Good morning and welcome to Brunswick Corporation's Q4 and full year 2020 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 Brent Dahl, Vice President, Investor Relations. Sir, please go ahead. Good morning and thank you for joining us. With me on the call this morning are Dave Foulkes, Brunswick CEO, and Ryan Gwillim, 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 these documents are available on our website at brunswick.com. During our presentation, we'll 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 consolidated financial statements accompanying today's results. I will now turn the call over to Dave. Thanks, Brent, and good morning, everybody. Our business has executed extremely well against our operating and strategic priorities in 2020, demonstrating the strength and resilience of our marine-focused portfolio. Despite the many challenges faced in 2020, including the significant disruptions to our global operations during the first half of the year due to the global pandemic, we expanded gross and operating margins, delivered an 11th consecutive year of adjusted EPS growth, and generated record free cash flow. The transformational changes we've made to our business in recent years have reinforced our position as the market leader in the marine industry and have positioned us to meet or exceed our strategic planned financial targets. Our propulsion business continues to deliver outstanding top-line and earnings growth, outperforming the market by leveraging the strongest product lineup in the industry and accelerating penetration into saltwater, repower, and international commercial markets. Our parts and accessories businesses delivered strong top-line growth and robust operating margins as a result of increased boating participation, which drove strong aftermarket sales, together with high demand for our full range of OEM systems and services as boat production increased during the second half of the year across the industry. Within our boat business, all brands contributed to the revenue and earnings growth over the second half of 2020 as U.S. marine retail demand continued to further through year-end. Our premium boat brands remain the market leaders in their categories, with a series of significant new product launches underway, and our value brands continue to offer attractive entry points to new and returning former boaters. The surge in retail demand resulted in historically low pipeline inventory levels, with 40% fewer boats in dealer inventory at the end of 2020 versus the end of 2019. Finally, Freedom Boat Club exceeded our expectations during 2020 by adding over 40 new locations and almost 10,000 new memberships, while also driving exceptionally strong synergy sales across our marine portfolio. Finally, although we continue to operate in an uncertain environment, I have high confidence that we will continue to execute our strategy and deliver very strong shareholder returns in 2021. I'll now provide some highlights on our segments and the overall marine market. Our propulsion business exceeded top-line and earnings expectations for 2020 by continuing to outperform the market due to the strength of our industry-leading product lineup. Field inventory of Mercury outboard engines remained significantly lower than in past years, and we continue to increase production to refill pipelines and meet exceptionally strong customer demand. Mercury continues to gain significant retail market share in outboard engines, especially in higher horsepower categories, where we have focused higher levels of investment in recent years. As a consequence of our constant product innovation and ability to quickly ramp up production, and as a result of the capacity increases in 2018 and 2019, Mercury secured more than 70 new or enhanced OEM partnerships in 2020. One recent win was the announcement of a major enhancement to Mercury's relationship with Crownline Boats, with Mercury becoming its exclusive marine propulsion partner beginning with 2022 model year products. Mercury's controls, rigging, and propeller business continues to be the market leader, with significant investment in technology leading to increased sales at a time where boat OEMs are ramping production to meet demand. New product and technology investments are also at the core of certain imminent new propulsion and controls products that I will discuss more towards the end of the call. Our parts and accessories businesses completed their first year as a separate reporting segment and delivered outstanding results in 2020. The segment top-line grew by 9% for the year, with aftermarket sales significantly outpacing recent historical trends and OEM customers increasing orders to keep up with production resulting from the accelerating retail demand. 2020 results were bolstered by very healthy boat usage as a consequence of the need for social distancing-friendly recreation and by favorable weather conditions in the U.S. throughout the year, especially compared with 2019. In addition, our engine P&A business enjoyed increased demand to supply products to our dealers in support of increased service needs, and our distribution business, which added 1,700 new dealer customers during the year, was also able to capitalize on both the increased participation and the extended fall season in both marine and RV spaces. The Advanced Systems Group, which includes all the brands and operations in our Power Products and onboard businesses, demonstrated significant second-half sales and earnings improvements, leveraging the same aftermarket and OEM trends while advancing restructuring actions to drive long-term efficiencies. With solid operating margins, these annuity-based businesses strengthen our overall financial profile and provide a robust baseline of earnings from which we can continually invest in our businesses and return capital to our shareholders. Our Boat segment finished 2020 with lower sales and earnings than 2019 as a result of pandemic-related plant shutdowns in the spring and production ramp-up activities that continued through the fall. However, the surging retail demand environment, together with prior cost reduction and organizational initiatives, led to a phenomenal second half of the year that saw revenues increase by 19%, operating earnings increase by 85%, and operating margins expand by 330 basis points when compared with the second half of 2019. Additionally, we exited 2020 with operating margins above 9% over the last two quarters, which is in line with our strategic plan target to achieve double-digit% operating margins in 2022. Pipeline inventory levels, a key driver of future wholesale boat sales, ended the year at approximately 19 weeks, the lowest level year-end for the last two decades. Boston Whaler and Sea Ray have seen very strong retail sales, and their dealer inventories are especially low. Our value brands have also performed well at retail and will also require significant pipeline replenishment. We continue to hire additional workers at most facilities to ramp up production, but it is very unlikely that pipelines will be significantly rebuilt until 2022 at the earliest. Freedom Boat Club continues to exceed our growth expectations with a 35% increase in memberships and 20% increase in locations during 2020. In addition, sales of Brunswick boats into the franchise network are exceeding expectations, each boat rigged with a Mercury engine and equipped with our P&A products. Just recently, Freedom was named a top franchise of 2021 by Franchise Business Review, a market research firm that performs independent surveys of franchisee satisfaction. Freedom was one of 200 honorees commended for the exceptional support and leadership demonstrated in leading franchisees through the challenges of 2020. Next, I'd like to review the sales performance of our business by region on a constant currency basis. Full year sales increased versus 2019 in most regions, with international sales up 10% and sales in the U.S. up 4%. Asia Pacific led the international growth with continued strength in commercial propulsion and P&A. Canadian sales lagged slightly as Canadian boat dealers had more inventory ahead of the COVID shutdowns and did not reopen for sales as quickly as other geographies. However, we saw a recovery in the Q4 as Canadian revenue grew by 19%, with additional growth anticipated in the region in 2021. Europe also delivered strong propulsion growth as dealers and distributors were able to get higher horsepower engines that had been capacity constrained in previous years. This table provides some color on the performance of the U.S. marine retail market for the first half, second half, and full year of 2020, with comparisons to 2019. All boat categories reported retail gains in the second half of full year of 2020. The main power Boat segments were up 32% in the second half of 2020 and were up 13% for the full year, with Brunswick's unit retail performance in line with the market growth rates. New product launches, including the new Boston Whaler 220 and 250 Dauntless models, which debuted in December, provide confidence in our ability to grow share in 2021, especially in margin-accretive premium categories such as saltwater fishing, day boats, and cruisers. Outboard engine unit registrations were up 35% in the back half of 2020, with Mercury significantly outperforming the market as they have done all year. In fact, Mercury gained retail share in 2020 in just about every horsepower node, with outsized increases in large outboard engines over 200 horsepower. As we enter 2021, retail continues in growth mode as lead generation, finance applications, dealer sentiment, and other leading indicators all remain very positive. In addition, similar to our comments on the last call, at the end of 2020, our percentage of dealer orders received with a customer name already attached is at least two times the percentage from the start of 2020, and for several brands, three or four times. All these factors give us high confidence in the continuing strength of the retail market as we move into 2021. I now turn the call over to Ryan for some additional comments on our financial performance. Thanks, Dave, and good morning, everyone. For the full year, net sales were up 6%, and adjusted operating earnings increased by 9%. Adjusted operating margins finished at 13.3%, 40 basis points higher than 2019, which is an outstanding accomplishment by our business units, considering the challenges faced by all of our businesses this year due to the pandemic. Our operating leverage fell within our targeted range, and we finished the year with an adjusted EPS of $5.07, which exceeded our most recent guidance due to the strong Q4 performance. 2020 also saw record free cash flow generation, which I'll discuss in a few minutes. As for the Q4 results, exceptional execution, together with continued robust retail demand, accelerating production levels, and strong late-season boat usage, drove outstanding results in the quarter, with significantly better year-over-year comparisons. Net sales in the quarter were up 27%, while operating earnings on an adjusted basis increased by 59%. Adjusted operating margins were 12.5%, up 250 basis points versus the Q4 of 2019, and we finished the quarter with an adjusted EPS of $1.32, up 61% from prior year. I'll now discuss our Q4 performance on a segment level. Starting with the Propulsion segment, revenue increased 33% as each product category experienced strong demand, especially in controls and systems and higher horsepower outboard engine categories. Market share gains and favorable changes in customer mix also contributed to increased revenues. All customer channels showed growth in the quarter as boat manufacturers continued to ramp up production, and increased capacity enabled continued elevated sales to the independent OEM, dealer, and international channels. Operating margins and operating earnings were up significantly in the quarter as a result of increased sales volumes and the associated favorable factory absorption from the increased production, partially offset by unfavorable impact of higher variable compensation costs and increased investment in new product development and technology. In our Parts and Accessories segment, revenues increased 27%, and operating earnings were up 56% versus Q4 2019 due to strong sales growth across all product categories. Adjusted operating margins of 15.6% were 280 basis points better than the prior year quarter, with the strong sales increases together with favorable product mix driving the robust increase in operating earnings. Another outstanding result for this aftermarket-driven, annuity-based business. Revenues in the Boat segment were higher by 20%, resulting from significantly higher wholesale sales to dealers, both to meet increased customer demand at the retail level and to begin refilling pipeline inventories. All of our boat brands steadily ramped up production in the Q4 to meet this strong demand. Increased production and sales resulted in higher operating margins of 9.2%, a 190 basis points increase compared to the Q4 of 2019. Each of our boat product categories contributed to the margin growth, with Boston Whaler and Lund delivering strong double-digit operating margins for the quarter. Finally, Freedom Boat Club continued to see revenue and earnings growth in the quarter at operating margins that are accretive to the overall Brunswick operating margins. As a result of the surge in retail demand, dealer pipelines ended the year at historically low levels, our lowest pipeline inventory levels in over 20 years. Our boat brands ended the year with 19 weeks of boats on hand, measured on a trailing 12-month basis, with units in the field lower by 40% versus year-end 2019. To update the reference scenario we laid out on the Q3 call, we wholesale sold just over 28,000 boats in 2020 while retailing almost 38,000 boats. We believe that our current manufacturing footprint will support the production necessary to satisfy the anticipated 2021 retail demand, but we continue to work with our brands to unlock additional near-term capacity through automation, labor, and select capital initiatives. The resulting pipeline levels at the end of 2021 would still be well below desired levels, but we anticipate that this will position us for strong wholesale sales again during 2022. Longer term, we are addressing capacity constraints with the announcement made earlier this week regarding the efficient investment to repurpose our Palm Coast, Florida facility for larger Boston Whaler products and expanding our facilities in Reynosa, Mexico, and Vila Nova de Cerveira, Portugal. We expect to begin seeing benefits from these actions in the second half of 2021, with even more significant benefits by the end of this year. We successfully executed our capital strategy in 2020 as our significant cash flow generation enabled us to meet or exceed our capital objectives despite pausing activities during the early days of the pandemic. We ended the year with $587 million of cash and generated $629 million of free cash flow. We deployed $182 million for capital expenditures as our cash usage always begins with the investment in new products and capacity projects across our businesses, which we believe will be the bedrock for future revenue and earnings growth. We completed approximately $118 million of share repurchases, taking advantage of a lower stock price early in the year and increased our dividends for the eighth consecutive year. We retired $155 million of long-term debt, leaving our debt leverage at 1.4 times on a growth basis. Our investment-grade credit remains strong, with our year-end cash balances, cash flow generation capabilities, and total liquidity affording us the opportunity to deploy capital in a variety of ways depending on market conditions. While we remain very cognizant of macroeconomic headwinds and other related uncertainties, our continued strong performance in a robust marine retail environment has created improved visibility into our substantial growth opportunities for 2021. The progression of the pandemic remains very dynamic, and the resulting impact on our dealers, OEM partners, suppliers, and the vmacroeconomic environment is difficult to fully predict. However, given our improved clarity on our ability to drive growth throughout the year, we are providing the following guidance for 2021. We anticipate U.S. marine industry retail demand up low- to mid-single-digit% for the year versus 2020, revenues of between $4.75 billion and $5 billion, adjusted operating margins to grow between 60 and 100 basis points, with operating expenses as a percentage of sales to be lower than in 2020, adjusted diluted EPS in the range of $6-$6.40, and finally, free cash flow generation to be in excess of $300 million. We're also providing directional guidance regarding the first quarter, where we anticipate revenue growth of approximately 25% over the first quarter of 2020, with adjusted operating leverage of high teens to low 20%. Note that year-over-year comparisons of quarterly performance are very likely to be volatile throughout 2021, given the significant impact of the pandemic on our 2020 results. Finally, the 2021 expectations assume no major additional pandemic-related business continuity issues. In addition, as we have cautioned in past quarters, it cannot be overstated that the level of recovery of the global economy, continued stable channel operations, the ability to moderate labor and input costs, and the absence of significant additional disruption to our global operations and supply chain will be important factors in determining whether we ultimately perform in line with our targets. I will conclude with an update on certain items that will impact our P&L and cash flow for 2021. As mentioned on the previous slide, we anticipate generating free cash flow in excess of $300 million in 2021, which reflects a return to more normal historical free cash flow levels. 2020 saw a significant amount of cash generated from the liquidation of inventories, which is likely not to repeat in 2021, and we estimate working capital increase by $140 million-$150 million for the year, primarily to rebuild inventories in our propulsion and P&A segment. Note that under the current plan, we would still generate more than $900 million of free cash flow between fiscal year 2020 and 2021, which would result in a free cash flow convergence of over 100% for the two-year period, and that's without sacrificing any investment in our businesses. Our estimated effective tax rate for the year is approximately 23%, with an increased cash tax rate of mid-teens% also impacting our year-over-year free cash flow comparison. Note that our current effective tax rate estimate does not reflect any potential changes in statutory tax rates. We anticipate between $125 and $135 million of depreciation and amortization expense, and that our average shares outstanding will be approximately 78 million shares. We anticipate executing a balanced capital strategy in 2021, leveraging our strong cash positions. We plan to retire $100 million of our long-term debt obligations, with our interest expense estimated to be about $60 million for the year. During 2020, we paused certain capital expenditures during the pandemic to conserve cash until the second half of the year. We anticipate returning to more normal levels of capital spending during 2021 of between $200 million-$220 million, including new product investments in all of our businesses, cost reduction and automation projects, and select additional capacity initiatives. Finally, we plan to continue our systematic approach to share repurchases, with our plan including between $80 million-$120 million of repurchases in 2021 spread relatively evenly across the year. 2020 will also see a renewed focus on M&A activity, primarily in our parts and accessories and Business Acceleration business units, including expanding Freedom Boat Club. Consistent with our past approach, our 2021 guidance does not assume the completion of any transactions, but we fully expect M&A to provide opportunities throughout the year. I will now turn the call back over to Dave to continue our outlook comments. Thanks, Ryan. Moving to our outlook by segment, we believe 2021 is setting up to be a fantastic year for all our businesses. As a quick reminder, comparisons will be more favorable during the first half of 2021 when compared to a first half of 2020 that saw significant disruption in our businesses due to the early stages of the pandemic. For our Propulsion segment, we anticipate net sales growth for the year to be in the high single- to low double-digit% range, with operating margins up more than 20 basis points versus 2020. While these propulsion sales increases are extremely strong, the sales increases in our Boat segment will be even more pronounced, as Mercury was in a much stronger inventory position heading into the pandemic shutdowns of 2020, and Mercury continued to ship engines through its distribution channels in late March and early April. We expect earnings growth to include margin expansion associated with new product introductions, increased factory absorption from elevated production levels, and currency tailwinds, partially offset by regional sales mix, increased tariffs due to volume increases, and some increase in our spending on products, technology, and other strategic priorities. Our top priority for this segment continues to be satisfying outboard engine demand and expanding market share through the introduction of new products and continued success in providing industry-leading propulsion solutions to new and existing OEM customers. We also anticipate additional margin benefits as we satisfy greater levels of demand in the dealer, repower, and international channels. We remain focused on developing new platforms and technology for our engine product lines and related control systems and are investing in exciting new product families that we project will enable top-line and earnings growth into the future. Turning to our Parts and Accessories segment, I want to remind everyone that these businesses derive more than 75% of their revenues from aftermarket sales. The P&A segment experienced the least amount of disruption to its business in 2020 as, in most cases, despite some regional disruptions, we were able to ship products to customers during the early stages of the pandemic. As a result of the significantly increased levels of boat usage in 2020 and the related parts and accessories consumption, we anticipate organic net sales growth in the mid-single digit% range for 2021. We expect margins to grow slightly in the year as we expect growth in our Advanced Systems Group and our distribution business to outpace certain higher-margin engine P&A products that had extremely strong second halves of 2020. This area will continue to be the primary focus of our M&A activity as we look for opportunities to further build out our technology and systems portfolio. Potential bolt-on deals in this area are generally in the $20 million-$50 million range, which can be funded from free cash flow and existing cash balances. The realignment of the Power Products and outboard businesses under our new Advanced Systems Group operating structure announced in 2020 will provide a streamlined operating model to increase margins moving forward and will benefit from an improved industry outlook in 2021 as this business is more heavily weighted towards OEM customers. We're very excited and confident in the outlook and growth opportunities for the high-technology product lines in this business and also expect to significantly expand our systems integration customer base. Finally, our Boat segment stands to benefit from year-over-year comparisons as one of the businesses in our portfolio, this business experienced the most significant pandemic-related operational disruption in 2020, with extended plant shutdowns in late March and early April and a rapid ramp-up in production through the second half of 2020 that now continues into 2021. As discussed earlier, the Boat segment will be focused on improving operational performance, fulfilling demand, and refilling pipelines in a very robust retail environment, which should lead to top-line growth of more than 30% and strong improvement in operating earnings and margins. With three-quarters of our entire calendar year 2021 wholesale orders already received and with several brands largely sold out into 2022, we anticipate consistent production throughout the year, which should result in cost efficiencies. We anticipate exiting 2021 with operating margins approaching our double-digit target for the segment. As Ryan mentioned earlier, we are reopening our Palm Coast, Florida facility to provide Boston Whaler with additional capacity while also expanding our existing Mexico and Portugal boat facilities. These capital-efficient solutions to significantly expand our boat manufacturing capacity will ensure that the brands produced at these facilities are well-positioned to take advantage of future market demand while avoiding substantial increases in fixed costs. The boat group plans to hire over 1,000 new employees throughout our facilities in 2021 to support our plant production growth. We will continue to expand Freedom Boat Club and execute against its growth strategy. We anticipate adding up to an additional 50 locations in 2021, including some outside the US, while capitalizing on our synergy opportunities and offering an expanded range of services to franchisees. Notably, the Freedom Fleet conversion to Brunswick boats and Mercury engines is ahead of plan, and we anticipate strong sales into the franchisee base in 2021. In addition to all the growth opportunities already discussed, we also have enterprise-wide work streams that are advancing our ACES technology strategy, deepening our focus on sustainability and DEI, and driving the implementation of a full portfolio of digital-first initiatives that span our business units and product categories. We are continuing our pivot to satisfy tomorrow's consumer by deeply understanding their needs, offering new modes and entry points for participation, and curating their customer journey through its various stages of consideration, transaction, ownership or participation, retention, and even disposition and reconsideration through a wide range of digital assets and tools and new communities. Although there was no in-person consumer electronics show in 2021, we plan to be back at CES in force in 2022. A recent example of an expansion of our product offerings to better serve our customers and partners was the launch of Boateka, a digitally-enabled direct-to-consumer business that simplifies the pre-owned boat buying experience and provides consumers confidence in the transaction. This pilot is primarily aimed at assisting our Freedom Boat Club franchisees and other shared access partners to more efficiently diversify their fleet products to clear the way for new Brunswick products. Our investments in accelerating and improving our digital assets and capabilities and digitally engaging our customers continue to yield benefits as 2021 early season in-person industry shows continued to be scaled down, postponed, or canceled due to COVID. These cancellations have not influenced our wholesale and retail demand projections moving forward, and in several cases, our virtual events in 2020 generated higher sales than the equivalent physical shows in the prior year. Brunswick and its employees were recognized for their performance, contributions, and initiatives many times during a challenging but very strong 2020. We averaged almost one major award per week, including receiving multiple innovation awards, awards highlighting our commitment to diversity, equity, and inclusion, our sustainability performance, and receiving our first-ever CES Innovation Award. Before we take questions, I'd like to leave you with a few dates to circle on your calendar. First, something we've hinted at for a while. On February the 11th, Mercury will be launching the most technically advanced and sophisticated propulsion system in the industry. I'm very excited about this. This launch will be followed a week later by the official launch of the beautiful new Sea Ray Sundancer 370 Outboard, the first Sea Ray product with a new Sea Ray design language. These are the first of many industry-advancing products that our businesses will be launching during 2021. Additionally, although we'll miss seeing all of you in person for our annual investor event in Miami, we are planning for a virtual investor event day later in the spring that will be pre-recorded and viewable online at your convenience. We hope this is a one-day detour, and we very much hope to be able to welcome you back in person to an investor day in Miami in 2022 as part of the recently announced expanded Miami International Boat Show. Brunswick has an exciting year ahead, and I look forward to sharing more information on our progress against our 2021 and 2022 goals and financial targets as we progress through the year. To that end, I will offer today that our current expectation for our 2022 EPS is that it will be at or above $7 per share. Finally, I want to once again offer heartfelt thanks to our global employee population for all of their hard work and sacrifices during a very challenging 2020. It's because of their outstanding efforts that we've been able to continue to execute our strategic plan while at the same time prioritizing protecting the health and welfare of the entire Brunswick team. We'll now open the line for questions. At this time, I would like to remind everyone, in order to ask a question, please press star one in your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Thank you. Your first question comes from the line of Grace Smalley. Your line is open. Hi, good morning. This is Grace Smalley from JP Morgan. Thank you for taking my question. I guess, firstly, on the retail side, you now expect U.S. industry retail unit growth of up low to mid singles this year. Could you elaborate on the leading indicators you are seeing in the market to support that, including touching on retail trends you have seen to start the year in January? And then, Ryan, on the wholesale side, could you walk through how many boats you expect to be able to produce and ship both in 2021 and 2022, taking into account your recent capacity expansion announcement? Thank you very much. Yeah, good morning, and thank you for joining. In terms of retail market in 2021, we have a lot of leading indicators that we've been monitoring. As you know, obviously, we're a seasonal business, but through the fall and winter months, we have continued to see elevated levels of retail demand, typically 40% or more above prior year levels. Leading indicators such as retail financing applications, I looked recently, were 60%, I think, up in the last week or so. So our current expectation is for a continued strength as we go into the year, potentially a little moderated in some areas by inventory availability, but we expect a strong start to 2021. Good morning, Grace. I'll take the wholesale question. So you heard the stats on 2020. We wholesale sold about 28,000, and we retail sold about 38,000. We believe that, given our current footprint, we have the capacity in order to produce at wholesale to match retail this year. So you could think that as around 39,000 units, high 38, low 39,000 units, which would represent a low to mid% increase in the retail market. Then when you start looking at out years, it's obviously difficult to forecast, but I would say, given all of the work we're doing at our facilities, in addition to the capacity projects that were announced on Monday, we could probably add a couple thousand boats at wholesale in each of 2022 and then 2023. But obviously, all of that is contingent on supply chain continuing to be strong, us being able to get our hiring needs to produce that amount, and frankly, just good operating across our footprint, which we anticipate doing. Great. Thank you very much. Thank you. Your next question comes from the line of Greg Badishkanian. Your line is open. Hey, guys. It's actually Fred Wightman on for Greg. I'm wondering if you could help us size the opportunity either in dollars or just sort of anecdotally with those 70 new OEM contracts that you touched on for the engine side. Are any of those really showing up in the reported numbers that we've seen so far? Is that something that we should start to ramp in 2021 and into 2022? How should we sort of think about the contribution from those? Yeah, hi, Fred. So I think your point is a good one. Even when we announce those contracts, that's typically the start of the process for us to obviously, the customer has to get rid of inventory of previous brands, and then we begin to phase in. Typically, the best time to phase in a new propulsion system is model year. So if we announce new relationships or expanded relationships in the back half of 2020, for example, the full impact is unlikely to occur until the 2022 model year, which would be June of 2021. So I would say that we are not yet seeing the full impact of any of the expanded relationships or new relationships that we announce in the back half of 2020. And, Fred, I think I would add, when we set out our 2022 strategic plan, we obviously had in mind that we would be conquesting and getting these new accounts and growing our share with our OEM. So when you see our outlook, some of that is baked in, obviously, but we are doing quite well in strengthening our relationships with the OEMs. Great. And then just finally, you guys alluded to some supply chain tightness a few different times, touched on it for the P&A side, some on the outboard side as well. Can you sort of just walk through where you see the biggest disconnect in terms of supply versus demand across the segments and how you should think about those sort of normalizing as we move through the year? Thank you. Thank you. Yeah, I think what we're really doing when we talk about supply chain here is recognizing a risk that is, to be honest, not manifested itself yet in a very significant way, but certainly is kind of influencing some of the knowable portion of how we position our guidance. So we've seen some of the categories that have expanded a lot, like pontoons. We see a bit of tightness in pontoon furniture. We have seen some tightness around transportation. Obviously, a number of goods from all kinds of sources are being shipped. That provides a bit of tightness. I would have to say, though, this is us telling you that it's tight. It's not telling you that it's really affecting us materially at this point in time, only that it's more of a risk that we're cognizant of as we expand further going forward. Great. Thank you. Your next question comes from the line of Craig Kennison. Your line is open. Hey, good morning. Thanks for taking my question. I wanted to go back to that capacity expansion in boats and wonder, is there a crossover impact on the engine business or your parts and accessory business to the extent you add capacity in boats? Will you need to add a similar amount of capacity in those categories, or does it already exist in this system? No, there's an effect. Certainly, as we add those additional boats, obviously, our brands are 100% sourced to Mercury and as much of our P&A as possible. Kind of as Ryan mentioned, as we kind of step our way through this, we will have some effect in the back half of 2021 of this additional capacity. And then we expect to add probably a couple of thousand units in 2022 and another couple of thousand. So that will be a material impact that's 10%, probably skewed a little more towards because of Boston Whaler, a little more towards our stronger margin boats and higher content. So there is a full-stack margin impact there across all of our businesses that we are working on dimensioning. Craig, just in case this is the follow-up question, we do not need to invest in bricks and mortar at Mercury to cover the additional engines and P&A at this time. That was really handled back in 2018 and 2019. That's great. That was a follow-up. And then maybe just then I'll use a different follow-up, which is dealers are making great money today because of the massive shortage in inventory. Obviously, you want to get back to a more reasonable level of inventory. But has this given you reason to rethink what the optimal level might be of structural inventory once you get back closer to balance? Yeah, I think we'll be working with our channel partners to work out exactly what that is. We certainly are at the moment in an unusual time. But we have, as you know, 17 boat brands, and I think last count about 600 models. So keeping inventory for that kind of SKU count requires quite a lot of models in the field just so they're all available at some level. And I think at the moment, anybody with inventory is at an advantage. So we will certainly not be as we look at inventory levels, we will be very careful about not placing our brands at an availability disadvantage in the field. So I think there may be an opportunity to relook at inventory levels. One of the things that we focused a lot on is the right inventory. So we work much more closely with our channel partners now to help them understand what is selling, both in terms of models and option content, so they don't get left with slow-moving inventory. And so that is a way in which we can be more efficient but still have the right number of models available in the field. Great. Thank you. Thanks, Fred. Your next question comes from the line of Mike Swartz. Your line is open. Hey, guys. Good morning. Just wanted to touch on the incremental boat capacity you've called. I'm just looking at it maybe from a different angle. Are there incremental costs associated with that that are flowing through the P&L? Is that just capital expense? And if it goes to the P&L, how should we think about the cadence of those costs coming through during the year? Hey, Mike. Good morning. It's Ryan. There is obviously some capital expenditure that's involved, certainly at Palm Coast as we bring it up to speed to be a Whaler facility, and then a little bit of expansion in the Portugal facility. But that is included in our plans in the guide for CapEx and obviously also included in the margin performance guidance that we gave today. So it's a little bit in 2021, a little bit more in 2022, but it is all included in the guide and, frankly, anticipated as part of a normal CapEx budget. Yeah, these are not large investments. They're a large impact, but the investments are pretty moderate. Okay. That's helpful. And then just with the commentary on getting to $7 or plus by 2022, I think when you outlined your 2022 plans back in early 2020, you'd really built that around a flat industry. So 13% growth 2020, low to mid-single this year. Obviously, we don't know what's going to happen in 2022, but it sounds like the three-year average is going to come in above flat. Any way to think about how big that number could be or maybe what some of the offsets are that you've maybe experienced since you originally gave that 2022 guidance? I'll take this one again. Listen, it's obvious that there are some tailwinds and some headwinds, but certainly, the market is a good tailwind right now, Mike. That's to be said. There's still things that we will be fighting against. Obviously, no one saw the pandemic come. Where we can get to, I think you know what the original range was, 625 to 725. We've kind of put a stake in the ground as a floor, and I think where that can go depends on execution. It depends on the continued successful product launches that we're having, which we fully intend to do well. I will make one comment that the $7 or more does not include any impact in M&A, so to the extent M&A would be completed, which we do believe we will this year or next year, that would be accretive to the overall goal. Yeah, I would just add that I think as we were thinking through guidance this time, we thought it was more important to start establishing some floors than it was to fully incorporate the potential stack of opportunities. Here, as we go through the first portion of this year, we'll be looking again, but certainly, we're protecting for some knowables at the moment, and we do think, certainly, that the full stack of opportunities is very significant. Great. Thank you. Your next question comes from the line of James Hardiman. Your line is open. Hey, good morning, guys. So. Good morning. Good morning. So Ryan, I wanted to maybe just extend some of the math a little bit further, maybe just put a bow on this. I mean, it sounds like if we extend some of the wholesale retail math out into 2022, for all intents and purposes, this replenishment cycle, if you want to call it that, is going to go into 2023, right? Unless we see a pretty dramatic drop in 2022 retail to the tune of, I guess, to the north of a 20% drop before we can completely bridge the 10,000-unit delta that was created in 2020. And that doesn't even really account for keeping weeks on hand constant. Am I thinking about that the right way? Yes, you are. Yeah, your math is right. Right, and there's no reason we should be thinking about a massive drop-off in 2022. Obviously, it's way too early to give guidance on 2022. There's nothing that would suggest that we would go sort of to pre-2019 levels, which is what we'd be talking about once we exit all this. We certainly don't see that, James. I mean, the increased, more diverse participation in boating, the more people getting back into the activity that have been gone, people jumping into Freedom Boat Club. I mean, all signs, I think, point to people wanting to be outside. They want to be on the water. The change in people's lifestyle, I think, with more flexible work arrangements and other just lifestyle changes is really offering people the ability to recreate outside more in different times. We're just not seeing a path to what you would say is a significant decrease in boating participation or new boat sales in the near term. Got it. And then second question, as we work through some of these cash flow numbers, you're talking $300 million in free cash flow. There's $100 million each for debt and share buybacks. So that leaves another $100 million, and your cash on the balance sheet is at least close to a record. So I guess first, what's the right level of cash to hold on your balance sheet? And then assuming that it's not $620 million, how should we think through some of these other opportunities? Obviously, the obvious answer is M&A. I'm curious what opportunities are not specifics, but what opportunities are presenting themselves in terms of valuations in the market right now? And then maybe secondly, this Freedom Boat Club is almost like M&A that you own, that you already own to a certain degree. So maybe think about what investments in your own franchises or corporate-owned clubs at Freedom Boat Club and how to think about return profile on that. All right. James, I'll try to unpack the first part of it. Maybe I'll let Dave speak to them. Okay. So first off, I would tell you that just like our strategic plan, I would go ahead and allocate $100 million or so to M&A this year and next year, right? That's part of our plan, and that's something that free cash flow will allow us to do. Coming down from the $629 million, it really starts with working capital reversing. This year, we grew working capital up kind of over $200 million. I think you'll see a pretty significant reverse in 2021 just solely because we need to build inventory and, again, building inventory and propulsion and P&A. Just a reminder, we don't have a whole lot of boat inventory. It's primarily WIP as we sell the boats directly to the dealers quickly after they are manufactured. And then there are puts and takes on a little bit more CapEx. There is going to be a little more taxes paid. So I think once you sit down and see the working capital reversal, which is significant, right? It is going to be $350 million. You are going to get to a number around 300 free cash flow. And then ending cash, we are very comfortable with ending cash anywhere between $300 million-$400 million. I think we will likely still be at or about that at the end of the year. We could be a little more or a little less. But that gives us plenty of room together with our untapped credit revolver that is always available to us. That gives us enough liquidity. And maybe Dave on Freedom and some of the exercises. Yeah. Hi, James. Well, I think maybe, yes, there are acquisitions available that our M&A teams are, I would say, active at the moment. In the spaces that we have previously indicated, our strategy is going to be focused on. In terms of Freedom and other kind of related businesses, we are pursuing a very aggressive strategy with Freedom. As we get the core business on its growth trajectory, we are able now to focus on how we build out monetizing the business and how we expand it, not just in the U.S., but internationally. And I would tell you that we will be in our investor day in spring presenting you with a much more comprehensive view of what Freedom might look like over the long term domestically, internationally, and with adjacent business opportunities. That's really helpful. Looking forward to it. Thanks, guys. Thanks, James. Your next question comes from the line of Anna Glaessgen. Your line is open. Hi. Good morning. Thanks for taking my questions. I guess earlier this year, we talked about how Mercury's share had already eclipsed some of the targets that were laid out at the investor day. Could you maybe update us on how you're thinking about 2022 in terms of the market share gains that we could see there? Yeah. We try and stay away from being too specific on this, but I would say that Mercury's momentum, if anything, is accelerating. And when you see the product that we're going to release very soon, that is only going to increase the acceleration. So I'm sorry about not being too precise, but I would say that the trend is extremely favorable and accelerating, and we expect it to continue. Okay. Got it. Thanks. And then turning to the margin guidance a bit, I guess, does this incorporate some of the catch-up on R&D or other OpEx that was pushed out from 2020 as you reprioritized kind of at the height of the pandemic earlier in 2022? Yeah. To be honest, in 2020, we did not slow down any key strategic initiatives, so we kept investing in product development and our digital strategies. There were some items of kind of maintenance-type stuff that we pushed out, and they certainly will be caught up in this year. I would tell you, though, that we certainly are increasing our investments in technology, particularly in our ACES strategy. You will see that not only in our business units, but also somewhat in enterprise costs. Some of those technologies are advanced enough so that we need a kind of holistic enterprise effort, so yeah, the capital expenditures this year will reflect some catch-up on kind of maintenance-type activities, some further, obviously, investments in new product, some in capacity, as we've outlined, and I would say some increased investments in our ACES and related technology strategies. Great. Thanks. Thanks, Anna. Your next question comes from the line of Gerrick Johnson. Your line is open. Great. Good morning. Thank you. So in speaking about supply, it sounds like the flow is pretty good. So I shouldn't be concerned about getting to the 25% 1Q top-line growth with inventory down 14%. I'm particularly looking at the WIP down 7%. It seems like you're going to have to flow a lot of inventory in a quarter. So if you can talk about that for a second. Yeah. No, Gerrick, we're pretty comfortable with the revenue guidance. Yes, there's pockets of inventory down. Obviously, you got to dig a little deeper. I think we're building capacity and building inventory and key propulsion areas and P&A as well. Obviously, there's places that were a little bit more hand-to-mouth, but we're working through that, obviously, and getting product to our dealers and OEMs as quickly as necessary. And remember, a lot of our P&A is delivered same day, next day, all over the world. So there's not a real need for it to sit in inventory very long in ours or in the dealers when a customer makes that order. So I think we're controlling it, and obviously, we'll watch for various pockets, but we're pretty comfortable with the first quarter guidance. Okay. Great. And beyond flow, how about cost? With the constraints and bottlenecks that we're seeing everywhere, we're seeing increased costs, logistics, all sorts of things. Any risk to your guidance that those costs baked in could go higher? I suppose there's always a risk, but I think, obviously, we have mid-year pricing. Our pricing is designed to be net positive, if you like, and we have some adjustments that we can make in the businesses through the year, both the model year for our boats and during other periods. Given demand, I think there's no reason why we should not be able to net out costs, although obviously, we'll be managing and pushing back everywhere we possibly can. I would say at the moment, those costs are containable. Okay. All right. Great. Thank you. Thanks, Gerrick. There are no following questions. At this time, we would like to turn the call back to Dave for some concluding remarks. Thank you all very, very much for joining us. 2020 was a challenging year, but as you can see, the business really fired on all cylinders. We anticipate doing exactly the same in 2021. Regarding our guidance, I would say that we incorporated not just some known risks, but also some unknowables and probably not the full stack of opportunities that we have going forward. So we will continue to look at that as we continue to report earnings throughout the year. The new product launches in the next few weeks are astonishing, and you'll enjoy them. Please stay in touch. They're very exciting, and they're just part of the next leg of differentiation and growth for our businesses that we are extremely excited about and look forward to sharing more of that with you at our virtual investor event in the spring. So thanks, everybody. Thanks to our tremendous team at Brunswick for a fantastic year, and thank you all for joining us this morning. This concludes today's conference call. You may now disconnect.