Certain statements in Management's Discussion and Analysis are based on non-GAAP financial measures. Specifically, the discussion of the Company's cash flows includes an analysis of free cash flows and the general discussion includes an analysis of operating earnings and operating margins without the impact of the goodwill and trade name impairment charges. GAAP refers to generally accepted accounting principles in the United States. A "non-GAAP financial measure" is a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of Operations, balance sheet or statement of cash flows of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Operating and statistical measures are not non-GAAP financial measures.

The Company includes non-GAAP financial measures in Management's Discussion and Analysis, as Brunswick's management believes that these measures and the information they provide are useful to investors because they permit investors to view Brunswick's performance using the same tools that Brunswick uses and to better evaluate its ongoing business performance.

Certain other statements in Management's Discussion and Analysis are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations that are subject to risks and uncertainties. Actual results may differ materially from expectations as of the date of this filing because of factors discussed in Part II - Other Information, Item 1A - Risk Factors in this filing.

Overview and Outlook

General

Net sales from continuing operations during the third quarter of 2008 decreased 21.7 percent to $1,038.8 million from $1,326.2 million in 2007. During the nine months ended September 27, 2008, net sales decreased 8.6 percent to $3,871.0 million from $4,235.2 million during the nine months ended September 29, 2007. For the three months ended September 27, 2008, the Company reported higher world-wide net sales in the Fitness segment, as well as higher sales outside the United States for the Bowling & Billiards segment, which were more than offset by a reduction in the Boat and Marine Engine segments' global sales. The overall decrease in sales was primarily due to the continued reduction in marine industry demand as a result of a weak U.S. economy, soft housing markets, the recent contraction of liquidity in global credit markets, and higher food and fuel prices that ultimately reduce the funds available for discretionary purchases. For the nine months ended September 27, 2008, the Company reported higher sales in the Fitness and Bowling & Billiards segments, as well as higher sales outside the United States for all segments, which were more than offset by a reduction in the Boat and Marine Engine segments' sales in the United States. The factors affecting year-to-date net sales were consistent with the factors that affected the third quarter net sales, although the effects of the global credit crisis had a more pervasive effect on the third quarter results.

Retail unit sales of powerboats in the United States have been declining since 2005, with the rate of decline accelerating in 2008. Industry retail unit sales were down significantly during the first nine months of 2008 compared with the already low retail unit sales during the first nine months of 2007.

Quarterly and year-to-date operating losses from continuing operations were $566.3 million and $573.2 million, with negative operating margins of 54.5 percent and 14.8 percent, respectively. These results included goodwill and trade name impairment charges of $495.1 million in the third quarter of 2008 and $511.1 million during the first nine months of 2008. In the three months and nine months ended September 29, 2007, quarterly operating losses and year-to-date operating earnings from continuing operations were $46.3 million and $93.0 million, with operating margins of (3.5) percent and 2.2 percent, respectively, which included trade name impairment charges of $66.4 million during the three and nine months ended September 29, 2007. The operating losses during 2008 were primarily as a result of higher goodwill and trade name impairment charges, lower sales from marine operations, reduced fixed-cost absorption due to reduced production rates in the Company's marine businesses in an effort to achieve appropriate levels of dealer pipeline inventories and higher restructuring, exit and other impairment charges. These factors were partially offset by successful cost-reduction initiatives, as discussed in Note
3 - Restructuring Activities in the Notes to Consolidated Financial Statements.

In March 2008, Brunswick sold its interest in its bowling joint venture in Japan for $40.4 million gross cash proceeds after post-closing adjustments, $37.4 million net of cash paid for taxes and other costs, For the nine months ended September 27, 2008, the sale resulted in a $20.9 million pretax gain, $9.9 million after-tax, and was recorded as Investment sale gains in the Consolidated Statements of Operations.

Restructuring Activities

In November 2006, Brunswick announced restructuring initiatives to improve the Company's cost structure, better utilize overall capacity and improve general operating efficiencies. These initiatives reflected the Company's response to a difficult marine market. As the marine market has continued to decline, Brunswick expanded its restructuring activities during 2006, 2007 and 2008 in order to improve performance and better position the Company for current market conditions and longer term growth.

The Company has disaggregated its restructuring initiatives into three classifications: exit activities; restructuring activities; and definite-lived asset impairments. The Company considers employee termination costs, lease exit costs, inventory write-downs and facility shutdown costs related to the sale of certain Baja boat business assets, the closure of its bowling pin manufacturing facility and the closure of the Valley-Dynamo coin-operated commercial billiards business to be exit activities. Other employee termination costs, costs to retain and relocate employees, consulting costs and costs to consolidate the manufacturing footprint are considered restructuring activities. Also, definite-lived impairments are costs related to the write-downs of fixed assets, tooling, patents and proprietary technology, and dealer networks.

Total restructuring, exit and other impairment charges in the third quarter were $39.1 million for the three months ended September 27, 2008. The $39.1 million consists of $15.8 million in the Boat segment, $12.9 million in the Marine Engine segment, $0.8 million in the Fitness segment, $1.8 million in the Bowling & Billiards segment and $7.8 million at Corporate. Total restructuring, exit and other impairment charges during the first nine months of 2008 were $128.4 million. The $128.4 million consists of $61.1 million in the Boat segment, $31.4 million in the Marine Engine segment, $2.1 million in the Fitness segment, $17.9 million in the Bowling & Billiards segment and $15.9 million at Corporate. See Note 3 - Restructuring Activities in the Notes to Consolidated Financial Statements for further details.

The actions taken under these initiatives are expected to benefit future operations by removing fixed costs of approximately $50 million from Cost of sales and approximately $250 million from Selling, general and administrative in the Consolidated Statements of Operations by the end of 2009 compared with 2007 spending levels. The majority of these costs are expected to be cash savings once all restructuring initiatives are complete. The Company has begun to see savings related to these initiatives in 2008 and expects all savings to be realized by the end of 2009.

Goodwill and Trade Name Impairments

Brunswick accounts for goodwill and identifiable intangible assets in accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," (SFAS 142). Under this standard, Brunswick assesses the impairment of goodwill and indefinite-lived intangible assets at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

During the third quarter of 2008, Brunswick encountered a significant adverse change in the business climate. A weak U.S. economy, soft housing markets and the recent contraction of liquidity in global credit markets have contributed to the continued reduction in demand for certain Brunswick products and specifically the reduced wholesale production rates for those affected products. As a result of this reduced demand, along with lower-than-projected profits across certain Brunswick brands and lower commitments received from its dealer network in the third quarter, management revised its future cash flow expectations in the third quarter of 2008, which lowered the fair value estimates of certain businesses.

As a result of the lower fair value estimates, Brunswick concluded that the carrying amounts of its Boat segment and Bowling Retail and Billiards reporting units within the Bowling & Billiards segment exceeded their respective fair values. The Company compared the implied fair value of the goodwill in each reporting unit with the carrying value and concluded that a $374.0 million pretax impairment charge needed to be recognized in the third quarter of 2008. Of this amount, $361.3 million relates to the Boat segment reporting unit and $1.7 million relates to the Bowling Retail reporting unit and $11.0 million relates to the Billiards reporting unit within the Bowling & Billiards segment. As a result of these impairments, all goodwill has been written down to zero at these respective reporting units.

In conjunction with the goodwill impairment testing, the Company analyzed the valuation of its other indefinite-lived intangibles, consisting exclusively of acquired trade names. Brunswick estimated the fair value of trade names by performing a discounted cash flow analysis based on the relief-from-royalty approach. This approach treats the trade name as if it were licensed by the Company rather than owned, and calculates its value based on the discounted cash flow of the projected license payments. The analysis resulted in a pretax trade name impairment charge of $121.1 million, representing the excess of the carrying cost of the trade names over the calculated fair value. Of this amount, $115.7 million relates to the Boat segment reporting unit, $4.5 million relates to the Marine Engine segment reporting unit and $0.9 million relates to the Billiards reporting unit within the Bowling & Billiards segment.

Other

The Company intends to continue its efforts to reduce its cost structure, including furloughing a significant portion of its salaried workforce in the United States for eight days during the fourth quarter of 2008. In addition, the Company plans to continue working toward achieving appropriate levels of marine dealer inventories by reducing production of boats and marine engines in excess of the reduced domestic retail demand for marine products and will be furloughing several of its fiberglass boat manufacturing facilities during the fourth quarter in order to accomplish lower production. The Company anticipates that marine sales will benefit from the introduction of new products; however, this benefit will be unable to offset the overall decline in sales as a result of lower marine retail demand, which stems from the weakening global economy. The recent openings of new Brunswick Zone XL retail bowling centers are expected to benefit Bowling & Billiards net sales; the weakening global economy is expected to partially offset the anticipated increase in net sales at the Bowling & Billiards segment. Sales in 2008 for the Fitness segment are expected to increase as a result of recently introduced products at Life Fitness.

The Company expects operating earnings and margins for 2008 to decrease as a result of goodwill impairment charges, trade name impairment charges and restructuring, exit and other impairment charges; reduced marine sales; weak demand for certain consumer products; and production declines in its marine businesses. These factors, along with continued increases in raw material, production, and freight and distribution costs are not expected to be fully offset by growth in Fitness and Bowling & Billiards operations and the benefits from restructuring and cost containment efforts undertaken during 2006, 2007 and 2008.

Brunswick's effective tax rate is expected to be 36 percent in 2008, which excludes the valuation allowance established against the Company's deferred tax assets, the effect of taxes on goodwill and trade name impairment charges, restructuring, exit and other impairment charges, the additional tax provisions realized in conjunction with the sale of its joint venture in Japan and the effect of the research and development tax credit, which was recently extended.

As discussed in Note 16 - Discontinued Operations in the Notes to Consolidated Financial Statements, on April 27, 2006, the Company announced its intention to sell the majority of the Brunswick New Technologies (BNT) business unit, consisting of the Company's marine electronics, portable navigation device (PND) and wireless fleet tracking businesses. During the second quarter of 2006, Brunswick began reporting the results of these BNT businesses, which were previously reported in the Marine Engine segment, as discontinued operations for all periods presented. The Company's results, as discussed in Management's Discussion and Analysis, reflect continuing operations only, unless otherwise noted. The Company completed the divestiture of the BNT discontinued operations in 2007.

Matters Affecting Comparability

The following events have occurred during the three months and nine months ended September 27, 2008, and September 29, 2007, which the Company believes affect the comparability of the results of operations:

Goodwill impairment charges. As a result of the continued reduction in demand for certain Brunswick products, along with lower-than-projected profits across certain Brunswick brands, management revised its future cash flow expectations in the third quarter of 2008. The revised future cash flow expectations resulted in the Company lowering its estimate of fair value of certain businesses and required the Company to take a $374.0 million pretax goodwill impairment charge during the third quarter of 2008, as prescribed by SFAS 142, as compared with no goodwill impairment during the third quarter of 2007.

During the nine months ended September 27, 2008, the Company incurred $377.2 million of goodwill impairment charges, which include the aforementioned $374.0 million, along with impairments related to the analyses of its Baja boat business and its Valley-Dynamo coin-operated commercial billiards business in the second quarter of 2008. There were no comparable charges recognized during the nine months ended September 29, 2007.

Trade name impairment charges. In conjunction with the goodwill impairment testing, the Company analyzed the valuation of its trade names in accordance with SFAS 142. The analysis resulted in a pretax trade name impairment charge of $121.1 million during the third quarter of 2008, representing the excess of the carrying cost of the trade names over the calculated fair value. This compares with a $66.4 million pretax trade name impairment charge taken in the third quarter of 2007 as a result of a valuation analysis performed on certain outboard boat company trade names.

During the nine months ended September 27, 2008, the Company has taken $133.9 million of trade name impairment charges, which includes the aforementioned $121.1 million and additional impairments related to the previous analyses of its Bluewater Marine boat business and its Valley-Dynamo coin-operated commercial billiards business in the second quarter of 2008. This charge compares with the $66.4 million trade name impairment charge taken during the nine months ended September 29, 2007, related to the impairment of certain outboard boat trade names.

Restructuring, exit and other impairment charges. Brunswick announced initiatives to improve the Company's cost structure, better utilize overall capacity and improve general operating efficiencies. During the third quarter of 2008, the Company recorded a charge of $39.1 million related to restructuring activities as compared with $4.7 million in the third quarter of 2007. During the first nine months of 2008, the Company recorded a charge of $128.4 million related to restructuring activities as compared with $13.4 million during the first nine months of 2007. See Note 3 - Restructuring Activities in the Notes to Consolidated Financial Statements for further details.

Investment sale gains. In March 2008, Brunswick sold its interest in its bowling joint venture in Japan for $40.4 million gross cash proceeds after post-closing adjustments, $37.4 million net of cash paid for taxes and other costs. For the nine months ended September 27, 2008, the sale resulted in a $20.9 million pretax gain, $9.9 million after-tax, and was recorded as Investment sale gains in the Consolidated Statements of Operations.

In September 2008, Brunswick sold its investment in a foundry located in Mexico for $5.1 million gross cash proceeds. The sale resulted in a $2.1 million pretax gain and was recorded as Investment sale gains in the Consolidated Statements of Operations.

Tax Items. The comparison of net earnings per diluted share between 2008 and 2007 is affected by special tax items. During the three months and nine months ended September 27, 2008, the Company recognized special tax provisions of $153.4 million and $153.1 million, respectively, on operating losses. Typically, the Company would recognize a tax benefit on operating losses; however, due to the uncertainty of the realization of certain net deferred tax assets, $294.8 million and $292.8 million of special tax charges were recognized, respectively, primarily as a result of the establishment of a deferred tax asset valuation allowance of $292.7 million. During the three months and nine months ended September 29, 2007, the Company reduced its tax provision by $3.7 million and $5.6 million, respectively, primarily as a result of favorable tax reassessments and its election to apply the indefinite reversal criterion of APB 23 to the undistributed net earnings of certain foreign subsidiaries, as discussed in Note
13 - Income Taxes in the Notes to Consolidated Financial Statements. These benefits were partially offset by expense related to changes in estimates of prior years' tax return filings and the impact of a foreign jurisdiction tax rate reduction on the underlying net deferred tax asset.

Results of Operations

Consolidated

The following table sets forth certain amounts, ratios and relationships
calculated from the Consolidated Statements of Operations for the three months
ended:

                                                                                     2008 vs. 2007
                                             Three Months Ended                   Increase/(Decrease)
                                       Restated
(in millions, except per share       September 27,        September 29,
data)                                    2008                 2007                 $                 %

Net sales                           $       1,038.8      $       1,326.2      $    (287.4 )          (21.7 )%
Gross margin (A)                    $         176.5      $         262.7      $     (86.2 )          (32.8 )%
Goodwill impairment charges         $         374.0      $             -      $     374.0               NM
Trade name impairment charges       $         121.1      $          66.4      $      54.7             82.4 %
Restructuring, exit and other
impairment charges                  $          39.1      $           4.7      $      34.4               NM
Operating earnings (loss)           $        (566.3 )    $         (46.3 )    $    (520.0 )             NM
Net earnings (loss) from
continuing operations               $        (729.1 )    $         (23.7 )    $    (705.4 )             NM

Diluted earnings (loss) per share
from continuing
 operations                         $         (8.26 )    $         (0.27 )    $     (7.99 )             NM

Expressed as a percentage of Net
sales:
Gross margin                                   17.0 %               19.8 %                       (280)bpts
Selling, general and
administrative expense                         17.1 %               15.6 %                        150 bpts
Research and development expense                3.0 %                2.3 %                         70 bpts
Goodwill impairment charges                    36.0 %                  - %                              NM
Trade name impairment charges                  11.7 %                5.0 %                        670 bpts
Restructuring, exit and other
impairment charges                              3.7 %                0.4 %                        330 bpts
Operating margin                              (54.5 )%              (3.5 )%                             NM


__________

bpts = basis points
NM = not meaningful

(A) Gross margin is defined as Net sales less Cost of sales as presented in the Consolidated Statements of Operations.

The decrease in net sales was primarily due to reduced marine industry demand compared with the third quarter of 2007 as a result of uncertainty in the global economy and the related recent contraction of liquidity in global credit markets. Although weakness in marine retail demand was previously isolated to the United States, the recent uncertainty in the global economy has had an adverse effect on world-wide retail demand. Although net sales in the third quarter of 2008 are down 22 percent from the third quarter of 2007, the Company has seen strong sales of commercial fitness equipment and bowling products and has experienced increases in revenue from recently opened Brunswick Zone XL centers.

The decrease in gross margin percentage in the third quarter of 2008 compared with the same period last year was primarily due to lower fixed-cost absorption and inefficiencies due to reduced production rates, as a result of the Company's efforts to achieve appropriate levels of marine customer pipeline inventories in light of lower retail demand, and higher raw material and component costs. This decrease was partially offset by successful cost-reduction efforts.

Selling, general and administrative expense decreased by $29.5 million to $177.4 million in the third quarter of 2008. The decrease was primarily driven by successful cost reduction initiatives, but was partially offset by increased variable compensation expense and the effect of unfavorable foreign currency translation.

During the third quarter of 2008, the Company reviewed its goodwill and trade names and determined that $495.1 million of impairment charges were necessary. These charges compare with the $66.4 million impairment charge taken on select trade names during the third quarter of 2007. See Note 2 - Goodwill and Trade Name Impairments in the Notes to Consolidated Financial Statements for further details.

Also during the third quarter of 2008, the Company accelerated its previously announced restructuring activities. These restructuring activities led to the increase in restructuring, exit and other impairment charges. Specifically, the Company has announced the closing of its production facilities in Pipestone, Minnesota; Roseburg, Oregon; and Arlington, Washington. A fourth plant, in Navassa, North Carolina, will be mothballed. The Arlington, Roseburg and Navassa shutdowns are expected to be completed by the end of 2008, with the Pipestone shutdown expected to be completed in the first quarter of 2009. See Note 3 - Restructuring Activities in the Notes to Consolidated Financial Statements for further details.

The decrease in operating earnings was mainly due to reduced sales volumes, goodwill and trade name impairments taken during the third quarter of 2008 and the unfavorable factors affecting gross margin and restructuring activities discussed above.

During the third quarter of 2008, Brunswick sold its investment in a foundry located in Mexico for $5.1 million gross cash proceeds, which resulted in a $2.1 million pretax gain.

Interest expense decreased $0.1 million in the third quarter of 2008 compared with the same period in 2007. Interest income increased $0.6 million in the third quarter of 2008 compared with the same period in 2007, primarily as a result of higher average cash balances during the third quarter of 2008.

The Company's effective tax rate in the third quarter of 2008 was a 26.7 percent tax provision on operating losses, compared with a 49.4 percent tax benefit in the comparable period of 2007. The tax rate change was mostly due to $294.8 million of special tax provisions in the third quarter of 2008, primarily related to the establishment of a deferred tax asset valuation allowance.

Net earnings from continuing operations and diluted earnings per share from continuing operations decreased primarily due to the same factors discussed above with respect to operating earnings.

Weighted average common shares outstanding used to calculate diluted earnings per share decreased to 88.3 million in the third quarter of 2008 from 89.0 million in the third quarter of 2007. The decrease in average shares outstanding was primarily due to the repurchase of 0.5 million shares since the third quarter of 2007 and the effect of a lower stock price in determining common share equivalents for options and SARs. See Note 15 - Share Repurchase Program in the Notes to Consolidated Financial Statements for additional information related to share repurchases.

The following table sets forth certain amounts, ratios and relationships calculated from the Consolidated Statements of Operations for the nine months ended:

                                                                                   2008 vs. 2007
                                            Nine Months Ended                   Increase/(Decrease)
                                      Restated
(in millions, except per share      September 27,        September 29,
data)                                   2008                 2007                $                 %

Net sales                          $       3,871.0      $       4,235.2     $    (364.2 )           (8.6 )%
Gross margin (A)                   $         749.5      $         896.2     $    (146.7 )          (16.4 )%
Goodwill impairment charges        $         377.2      $             -     $     377.2               NM
Trade name impairment charges      $         133.9      $          66.4     $      67.5               NM
Restructuring, exit and other
impairment charges                 $         128.4      $          13.4     $     115.0               NM
Operating earnings (loss)          $        (573.2 )    $          93.0     $    (666.2 )             NM
Net earnings (loss) from
continuing operations              $        (721.8 )    $          67.5     $    (789.3 )             NM

Diluted earnings (loss) per
share from continuing operations   $         (8.18 )    $          0.75     $     (8.93 )             NM

Expressed as a percentage of Net
sales:
Gross margin                                  19.4 %               21.2 %                      (180)bpts
Selling, general and
administrative expense                        15.1 %               14.7 %                        40 bpts
Research and development expense               2.5 %                2.4 %                        10 bpts
Goodwill impairment charges                    9.8 %                  - %                       980 bpts
Trade name impairment charges                  3.5 %                1.6 %                       190 bpts
Restructuring, exit and other
impairment charges                             3.3 %                0.3 %                       300 bpts
Operating margin                             (14.8 )%               2.2 %                             NM


__________
. . .