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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended December 28, 2008

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number 1-1370





BRIGGS & STRATTON CORPORATION

(Exact name of registrant as specified
in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Wisconsin                                                      |  | 39-0182330                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

12301 West Wirth Street, Wauwatosa, Wisconsin 53222

(Address of Principal Executive Offices) (Zip Code)

414/259-5333

(Registrants telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    x    No   ̈

Indicate by check mark whether the registrant is
a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule
12b-2 of the Exchange Act. (Check one):



|                        |  |                                                 |  |                           |  |  
|----------------------- |  | ----------------------------------------------- |  | ------------------------- |  | -
|Large accelerated filer |  | x                                               |  | Accelerated filer         |  |  ̈
|                        |  |                                                 | 
|Non-accelerated filer   |  |  ̈ (Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



|                                        |  |                                
|--------------------------------------- |  | -------------------------------
|Class                                   |  | Outstanding at January 30, 2009
|COMMON STOCK, par value $0.01 per share |  | 49,811,802 Shares              









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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

INDEX



|                               |  |                                                                                                                  |  |         
|------------------------------ |  | ---------------------------------------------------------------------------------------------------------------- |  | --------
|                               |  |                                                                                                                  |  | Page No.
|PART I  FINANCIAL INFORMATION |  |                                                                                                                 
|                               |  |                                                                                                                 
|Item 1.                        |  | Financial Statements                                                                                             |  |         
|                               |  |                                                                                                                 
|                               |  | Consolidated Condensed Balance Sheets  December 28, 2008 and June 29, 2008                                      |  | 3       
|                               |  |                                                                                                                 
|                               |  | Consolidated Condensed Statements of Income  Three and Six Months Ended December 28, 2008 and December 30, 2007 |  | 5       
|                               |  |                                                                                                                 
|                               |  | Consolidated Condensed Statements of Cash Flows  Six Months Ended December 28, 2008 and December 30, 2007       |  | 6       
|                               |  |                                                                                                                 
|                               |  | Notes to Consolidated Condensed Financial Statements                                                             |  | 7       
|                               |  |                                                                                                                 
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                            |  | 20      
|                               |  |                                                                                                                 
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                                       |  | 24      
|                               |  |                                                                                                                 
|Item 4.                        |  | Controls and Procedures                                                                                          |  | 24      
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                                                 
|                               |  |                                                                                                                 
|Item 1.                        |  | Legal Proceedings                                                                                                |  | 24      
|                               |  |                                                                                                                 
|Item 1A.                       |  | Risk Factors                                                                                                     |  | 24      
|                               |  |                                                                                                                 
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                                              |  | 24      
|                               |  |                                                                                                                 
|Item 6.                        |  | Exhibits                                                                                                         |  | 24      
|                               | 
|Signatures                     |  | 26                                                                                                              
|                               | 
|Exhibit Index                  |  | 27                                                                                                              



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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES



PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

ASSETS



|                                          |  |                  |           |              |   |          
|----------------------------------------- |  | ---------------- | --------- | ------------ | - | ---------
|                                          |  | December 28,2008 |           | June 29,2008
|CURRENT ASSETS:                           |  |                  |           |              |   |          
|Cash and cash equivalents                 |  | $                | 19,036    |              | $ | 32,468   
|Accounts receivable, net                  |  |                  | 329,593   |              |   | 320,568  
|Inventories -                             |  |                  |           |              |   |          
|Finished products and parts               |  |                  | 451,267   |              |   | 339,186  
|Work in process                           |  |                  | 143,425   |              |   | 177,280  
|Raw materials                             |  |                  | 13,528    |              |   | 13,738   
|                                          |  |                  |           |              |   |          
|Total inventories                         |  |                  | 608,220   |              |   | 530,204  
|                                          |  |                  |           |              |   |          
|Deferred income tax asset                 |  |                  | 54,608    |              |   | 53,496   
|Prepaid expenses and other current assets |  |                  | 45,707    |              |   | 41,801   
|                                          |  |                  |           |              |   |          
|Total current assets                      |  |                  | 1,057,164 |              |   | 978,537  
|                                          |  |                  |           |              |   |          
|OTHER ASSETS:                             |  |                  |           |              |   |          
|Goodwill                                  |  |                  | 248,546   |              |   | 248,328  
|Investments                               |  |                  | 16,968    |              |   | 21,956   
|Prepaid pension                           |  |                  | 97,119    |              |   | 90,020   
|Deferred loan costs, net                  |  |                  | 2,360     |              |   | 3,106    
|Other intangible assets, net              |  |                  | 98,518    |              |   | 90,687   
|Other long-term assets, net               |  |                  | 8,646     |              |   | 8,827    
|                                          |  |                  |           |              |   |          
|Total other assets                        |  |                  | 472,157   |              |   | 462,924  
|                                          |  |                  |           |              |   |          
|PLANT AND EQUIPMENT:                      |  |                  |           |              |   |          
|Cost                                      |  |                  | 1,017,261 |              |   | 1,012,987
|Less - accumulated depreciation           |  |                  | 637,334   |              |   | 621,154  
|                                          |  |                  |           |              |   |          
|Total plant and equipment, net            |  |                  | 379,927   |              |   | 391,833  
|                                          |  |                  |           |              |   |          
|TOTAL ASSETS                              |  | $                | 1,909,248 |              | $ | 1,833,294
|                                          |  |                  |           |              |   |          

The accompanying notes are an integral part of these statements.



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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES



CONSOLIDATED CONDENSED BALANCE SHEETS (Continued)

(In thousands, except per share data)

LIABILITIES & SHAREHOLDERS INVESTMENT



|                                                                |  |                  |           |   |              |   |           |  
|--------------------------------------------------------------- |  | ---------------- | --------- | - | ------------ | - | --------- | -
|                                                                |  | December 28,2008 |           |   | June 29,2008 |  
|CURRENT LIABILITIES:                                            |  |                  |           |   |              |   |           |  
|Accounts payable                                                |  | $                | 194,223   |   |              | $ | 170,476   |  
|Short-term debt                                                 |  |                  | 204,894   |   |              |   | 3,000     |  
|Accrued liabilities                                             |  |                  | 169,631   |   |              |   | 160,126   |  
|                                                                |  |                  |           |   |              |   |           |  
|Total current liabilities                                       |  |                  | 568,748   |   |              |   | 333,602   |  
|                                                                |  |                  |           |   |              |   |           |  
|OTHER LIABILITIES:                                              |  |                  |           |   |              |   |           |  
|Deferred income tax liability                                   |  |                  | 50,833    |   |              |   | 47,266    |  
|Accrued pension cost                                            |  |                  | 36,936    |   |              |   | 36,173    |  
|Accrued employee benefits                                       |  |                  | 18,685    |   |              |   | 18,521    |  
|Accrued postretirement health care obligation                   |  |                  | 156,406   |   |              |   | 161,684   |  
|Other long-term liabilities                                     |  |                  | 32,936    |   |              |   | 32,970    |  
|Long-term debt                                                  |  |                  | 246,848   |   |              |   | 365,555   |  
|                                                                |  |                  |           |   |              |   |           |  
|Total other liabilities                                         |  |                  | 542,644   |   |              |   | 662,169   |  
|                                                                |  |                  |           |   |              |   |           |  
|SHAREHOLDERS INVESTMENT:                                       |  |                  |           |   |              |   |           |  
|Common stock -                                                  |  |                  |           |   |              |   |           |  
|Authorized 120,000 shares, $.01 par value, issued 57,854 shares |  |                  | 579       |   |              |   | 579       |  
|Additional paid-in capital                                      |  |                  | 76,153    |   |              |   | 76,667    |  
|Retained earnings                                               |  |                  | 1,061,978 |   |              |   | 1,082,553 |  
|Accumulated other comprehensive loss                            |  |                  | (131,793  | ) |              |   | (110,234  | )
|Treasury stock at cost, 8,042 and 8,154 shares, respectively    |  |                  | (209,061  | ) |              |   | (212,042  | )
|                                                                |  |                  |           |   |              |   |           |  
|Total shareholders investment                                  |  |                  | 797,856   |   |              |   | 837,523   |  
|                                                                |  |                  |           |   |              |   |           |  
|TOTAL LIABILITIES AND SHAREHOLDERS INVESTMENT                  |  | $                | 1,909,248 |   |              | $ | 1,833,294 |  
|                                                                |  |                  |           |   |              |   |           |  

The accompanying notes are an integral part of these statements.



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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES



CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)



|                                                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|--------------------------------------------------------- |  | ------------------ | ------- | - | ---------------- | - | ------- | ---------------- |  | - | ---------------- | - |  | - | ------- | -
|                                                          |  | Three Months Ended |         |   | Six Months Ended |  
|                                                          |  | December 28,2008   |         |   | December 30,2007 |   |         | December 28,2008 |  |   | December 30,2007 |  
|NET SALES                                                 |  | $                  | 477,481 |   |                  | $ | 477,537 |                  |  | $ | 935,632          |   |  | $ | 844,606 |  
|COST OF GOODS SOLD                                        |  |                    | 401,584 |   |                  |   | 433,220 |                  |  |   | 795,016          |   |  |   | 757,445 |  
|                                                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Gross profit on sales                                     |  |                    | 75,897  |   |                  |   | 44,317  |                  |  |   | 140,616          |   |  |   | 87,161  |  
|ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |  |                    | 63,302  |   |                  |   | 66,430  |                  |  |   | 128,153          |   |  |   | 130,570 |  
|                                                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Income (Loss) from operations                             |  |                    | 12,595  |   |                  |   | (22,113 | )                |  |   | 12,463           |   |  |   | (43,409 | )
|INTEREST EXPENSE                                          |  |                    | (8,714  | ) |                  |   | (10,610 | )                |  |   | (16,611          | ) |  |   | (19,583 | )
|OTHER INCOME, net                                         |  |                    | 687     |   |                  |   | 37,995  |                  |  |   | 1,886            |   |  |   | 38,017  |  
|                                                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Income (Loss) before provision (credit) for income taxes  |  |                    | 4,568   |   |                  |   | 5,272   |                  |  |   | (2,262           | ) |  |   | (24,975 | )
|PROVISION (CREDIT) FOR INCOME TAXES                       |  |                    | 1,376   |   |                  |   | 1,209   |                  |  |   | (3,498           | ) |  |   | (8,226  | )
|                                                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|NET INCOME (LOSS)                                         |  | $                  | 3,192   |   |                  | $ | 4,063   |                  |  | $ | 1,236            |   |  | $ | (16,749 | )
|                                                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|EARNINGS (LOSS) PER SHARE DATA -                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Average shares outstanding                                |  |                    | 49,571  |   |                  |   | 49,536  |                  |  |   | 49,567           |   |  |   | 49,543  |  
|                                                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Basic earnings (loss) per share                           |  | $                  | 0.06    |   |                  | $ | 0.08    |                  |  | $ | 0.02             |   |  | $ | (0.34   | )
|                                                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Diluted average shares outstanding                        |  |                    | 49,707  |   |                  |   | 49,637  |                  |  |   | 49,664           |   |  |   | 49,543  |  
|                                                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Diluted earnings (loss) per share                         |  | $                  | 0.06    |   |                  | $ | 0.08    |                  |  | $ | 0.02             |   |  | $ | (0.34   | )
|                                                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|CASH DIVIDENDS PER SHARE                                  |  | $                  | 0.22    |   |                  | $ | 0.22    |                  |  | $ | 0.44             |   |  | $ | 0.44    |  
|                                                          |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  

The accompanying notes are an integral part of these statements.



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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



|                                                                                     |  |                  |         |   |                  |   |          |  
|------------------------------------------------------------------------------------ |  | ---------------- | ------- | - | ---------------- | - | -------- | -
|                                                                                     |  | Six Months Ended |        
|                                                                                     |  | December 28,2008 |         |   | December 30,2007 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                |  |                  |         |   |                  |   |          |  
|Net income (loss)                                                                    |  | $                | 1,236   |   |                  | $ | (16,749  | )
|Adjustments to reconcile net income (loss) to net cash used in operating activities: |  |                  |         |   |                  |   |          |  
|Depreciation and amortization                                                        |  |                  | 34,580  |   |                  |   | 34,930   |  
|Stock compensation expense                                                           |  |                  | 2,560   |   |                  |   | 3,261    |  
|Loss (Gain) on disposition of plant and equipment                                    |  |                  | 641     |   |                  |   | (404     | )
|Gain on sale of investment                                                           |  |                  |        |   |                  |   | (36,960  | )
|(Provision) Credit for deferred income taxes                                         |  |                  | 4       |   |                  |   | (701     | )
|Earnings of unconsolidated affiliates                                                |  |                  | (810    | ) |                  |   | (1,552   | )
|Dividends received from unconsolidated affiliates                                    |  |                  | 4,812   |   |                  |   | 2,507    |  
|Change in operating assets and liabilities:                                          |  |                  |         |   |                  |   |          |  
|Increase in accounts receivable                                                      |  |                  | (8,344  | ) |                  |   | (14,933  | )
|Increase in inventories                                                              |  |                  | (68,125 | ) |                  |   | (81,498  | )
|Decrease (Increase) in other current assets                                          |  |                  | (355    | ) |                  |   | 8,797    |  
|Increase (Decrease) in accounts payable and accrued liabilities                      |  |                  | 4,958   |   |                  |   | (51,429  | )
|Change in accrued/prepaid pension                                                    |  |                  | (4,214  | ) |                  |   | (1,129   | )
|Other, net                                                                           |  |                  | (5,684  | ) |                  |   | (6,783   | )
|                                                                                     |  |                  |         |   |                  |   |          |  
|Net cash used by operating activities                                                |  |                  | (38,741 | ) |                  |   | (162,643 | )
|                                                                                     |  |                  |         |   |                  |   |          |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                |  |                  |         |   |                  |   |          |  
|Additions to plant and equipment                                                     |  |                  | (21,140 | ) |                  |   | (34,177  | )
|Cash paid for acquisition, net of cash acquired                                      |  |                  | (24,757 | ) |                  |   |         |  
|Proceeds received on sale of plant and equipment                                     |  |                  | 2,211   |   |                  |   | 523      |  
|Proceeds received on sale of investment                                              |  |                  |        |   |                  |   | 66,011   |  
|Other, net                                                                           |  |                  |        |   |                  |   | (503     | )
|                                                                                     |  |                  |         |   |                  |   |          |  
|Net cash provided (used) by investing activities                                     |  |                  | (43,686 | ) |                  |   | 31,854   |  
|                                                                                     |  |                  |         |   |                  |   |          |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                |  |                  |         |   |                  |   |          |  
|Net borrowings on loans, notes payable and long-term debt                            |  |                  | 81,650  |   |                  |   | 159,920  |  
|Issuance cost of amended revolver                                                    |  |                  |        |   |                  |   | (1,286   | )
|Dividends paid                                                                       |  |                  | (10,906 | ) |                  |   | (10,901  | )
|Stock option proceeds and tax benefits                                               |  |                  |        |   |                  |   | 991      |  
|                                                                                     |  |                  |         |   |                  |   |          |  
|Net cash provided by financing activities                                            |  |                  | 70,744  |   |                  |   | 148,724  |  
|                                                                                     |  |                  |         |   |                  |   |          |  
|EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS        |  |                  | (1,749  | ) |                  |   | 1,517    |  
|                                                                                     |  |                  |         |   |                  |   |          |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                 |  |                  | (13,432 | ) |                  |   | 19,452   |  
|CASH AND CASH EQUIVALENTS, beginning                                                 |  |                  | 32,468  |   |                  |   | 29,469   |  
|                                                                                     |  |                  |         |   |                  |   |          |  
|CASH AND CASH EQUIVALENTS, ending                                                    |  | $                | 19,036  |   |                  | $ | 48,921   |  
|                                                                                     |  |                  |         |   |                  |   |          |  
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                    |  |                  |         |   |                  |   |          |  
|Interest paid                                                                        |  | $                | 16,142  |   |                  | $ | 20,952   |  
|                                                                                     |  |                  |         |   |                  |   |          |  
|Income taxes paid                                                                    |  | $                | 2,121   |   |                  | $ | 2,798    |  
|                                                                                     |  |                  |         |   |                  |   |          |  

The accompanying notes are an integral part of these statements.



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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES



NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

General Information

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the rules and regulations of the Securities
and Exchange Commission and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the
United States. The year-end condensed balance sheet data was derived from audited financial statements, but also does not include all disclosures required by accounting principles generally accepted in the United States. However, in the opinion of
Briggs & Stratton Corporation (the Company), adequate disclosures have been presented to prevent the information from being misleading, and all adjustments necessary to present fair statements of the results of operations and financial
position have been included. All of these adjustments are of a normal recurring nature. These consolidated condensed financial statements should be read in conjunction with the financial statements and the notes thereto which were included in our
latest Annual Report on Form 10-K.

Earnings Per Share

Basic earnings per share, for each period presented, is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share, for each
period presented, is computed reflecting the potential dilution that would occur if options or other contracts to issue common stock were exercised or converted into common stock at the beginning of the period.

Shares outstanding used to compute diluted earnings per share for the three and six months ended December 28, 2008 excluded outstanding options to
purchase approximately 4,329,000 and 4,130,000 shares of common stock, respectively, because the options exercise price was greater than the average market price of the common shares.

Shares outstanding used to compute diluted earnings per share for the three months ended December 30, 2007 excluded outstanding options to purchase
approximately 3,885,000 shares of common stock because the options exercise price was greater than the average market price of the common shares. Shares outstanding used to compute diluted earnings per share for the six months ended
December 30, 2007 excluded all shares of restricted and deferred stock and all outstanding options to purchase shares of common stock, as their inclusion would have been anti-dilutive.

Information on earnings per share is as follows (in thousands):



|                                                                                                                                              |  |                    |        |                  |   |                  |  |                  |        |  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------ | ---------------- | - | ---------------- |  | ---------------- | ------ |  | - | ------- | -
|                                                                                                                                              |  | Three Months Ended |        | Six Months Ended |  
|                                                                                                                                              |  | December 28,2008   |        | December 30,2007 |   | December 28,2008 |  | December 30,2007 |       
|Net income (loss)                                                                                                                             |  | $                  | 3,192  |                  | $ | 4,063            |  | $                | 1,236  |  | $ | (16,749 | )
|                                                                                                                                              |  |                    |        |                  |   |                  |  |                  |        |  |   |         |  
|Average shares of common stock outstanding                                                                                                    |  |                    | 49,571 |                  |   | 49,536           |  |                  | 49,567 |  |   | 49,543  |  
|Incremental common shares applicable to restricted and deferred common stock based on the common stock average market price during the period |  |                    | 136    |                  |   | 101              |  |                  | 97     |  |   |        |  
|Diluted average shares of common stock outstanding                                                                                            |  |                    | 49,707 |                  |   | 49,637           |  |                  | 49,664 |  |   | 49,543  |  



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Comprehensive Income (Loss)

Comprehensive income (loss) is a more inclusive financial reporting method that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income.
Comprehensive income (loss) is defined as net income and other changes in shareholders investment from transactions and events other than with shareholders. Total comprehensive income (loss) is as follows (in thousands):



|                                                             |  |                    |        |                  |                  |   |                  |  |   |                  |   |  |   |         |  
|------------------------------------------------------------ |  | ------------------ | ------ | ---------------- | ---------------- | - | ---------------- |  | - | ---------------- | - |  | - | ------- | -
|                                                             |  | Three Months Ended |        | Six Months Ended |                 
|                                                             |  | December 28,2008   |        |                  | December 30,2007 |   | December 28,2008 |  |   | December 30,2007 |  
|Net income (loss)                                            |  | $                  | 3,192  |                  |                  | $ | 4,063            |  | $ | 1,236            |   |  | $ | (16,749 | )
|Cumulative translation adjustments                           |  |                    | (8,472 | )                |                  |   | 2,321            |  |   | (18,864          | ) |  |   | 4,096   |  
|Unrealized gain (loss) on derivative instruments             |  |                    | (1,848 | )                |                  |   | 974              |  |   | (7,165           | ) |  |   | (530    | )
|Amortization of net actuarial changes and prior service cost |  |                    | 2,236  |                  |                  |   | 1,518            |  |   | 4,470            |   |  |   | 3,036   |  
|                                                             |  |                    |        |                  |                  |   |                  |  |   |                  |   |  |   |         |  
|Total comprehensive income (loss)                            |  | $                  | (4,892 | )                |                  | $ | 8,876            |  | $ | (20,323          | ) |  | $ | (10,147 | )
|                                                             |  |                    |        |                  |                  |   |                  |  |   |                  |   |  |   |         |  

The components of Accumulated Other Comprehensive Loss are as follows (in thousands):



|                                                   |  |                  |          |   |              |   |          |  
|-------------------------------------------------- |  | ---------------- | -------- | - | ------------ | - | -------- | -
|                                                   |  | December 28,2008 |          |   | June 29,2008 |  
|Cumulative translation adjustments                 |  | $                | 3,781    |   |              | $ | 22,645   |  
|Unrealized gain (loss) on derivative instruments   |  |                  | (2,716   | ) |              |   | 4,449    |  
|Unrecognized pension and postretirement obligation |  |                  | (132,858 | ) |              |   | (137,328 | )
|                                                   |  |                  |          |   |              |   |          |  
|Accumulated other comprehensive loss               |  | $                | (131,793 | ) |              | $ | (110,234 | )
|                                                   |  |                  |          |   |              |   |          |  

Derivatives

Derivatives are recorded on the balance sheet as assets or liabilities, measured at fair value. The Company enters into derivative contracts designated as cash flow hedges to manage currency and certain material
exposures. These instruments generally do not have a maturity of more than twelve months.

Changes in the fair value of cash flow hedges to
manage its foreign currency exposure are recorded on the Consolidated Condensed Statements of Income or as a component of Accumulated Other Comprehensive Loss. The amounts included in Accumulated Other Comprehensive Loss will be reclassified into
income when the forecasted transactions occur. These forecasted transactions represent the exporting of products for which the Company will receive foreign currency and the importing of products for which it will be required to pay in a foreign
currency. Changes in the fair value of all derivatives deemed to be ineffective would be recorded as either income or expense in the accompanying Consolidated Condensed Statements of Income.

The Company manages its exposure to fluctuation in the cost of natural gas used by its operating facilities through participation in a third party
managed dollar cost averaging program linked to NYMEX futures. As a participant in the program, the Company hedges up to 100% of its anticipated monthly natural gas usage along with a pool of other companies. The Company does not hold any actual
futures contracts, and actual delivery of natural gas is not required of the participants in the program. Cash settlements occur on a monthly basis based on the difference between the average dollar price of the underlying NYMEX futures held by the
third party and the actual price of natural gas paid by the Company in the period. The fair value of the underlying NYMEX futures is reflected as an asset or liability on the accompanying Consolidated Condensed Balance Sheets. Changes in fair value
are reflected as a Component of Accumulated Other Comprehensive Loss, which are reclassified into the income statement as the monthly cash settlements occur and actual natural gas is consumed.

The Company manages its exposure to fluctuations in the cost of copper to be used in manufacturing by entering into forward purchase contracts designated
as cash flow hedges. The Company hedges up to 80% of its anticipated copper usage, and the fair value of outstanding future contracts is reflected as an asset or liability on the accompanying Consolidated Condensed Balance Sheet



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based on NYMEX prices. Changes in fair value are reflected as a Component of Accumulated Other Comprehensive Loss if the forward purchase contracts are
deemed to be effective. Changes in the fair value of all derivatives deemed to be ineffective would be recorded as either income or expense in the accompanying Consolidated Condensed Statements of Income. Unrealized gains or losses associated with
the forward purchase contracts are captured in inventory costs and are realized in the income statement when sales of inventory are made.

Segment
Information

The Company operates two reportable business segments that are managed separately based on fundamental differences in their
operations. Summarized segment data is as follows (in thousands):



|                                                                                  |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|--------------------------------------------------------------------------------- |  | ------------------ | ------- | - | ---------------- | - | ------- | ---------------- |  | - | ---------------- | - |  | - | ------- | -
|                                                                                  |  | Three Months Ended |         |   | Six Months Ended |  
|                                                                                  |  | December 28,2008   |         |   | December 30,2007 |   |         | December 28,2008 |  |   | December 30,2007 |  
|NET SALES:                                                                        |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Engines                                                                           |  | $                  | 339,287 |   |                  | $ | 315,537 |                  |  | $ | 597,908          |   |  | $ | 523,953 |  
|Power Products                                                                    |  |                    | 192,012 |   |                  |   | 195,695 |                  |  |   | 447,543          |   |  |   | 383,086 |  
|Inter-Segment Eliminations                                                        |  |                    | (53,818 | ) |                  |   | (33,695 | )                |  |   | (109,819         | ) |  |   | (62,433 | )
|                                                                                  |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Total *                                                                           |  | $                  | 477,481 |   |                  | $ | 477,537 |                  |  | $ | 935,632          |   |  | $ | 844,606 |  
|                                                                                  |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|* International sales based on product shipment destination included in net sales |  | $                  | 165,225 |   |                  | $ | 152,019 |                  |  | $ | 276,394          |   |  | $ | 255,437 |  
|                                                                                  |  |                    |         |  
|GROSS PROFIT ON SALES:                                                            |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Engines                                                                           |  | $                  | 65,697  |   |                  | $ | 42,421  |                  |  | $ | 106,124          |   |  | $ | 76,675  |  
|Power Products                                                                    |  |                    | 10,953  |   |                  |   | 1,236   |                  |  |   | 32,484           |   |  |   | 9,661   |  
|Inter-Segment Eliminations                                                        |  |                    | (753    | ) |                  |   | 660     |                  |  |   | 2,008            |   |  |   | 825     |  
|                                                                                  |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Total                                                                             |  | $                  | 75,897  |   |                  | $ | 44,317  |                  |  | $ | 140,616          |   |  | $ | 87,161  |  
|                                                                                  |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|INCOME (LOSS) FROM OPERATIONS:                                                    |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Engines                                                                           |  | $                  | 21,970  |   |                  | $ | (5,857  | )                |  | $ | 16,459           |   |  | $ | (17,085 | )
|Power Products                                                                    |  |                    | (8,622  | ) |                  |   | (16,916 | )                |  |   | (6,004           | ) |  |   | (27,149 | )
|Inter-Segment Eliminations                                                        |  |                    | (753    | ) |                  |   | 660     |                  |  |   | 2,008            |   |  |   | 825     |  
|                                                                                  |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  
|Total                                                                             |  | $                  | 12,595  |   |                  | $ | (22,113 | )                |  | $ | 12,463           |   |  | $ | (43,409 | )
|                                                                                  |  |                    |         |   |                  |   |         |                  |  |   |                  |   |  |   |         |  

Warranty

The Company recognizes the cost associated with its standard warranty on Engines and Power Products at the time of sale. The amount recognized is based on historical failure rates and current claim cost experience. In
the first quarter of fiscal 2008, the Company incurred $2.1 million of expenses to accrue for current and future warranty claims related to a snow thrower engine recall. An additional $17.7 million was accrued in the second quarter of fiscal 2008
and no additional expenses were specifically accrued thereafter. The snow thrower engines were recalled due to a potential risk of fire. The amounts accrued were to repair the units to reduce or eliminate the potential fire hazard. As of
December 28, 2008, June 29, 2008 and December 30, 2007, the balance sheet included $3.3 million, $3.8 million and $7.7 million, respectively, of reserves for this specific engine warranty matter. During fiscal 2008, product
liability reserves totaling less than $50,000 were accrued for product liability matters related to this recall as the Company has had minimal product liability claims asserted for nominal amounts related to the snow engine recall. The following is
a reconciliation of the changes in accrued warranty costs, including the snow thrower engine recall, for the reporting period (in thousands):



|                                      |  |                  |         |   |                  |   |         |  
|------------------------------------- |  | ---------------- | ------- | - | ---------------- | - | ------- | -
|                                      |  | Six Months Ended |        
|                                      |  | December 28,2008 |         |   | December 30,2007 |  
|Beginning balance                     |  | $                | 49,548  |   |                  | $ | 54,566  |  
|Payments                              |  |                  | (17,652 | ) |                  |   | (32,335 | )
|Provision for current year warranties |  |                  | 15,683  |   |                  |   | 31,952  |  
|Adjustment to prior years warranties |  |                  | (834    | ) |                  |   | (2,846  | )
|                                      |  |                  |         |   |                  |   |         |  
|Ending balance                        |  | $                | 46,745  |   |                  | $ | 51,337  |  
|                                      |  |                  |         |   |                  |   |         |  



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Stock Incentives

Stock based compensation is calculated by estimating the fair value of incentive stock awards granted and amortizing the estimated value over the awards vesting period. Stock based compensation expense was $0.6
million and $2.6 million for the quarter and six months ended December 28, 2008, respectively. For the quarter and six months ended December 30, 2007, stock based compensation was $0.6 million and $3.3 million, respectively.

Pension and Postretirement Benefits

The Company has
noncontributory, defined benefit retirement plans and postretirement plans covering certain employees. The following tables summarize the plans income and expense for the periods indicated (in thousands):



|                                              |  |                    |         |   |                               |   |         |                  |  |   |                  |   |  |   |        |  
|--------------------------------------------- |  | ------------------ | ------- | - | ----------------------------- | - | ------- | ---------------- |  | - | ---------------- | - |  | - | ------ | -
|                                              |  | Pension Benefits   |         |   | Other Postretirement Benefits |  
|                                              |  | Three Months Ended |         |   | Three Months Ended            |  
|                                              |  | December 28,2008   |         |   | December 30,2007              |   |         | December 28,2008 |  |   | December 30,2007 |  
|Components of net periodic (income) expense:  |  |                    |         |   |                               |   |         |                  |  |   |                  |   |  |   |        |  
|Service cost-benefits earned                  |  | $                  | 2,603   |   |                               | $ | 2,406   |                  |  | $ | 319              |   |  | $ | 471    |  
|Interest cost on projected benefit obligation |  |                    | 15,231  |   |                               |   | 15,049  |                  |  |   | 3,100            |   |  |   | 3,475  |  
|Expected return on plan assets                |  |                    | (20,796 | ) |                               |   | (20,293 | )                |  |   |                 |   |  |   |       |  
|Amortization of:                              |  |                    |         |   |                               |   |         |                  |  |   |                  |   |  |   |        |  
|Transition obligation                         |  |                    | 2       |   |                               |   | 2       |                  |  |   |                 |   |  |   | 11     |  
|Prior service cost                            |  |                    | 852     |   |                               |   | 823     |                  |  |   | (219             | ) |  |   | (213   | )
|Actuarial loss                                |  |                    | 146     |   |                               |   | 1,543   |                  |  |   | 2,603            |   |  |   | 2,682  |  
|                                              |  |                    |         |   |                               |   |         |                  |  |   |                  |   |  |   |        |  
|Net periodic (income) expense                 |  | $                  | (1,962  | ) |                               | $ | (470    | )                |  | $ | 5,803            |   |  | $ | 6,426  |  
|                                              |  |                    |         |   |                               |   |         |                  |  |   |                  |   |  |   |        |  
|                                              |  |                   
|                                              |  | Pension Benefits   |         |   | Other Postretirement Benefits |  
|                                              |  | Six Months Ended   |         |   | Six Months Ended              |  
|                                              |  | December 28,2008   |         |   | December 30,2007              |   |         | December 28,2008 |  |   | December 30,2007 |  
|Components of net periodic (income) expense:  |  |                    |         |   |                               |   |         |                  |  |   |                  |   |  |   |        |  
|Service cost-benefits earned                  |  | $                  | 5,739   |   |                               | $ | 6,029   |                  |  | $ | 637              |   |  | $ | 943    |  
|Interest cost on projected benefit obligation |  |                    | 30,573  |   |                               |   | 30,163  |                  |  |   | 6,201            |   |  |   | 6,950  |  
|Expected return on plan assets                |  |                    | (41,665 | ) |                               |   | (40,672 | )                |  |   |                 |   |  |   |       |  
|Amortization of:                              |  |                    |         |   |                               |   |         |                  |  |   |                  |   |  |   |        |  
|Transition obligation                         |  |                    | 4       |   |                               |   | 4       |                  |  |   |                 |   |  |   | 21     |  
|Prior service cost                            |  |                    | 1,674   |   |                               |   | 1,645   |                  |  |   | (438             | ) |  |   | (426   | )
|Actuarial loss                                |  |                    | 279     |   |                               |   | 2,684   |                  |  |   | 5,206            |   |  |   | 5,364  |  
|                                              |  |                    |         |   |                               |   |         |                  |  |   |                  |   |  |   |        |  
|Net periodic (income) expense                 |  | $                  | (3,396  | ) |                               | $ | (147    | )                |  | $ | 11,606           |   |  | $ | 12,852 |  
|                                              |  |                    |         |   |                               |   |         |                  |  |   |                  |   |  |   |        |  



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The Company expects to make benefit payments of approximately $1.9 million attributable to its
non-qualified pension plans during fiscal 2009. During the six months ended December 28, 2008, the Company made payments of approximately $0.9 million for its non-qualified pension plans. The Company anticipates making benefit payments of
approximately $29.7 million for its other postretirement benefit plans during fiscal 2009. During the six months ended December 28, 2008, the Company made payments of $13.8 million for its other postretirement benefit plans.

Based on an estimated $800 million fair market value of plan assets as of December 28, 2008 and an assumed discount rate of 6.5%, the
Company projects it would be required to recognize a decrease in its pension funded status of approximately $191 million at June 28, 2009. This $191 million decrease would change the current prepaid pension asset position to an
accrued pension liability position. Additionally, accumulated other comprehensive loss would increase approximately $122 million, net of tax.

A 0.25% decrease in the discount rate would decrease annual pension expense by approximately $0.5 million. A 0.25% decrease in the expected return on plan assets would increase our annual pension expense by approximately $2.3 million.

The Company is not required to, nor intends to, make any contributions to the qualified pension plan in fiscal 2009. The Company was not
required, nor did it make any contributions to the qualified pension plan in fiscal 2008. Assuming plan assets decrease in a range of 10% to 20% during fiscal 2009 and the discount rate is in a range of 5.5% to 7.5% for fiscal 2009, the Company may
be required to make contributions to the qualified pension plan in a range of $5 million to $40 million for the fiscal 2010 plan year.

Given recent market volatility, it is difficult to predict the book and/or funding impact, as it is dependent on several factors including the discount rate, actual returns on plan assets and other actuarial assumptions. Final
determination will only be known on the June 30, 2009 measurement date.

Income Taxes

As of June 29, 2008, the Company had $27.8 million of gross unrecognized tax benefits. Of this amount, $19.2 million represented the portion that, if
recognized, would impact the effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. For the six months ended December 28, 2008, the Company recorded a reduction in the tax
reserve of $3.0 million. The decrease relates primarily to the resolution of a favorable tax treatment of foreign dividends recorded in the first quarter plus a small impact of foreign exchange and interest rate adjustments in both quarters.

The Company files income tax returns in the U.S. federal and various state and foreign jurisdictions. In the U.S. the Company is no longer
subject to U.S. federal income tax examinations by the tax authorities before 2004 and is currently at appeals for taxable years ending in 2004 and 2005. With respect to the Companys major foreign jurisdictions, it is no longer subject to tax
examinations by tax authorities before 1997.

New Accounting Pronouncements

In March 2008, the Financial Accounting Standards Board (FASB) issued Statement No. 161, Disclosures about Derivative Instruments
and Hedging Activities  an amendment of FASB Statement No. 133 (SFAS 161). SFAS 161 is intended to help investors better understand how derivative instruments and hedging activities affect an entitys financial
position, financial performance and cash flows through enhanced disclosure requirements. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. At this time, the impact of adoption of SFAS 161 on the
Companys consolidated financial position is being assessed.



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In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141R,
Business Combinations (SFAS 141R). SFAS 141R states that all business combinations (whether full, partial or step acquisitions) will result in all assets and liabilities of an acquired business being recorded at their fair values.
Certain forms of contingent consideration and certain acquired contingencies will be recorded at fair value at the acquisition date. SFAS 141R also states acquisition costs will generally be expensed as incurred and restructuring costs will be
expensed in periods after the acquisition date. This statement is effective prospectively for financial statements issued for fiscal years beginning after December 15, 2008. The impact of the adoption of SFAS 141R will depend on the nature and
significance of business combinations the Company enters into subsequent to adoption.

Acquisitions

On June 30, 2008 the Company, through its wholly owned subsidiary Briggs & Stratton Australia, Pty Limited, acquired Victa Lawncare Pty.
Ltd. (Victa) of Sydney, Australia from GUD Holdings Limited for total consideration of $24.8 million in net cash. Victa is a leading designer, manufacturer and marketer of a broad range of outdoor power equipment used in consumer lawn
and garden applications in Australia and New Zealand. Victas products are sold at large retail stores and independent dealers. Victa had net sales of approximately $57 million for the twelve months ended June 30, 2008. The Company
financed the transaction from cash on hand and its existing credit facilities. Victa is included in the Power Products Segment.

The
acquisition has been accounted for using the purchase method of accounting. The purchase price was allocated to identifiable assets acquired and liabilities assumed based upon their estimated fair values, with the excess purchase price recorded as
goodwill. This goodwill is recorded within the Engines Segment. Final adjustments to the purchase price allocation, resulting from finalizing a third party valuation of certain assets fair values, are not expected to be material to the
consolidated financial statements. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands):



|                              |  |   |       
|----------------------------- |  | - | ------
|Assets Acquired:              |  |   |       
|Current assets                |  | $ | 12,928
|Property, plant and equipment |  |   | 6,092 
|Goodwill                      |  |   | 243   
|Other intangible assets       |  |   | 12,282
|                              |  |   |       
|Total assets acquired         |  |   | 31,545
|                              | 
|Liabilities Assumed:          |  |   |       
|Current liabilities           |  | $ | 6,788 
|                              |  |   |       
|Total liabilities assumed     |  |   | 6,788 
|                              |  |   |       
|Net assets acquired           |  | $ | 24,757
|                              |  |   |       



Fair Value Measurements

Effective June 30, 2008, the Company adopted SFAS 157, Fair Value Measurements, which establishes a new framework for measuring fair value and
expands the related disclosures. To increase consistency and comparability in fair value measurements and related disclosures, SFAS 157 established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value
into three broad levels:

Level 1: Quoted prices for identical instruments in active markets.



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Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments
in markets that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are observable.

Level 3:
Significant inputs to the valuation model are unobservable.

The following table presents information about the Companys financial
assets and liabilities measured at fair value on a recurring basis as of December 28, 2008 (in thousands):



|             |  |                   |  |                              |  |         |  |        
|------------ |  | ----------------- |  | ---------------------------- |  | ------- |  | -------
|             |  |                   |  | Fair Value Measurement Using
|             |  | December 28, 2008 |  | Level 1                      |  | Level 2 |  | Level 3
|Assets:      |  |                   |  |                              |  |         |  |        
|Derivatives  |  | 4,077             |  | 4,077                        |  |        |  |       
|Liabilities: |  |                   |  |                              |  |         |  |        
|Derivatives  |  | 3,871             |  | 5                            |  | 3,866   |  |       

Effective January 1, 2008, the Company adopted SFAS No. 159, which provides entities the
option to measure many financial instruments and certain other items at fair value. Entities that choose the fair value option will recognize unrealized gains and losses on items for which the fair value option was elected in earnings at each
subsequent reporting date. The Company has currently chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with accounting principles generally accepted in the United States.

Commitments and Contingencies

The
Company is subject to various unresolved legal actions that arise in the normal course of its business. These actions typically relate to product liability (including asbestos-related liability), patent and trademark matters, and disputes with
customers, suppliers, distributors and dealers, competitors and employees.

Starting with the first complaint in June 2004, various
plaintiff groups have filed complaints in federal courts across the country against the Company and other engine and lawnmower manufacturers alleging, among other things, that the horsepower labels on the products they purchased were inaccurate and
that the Company conspired with other engine and lawnmower manufacturers to conceal the true horsepower of these engines. In these 62 actions, plaintiffs seek to certify 52 separate classes of all persons in each of the 50 states, Puerto Rico and
the District of Columbia who purchased a lawnmower containing a gasoline combustion engine up to 30 horsepower from 1994 to the present. Plaintiffs seek injunctive relief, compensatory and punitive damages, and attorneys fees.

On September 25, 2008, the Company, along with several other defendants, filed a motion with the Judicial Panel on Multidistrict Litigation seeking
to transfer the pending actions, and any subsequently filed similar actions, to a single federal court for coordinated pretrial proceedings. On December 5, 2008, the Multidistrict Litigation Panel granted the motion and transferred the cases to
Judge Adelman of the United States District Court for the Eastern District of Wisconsin (In Re: Lawnmower Engine Horsepower Marketing and Sales Practices Litigation, Case No. 2:08-md-01999). On January 27, 2009, Judge Adelman held an
initial hearing in the action. At that hearing, the court appointed lead plaintiffs class counsel, liaison counsel for defendants, and entered a stay of all litigation in all cases for 120 days so that the parties may conduct mediation in an
effort to resolve all outstanding litigation. The court set May 28, 2009 as the next status date to report on the mediation efforts. The Company has yet to answer or otherwise plead in response to any of the complaints filed to date.



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Although it is not possible to predict with certainty the outcome of these unresolved legal actions
or the range of possible loss, the Company believes the unresolved legal actions will not have a material effect on its financial position.

Casualty
Event

On December 1, 2008, a fire destroyed inventory and equipment in a leased warehouse facility in Dyersburg, Tennessee. The
destroyed facility supported the lawn and garden manufacturing operations in Newbern, Tennessee where production was temporarily suspended as replacement parts and components were expedited. Production at the Newbern plant has since resumed to
normal levels. The business interruption effect is still being quantified; however, the Company expects all related losses to be effectively covered by insurance.

Assets lost in the fire were valued at approximately $24.9 million. Subsequent to the second fiscal quarter, an insurance proceed installment of $12.0 million was received. The Company believes all property losses
incurred are covered under property insurance policies subject to customary incurred loss deductibles.

Financial Information of Subsidiary Guarantor of
Indebtedness

In June 1997, the Company issued $100 million of 7.25% senior notes, in May 2001, the Company issued $275 million of
8.875% senior notes and in February 2005, the Company issued $125 million of variable rate term notes. In addition, the Company had a $350 million revolving credit facility used to finance seasonal working capital needs that was to expire in May
2009.

On July 12, 2007, the Company entered into a $500 million amended and restated multicurrency credit agreement. The Amended
Credit Agreement (Revolver) provides a revolving credit facility for up to $500 million in revolving loans, including up to $25 million in swing-line loans. The Company used the proceeds of the Revolver to, among other things, pay off
the remaining amount outstanding under the Companys variable rate term notes issued in February 2005 and retire the 7.25% senior notes that were due in September 2007. The Revolver has a term of five years and all outstanding borrowings
on the Revolver are due and payable on July 12, 2012. The Revolver contains covenants that the Company considers usual and customary for an agreement of this type, including a Maximum Total Leverage Ratio and Minimum Interest Coverage Ratio.
Certain of the Companys subsidiaries are required to be guarantors of the Companys obligations under the Revolver.

Under the
terms of the Companys 8.875% senior notes and the Revolver (collectively, the Domestic Indebtedness), Briggs & Stratton Power Products Group, LLC is the joint and several guarantor of the Domestic Indebtedness (the
Guarantor). The guarantees are full and unconditional guarantees. Additionally, if at any time a domestic subsidiary of the Company constitutes a significant domestic subsidiary, then such domestic subsidiary will also become a guarantor
of the Domestic Indebtedness. Currently, all of the Domestic Indebtedness is unsecured. If the Company were to fail to make a payment of interest or principal on its due date, the Guarantor is obligated to pay the outstanding Domestic Indebtedness.
The Company had the following outstanding amounts related to the guaranteed debt (in thousands):



|                                                  |  |                                  |         |                   |   |        
|------------------------------------------------- |  | -------------------------------- | ------- | ----------------- | - | -------
|                                                  |  | December 28, 2008Carrying Amount |         | Maximum Guarantee
|8.875% Senior Notes, due March 15, 2011           |  | $                                | 246,848 |                   | $ | 248,000
|Revolving Credit Facility, expiring July 12, 2012 |  | $                                | 199,700 |                   | $ | 500,000



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The following condensed supplemental consolidating financial information reflects the summarized
financial information of the Company, its Guarantor and Non-Guarantor Subsidiaries (in thousands):

BALANCE SHEET

As of December 28, 2008



|                            |  |                              |           |                     |   |                           |  |              |         |  |              |            |   |  |   |          
|--------------------------- |  | ---------------------------- | --------- | ------------------- | - | ------------------------- |  | ------------ | ------- |  | ------------ | ---------- | - |  | - | ---------
|                            |  | Briggs & StrattonCorporation |           | GuarantorSubsidiary |   | Non-GuarantorSubsidiaries |  | Eliminations |         |  | Consolidated
|Current assets              |  | $                            | 630,396   |                     | $ | 442,011                   |  | $            | 253,752 |  | $            | (268,995   | ) |  | $ | 1,057,164
|Investment in subsidiaries  |  |                              | 704,549   |                     |   |                          |  |              |        |  |              | (704,549   | ) |  |   |         
|Non-current assets          |  |                              | 537,609   |                     |   | 309,743                   |  |              | 46,916  |  |              | (42,184    | ) |  |   | 852,084  
|                            |  |                              |           |                     |   |                           |  |              |         |  |              |            |   |  |   |          
|                            |  | $                            | 1,872,554 |                     | $ | 751,754                   |  | $            | 300,668 |  | $            | (1,015,728 | ) |  | $ | 1,909,248
|                            |  |                              |           |                     |   |                           |  |              |         |  |              |            |   |  |   |          
|Current liabilities         |  | $                            | 604,423   |                     | $ | 104,661                   |  | $            | 128,659 |  | $            | (268,995   | ) |  | $ | 568,748  
|Long-term debt              |  |                              | 246,848   |                     |   |                          |  |              |        |  |              |           |   |  |   | 246,848  
|Other long-term obligations |  |                              | 223,427   |                     |   | 71,721                    |  |              | 42,834  |  |              | (42,186    | ) |  |   | 295,796  
|Shareholders investment    |  |                              | 797,856   |                     |   | 575,372                   |  |              | 129,175 |  |              | (704,547   | ) |  |   | 797,856  
|                            |  |                              |           |                     |   |                           |  |              |         |  |              |            |   |  |   |          
|                            |  | $                            | 1,872,554 |                     | $ | 751,754                   |  | $            | 300,668 |  | $            | (1,015,728 | ) |  | $ | 1,909,248
|                            |  |                              |           |                     |   |                           |  |              |         |  |              |            |   |  |   |          

BALANCE SHEET

As of June 29, 2008



|                            |  |                              |           |                     |   |                           |  |              |         |  |              |            |   |  |   |          
|--------------------------- |  | ---------------------------- | --------- | ------------------- | - | ------------------------- |  | ------------ | ------- |  | ------------ | ---------- | - |  | - | ---------
|                            |  | Briggs & StrattonCorporation |           | GuarantorSubsidiary |   | Non-GuarantorSubsidiaries |  | Eliminations |         |  | Consolidated
|Current assets              |  | $                            | 543,349   |                     | $ | 1,071,298                 |  | $            | 234,889 |  | $            | (870,999   | ) |  | $ | 978,537  
|Investment in subsidiaries  |  |                              | 1,065,613 |                     |   |                          |  |              |        |  |              | (1,065,613 | ) |  |   |         
|Non-current assets          |  |                              | 371,781   |                     |   | 445,777                   |  |              | 37,199  |  |              |           |   |  |   | 854,757  
|                            |  |                              |           |                     |   |                           |  |              |         |  |              |            |   |  |   |          
|                            |  | $                            | 1,980,743 |                     | $ | 1,517,075                 |  | $            | 272,088 |  | $            | (1,936,612 | ) |  | $ | 1,833,294
|                            |  |                              |           |                     |   |                           |  |              |         |  |              |            |   |  |   |          
|Current liabilities         |  | $                            | 574,795   |                     | $ | 462,968                   |  | $            | 166,838 |  | $            | (870,999   | ) |  | $ | 333,602  
|Long-term debt              |  |                              | 365,555   |                     |   |                          |  |              |        |  |              |           |   |  |   | 365,555  
|Other long-term obligations |  |                              | 202,870   |                     |   | 93,218                    |  |              | 526     |  |              |           |   |  |   | 296,614  
|Shareholders investment    |  |                              | 837,523   |                     |   | 960,889                   |  |              | 104,724 |  |              | (1,065,613 | ) |  |   | 837,523  
|                            |  |                              |           |                     |   |                           |  |              |         |  |              |            |   |  |   |          
|                            |  | $                            | 1,980,743 |                     | $ | 1,517,075                 |  | $            | 272,088 |  | $            | (1,936,612 | ) |  | $ | 1,833,294
|                            |  |                              |           |                     |   |                           |  |              |         |  |              |            |   |  |   |          



15



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##### Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES



STATEMENT OF INCOME

For the Three Months Ended December 28, 2008



|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|--------------------------------------------------------- |  | ---------------------------- | ------- | - | ------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                          |  | Briggs & StrattonCorporation |         |   | GuarantorSubsidiary |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Net sales                                                 |  | $                            | 313,218 |   |                     | $ | 172,021 |                           |  | $ | 77,146       |   |  | $            | (84,904 | ) |  | $ | 477,481 |  
|Cost of goods sold                                        |  |                              | 258,245 |   |                     |   | 164,770 |                           |  |   | 65,884       |   |  |              | (87,315 | ) |  |   | 401,584 |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Gross profit                                              |  |                              | 54,973  |   |                     |   | 7,251   |                           |  |   | 11,262       |   |  |              | 2,411   |   |  |   | 75,897  |  
|Engineering, selling, general and administrative expenses |  |                              | 36,921  |   |                     |   | 18,109  |                           |  |   | 8,272        |   |  |              |        |   |  |   | 63,302  |  
|Equity in loss from subsidiaries                          |  |                              | 5,042   |   |                     |   |        |                           |  |   |             |   |  |              | (5,042  | ) |  |   |        |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                             |  |                              | 13,010  |   |                     |   | (10,858 | )                         |  |   | 2,990        |   |  |              | 7,453   |   |  |   | 12,595  |  
|Interest expense                                          |  |                              | (8,531  | ) |                     |   | (59     | )                         |  |   | (124         | ) |  |              |        |   |  |   | (8,714  | )
|Other income (expense), net                               |  |                              | 1,441   |   |                     |   | 302     |                           |  |   | (502         | ) |  |              | (554    | ) |  |   | 687     |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) before income taxes                         |  |                              | 5,920   |   |                     |   | (10,615 | )                         |  |   | 2,364        |   |  |              | 6,899   |   |  |   | 4,568   |  
|Provision (credit) for income taxes                       |  |                              | 4,585   |   |                     |   | (4,056  | )                         |  |   | 847          |   |  |              |        |   |  |   | 1,376   |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net income (loss)                                         |  | $                            | 1,335   |   |                     | $ | (6,559  | )                         |  | $ | 1,517        |   |  | $            | 6,899   |   |  | $ | 3,192   |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  

STATEMENT OF INCOME

For the Six Months Ended December 28, 2008



|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|--------------------------------------------------------- |  | ---------------------------- | ------- | - | ------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | -------- | - |  | - | ------- | -
|                                                          |  | Briggs & StrattonCorporation |         |   | GuarantorSubsidiary |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |         
|Net sales                                                 |  | $                            | 551,677 |   |                     | $ | 406,053 |                           |  | $ | 154,532      |   |  | $            | (176,630 | ) |  | $ | 935,632 |  
|Cost of goods sold                                        |  |                              | 463,591 |   |                     |   | 383,212 |                           |  |   | 132,917      |   |  |              | (184,704 | ) |  |   | 795,016 |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Gross profit                                              |  |                              | 88,086  |   |                     |   | 22,841  |                           |  |   | 21,615       |   |  |              | 8,074    |   |  |   | 140,616 |  
|Engineering, selling, general and administrative expenses |  |                              | 74,211  |   |                     |   | 34,877  |                           |  |   | 19,065       |   |  |              |         |   |  |   | 128,153 |  
|Equity in loss from subsidiaries                          |  |                              | 7,056   |   |                     |   |        |                           |  |   |             |   |  |              | (7,056   | ) |  |   |        |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Income (loss) from operations                             |  |                              | 6,819   |   |                     |   | (12,036 | )                         |  |   | 2,550        |   |  |              | 15,130   |   |  |   | 12,463  |  
|Interest expense                                          |  |                              | (16,313 | ) |                     |   | (100    | )                         |  |   | (198         | ) |  |              |         |   |  |   | (16,611 | )
|Other income (expense), net                               |  |                              | 3,416   |   |                     |   | 232     |                           |  |   | (497         | ) |  |              | (1,265   | ) |  |   | 1,886   |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Income (loss) before income taxes                         |  |                              | (6,078  | ) |                     |   | (11,904 | )                         |  |   | 1,855        |   |  |              | 13,865   |   |  |   | (2,262  | )
|Provision (credit) for income taxes                       |  |                              | (505    | ) |                     |   | (4,531  | )                         |  |   | 1,538        |   |  |              |         |   |  |   | (3,498  | )
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Net income (loss)                                         |  | $                            | (5,573  | ) |                     | $ | (7,373  | )                         |  | $ | 317          |   |  | $            | 13,865   |   |  | $ | 1,236   |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  



16



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##### Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES



STATEMENT OF INCOME

For the Three Months Ended December 30, 2007



|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|--------------------------------------------------------- |  | ---------------------------- | ------- | - | ------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                          |  | Briggs & StrattonCorporation |         |   | GuarantorSubsidiary |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Net sales                                                 |  | $                            | 302,052 |   |                     | $ | 187,715 |                           |  | $ | 52,551       |   |  | $            | (64,781 | ) |  | $ | 477,537 |  
|Cost of goods sold                                        |  |                              | 265,339 |   |                     |   | 188,623 |                           |  |   | 43,143       |   |  |              | (63,885 | ) |  |   | 433,220 |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Gross profit (loss)                                       |  |                              | 36,713  |   |                     |   | (908    | )                         |  |   | 9,408        |   |  |              | (896    | ) |  |   | 44,317  |  
|Engineering, selling, general and administrative expenses |  |                              | 40,715  |   |                     |   | 18,710  |                           |  |   | 7,005        |   |  |              |        |   |  |   | 66,430  |  
|Equity in loss from subsidiaries                          |  |                              | 11,108  |   |                     |   |        |                           |  |   |             |   |  |              | (11,108 | ) |  |   |        |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                             |  |                              | (15,110 | ) |                     |   | (19,618 | )                         |  |   | 2,403        |   |  |              | 10,212  |   |  |   | (22,113 | )
|Interest expense                                          |  |                              | (10,466 | ) |                     |   | (38     | )                         |  |   | (106         | ) |  |              |        |   |  |   | (10,610 | )
|Other income (expense), net                               |  |                              | 36,854  |   |                     |   | 789     |                           |  |   | (122         | ) |  |              | 474     |   |  |   | 37,995  |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) before income taxes                         |  |                              | 11,278  |   |                     |   | (18,867 | )                         |  |   | 2,175        |   |  |              | 10,686  |   |  |   | 5,272   |  
|Provision (credit) for income taxes                       |  |                              | 6,793   |   |                     |   | (6,700  | )                         |  |   | 1,116        |   |  |              |        |   |  |   | 1,209   |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net income (loss)                                         |  | $                            | 4,485   |   |                     | $ | (12,167 | )                         |  | $ | 1,059        |   |  | $            | 10,686  |   |  | $ | 4,063   |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  

STATEMENT OF INCOME

For the Six Months Ended December 30, 2007



|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|--------------------------------------------------------- |  | ---------------------------- | ------- | - | ------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | -------- | - |  | - | ------- | -
|                                                          |  | Briggs & StrattonCorporation |         |   | GuarantorSubsidiary |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |         
|Net sales                                                 |  | $                            | 498,919 |   |                     | $ | 365,769 |                           |  | $ | 98,396       |   |  | $            | (118,478 | ) |  | $ | 844,606 |  
|Cost of goods sold                                        |  |                              | 435,743 |   |                     |   | 360,784 |                           |  |   | 80,038       |   |  |              | (119,120 | ) |  |   | 757,445 |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Gross profit                                              |  |                              | 63,176  |   |                     |   | 4,985   |                           |  |   | 18,358       |   |  |              | 642      |   |  |   | 87,161  |  
|Engineering, selling, general and administrative expenses |  |                              | 77,928  |   |                     |   | 37,143  |                           |  |   | 15,499       |   |  |              |         |   |  |   | 130,570 |  
|Equity in loss from subsidiaries                          |  |                              | 19,530  |   |                     |   |        |                           |  |   |             |   |  |              | (19,530  | ) |  |   |        |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Income (loss) from operations                             |  |                              | (34,282 | ) |                     |   | (32,158 | )                         |  |   | 2,859        |   |  |              | 20,172   |   |  |   | (43,409 | )
|Interest expense                                          |  |                              | (19,309 | ) |                     |   | (110    | )                         |  |   | (164         | ) |  |              |         |   |  |   | (19,583 | )
|Other income (expense), net                               |  |                              | 35,989  |   |                     |   | 1,694   |                           |  |   | (735         | ) |  |              | 1,069    |   |  |   | 38,017  |  
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Income (loss) before income taxes                         |  |                              | (17,602 | ) |                     |   | (30,574 | )                         |  |   | 1,960        |   |  |              | 21,241   |   |  |   | (24,975 | )
|Provision (credit) for income taxes                       |  |                              | 858     |   |                     |   | (10,560 | )                         |  |   | 1,476        |   |  |              |         |   |  |   | (8,226  | )
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Net income (loss)                                         |  | $                            | (18,460 | ) |                     | $ | (20,014 | )                         |  | $ | 484          |   |  | $            | 21,241   |   |  | $ | (16,749 | )
|                                                          |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  



17



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##### Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES



STATEMENT OF CASH FLOWS

For the Six Months Ended December 28, 2008



|                                                                              |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|----------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                                              |  | Briggs & StrattonCorporation |         |   | GuarantorSubsidiary |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Net Cash Provided (Used) by Operating Activities                              |  | $                            | (75,451 | ) |                     | $ | 36,052  |                           |  | $ | 32,228       |   |  | $            | (31,570 | ) |  | $ | (38,741 | )
|                                                                              |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Cash Flows from Investing Activities:                                         |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Additions to plant and equipment                                              |  |                              | (15,022 | ) |                     |   | (4,685  | )                         |  |   | (1,433       | ) |  |              |        |   |  |   | (21,140 | )
|Cash paid for acquisition, net of cash acquired                               |  |                              |        |   |                     |   |        |                           |  |   | (24,757      | ) |  |              |        |   |  |   | (24,757 | )
|Proceeds received on sale of plant and equipment                              |  |                              | 26      |   |                     |   | 2,167   |                           |  |   | 18           |   |  |              |        |   |  |   | 2,211   |  
|Cash investment in subsidiary                                                 |  |                              | (9,686  | ) |                     |   |        |                           |  |   | (221         | ) |  |              | 9,907   |   |  |   |        |  
|                                                                              |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net Cash Used by Investing Activities                                         |  |                              | (24,682 | ) |                     |   | (2,518  | )                         |  |   | (26,393      | ) |  |              | 9,907   |   |  |   | (43,686 | )
|                                                                              |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Cash Flows from Financing Activities:                                         |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net borrowings on loans, notes payable and long-term debt                     |  |                              | 111,986 |   |                     |   | (30,418 | )                         |  |   | (30,371      | ) |  |              | 30,453  |   |  |   | 81,650  |  
|Dividends paid                                                                |  |                              | (10,906 | ) |                     |   |        |                           |  |   | (1,117       | ) |  |              | 1,117   |   |  |   | (10,906 | )
|Capital contributions received                                                |  |                              |        |   |                     |   |        |                           |  |   | 9,907        |   |  |              | (9,907  | ) |  |   |        |  
|                                                                              |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net Cash Provided (Used) by Financing Activities                              |  |                              | 101,080 |   |                     |   | (30,418 | )                         |  |   | (21,581      | ) |  |              | 21,663  |   |  |   | 70,744  |  
|                                                                              |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Effect of Foreign Currency Exchange Rate Changes on Cash and Cash Equivalents |  |                              |        |   |                     |   |        |                           |  |   | (1,749       | ) |  |              |        |   |  |   | (1,749  | )
|                                                                              |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net Increase (Decrease) in Cash and Cash Equivalents                          |  |                              | 947     |   |                     |   | 3,116   |                           |  |   | (17,495      | ) |  |              |        |   |  |   | (13,432 | )
|Cash and Cash Equivalents, Beginning                                          |  |                              | 2,560   |   |                     |   | 1,087   |                           |  |   | 28,821       |   |  |              |        |   |  |   | 32,468  |  
|                                                                              |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Cash and Cash Equivalents, Ending                                             |  | $                            | 3,507   |   |                     | $ | 4,203   |                           |  | $ | 11,326       |   |  | $            |        |   |  | $ | 19,036  |  
|                                                                              |  |                              |         |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  



18



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##### Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES



STATEMENT OF CASH FLOWS

For the Six Months Ended December 30, 2007



|                                                                              |  |                              |          |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |          |  
|----------------------------------------------------------------------------- |  | ---------------------------- | -------- | - | ------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | -------- | -
|                                                                              |  | Briggs & StrattonCorporation |          |   | GuarantorSubsidiary |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Net Cash Used by Operating Activities                                         |  | $                            | (164,714 | ) |                     | $ | (4,016  | )                         |  | $ | (556         | ) |  | $            | 6,643   |   |  | $ | (162,643 | )
|                                                                              |  |                              |          |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |          |  
|Cash Flows from Investing Activities:                                         |  |                              |          |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |          |  
|Additions to plant and equipment                                              |  |                              | (14,489  | ) |                     |   | (17,952 | )                         |  |   | (1,736       | ) |  |              |        |   |  |   | (34,177  | )
|Proceeds received on sale of plant and equipment                              |  |                              | 406      |   |                     |   | 86      |                           |  |   | 31           |   |  |              |        |   |  |   | 523      |  
|Proceeds received on sale of investment                                       |  |                              | 66,011   |   |                     |   |        |                           |  |   |             |   |  |              |        |   |  |   | 66,011   |  
|Cash investment in subsidiary                                                 |  |                              | (5,819   | ) |                     |   |        |                           |  |   | (202         | ) |  |              | 6,021   |   |  |   |         |  
|Other, net                                                                    |  |                              | (503     | ) |                     |   |        |                           |  |   |             |   |  |              |        |   |  |   | (503     | )
|                                                                              |  |                              |          |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |          |  
|Net Cash Provided (Used) by Investing Activities                              |  |                              | 45,606   |   |                     |   | (17,866 | )                         |  |   | (1,907       | ) |  |              | 6,021   |   |  |   | 31,854   |  
|                                                                              |  |                              |          |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |          |  
|Cash Flows from Financing Activities:                                         |  |                              |          |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |          |  
|Net borrowings on loans, notes payable and long-term debt                     |  |                              | 130,187  |   |                     |   | 28,866  |                           |  |   | 7,510        |   |  |              | (6,643  | ) |  |   | 159,920  |  
|Issuance cost of amended revolver                                             |  |                              | (1,286   | ) |                     |   |        |                           |  |   |             |   |  |              |        |   |  |   | (1,286   | )
|Dividends paid                                                                |  |                              | (10,901  | ) |                     |   |        |                           |  |   |             |   |  |              |        |   |  |   | (10,901  | )
|Capital contributions received                                                |  |                              |         |   |                     |   | 383     |                           |  |   | 5,638        |   |  |              | (6,021  | ) |  |   |         |  
|Stock option proceeds and tax benefits                                        |  |                              | 991      |   |                     |   |        |                           |  |   |             |   |  |              |        |   |  |   | 991      |  
|                                                                              |  |                              |          |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |          |  
|Net Cash Provided by Financing Activities                                     |  |                              | 118,991  |   |                     |   | 29,249  |                           |  |   | 13,148       |   |  |              | (12,664 | ) |  |   | 148,724  |  
|                                                                              |  |                              |          |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |          |  
|Effect of Foreign Currency Exchange Rate Changes on Cash and Cash Equivalents |  |                              |         |   |                     |   |        |                           |  |   | 1,517        |   |  |              |        |   |  |   | 1,517    |  
|                                                                              |  |                              |          |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |          |  
|Net Increase (Decrease) in Cash and Cash Equivalents                          |  |                              | (117     | ) |                     |   | 7,367   |                           |  |   | 12,202       |   |  |              |        |   |  |   | 19,452   |  
|Cash and Cash Equivalents, Beginning                                          |  |                              | 8,785    |   |                     |   | (1,402  | )                         |  |   | 22,086       |   |  |              |        |   |  |   | 29,469   |  
|                                                                              |  |                              |          |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |          |  
|Cash and Cash Equivalents, Ending                                             |  | $                            | 8,668    |   |                     | $ | 5,965   |                           |  | $ | 34,288       |   |  | $            |        |   |  | $ | 48,921   |  
|                                                                              |  |                              |          |   |                     |   |         |                           |  |   |              |   |  |              |         |   |  |   |          |  



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following is managements discussion and analysis of the Companys financial condition and results of
operations for the periods included in the accompanying consolidated condensed financial statements:

RESULTS OF OPERATIONS

SALES

Consolidated net sales for
the second quarter of fiscal 2009 were consistent with the second quarter of fiscal 2008 at $477 million.

Second quarter net sales for the
Engines Segment were $339 million versus $316 million in fiscal 2008, an increase of $23 million or 7%. This increase reflects 11% greater engine unit shipments compared to the same period a year ago driven by increased engine requirements for
portable generators and snow removal equipment.

Second quarter fiscal 2009 Power Products Segment net sales were $192 million, down $4
million or 2% from the second quarter of fiscal 2008. This is primarily the result of decreased shipments of pressure washer product since demand for this product has softened between years as consumer sentiment weakened. Offsetting this decrease
was $12 million of sales related to our June 30, 2008 acquisition of Victa.

Consolidated net sales for the first six months of fiscal
2009 totaled $936 million, an increase of $91 million or 11% over the first six months of fiscal 2008.

Engines Segment net sales for the
first six months of fiscal 2009 were $598 million, up $74 million or 14% from the prior year. This increase reflects a 16% increase in engine unit shipments between years resulting from strong demand for engines for portable generators caused by
weather events and snow removal equipment for the current snow season. Additionally, engine demand resulted from low channel inventories of lawn and garden equipment that needed to be replenished for retail demand during the first quarter.

Power Products Segment net sales for the first six months of fiscal 2009 were $448 million, up $65 million or 17% from the prior year.
This improvement was the result of $25.2 million of net sales from the Victa acquisition and increased sales of portable generators caused by a number of hurricanes making landfall in the United States in the first quarter of fiscal 2009. This was
partially offset by weaker pressure washer product demand in the second quarter.

GROSS PROFIT MARGIN

The consolidated gross profit margin in the second quarter of fiscal 2009 improved to 15.9% from 9.3% in the same period last year.

The Engines Segment gross profit margin increased to 19.4% in the second quarter of fiscal 2009 from 13.4% in the second quarter of fiscal 2008. The
margin improvement was favorably impacted by the absence of the prior year $17.7 million warranty expense associated with the snow engine recall and $2.4 million of costs incurred to close the Rolla facility. The remainder of the improvement was the
result of a 2.9% production volume increase year over year and planned reductions of selected operating expenses, offset by commodity costs that continue to be higher than the prior year.

The Power Products Segment gross profit margin improved to 5.7% for the second quarter of fiscal 2009 from 0.6 % in the second quarter of fiscal
2008. This improvement resulted from a favorable mix of portable generator unit shipments and better plant utilization from ongoing portable generator demand. Pricing improvements experienced in the quarter were offset by increased costs for
commodities and components.



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The consolidated gross profit margin for the first six months of fiscal 2009 improved to 15.0% from
10.3% in the same period a year ago.

The Engines Segment gross profit margin for the first six months of fiscal 2009 increased to 17.7%
from 14.6% in the prior year. The margin improvement was favorably impacted by the absence of the prior year $19.8 million warranty expense associated with the snow engine recall and $6.4 million of costs incurred to close the Rolla facility. The
remainder of the improvement was the result of a 3.1% production volume increase year over year and planned reductions of selected operating expenses, offset by commodity costs that continue to be higher than the prior year. Additionally, pricing on
engines sold to Europe was less favorable than the prior year due to currency fluctuations.

The Power Products gross profit margin for the
first six months of fiscal 2009 increased to 7.3% from 2.5% in fiscal 2008. This improvement was partially attributable to higher production volumes combined with an improvement year over year in margins resulting from a favorable product mix.

ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Engineering, selling, general and administrative expenses were $63 million in the second quarter of fiscal 2009, a decrease of $3 million or 5% from the second quarter of fiscal 2008. This decrease is primarily
attributable to planned reductions of salaries, marketing and professional service expenses. Engineering, selling, general and administrative expenses were $128 million for the first six months of fiscal 2009, a decrease of $2 million or 2% from
fiscal 2008, attributable to the same reasons mentioned for the second quarter.

INTEREST EXPENSE

Interest expense for the second quarter of fiscal 2009 was $8.7 million, down $1.9 million or 18% from fiscal 2008. Interest expense for the first six
months of fiscal 2009 was $16.6 million, down $3.0 million or 15% from fiscal 2008. The decreased interest expense is attributable to lower interest rates and lower average outstanding borrowings.

PROVISION FOR INCOME TAXES

The second quarter and
year to date fiscal 2009 effective tax rates were 30% and 155%, respectively, versus the 23% and 33% in the same respective periods of fiscal 2008. The effective tax rate fluctuation between the second quarters was due to the difference in
dividends. The difference in the year to date rates was due to the resolution of federal tax matters.

LIQUIDITY AND CAPITAL RESOURCES

Cash used in operating activities for the first six months of fiscal 2009 was $39 million as compared to $163 million for fiscal 2008,
a $124 million improvement. This improvement was due to improved operating results and an improvement in working capital accounts, primarily resulting from the timing of payments of accounts payable.

In the first six months of fiscal 2009, $44 million was used for investing activities as compared to $32 million provided by investing activities in
fiscal 2008. This $76 million change was primarily the result of $66 million in proceeds received on the sale of an investment in preferred stock including the final dividends paid on the preferred stock in the prior year and $25 million net cash
used for the acquisition of Victa in fiscal 2009, offset by $13 million less of additions to plant and equipment between years. The reduction of plant and equipment additions primarily relates to absence of capital expenditures incurred in the prior
year related to the new lawn equipment plant located in Newbern, Tennessee and projects in McDonough, Georgia, both of which have taken on additional capacity due to the closure of our Port Washington, Wisconsin facility. Additionally, capital
projects occurred in our Poplar Bluff, Missouri facility in the prior year as it prepared for additional capacity from the closure of our Rolla, Missouri facility.



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Net cash provided by financing activities was $71 million in the first six months of fiscal 2009, a
$78 million decrease from the $149 million provided in fiscal 2008, primarily attributable to decreased net borrowings between years.

FUTURE LIQUIDITY AND CAPITAL RESOURCES

On July 12, 2007, the Company entered into a $500 million amended and restated
multicurrency credit agreement. The Amended Credit Agreement (Revolver) provides a revolving credit facility for up to $500 million in revolving loans, including up to $25 million in swing-line loans. The Revolver has a term of five
years and all outstanding borrowings on the Revolver are due and payable on July 12, 2012. As of the end of the second quarter of fiscal 2009, the unused availability of the revolving credit facility was approximately $298 million. This credit
facility and the Companys other indebtedness contain restrictive covenants as described in Note 8 of the Notes to the Consolidated Financial Statements of the Companys Annual Report on Form 10-K. As of the end of the second quarter of
fiscal 2009, the Company was in compliance with these covenants.

Management expects cash outflows for capital expenditures to be
approximately $50 million in fiscal 2009. These anticipated expenditures provide for continued investment in equipment, new products and capacity enhancements. These expenditures will be funded using available cash.

The Company is not required to, nor intends to, make any contributions to the pension plans in fiscal 2009. Assuming plan assets decrease in a range of
10% to 20% during fiscal 2009 and the discount rate is in a range of 5.5% to 7.5% for fiscal 2009, the Company may be required to make contributions to the pension plans in a range of $5 million to $40 million for the fiscal 2010 plan year.

Management believes that available cash, the credit facility, cash generated from operations and existing lines of credit will be adequate
to fund capital requirements for the foreseeable future.

OTHER MATTERS

A discussion of an acquisition and casualty event are included in the Notes to Consolidated Condensed Financial Statements of this Form 10-Q under the
headings Acquisitions and Casualty Event, respectively, and incorporated herein by reference.

OFF-BALANCE SHEET ARRANGEMENTS

There have been no material changes since the August 28, 2008, filing of the Companys Annual Report on Form 10-K.

CONTRACTUAL OBLIGATIONS

There have been no material changes since the August 28, 2008, filing of the Companys Annual Report on Form 10-K.

CRITICAL ACCOUNTING POLICIES

There have been no material changes in the Companys critical accounting policies since
the August 28, 2008 filing of its Annual Report on Form 10-K. As discussed in our annual report, the preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to
make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of
estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.



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The most significant accounting estimates inherent in the preparation of our financial statements
include a goodwill assessment, estimates as to the realizability of accounts receivable and inventory assets, as well as estimates used in the determination of liabilities related to customer rebates, pension obligations, postretirement benefits,
warranty, product liability, group health insurance, litigation and taxation. Various assumptions and other factors underlie the determination of these significant estimates. The process of determining significant estimates is fact specific and
takes into account factors such as historical experience, current and expected economic conditions, product mix, and, in some instances, actuarial techniques. The Company re-evaluates these significant factors as facts and circumstances change.

The pension benefit obligation and related pension expense or income is impacted by certain actuarial assumptions, including the discount
rate and expected rate of return on plan assets. These rates are evaluated considering such factors as market interest rates and historical assets performance, which is essential in the current volatile market.

NEW ACCOUNTING PRONOUNCEMENTS

A
discussion of new accounting pronouncements is included in the Notes to Consolidated Condensed Financial Statements of this Form 10-Q under the heading New Accounting Pronouncements and incorporated herein by reference.

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. The words
anticipate, believe, could, estimate, expect, forecast, intend, may, objective, plan, project, seek,
think, will, and similar expressions are intended to identify forward-looking statements. The forward-looking statements are based on the Companys current views and assumptions and involve risks and uncertainties that
include, among other things, the ability to successfully forecast demand for our products and appropriately adjust our manufacturing and inventory levels; changes in our operating expenses; changes in interest rates; the effects of weather on the
purchasing patterns of consumers and original equipment manufacturers (OEMs); actions of engine manufacturers and OEMs with whom we compete; the seasonal nature of our business; changes in laws and regulations, including environmental, tax, pension
funding and accounting standards; work stoppages or other consequences of any deterioration in our employee relations; work stoppages by other unions that affect the ability of suppliers or customers to manufacture; acts of war or terrorism that may
disrupt our business operations or those of our customers and suppliers; changes in customer and OEM demand; changes in prices of raw materials and parts that we purchase; changes in domestic economic conditions, including housing starts and changes
in consumer confidence; changes in the market value of the assets in our defined benefit pension plan and any related funding requirements; changes in foreign economic conditions, including currency rate fluctuations; the actions of customers of our
OEM customers; the ability to bring new productive capacity on line efficiently and with good quality; the ability to successfully realize the maximum market value of assets that may require disposal if products or production methods change; new
facts that come to light in the future course of litigation proceedings which could affect our assessment of those matters; and other factors that may be disclosed from time to time in our SEC filings or otherwise, including the factors discussed in
Item 1A, Risk Factors, of the Companys Annual Report on Form 10-K and in its periodic reports on Form 10-Q. Some or all of the factors may be beyond our control. We caution you that any forward-looking statement reflects only our belief
at the time the statement is made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made.



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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes since the August 28, 2008, filing of the Companys Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The Companys management, with the participation of the Companys Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Companys disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, the Companys Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the
Companys disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange
Act.

INTERNAL CONTROL OVER FINANCIAL REPORTING

There has not been any change in the Companys internal control over financial reporting during the second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the
Companys internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

A discussion of legal proceedings is included in the Notes to Consolidated Condensed Financial Statements of this Form 10-Q under the heading Commitments and Contingencies and incorporated herein by reference.

ITEM 1A. RISK FACTORS

In addition to the risk factors outlined in the August 28, 2008 filing of the Companys Annual Report on Form 10-K, the Company faces risks related to the current credit crisis. Current uncertainty in global economic conditions
resulting from the recent disruption in credit markets poses a risk to the overall economy that could impact consumer and customer demand for our products, as well as our ability to manage relationships with our customers, suppliers and creditors.
If the current situation deteriorates significantly, our business could be negatively impacted, including such areas as reduced demand for our products from a slow-down in the general economy, or supplier or customer disruptions resulting from
tighter credit markets.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company held its Annual Meeting of Shareholders on October 15, 2008. Information on the matters voted upon and the votes cast with respect to
each matter was previously reported in the Companys Quarterly Report on Form 10-Q for the quarter ended September 28, 2008 filed on November 5, 2008.

ITEM 6. EXHIBITS



|              |  |                                                                                                                                                                                   
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                       
|10.0          |  | Amended and Restated Form of Officer Employment Agreement (Filed as Exhibit 10.1 to the Companys Report on Form 8-K dated December 8, 2008 and incorporated by reference
herein.)



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|      |  |                                                                                                                                                                                             
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.3  |  | Amended and Restated Form of Change of Control Employment Agreement (Filed as Exhibit 10.2 to the Companys Report on Form 8-K dated December 8, 2008 and incorporated by reference
herein.)
|      | 
|10.11 |  | Amendment to the Deferred Compensation Plan for Directors (Filed herewith)                                                                                                                  
|      | 
|10.15 |  | Amendment to the Key Employees Savings and Investment Plan (Filed herewith)                                                                                                                 
|      | 
|31.1  |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)                                                                     
|      | 
|31.2  |  | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)                                                                     
|      | 
|32.1  |  | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)                                                                     
|      | 
|32.2  |  | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)                                                                     



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



|                       |  |  |  |                                                      
|---------------------- |  |  |  | -----------------------------------------------------
|                       |  |  |  | BRIGGS & STRATTON CORPORATION                        
|                       |  |  |  | (Registrant)                                         
|                       |  | 
|Date: February 4, 2009 |  |  |  | /s/ James E. Brenn                                   
|                       |  |  |  | James E. Brenn                                       
|                       |  |  |  | Senior Vice President and Chief Financial Officer and
|                       |  |  |  | Duly Authorized Officer                              



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EXHIBIT INDEX



|              |  |                                                                                                                                                                                             
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                 
|10.0          |  | Amended and Restated Form of Officer Employment Agreement (Filed as Exhibit 10.1 to the Companys Report on Form 8-K dated December 8, 2008 and incorporated by reference
herein.)          
|              | 
|10.3          |  | Amended and Restated Form of Change of Control Employment Agreement (Filed as Exhibit 10.2 to the Companys Report on Form 8-K dated December 8, 2008 and incorporated by reference herein.)
|              | 
|10.11         |  | Amendment to the Deferred Compensation Plan for Directors (Filed herewith)                                                                                                                  
|              | 
|10.15         |  | Amendment to the Key Employees Savings and Investment Plan (Filed herewith)                                                                                                                 
|              | 
|31.1          |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)                                                                     
|              | 
|31.2          |  | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)                                                                     
|              | 
|32.1          |  | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)                                                                     
|              | 
|32.2          |  | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)                                                                     



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