginning to see that normalize. I think you look at inflation, obviously, the Fed would like it to be 2%, but compared to where it was two or three years ago, we're in a much more normalized situation. So I think that based on depressed sales over the last few years, we likely have some buyers waiting for the right point to come back into the market. We will see the full effect of those 75-100 basis points of rate cuts this year. And we have a kind of replacement, we're well below replacement rates. Generally, we continue to see new boaters come in around the historical pace, I would say, of 25-ish% of new boat sales. generally we continue to see new boaters come in around the historical pace i would say of 25-ish% of new boat sales But if you think about the shocks that we've experienced over the last several years, certainly on the interest rate side, conditions have not been positive and constructive. but if you think about the shocks that we've experienced over the last several years certainly on the interest rate side conditions have not been positive and constructive We are beginning to see that normalize. we are beginning to see that normalize I think you look at inflation, obviously, the Fed would like it to be 2%, but compared to where it was two or three years ago, we're in a much more normalized situation. i think you look at inflation obviously the fed would like it to be 2% but compared to where it was two or three years ago we're in a much more normalized situation So I think that based on depressed sales over the last few years, we likely have some buyers waiting for the right point to come back into the market. so i think that based on depressed sales over the last few years we likely have some buyers waiting for the right point to come back into the market We will see the full effect of those 75-100 basis points of rate cuts this year. we will see the full effect of those 75-100 basis points of rate cuts this year And we have a kind of replacement, we're well below replacement rates. and we have a kind of replacement we're well below replacement rates So I think all of those suggest pull forces for retail. But of course, if that happens, that will be great. But at the moment, we're forecasting at least some uplift in the market. So I think all of those suggest pull forces for retail. so i think all of those suggest pull forces for retail But of course, if that happens, that will be great. but of course if that happens that will be great But at the moment, we're forecasting at least some uplift in the market. but at the moment we're forecasting at least some uplift in the market

Speaker 8: I would also add, Craig, that we've been very thoughtful, us and really the industry, about pricing over the last handful of years. And now you're seeing a more balanced dynamic between trade-in values for people that bought around 2020 or 2021 and what they can purchase today. So I think people are getting a little bit more value for their trade-in. They've held it for a little bit longer, so their ability to trade up and trade back in is greatly improved now over maybe where it was two or three years ago. I would also add, Craig, that we've been very thoughtful, us and really the industry, about pricing over the last handful of years. i would also add craig that we've been very thoughtful us and really the industry about pricing over the last handful of years And now you're seeing a more balanced dynamic between trade-in values for people that bought around 2020 or 2021 and what they can purchase today. and now you're seeing a more balanced dynamic between trade-in values for people that bought around 2020 or 2021 and what they can purchase today So I think people are getting a little bit more value for their trade-in. so i think people are getting a little bit more value for their trade-in They've held it for a little bit longer, so their ability to trade up and trade back in is greatly improved now over maybe where it was two or three years ago. they've held it for a little bit longer so their ability to trade up and trade back in is greatly improved now over maybe where it was two or three years ago

Speaker 2: Good point. That's very helpful. Thank you both. Good point. good point That's very helpful. that's very helpful Thank you both. thank you both

Speaker 7: Our next question is from Gerrick Johnson with Seaport Research. Our next question is from Gerrick Johnson with Seaport Research . our next question is from gerrick johnson with seaport research

Speaker 4: Hey, good morning. Hey, good morning. hey good morning I wanted to ask you about propulsion. Outboard was up 26%. Your boat business was up 11%. So I'm just going to infer here that your sales to OEM customers really expanded nicely. Can you talk about that, your business to OEM customers and how much of your growth there is coming from existing customers and how much from new wins? I wanted to ask you about propulsion. i wanted to ask you about propulsion Outboard was up 26%. outboard was up 26% Your boat business was up 11%. your boat business was up 11% So I'm just going to infer here that your sales to OEM customers really expanded nicely. so i'm just going to infer here that your sales to oem customers really expanded nicely Can you talk about that, your business to OEM customers and how much of your growth there is coming from existing customers and how much from new wins? can you talk about that your business to oem customers and how much of your growth there is coming from existing customers and how much from new wins

Speaker 3: Yeah. Hey, Gerrick. Good question. So Brunswick's boat brands are performing very well in the marketplace. In fact, we're gaining share. But we focus a lot on the U.S. market, and we chose to add a few more details on Europe in particular this time, where Mercury is gaining share in a lot of markets, a lot of parts of the E.U. So I think we signed multi-year agreements with some of the biggest and fastest-growing OEMs in Europe recently. Yeah. yeah Hey, Gerrick. hey gerrick Good question. good question So Brunswick's boat brands are performing very well in the marketplace. so brunswick's boat brands are performing very well in the marketplace In fact, we're gaining share. in fact we're gaining share But we focus a lot on the U.S. market, and we chose to add a few more details on Europe in particular this time, where Mercury is gaining share in a lot of markets, a lot of parts of the E.U. but we focus a lot on the u.s market and we chose to add a few more details on europe in particular this time where mercury is gaining share in a lot of markets a lot of parts of the e.u So I think we signed multi-year agreements with some of the biggest and fastest-growing OEMs in Europe recently. so i think we signed multi-year agreements with some of the biggest and fastest-growing oems in europe recently In fact, some of these are five-year agreements, which is quite unusual. So if you think about Mercury's strategy, obviously, it's to get best products and technology in the marketplace, advance share, but then fortify that share by putting in place multi-year agreements. And so I think the implications of those five-year agreements are these large and fast-growing OEMs, not just in the U.S., but in Europe, are putting that trust that Mercury is going to be the leader for a long time. And they have seen some of our new product plans, so I think that trust is extremely well placed. So yeah, I think that we are growing share with new customers. We've gone exclusive with a number of customers now that we weren't exclusive with before. And we're signing longer agreements that fortify our position. In fact, some of these are five-year agreements, which is quite unusual. in fact some of these are five-year agreements which is quite unusual So if you think about Mercury's strategy, obviously, it's to get best products and technology in the marketplace, advance share, but then fortify that share by putting in place multi-year agreements. so if you think about mercury's strategy obviously it's to get best products and technology in the marketplace advance share but then fortify that share by putting in place multi-year agreements And so I think the implications of those five-year agreements are these large and fast-growing OEMs, not just in the U.S., but in Europe, are putting that trust that Mercury is going to be the leader for a long time. and so i think the implications of those five-year agreements are these large and fast-growing oems not just in the u.s but in europe are putting that trust that mercury is going to be the leader for a long time And they have seen some of our new product plans, so I think that trust is extremely well placed. and they have seen some of our new product plans so i think that trust is extremely well placed So yeah, I think that we are growing share with new customers. so yeah i think that we are growing share with new customers We've gone exclusive with a number of customers now that we weren't exclusive with before. we've gone exclusive with a number of customers now that we weren't exclusive with before And we're signing longer agreements that fortify our position. and we're signing longer agreements that fortify our position Connecting what you just discussed a bit with some of the kind of strategic spending that we referred to, clearly, a significant portion of that is in Mercury. We hired 60 new Mercury engineers in 2025. So despite the fact that we were continuing to watch our spending, we are loading up for another product blitz in Mercury. We have five new outboard programs going. Obviously, we shared some details of those with some of those customers. So I think that, yeah, we're getting more customers. Our existing customers are signing long-term agreements with us. And a number of customers who are not exclusive to us are going exclusive. All of those effects will be positive, I think. Connecting what you just discussed a bit with some of the kind of strategic spending that we referred to, clearly, a significant portion of that is in Mercury. connecting what you just discussed a bit with some of the kind of strategic spending that we referred to clearly a significant portion of that is in mercury We hired 60 new Mercury engineers in 2025. we hired 60 new mercury engineers in 2025 So despite the fact that we were continuing to watch our spending, we are loading up for another product blitz in Mercury. so despite the fact that we were continuing to watch our spending we are loading up for another product blitz in mercury We have five new outboard programs going. we have five new outboard programs going Obviously, we shared some details of those with some of those customers. obviously we shared some details of those with some of those customers So I think that, yeah, we're getting more customers. so i think that yeah we're getting more customers Our existing customers are signing long-term agreements with us. our existing customers are signing long-term agreements with us And a number of customers who are not exclusive to us are going exclusive. and a number of customers who are not exclusive to us are going exclusive All of those effects will be positive, I think. all of those effects will be positive i think

Speaker 8: Then, Gerrick, as it relates to just kind of the near-term Q4 and as we move into 2026, engine pipelines, which we talk a lot about boat pipelines and the ability to put more wholesale into the field when pipelines are lean, our engine pipelines, so engines that are sitting both with our dealer network and with our OEMs, are kind of at historical lean levels. We took mid-20,000 engines out in the U.S. alone in 2024. Of the pipelines, it's about 17%. And last year, we took another 10% out just in the U.S. alone. And so you're seeing build rates with our OEMs remain pretty static, if not improving a little bit. And their need to buy engines follows that trend. Then, Gerrick, as it relates to just kind of the near-term Q4 and as we move into 2026, engine pipelines, which we talk a lot about boat pipelines and the ability to put more wholesale into the field when pipelines are lean, our engine pipelines, so engines that are sitting both with our dealer network and with our OEMs, are kind of at historical lean levels. then gerrick as it relates to just kind of the near-term q4 and as we move into 2026 engine pipelines which we talk a lot about boat pipelines and the ability to put more wholesale into the field when pipelines are lean our engine pipelines so engines that are sitting both with our dealer network and with our oems are kind of at historical lean levels We took mid-20,000 engines out in the U.S. alone in 2024. we took mid-20,000 engines out in the u.s alone in 2024 Of the pipelines, it's about 17%. of the pipelines it's about 17% And last year, we took another 10% out just in the U.S. alone. and last year we took another 10% out just in the u.s alone And so you're seeing build rates with our OEMs remain pretty static, if not improving a little bit. and so you're seeing build rates with our oems remain pretty static if not improving a little bit And their need to buy engines follows that trend. and their need to buy engines follows that trend So you have the share gains, and you have the benefit of low pipeline inventory sitting at the OEM leads to a pretty nice outlook that you've seen. So you have the share gains, and you have the benefit of low pipeline inventory sitting at the OEM leads to a pretty nice outlook that you've seen. so you have the share gains and you have the benefit of low pipeline inventory sitting at the oem leads to a pretty nice outlook that you've seen

Speaker 4: Okay. Very, very thorough. Thank you. I have more, but I'll get back in queue. Thank you. Okay. okay Very, very thorough. very very thorough Thank you. thank you I have more, but I'll get back in queue. i have more but i'll get back in queue Thank you. thank you

Speaker 7: Our next question is from Anna Glaessgen with B. Riley Securities. Our next question is from Anna Glaessgen with B. our next question is from anna glaessgen with b Riley Securities. riley securities

Speaker 1: Good morning. Thanks for taking my question. I'd like to continue along the track of talking about pipeline and expectations for retail versus wholesale. We're expecting flattish, flat to slightly up retail, getting a little bit of a break on interest rates. I guess, what would you think it would take to see some pipeline replenishment for wholesale to exceed retail? Or do you think we're at kind of a new normal of lower inventory versus pre-COVID? Thanks. Good morning. good morning Thanks for taking my question. thanks for taking my question I'd like to continue along the track of talking about pipeline and expectations for retail versus wholesale. i'd like to continue along the track of talking about pipeline and expectations for retail versus wholesale We're expecting flattish, flat to slightly up retail, getting a little bit of a break on interest rates. we're expecting flattish flat to slightly up retail getting a little bit of a break on interest rates I guess, what would you think it would take to see some pipeline replenishment for wholesale to exceed retail? i guess what would you think it would take to see some pipeline replenishment for wholesale to exceed retail Or do you think we're at kind of a new normal of lower inventory versus pre-COVID? or do you think we're at kind of a new normal of lower inventory versus pre-covid Thanks. thanks

Speaker 3: Hey, Anna, thank you for the question. Hey, Anna, thank you for the question. hey anna thank you for the question Yeah, I don't think that we're at kind of new normal as such. I mean, clearly, there are a lot of things in the last few years that have caused our channel partners to be cautious about ordering. But I would say you see a sentiment across OEMs, dealers, and customers continuing to improve and confidence to build. One of the things that's helpful for our channel partners about just holding inventory is the double effect, if you like, of interest rate reductions. The carrying cost is lower because floor plan is lower, and the margins tend to be higher because discounting is lower. So I think that as either our OEMs or channel partners calculate the carrying cost or marginal benefit, if you like, of inventory, those positive effects on both ends, the carrying cost and the demand, are both constructive at the moment. Yeah, I don't think that we're at kind of new normal as such. yeah i don't think that we're at kind of new normal as such I mean, clearly, there are a lot of things in the last few years that have caused our channel partners to be cautious about ordering. i mean clearly there are a lot of things in the last few years that have caused our channel partners to be cautious about ordering But I would say you see a sentiment across OEMs, dealers, and customers continuing to improve and confidence to build. but i would say you see a sentiment across oems dealers and customers continuing to improve and confidence to build One of the things that's helpful for our channel partners about just holding inventory is the double effect, if you like, of interest rate reductions. one of the things that's helpful for our channel partners about just holding inventory is the double effect if you like of interest rate reductions The carrying cost is lower because floor plan is lower, and the margins tend to be higher because discounting is lower. the carrying cost is lower because floor plan is lower and the margins tend to be higher because discounting is lower So I think that as either our OEMs or channel partners calculate the carrying cost or marginal benefit, if you like, of inventory, those positive effects on both ends, the carrying cost and the demand, are both constructive at the moment. so i think that as either our oems or channel partners calculate the carrying cost or marginal benefit if you like of inventory those positive effects on both ends the carrying cost and the demand are both constructive at the moment So yeah, I think it's nice to see that we are getting strong pull-through from our channel partners in this early point of the year, as evidence, as I mentioned earlier, by a stronger fill rate, if you like, than at this point last year. So it's a case of gradually building confidence, and I think that confidence certainly is building at the moment. So yeah, I think it's nice to see that we are getting strong pull-through from our channel partners in this early point of the year, as evidence, as I mentioned earlier, by a stronger fill rate, if you like, than at this point last year. so yeah i think it's nice to see that we are getting strong pull-through from our channel partners in this early point of the year as evidence as i mentioned earlier by a stronger fill rate if you like than at this point last year So it's a case of gradually building confidence, and I think that confidence certainly is building at the moment. so it's a case of gradually building confidence and i think that confidence certainly is building at the moment

Speaker 1: Great. Thanks, Dave. And Ryan, one on the tariff math, I guess, for the full year in 2025, which was partial because we didn't have Q1 impact, it was a $75 million net impact. And then for 2026, it's an incremental $35 million-$45 million with a majority of Q1. I guess that implies kind of a step up in that quarterly rate, if I'm thinking about that correctly. Great. great Thanks, Dave. thanks dave And Ryan, one on the tariff math, I guess, for the full year in 2025, which was partial because we didn't have Q1 impact, it was a $75 million net impact. and ryan one on the tariff math i guess for the full year in 2025 which was partial because we didn't have q1 impact it was a $75 million net impact And then for 2026, it's an incremental $35 million-$45 million with a majority of Q1. and then for 2026 it's an incremental $35 million-$45 million with a majority of q1 I guess that implies kind of a step up in that quarterly rate, if I'm thinking about that correctly. i guess that implies kind of a step up in that quarterly rate if i'm thinking about that correctly I guess, is that a function of mix with propulsion expected to grow more in 2026, which carries more tariff impact? Just any help there? Thanks. I guess, is that a function of mix with propulsion expected to grow more in 2026, which carries more tariff impact? i guess is that a function of mix with propulsion expected to grow more in 2026 which carries more tariff impact Just any help there? just any help there Thanks. thanks

Speaker 8: Yeah. I wish it was really straightforward, Anna, but the upshot is Q1 takes the brunt because there was basically no tariffs in Q1 of last year. And then if you remember, the ACES rates kind of bounced around a little bit. And then we got the 232 incremental impact in August, which impacted the back half of the year only. Remember, there is balance sheet and capitalized variance. There's some kind of accounting math that plays into this as well. And there's some of that impact in Q1. Yeah. yeah I wish it was really straightforward, Anna, but the upshot is Q1 takes the brunt because there was basically no tariffs in Q1 of last year. i wish it was really straightforward anna but the upshot is q1 takes the brunt because there was basically no tariffs in q1 of last year And then if you remember, the ACES rates kind of bounced around a little bit. and then if you remember the aces rates kind of bounced around a little bit And then we got the 232 incremental impact in August, which impacted the back half of the year only. and then we got the 232 incremental impact in august which impacted the back half of the year only Remember, there is balance sheet and capitalized variance. remember there is balance sheet and capitalized variance There's some kind of accounting math that plays into this as well. there's some kind of accounting math that plays into this as well And there's some of that impact in Q1. and there's some of that impact in q1 But really, if you think about it, the first half is going to take all of the incremental tariff costs, call it half to two-thirds of that in the first quarter, which is really that combined with accelerated product spending, which we want to do really in the quarter. That can be a $30-ish million number in total. So if you normalize Q1 just for those two items, you're at an EPS growth of 25%+, which looks similar to the rest of the year. So yeah, that's the tariff math. It's really the continuation of what happened in 2025 with a little bit of accounting treatment roll off given the inventory valuations. But really, if you think about it, the first half is going to take all of the incremental tariff costs, call it half to two-thirds of that in the first quarter, which is really that combined with accelerated product spending, which we want to do really in the quarter. but really if you think about it the first half is going to take all of the incremental tariff costs call it half to two-thirds of that in the first quarter which is really that combined with accelerated product spending which we want to do really in the quarter That can be a $30-ish million number in total. that can be a $30-ish million number in total So if you normalize Q1 just for those two items, you're at an EPS growth of 25%+, which looks similar to the rest of the year. so if you normalize q1 just for those two items you're at an eps growth of 25%+ which looks similar to the rest of the year So yeah, that's the tariff math. so yeah that's the tariff math It's really the continuation of what happened in 2025 with a little bit of accounting treatment roll off given the inventory valuations. it's really the continuation of what happened in 2025 with a little bit of accounting treatment roll off given the inventory valuations

Speaker 1: Okay. Great. Super helpful. Thanks, that. Okay. okay Great. great Super helpful. super helpful Thanks, that. thanks that

Speaker 7: Our next question is from Scott Stember with Roth Capital. Our next question is from Scott Stember with Roth Capital. our next question is from scott stember with roth capital

Speaker 9: Good morning, and thanks for taking my questions. Hey, morning, Scott. Can we talk about the IEEPA tariffs? Good morning, and thanks for taking my questions. good morning and thanks for taking my questions Hey, morning, Scott. hey morning scott Can we talk about the IEEPA tariffs? can we talk about the ieepa tariffs Obviously, we're going to get some kind of ruling in the coming days from the Supreme Court. Just trying to get a sense of how much of a benefit you could get if they get eliminated. Can you just size up how much of your tariffs are IEEPA-driven? Obviously, we're going to get some kind of ruling in the coming days from the Supreme Court. obviously we're going to get some kind of ruling in the coming days from the supreme court Just trying to get a sense of how much of a benefit you could get if they get eliminated. just trying to get a sense of how much of a benefit you could get if they get eliminated Can you just size up how much of your tariffs are IEEPA-driven? can you just size up how much of your tariffs are ieepa-driven

Speaker 8: Yeah, Scott, I'll take this one as well. Yes. I mean, if you look at a full year of IEEPA, call it $20 million-$25 million is the impact. And so again, that's a full-year impact. You don't know when it would be effective or when it would, if there'd be a look back and all of the above. So it would be a material good guy for us, but it's only a portion of the tariffs given all the reciprocal 232 and other impacts that we're facing. Yeah, Scott, I'll take this one as well. yeah scott i'll take this one as well Yes. yes I mean, if you look at a full year of IEEPA, call it $20 million-$25 million is the impact. i mean if you look at a full year of ieepa call it $20 million-$25 million is the impact And so again, that's a full-year impact. and so again that's a full-year impact You don't know when it would be effective or when it would, if there'd be a look back and all of the above. you don't know when it would be effective or when it would if there'd be a look back and all of the above So it would be a material good guy for us, but it's only a portion of the tariffs given all the reciprocal 232 and other impacts that we're facing. so it would be a material good guy for us but it's only a portion of the tariffs given all the reciprocal 232 and other impacts that we're facing

Speaker 9: Got it. Got it. got it And then, Dave, just following up on your comments about interest rates, financing rates for the consumer, you said about 7.5% currently. Can you just maybe frame out how much rates have actually gone down as of late, given the 75 basis points of cuts from the Fed? Just trying to get a sense of how much relief we're talking about in the actual financing rates for the consumer versus six months ago. And then, Dave, just following up on your comments about interest rates, financing rates for the consumer, you said about 7.5% currently. and then dave just following up on your comments about interest rates financing rates for the consumer you said about 7.5% currently Can you just maybe frame out how much rates have actually gone down as of late, given the 75 basis points of cuts from the Fed? can you just maybe frame out how much rates have actually gone down as of late given the 75 basis points of cuts from the fed Just trying to get a sense of how much relief we're talking about in the actual financing rates for the consumer versus six months ago. just trying to get a sense of how much relief we're talking about in the actual financing rates for the consumer versus six months ago

Speaker 3: Yeah. So maybe I'll start a bit further back, Scott. So if you looked in 2019 at what the financing rate would be, it would be in the kind of 5.5%-6% range. It peaked in 2024 at about 10%, and now it's down to about 7.5%. So very material improvements versus peak rates. Still 150 basis points above kind of pre-pandemic levels. Yeah. yeah So maybe I'll start a bit further back, Scott. so maybe i'll start a bit further back scott So if you looked in 2019 at what the financing rate would be, it would be in the kind of 5.5%-6% range. so if you looked in 2019 at what the financing rate would be it would be in the kind of 5.5%-6% range It peaked in 2024 at about 10%, and now it's down to about 7.5%. it peaked in 2024 at about 10% and now it's down to about 7.5% So very material improvements versus peak rates. so very material improvements versus peak rates Still 150 basis points above kind of pre-pandemic levels. still 150 basis points above kind of pre-pandemic levels But that is overall still a tailwind versus the last couple of years, certainly. And on top of that, as Ryan mentioned, there are a couple of other tailwinds, including the fact that our price increases over the last couple of years and this year will be pretty modest. And the trading values are beginning to normalize versus some of the kind of peak prices that people paid in COVID. So they have more equity in their existing product, which is encouraging in terms of the ability to trade up. But yeah, I think we've got a couple of tailwinds there. But that is overall still a tailwind versus the last couple of years, certainly. but that is overall still a tailwind versus the last couple of years certainly And on top of that, as Ryan mentioned, there are a couple of other tailwinds, including the fact that our price increases over the last couple of years and this year will be pretty modest. and on top of that as ryan mentioned there are a couple of other tailwinds including the fact that our price increases over the last couple of years and this year will be pretty modest And the trading values are beginning to normalize versus some of the kind of peak prices that people paid in COVID. and the trading values are beginning to normalize versus some of the kind of peak prices that people paid in covid So they have more equity in their existing product, which is encouraging in terms of the ability to trade up. so they have more equity in their existing product which is encouraging in terms of the ability to trade up But yeah, I think we've got a couple of tailwinds there. but yeah i think we've got a couple of tailwinds there

Speaker 9: Gotcha. That's all I have. Thank you. Gotcha. gotcha That's all I have. that's all i have Thank you. thank you

Speaker 3: Thank you. Thank you. thank you

Speaker 7: Our next question is from Xian Siew with BNP Paribas. Our next question is from Xian Siew with BNP Paribas. our next question is from xian siew with bnp paribas

Speaker 11: Hi, guys. Thanks for the question. Hi, guys. hi guys Thanks for the question. thanks for the question Maybe given the competitive advantage of Mercury on the tariff front versus maybe the Japanese OEMs and the recent momentum, I mean, how are you thinking about market share opportunities into 2026? What's kind of baked into the expectations for propulsion? Thanks. Maybe given the competitive advantage of Mercury on the tariff front versus maybe the Japanese OEMs and the recent momentum, I mean, how are you thinking about market share opportunities into 2026? maybe given the competitive advantage of mercury on the tariff front versus maybe the japanese oems and the recent momentum i mean how are you thinking about market share opportunities into 2026 What's kind of baked into the expectations for propulsion? what's kind of baked into the expectations for propulsion Thanks. thanks

Speaker 3: Yeah. Thank you, Xian. I think it's difficult to know at the moment. The reality is we think we have a long-term structural advantage here. But in terms of what happens in the market, it depends on what the pricing policy to some extent of the competitors turns out to be, how much pain they're willing to take on margins. We have a pretty dynamic situation with the yen as well. We did see that, obviously, they took some pain on margins in the back half of 2025. So I think we will see a steady march on share. Yeah. yeah Thank you, Xian. thank you xian I think it's difficult to know at the moment. i think it's difficult to know at the moment The reality is we think we have a long-term structural advantage here. the reality is we think we have a long-term structural advantage here But in terms of what happens in the market, it depends on what the pricing policy to some extent of the competitors turns out to be, how much pain they're willing to take on margins. but in terms of what happens in the market it depends on what the pricing policy to some extent of the competitors turns out to be how much pain they're willing to take on margins We have a pretty dynamic situation with the yen as well. we have a pretty dynamic situation with the yen as well We did see that, obviously, they took some pain on margins in the back half of 2025. we did see that obviously they took some pain on margins in the back half of 2025 So I think we will see a steady march on share. so i think we will see a steady march on share I do think that will be supercharged in certain segments as we begin to introduce new products. We have a very exciting product plan at the moment, I think. And so I think we see selective gain. Some of that is targeted at what we've come to refer to as ultra-high horsepower. Some of it is more refresh and upgrades to more mid-horsepower engines as well, which, although not quite as glamorous, do represent high volume for us. So yeah, we have a very solid product plan. A lot of products coming to the market over the next couple of years. And then I think we'll see this steady march as OEMs continue to move towards us and, in some cases, become exclusive. I do think that will be supercharged in certain segments as we begin to introduce new products. i do think that will be supercharged in certain segments as we begin to introduce new products We have a very exciting product plan at the moment, I think. we have a very exciting product plan at the moment i think And so I think we see selective gain. and so i think we see selective gain Some of that is targeted at what we've come to refer to as ultra-high horsepower. some of that is targeted at what we've come to refer to as ultra-high horsepower Some of it is more refresh and upgrades to more mid-horsepower engines as well, which, although not quite as glamorous, do represent high volume for us. some of it is more refresh and upgrades to more mid-horsepower engines as well which although not quite as glamorous do represent high volume for us So yeah, we have a very solid product plan. so yeah we have a very solid product plan A lot of products coming to the market over the next couple of years. a lot of products coming to the market over the next couple of years And then I think we'll see this steady march as OEMs continue to move towards us and, in some cases, become exclusive. and then i think we'll see this steady march as oems continue to move towards us and in some cases become exclusive

Speaker 8: The other factor, just yeah, just real quick, the other factor, we've had really strong wholesale share here the last several months. The other factor, just yeah, just real quick, the other factor, we've had really strong wholesale share here the last several months. the other factor just yeah just real quick the other factor we've had really strong wholesale share here the last several months So that's a good prediction, really, of where we think the 2026 share will continue to grow. So that's a good prediction, really, of where we think the 2026 share will continue to grow. so that's a good prediction really of where we think the 2026 share will continue to grow

Speaker 11: Makes sense. Then maybe just as a follow-up, 2026 guidance, I think, implies something like 20% incremental margins, which is inclusive of, I guess, the incremental tariffs. So underlying, if we kind of set that aside, quite strong incremental margins. I guess, how do you think about the potential for incremental margins and flow-through as you kind of continue to recover from here? Makes sense. makes sense Then maybe just as a follow-up, 2026 guidance, I think, implies something like 20% incremental margins, which is inclusive of, I guess, the incremental tariffs. then maybe just as a follow-up 2026 guidance i think implies something like 20% incremental margins which is inclusive of i guess the incremental tariffs So underlying, if we kind of set that aside, quite strong incremental margins. so underlying if we kind of set that aside quite strong incremental margins I guess, how do you think about the potential for incremental margins and flow-through as you kind of continue to recover from here? i guess how do you think about the potential for incremental margins and flow-through as you kind of continue to recover from here

Speaker 3: Yeah, you're exactly right. Your math is correct. So nothing's really changed. Even in a tariff-impact environment, we think we can deliver north of 20% incrementals. That's obviously going to be a little bit higher in propulsion and PNA and pretty strong in Navico as well. Yeah, you're exactly right. yeah you're exactly right Your math is correct. your math is correct So nothing's really changed. so nothing's really changed Even in a tariff-impact environment, we think we can deliver north of 20% incrementals. even in a tariff-impact environment we think we can deliver north of 20% incrementals That's obviously going to be a little bit higher in propulsion and PNA and pretty strong in Navico as well. that's obviously going to be a little bit higher in propulsion and pna and pretty strong in navico as well I mean, we haven't talked a lot about Navico, but what a great fourth quarter and really year that Navico had here in 2025 and to start 2026, just because their product and variable margins are the highest in the company. And the boat group's taken all the right steps to take costs out and deliver on their margin targets as well. So north of 20% is always the goal. But as you've seen in past years, with volume comes some supercharged incrementals. And we think that 2026 and beyond is going to be a period where we have more volume, and you're going to see things improve and increase. I mean, we haven't talked a lot about Navico, but what a great fourth quarter and really year that Navico had here in 2025 and to start 2026, just because their product and variable margins are the highest in the company. i mean we haven't talked a lot about navico but what a great fourth quarter and really year that navico had here in 2025 and to start 2026 just because their product and variable margins are the highest in the company And the boat group's taken all the right steps to take costs out and deliver on their margin targets as well. and the boat group's taken all the right steps to take costs out and deliver on their margin targets as well So north of 20% is always the goal. so north of 20% is always the goal But as you've seen in past years, with volume comes some supercharged incrementals. but as you've seen in past years with volume comes some supercharged incrementals And we think that 2026 and beyond is going to be a period where we have more volume, and you're going to see things improve and increase. and we think that 2026 and beyond is going to be a period where we have more volume and you're going to see things improve and increase

Speaker 11: Great. Thank you, guys, and good luck. Great. great Thank you, guys, and good luck. thank you guys and good luck

Speaker 7: Thank you. Our next question is from Jaime Katz with Morningstar. Thank you. thank you Our next question is from Jaime Katz with Morningstar. our next question is from jaime katz with morningstar

Speaker 5: Hey, good morning, guys. I just want to stay on that margin topic. Hey, good morning, guys. hey good morning guys I just want to stay on that margin topic. i just want to stay on that margin topic And I think in our model at least, absorption isn't really benefiting the PNA as much as we thought it would be, right? You're looking at 7.5%-8% operating margins in the year ahead. So will you guys talk about, I guess, outside of tariffs, what's the biggest sort of cost headwind holding that adjusted operating margin back? And then maybe where the top opportunity for upside resides in the cost structure. Thanks. And I think in our model at least, absorption isn't really benefiting the PNA as much as we thought it would be, right? and i think in our model at least absorption isn't really benefiting the pna as much as we thought it would be right You're looking at 7.5%-8% operating margins in the year ahead. you're looking at 7.5%-8% operating margins in the year ahead So will you guys talk about, I guess, outside of tariffs, what's the biggest sort of cost headwind holding that adjusted operating margin back? so will you guys talk about i guess outside of tariffs what's the biggest sort of cost headwind holding that adjusted operating margin back And then maybe where the top opportunity for upside resides in the cost structure. and then maybe where the top opportunity for upside resides in the cost structure Thanks. thanks

Speaker 3: Is really the accelerated spending on investments necessary to grow the top line. We believe that we're in a spot where the industry is probably primed to grow and increase, and we want to be there with the right product consumers. And so you've seen on the bridge that we showed kind of a big chunk of OpEx increase. Is really the accelerated spending on investments necessary to grow the top line. is really the accelerated spending on investments necessary to grow the top line We believe that we're in a spot where the industry is probably primed to grow and increase, and we want to be there with the right product consumers. we believe that we're in a spot where the industry is probably primed to grow and increase and we want to be there with the right product consumers And so you've seen on the bridge that we showed kind of a big chunk of OpEx increase. and so you've seen on the bridge that we showed kind of a big chunk of opex increase I mean, most of that is strategic investment in product, in growth initiatives that will support us moving forward, inclusive of things like sales and marketing, IT, and necessary systems that will enable us to service our customers even better. So the good news is there's no year-over-year wonkiness with comp, right? Because that'll be kind of a zero factor year-over-year. So think of it really as just growth initiative spending, which we're happy to do to continue to drive our market share and our leading products. I mean, most of that is strategic investment in product, in growth initiatives that will support us moving forward, inclusive of things like sales and marketing, IT, and necessary systems that will enable us to service our customers even better. i mean most of that is strategic investment in product in growth initiatives that will support us moving forward inclusive of things like sales and marketing it and necessary systems that will enable us to service our customers even better So the good news is there's no year-over-year wonkiness with comp, right? so the good news is there's no year-over-year wonkiness with comp right Because that'll be kind of a zero factor year-over-year. because that'll be kind of a zero factor year-over-year So think of it really as just growth initiative spending, which we're happy to do to continue to drive our market share and our leading products. so think of it really as just growth initiative spending which we're happy to do to continue to drive our market share and our leading products

Speaker 8: Yeah. Jaime, I'll just add to that. I think, I mean, obviously, as a management team in a business, we're thinking about 2026, but we're also thinking about 2027 and 2028. How do we grow the business long-term? We think that we're at an inflection point at the moment. Yeah. yeah Jaime, I'll just add to that. jaime i'll just add to that I think, I mean, obviously, as a management team in a business, we're thinking about 2026, but we're also thinking about 2027 and 2028. i think i mean obviously as a management team in a business we're thinking about 2026 but we're also thinking about 2027 and 2028 How do we grow the business long-term? how do we grow the business long-term We think that we're at an inflection point at the moment. we think that we're at an inflection point at the moment So we took the decision to accelerate investment in certain areas that we think are going to grow us not just in 2026, but well beyond. And that is new products, to some extent AI. And I don't throw that out there lightly. I know it's a very kind of topic of the year, but AI can be a big influence on efficiencies in our business and also strongly influence and improve our kind of products and overall go-to-market. So there's just some spending. But as you know, we offset a lot of that by really laser-focused on operating efficiency. You know about the footprint reduction actions that we're taking. So we're very balanced. But I think the strong cash flow and through cycle performance that we have allows us to make investments maybe ahead of where other people might be able to make them. So we took the decision to accelerate investment in certain areas that we think are going to grow us not just in 2026, but well beyond. so we took the decision to accelerate investment in certain areas that we think are going to grow us not just in 2026 but well beyond And that is new products, to some extent AI. and that is new products to some extent ai And I don't throw that out there lightly. and i don't throw that out there lightly I know it's a very kind of topic of the year, but AI can be a big influence on efficiencies in our business and also strongly influence and improve our kind of products and overall go-to-market. i know it's a very kind of topic of the year but ai can be a big influence on efficiencies in our business and also strongly influence and improve our kind of products and overall go-to-market So there's just some spending. so there's just some spending But as you know, we offset a lot of that by really laser-focused on operating efficiency. but as you know we offset a lot of that by really laser-focused on operating efficiency You know about the footprint reduction actions that we're taking. you know about the footprint reduction actions that we're taking So we're very balanced. so we're very balanced But I think the strong cash flow and through cycle performance that we have allows us to make investments maybe ahead of where other people might be able to make them. but i think the strong cash flow and through cycle performance that we have allows us to make investments maybe ahead of where other people might be able to make them This is not just about growth in 2026. It's about long-term growth, medium-term growth as well. We think we are well-positioned to achieve that. This is not just about growth in 2026. this is not just about growth in 2026 It's about long-term growth, medium-term growth as well. it's about long-term growth medium-term growth as well We think we are well-positioned to achieve that. we think we are well-positioned to achieve that

Speaker 5: Very helpful. Thanks. Very helpful. very helpful Thanks. thanks

Speaker 7: Thank you. This concludes our question-and-answer session. I would like to hand the floor back over to Dave for any closing remarks. Thank you. thank you This concludes our question-and-answer session. this concludes our question-and-answer session I would like to hand the floor back over to Dave for any closing remarks. i would like to hand the floor back over to dave for any closing remarks

Speaker 3: Yeah. Thank you all for the great questions, as usual. This is another very encouraging quarter for us with improving retail revenue up across all our businesses and global regions, very solid earnings, and continued exceptional free cash flow generation. Full-year revenue being up over prior year for the first time in three years is very nice. A real, I think, a tangible signal of an inflection point. Early 2026 retail is strong, and wholesale orders are also strong from our dealers. So that's really encouraging. Yeah. yeah Thank you all for the great questions, as usual. thank you all for the great questions as usual This is another very encouraging quarter for us with improving retail revenue up across all our businesses and global regions, very solid earnings, and continued exceptional free cash flow generation. this is another very encouraging quarter for us with improving retail revenue up across all our businesses and global regions very solid earnings and continued exceptional free cash flow generation Full-year revenue being up over prior year for the first time in three years is very nice. full-year revenue being up over prior year for the first time in three years is very nice A real, I think, a tangible signal of an inflection point. a real i think a tangible signal of an inflection point Early 2026 retail is strong, and wholesale orders are also strong from our dealers. early 2026 retail is strong and wholesale orders are also strong from our dealers So that's really encouraging. so that's really encouraging We continue, though, to be laser-focused, as I mentioned, on structural cost reduction actions, but we are and have accelerated some investments in new products and technology, notably in propulsion. We tend to focus on big picture things, but don't overlook the fact that we won the two big awards in the European Boat Shows early this year: European Powerboat of the Year, Motor Boat of the Year. We don't just win because of scale and technology. We win because we have the best products. And we will continue to do that. And on that note, we'll be introducing quite a few new products at the Miami Boat Show. So I'm excited about that. Please join us if you can. We will be launching and debuting more new products across the businesses than I can remember for quite some time. We continue, though, to be laser-focused, as I mentioned, on structural cost reduction actions, but we are and have accelerated some investments in new products and technology, notably in propulsion. we continue though to be laser-focused as i mentioned on structural cost reduction actions but we are and have accelerated some investments in new products and technology notably in propulsion We tend to focus on big picture things, but don't overlook the fact that we won the two big awards in the European Boat Shows early this year: European Powerb oat of the Year, Motor Boat of the Year. we tend to focus on big picture things but don't overlook the fact that we won the two big awards in the european boat shows early this year european powerb oat of the year motor boat of the year We don't just win because of scale and technology. we don't just win because of scale and technology We win because we have the best products. we win because we have the best products And we will continue to do that. and we will continue to do that And on that note, we'll be introducing quite a few new products at the Miami Boat Show. and on that note we'll be introducing quite a few new products at the miami boat show So I'm excited about that. so i'm excited about that Please join us if you can. please join us if you can We will be launching and debuting more new products across the businesses than I can remember for quite some time. we will be launching and debuting more new products across the businesses than i can remember for quite some time Look forward to seeing many of you at that investor and analyst event on February 12th. Please make the time. We'd love to see you. Thank you. Look forward to seeing many of you at that investor and analyst event on February 12th. look forward to seeing many of you at that investor and analyst event on february 12th Please make the time. please make the time We'd love to see you. we'd love to see you Thank you. thank you