<PAGE>   1

                                   FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


(Mark One)
      [X]       ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
                     For the fiscal year ended         JULY 3, 1994
                                       OR
      [ ]       TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                   For the transition period from ________ to ________



Commission file number 1-1370

                         BRIGGS & STRATTON CORPORATION
             (Exact name of registrant as specified in its charter)

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

        12301 WEST WIRTH STREET
          WAUWATOSA, WISCONSIN                         53222
   (Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code:  414-259-5333

Securities registered pursuant to Section 12(b) of the Act:


        Title of Each Class            Name of Each Exchange on Which Registered
      Common Stock (par value                   
         $0.01 per share)                       New York Stock Exchange
    Common Share Purchase Rights                New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  NONE

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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  [ X ]

The aggregate market value of voting stock held by nonaffiliates of the
registrant was approximately $1,071,166,000 based on the reported last sale
price of such securities as of September 8, 1994.

Number of Shares of Common Stock Outstanding at September 8, 1994: 14,463,500.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                           Part of Form 10-K Into Which Portions
                 Document                       of Document are Incorporated
                 --------                 ----------------------------------
        Annual Report to Shareholders
        for year ended July 3, 1994              Parts I (Item 1) and II

        Proxy Statement for Annual Meeting
        on October 19, 1994                               Part III

The Exhibit Index is located on page 14.

<PAGE>   2




                               TABLE OF CONTENTS


                                     PART I

Item                                                                   Page
- - - ----                                                                   ----
1.  Business                                                            1 
                                                                          
2.  Properties                                                          3 
                                                                          
3.  Legal Proceedings                                                   3 
                                                                          
4.  Submission of Matters to a Vote of Security Holders                 3 
                                                                          
                                   PART II                                
                                                                          
5.  Market for the Registrant's Common Equity and Related                 
       Stockholder Matters                                              6 
                                                                          
6.  Selected Financial Data                                             6 
                                                                          
7.  Management's Discussion and Analysis of Financial Condition           
       and Results of Operations                                        6 
                                                                          
8.  Financial Statements and Supplementary Data                         6 
                                                                          
9.  Changes in and Disagreements with Accountants on Accounting           
       and Financial Disclosure                                         6 
                                                                          
                                   PART III                               
                                                                          
10.  Directors and Executive Officers of the Registrant                 6
                                                                          
11.  Executive Compensation                                             6
                                                                          
12.  Security Ownership of Certain Beneficial Owners and                  
        Management                                                      6
                                                                          
13.  Certain Relationships and Related Transactions                     6
                                                                          
                                   PART IV                                
                                                                          
14.  Exhibits, Financial Statement Schedules, and Reports on              
        Form 8-K                                                        7
                                                                          
     Signatures                                                         9
        
                                                                   

<PAGE>   3



                                     PART I


Item1.  Business

Basic Business

Briggs & Stratton Corporation is the world's largest producer of air cooled
gasoline engines for outdoor power equipment and locks for automobiles and
trucks. The Company designs, manufactures, markets and services these products
for original equipment manufacturers worldwide.

Engines

Engines, parts and related products provided 93% of sales in fiscal 1994. These
engines were air cooled aluminum alloy gasoline engines ranging from 3 to 20
horsepower.

In fiscal 1994, approximately 85% of original equipment gasoline engine sales
were to manufacturers of lawn and garden equipment; approximately 15% were
to manufacturers of other powered equipment, primarily for the construction
industry and for agriculture. In the United States and Canada, engine sales
are made primarily directly to original equipment manufacturers.

Sales to the Company's largest engine customer, MTD Products Inc., were 18% of
total sales in fiscal 1994. Sales to its second largest customer, Tomkins PLC,
were 12% of sales and sales to its third largest customer, A B Electrolux, were
12% of sales. Under purchasing plans available to all gasoline engine
customers, the Company normally enters into annual engine supply agreements
with these producers of end products powered by the Company's gasoline engines.
Company management has no reason to anticipate a change from the continuation
of this practice or in its historical business relationships with these
companies.

The major domestic competitors of the Company in engine manufacturing are
Tecumseh Products Company, Kohler Co., Kawasaki Heavy Industries, Ltd. and Onan
Corporation.  Also, two domestic lawn mower manufacturers, Toro Co. Inc.
through its Lawn-Boy Inc. branch and Honda Motor Co., Ltd., manufacture their
own engines. Eight Japanese small engine manufacturers, of which Honda and
Kawasaki are the largest, are worldwide competitors not only in the sale of
engines, but end products as well. Tecnamotor S.p.A., located in Italy and
owned by Tecumseh, is a major competitor in Europe. Major areas of competition
from all engine manufacturers are product quality, price, timely delivery and
service. The Company believes its product quality and service reputation have
given it the strong brand name identification it enjoys.

Servicing of all the Company's gasoline engine products is done by a network
of over 32,000 independent service parts distribution and repair outlets in
the United States and Canada and many foreign countries.

Manufacturing activity in the lawn and garden industry is driven by the need to
deliver new lawn mowers, garden tractors and tillers for retail sales in the
spring and early summer. Thus, demand from customers is at its height in their
winter and spring manufacturing season. Most engines are manufactured to
individual customer specifications. The Company offers financial incentives to
its OEMs to specify standardized engines; to take delivery during the off
season; and to commit early, for delivery at specific times during the busy
season. These programs, designed to level manufacturing activity, cause the
Company to build inventories of finished engines in the first and second
quarters.  Thus, sales generally are highest in the March quarter and weakest
in the September quarter. Customer orders in the last three months of the
fiscal year depend on spring retail sales, so the June quarter is the least
predictable.

                                      1

<PAGE>   4
Locks and Keys

Mechanical locks, electro-mechanical locks and related products provided
approximately 7% of sales in fiscal 1994. Customers are primarily the major
automobile and truck manufacturers in North America. Major competitors of the
Company in lock manufacturing are Hurd Lock & Manufacturing Company and
All-Lock Company, Inc.  Price, product quality, delivery performance and
technical support are major areas of competition.

A substantial portion of the Company's lock production is sold to two of the
three large North American automobile manufacturers as original equipment
components.  The loss of these customers would effectively eliminate the
Company's lock business. These manufacturers have been customers for many years
and the Company anticipates continued business in future years. However, the
largest of these customers has changed its purchasing practices. These
practices may change the level of business the Company receives from that
customer in the future.  A substantial reduction from the current level of
business with that customer would significantly impact the Company's lock
business.

Sales to original equipment customers are made by personnel from the Milwaukee
headquarters and Detroit sales office. Independent Sales Representatives are
utilized in servicing certain other industrial OEM accounts. Service parts
and replacement locks are sold to OEMs and to Locksmith Wholesalers.

In May, the Board of Directors approved the spin-off of the lock division to
the Company shareholders. It is currently anticipated that the spin-off will
occur in early calendar 1995.

General

The Company manufactures a majority of the components used in its
products and purchases the balance of its requirements. The Company
manufactures its own ductile and grey iron castings,  aluminum and zinc die
castings and a high percentage of other major components, such as carburetors
and ignition systems. The Company also purchases certain finished standard
commercial parts such as piston rings, spark plugs, valves and plastic
components, some stampings and screw machine parts and smaller quantities of
other components. Raw material purchases are for aluminum, steel, zinc and
brass. The Company believes its sources of supply are adequate.

The Company holds certain patents on features incorporated in its
products; however, the success of the Company's business is not considered to
be primarily dependent upon patent protection. Licenses, franchises and
concessions are not a material factor in the Company's business.

For the years ending July 3, 1994, June 27, 1993 and June 30, 1992, the Company
spent approximately $12,520,000, $10,411,000 and $10,808,000, respectively,
on Company sponsored research activities relating to the development of new
products or the improvement of existing products.

The average number of persons employed by the Company during the fiscal year
was 8,583. Employment ranged from a low of 7,879 in July 1993 to a high of
8,801 in December 1994.

Financial Information About Industry Segments

Financial information about industry segments appears in Note 3 of the 1994
Annual Report to Shareholders and is incorporated herein by reference.
                                      2

<PAGE>   5


Export Sales

Export sales for fiscal 1994 were $264,866,000 (21% of total sales), for fiscal
1993 were $249,610,000 (22% of total sales) and for fiscal 1992 were
$210,728,000 (20% of total sales). These sales were principally to customers in
European countries.

I
tem 2.  Properties

The corporate offices as well as the Company's largest engine manufacturing
facility are located in Wauwatosa, Wisconsin, a suburb of Milwaukee. Three
other facilities located in the Milwaukee metropolitan area are used for
production, warehousing and distribution of engines and engine parts. These are
owned facilities containing approximately 3,232,000 square feet of office,
warehouse and production area. Engines also are manufactured at a 292,000
square foot owned facility in Murray, Kentucky and a 236,000 square foot owned
facility in Poplar Bluff, Missouri. The engine business is seasonal, with
demand for engines at its height in the winter and early spring. Engine
manufacturing operations run at capacity levels during the peak season, with
many operations running three shifts. Engine operations generally run one shift
in the summer, when demand is weakest and production is considerably under
capacity. During the winter, when finished goods inventories reach their
highest levels, owned warehouse space may be insufficient and capacity may be
expanded through rented space. Excess warehouse space exists in the spring and
summer seasons. In May, the Board of Directors approved a plan of relocation
for several of the Company's facilities over the next three years. The plan
provides for the expansion of existing facilities in Murray, Kentucky and
Poplar Bluff, Missouri and the establishment of three new engine manufacturing
facilities. The Company has announced the selection of sites in Statesboro,
Georgia and Auburn, Alabama for two of the facilities.  The Company's owned
properties are well maintained.

The Company leases 173,000 square feet of space to house its European warehouse
in the Netherlands and its foreign sales and service operations in Australia,
Canada, France, Germany, New Zealand, Switzerland and the United Kingdom.

The Company's domestic lock manufacturing facility is located in the Milwaukee
suburb of Glendale, Wisconsin. This facility has floor space of approximately
352,000 square feet. The Company also owns a 50,000 square foot assembly plant
in Juarez, Mexico. Both properties are well maintained and are adequate for its
current needs. Additional demand could be met through increased manufacturing
capacity gained by adding a shift.


Item 3.  Legal Proceedings

There are no pending legal proceedings that are required to be reported under
this item.


Item 4.  Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the three months ended July 3,
1994.

                                      3

<PAGE>   6


Executive Officers of the Registrant


<TABLE>
<CAPTION>
           Name, Age, Position            Business Experience for Past Five Years
           ------------------             ------------------------------------------
<S>                                       <C>
FREDERICK P. STRATTON, JR., 55            Mr. Stratton was elected to the position of Chief Executive Officer in May
Chairman and Chief Executive Officer      1977 and Chairman in November 1986. He also served in the position of President
(1) (2)                                   from January 1992 to August 1994.

ROBERT H. ELDRIDGE, 56                    Mr. Eldridge was elected to his current position effective January 1984.
Secretary - Treasurer  (1)

MICHAEL D. HAMILTON, 52                   Mr. Hamilton was elected to his present position effective June 1989.
Executive Vice President -
Sales and Service

JOHN S. SHIELY, 42                        Mr. Shiely was elected to his current position in August 1994 after serving
President and Chief Operating             as Executive Vice President - Administration since November 1991. He joined
Officer (1)                               the Company in June 1986 as General Counsel and served as Vice President and
                                          General Counsel from November 1990 to November 1991.

JAMES A. WIER, 51
Executive Vice President - Operations     Mr. Wier was elected to his current position in April 1989.

ERIK ASPELIN, 53                          Mr. Aspelin assumed his current position in July 1989.
Vice President - Distribution
Sales and Service

JAMES E. BRENN, 46                        Mr. Brenn was elected to his current position in November 1988.
Vice President and Controller

RICHARD J. FOTSCH, 39                     Mr. Fotsch was elected an executive officer in May 1993 after serving the Small
Vice President; General Manager -         Engine Division as General Manager from July 1989 to July 1990 and as Vice
Small Engine Division                     President and General Manager from July 1990 to May 1993.

</TABLE>


                                       4



<PAGE>   7


<TABLE>
<S>                                        <C>
HUGO A. KELTZ, 46                           Mr. Keltz was elected an executive officer in May 1992 after serving as Vice
Vice President - International              President - International since June 1991. He served as Regional Director -
                                            Europe from November 1989 to June 1991 after serving as International General
                                            Service and Distribution Manager from October 1988 to November 1989.

PAUL M. NEYLON, 47                          Mr. Neylon was elected an executive officer in May 1993, after serving the
Vice President; General Manager -           Vanguard Division as Vice President and General Manager since November 1991.
Vanguard Division                           He previously served the Castings Division as General Manager from July 1989 to
                                            July 1990 and as Vice President and General Manager from July 1990 to November 1991.

STEPHEN H. RUGG, 47                         Mr. Rugg was elected to his current position in November 1988.
Vice President - Sales and Marketing

GREGORY D. SOCKS, 45                        Mr. Socks was elected an executive officer in May 1993 after serving the Large
Vice President; General Manager -           Engine Division as General Manager from August 1989 to July 1990 and Vice
Large Engine Division                       President and General Manager from July 1990 to May 1993.

HAROLD M. STRATTON II, 46                   Mr. Stratton was elected to his current position effective April 1, 1989.
Vice President; General Manager -
B&S Technologies

GERALD E. ZITZER, 47                        Mr. Zitzer was elected to his current position in November 1988.
Vice President - Human Resources

</TABLE>



(1)   Officer is also a Director of the Company.

(2)   Member of the Executive Committee and Planning Committee.

Frederick P. Stratton, Jr., and Harold M. Stratton II are brothers.

Officers are elected annually and serve until their successors are elected
and qualify.

                                      5

<PAGE>   8

                                    PART II


Item 5.    Market for the Registrant's Common Equity and Related Stockholder
Matters

Information required by this Item is incorporated by reference to "Quarterly
Financial Data, Dividend and Market Information" on page 32 of the 1994 Annual
Report to Shareholders.


Item 6.    Selected Financial Data

Information required by this Item appears under the heading "Ten Year
Comparisons" on pages 34 and 35 of the 1994 Annual Report to Shareholders and
is incorporated herein by reference.


Item 7.    Management's Discussion and Analysis of Financial Condition and
Results of Operations

Management's discussion and analysis of results of operations and financial
condition of the Company appears on pages 29 through 31 of the 1994 Annual
Report to Shareholders and is incorporated by reference in this Form 10-K.


Item 8.    Financial Statements and Supplementary Data

The information required by Item 8 is incorporated by reference from the
Consolidated Financial Statements and Notes to Consolidated Financial
Statements appearing on pages 15 through 26 and page 32 of the 1994 Annual
Report to Shareholders.


Item 9.    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

The Company has not changed independent accountants in the last two years.


                                    PART III


Item 10.   Directors and Executive Officers of the Registrant

Information pertaining to directors is incorporated herein by reference from
pages 2 and 3 of the Company's 1994 Annual Meeting Proxy Statement dated
September 8, 1994. Information regarding executive officers required by Item
401 and 405 of Regulation S-K is furnished in Part I.


Item 11.   Executive Compensation

The information required by Item 11 is incorporated by reference from the
section entitled Election of Directors on page 2, the Nominating and Salaried
Personnel Committee Report on Executive Compensation found on pages 7-10 and
the Executive Compensation section found on pages 11-15 of the Company's 1994
Annual Meeting Proxy Statement.


Item 12.   Security Ownership of Certain Beneficial Owners and Management

The information required by Item 12 is incorporated by reference from pages
5 and 6 of the Company's 1994 Annual Meeting Proxy Statement.


Item 13.   Certain Relationships and Related Transactions

The information required by Item 13 is incorporated by reference from page
4 of the Company's 1994 Annual Meeting Proxy Statement.

                                      6

<PAGE>   9


                                    PART IV


Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)   The following documents are filed as a part of this report:


                                                           Page Reference
                                                      -------------------------
                                                                      1994
                                                                  Annual Report
                                                         1994            to
                                                       Form 10-K   Shareholders
                                                       ----------  ------------
1.  Financial Statements

        Consolidated Balance Sheets,
          July 3, 1994 and June 27, 1993                               16*

        For the Years Ended July 3, 1994,
          June 27, 1993 and June 30, 1992:

          Consolidated Statements of Income and
            Shareholders' Investment                                    15*, 17*

          Consolidated Statements of Cash Flows                         18*

          Notes to Consolidated Financial Statements                    19-26*

        Report of Independent Public Accountants                        28*

         * Incorporated herein by reference to the Registrant's 1994 Annual 
           Report to Shareholders for the fiscal year ended July 3, 1994.

2.  Financial Statement Schedules

        Report of Independent Public Accountants          10

        Schedule V - Property, Plant and Equipment        11

        Schedule VI - Accumulated Depreciation and
          Unamortized Investment Tax Credit               12

        Schedule VIII - Valuation and Qualifying
          Accounts                                        13

        Schedule X - Supplementary Income
          Statement Information                           13

        All other schedules are omitted because they are not applicable or
        the required information is shown in the financial statements or the 
        notes thereto.

        The individual financial statements of the Registrant have been omitted
        since the Registrant is primarily an operating company and the 
        subsidiaries included in the consolidated statements are wholly owned.

3.  Exhibits

        See Exhibit Index on page 14 of this report, which is incorporated
        herein by reference.

        Executive Compensation Plans and Arrangements:

          Forms of Officer Employment Agreements.
          (Filed as Exhibit 10.0 to the Company's Annual Report on Form 10-K 
          for fiscal year ended June 27, 1993 and incorporated by reference 
          herein.)

                                      7

<PAGE>   10

   Survivor Annuity Plan.
     (Filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K for 
     fiscal year ended June 30, 1986 and incorporated by reference herein.)

   Supplemental Retirement Program.
     (Filed as Exhibit 10.3 to the Company's Annual Report on Form 10-K for 
     fiscal year ended June 30, 1990 and incorporated by reference herein.)

   Economic Value Added Incentive Compensation Plan.
     (Filed as Exhibit 10.3 to the Company's Annual Report on Form 10-K for 
     fiscal year ended June 27, 1993 and incorporated by reference herein.)

   Form of Change of Control Employment Agreements.
     (Filed as Exhibit 10.4 to the Company's Annual Report on Form 10-K for 
     fiscal year ended June 27, 1993 and incorporated by reference herein.)

   Trust Agreement with an independent trustee to provide payments under various
     compensation agreements with company employees upon the occurrence of a 
     change in control.
       (Filed as Exhibit 10.1 to the Company's Report on Form 10-Q for the 
       quarter ended October 1, 1989, and incorporated by reference herein.)

   Stock Incentive Plan.
     (Filed as Exhibit A to the Company's 1990 Annual Meeting Proxy Statement,
     which was filed as Exhibit 100A to the Company's Annual Report on Form 
     10-K for fiscal year ended June 30, 1990 and incorporated by reference 
     herein.)

   Leveraged Stock Option Program
     (Filed as Exhibit 10.7 to the Company's Annual Report on Form 10-K for 
     fiscal year ended June 27, 1993 and incorporated by reference herein.)

   Deferred Compensation Agreement
     (Filed herewith.)

(b)   Reports on Form 8-K

         On May 20, 1994, the Company filed a report on Form 8-K for the purpose
         of reporting the approval by the Board of Directors on May 17, 1994 of
         two actions. The Board approved a spin-off of the Briggs & Stratton
         Technologies Division to Briggs & Stratton's shareholders which is
         anticipated to occur in January 1995. The Board also approved a Plan
         of Relocation which provides for the expansion of existing facilities
         and the establishment of three new manufacturing facilities outside of
         Milwaukee at a cost of approximately $112 million over the next two
         years.

                                       8

<PAGE>   11

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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

                                                   By /s/ R. H. Eldridge
                                                   ------------------------
                                                        R. H. Eldridge
September 20, 1994                                   Secretary-Treasurer


                  -----------------------------------------


                               POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Frederick P. Stratton, Jr. and Robert H. Eldridge, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments to this report, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitutes, may lawfully
do or cause to be done by virtue thereof.


                  -----------------------------------------


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the 
registrant and in the capacities and on the dates indicated.



<TABLE>
<S>                                                                      <C>
/s/ F. P. Stratton, Jr.                                                  /s/ Sheldon B. Lubar                          
- - - -------------------------------------------                              -------------------------------------------   
F. P. Stratton, Jr.      September 20, 1994                              Sheldon B. Lubar         September 20, 1994   
Chairman and Chief Executive Officer and                                 Director                                      
Director (Principal Executive Officer)                                                                                 
                                                                                                                       
                                                                                                                       
                                                                                                                       
/s/ Robert H. Eldridge                                                   /s/ John L. Murray                            
- - - -------------------------------------------                              -------------------------------------------   
Robert H. Eldridge       September 20, 1994                              John L. Murray           September 20, 1994   
Secretary-Treasurer and Director                                         Director                                      
(Principal Financial Officer)                                                                                          
                                                                                                                       
                                                                                                                       
                                                                                                                       
/s/ James E. Brenn                                                       /s/ C. B. Rogers, Jr.                         
- - - -------------------------------------------                              -------------------------------------------   
James E. Brenn           September 20, 1994                              C. B. Rogers, Jr.        September 20, 1994   
Vice President and Controller                                            Director                                      
(Principal Accounting Officer)                                                                                         
                                                                                                                       
                                                                                                                       
                                                                                                                       
/s/ Michael E. Batten                                                    /s/ John S. Shiely                            
- - - -------------------------------------------                              -------------------------------------------   
Michael E. Batten        September 20, 1994                              John S. Shiely           September 20, 1994   
Director                                                                 President and Chief Operating Officer and     
                                                                         Director                                      

/s/ Peter A. Georgescu                                                   /s/ Elwin J. Zarwell                       
- - - -------------------------------------------                              -------------------------------------------
Peter A. Georgescu       September 20, 1994                              Elwin J. Zarwell         September 20, 1994
Director                                                                 Director                                      
                                                                         

</TABLE>

                                                                         
                                                                         
                                                                         
                                             
                                       9

<PAGE>   12

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

We have audited in accordance with generally accepted auditing standards the
consolidated financial statements included in the Briggs & Stratton Corporation
Annual Report to Shareholders incorporated by reference in this Form 10-K and
have issued our report thereon dated July 28, 1994. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole. The
schedules listed in the accompanying index are the responsibility of the
Company's management and are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
consolidated financial statements. These schedules have been subjected to the
auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly state in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.

                                                    ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin,
July 28, 1994.


                                      10

<PAGE>   13
                 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

                   SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT


<TABLE>
<CAPTION>
                                     Balance at                                    Adjustments   Balance at
                                     Beginning         Additions    Retirements         for        End of
     Description                      of Period         at Cost      or Sales     Translation     Period
      ----------                    -----------        ---------     ----------    -----------    ------------
<S>                                 <C>              <C>            <C>             <C>          <C>
Year Ended June 30, 1992
- - - ---------------------------
  Land and land improvement         $  10,909,000    $   171,000     $   234,000    $  93,000    $  10,939,000
  Buildings                           111,250,000      1,620,000         698,000      521,000      112,693,000
  Machinery and equipment             488,819,000     40,725,000      27,157,000      285,000      502,672,000
  Construction in progress             21,510,000     (2,292,000)      2,089,000          -         17,129,000
                                    -------------    -----------     -----------    ---------    -------------
    Totals                          $ 632,488,000    $40,224,000     $30,178,000    $ 899,000    $ 643,433,000
                                    =============    ===========     ===========    =========     ============

Year Ended June 27, 1993
- - - ----------------------------
  Land and land improvements        $  10,939,000    $    95,000     $     2,000    $ (41,000)   $  10,991,000
  Buildings                           112,693,000      2,061,000         337,000     (351,000)     114,066,000
  Machinery and equipment             502,672,000     36,460,000      22,144,000     (423,000)     516,565,000
  Construction in progress             17,129,000       (506,000)        120,000       (5,000)      16,498,000
                                    -------------    -----------     -----------    ---------    -------------
    Totals                          $ 643,433,000    $38,110,000     $22,603,000    $(820,000)   $ 658,120,000
                                    =============    ===========     ===========    =========     ============

Year Ended July 3, 1994
- - - ----------------------------
  Land and land improvements        $  10,991,000    $   180,000     $   782,000    $(110,000)   $  10,279,000
  Buildings                           114,066,000      2,084,000       4,078,000     (106,000)     111,966,000
  Machinery and equipment             516,565,000     38,325,000      24,369,000      180,000      530,701,000
  Construction in progress             16,498,000        215,000          56,000      (10,000)      16,647,000
                                    -------------    -----------     -----------    ---------    -------------
     Totals                         $ 658,120,000    $40,804,000     $29,285,000    $ (46,000)   $ 669,593,000
                                    =============    ===========     ===========    =========     ============
</TABLE>


                                      11

<PAGE>   14
                 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

                   SCHEDULE VI - ACCUMULATED DEPRECIATION AND
                       UNAMORTIZED INVESTMENT TAX CREDIT


<TABLE>
<CAPTION>
                                                                      Deductions
                                                                        From
                                                                       Reserves -
                                                        Provision     Retirements,
                                       Balance at         Charged      Renewals      Adjustments       Balance at
                                       Beginning        to Profit        and             for               End
          Description                  of Period         and Loss     Replacements    Translation      of Period
          -----------              --------------    ------------    -------------  --------------    ------------
<S>                                 <C>              <C>            <C>               <C>            <C>
Year Ended June 30, 1992
- - - -------------------------
  Land improvements                $   3,643,000     $    295,000    $    41,000       $     -        $   3,897,000
  Buildings                           48,930,000        3,802,000        576,000         168,000         52,324,000
  Machinery and equipment            253,586,000       38,046,000     19,251,000         198,000        272,579,000
                                   -------------     ------------    -----------       ---------      -------------
                                   $ 306,159,000     $ 42,143,000    $19,868,000       $ 366,000      $ 328,800,000
  Unamortized investment
   tax credit                          5,965,000       (1,030,000)             -               -          4,935,000
                                   -------------     ------------    -----------       ---------      -------------
    Totals                         $ 312,124,000     $ 41,113,000    $19,868,000       $ 366,000      $ 333,735,000
                                   =============     ============    ===========       =========      =============

Year Ended June 27, 1993
- - - --------------------------
  Land improvements                $   3,897,000     $    300,000    $     2,000       $       -      $   4,195,000
  Buildings                           52,324,000        3,921,000        281,000        (151,000)        55,813,000
  Machinery and equipment            272,579,000       43,881,000     17,629,000        (316,000)       298,515,000
                                   -------------     ------------    -----------       ---------      -------------
                                   $ 328,800,000     $ 48,102,000    $17,912,000       $(467,000)     $ 358,523,000

  Unamortized investment
   tax credit                          4,935,000         (880,000)             -               -          4,055,000
                                   -------------     ------------    -----------       ---------      -------------
    Totals                         $ 333,735,000     $ 47,222,000    $17,912,000       $(467,000)     $ 362,578,000
                                    ============     ============    ===========       =========      =============
Year Ended July 3, 1994
- - - -------------------------
  Land improvements                $   4,195,000     $    296,000    $   359,000       $       -      $   4,132,000
  Buildings                           55,813,000        3,768,000      1,931,000           6,000         57,656,000
  Machinery and equipment            298,515,000       39,716,000     19,670,000         129,000        318,690,000
                                   -------------     ------------    -----------       ---------      -------------
                                   $ 358,523,000     $ 43,780,000    $21,960,000       $ 135,000      $ 380,478,000

  Unamortized investment
   tax credit                         4,055,000          (830,000)             -               -          3,225,000
                                   -------------     ------------    -----------       ---------      -------------
    Totals                         $362,578,000      $ 42,950,000    $21,960,000       $ 135,000      $ 383,703,000
                                   ============      ============    ===========       =========      =============
</TABLE>


The annual rates used for computing depreciation are shown below:


<TABLE>
<CAPTION>
                                                    Straight-Line
                                                        Rate
                                                      -----------
        <S>                                           <C>
        Land improvements                             3-1/3% to 5%
        Buildings                                      2% to 10%
        Machinery and equipment                        5% to 50%
</TABLE>


Certain tools, dies, jigs and fixtures, classified with machinery and equipment
are depreciated on a straight-line basis over five years.

                                      12

<PAGE>   15

                 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

               SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS


<TABLE>
<CAPTION>
                                                   Provision
                               Balance at           Charged                        Balance at
                               Beginning           to Profit                         End of
        Description            of Period           and Loss          Payments        Period
       ------------          -------------        ----------       -----------    --------------
<S>                          <C>                   <C>             <C>             <C>
Year Ended June 30, 1992
- - - ------------------------
Estimated warranty
 expense to be incurred       $  24,754,000        $ 25,003,000    $ 23,929,000    $ 25,828,000
                              =============        ============     ===========    ============
Reserve for retired
 employees' life insurance    $   9,755,000        $    811,000    $    817,000    $  9,749,000
                              =============        ============    ============    =============   
Year Ended June 27, 1993
- - - ------------------------
Estimated warranty
 expense to be incurred       $  25,828,000        $ 23,523,000    $ 21,033,000    $ 28,318,000
                              =============        ============    ============    =============   
Reserve for retired
 employees' life insurance    $   9,749,000        $    825,000    $    827,000    $  9,747,000
                              =============        ============    ============    ============   
Year Ended July 3, 1994
- - - ------------------------
Estimated warranty
 expense to be incurred       $  28,318,000        $ 23,694,000    $ 22,212,000    $ 29,800,000
                              =============        ============    ============    ============   
Reserve for retired
 employees' life insurance    $   9,747,000        $    908,000    $    664,000     $ 9,991,000
                              =============        ============    ============    ============   
</TABLE>


            SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION

The following amounts were charged directly to current operations.


<TABLE>
<CAPTION>
                                                     For the Fiscal Year
                                      ------------------------------------------------------ 
                                          1994                1993                 1992
                                      -------------        -------------       -------------
        <S>                           <C>                  <C>                 <C>
        Maintenance and repairs       $  56,415,000        $  51,675,000       $  47,746,000

        Depreciation                     42,950,000           47,222,000          41,113,000
</TABLE>


                                      13

<PAGE>   16
                         BRIGGS & STRATTON CORPORATION


                                 EXHIBIT INDEX
                        1994 ANNUAL REPORT ON FORM 10-K


<TABLE>
<CAPTION>

Exhibit 
Number          Description 
- - - --------        ------------   
<S>       <C>
3.1       Articles of Incorporation.            
            (Filed as Exhibit 3.1 to the Company's Report on Form 8-B dated 
            October 12, 1992, and incorporated by reference herein.)


 3.2      Bylaws.
            (Filed as Exhibit 3.2 to the Company's Report on Form 8-B dated October 12,
            1992 and incorporated by reference herein.)

 4        Rights Agreement dated as of December 20, 1989, between Briggs &
          Stratton Corporation and First Wisconsin Trust Company which includes the form
          of Right Certificate as Exhibit A and the Summary of Rights to Purchase Common
          Shares as Exhibit B.
              (Filed as Exhibit 1 to the Company's Report on Form
              8-K dated December 20, 1989 and incorporated by reference herein.)

 10.0     Forms of Officer Employment Agreements.
              (Filed as Exhibit 10.0 to the Company's Annual Report on Form 10-K for fiscal
              year ended June 27, 1993 and incorporated by reference herein.)

 10.1     Survivor Annuity Plan.
              (Filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K for fiscal
              year ended June 30, 1986 and incorporated by reference herein.)

 10.2     Supplemental Retirement Program.
              (Filed as Exhibit 10.3 to the Company's Annual Report on Form 10-K for fiscal
              year ended June 30, 1990 and incorporated by reference herein.)

 10.3     Economic Value Added Incentive Compensation Plan.
              (Filed as Exhibit 10.3 to the Company's Annual Report on Form 10-K for fiscal
              year ended June 27, 1993 and incorporated by reference herein.)

 10.4     Form of Change of Control Employment Agreements.
           (Filed as Exhibit 10.4 to the Company's Annual Report on Form 10-K for fiscal
           year ended June 27, 1993 and incorporated by reference herein.)

 10.5     Trust Agreement with an independent trustee to provide payments
          under various compensation agreements with company employees upon the occurrence
          of a change in control.
               (Filed as Exhibit 10.1 to the Company's Report on Form
               10-Q for the quarter ended October 1, 1989, and incorporated by reference herein.)

 10.6     Stock Incentive Plan.
             (Filed as Exhibit A to the Company's 1993 Annual Meeting Proxy Statement, which
             was filed as Exhibit 100A to the Company's Annual Report on Form 10-K for fiscal
             year ended June 27, 1993 and incorporated by reference herein.)

 10.7     Leveraged Stock Option Program
             (Filed as Exhibit 10.7 to the Company's Annual Report on Form 10-K for fiscal
             year ended June 27, 1993 and incorporated by reference herein.)

 10.8     Deferred Compensation Agreement
             (Filed herewith.)

 13       Annual Report to Shareholders for Year Ended July 3, 1994.
             (Filed herewith solely to the extent specific portions thereof are incorporated
             herein by reference.)
</TABLE>


                                      14

<PAGE>   17

<TABLE>
<CAPTION>
Exhibit
Number          Description
- - - ------         -------------
<S>       <C>
21        Subsidiaries of the Registrant.
            (Filed as Exhibit 22 to the Company's Annual Report on Form 10-K for fiscal
            year ended June 27, 1993 and incorporated by reference herein.)

23        Consent of Independent Public Accountants.
            (Filed herewith.)

24        Power of Attorney
            (Included in the Signature Page of this report.)

27        Financial Data Schedule
            (Filed herewith.)
</TABLE>



                                   15






<PAGE>   1
                                                            EXHIBIT NO. 10.8

                 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES


                        DEFERRED COMPENSATION AGREEMENT

         AGREEMENT made this 9th day of June, 1994, between Briggs & Stratton
Corporation (the "Company") and Frederick P. Stratton, Jr. (the "Executive").

         1.  DEFERRAL OF COMPENSATION. This Agreement shall operate to defer,
on an unfunded basis, compensation earned by the Executive as an employee of
the Company for the company's fiscal year ending in 1995, to the extent that
such compensation would otherwise be non-deductible under Section 162 (m) of
the Internal Revenue Code, as amended from time to time. The amount deferred
hereunder shall be paid to the Executive as soon as practicable following the
Company fiscal year in which the executive terminates employment with the
Company, such payment to be made in one lump sum, or in such other manner as
may be agreed upon between the Executive and the Company's Nominating and
Salary Personnel Committee of the Board. Such agreement, if any, must occur
before the termination of employment by the Executive, or such payment shall be
in a lump sum.

         2.  DEATH OF EXECUTIVE. If the Executive dies prior to receiving all
funds payable hereunder, the entire unpaid balance shall be paid in the same

manner as provided for the Executive under the Company's Economic Value Added
Incentive Compensation Plan.

         3.  BINDING EFFECT. This Agreement has been approved by the Company's
Board of Directors and its Nominating and Salaried Personnel Committee, and
shall be binding and inure to the benefit of the Company, its successors and
assigns and the Executive and his heirs, executors, administrators, and legal
representatives.

         4.  MISCELLANEOUS. Amounts deferred hereunder shall be credited with
interest on a book (unfunded) basis beginning on the last day of the Company
fiscal year for which a deferral is made, and continuing thereafter at a rate
equal to 80% of the prime rate made available to the best customers of Firstar
Bank Milwaukee N.A., and adjusted and compounded annually as of the last day of
each subsequent Company fiscal year until paid. Payment of deferrals hereunder
shall be subject to tax or other withholding requirements as may be required by
law. The Company's Board, or its Nominating and Salaried Personnel Committee,
shall have the power to modify or terminate this Agreement, but only with
consent of the Executive.

                                      16

<PAGE>   2


         IN WITNESS WHEREOF, Briggs & Stratton Corporation has caused this
Deferred Compensation Agreement to be executed by its duly authorized Director
and Frederick P. Stratton, Jr., together with his spouse, Anne Y. Stratton,
hereunto have set their hands as of the date first above written.

                                             BRIGGS & STRATTON CORPORATION

                                             By: /s/ John L. Murray
                                                ---------------------------
                                             John L. Murray
                                             Chairman, Nominating and
                                             Salaried Personnel Committee


                                             /s/ Frederick P. Stratton, Jr.
                                             ------------------------------
                                               Frederick P. Stratton, Jr.


                                             /s/ Anne Y. Stratton
                                             ------------------------------
                                             Anne Y. Stratton

                                      17



<PAGE>   1
                                                                     EXHIBIT 13
CONSOLIDATED STATEMENTS OF INCOME                                   
- - - --------------------------------------------------------------------------------

FOR THE YEARS ENDED JULY 3, 1994, JUNE 27, 1993, AND JUNE 30, 1992



<TABLE>
<CAPTION>
                                                                        1994                  1993                  1992
                                                                        ----                  ----                  ----
<S>                                                                <C>                   <C>                  <C>           
NET SALES .....................................................    $1,285,517,000        $1,139,462,000       $1,041,828,000
COST OF GOODS SOLD.............................................     1,018,977,000           926,861,000          867,780,000
                                                                  ---------------        --------------       --------------
  Gross Profit on Sales........................................       266,540,000           212,601,000          174,048,000
ENGINEERING, SELLING,                                                                                       
  GENERAL AND                                                                                               
  ADMINISTRATIVE EXPENSES.....................................         94,795,000            83,176,000           78,736,000
                                                                  ---------------        --------------       --------------
   Income from Operations.....................................        171,745,000           129,425,000           95,312,000
INTEREST EXPENSE..............................................         (8,997,000)          (11,283,000)         (11,246,000)
OTHER INCOME (EXPENSE), Net...................................          6,973,000            (3,737,000)          (3,863,000)
                                                                  ---------------        --------------       --------------
  Income Before Provision for                                                                               
    Income Taxes..............................................        169,721,000           114,405,000           80,203,000
PROVISION FOR INCOME TAXES....................................         67,240,000            44,060,000           28,700,000
                                                                  ---------------        --------------       --------------
  Net Income Before Cumulative Effect of                                                                    
    Accounting Changes........................................        102,481,000            70,345,000           51,503,000
CUMULATIVE EFFECT OF 
  ACCOUNTING CHANGES FOR:
    Postretirement Health Care, Net of
      Income Taxes of $25,722,000.............................        (40,232,000)               -                    -

    Postemployment Benefits, Net of
      Income Taxes of $430,000................................           (672,000)               -                    - 
    Deferred Income Taxes.....................................          8,346,000                -                    - 
                                                                  ---------------        --------------       --------------
                                                                      (32,558,000)               -                    - 
                                                                  ---------------        --------------       --------------
NET INCOME....................................................     $   69,923,000        $   70,345,000       $   51,503,000
                                                                  ===============        ==============       ==============
PER SHARE DATA:
    Net Income Before Cumulative Effect of
      Accounting Changes......................................     $         7.09        $         4.86       $         3.56

    Cumulative Effect of
      Accounting Changes......................................              (2.25)                -                    - 
                                                                  ---------------        --------------       --------------
NET INCOME....................................................     $         4.84        $         4.86       $         3.56
                                                                  ===============        ==============       ==============
                                                                                                            

</TABLE>


The accompanying notes to consolidated
 financial statements are an integral part
of these statements.




                                                                             15


<PAGE>   2

CONSOLIDATED BALANCE SHEETS
- - - --------------------------------------------------------------------------------


AS OF JULY 3, 1994 AND JUNE 27, 1993


<TABLE>
<CAPTION>
                                                                                      1994                         1993
                                                                                      ----                         ----
<S>                                                                               <C>                         <C>
ASSETS                                                                            
CURRENT ASSETS:
  Cash and Cash Equivalents...................................................    $ 221,101,000               $  39,501,000
  Short-Term Investments......................................................          -                        70,422,000
  Receivables, Less Reserves of $1,678,000 and $754,000, Respectively.........      122,597,000                 124,981,000
  Inventories -
    Finished Products and Parts...............................................       55,847,000                  46,061,000
    Work in Process...........................................................       27,078,000                  25,320,000
    Raw Materials.............................................................        2,745,000                   2,684,000
                                                                                  -------------               -------------
      Total Inventories.......................................................       85,670,000                  74,065,000
  Future Income Tax Benefits..................................................       32,868,000                  27,457,000
  Prepaid Expenses............................................................       20,548,000                  16,537,000
                                                                                  -------------               -------------
      Total Current Assets....................................................      482,784,000                 352,963,000
PREPAID PENSION COST..........................................................        8,681,000                   7,602,000
PLANT AND EQUIPMENT:
  Land and Land Improvements..................................................       10,279,000                  10,991,000
  Buildings...................................................................      111,966,000                 114,066,000
  Machinery and Equipment.....................................................      530,701,000                 516,565,000
  Construction in Progress....................................................       16,647,000                  16,498,000
                                                                                  -------------               -------------
                                                                                    669,593,000                 658,120,000
  Less - Accumulated Depreciation and Unamortized
    Investment Tax Credit.....................................................      383,703,000                 362,578,000
                                                                                  -------------               -------------
      Total Plant and Equipment, Net..........................................      285,890,000                 295,542,000
                                                                                  -------------               -------------
                                                                                  $ 777,355,000               $ 656,107,000
                                                                                  =============               =============

LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
  Accounts Payable............................................................    $  56,364,000               $  39,357,000
  Foreign Loans...............................................................       21,323,000                  15,927,000
  Accrued Liabilities -
    Wages and Salaries........................................................       48,545,000                  34,668,000
    Warranty..................................................................       29,800,000                  28,318,000
    Taxes, Other Than Income Taxes............................................        6,772,000                   6,003,000
    Other.....................................................................       34,837,000                  23,079,000
                                                                                  -------------               -------------
      Total Accrued Liabilities...............................................      119,954,000                  92,068,000
  Federal and State Income Taxes..............................................        9,103,000                  10,592,000
                                                                                  -------------               -------------
      Total Current Liabilities...............................................      206,744,000                 157,944,000
DEFERRED INCOME TAXES.........................................................       12,317,000                  49,900,000
ACCRUED EMPLOYEE BENEFITS.....................................................       15,423,000                  13,305,000
ACCRUED POSTRETIREMENT HEALTH CARE OBLIGATION ................................       64,079,000                       -
LONG-TERM DEBT................................................................       75,000,000                  75,000,000
SHAREHOLDERS' INVESTMENT:
  Common Stock -
    Authorized 30,000,000 shares $.01 Par Value,
      Issued and Outstanding 14,463,500 Shares in 1994 and 1993................         145,000                     145,000
  Additional Paid-In Capital..................................................       42,358,000                  42,883,000
  Retained Earnings...........................................................      362,136,000                 318,247,000
  Cumulative Translation Adjustments..........................................         (847,000)                 (1,317,000)
                                                                                  -------------               -------------     
      Total Shareholders' Investment..........................................      403,792,000                 359,958,000
                                                                                  -------------               -------------
                                                                                  $ 777,355,000               $ 656,107,000
                                                                                  =============               =============
 </TABLE>


The accompanying notes to consolidated financial statements are an integral 
part of these balance sheets.





16

<PAGE>   3
CONSOLIDATED STATEMENTS
OF SHAREHOLDERS' INVESTMENT
- - - --------------------------------------------------------------------------------
FOR THE YEARS ENDED JULY 3, 1994, JUNE 27, 1993 AND JUNE 30, 1992



<TABLE>
<CAPTION>

                                                                         Additional                                   Cumulative
                                                    Common                Paid-In               Retained              Translation
                                                    Stock                 Capital               Earnings              Adjustments
                                                 ------------           -----------          -------------           ------------
<S>                                             <C>                   <C>                   <C>                     <C>
BALANCES JUNE 30,1991 .......................    $ 43,391,000           $    -               $ 244,129,000           $ (2,805,000)
  Net Income  ...............................          -                     -                  51,503,000                 -
  Cash Dividends Paid ($1.60 per share) .....          -                     -                 (23,142,000)                -
  Currency Translation Adjustments  .........          -                     -                      -                    (672,000)
                                                 ------------           -----------          -------------           ------------
BALANCES JUNE 30, 1992  .....................      43,391,000                -                 272,490,000             (3,477,000)
  Net Income  ...............................          -                     -                  70,345,000                 -
  Cash Dividends Paid ($1.70 per share) .....          -                     -                 (24,588,000)                -
  Reduction of Par Value  ...................     (43,246,000)           43,246,000                 -                      -
  Purchase of Common Stock  
   for Treasury .............................          -                   (463,000)                -                      -
  Proceeds from Exercise of 
   Stock Options  ...........................          -                    100,000                 -                      -
  Currency Translation Adjustments  .........          -                     -                      -                  (1,340,000)
  Loss on Foreign Subsidiary  ...............          -                     -                      -                   3,500,000
                                                 ------------           -----------          -------------           ------------
BALANCES JUNE 27, 1993  .....................         145,000            42,883,000            318,247,000             (1,317,000)
  Net Income  ...............................          -                     -                  69,923,000                 -
  Cash Dividends Paid ($1.80 per share) .....          -                     -                 (26,034,000)                -
  Purchase of Common Stock  
   for Treasury .............................          -                   (791,000)                -                      -
  Proceeds from Exercise of 
   Stock Options  ...........................          -                    266,000                 -                      -
  Currency Translation Adjustments  .........          -                     -                      -                     470,000
                                                 ------------           -----------          -------------           ------------
BALANCES JULY 3, 1994 .......................    $    145,000           $42,358,000          $ 362,136,000           $   (847,000)
                                                 ============           ===========          =============           ============

</TABLE>




The accompanying notes to consolidated financial statements are an integral
part of these statements.



                                                                               
                                                                             17

<PAGE>   4


CONSOLIDATED STATEMENTS OF CASH FLOWS
- - - --------------------------------------------------------------------

FOR THE YEARS ENDED JULY 3, 1994, JUNE 27, 1993 AND JUNE 30, 1992


<TABLE>
<CAPTION>
                                                                                      
Increase (Decrease) in Cash and Cash Equivalents                                      
                                                                             1994                1993              1992
                                                                             ----                ----              ----
<S>                                                                     <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                                 
  Net Income...............................................             $ 69,923,000       $  70,345,000      $ 51,503,000 
  Adjustments to Reconcile Net Income to                                                                         
    Net Cash Provided by Operating Activities -                                                        

    Cumulative Effect of Accounting Changes,                                                 
      Net of Income Taxes..................................               32,558,000              -                 -
    Depreciation...........................................               42,950,000          47,222,000        41,113,000 
    (Gain) Loss on Disposition of Plant and Equipment......                  (96,000)          4,027,000         6,175,000 
    Loss on Foreign Subsidiary.............................                   -                3,500,000            -  
    Change in Operating Assets and Liabilities -                                      
      (Increase) Decrease in Receivables...................                2,384,000         (21,366,000)      (20,089,000)
      (Increase) in Inventories............................              (11,605,000)         (1,576,000)       (7,449,000)
      (Increase) in Other Current Assets...................              (10,593,000)         (1,893,000)       (6,680,000)
      Increase in Accounts Payable,                                                   
        Accrued Liabilities and Income Taxes...............               38,132,000          13,731,000        22,981,000
      Other, Net...........................................                1,420,000          (3,699,000)       (6,645,000)
                                                                        ------------         -----------       -----------
        Net Cash Provided by Operating Activities..........              165,073,000         110,291,000        80,909,000
                                                                        ------------         -----------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES:                                                 
  Additions to Plant and Equipment.........................              (40,804,000)        (38,110,000)      (40,224,000)
  Proceeds Received on Sale of Plant and Equipment.........                7,268,000             626,000         4,121,000
  Sale (Purchase) of Short-Term Investments................               70,422,000         (70,422,000)           -
                                                                        ------------         -----------       -----------
        Net Cash Provided by (Used in) Investing                                      
        Activities.........................................               36,886,000        (107,906,000)      (36,103,000)
                                                                        ------------         -----------       -----------
CASH FLOWS FROM FINANCING ACTIVITIES:                                                
  Net Borrowings (Repayments) on Loans and Notes Payable...                5,396,000         (15,926,000)       11,398,000
  Cash Dividends Paid......................................              (26,034,000)        (24,588,000)      (23,142,000)
  Purchase of Common Stock for Treasury....................                 (791,000)           (463,000)           -
  Proceeds from Exercise of Stock Options..................                  266,000             100,000            -
                                                                        ------------         -----------       -----------
        Net Cash Used in Financing Activities..............              (21,163,000)        (40,877,000)      (11,744,000)
                                                                        ------------         -----------       -----------
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE                                              
  CHANGES ON CASH AND CASH EQUIVALENTS.....................                  804,000            (949,000)       (1,191,000)
                                                                        ------------         -----------       -----------
NET INCREASE (DECREASE) IN CASH AND                                                   
  CASH EQUIVALENTS.........................................              181,600,000         (39,441,000)       31,871,000
CASH AND CASH EQUIVALENTS:                                                            
  Beginning of Year........................................               39,501,000          78,942,000        47,071,000
                                                                        ------------         -----------       -----------
  End of Year..............................................             $221,101,000       $  39,501,000      $ 78,942,000
                                                                        ============       =============      ============
SUPPLEMENTAL DISCLOSURE OF                                                            
  CASH FLOW INFORMATION:                                                              
  Interest Paid............................................             $  8,997,000       $  11,286,000      $ 11,198,000
                                                                        ============       =============      ============
  Income Taxes Paid........................................             $ 77,748,000       $  54,228,000      $ 31,000,000
                                                                        ============       =============      ============
</TABLE>
                                                              
                                                                      
     The accompanying notes to consolidated financial statements are an 
integral part of these statements.

18

<PAGE>   5
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
- - - -------------------------------------------------------------------------------

FOR THE YEARS ENDED JULY 3, 1994, JUNE 27, 1993 AND JUNE 30, 1992

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The significant accounting policies followed by Briggs & Stratton Corporation
and subsidiaries (the Company) in the preparation of these financial
statements, as summarized below, are in conformity with generally accepted
accounting principles.

Fiscal Year: During 1993, the Company changed its fiscal year from June 30 each
year to 52 or 53 week year ending on the Sunday nearest the last day of June in
each year.  Therefore, the 1994 fiscal year ended on July 3 (and was 53 weeks
long) and the 1993 fiscal year ended on June 27 (52 weeks).  Fiscal year 1992
was under the fiscal calendar which ended on June 30. All references to years
relate to fiscal years rather than calendar years.

Principles of Consolidation: The consolidated financial statements include the
accounts of Briggs & Stratton Corporation and its wholly owned domestic and
foreign subsidiaries after elimination of intercompany accounts and
transactions.

Cash and Cash Equivalents:  This caption includes cash and certificates of
deposit.  The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.

Short-Term Investments: This caption represents short maturity mutual fund
investments that can be readily purchased or sold using established markets.  
These investments are stated at cost plus accrued income which equals market
value.  There were none at the end of fiscal 1994.

Inventories: Inventories are stated at cost, which does not exceed market.  The
last-in, first-out (LIFO) method was used for determining the cost of
approximately 89% of total inventories at July 3, 1994, 89% at June 27, 1993
and 90% at June 30, 1992.  The cost for the remaining portion of the inventories
was determined using the first-in, first-out (FIFO) method.  If the FIFO
inventory valuation method had been used exclusively, inventories would have
been $42,268,000, $40,888,000 and $39,738,000 higher in the respective years.
The LIFO inventory adjustment was determined on an overall basis, and
accordingly, each class of inventory reflects an allocation based on the FIFO
amounts.

Plant and Equipment and Depreciation: Plant and equipment is stated at cost, and
depreciation is computed using the straight-line method at rates based upon the
estimated useful lives of the assets.

Expenditures for repairs and maintenance are charged to expense as incurred.
Expenditures for major renewals and betterments, which significantly extend the
useful lives of existing plant and equipment, are capitalized and depreciated.
Upon retirement or disposition of plant and equipment, the cost and related
accumulated depreciation are removed from the accounts and any resulting gain
or loss is recognized in income.

Investment Tax Credits: The Company follows the deferral method of accounting
for the Federal investment tax credit.  The credit, which was eliminated in
1986, has been recorded as an addition to accumulated depreciation and is being
amortized over the estimated useful lives of the related assets via a reduction
of depreciation expense.

The amounts amortized into income in each of the three years were $830,000 in
1994, $880,000 in 1993 and $1,030,000 in 1992.  At the end of fiscal years 1994
and 1993, unamortized deferred investment tax credits aggregated $3,225,000 and
$4,055,000, respectively.

                                                                       19

<PAGE>   6
NOTES . . .
- - - -------------------------------------------------------------------------------
Income Taxes: The Provision for Income Taxes includes Federal, state and
foreign income taxes currently payable and those deferred or prepaid because of
temporary differences between financial statement and tax bases of assets and
liabilities. The Future Income Tax Benefits represent temporary differences
relating to current assets and current liabilities and the Deferred Income
Taxes represent temporary differences relating to noncurrent assets and
liabilities.

Research and Development Costs: Expenditures relating to the development of new
products and processes, including significant improvements and refinements to
existing products, are expensed as incurred. The amounts charged against income
were $12,520,000 in 1994, $10,411,000 in 1993 and $10,808,000 in 1992.

Accrued Employee Benefits: The Company's life insurance program includes
payment of a death benefit to beneficiaries of retired employees. The Company
accrues for the estimated cost of these benefits over the estimated working 
life of the employee. Past service costs for all retired employees have been 
fully provided for and the Company also accrues for the estimated cost of 
supplemental retirement and death benefit agreements with executive officers.

Accrued Postretirement Health Care Obligation:  During the 1994 fiscal year,
the Company adopted the accounting prescribed in FAS 106 (Postretirement
Benefits Other Than Pensions).  This change and the amounts associated with it
are more fully described in Note No. 9.

Foreign Currency Translation: Foreign currency balance sheet accounts are
translated into United States dollars at the rates of exchange in effect at
fiscal year end. Income and expenses are translated at the average rates of
exchange in effect during the year. The related translation adjustments are
made directly to a separate component of shareholders' investment.

(2) INCOME TAXES:

The provision for income taxes consists of the following (in thousands of
dollars):


<TABLE>
<CAPTION>

                                     1994        1993        1992
                                     ----        ----        ----
<S>                                <C>         <C>         <C>

Current
  Federal......................    $62,795     $43,403     $30,677
  State........................     10,482       7,464       4,508
  Foreign......................      2,059         818       1,585
                                   -------     -------     -------
                                    75,336      51,685      36,770
Deferred.......................     (8,096)     (7,625)     (8,070)
                                   -------     -------     -------
Total..........................    $67,240     $44,060     $28,700
                                   =======     =======     =======
</TABLE>


The provision for deferred income taxes consists of the following items (in
thousands of dollars):


<TABLE>
<CAPTION>

                                     1994        1993        1992
                                     ----        ----        ----
<S>                                <C>         <C>         <C>

Future income tax effect of
  tax depreciation in excess
  of (or less than) book
  depreciation..................   $(2,232)    $(3,007)    $  955

Tax effect resulting from
  maintenance and supply
  inventories being capitalized
  for tax purposes, but which
  continue to be expensed for
  book purposes.................       731       1,213     (4,433)

Difference between book and tax
  loss on sale of fixed assets..        -           -      (2,144)

Other items.....................    (6,595)     (5,831)    (2,448)
                                   -------     -------    -------
                                   $(8,096)    $(7,625)   $(8,070)
                                   =======     =======    =======
</TABLE>











A reconciliation of the U.S. statutory tax rates to the effective tax rates
follows:


<TABLE>
<CAPTION>

                                     1994        1993        1992
                                     ----        ----        ----
<S>                                 <C>          <C>         <C>

U.S. statutory rate..............   35.0%        34.0%       34.0%

State taxes, net of Federal
  tax benefit....................    3.6%         3.8%        2.9%

Foreign Sales Corporation tax
  benefit........................    (.5%)        (.9%)      (1.1%)

Loss on foreign subsidiary not
  deductible.....................     -           1.0%         - 

Other............................    1.5%          .6%         - 
                                    ----         ----        ----
Effective tax rate...............   39.6%        38.5%       35.8%
                                    ====         ====        ====
</TABLE>



20

<PAGE>   7
NOTES . . .
- - - --------------------------------------------------------------------------------

At the beginning of fiscal year 1994, the Company adopted Financial Accounting
Standard (FAS) No. 109 which required a change in the recording of deferred
taxes.  The former method emphasized provisions which were made in the income
statement.  The emphasis in the new method is on the balance sheet and requires
that the amounts to be recorded are the amounts which will eventually be paid
out.  The adoption of this standard resulted in a cumulative adjustment which
was recorded as income totaling $8,346,000 or $.58 per share.

The components of deferred tax assets and liabilities at the end of the fiscal
year were:


<TABLE>
<CAPTION>
        Future Income Tax Benefits:
        <S>                                             <C>
        Inventory................................       $ 3,675,000
        Prepaid Expenses.........................         1,712,000
        Payroll Related Accruals.................         7,145,000
        Warranty Reserves........................        11,622,000
        Other Accrued Liabilities................         6,727,000
        Miscellaneous............................         1,987,000
                                                        -----------
                                                        $32,868,000
                                                        ===========
<CAPTION>
        Deferred Income Taxes:
        <S>                                             <C>
        Difference between book and tax methods
          applied to maintenance and supply
          inventories............................       $(4,037,000)
        Prepaid Pension Cost.....................         3,487,000
        Accumulated Depreciation.................        43,866,000
        Accrued Employee Benefits................        (6,047,000)
        Postretirement
          Health Care Obligation.................       (24,991,000)
        Miscellaneous............................            39,000
                                                        -----------
                                                        $12,317,000
                                                        ===========

</TABLE>


(3) INDUSTRY SEGMENTS:

Certain information concerning the Company's industry segments is presented
below (in thousands of dollars):


<TABLE>
<CAPTION>
                                                         YEAR ENDED
                                          ---------------------------------------
                                          7-3-94          6-27-93         6-30-92
                                          ------          -------         -------
<S>                                     <C>             <C>             <C>
SALES -
 Engines & parts...................     $1,197,744      $1,066,053      $  967,802
 Locks.............................         87,773          73,409          74,026
                                        ----------      ----------      ----------
                                        $1,285,517      $1,139,462      $1,041,828
                                        ==========      ==========      ==========
INCOME FROM OPERATIONS -
 Engines & parts...................     $  158,900      $  128,079      $   90,781
 Locks.............................         12,845           1,346           4,531
                                        ----------      ----------      ----------
                                        $  171,745      $  129,425      $   95,312
                                        ==========      ==========      ==========

ASSETS -
 Engines & parts...................     $  467,561      $  458,369      $  455,691
 Locks.............................         46,832          49,557          45,713
 Unallocated.......................        262,962         148,181         112,449
                                        ----------      ----------      ----------
                                        $  777,355      $  656,107      $  613,853
                                        ==========      ==========      ==========
DEPRECIATION EXPENSE -
 Engines & parts...................     $   40,605      $   44,895      $   38,808
 Locks.............................          2,345           2,327           2,305
                                        ----------      ----------      ----------
                                        $   42,950      $   47,222      $   41,113
                                        ==========      ==========      ==========
EXPENDITURES FOR PLANT AND
EQUIPMENT -     
 Engines & parts...................     $   37,398      $   34,251      $   37,035
 Locks.............................          3,406           3,859           3,189
                                        ----------      ----------      ----------
                                        $   40,804      $   38,110      $   40,224
                                        ==========      ==========      ==========

</TABLE>


Unallocated assets include cash and cash equivalents, short-term investments,
future income tax benefits, prepaid pension costs and other assets.

Export sales for fiscal 1994 were $264,866,000 (21% of total sales), for fiscal
1993 were $249,610,000 (22%) and for fiscal 1992 were $210,728,000 (20%).  These
sales were principally to customers in European countries.

In the fiscal years 1994, 1993 and 1992, there were sales to three major engine
customers that exceeded 10% of total Company net sales.  The sales to these
customers are summarized below (in thousands of dollars and percent of total
Company sales):



<TABLE>
<CAPTION>                                                   
                      1994               1993               1992
                      ----               ----               ----
     Customer    Sales      %        Sales      %        Sales     %
                 -----      -        -----      -        -----     -
        <S>     <C>        <C>     <C>         <C>     <C>        <C>
        A       $234,363   18%     $214,995    19%     $187,498   18%
        B        149,397   12%      139,662    12%      126,539   12%
        C        148,091   12%      119,912    11%      119,612   11%
                --------   ---     --------    ---     --------   ---
                $531,851   42%     $474,569    42%     $433,649   41%
                ========   ===     ========    ===     ========   ===
                                                               
</TABLE>


                                                                            21

<PAGE>   8
NOTES . . .
- - - -------------------------------------------------------------------------------

(4)  INDEBTEDNESS:

The Company had access to domestic lines of credit totaling $47,000,000 during
the fiscal year 1994.  These lines will remain available until they expire at
various dates, the latest of which is in November, 1994.  These lines are
renewable annually with arrangements providing amounts for short-term use at
the then prevailing rate.  There are no significant compensating balance
requirements.

The following data relates to domestic notes payable:



<TABLE>
<CAPTION>
                                              1994          1993
                                              -----         ----
<S>                                        <C>          <C>
Balance at
  Fiscal Year End ......................   $  -         $  -
Weighted Average 
  Interest Rate at
  Fiscal Year End ......................      -            - 
Maximum Amount
  Outstanding at
  Any Month End  .......................      -         $77,223,000
Average Amount
  Outstanding ..........................   $  70,000    $24,800,000
Weighted Average
  Interest Rate
  During the Year ......................       3.59%          3.77%

</TABLE>


The lines of credit available to the Company in foreign countries are in
connection with short-term borrowings and bank overdrafts used in the normal
course of business.  These amounts total $29,000,000 and expire at various
times through March, 1995.  None of these arrangements had material commitment
fees for compensating balance requirements.
The following information relates to the foreign loans:



<TABLE>
<CAPTION>
                                               1994          1993
                                               -----         ----
<S>                                        <C>            <C>
Balance at
  Fiscal Year End ......................   $21,323,000   $15,927,000
Weighted Average 
  Interest Rate at
  Fiscal Year End ......................         6.13%         7.90%
Maximum Amount
  Outstanding at
  Any Month End  .......................   $24,174,000   $31,774,000
Average Amount
  Outstanding ..........................   $19,508,000   $26,802,000
Weighted Average
  Interest Rate
  During the Year ......................         6.86%         9.27%

</TABLE>


The Company's long-term debt consists of 9.21% Senior Notes due June 15, 2001. 
Payments on these notes are due in five equal annual installments beginning in
1997.  The notes include covenants that limit total borrowings, require
maintenance of $200,000,000 minimum net worth and set certain restrictions on
the sale or collateralizing of the Company's assets.

(5)  OTHER INCOME (EXPENSE):

The components of the other income (expense) are (in thousands of dollars):



<TABLE>
<CAPTION>

                                                   Year Ended
                                          -------------------------------
                                           7-3-94     6-27-93     6-30-92
                                           ------     -------     --------
<S>                                       <C>         <C>         <C>
Interest Income  ....................     $ 3,527     $ 1,640     $ 1,451
Gain on sale of German
 land and buildings .................       2,819         -           - 
Loss on sale of
 plastic molding
 operation ..........................         -           -        (1,623)
Loss on retirement
 of assets no longer
 used in manufacturing
 processes...........................         -        (1,996)     (2,122)     
Loss on the
 disposition of other
 plant and equipment ................      (2,723)     (2,031)     (2,430)
Loss on foreign
 subsidiary..........................         -        (3,500)        -
Income from joint
 ventures ...........................       2,307       1,120         - 
Other Items .........................       1,043       1,030         861
                                          -------     -------     -------
Total ...............................     $ 6,973     $(3,737)    $(3,863)
                                          =======     =======     =======
</TABLE>


The $3,500,000 loss on foreign subsidiary in fiscal year 1993 is the
recognition of the cumulative translation adjustment relating to the Company's
German subsidiary, which changed business operations during the year from an
engine and parts distributor to a commissioned agent.

22

<PAGE>   9
NOTES . . .
- - - --------------------------------------------------------------------------------

(6) GUARANTEES AND COMMITMENTS:

The Company is a 50% guarantor on bank loans of an unconsolidated Japanese
joint venture for the manufacture of engines.  These bank loans totaled
approximately $8,000,000 at the end of 1994 fiscal year.

The Company has forward foreign currency exchange contracts to purchase 6.9
billion Japanese yen for $68.5 million through June of 1995.  These contracts
are used to hedge the commitments to purchase engines from the Company's
Japanese joint venture.  The Company's European subsidiaries have forward
currency contracts to exchange 15.7 million German Marks for $10.0 million
through February of 1995.  The Company's Canadian subsidiary also has forward
contracts to exchange 4.4 million Canadian dollars for 3.2 million U.S. dollars
through June 1995.  These contracts are used to hedge intercompany inventory
purchases by these foreign subsidiaries.  Accordingly, any gain or loss on the
above contracts has been deferred at July 3, 1994.

The Company's Board of Directors approved the building of three new plants in
the United States.  It is anticipated that this project will total $112,000,000
and will be financed from operating cash flow and available lines of credit. As
of the date of this annual report, no sites had been decided upon and no
contracts had been signed.

The Company is also committed to the purchase of a foundry of which the total
cost is estimated to be $20,000,000.

The Company has no other material commitments for materials or capital
expenditures at July 3, 1994.


(7) STOCK OPTIONS:

In 1990, shareholders approved the Stock Incentive Plan under which 400,000
shares of the Company's common stock have been reserved for issuance. In fiscal
1994, shareholders approved an additional 1,250,000 shares for issuance under
the Stock Incentive Plan.

Information on the options outstanding is as follows:



<TABLE>
<CAPTION>
                                                        Options
                                                    Outstanding in
                                                       Number of
                                                     Common Stock
                                                        Shares
                                      -----------------------------------------
                                         1994             1993           1992
                                         ----             ----           ----
<S>                                 <C>              <C>            <C>
Balance, beginning of year........     195,092          207,500        102,500
Granted during the year - 
  1992 at $46.31 per share........         -                -          105,000 
  1994 at $104.07 per share.......     126,710              -              -
Exercised during the year.........      (9,500)         (12,408)           -
Terminated during the year........      (8,870)             -              -
                                       -------          -------        -------
Balance, end of year..............     303,432          195,092        207,500
                                       =======          =======        =======

</TABLE>



Options were granted in 1990 at $28.00 per share and will expire on February
19, 2000. Options were granted in 1991 at $31.25 per share and will expire on
February 18, 2001.

Of the options granted in 1992, 50% are exercisable on or after January 1,
1996, and the remainder are exercisable on or after January 1, 1997.  These
options will expire on May 17, 2002.  The options exercised in the fiscal year
1993 reflect an acceleration of exercise rights due to employee retirements and
were issued from treasury shares purchased on the open market.  None were
granted during fiscal 1993.  The options granted in 1994 will become
exercisable August 16, 1996 and expire August 16, 1998.  All options were
granted at a price equal to or greater than the fair market value at the date
of grant.


(8)  SHAREHOLDER RIGHTS PLAN:

On December 20, 1989, the Board of Directors declared a dividend distribution
of one common stock purchase right (a "right") for each share of the Company's
common stock outstanding on January 5, 1990.  Each right would entitle
shareowners to buy one-half of one share of the Company's common stock at an
exercise price of $85.00 per share, subject to adjustment.  The rights are not
currently exercisable, but would become exercisable if certain events occurred
relating to a person or group acquiring or attempting to acquire 20 percent or
more of the outstanding shares of common stock.  The rights expire on January
5, 2000, unless redeemed or exchanged by the Company earlier.

                                                                            23

<PAGE>   10
NOTES . . .
- - - --------------------------------------------------------------------------------

(9) RETIREMENT PLANS AND POSTRETIREMENT COSTS:
The Company has noncontributory, defined benefit retirement plans covering 
substantially all employees. The following tables summarize the plans' income 
and expense, actuarial assumptions, and funded status for the three years 
indicated (dollars in thousands):


<TABLE>
<CAPTION>

                                                 Qualified Plans                     Supplemental Plans
                                          ----------------------------         -----------------------------
                                          1994       1993         1992         1994         1993        1992
                                          ----       ----         ----         ----         ----        ----
<S>                                     <C>          <C>         <C>          <C>          <C>        <C>
Income and Expense:
- - - -------------------                                                
Service Cost-Benefits Earned
  During the Year..................     $ 13,079     $ 12,222     $ 11,458     $   296     $   150     $   111
Interest Cost on Projected
  Benefit Obligation...............       36,408       35,448       33,040         706         542         482
Actual Return on Plan Assets.......       (7,152)     (56,232)     (63,160)         (3)         (2)          4
Net Amortization, Deferral
  and Windows......................      (42,978)       8,577       17,134         380         198         178
                                        --------     --------     --------     -------     -------      ------
Net Periodic Pension
  Expense (Income).................     $   (643)    $     15     $ (1,528)    $ 1,379     $   888     $   775
                                        ========     ========     ========     =======     =======     =======
Actuarial Assumptions:
- - - ----------------------
Discount Rate Used to Determine
  Present Value of Projected
  Benefit Obligation...............        7.75%        8.25%        8.25%       7.75%       8.25%       8.25%
Expected Rate of Future
  Compensation Level Increases.....         5.5%         5.5%         5.5%        5.5%        6.5%        7.0%
Expected Long-Term Rate of
  Return on Plan Assets............         9.0%         9.0%         9.0%        9.0%        9.0%        9.0%

Funded Status:
- - - --------------
Actuarial Present Value of
  Benefit Obligations:
    Vested.........................     $359,383     $326,062     $315,589     $ 6,560     $ 5,592     $ 5,329
    Non-Vested.....................       34,382       37,623       33,069          23           4           2
                                        --------     --------     --------     -------     -------     -------
    Accumulated Benefit
    Obligation.....................      393,765      363,685      348,658       6,583       5,596       5,331
Effect of Projected Future
  Wage and Salary Increases........      112,771      101,471       83,879       3,267       1,410         916
                                        --------     --------     --------     -------     -------     -------
    Projected Benefit Obligation...      506,536      465,156      432,537       9,850       7,006       6,247
Plan Assets at Fair Market Value...      560,585      578,780      546,755         103          58          37
                                        --------     --------     --------     -------     -------     -------
Plan Assets in Excess of (Less Than)
  Projected Benefit Obligation.....       54,049      113,624      114,218      (9,747)     (6,948)     (6,210)
Remaining Unrecognized Net
  Obligation (Asset) Arising
  from the Initial Application of
  SFAS No. 87......................      (43,776)     (49,256)     (54,735)        336         414         492
Unrecognized Net Loss (Gain).......         (502)     (55,560)     (51,154)      3,416       2,486       2,033
Unrecognized Prior Service Cost....       (1,090)      (1,206)      (1,321)      1,176          -           - 
                                        --------     --------     --------     -------     -------     -------
Prepaid (Accrued) Pension Cost.....     $  8,681     $  7,602     $  7,008     $(4,819)    $(4,048)    $(3,685)
                                        ========     ========     ========     =======     =======     =======

</TABLE>


Salaried employees of the Company may participate in a salary reduction deferred
compensation plan. The Company makes matching contributions of $.50 for every
$1.00 deferred by a participant to a maximum of 3% of each participant's salary.
Company contributions totaled $1,630,000 in 1994, $1,461,000 in 1993 and
$1,314,000 in 1992.

24


<PAGE>   11
NOTES ...
- - - --------------------------------------------------------------------------------

At the beginning of fiscal year 1994, the Company adopted two additional
Statements of Financial Accounting Standards (FAS) as follows:

      FAS 106 - Postretirement Benefits Other   
        Than Pensions -

        This new standard requires that the Company record the expected cost of
        health care and life insurance benefits during the years that the
        employees render service - a significant change from the preceding
        method which recognized health care benefits on a cash basis. 
        Postretirement life insurance benefits were previously being accounted
        for in a manner substantially emulating the new standards, so no
        adjustment was necessary.  The cumulative effect of this change in
        accounting for postretirement health care benefits was a charge totaling
        $65,954,000 on a before tax basis or $40,232,000 on an after tax basis
        ($2.78 per share).  The additional annual cost of accruing this cost
        over the former method was approximately $2,000,000.

        For measurement purposes, a 10.5% annual rate of increase in the per
        capita cost of covered health care claims was assumed for the years 1995
        through 1997, decreasing gradually to 6% for the year 2007.  The health
        care cost trend rate assumption has a significant effect on the amounts
        reported.  The rates, if increased by 1%, would add $6,806,000 to the
        accumulated postretirement benefit and $849,000 to the service and
        interest cost for the year.

        The discount rate used in determining the accumulated postretirement
        benefit obligations was 7.75% compounded annually.  Both the health care
        and life insurance plans are unfunded.

        The components of the accumulated postretirement benefit obligations at
        the end of the 1994 fiscal year were (in thousands of dollars):





<TABLE>
<CAPTION>
                                                                    Health              Life      
                                                                     Care             Insurance   
                                                                    ------            ---------   
                <S>                                                <C>                 <C>        
                Retirees .......................................   $20,063             $ 7,988    
                Fully Eligible                                                                    
                  Plan Participants ............................    12,110               1,299    
                Other Active Participants ......................    36,155               1,402    
                                                                   -------             -------    
                                                                   $68,328             $10,689    
                Unrecognized net obligation.....................      --                  (658)   
                Unrecognized gain (loss) .......................       151                 (41)   
                                                                   -------             -------    
                                                                   $68,479             $ 9,990    
                                                                                       =======    
                Less current portion ...........................     4,400                        
                                                                   -------                        
                                                                   $64,079                        
                                                                   =======                        
</TABLE>
                                                
                                                        

        The current portion of the health care component above represent the
        benefits expected to be paid within the next twelve months and are
        included in the caption Accrued Liabilities in the accompanying balance
        sheet.  The net health care balance has its own caption in this balance
        sheet.  The life insurance component is included in the caption Accrued
        Employee Benefits. 

        The net periodic postretirement costs recorded during fiscal 1994 were
        (in thousands of dollars):




<TABLE>
<CAPTION>
                                                                    Health              Life
                                                                     Care             Insurance
                                                                    ------            ---------
                <S>                                                <C>                 <C>
                Service Cost-benefits attributed to
                  service during the year ......................   $ 1,768             $  75
                Interest cost on accumulated 
                  benefit obligation  ..........................     4,951               786
                Other ..........................................      -                   47
                                                                   -------             -----
                                                                   $ 6,719             $ 908
                                                                   =======             =====
</TABLE>
                                                
                     
                     
        The cost of retiree health care benefits which were expensed when
        claims were paid in previous fiscal years totaled $4,522,000 in 1993 and
        $4,803,000 in 1992.
                     
                     

                                                                              25

<PAGE>   12
NOTES . . .
- - - ------------------------------------------------------------------------------

      FAS 112 - Postemployment Benefits -

        This new standard requires that the Company record the expected cost of
        postemployment benefits (not to be confused with the postretirement     
        benefits described in the preceding paragraphs), also over the years
        that employees render service. These benefits are substantially smaller
        amounts because they apply only to employees who permanently terminate
        employment prior to retirement. The cumulative effect of this change
        was a charge totaling $1,102,000 or $672,000 after taxes ($.05 per
        share). There will be no significant increase in the annual costs of
        these plans.

        The items included in this amount are disability payments, life
        insurance  and medical benefits, and these amounts are also discounted
        using a 7.75%  interest rate.

(10) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate
that value:

Cash and Cash Equivalents: The carrying amount approximates fair value because
of the short maturity of those instruments.

Long-Term Debt: The fair value of the Company's long-term debt is estimated
based on quotations made on similar issues.

The estimated fair values of the Company's financial instruments are as follows
(in thousands of dollars):



<TABLE>
<CAPTION>
                                                          1994
                                               --------------------------
                                                Carrying            Fair
                                                 Amount             Value
                                               ----------          -------
<S>                                            <C>                 <C>
Cash and Cash Equivalents .................... $221,101            $221,101

Long-Term Debt................................ $ 75,000            $ 77,889


</TABLE>


(11) RECAPITALIZATION:

In October, 1992, the Company was reincorporated in the State of Wisconsin. As
part of this reincorporation, each outstanding share of the old Delaware
Corporation $3.00 par value common stock was converted automatically to one
share of the new Wisconsin Corporation $.01 par value common stock. This change
resulted in the transfer of $43,246,000 from the common stock account to the
additional paid-in capital account.


(12) SPIN-OFF

The Company announced in May of 1994 that it intends to spin off the lock
business to its shareholders. This spin-off is expected to occur in early
calendar year 1995 and will be accomplished by creating a subsidiary corporation
which will hold all of the assets and liabilities of the lock business and then
immediately distributing the shares of this corporation to the Briggs & Stratton
Corporation shareholders as a tax-free dividend.




26


<PAGE>   13
REPORT OF 
INDEPENDENT PUBLIC ACCOUNTANTS
- - - ------------------------------------------------------------------------

To the Shareholders of
Briggs & Stratton Corporation:

We have audited the accompanying consolidated balance sheets of Briggs &
Stratton Corporation (a Wisconsin Corporation) and subsidiaries as of July 3,
1994 and June 27, 1993, and the related consolidated statements of income,
shareholders' investment and cash flows for each of the three years in the
period ended July 3, 1994. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Briggs & Stratton Corporation
and subsidiaries as of July 3, 1994 and June 27, 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
July 3, 1994, in conformity with generally accepted accounting principles.

As discussed in Notes 2 and 9 to the consolidated financial statements,
effective at the beginning of the 1994 fiscal year, the Company changed its
methods of accounting for postretirement benefits other than pensions,
postemployment benefits and income taxes.



                                               ARTHUR ANDERSEN & CO.


Milwaukee, Wisconsin,
July 28, 1994


28       

<PAGE>   14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
- - - --------------------------------------------------------------------------------

FISCAL 1994 COMPARED TO FISCAL 1993

Sales for fiscal 1994 increased 13% or $146,055,000 over fiscal 1993 and
totaled $1,285,517,000, a new record for the Company.  The major part of this
increase, which is in engine sales, is the result of three factors: a 5%
increase in engine units shipped; a modest increase in selling prices and a step
up to higher selling price engines in the same horsepower category; and a
continuance of the shift to higher horsepower, higher selling price engines. 
These improvements occurred in the domestic market because of the heavy demand
for lawn and garden equipment due primarily to favorable weather conditions and
housing starts.  Export sales increased between years despite weak economies
in Europe.  

Service sales increased 7% between years, primarily because of an increase in
demand for service parts.  Lock sales increased 20%, whereas lock unit sales
increased 13%.  This reflects a trend to higher unit price lock sets.  The 
increases in quantities are due to the growth in the U.S. car and truck 
industry.

The rate of gross profit increased from 19% in 1993 to 21% in 1994.  The
increase in total volume contributed to this improvement by spreading fixed
overhead over a larger number of engine units.  Increases in selling prices and
sales of higher profit margin engines also contributed to this change.  The
lack of the $8,408,000 additional depreciation recorded in fiscal 1993 also
contributed to the improvement between years.

Engineering, selling and general and administrative expenses increased
$11,619,000 or 14% between years.  Approximately one-half of this amount is due
to increased manpower costs which is primarily due to the increases in profit
sharing accruals.  The remaining increase is due to additional operating
expenses, primarily in the areas of professional services, advertising, and the
provision to the reserve for doubtful accounts.  

Interest expense is down $2,286,000 or 20% between years because of the lack of
any substantial amounts of domestic working capital loans during the year.  The
Company was able to finance virtually all of its midyear additional domestic
working capital needs through available cash.  Foreign loans also generated
less interest expense in 1994 due to a $7,294,000 reduction in average loans
outstanding and a nearly 2.4% decrease in average interest rates.  The end of
the year balance in foreign loans, however, reflected an increase of $5,400,000
used for working capital needs at the Company's European subsidiaries.

The Company has available $47,000,000 in domestic lines of credit plus an
additional $56,000,000 in seasonal lines, which it used only a short time in
midyear.  The Company makes extensive use of its foreign lines of credit
through its foreign subsidiaries.  Also during the year the Company was in
compliance with the covenants of the $75,000,000 long-term loan agreement.

Other income and expense changed from a net expense in 1993 to a net income in
1994.  The detail contents of this category are shown in Note 5.  The current
fiscal year did not include the $3,500,000 write-off of the cumulative
translation adjustment made in 1993.  Fiscal year 1994 did, however, contain a
gain on the sale of a subsidiary's real estate in conjunction with the change
in business in Germany in the previous fiscal year.  

The provision for income taxes was higher between years primarily because of
the increase in income.  The effective tax rate moved from  38.5% last year to
39.6% in 1994.  This was primarily due to a 1% increase in the U.S. statutory
rate.

The cumulative effect of the changes in accounting, which amounted to a net
$32,558,000 charge in the current year's statement of income, consists of
amounts that come from adopting three Financial Accounting Standards (Numbers
106, 109 and 112) during the year, and are fully described in Notes 2 and 9.

Cash and equivalents and short-term investments increased $111,178,000 between
years as a result of retaining funds generated by profitable operations during
the year.  These funds and previously generated funds, along with the Company's
lines of credit, will provide the majority of the financing for the plant
expansions described in Note 6 and the normal higher working capital needs in
the middle of the 1995 fiscal year. 

Accounts receivable decreased $2,384,000 since the end of fiscal 1993.  This
was in spite of a $70,196,000 increase in sales in the fourth fiscal quarter of
1994 over the same period in 1993.   This improvement is due to a surge in
sales at the end of the previous year's fourth quarter.


                                                                            29

<PAGE>   15

MANAGEMENT'S DISCUSSION . . .
- - - --------------------------------------------------------------------------------

Inventories increased $11,605,000 between years - mostly in the finished goods
category.  The Company continued a high rate of production throughout the
fourth quarter and has extended it into the first quarter of the 1995 fiscal 
year.  This increase in finished engines will be used to fill the seasonal 
demand after the first fiscal quarter of 1995. 

Expenditures for plant and equipment totaled $40,804,000, an amount similar to
the expenditures in each of the preceding two years.  The 1995 fiscal year
will include expenditures for new plants described in Note 6 and therefore
will be substantially higher.  These expenditures will total approximately
$132,000,000, the majority of which could be spent in fiscal 1995.  As
described earlier, these expenditures are expected to be primarily internally
financed.

The Company and other parties have been issued an order by the U.S.
Environmental Protection Agency (EPA) that requires the cleanup of a site in the
State of Georgia near the site of the Company's former lock manufacturing
plant.  The work specified in the order will be completed by the end of the
1994 calendar year.  The Company has reserves totaling $4,202,000 to pay for
its cleanup.  In the opinion of management, this reserve is adequate to finance
the remaining costs of cleanup.

The EPA is developing national emission standards under a two phase process for
equipement powered by small air cooled gasoline engines.  It has recently
proposed phase one emission standards to be effective in August 1996.  The
California Air Resources Board previously adopted emission standards to be
effective in January 1995.  Changes to engine models that are necessary to
comply with these standards are being made or have been made.  The Company
believes that the costs associated with compliance with the standards will not 
have a material effect on the financial position or results of operations of 
the Company.

Phase two of the EPA standards have not been established and it may be several
years before they are completed.  It is expected that they will be phased in
over several years and therefore it is impossible to quantify the cost of
compliance at this date.

Company management believes that the economic factors that contributed to the
strong demand in fiscal 1994 will continue into fiscal 1995.  Therefore, if the
weather cooperates in providing normal precipitation, the Company could benefit
from another year of strong demand for lawn and garden equipment during the
selling season.

In August 1994, the Company's Board of Directors approved a 2-for-1 stock split
contingent on approval of an increase in the number of authorized common stock
shares to be voted on by the shareholders at their annual meeting on October
19, 1994.  The Board also stated its intent to increase the per share dividend
rate from $.23 per share to $.25 per share effective with the January 1995
payment on the split shares.

FISCAL 1993 COMPARED TO FISCAL 1992

Sales increased $97,634,000 between fiscal 1993 and fiscal 1992.  This was a 9%
increase between years and was greater than the 3% increase in the number of
engines sold.  It reflected the continuing shift to higher horsepower, higher
selling price engines plus the realization of approximately a 2% price increase
between years.  Sales dollar increases occurred in export sales due to
favorable weather conditions and improved currency exchange rates.  Service
sales increased 7%.  Lock unit sales declined 1% between years.

Gross profit increased 22% between years.  This was due to an increase in the
gross profit rate from 17% in fiscal 1992 to 19% in 1993, and resulted from a
continuing reduction in operating costs, stable material costs and fixed costs
being spread over higher volume.  The 1993 fiscal year improvements were after
the Company absorbed $8,408,000 of additional depreciation on assets used to
produce discontinued engine models.

Engineering, selling and general and administrative expenses increased
$4,440,000 or 6% between years.  This increase reflected higher manpower costs
due to the additional profit sharing provision in the current fiscal year, and
increased operating costs of foreign subsidiaries in Canada, France and
Switzerland that were established at varying times in the current and preceding
fiscal years.  These new subsidiaries resulted in increased gross profit on
items sold by them.

Interest expense remained constant between years.  This reflected interest
savings on reduced domestic debt offset by higher interest expense on increased
foreign debt.



30

<PAGE>   16
MANAGEMENT'S DISCUSSION . . .
- - - -------------------------------------------------------------------------------

Other income and expense remained relatively steady between years.  The 1993
fiscal year contained a $3,500,000 charge due to the recognition of the
cumulative translation adjustment relating to the Company's German subsidiary,
which changed business operations during the year from an engine and parts
distributor to a commissioned agent.

The provision for income taxes was higher between years primarily due to the
increase in income.  As income increases, the graduated state income tax rates
go up, and the effect of relatively fixed tax credits go down.  The write-down
of the German subsidiary investment described previously also raised the
income tax provision because of its nondeductibility for tax purposes.  The net
result of these changes was an increase in the effective income tax rate from
35.8% in 1992 to 38.5% in 1993.

Cash equivalents and short-term investments increased $30,981,000 between
years.  This resulted from the cash that was generated by profitable operations
in 1993.

The investment in accounts receivable increased $21,366,000 between years. 
This was due to the additional sales late in the last quarter of fiscal 1993.

Inventories showed no substantial change between fiscal years.  This reflects
stable inventory quantities and stable prices.

Current liabilities, excluding loans and notes payable, increased $13,731,000
between years.  This reflects a higher payroll accrual due to increased
employment at the end of 1993 and increases in accrued profit sharing paid out
early in fiscal 1994.  The increased payroll taxes on these items also
contributed to this increase.

Expenditures for plant and equipment totaled $38,110,000, a small decrease
between years.  There were no major projects included in these totals.

The Company's current ratio improved from 1.9 to 1 in 1992 to 2.2 to 1 in 1993. 
This increase continued the improvement in liquidity in the preceding four
years, and was also reflected in the steady increases in the cash and
equivalents and short-term investment amounts during those years.  The lines of
credit available to the Company were adequate to finance any of its seasonal
working capital needs.

During 1993, the Company changed its State of incorporation to Wisconsin, from
the State of Delaware.  As a part of this reincorporation, the par value of the
common stock was reduced from $3.00 per share to $.01 per share.  This
transaction resulted in a new shareholder investment account called Additional
Paid-In Capital.  This new account is analyzed in the financial statements.




                                                                            31

<PAGE>   17
QUARTERLY FINANCIAL DATA,
DIVIDEND AND MARKET INFORMATION
- - - -------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                              In Thousands (Unaudited)                           Per Share of Common Stock
                     ------------------------------------------    -------------------------------------------------
                                                                                                 Market Price Range
                                             (1)                    (1)                             on New York
                                             Net        Net          Net       Net                 Stock Exchange
Quarter               Net        Gross      Income     Income      Income    Income   Dividends    ----------------
Ended                Sales      Profit      (Loss)     (Loss)      (Loss)    (Loss)   Declared    High       Low
- - - -------             -------     -------     -------     ------     -------   -------  --------    -----      ----
Fiscal 1994

<S>              <C>          <C>         <C>         <C>          <C>       <C>        <C>        <C>      <C>
SEPTEMBER        $  198,572   $  28,196   $   6,421   $ (26,137)   $   .44   $ (1.81)   $  .44     85       64-7/8
DECEMBER            328,937      72,381      28,637      28,637       1.98      1.98       .44     89-1/2   80-5/8
MARCH               386,196      82,973      35,709      35,709       2.47      2.47       .46     90-1/4   80-1/2
JUNE                371,812      82,990      31,714      31,714       2.20      2.20       .46     88       66-1/4
                 ----------   ---------   ---------   ---------    -------    ------    ------
TOTAL            $1,285,517   $ 266,540   $ 102,481   $  69,923    $  7.09    $ 4.84    $ 1.80 
                 ==========   =========   =========   =========    =======    ======    ======                    

(1) Before cumulative effect of accounting changes.

<CAPTION>

Fiscal 1993
<S>              <C>          <C>         <C>         <C>          <C>       <C>        <C>        <C>      <C>
September        $  171,773   $  17,723   $  (1,971)  $  (1,971)   $  (.14)  $  (.14)   $  .42     48-7/8   42-1/8
December            305,174      61,334      23,402      23,402       1.62      1.62       .42     51-1/2   45-5/8
March               360,899      75,021      30,817      30,817       2.13      2.13       .42     67-1/2   46-3/4
June                301,616      58,523      18,097      18,097       1.25      1.25       .44     68-5/8   59-1/8
                 ----------   ---------   ---------   ---------    -------    ------    ------
Total            $1,139,462   $ 212,601   $  70,345   $  70,345    $  4.86    $ 4.86    $ 1.70 
                 ==========   =========   =========   =========    =======    ======    ======                     

</TABLE>


The number of record holders of Briggs & Stratton Corporation Common Stock 
on August 4, 1994 was 6,191.



32

<PAGE>   18
TEN YEAR COMPARISONS
- - - --------------------------------------------------------------------------------


<TABLE>
<CAPTION>
For the Years Ended                                                                           7-3-94                  6-27-93
(All dollar amounts other than per share data are stated in thousands)

<S>                                                                                         <C>                     <C>
SUMMARY OF OPERATIONS

  NET SALES............................................................                     1,285,517               1,139,462

  GROSS PROFIT ON SALES................................................                       266,540                 212,601

  PROVISION (CREDIT) FOR INCOME TAXES..................................                        67,240                  44,060

  NET INCOME (LOSS) before cumulative effect of accounting changes.....                       102,481                  70,345

  NET INCOME (LOSS)....................................................                        69,923                  70,345

  AVERAGE NUMBER OF SHARES OF
    COMMON STOCK OUTSTANDING...........................................                        14,464                  14,464

PER SHARE OF COMMON STOCK:

  Net Income (Loss) before cumulative effect of accounting changes.....                          7.09                    4.86

  Net Income (Loss)....................................................                          4.84                    4.86

  Cash Dividends.......................................................                          1.80                    1.70

  Shareholders' Investment.............................................                         27.92                   24.89

OTHER DATA

  SHAREHOLDERS' INVESTMENT.............................................                        403,792                 359,958

  LONG-TERM DEBT.......................................................                         75,000                  75,000

  TOTAL ASSETS.........................................................                        777,355                 656,107

  PLANT AND EQUIPMENT..................................................                        669,593                 658,120

  PLANT AND EQUIPMENT NET OF RESERVES..................................                        285,890                 295,542

  PROVISION FOR DEPRECIATION...........................................                         42,950                  47,222

  EXPENDITURES FOR PLANT AND EQUIPMENT.................................                         40,804                  38,110

  WORKING CAPITAL......................................................                        276,040                 195,019

    Current Ratio......................................................                       2.3 to 1                2.2 to 1

  NUMBER OF EMPLOYEES AT YEAR END......................................                          8,628                   7,950
 
  NUMBER OF SHAREHOLDERS AT YEAR END...................................                          6,228                   6,651

  QUOTED MARKET PRICE:

    High...............................................................                         90-1/4                  68-5/8

    Low................................................................                         64-7/8                  42-1/8

</TABLE>



34

<PAGE>   19
- - - --------------------------------------------------------------------------------


<TABLE>
<CAPTION>

6-30-92           6-30-91          6-30-90         6-30-89          6-30-88         6-30-87          6-30-86           6-30-85
<S>               <C>            <C>               <C>              <C>             <C>              <C>               <C>
1,041,828         950,747        1,002,857         876,379          914,057         784,665          745,831           717,773
                            
  174,048         132,431          132,438          59,629          115,113         111,618          124,408           111,248
                            
   28,700          16,500           18,290         (13,980)          12,950          18,950           27,850            28,990
                            
   51,503          36,453           35,375         (20,032)          30,211          26,614           34,080            33,517
                            
   51,503          36,453           35,375         (20,032)          30,211          26,614           34,080            33,517
                            
                            
   14,464          14,464           14,464          14,464           14,464          14,464           14,464            14,464
                            
                            
     3.56            2.52              2.45          (1.39)            2.09            1.84             2.36              2.32
                            
     3.56            2.52              2.45          (1.39)            2.09            1.84             2.36              2.32
                            
     1.60            1.60              1.60           1.60             1.60            1.60             1.60              1.60
                            
    21.60           19.69             18.76          17.92            20.97           20.48            20.29             19.59
                            
                            

  312,404         284,715           271,383        259,226          303,305         296,260          293,517           283,399
                            
   75,000          75,000            75,000         75,000            -               -                -                 - 
                            
  613,853         556,791           535,040        560,816          510,600         451,879          436,622           411,598
                            
  643,433         632,488           606,863        580,184          513,700         470,586          427,672           390,657
                            
  309,698         320,364           326,288        330,198          295,573         273,903          248,347           230,240
                            
   41,113          36,447            39,889         38,995           29,955          24,502           21,508            17,914
                            
   40,224          32,036            37,797         79,513           57,001          52,235           46,288            58,443
                            
  137,008         105,298            84,082         63,757           63,372          77,281           93,854            92,511
                            
 1.9 to 1        1.8 to 1          1.7 to 1       1.4 to 1         1.4 to 1        1.8 to 1         2.0 to 1          2.0 to 1
                            
    7,799           7,242             7,994          7,316            9,827           8,611            8,299             8,203
                            
    7,118           7,943             8,466          9,222            6,923           7,206            7,924             8,959
                            

   54-3/4          33-3/4            34             34-3/4           41-7/8              42           40-1/4            31-1/8

   32-7/8          20-1/2            24-1/8         24-3/4           20-1/4          31-1/2           25-3/4            25-1/2
                            
</TABLE>
 


                                                              35






<PAGE>   1
                                                                  EXHIBIT NO. 23

                 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES



                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of
our reports included (or incorporated by reference) in this Form 10-K, into
the Company's previously filed Registration Statements, File No. 33-39113 and
File No. 33-54357.

                                                     ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin,
September 27, 1994.






<TABLE> <S> <C>

<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                           JUL-3-1994
<PERIOD-START>                             JUN-28-1993
<PERIOD-END>                                JUL-3-1994
<EXCHANGE-RATE>                                      1
<CASH>                                     221,101,000
<SECURITIES>                                         0
<RECEIVABLES>                              122,597,000
<ALLOWANCES>                                         0
<INVENTORY>                                 85,670,000
<CURRENT-ASSETS>                           482,784,000
<PP&E>                                     669,593,000
<DEPRECIATION>                             383,703,000
<TOTAL-ASSETS>                             777,355,000
<CURRENT-LIABILITIES>                      206,744,000
<BONDS>                                              0
<COMMON>                                       145,000
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<OTHER-SE>                                 403,647,000
<TOTAL-LIABILITY-AND-EQUITY>               777,355,000
<SALES>                                  1,285,517,000
<TOTAL-REVENUES>                         1,285,517,000
<CGS>                                    1,018,977,000
<TOTAL-COSTS>                            1,018,977,000
<OTHER-EXPENSES>                            87,822,000 
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                           8,997,000
<INCOME-PRETAX>                            169,721,000
<INCOME-TAX>                                67,240,000
<INCOME-CONTINUING>                        102,481,000
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                 (32,558,000)
<NET-INCOME>                                69,923,000
<EPS-PRIMARY>                                     4.84
<EPS-DILUTED>                                     4.84
        

</TABLE>