|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Wisconsin
|
|
39-1382325
|
(State of organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
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3700 West Juneau Avenue
Milwaukee, Wisconsin
|
|
53208
|
(Address of principal executive offices)
|
|
(Zip code)
|
|
Large accelerated filer
|
|
x
|
Accelerated filer
|
|
¨
|
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
|
Smaller reporting company
|
|
¨
|
Part I
|
||
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
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|
|
Item 4.
|
||
|
|
|
Part II
|
||
|
|
|
Item 1.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2016 |
|
June 28,
2015 |
|
June 26,
2016 |
|
June 28,
2015 |
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Motorcycles and Related Products
|
$
|
1,670,113
|
|
|
$
|
1,650,783
|
|
|
$
|
3,246,723
|
|
|
$
|
3,161,353
|
|
Financial Services
|
190,964
|
|
|
173,609
|
|
|
364,322
|
|
|
335,984
|
|
||||
Total revenue
|
1,861,077
|
|
|
1,824,392
|
|
|
3,611,045
|
|
|
3,497,337
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Motorcycles and Related Products cost of goods sold
|
1,062,555
|
|
|
1,003,569
|
|
|
2,048,885
|
|
|
1,923,864
|
|
||||
Financial Services interest expense
|
42,895
|
|
|
41,188
|
|
|
88,814
|
|
|
79,724
|
|
||||
Financial Services provision for credit losses
|
23,461
|
|
|
15,175
|
|
|
60,584
|
|
|
41,422
|
|
||||
Selling, administrative and engineering expense
|
319,844
|
|
|
301,944
|
|
|
611,612
|
|
|
579,693
|
|
||||
Total costs and expenses
|
1,448,755
|
|
|
1,361,876
|
|
|
2,809,895
|
|
|
2,624,703
|
|
||||
Operating income
|
412,322
|
|
|
462,516
|
|
|
801,150
|
|
|
872,634
|
|
||||
Investment income
|
688
|
|
|
1,450
|
|
|
1,454
|
|
|
2,772
|
|
||||
Interest expense
|
7,094
|
|
|
9
|
|
|
14,262
|
|
|
18
|
|
||||
Income before provision for income taxes
|
405,916
|
|
|
463,957
|
|
|
788,342
|
|
|
875,388
|
|
||||
Provision for income taxes
|
125,485
|
|
|
164,147
|
|
|
257,422
|
|
|
305,724
|
|
||||
Net income
|
$
|
280,431
|
|
|
$
|
299,810
|
|
|
$
|
530,920
|
|
|
$
|
569,664
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.55
|
|
|
$
|
1.44
|
|
|
$
|
2.92
|
|
|
$
|
2.72
|
|
Diluted
|
$
|
1.55
|
|
|
$
|
1.44
|
|
|
$
|
2.91
|
|
|
$
|
2.71
|
|
Cash dividends per common share
|
$
|
0.35
|
|
|
$
|
0.31
|
|
|
$
|
0.70
|
|
|
$
|
0.62
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2016 |
|
June 28,
2015 |
|
June 26,
2016 |
|
June 28,
2015 |
||||||||
Net income
|
$
|
280,431
|
|
|
$
|
299,810
|
|
|
$
|
530,920
|
|
|
$
|
569,664
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
2,628
|
|
|
4,251
|
|
|
15,321
|
|
|
(22,770
|
)
|
||||
Derivative financial instruments
|
3,009
|
|
|
(13,286
|
)
|
|
(5,343
|
)
|
|
(2,214
|
)
|
||||
Marketable securities
|
(32
|
)
|
|
(128
|
)
|
|
(77
|
)
|
|
(195
|
)
|
||||
Pension and postretirement benefit plans
|
7,572
|
|
|
8,798
|
|
|
15,143
|
|
|
17,596
|
|
||||
Total other comprehensive income (loss), net of tax
|
$
|
13,177
|
|
|
$
|
(365
|
)
|
|
$
|
25,044
|
|
|
$
|
(7,583
|
)
|
Comprehensive income
|
$
|
293,608
|
|
|
$
|
299,445
|
|
|
$
|
555,964
|
|
|
$
|
562,081
|
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
||||||
|
June 26,
2016 |
|
December 31,
2015 |
|
June 28,
2015 |
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
864,670
|
|
|
$
|
722,209
|
|
|
$
|
1,247,579
|
|
Marketable securities
|
5,070
|
|
|
45,192
|
|
|
52,516
|
|
|||
Accounts receivable, net
|
311,956
|
|
|
247,405
|
|
|
277,569
|
|
|||
Finance receivables, net
|
2,457,974
|
|
|
2,053,582
|
|
|
2,331,723
|
|
|||
Inventories
|
371,196
|
|
|
585,907
|
|
|
395,044
|
|
|||
Restricted cash
|
78,078
|
|
|
88,267
|
|
|
136,760
|
|
|||
Deferred income taxes
|
116,214
|
|
|
102,769
|
|
|
94,778
|
|
|||
Other current assets
|
153,866
|
|
|
132,552
|
|
|
154,009
|
|
|||
Total current assets
|
4,359,024
|
|
|
3,977,883
|
|
|
4,689,978
|
|
|||
Finance receivables, net
|
4,824,071
|
|
|
4,814,571
|
|
|
4,816,772
|
|
|||
Property, plant and equipment, net
|
951,309
|
|
|
942,418
|
|
|
873,007
|
|
|||
Goodwill
|
54,542
|
|
|
54,182
|
|
|
26,105
|
|
|||
Deferred income taxes
|
83,047
|
|
|
99,614
|
|
|
66,755
|
|
|||
Other long-term assets
|
76,447
|
|
|
84,309
|
|
|
76,577
|
|
|||
|
$
|
10,348,440
|
|
|
$
|
9,972,977
|
|
|
$
|
10,549,194
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
273,696
|
|
|
$
|
235,614
|
|
|
$
|
407,636
|
|
Accrued liabilities
|
485,811
|
|
|
471,964
|
|
|
448,737
|
|
|||
Short-term debt
|
1,020,487
|
|
|
1,201,380
|
|
|
114,983
|
|
|||
Current portion of long-term debt, net
|
732,773
|
|
|
838,349
|
|
|
1,544,956
|
|
|||
Total current liabilities
|
2,512,767
|
|
|
2,747,307
|
|
|
2,516,312
|
|
|||
Long-term debt, net
|
5,308,063
|
|
|
4,832,469
|
|
|
4,551,083
|
|
|||
Pension liability
|
129,465
|
|
|
164,888
|
|
|
66,786
|
|
|||
Postretirement healthcare liability
|
188,846
|
|
|
193,659
|
|
|
196,369
|
|
|||
Other long-term liabilities
|
188,292
|
|
|
195,000
|
|
|
195,017
|
|
|||
Commitments and contingencies (Note 18)
|
|
|
|
|
|
||||||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Preferred stock, none issued
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock
|
3,453
|
|
|
3,449
|
|
|
3,448
|
|
|||
Additional paid-in-capital
|
1,349,755
|
|
|
1,328,561
|
|
|
1,304,855
|
|
|||
Retained earnings
|
9,365,105
|
|
|
8,961,985
|
|
|
8,898,959
|
|
|||
Accumulated other comprehensive loss
|
(590,161
|
)
|
|
(615,205
|
)
|
|
(522,526
|
)
|
|||
Treasury stock, at cost
|
(8,107,145
|
)
|
|
(7,839,136
|
)
|
|
(6,661,109
|
)
|
|||
Total shareholders' equity
|
2,021,007
|
|
|
1,839,654
|
|
|
3,023,627
|
|
|||
|
$
|
10,348,440
|
|
|
$
|
9,972,977
|
|
|
$
|
10,549,194
|
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
||||||
|
June 26,
2016 |
|
December 31,
2015 |
|
June 28,
2015 |
||||||
Balances held by consolidated variable interest entities (Note 12)
|
|
|
|
|
|
||||||
Current finance receivables, net
|
$
|
258,870
|
|
|
$
|
322,768
|
|
|
$
|
409,198
|
|
Other assets
|
$
|
3,047
|
|
|
$
|
4,706
|
|
|
$
|
3,067
|
|
Non-current finance receivables, net
|
$
|
884,226
|
|
|
$
|
1,250,919
|
|
|
$
|
1,740,420
|
|
Restricted cash - current and non-current
|
$
|
79,475
|
|
|
$
|
100,151
|
|
|
$
|
149,418
|
|
Current portion of long-term debt, net
|
$
|
288,786
|
|
|
$
|
351,123
|
|
|
$
|
459,085
|
|
Long-term debt, net
|
$
|
786,145
|
|
|
$
|
1,108,254
|
|
|
$
|
1,552,376
|
|
|
Six months ended
|
||||||
|
June 26,
2016 |
|
June 28,
2015 |
||||
Net cash provided by operating activities (Note 3)
|
$
|
456,290
|
|
|
$
|
613,944
|
|
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(107,531
|
)
|
|
(85,180
|
)
|
||
Origination of finance receivables
|
(1,991,384
|
)
|
|
(1,976,563
|
)
|
||
Collections on finance receivables
|
1,630,213
|
|
|
1,570,431
|
|
||
Proceeds from finance receivables sold
|
312,571
|
|
|
—
|
|
||
Sales and redemptions of marketable securities
|
40,000
|
|
|
4,500
|
|
||
Other
|
166
|
|
|
5,111
|
|
||
Net cash used by investing activities
|
(115,965
|
)
|
|
(481,701
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of medium-term notes
|
1,193,396
|
|
|
595,386
|
|
||
Repayments of medium-term notes
|
(450,000
|
)
|
|
—
|
|
||
Proceeds from securitization debt
|
—
|
|
|
1,195,668
|
|
||
Repayments of securitization debt
|
(385,837
|
)
|
|
(454,332
|
)
|
||
Net decrease in credit facilities and unsecured commercial paper
|
(181,259
|
)
|
|
(616,586
|
)
|
||
Borrowings of asset-backed commercial paper
|
33,428
|
|
|
40,209
|
|
||
Repayments of asset-backed commercial paper
|
(34,989
|
)
|
|
(35,730
|
)
|
||
Net change in restricted cash
|
17,992
|
|
|
(40,159
|
)
|
||
Dividends paid
|
(127,800
|
)
|
|
(129,745
|
)
|
||
Purchase of common stock for treasury
|
(269,411
|
)
|
|
(358,425
|
)
|
||
Excess tax benefits from share-based payments
|
331
|
|
|
2,401
|
|
||
Issuance of common stock under employee stock option plans
|
2,367
|
|
|
15,664
|
|
||
Net cash (used by) provided by financing activities
|
(201,782
|
)
|
|
214,351
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
3,918
|
|
|
(5,695
|
)
|
||
Net increase in cash and cash equivalents
|
$
|
142,461
|
|
|
$
|
340,899
|
|
Cash and cash equivalents:
|
|
|
|
||||
Cash and cash equivalents—beginning of period
|
$
|
722,209
|
|
|
$
|
906,680
|
|
Net increase in cash and cash equivalents
|
142,461
|
|
|
340,899
|
|
||
Cash and cash equivalents—end of period
|
$
|
864,670
|
|
|
$
|
1,247,579
|
|
|
June 26,
2016 |
|
December 31,
2015 |
|
June 28,
2015 |
||||||
Available-for-sale: Corporate bonds
|
$
|
5,070
|
|
|
$
|
45,192
|
|
|
$
|
52,516
|
|
Trading securities: Mutual funds
|
37,651
|
|
|
36,256
|
|
|
37,698
|
|
|||
|
$
|
42,721
|
|
|
$
|
81,448
|
|
|
$
|
90,214
|
|
|
June 26,
2016 |
|
December 31,
2015 |
|
June 28,
2015 |
||||||
Components at the lower of FIFO cost or market
|
|
|
|
|
|
||||||
Raw materials and work in process
|
$
|
134,702
|
|
|
$
|
161,704
|
|
|
$
|
137,151
|
|
Motorcycle finished goods
|
152,035
|
|
|
327,952
|
|
|
186,326
|
|
|||
Parts and accessories and general merchandise
|
133,727
|
|
|
145,519
|
|
|
121,469
|
|
|||
Inventory at lower of FIFO cost or market
|
420,464
|
|
|
635,175
|
|
|
444,946
|
|
|||
Excess of FIFO over LIFO cost
|
(49,268
|
)
|
|
(49,268
|
)
|
|
(49,902
|
)
|
|||
|
$
|
371,196
|
|
|
$
|
585,907
|
|
|
$
|
395,044
|
|
|
Six months ended
|
||||||
|
June 26,
2016 |
|
June 28,
2015 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
530,920
|
|
|
$
|
569,664
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization of intangibles
|
100,956
|
|
|
93,640
|
|
||
Amortization of deferred loan origination costs
|
43,555
|
|
|
47,524
|
|
||
Amortization of financing origination fees
|
5,146
|
|
|
4,820
|
|
||
Provision for employee long-term benefits
|
18,405
|
|
|
24,635
|
|
||
Employee benefit plan contributions and payments
|
(35,189
|
)
|
|
(12,725
|
)
|
||
Stock compensation expense
|
15,797
|
|
|
16,734
|
|
||
Net change in wholesale finance receivables related to sales
|
(442,254
|
)
|
|
(418,969
|
)
|
||
Provision for credit losses
|
60,584
|
|
|
41,422
|
|
||
Gain on off-balance sheet securitization
|
(9,269
|
)
|
|
—
|
|
||
Pension plan settlement expense
|
600
|
|
|
—
|
|
||
Deferred income taxes
|
(3,548
|
)
|
|
(1,195
|
)
|
||
Foreign currency adjustments
|
(7,966
|
)
|
|
11,041
|
|
||
Other, net
|
(12,542
|
)
|
|
(1,964
|
)
|
||
Changes in current assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(55,109
|
)
|
|
(43,309
|
)
|
||
Finance receivables—accrued interest and other
|
(125
|
)
|
|
(270
|
)
|
||
Inventories
|
225,586
|
|
|
38,012
|
|
||
Accounts payable and accrued liabilities
|
53,790
|
|
|
232,357
|
|
||
Derivative instruments
|
(1,474
|
)
|
|
1,185
|
|
||
Other
|
(31,573
|
)
|
|
11,342
|
|
||
Total adjustments
|
(74,630
|
)
|
|
44,280
|
|
||
Net cash provided by operating activities
|
$
|
456,290
|
|
|
$
|
613,944
|
|
|
August 4, 2015
|
||
Current assets
|
$
|
11,088
|
|
Property, plant and equipment
|
144
|
|
|
Intangible assets
|
20,842
|
|
|
Goodwill
|
28,567
|
|
|
Total assets
|
60,641
|
|
|
Current liabilities
|
731
|
|
|
Net assets acquired
|
$
|
59,910
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||
|
June 26, 2016
|
|
June 28, 2015
|
|
June 26, 2016
|
|
June 28, 2015
|
||||||
Balance, beginning of period
|
54,585
|
|
|
25,632
|
|
|
$
|
54,182
|
|
|
$
|
27,752
|
|
Currency translations
|
(43
|
)
|
|
473
|
|
|
360
|
|
|
(1,647
|
)
|
||
Balance, end of period
|
54,542
|
|
|
26,105
|
|
|
$
|
54,542
|
|
|
$
|
26,105
|
|
|
June 26, 2016
|
|
|
||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Estimated useful life (years)
|
||||||
Other intangible assets
|
|
|
|
|
|
|
|
||||||
Reacquired distribution rights
|
$
|
13,501
|
|
|
$
|
(6,188
|
)
|
|
$
|
7,313
|
|
|
2
|
Customer relationships
|
7,617
|
|
|
(349
|
)
|
|
7,268
|
|
|
20
|
|||
Total other intangible assets
|
$
|
21,118
|
|
|
$
|
(6,537
|
)
|
|
$
|
14,581
|
|
|
|
|
December 31, 2015
|
|
|
||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Estimated useful life (years)
|
||||||
Other intangible assets
|
|
|
|
|
|
|
|
||||||
Reacquired distribution rights
|
$
|
12,614
|
|
|
$
|
(2,628
|
)
|
|
$
|
9,986
|
|
|
2
|
Customer relationships
|
7,116
|
|
|
(148
|
)
|
|
6,968
|
|
|
20
|
|||
Total other intangible assets
|
$
|
19,730
|
|
|
$
|
(2,776
|
)
|
|
$
|
16,954
|
|
|
|
|
|
Estimated Amortization
|
||
2016 (remaining 6 months)
|
|
$
|
3,588
|
|
2017
|
|
4,346
|
|
|
2018
|
|
384
|
|
|
2019
|
|
384
|
|
|
2020
|
|
384
|
|
|
2021
|
|
384
|
|
|
Thereafter
|
|
5,111
|
|
|
|
|
$
|
14,581
|
|
|
June 26,
2016 |
|
December 31,
2015 |
|
June 28,
2015 |
||||||
Retail
|
$
|
6,020,750
|
|
|
$
|
5,991,471
|
|
|
$
|
5,962,685
|
|
Wholesale
|
1,422,648
|
|
|
1,023,860
|
|
|
1,325,041
|
|
|||
Total finance receivables
|
7,443,398
|
|
|
7,015,331
|
|
|
7,287,726
|
|
|||
Allowance for credit losses
|
(161,353
|
)
|
|
(147,178
|
)
|
|
(139,231
|
)
|
|||
Finance receivables, net
|
$
|
7,282,045
|
|
|
$
|
6,868,153
|
|
|
$
|
7,148,495
|
|
|
Three months ended June 26, 2016
|
||||||||||
|
Retail
|
|
Wholesale
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
146,727
|
|
|
$
|
9,457
|
|
|
$
|
156,184
|
|
Provision for credit losses
|
24,563
|
|
|
(1,102
|
)
|
|
23,461
|
|
|||
Charge-offs
|
(26,460
|
)
|
|
—
|
|
|
(26,460
|
)
|
|||
Recoveries
|
11,459
|
|
|
—
|
|
|
11,459
|
|
|||
Other
(a)
|
(3,291
|
)
|
|
—
|
|
|
(3,291
|
)
|
|||
Balance, end of period
|
$
|
152,998
|
|
|
$
|
8,355
|
|
|
$
|
161,353
|
|
|
|
|
|
|
|
||||||
|
Three months ended June 28, 2015
|
||||||||||
|
Retail
|
|
Wholesale
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
123,777
|
|
|
$
|
9,043
|
|
|
$
|
132,820
|
|
Provision for credit losses
|
16,890
|
|
|
(1,715
|
)
|
|
15,175
|
|
|||
Charge-offs
|
(21,003
|
)
|
|
—
|
|
|
(21,003
|
)
|
|||
Recoveries
|
12,239
|
|
|
—
|
|
|
12,239
|
|
|||
Balance, end of period
|
$
|
131,903
|
|
|
$
|
7,328
|
|
|
$
|
139,231
|
|
|
|
|
|
|
|
||||||
|
Six months ended June 26, 2016
|
||||||||||
|
Retail
|
|
Wholesale
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
139,320
|
|
|
$
|
7,858
|
|
|
$
|
147,178
|
|
Provision for credit losses
|
60,087
|
|
|
497
|
|
|
60,584
|
|
|||
Charge-offs
|
(66,104
|
)
|
|
—
|
|
|
(66,104
|
)
|
|||
Recoveries
|
22,986
|
|
|
—
|
|
|
22,986
|
|
|||
Other
(a)
|
(3,291
|
)
|
|
—
|
|
|
(3,291
|
)
|
|||
Balance, end of period
|
$
|
152,998
|
|
|
$
|
8,355
|
|
|
$
|
161,353
|
|
|
|
|
|
|
|
||||||
|
Six months ended June 28, 2015
|
||||||||||
|
Retail
|
|
Wholesale
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
122,025
|
|
|
$
|
5,339
|
|
|
$
|
127,364
|
|
Provision for credit losses
|
39,433
|
|
|
1,989
|
|
|
41,422
|
|
|||
Charge-offs
|
(53,736
|
)
|
|
—
|
|
|
(53,736
|
)
|
|||
Recoveries
|
24,181
|
|
|
—
|
|
|
24,181
|
|
|||
Balance, end of period
|
$
|
131,903
|
|
|
$
|
7,328
|
|
|
$
|
139,231
|
|
(a)
|
Related to the sale of finance receivables with a principal balance of
$301.8 million
through an off-balance sheet asset-backed securitization transaction (see Note 12 for additional information).
|
|
June 26, 2016
|
||||||||||
|
Retail
|
|
Wholesale
|
|
Total
|
||||||
Allowance for credit losses, ending balance:
|
|
|
|
|
|
||||||
Individually evaluated for impairment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collectively evaluated for impairment
|
152,998
|
|
|
8,355
|
|
|
161,353
|
|
|||
Total allowance for credit losses
|
$
|
152,998
|
|
|
$
|
8,355
|
|
|
$
|
161,353
|
|
Finance receivables, ending balance:
|
|
|
|
|
|
||||||
Individually evaluated for impairment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collectively evaluated for impairment
|
6,020,750
|
|
|
1,422,648
|
|
|
7,443,398
|
|
|||
Total finance receivables
|
$
|
6,020,750
|
|
|
$
|
1,422,648
|
|
|
$
|
7,443,398
|
|
|
|
|
|
|
|
||||||
|
December 31, 2015
|
||||||||||
|
Retail
|
|
Wholesale
|
|
Total
|
||||||
Allowance for credit losses, ending balance:
|
|
|
|
|
|
||||||
Individually evaluated for impairment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collectively evaluated for impairment
|
139,320
|
|
|
7,858
|
|
|
147,178
|
|
|||
Total allowance for credit losses
|
$
|
139,320
|
|
|
$
|
7,858
|
|
|
$
|
147,178
|
|
Finance receivables, ending balance:
|
|
|
|
|
|
||||||
Individually evaluated for impairment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collectively evaluated for impairment
|
5,991,471
|
|
|
1,023,860
|
|
|
7,015,331
|
|
|||
Total finance receivables
|
$
|
5,991,471
|
|
|
$
|
1,023,860
|
|
|
$
|
7,015,331
|
|
|
|
|
|
|
|
||||||
|
June 28, 2015
|
||||||||||
|
Retail
|
|
Wholesale
|
|
Total
|
||||||
Allowance for credit losses, ending balance:
|
|
|
|
|
|
||||||
Individually evaluated for impairment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collectively evaluated for impairment
|
131,903
|
|
|
7,328
|
|
|
139,231
|
|
|||
Total allowance for credit losses
|
$
|
131,903
|
|
|
$
|
7,328
|
|
|
$
|
139,231
|
|
Finance receivables, ending balance:
|
|
|
|
|
|
||||||
Individually evaluated for impairment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collectively evaluated for impairment
|
5,962,685
|
|
|
1,325,041
|
|
|
7,287,726
|
|
|||
Total finance receivables
|
$
|
5,962,685
|
|
|
$
|
1,325,041
|
|
|
$
|
7,287,726
|
|
|
June 26, 2016
|
||||||||||||||||||||||
|
Current
|
|
31-60 Days
Past Due
|
|
61-90 Days
Past Due
|
|
Greater than
90 Days
Past Due
|
|
Total
Past Due
|
|
Total
Finance
Receivables
|
||||||||||||
Retail
|
$
|
5,852,659
|
|
|
$
|
108,192
|
|
|
$
|
37,961
|
|
|
$
|
21,938
|
|
|
$
|
168,091
|
|
|
$
|
6,020,750
|
|
Wholesale
|
1,421,846
|
|
|
457
|
|
|
153
|
|
|
192
|
|
|
802
|
|
|
1,422,648
|
|
||||||
Total
|
$
|
7,274,505
|
|
|
$
|
108,649
|
|
|
$
|
38,114
|
|
|
$
|
22,130
|
|
|
$
|
168,893
|
|
|
$
|
7,443,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
December 31, 2015
|
||||||||||||||||||||||
|
Current
|
|
31-60 Days
Past Due
|
|
61-90 Days
Past Due
|
|
Greater than
90 Days
Past Due
|
|
Total
Past Due
|
|
Total
Finance
Receivables
|
||||||||||||
Retail
|
$
|
5,796,003
|
|
|
$
|
118,996
|
|
|
$
|
43,680
|
|
|
$
|
32,792
|
|
|
$
|
195,468
|
|
|
$
|
5,991,471
|
|
Wholesale
|
1,022,365
|
|
|
888
|
|
|
530
|
|
|
77
|
|
|
1,495
|
|
|
1,023,860
|
|
||||||
Total
|
$
|
6,818,368
|
|
|
$
|
119,884
|
|
|
$
|
44,210
|
|
|
$
|
32,869
|
|
|
$
|
196,963
|
|
|
$
|
7,015,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
June 28, 2015
|
||||||||||||||||||||||
|
Current
|
|
31-60 Days
Past Due
|
|
61-90 Days
Past Due
|
|
Greater than
90 Days
Past Due
|
|
Total
Past Due
|
|
Total
Finance
Receivables
|
||||||||||||
Retail
|
$
|
5,819,279
|
|
|
$
|
96,982
|
|
|
$
|
28,150
|
|
|
$
|
18,274
|
|
|
$
|
143,406
|
|
|
$
|
5,962,685
|
|
Wholesale
|
1,324,174
|
|
|
513
|
|
|
181
|
|
|
173
|
|
|
867
|
|
|
1,325,041
|
|
||||||
Total
|
$
|
7,143,453
|
|
|
$
|
97,495
|
|
|
$
|
28,331
|
|
|
$
|
18,447
|
|
|
$
|
144,273
|
|
|
$
|
7,287,726
|
|
|
June 26, 2016
|
|
December 31, 2015
|
|
June 28, 2015
|
||||||
Prime
|
$
|
4,756,479
|
|
|
$
|
4,777,448
|
|
|
$
|
4,718,363
|
|
Sub-prime
|
1,264,271
|
|
|
1,214,023
|
|
|
1,244,322
|
|
|||
Total
|
$
|
6,020,750
|
|
|
$
|
5,991,471
|
|
|
$
|
5,962,685
|
|
|
June 26, 2016
|
|
December 31, 2015
|
|
June 28, 2015
|
||||||
Doubtful
|
$
|
—
|
|
|
$
|
5,169
|
|
|
$
|
—
|
|
Substandard
|
19,637
|
|
|
21,774
|
|
|
7,739
|
|
|||
Special Mention
|
4,334
|
|
|
6,271
|
|
|
15,343
|
|
|||
Medium Risk
|
6,350
|
|
|
11,494
|
|
|
3,245
|
|
|||
Low Risk
|
1,392,327
|
|
|
979,152
|
|
|
1,298,714
|
|
|||
Total
|
$
|
1,422,648
|
|
|
$
|
1,023,860
|
|
|
$
|
1,325,041
|
|
|
June 26, 2016
|
||||||||||||||
|
Balance
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
549,426
|
|
|
$
|
392,800
|
|
|
$
|
156,626
|
|
|
$
|
—
|
|
Marketable securities
|
42,721
|
|
|
37,651
|
|
|
5,070
|
|
|
—
|
|
||||
Derivatives
|
9,528
|
|
|
—
|
|
|
9,528
|
|
|
—
|
|
||||
|
$
|
601,675
|
|
|
$
|
430,451
|
|
|
$
|
171,224
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
1,605
|
|
|
$
|
—
|
|
|
$
|
1,605
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2015
|
||||||||||||||
|
Balance
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
555,910
|
|
|
$
|
390,706
|
|
|
$
|
165,204
|
|
|
$
|
—
|
|
Marketable securities
|
81,448
|
|
|
36,256
|
|
|
45,192
|
|
|
—
|
|
||||
Derivatives
|
16,235
|
|
|
—
|
|
|
16,235
|
|
|
—
|
|
||||
|
$
|
653,593
|
|
|
$
|
426,962
|
|
|
$
|
226,631
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
1,300
|
|
|
$
|
—
|
|
|
$
|
1,300
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
June 28, 2015
|
||||||||||||||
|
Balance
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
1,030,928
|
|
|
$
|
558,660
|
|
|
$
|
472,268
|
|
|
$
|
—
|
|
Marketable securities
|
90,214
|
|
|
37,698
|
|
|
52,516
|
|
|
—
|
|
||||
Derivatives
|
26,501
|
|
|
—
|
|
|
26,501
|
|
|
—
|
|
||||
|
$
|
1,147,643
|
|
|
$
|
596,358
|
|
|
$
|
551,285
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
986
|
|
|
$
|
—
|
|
|
$
|
986
|
|
|
$
|
—
|
|
|
June 26, 2016
|
|
December 31, 2015
|
|
June 28, 2015
|
||||||||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
864,670
|
|
|
$
|
864,670
|
|
|
$
|
722,209
|
|
|
$
|
722,209
|
|
|
$
|
1,247,579
|
|
|
$
|
1,247,579
|
|
Marketable securities
|
$
|
42,721
|
|
|
$
|
42,721
|
|
|
$
|
81,448
|
|
|
$
|
81,448
|
|
|
$
|
90,214
|
|
|
$
|
90,214
|
|
Derivatives
|
$
|
9,528
|
|
|
$
|
9,528
|
|
|
$
|
16,235
|
|
|
$
|
16,235
|
|
|
$
|
26,501
|
|
|
$
|
26,501
|
|
Finance receivables, net
|
$
|
7,369,410
|
|
|
$
|
7,282,045
|
|
|
$
|
6,937,053
|
|
|
$
|
6,868,153
|
|
|
$
|
7,251,671
|
|
|
$
|
7,148,495
|
|
Restricted cash
|
$
|
92,650
|
|
|
$
|
92,650
|
|
|
$
|
110,642
|
|
|
$
|
110,642
|
|
|
$
|
162,211
|
|
|
$
|
162,211
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives
|
$
|
1,605
|
|
|
$
|
1,605
|
|
|
$
|
1,300
|
|
|
$
|
1,300
|
|
|
$
|
986
|
|
|
$
|
986
|
|
Unsecured commercial paper
|
$
|
1,020,487
|
|
|
$
|
1,020,487
|
|
|
$
|
1,201,380
|
|
|
$
|
1,201,380
|
|
|
$
|
114,983
|
|
|
$
|
114,983
|
|
Asset-backed Canadian commercial paper conduit facility
|
$
|
161,626
|
|
|
$
|
161,626
|
|
|
$
|
153,839
|
|
|
$
|
153,839
|
|
|
$
|
160,940
|
|
|
$
|
160,940
|
|
Medium-term notes
|
$
|
4,239,390
|
|
|
$
|
4,063,297
|
|
|
$
|
3,410,966
|
|
|
$
|
3,316,949
|
|
|
$
|
4,077,952
|
|
|
$
|
3,923,638
|
|
Senior unsecured notes
|
$
|
808,227
|
|
|
$
|
740,982
|
|
|
$
|
737,435
|
|
|
$
|
740,653
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term asset-backed securitization debt
|
$
|
1,080,416
|
|
|
$
|
1,074,931
|
|
|
$
|
1,455,776
|
|
|
$
|
1,459,377
|
|
|
$
|
2,016,232
|
|
|
$
|
2,011,461
|
|
|
June 26, 2016
|
|
December 31, 2015
|
|
June 28, 2015
|
||||||||||||||||||||||||||||||
Derivatives Designated As Hedging
Instruments Under ASC
Topic 815
|
Notional
Value
|
|
Asset
Fair Value
(a)
|
|
Liability
Fair Value
(b)
|
|
Notional
Value
|
|
Asset
Fair Value
(a)
|
|
Liability
Fair Value
(b)
|
|
Notional
Value
|
|
Asset
Fair Value
(a)
|
|
Liability
Fair Value
(b)
|
||||||||||||||||||
Foreign currency contracts
(c)
|
$
|
542,788
|
|
|
$
|
9,423
|
|
|
$
|
1,358
|
|
|
$
|
436,352
|
|
|
$
|
16,167
|
|
|
$
|
181
|
|
|
$
|
367,309
|
|
|
$
|
23,136
|
|
|
$
|
—
|
|
Commodity
contracts
(c)
|
861
|
|
|
88
|
|
|
—
|
|
|
968
|
|
|
—
|
|
|
159
|
|
|
1,166
|
|
|
—
|
|
|
98
|
|
|||||||||
Treasury rate locks
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|
3,365
|
|
|
—
|
|
|||||||||
Total
|
$
|
543,649
|
|
|
$
|
9,511
|
|
|
$
|
1,358
|
|
|
$
|
437,320
|
|
|
$
|
16,167
|
|
|
$
|
340
|
|
|
$
|
668,475
|
|
|
$
|
26,501
|
|
|
$
|
98
|
|
|
June 26, 2016
|
|
December 31, 2015
|
|
June 28, 2015
|
||||||||||||||||||||||||||||||
Derivatives Not Designated As Hedging
Instruments Under ASC
Topic 815
|
Notional
Value
|
|
Asset
Fair Value
(a)
|
|
Liability
Fair Value
(b)
|
|
Notional
Value
|
|
Asset
Fair Value
(a)
|
|
Liability
Fair Value
(b)
|
|
Notional
Value
|
|
Asset
Fair Value
(a)
|
|
Liability
Fair Value
(b)
|
||||||||||||||||||
Commodity contracts
|
$
|
4,298
|
|
|
$
|
17
|
|
|
$
|
247
|
|
|
$
|
6,510
|
|
|
$
|
68
|
|
|
$
|
960
|
|
|
$
|
8,218
|
|
|
$
|
—
|
|
|
$
|
888
|
|
|
$
|
4,298
|
|
|
$
|
17
|
|
|
$
|
247
|
|
|
$
|
6,510
|
|
|
$
|
68
|
|
|
$
|
960
|
|
|
$
|
8,218
|
|
|
$
|
—
|
|
|
$
|
888
|
|
(a)
|
Included in other current assets
|
(b)
|
Included in accrued liabilities
|
(c)
|
Derivative designated as a cash flow hedge
|
|
Amount of Gain/(Loss) Recognized in OCI, before tax
|
||||||||||||||
|
Three months ended
|
|
Six months ended
|
||||||||||||
Cash Flow Hedges
|
June 26,
2016 |
|
June 28,
2015 |
|
June 26,
2016 |
|
June 28,
2015 |
||||||||
Foreign currency contracts
|
$
|
8,017
|
|
|
$
|
(4,458
|
)
|
|
$
|
(4,507
|
)
|
|
$
|
28,210
|
|
Commodity contracts
|
119
|
|
|
(3
|
)
|
|
(73
|
)
|
|
(123
|
)
|
||||
Treasury rate locks
|
—
|
|
|
3,365
|
|
|
—
|
|
|
3,365
|
|
||||
Total
|
$
|
8,136
|
|
|
$
|
(1,096
|
)
|
|
$
|
(4,580
|
)
|
|
$
|
31,452
|
|
|
Amount of Gain/(Loss) Reclassified from AOCL into Income
|
|
|
||||||||||||||||
|
Three months ended
|
|
Six months ended
|
|
Expected to be Reclassified
|
||||||||||||||
Cash Flow Hedges
|
June 26,
2016 |
|
June 28,
2015 |
|
June 26,
2016 |
|
June 28,
2015 |
|
Over the Next Twelve Months
|
||||||||||
Foreign currency contracts
(a)
|
$
|
3,551
|
|
|
$
|
20,131
|
|
|
$
|
4,407
|
|
|
$
|
35,407
|
|
|
$
|
7,824
|
|
Commodity contracts
(a)
|
(104
|
)
|
|
(125
|
)
|
|
(319
|
)
|
|
(439
|
)
|
|
88
|
|
|||||
Treasury rate locks
(b)
|
(90
|
)
|
|
—
|
|
|
(181
|
)
|
|
—
|
|
|
(362
|
)
|
|||||
Total
|
$
|
3,357
|
|
|
$
|
20,006
|
|
|
$
|
3,907
|
|
|
$
|
34,968
|
|
|
$
|
7,550
|
|
(a)
|
Gain/(loss) reclassified from accumulated other comprehensive loss (AOCL) to income is included in cost of goods sold
|
(b)
|
Gain/(loss) reclassified from accumulated other comprehensive loss (AOCL) to income is included in interest expense
|
|
Amount of Gain/(Loss) Recognized in Income on Derivative
|
||||||||||||||
|
Three months ended
|
|
Six months ended
|
||||||||||||
Derivatives Not Designated As Hedges
|
June 26,
2016 |
|
June 28,
2015 |
|
June 26,
2016 |
|
June 28,
2015 |
||||||||
Commodity contracts
(a)
|
$
|
67
|
|
|
$
|
14
|
|
|
$
|
(224
|
)
|
|
$
|
(526
|
)
|
Total
|
$
|
67
|
|
|
$
|
14
|
|
|
$
|
(224
|
)
|
|
$
|
(526
|
)
|
(a)
|
Gain/(loss) recognized in income is included in cost of goods sold.
|
|
|
Three months ended June 26, 2016
|
||||||||||||||||||
|
|
Foreign currency translation adjustments
|
|
Marketable securities
|
|
Derivative financial instruments
|
|
Pension and postretirement benefit plans
|
|
Total
|
||||||||||
Balance, beginning of period
|
|
$
|
(46,151
|
)
|
|
$
|
(1,139
|
)
|
|
$
|
(2,466
|
)
|
|
$
|
(553,582
|
)
|
|
$
|
(603,338
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
2,516
|
|
|
(51
|
)
|
|
8,136
|
|
|
—
|
|
|
10,601
|
|
|||||
Income tax
|
|
112
|
|
|
19
|
|
|
(3,014
|
)
|
|
—
|
|
|
(2,883
|
)
|
|||||
Net other comprehensive income (loss) before reclassifications
|
|
2,628
|
|
|
(32
|
)
|
|
5,122
|
|
|
—
|
|
|
7,718
|
|
|||||
Reclassifications:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Realized (gains) losses - foreign currency contracts
(a)
|
|
—
|
|
|
—
|
|
|
(3,551
|
)
|
|
—
|
|
|
(3,551
|
)
|
|||||
Realized (gains) losses - commodities contracts
(a)
|
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
|||||
Realized (gains) losses - treasury rate lock
(c)
|
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
|||||
Prior service credits
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(446
|
)
|
|
(446
|
)
|
|||||
Actuarial losses
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,472
|
|
|
12,472
|
|
|||||
Total reclassifications before tax
|
|
—
|
|
|
—
|
|
|
(3,357
|
)
|
|
12,026
|
|
|
8,669
|
|
|||||
Income tax expense (benefit)
|
|
—
|
|
|
—
|
|
|
1,244
|
|
|
(4,454
|
)
|
|
(3,210
|
)
|
|||||
Net reclassifications
|
|
—
|
|
|
—
|
|
|
(2,113
|
)
|
|
7,572
|
|
|
5,459
|
|
|||||
Other comprehensive income (loss)
|
|
2,628
|
|
|
(32
|
)
|
|
3,009
|
|
|
7,572
|
|
|
13,177
|
|
|||||
Balance, end of period
|
|
$
|
(43,523
|
)
|
|
$
|
(1,171
|
)
|
|
$
|
543
|
|
|
$
|
(546,010
|
)
|
|
$
|
(590,161
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 28, 2015
|
||||||||||||||||||
|
|
Foreign currency translation adjustments
|
|
Marketable securities
|
|
Derivative financial instruments
|
|
Pension and postretirement benefit plans
|
|
Total
|
||||||||||
Balance, beginning of period
|
|
$
|
(30,503
|
)
|
|
$
|
(767
|
)
|
|
$
|
30,114
|
|
|
$
|
(521,005
|
)
|
|
$
|
(522,161
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
5,040
|
|
|
(204
|
)
|
|
(1,096
|
)
|
|
—
|
|
|
3,740
|
|
|||||
Income tax
|
|
(789
|
)
|
|
76
|
|
|
406
|
|
|
—
|
|
|
(307
|
)
|
|||||
Net other comprehensive income (loss) before reclassifications
|
|
4,251
|
|
|
(128
|
)
|
|
(690
|
)
|
|
—
|
|
|
3,433
|
|
|||||
Reclassifications:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Realized (gains) losses - foreign currency contracts
(a)
|
|
—
|
|
|
—
|
|
|
(20,131
|
)
|
|
—
|
|
|
(20,131
|
)
|
|||||
Realized (gains) losses - commodities contracts
(a)
|
|
—
|
|
|
—
|
|
|
125
|
|
|
—
|
|
|
125
|
|
|||||
Prior service credits
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(695
|
)
|
|
(695
|
)
|
|||||
Actuarial losses
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,670
|
|
|
14,670
|
|
|||||
Total reclassifications before tax
|
|
—
|
|
|
—
|
|
|
(20,006
|
)
|
|
13,975
|
|
|
(6,031
|
)
|
|||||
Income tax expense (benefit)
|
|
—
|
|
|
—
|
|
|
7,410
|
|
|
(5,177
|
)
|
|
2,233
|
|
|||||
Net reclassifications
|
|
—
|
|
|
—
|
|
|
(12,596
|
)
|
|
8,798
|
|
|
(3,798
|
)
|
|||||
Other comprehensive income (loss)
|
|
4,251
|
|
|
(128
|
)
|
|
(13,286
|
)
|
|
8,798
|
|
|
(365
|
)
|
|||||
Balance, end of period
|
|
$
|
(26,252
|
)
|
|
$
|
(895
|
)
|
|
$
|
16,828
|
|
|
$
|
(512,207
|
)
|
|
$
|
(522,526
|
)
|
|
|
Six months ended June 26, 2016
|
||||||||||||||||||
|
|
Foreign currency translation adjustments
|
|
Marketable securities
|
|
Derivative financial instruments
|
|
Pension and postretirement benefit plans
|
|
Total
|
||||||||||
Balance, beginning of period
|
|
$
|
(58,844
|
)
|
|
$
|
(1,094
|
)
|
|
$
|
5,886
|
|
|
$
|
(561,153
|
)
|
|
$
|
(615,205
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
17,087
|
|
|
(122
|
)
|
|
(4,580
|
)
|
|
—
|
|
|
12,385
|
|
|||||
Income tax
|
|
(1,766
|
)
|
|
45
|
|
|
1,696
|
|
|
—
|
|
|
(25
|
)
|
|||||
Net other comprehensive income (loss) before reclassifications
|
|
15,321
|
|
|
(77
|
)
|
|
(2,884
|
)
|
|
—
|
|
|
12,360
|
|
|||||
Reclassifications:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Realized (gains) losses - foreign currency contracts
(a)
|
|
—
|
|
|
—
|
|
|
(4,407
|
)
|
|
—
|
|
|
(4,407
|
)
|
|||||
Realized (gains) losses - commodities contracts
(a)
|
|
—
|
|
|
—
|
|
|
319
|
|
|
—
|
|
|
319
|
|
|||||
Realized (gains) losses - treasury rate lock
(c)
|
|
—
|
|
|
—
|
|
|
181
|
|
|
—
|
|
|
181
|
|
|||||
Prior service credits
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(892
|
)
|
|
(892
|
)
|
|||||
Actuarial losses
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,944
|
|
|
24,944
|
|
|||||
Total reclassifications before tax
|
|
—
|
|
|
—
|
|
|
(3,907
|
)
|
|
24,052
|
|
|
20,145
|
|
|||||
Income tax expense (benefit)
|
|
—
|
|
|
—
|
|
|
1,448
|
|
|
(8,909
|
)
|
|
(7,461
|
)
|
|||||
Net reclassifications
|
|
—
|
|
|
—
|
|
|
(2,459
|
)
|
|
15,143
|
|
|
12,684
|
|
|||||
Other comprehensive income (loss)
|
|
15,321
|
|
|
(77
|
)
|
|
(5,343
|
)
|
|
15,143
|
|
|
25,044
|
|
|||||
Balance, end of period
|
|
$
|
(43,523
|
)
|
|
$
|
(1,171
|
)
|
|
$
|
543
|
|
|
$
|
(546,010
|
)
|
|
$
|
(590,161
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 28, 2015
|
||||||||||||||||||
|
|
Foreign currency translation adjustments
|
|
Marketable securities
|
|
Derivative financial instruments
|
|
Pension and postretirement benefit plans
|
|
Total
|
||||||||||
Balance, beginning of period
|
|
$
|
(3,482
|
)
|
|
$
|
(700
|
)
|
|
$
|
19,042
|
|
|
$
|
(529,803
|
)
|
|
$
|
(514,943
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
(24,951
|
)
|
|
(310
|
)
|
|
31,452
|
|
|
—
|
|
|
6,191
|
|
|||||
Income tax
|
|
2,181
|
|
|
115
|
|
|
(11,650
|
)
|
|
—
|
|
|
(9,354
|
)
|
|||||
Net other comprehensive (loss) income before reclassifications
|
|
(22,770
|
)
|
|
(195
|
)
|
|
19,802
|
|
|
—
|
|
|
(3,163
|
)
|
|||||
Reclassifications:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Realized (gains) losses - foreign currency contracts
(a)
|
|
—
|
|
|
—
|
|
|
(35,407
|
)
|
|
—
|
|
|
(35,407
|
)
|
|||||
Realized (gains) losses - commodities contracts
(a)
|
|
—
|
|
|
—
|
|
|
439
|
|
|
—
|
|
|
439
|
|
|||||
Prior service credits
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,390
|
)
|
|
(1,390
|
)
|
|||||
Actuarial losses
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,340
|
|
|
29,340
|
|
|||||
Total reclassifications before tax
|
|
—
|
|
|
—
|
|
|
(34,968
|
)
|
|
27,950
|
|
|
(7,018
|
)
|
|||||
Income tax expense (benefit)
|
|
—
|
|
|
—
|
|
|
12,952
|
|
|
(10,354
|
)
|
|
2,598
|
|
|||||
Net reclassifications
|
|
—
|
|
|
—
|
|
|
(22,016
|
)
|
|
17,596
|
|
|
(4,420
|
)
|
|||||
Other comprehensive (loss) income
|
|
(22,770
|
)
|
|
(195
|
)
|
|
(2,214
|
)
|
|
17,596
|
|
|
(7,583
|
)
|
|||||
Balance, end of period
|
|
$
|
(26,252
|
)
|
|
$
|
(895
|
)
|
|
$
|
16,828
|
|
|
$
|
(512,207
|
)
|
|
$
|
(522,526
|
)
|
(a)
|
Amounts reclassified to net income are included in Motorcycles and Related Products cost of goods sold.
|
(b)
|
Amounts reclassified are included in the computation of net periodic period cost. See Note 16 for information related to pension and postretirement benefit plans.
|
(c)
|
Amounts reclassified to net income are included in interest expense.
|
|
|
June 26,
2016 |
|
December 31,
2015 |
|
June 28,
2015 |
||||||
Unsecured commercial paper
|
|
$
|
1,020,487
|
|
|
$
|
1,201,380
|
|
|
$
|
114,983
|
|
Total short-term debt
|
|
$
|
1,020,487
|
|
|
$
|
1,201,380
|
|
|
$
|
114,983
|
|
|
|
June 26,
2016 |
|
December 31,
2015 |
|
June 28,
2015 |
||||||
Secured debt
|
|
|
|
|
|
|
||||||
Asset-backed Canadian commercial paper conduit facility
|
|
$
|
161,626
|
|
|
$
|
153,839
|
|
|
$
|
160,940
|
|
Term asset-backed securitization debt
|
|
1,077,317
|
|
|
1,463,154
|
|
|
2,017,079
|
|
|||
Less: unamortized discount and debt issuance costs
|
|
(2,386
|
)
|
|
(3,777
|
)
|
|
(5,618
|
)
|
|||
Total secured debt
|
|
1,236,557
|
|
|
1,613,216
|
|
|
2,172,401
|
|
|||
|
|
|
|
|
|
|
||||||
Unsecured notes
|
|
|
|
|
|
|
||||||
1.15% Medium-term notes due in 2015 par value
|
|
—
|
|
|
—
|
|
|
600,000
|
|
|||
3.88% Medium-term notes due in 2016 par value
|
|
—
|
|
|
450,000
|
|
|
450,000
|
|
|||
2.70% Medium-term notes due in 2017 par value
|
|
400,000
|
|
|
400,000
|
|
|
400,000
|
|
|||
1.55% Medium-term notes due in 2017 par value
|
|
400,000
|
|
|
400,000
|
|
|
400,000
|
|
|||
6.80% Medium-term notes due in 2018 par value
|
|
878,708
|
|
|
878,708
|
|
|
887,958
|
|
|||
2.40% Medium-term notes due in 2019 par value
|
|
600,000
|
|
|
600,000
|
|
|
600,000
|
|
|||
2.25% Medium-term notes due in 2019 par value
|
|
600,000
|
|
|
—
|
|
|
—
|
|
|||
2.15% Medium-term notes due in 2020 par value
|
|
600,000
|
|
|
600,000
|
|
|
600,000
|
|
|||
2.85% Medium-term notes due in 2021 par value
|
|
600,000
|
|
|
—
|
|
|
—
|
|
|||
3.50% Senior unsecured notes due in 2025 par value
|
|
450,000
|
|
|
450,000
|
|
|
—
|
|
|||
4.625% Senior unsecured notes due in 2045 par value
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|||
Less: unamortized discount and debt issuance costs
|
|
(24,429
|
)
|
|
(21,106
|
)
|
|
(14,320
|
)
|
|||
Gross long-term debt
|
|
6,040,836
|
|
|
5,670,818
|
|
|
6,096,039
|
|
|||
Less: current portion of long-term debt, net of unamortized discount and issuance costs
|
|
(732,773
|
)
|
|
(838,349
|
)
|
|
(1,544,956
|
)
|
|||
Total long-term debt
|
|
$
|
5,308,063
|
|
|
$
|
4,832,469
|
|
|
$
|
4,551,083
|
|
|
June 26, 2016
|
||||||||||||||||||||||
|
Finance receivables
|
|
Allowance for credit losses
|
|
Restricted cash
|
|
Other assets
|
|
Total assets
|
|
Asset-backed debt
|
||||||||||||
On-balance sheet assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Term asset-backed securitizations
|
$
|
1,173,527
|
|
|
$
|
(30,431
|
)
|
|
$
|
79,475
|
|
|
$
|
2,825
|
|
|
$
|
1,225,396
|
|
|
$
|
1,074,931
|
|
Asset-backed U.S. commercial paper conduit facility
|
—
|
|
|
—
|
|
|
—
|
|
|
222
|
|
|
222
|
|
|
—
|
|
||||||
Unconsolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset-backed Canadian commercial paper conduit facility
|
177,360
|
|
|
(3,620
|
)
|
|
13,175
|
|
|
332
|
|
|
187,247
|
|
|
161,626
|
|
||||||
Total on-balance sheet assets and liabilities
|
$
|
1,350,887
|
|
|
$
|
(34,051
|
)
|
|
$
|
92,650
|
|
|
$
|
3,379
|
|
|
$
|
1,412,865
|
|
|
$
|
1,236,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
December 31, 2015
|
||||||||||||||||||||||
|
Finance receivables
|
|
Allowance for credit losses
|
|
Restricted cash
|
|
Other assets
|
|
Total assets
|
|
Asset-backed debt
|
||||||||||||
On-balance sheet assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Term asset-backed securitizations
|
$
|
1,611,624
|
|
|
$
|
(37,937
|
)
|
|
$
|
100,151
|
|
|
$
|
4,383
|
|
|
$
|
1,678,221
|
|
|
$
|
1,459,377
|
|
Asset-backed U.S. commercial paper conduit facility
|
—
|
|
|
—
|
|
|
—
|
|
|
323
|
|
|
323
|
|
|
—
|
|
||||||
Unconsolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset-backed Canadian commercial paper conduit facility
|
170,708
|
|
|
(3,061
|
)
|
|
10,491
|
|
|
393
|
|
|
178,531
|
|
|
153,839
|
|
||||||
Total on-balance sheet assets and liabilities
|
$
|
1,782,332
|
|
|
$
|
(40,998
|
)
|
|
$
|
110,642
|
|
|
$
|
5,099
|
|
|
$
|
1,857,075
|
|
|
$
|
1,613,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
June 28, 2015
|
||||||||||||||||||||||
|
Finance receivables
|
|
Allowance for credit losses
|
|
Restricted cash
|
|
Other assets
|
|
Total assets
|
|
Asset-backed debt
|
||||||||||||
On-balance sheet assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Term asset-backed securitizations
|
$
|
2,199,018
|
|
|
$
|
(49,400
|
)
|
|
$
|
149,418
|
|
|
$
|
2,857
|
|
|
$
|
2,301,893
|
|
|
$
|
2,011,461
|
|
Asset-backed U.S. commercial paper conduit facility
|
—
|
|
|
—
|
|
|
—
|
|
|
210
|
|
|
210
|
|
|
—
|
|
||||||
Unconsolidated VIEs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset-backed Canadian commercial paper conduit facility
|
176,730
|
|
|
(2,657
|
)
|
|
12,793
|
|
|
340
|
|
|
187,206
|
|
|
160,940
|
|
||||||
Total on-balance sheet assets and liabilities
|
$
|
2,375,748
|
|
|
$
|
(52,057
|
)
|
|
$
|
162,211
|
|
|
$
|
3,407
|
|
|
$
|
2,489,309
|
|
|
$
|
2,172,401
|
|
|
2016
|
|
2015
|
||||||||||||
|
Transfers
|
|
Proceeds
|
|
Transfers
|
|
Proceeds
|
||||||||
First quarter
|
$
|
6,600
|
|
|
$
|
5,800
|
|
|
$
|
19,200
|
|
|
$
|
16,800
|
|
Second quarter
|
$
|
31,400
|
|
|
$
|
27,500
|
|
|
$
|
26,800
|
|
|
$
|
23,400
|
|
|
June 26,
2016 |
|
December 31,
2015 |
|
June 28,
2015 |
||||||
On-balance sheet retail motorcycle finance receivables
|
$
|
5,872,668
|
|
|
$
|
5,843,352
|
|
|
$
|
5,799,682
|
|
Off-balance sheet retail motorcycle finance receivables
|
292,176
|
|
|
—
|
|
|
—
|
|
|||
Total serviced retail motorcycle finance receivables
|
$
|
6,164,844
|
|
|
$
|
5,843,352
|
|
|
$
|
5,799,682
|
|
|
Amount 30 days or more past due:
|
||||||||||
|
June 26,
2016 |
|
December 31,
2015 |
|
June 28,
2015 |
||||||
On-balance sheet retail motorcycle finance receivables
|
$
|
168,091
|
|
|
$
|
195,468
|
|
|
$
|
143,406
|
|
Off-balance sheet retail motorcycle finance receivables
|
460
|
|
|
—
|
|
|
—
|
|
|||
Total serviced retail motorcycle finance receivables
|
$
|
168,551
|
|
|
$
|
195,468
|
|
|
$
|
143,406
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2016 |
|
June 28,
2015 |
|
June 26,
2016 |
|
June 28,
2015 |
||||||||
On-balance sheet retail motorcycle finance receivables
|
$
|
15,001
|
|
|
$
|
8,764
|
|
|
$
|
43,118
|
|
|
$
|
29,555
|
|
Off-balance sheet retail motorcycle finance receivables
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||
Total serviced retail motorcycle finance receivables
|
$
|
15,016
|
|
|
$
|
8,764
|
|
|
$
|
43,133
|
|
|
$
|
29,555
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2016 |
|
June 28,
2015 |
|
June 26,
2016 |
|
June 28,
2015 |
||||||||
Balance, beginning of period
|
$
|
74,836
|
|
|
$
|
71,073
|
|
|
$
|
74,217
|
|
|
$
|
69,250
|
|
Warranties issued during the period
|
20,202
|
|
|
21,843
|
|
|
38,214
|
|
|
36,954
|
|
||||
Settlements made during the period
|
(22,679
|
)
|
|
(23,554
|
)
|
|
(40,842
|
)
|
|
(37,119
|
)
|
||||
Recalls and changes to pre-existing warranty liabilities
|
10,121
|
|
|
14,054
|
|
|
10,891
|
|
|
14,331
|
|
||||
Balance, end of period
|
$
|
82,480
|
|
|
$
|
83,416
|
|
|
$
|
82,480
|
|
|
$
|
83,416
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2016 |
|
June 28,
2015 |
|
June 26,
2016 |
|
June 28,
2015 |
||||||||
Numerator
:
|
|
|
|
|
|
|
|
||||||||
Net income used in computing basic and diluted earnings per share
|
$
|
280,431
|
|
|
$
|
299,810
|
|
|
$
|
530,920
|
|
|
$
|
569,664
|
|
Denominator
:
|
|
|
|
|
|
|
|
||||||||
Denominator for basic earnings per share - weighted-average common shares
|
180,587
|
|
|
207,650
|
|
|
181,976
|
|
|
209,115
|
|
||||
Effect of dilutive securities - employee stock compensation plan
|
752
|
|
|
940
|
|
|
764
|
|
|
1,050
|
|
||||
Denominator for diluted earnings per share - adjusted weighted-average shares outstanding
|
181,339
|
|
|
208,590
|
|
|
182,740
|
|
|
210,165
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.55
|
|
|
$
|
1.44
|
|
|
$
|
2.92
|
|
|
$
|
2.72
|
|
Diluted
|
$
|
1.55
|
|
|
$
|
1.44
|
|
|
$
|
2.91
|
|
|
$
|
2.71
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2016 |
|
June 28,
2015 |
|
June 26,
2016 |
|
June 28,
2015 |
||||||||
Pension and SERPA Benefits
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
8,359
|
|
|
$
|
10,010
|
|
|
$
|
16,718
|
|
|
$
|
20,020
|
|
Interest cost
|
22,707
|
|
|
21,836
|
|
|
45,414
|
|
|
43,672
|
|
||||
Expected return on plan assets
|
(36,445
|
)
|
|
(36,232
|
)
|
|
(72,890
|
)
|
|
(72,465
|
)
|
||||
Amortization of unrecognized:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
255
|
|
|
109
|
|
|
510
|
|
|
218
|
|
||||
Net loss
|
11,588
|
|
|
13,677
|
|
|
23,176
|
|
|
27,354
|
|
||||
Settlement loss
|
300
|
|
|
—
|
|
|
600
|
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
6,764
|
|
|
$
|
9,400
|
|
|
$
|
13,528
|
|
|
$
|
18,799
|
|
Postretirement Healthcare Benefits
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1,870
|
|
|
$
|
2,065
|
|
|
$
|
3,740
|
|
|
$
|
4,130
|
|
Interest cost
|
3,704
|
|
|
3,541
|
|
|
7,408
|
|
|
7,082
|
|
||||
Expected return on plan assets
|
(3,017
|
)
|
|
(2,877
|
)
|
|
(6,034
|
)
|
|
(5,754
|
)
|
||||
Amortization of unrecognized:
|
|
|
|
|
|
|
|
||||||||
Prior service credit
|
(701
|
)
|
|
(804
|
)
|
|
(1,402
|
)
|
|
(1,608
|
)
|
||||
Net loss
|
884
|
|
|
993
|
|
|
1,768
|
|
|
1,986
|
|
||||
Net periodic benefit cost
|
$
|
2,740
|
|
|
$
|
2,918
|
|
|
$
|
5,480
|
|
|
$
|
5,836
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2016 |
|
June 28,
2015 |
|
June 26,
2016 |
|
June 28,
2015 |
||||||||
Motorcycles net revenue
|
$
|
1,670,113
|
|
|
$
|
1,650,783
|
|
|
$
|
3,246,723
|
|
|
$
|
3,161,353
|
|
Gross profit
|
607,558
|
|
|
647,214
|
|
|
1,197,838
|
|
|
1,237,489
|
|
||||
Selling, administrative and engineering expense
|
284,809
|
|
|
266,611
|
|
|
542,632
|
|
|
511,432
|
|
||||
Operating income from Motorcycles
|
322,749
|
|
|
380,603
|
|
|
655,206
|
|
|
726,057
|
|
||||
Financial Services revenue
|
190,964
|
|
|
173,609
|
|
|
364,322
|
|
|
335,984
|
|
||||
Financial Services expense
|
101,391
|
|
|
91,696
|
|
|
218,378
|
|
|
189,407
|
|
||||
Operating income from Financial Services
|
89,573
|
|
|
81,913
|
|
|
145,944
|
|
|
146,577
|
|
||||
Operating income
|
$
|
412,322
|
|
|
$
|
462,516
|
|
|
$
|
801,150
|
|
|
$
|
872,634
|
|
|
Three months ended June 26, 2016
|
||||||||||||||
|
HDMC Entities
|
|
HDFS Entities
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Motorcycles and Related Products
|
$
|
1,673,379
|
|
|
$
|
—
|
|
|
$
|
(3,266
|
)
|
|
$
|
1,670,113
|
|
Financial Services
|
—
|
|
|
191,935
|
|
|
(971
|
)
|
|
190,964
|
|
||||
Total revenue
|
1,673,379
|
|
|
191,935
|
|
|
(4,237
|
)
|
|
1,861,077
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Motorcycles and Related Products cost of goods sold
|
1,062,555
|
|
|
—
|
|
|
—
|
|
|
1,062,555
|
|
||||
Financial Services interest expense
|
—
|
|
|
42,895
|
|
|
—
|
|
|
42,895
|
|
||||
Financial Services provision for credit losses
|
—
|
|
|
23,461
|
|
|
—
|
|
|
23,461
|
|
||||
Selling, administrative and engineering expense
|
285,367
|
|
|
38,301
|
|
|
(3,824
|
)
|
|
319,844
|
|
||||
Total costs and expenses
|
1,347,922
|
|
|
104,657
|
|
|
(3,824
|
)
|
|
1,448,755
|
|
||||
Operating income
|
325,457
|
|
|
87,278
|
|
|
(413
|
)
|
|
412,322
|
|
||||
Investment income
|
43,688
|
|
|
—
|
|
|
(43,000
|
)
|
|
688
|
|
||||
Interest expense
|
7,094
|
|
|
—
|
|
|
—
|
|
|
7,094
|
|
||||
Income before provision for income taxes
|
362,051
|
|
|
87,278
|
|
|
(43,413
|
)
|
|
405,916
|
|
||||
Provision for income taxes
|
93,788
|
|
|
31,697
|
|
|
—
|
|
|
125,485
|
|
||||
Net income
|
$
|
268,263
|
|
|
$
|
55,581
|
|
|
$
|
(43,413
|
)
|
|
$
|
280,431
|
|
|
Six months ended June 26, 2016
|
||||||||||||||
|
HDMC Entities
|
|
HDFS Entities
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Motorcycles and Related Products
|
$
|
3,252,018
|
|
|
$
|
—
|
|
|
$
|
(5,295
|
)
|
|
$
|
3,246,723
|
|
Financial Services
|
—
|
|
|
365,456
|
|
|
(1,134
|
)
|
|
364,322
|
|
||||
Total revenue
|
3,252,018
|
|
|
365,456
|
|
|
(6,429
|
)
|
|
3,611,045
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Motorcycles and Related Products cost of goods sold
|
2,048,885
|
|
|
—
|
|
|
—
|
|
|
2,048,885
|
|
||||
Financial Services interest expense
|
—
|
|
|
88,814
|
|
|
—
|
|
|
88,814
|
|
||||
Financial Services provision for credit losses
|
—
|
|
|
60,584
|
|
|
—
|
|
|
60,584
|
|
||||
Selling, administrative and engineering expense
|
543,598
|
|
|
74,275
|
|
|
(6,261
|
)
|
|
611,612
|
|
||||
Total costs and expenses
|
2,592,483
|
|
|
223,673
|
|
|
(6,261
|
)
|
|
2,809,895
|
|
||||
Operating income
|
659,535
|
|
|
141,783
|
|
|
(168
|
)
|
|
801,150
|
|
||||
Investment income
|
184,454
|
|
|
—
|
|
|
(183,000
|
)
|
|
1,454
|
|
||||
Interest expense
|
14,262
|
|
|
—
|
|
|
—
|
|
|
14,262
|
|
||||
Income before provision for income taxes
|
829,727
|
|
|
141,783
|
|
|
(183,168
|
)
|
|
788,342
|
|
||||
Provision for income taxes
|
204,361
|
|
|
53,061
|
|
|
—
|
|
|
257,422
|
|
||||
Net income
|
$
|
625,366
|
|
|
$
|
88,722
|
|
|
$
|
(183,168
|
)
|
|
$
|
530,920
|
|
|
Three months ended June 28, 2015
|
||||||||||||||
|
HDMC Entities
|
|
HDFS Entities
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Motorcycles and Related Products
|
$
|
1,653,759
|
|
|
$
|
—
|
|
|
$
|
(2,976
|
)
|
|
$
|
1,650,783
|
|
Financial Services
|
—
|
|
|
174,147
|
|
|
(538
|
)
|
|
173,609
|
|
||||
Total revenue
|
1,653,759
|
|
|
174,147
|
|
|
(3,514
|
)
|
|
1,824,392
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Motorcycles and Related Products cost of goods sold
|
1,003,569
|
|
|
—
|
|
|
—
|
|
|
1,003,569
|
|
||||
Financial Services interest expense
|
—
|
|
|
41,188
|
|
|
—
|
|
|
41,188
|
|
||||
Financial Services provision for credit losses
|
—
|
|
|
15,175
|
|
|
—
|
|
|
15,175
|
|
||||
Selling, administrative and engineering expense
|
267,149
|
|
|
38,309
|
|
|
(3,514
|
)
|
|
301,944
|
|
||||
Total costs and expenses
|
1,270,718
|
|
|
94,672
|
|
|
(3,514
|
)
|
|
1,361,876
|
|
||||
Operating income
|
383,041
|
|
|
79,475
|
|
|
—
|
|
|
462,516
|
|
||||
Investment income
|
1,450
|
|
|
—
|
|
|
—
|
|
|
1,450
|
|
||||
Interest expense
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Income before provision for income taxes
|
384,482
|
|
|
79,475
|
|
|
—
|
|
|
463,957
|
|
||||
Provision for income taxes
|
134,633
|
|
|
29,514
|
|
|
—
|
|
|
164,147
|
|
||||
Net income
|
$
|
249,849
|
|
|
$
|
49,961
|
|
|
$
|
—
|
|
|
$
|
299,810
|
|
|
Six months ended June 28, 2015
|
||||||||||||||
|
HDMC Entities
|
|
HDFS Entities
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Motorcycles and Related Products
|
$
|
3,166,641
|
|
|
$
|
—
|
|
|
$
|
(5,288
|
)
|
|
$
|
3,161,353
|
|
Financial Services
|
—
|
|
|
336,837
|
|
|
(853
|
)
|
|
335,984
|
|
||||
Total revenue
|
3,166,641
|
|
|
336,837
|
|
|
(6,141
|
)
|
|
3,497,337
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Motorcycles and Related Products cost of goods sold
|
1,923,864
|
|
|
—
|
|
|
—
|
|
|
1,923,864
|
|
||||
Financial Services interest expense
|
—
|
|
|
79,724
|
|
|
—
|
|
|
79,724
|
|
||||
Financial Services provision for credit losses
|
—
|
|
|
41,422
|
|
|
—
|
|
|
41,422
|
|
||||
Selling, administrative and engineering expense
|
512,284
|
|
|
73,550
|
|
|
(6,141
|
)
|
|
579,693
|
|
||||
Total costs and expenses
|
2,436,148
|
|
|
194,696
|
|
|
(6,141
|
)
|
|
2,624,703
|
|
||||
Operating income
|
730,493
|
|
|
142,141
|
|
|
—
|
|
|
872,634
|
|
||||
Investment income
|
102,772
|
|
|
—
|
|
|
(100,000
|
)
|
|
2,772
|
|
||||
Interest expense
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||
Income before provision for income taxes
|
833,247
|
|
|
142,141
|
|
|
(100,000
|
)
|
|
875,388
|
|
||||
Provision for income taxes
|
256,149
|
|
|
49,575
|
|
|
—
|
|
|
305,724
|
|
||||
Net income
|
$
|
577,098
|
|
|
$
|
92,566
|
|
|
$
|
(100,000
|
)
|
|
$
|
569,664
|
|
|
June 26, 2016
|
||||||||||||||
|
HDMC Entities
|
|
HDFS Entities
|
|
Eliminations
|
|
Consolidated
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
445,662
|
|
|
$
|
419,008
|
|
|
$
|
—
|
|
|
$
|
864,670
|
|
Marketable securities
|
5,070
|
|
|
—
|
|
|
—
|
|
|
5,070
|
|
||||
Accounts receivable, net
|
816,439
|
|
|
—
|
|
|
(504,483
|
)
|
|
311,956
|
|
||||
Finance receivables, net
|
—
|
|
|
2,457,974
|
|
|
—
|
|
|
2,457,974
|
|
||||
Inventories
|
371,196
|
|
|
—
|
|
|
—
|
|
|
371,196
|
|
||||
Restricted cash
|
—
|
|
|
78,078
|
|
|
—
|
|
|
78,078
|
|
||||
Deferred income taxes
|
60,497
|
|
|
55,717
|
|
|
—
|
|
|
116,214
|
|
||||
Other current assets
|
124,923
|
|
|
38,203
|
|
|
(9,260
|
)
|
|
153,866
|
|
||||
Total current assets
|
1,823,787
|
|
|
3,048,980
|
|
|
(513,743
|
)
|
|
4,359,024
|
|
||||
Finance receivables, net
|
—
|
|
|
4,824,071
|
|
|
—
|
|
|
4,824,071
|
|
||||
Property, plant and equipment, net
|
916,388
|
|
|
34,921
|
|
|
—
|
|
|
951,309
|
|
||||
Goodwill
|
54,542
|
|
|
—
|
|
|
—
|
|
|
54,542
|
|
||||
Deferred income taxes
|
76,194
|
|
|
8,555
|
|
|
(1,702
|
)
|
|
83,047
|
|
||||
Other long-term assets
|
133,540
|
|
|
24,744
|
|
|
(81,837
|
)
|
|
76,447
|
|
||||
|
$
|
3,004,451
|
|
|
$
|
7,941,271
|
|
|
$
|
(597,282
|
)
|
|
$
|
10,348,440
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
239,380
|
|
|
$
|
538,799
|
|
|
$
|
(504,483
|
)
|
|
$
|
273,696
|
|
Accrued liabilities
|
397,645
|
|
|
97,150
|
|
|
(8,984
|
)
|
|
485,811
|
|
||||
Short-term debt
|
—
|
|
|
1,020,487
|
|
|
—
|
|
|
1,020,487
|
|
||||
Current portion of long-term debt, net
|
—
|
|
|
732,773
|
|
|
—
|
|
|
732,773
|
|
||||
Total current liabilities
|
637,025
|
|
|
2,389,209
|
|
|
(513,467
|
)
|
|
2,512,767
|
|
||||
Long-term debt, net
|
740,982
|
|
|
4,567,081
|
|
|
—
|
|
|
5,308,063
|
|
||||
Pension liability
|
129,465
|
|
|
—
|
|
|
—
|
|
|
129,465
|
|
||||
Postretirement healthcare benefits
|
188,846
|
|
|
—
|
|
|
—
|
|
|
188,846
|
|
||||
Other long-term liabilities
|
157,835
|
|
|
27,621
|
|
|
2,836
|
|
|
188,292
|
|
||||
Shareholders’ equity
|
1,150,298
|
|
|
957,360
|
|
|
(86,651
|
)
|
|
2,021,007
|
|
||||
|
$
|
3,004,451
|
|
|
$
|
7,941,271
|
|
|
$
|
(597,282
|
)
|
|
$
|
10,348,440
|
|
|
December 31, 2015
|
||||||||||||||
|
HDMC Entities
|
|
HDFS Entities
|
|
Eliminations
|
|
Consolidated
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
400,443
|
|
|
$
|
321,766
|
|
|
$
|
—
|
|
|
$
|
722,209
|
|
Marketable securities
|
45,192
|
|
|
—
|
|
|
—
|
|
|
45,192
|
|
||||
Accounts receivable, net
|
390,799
|
|
|
—
|
|
|
(143,394
|
)
|
|
247,405
|
|
||||
Finance receivables, net
|
—
|
|
|
2,053,582
|
|
|
—
|
|
|
2,053,582
|
|
||||
Inventories
|
585,907
|
|
|
—
|
|
|
—
|
|
|
585,907
|
|
||||
Restricted cash
|
—
|
|
|
88,267
|
|
|
—
|
|
|
88,267
|
|
||||
Deferred income taxes
|
56,319
|
|
|
46,450
|
|
|
—
|
|
|
102,769
|
|
||||
Other current assets
|
90,824
|
|
|
43,807
|
|
|
(2,079
|
)
|
|
132,552
|
|
||||
Total current assets
|
1,569,484
|
|
|
2,553,872
|
|
|
(145,473
|
)
|
|
3,977,883
|
|
||||
Finance receivables, net
|
—
|
|
|
4,814,571
|
|
|
—
|
|
|
4,814,571
|
|
||||
Property, plant and equipment, net
|
906,972
|
|
|
35,446
|
|
|
—
|
|
|
942,418
|
|
||||
Goodwill
|
54,182
|
|
|
—
|
|
|
—
|
|
|
54,182
|
|
||||
Deferred income taxes
|
86,075
|
|
|
15,681
|
|
|
(2,142
|
)
|
|
99,614
|
|
||||
Other long-term assets
|
133,753
|
|
|
31,158
|
|
|
(80,602
|
)
|
|
84,309
|
|
||||
|
$
|
2,750,466
|
|
|
$
|
7,450,728
|
|
|
$
|
(228,217
|
)
|
|
$
|
9,972,977
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
220,050
|
|
|
$
|
158,958
|
|
|
$
|
(143,394
|
)
|
|
$
|
235,614
|
|
Accrued liabilities
|
387,137
|
|
|
89,048
|
|
|
(4,221
|
)
|
|
471,964
|
|
||||
Short-term debt
|
—
|
|
|
1,201,380
|
|
|
—
|
|
|
1,201,380
|
|
||||
Current portion of long-term debt
|
—
|
|
|
838,349
|
|
|
—
|
|
|
838,349
|
|
||||
Total current liabilities
|
607,187
|
|
|
2,287,735
|
|
|
(147,615
|
)
|
|
2,747,307
|
|
||||
Long-term debt
|
740,653
|
|
|
4,091,816
|
|
|
—
|
|
|
4,832,469
|
|
||||
Pension liability
|
164,888
|
|
|
—
|
|
|
—
|
|
|
164,888
|
|
||||
Postretirement healthcare benefits
|
193,659
|
|
|
—
|
|
|
—
|
|
|
193,659
|
|
||||
Other long-term liabilities
|
166,440
|
|
|
28,560
|
|
|
—
|
|
|
195,000
|
|
||||
Shareholders’ equity
|
877,639
|
|
|
1,042,617
|
|
|
(80,602
|
)
|
|
1,839,654
|
|
||||
|
$
|
2,750,466
|
|
|
$
|
7,450,728
|
|
|
$
|
(228,217
|
)
|
|
$
|
9,972,977
|
|
|
June 28, 2015
|
||||||||||||||
|
HDMC Entities
|
|
HDFS Entities
|
|
Eliminations
|
|
Consolidated
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
828,289
|
|
|
$
|
419,290
|
|
|
$
|
—
|
|
|
$
|
1,247,579
|
|
Marketable securities
|
52,516
|
|
|
—
|
|
|
—
|
|
|
52,516
|
|
||||
Accounts receivable, net
|
743,341
|
|
|
—
|
|
|
(465,772
|
)
|
|
277,569
|
|
||||
Finance receivables, net
|
—
|
|
|
2,331,723
|
|
|
—
|
|
|
2,331,723
|
|
||||
Inventories
|
395,044
|
|
|
—
|
|
|
—
|
|
|
395,044
|
|
||||
Restricted cash
|
—
|
|
|
136,760
|
|
|
—
|
|
|
136,760
|
|
||||
Deferred income taxes
|
51,667
|
|
|
43,111
|
|
|
—
|
|
|
94,778
|
|
||||
Other current assets
|
126,856
|
|
|
34,029
|
|
|
(6,876
|
)
|
|
154,009
|
|
||||
Total current assets
|
2,197,713
|
|
|
2,964,913
|
|
|
(472,648
|
)
|
|
4,689,978
|
|
||||
Finance receivables, net
|
—
|
|
|
4,816,772
|
|
|
—
|
|
|
4,816,772
|
|
||||
Property, plant and equipment, net
|
841,361
|
|
|
31,646
|
|
|
—
|
|
|
873,007
|
|
||||
Goodwill
|
26,105
|
|
|
—
|
|
|
—
|
|
|
26,105
|
|
||||
Deferred income taxes
|
57,587
|
|
|
10,861
|
|
|
(1,693
|
)
|
|
66,755
|
|
||||
Other long-term assets
|
121,264
|
|
|
34,576
|
|
|
(79,263
|
)
|
|
76,577
|
|
||||
|
$
|
3,244,030
|
|
|
$
|
7,858,768
|
|
|
$
|
(553,604
|
)
|
|
$
|
10,549,194
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
306,335
|
|
|
$
|
567,073
|
|
|
$
|
(465,772
|
)
|
|
$
|
407,636
|
|
Accrued liabilities
|
369,467
|
|
|
87,839
|
|
|
(8,569
|
)
|
|
448,737
|
|
||||
Short-term debt
|
—
|
|
|
114,983
|
|
|
—
|
|
|
114,983
|
|
||||
Current portion of long-term debt
|
—
|
|
|
1,544,956
|
|
|
—
|
|
|
1,544,956
|
|
||||
Total current liabilities
|
675,802
|
|
|
2,314,851
|
|
|
(474,341
|
)
|
|
2,516,312
|
|
||||
Long-term debt
|
—
|
|
|
4,551,083
|
|
|
—
|
|
|
4,551,083
|
|
||||
Pension liability
|
66,786
|
|
|
—
|
|
|
—
|
|
|
66,786
|
|
||||
Postretirement healthcare liability
|
196,369
|
|
|
—
|
|
|
—
|
|
|
196,369
|
|
||||
Other long-term liabilities
|
168,043
|
|
|
26,974
|
|
|
—
|
|
|
195,017
|
|
||||
Shareholders’ equity
|
2,137,030
|
|
|
965,860
|
|
|
(79,263
|
)
|
|
3,023,627
|
|
||||
|
$
|
3,244,030
|
|
|
$
|
7,858,768
|
|
|
$
|
(553,604
|
)
|
|
$
|
10,549,194
|
|
|
Six months ended June 26, 2016
|
||||||||||||||
|
HDMC Entities
|
|
HDFS Entities
|
|
Eliminations
|
|
Consolidated
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
625,366
|
|
|
$
|
88,722
|
|
|
$
|
(183,168
|
)
|
|
$
|
530,920
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization of intangibles
|
97,025
|
|
|
3,931
|
|
|
—
|
|
|
100,956
|
|
||||
Amortization of deferred loan origination costs
|
—
|
|
|
43,555
|
|
|
—
|
|
|
43,555
|
|
||||
Amortization of financing origination fees
|
330
|
|
|
4,816
|
|
|
—
|
|
|
5,146
|
|
||||
Provision for employee long-term benefits
|
18,405
|
|
|
—
|
|
|
—
|
|
|
18,405
|
|
||||
Employee benefit plan contributions and payments
|
(35,189
|
)
|
|
—
|
|
|
—
|
|
|
(35,189
|
)
|
||||
Stock compensation expense
|
14,562
|
|
|
1,235
|
|
|
—
|
|
|
15,797
|
|
||||
Net change in wholesale finance receivables related to sales
|
—
|
|
|
—
|
|
|
(442,254
|
)
|
|
(442,254
|
)
|
||||
Provision for credit losses
|
—
|
|
|
60,584
|
|
|
—
|
|
|
60,584
|
|
||||
Gain on off-balance sheet securitization
|
—
|
|
|
(9,269
|
)
|
|
—
|
|
|
(9,269
|
)
|
||||
Pension plan settlement expense
|
600
|
|
|
—
|
|
|
—
|
|
|
600
|
|
||||
Deferred income taxes
|
798
|
|
|
(3,906
|
)
|
|
(440
|
)
|
|
(3,548
|
)
|
||||
Foreign currency adjustments
|
(7,966
|
)
|
|
—
|
|
|
—
|
|
|
(7,966
|
)
|
||||
Other, net
|
(12,539
|
)
|
|
(171
|
)
|
|
168
|
|
|
(12,542
|
)
|
||||
Change in current assets and current liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable, net
|
(416,198
|
)
|
|
—
|
|
|
361,089
|
|
|
(55,109
|
)
|
||||
Finance receivables—accrued interest and other
|
—
|
|
|
(125
|
)
|
|
—
|
|
|
(125
|
)
|
||||
Inventories
|
225,586
|
|
|
—
|
|
|
—
|
|
|
225,586
|
|
||||
Accounts payable and accrued liabilities
|
23,420
|
|
|
385,992
|
|
|
(355,622
|
)
|
|
53,790
|
|
||||
Derivative instruments
|
(1,474
|
)
|
|
—
|
|
|
—
|
|
|
(1,474
|
)
|
||||
Other
|
(33,237
|
)
|
|
1,664
|
|
|
—
|
|
|
(31,573
|
)
|
||||
Total adjustments
|
(125,877
|
)
|
|
488,306
|
|
|
(437,059
|
)
|
|
(74,630
|
)
|
||||
Net cash provided by operating activities
|
499,489
|
|
|
577,028
|
|
|
(620,227
|
)
|
|
456,290
|
|
||||
|
|
|
|
|
|
|
|
|
Six months ended June 26, 2016
|
||||||||||||||
|
HDMC Entities
|
|
HDFS Entities
|
|
Eliminations
|
|
Consolidated
|
||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
(104,125
|
)
|
|
(3,406
|
)
|
|
—
|
|
|
(107,531
|
)
|
||||
Origination of finance receivables
|
—
|
|
|
(4,507,717
|
)
|
|
2,516,333
|
|
|
(1,991,384
|
)
|
||||
Collections of finance receivables
|
—
|
|
|
3,709,319
|
|
|
(2,079,106
|
)
|
|
1,630,213
|
|
||||
Proceeds from finance receivables sold
|
—
|
|
|
312,571
|
|
|
—
|
|
|
312,571
|
|
||||
Sales and redemptions of marketable securities
|
40,000
|
|
|
—
|
|
|
—
|
|
|
40,000
|
|
||||
Other
|
166
|
|
|
—
|
|
|
—
|
|
|
166
|
|
||||
Net cash used by investing activities
|
(63,959
|
)
|
|
(489,233
|
)
|
|
437,227
|
|
|
(115,965
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of medium-term notes
|
—
|
|
|
1,193,396
|
|
|
—
|
|
|
1,193,396
|
|
||||
Repayments of medium-term notes
|
—
|
|
|
(450,000
|
)
|
|
—
|
|
|
(450,000
|
)
|
||||
Repayments of securitization debt
|
—
|
|
|
(385,837
|
)
|
|
—
|
|
|
(385,837
|
)
|
||||
Net decrease in credit facilities and unsecured commercial paper
|
—
|
|
|
(181,259
|
)
|
|
—
|
|
|
(181,259
|
)
|
||||
Borrowings of asset-backed commercial paper
|
—
|
|
|
33,428
|
|
|
—
|
|
|
33,428
|
|
||||
Repayments of asset-backed commercial paper
|
—
|
|
|
(34,989
|
)
|
|
—
|
|
|
(34,989
|
)
|
||||
Net change in restricted cash
|
—
|
|
|
17,992
|
|
|
—
|
|
|
17,992
|
|
||||
Dividends paid
|
(127,800
|
)
|
|
(183,000
|
)
|
|
183,000
|
|
|
(127,800
|
)
|
||||
Purchase of common stock for treasury
|
(269,411
|
)
|
|
—
|
|
|
—
|
|
|
(269,411
|
)
|
||||
Excess tax benefits from share-based payments
|
331
|
|
|
—
|
|
|
—
|
|
|
331
|
|
||||
Issuance of common stock under employee stock option plans
|
2,367
|
|
|
—
|
|
|
—
|
|
|
2,367
|
|
||||
Net cash (used by) provided by financing activities
|
(394,513
|
)
|
|
9,731
|
|
|
183,000
|
|
|
(201,782
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
4,202
|
|
|
(284
|
)
|
|
—
|
|
|
3,918
|
|
||||
Net increase in cash and cash equivalents
|
$
|
45,219
|
|
|
$
|
97,242
|
|
|
$
|
—
|
|
|
$
|
142,461
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents—beginning of period
|
$
|
400,443
|
|
|
$
|
321,766
|
|
|
$
|
—
|
|
|
$
|
722,209
|
|
Net increase in cash and cash equivalents
|
45,219
|
|
|
97,242
|
|
|
—
|
|
|
142,461
|
|
||||
Cash and cash equivalents—end of period
|
$
|
445,662
|
|
|
$
|
419,008
|
|
|
$
|
—
|
|
|
$
|
864,670
|
|
|
Six months ended June 28, 2015
|
||||||||||||||
|
HDMC Entities
|
|
HDFS Entities
|
|
Eliminations
|
|
Consolidated
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
577,098
|
|
|
$
|
92,566
|
|
|
$
|
(100,000
|
)
|
|
$
|
569,664
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization of intangibles
|
88,996
|
|
|
4,644
|
|
|
—
|
|
|
93,640
|
|
||||
Amortization of deferred loan origination costs
|
—
|
|
|
47,524
|
|
|
—
|
|
|
47,524
|
|
||||
Amortization of financing origination fees
|
—
|
|
|
4,820
|
|
|
—
|
|
|
4,820
|
|
||||
Provision for employee long-term benefits
|
24,635
|
|
|
—
|
|
|
—
|
|
|
24,635
|
|
||||
Employee benefit plan contributions and payments
|
(12,725
|
)
|
|
—
|
|
|
—
|
|
|
(12,725
|
)
|
||||
Stock compensation expense
|
15,415
|
|
|
1,319
|
|
|
—
|
|
|
16,734
|
|
||||
Net change in wholesale finance receivables related to sales
|
—
|
|
|
—
|
|
|
(418,969
|
)
|
|
(418,969
|
)
|
||||
Provision for credit losses
|
—
|
|
|
41,422
|
|
|
—
|
|
|
41,422
|
|
||||
Deferred income taxes
|
5,832
|
|
|
(7,027
|
)
|
|
—
|
|
|
(1,195
|
)
|
||||
Foreign currency adjustments
|
11,041
|
|
|
—
|
|
|
—
|
|
|
11,041
|
|
||||
Other, net
|
(2,671
|
)
|
|
707
|
|
|
—
|
|
|
(1,964
|
)
|
||||
Change in current assets and current liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable, net
|
(347,967
|
)
|
|
—
|
|
|
304,658
|
|
|
(43,309
|
)
|
||||
Finance receivables—accrued interest and other
|
—
|
|
|
(270
|
)
|
|
—
|
|
|
(270
|
)
|
||||
Inventories
|
38,012
|
|
|
—
|
|
|
—
|
|
|
38,012
|
|
||||
Accounts payable and accrued liabilities
|
144,784
|
|
|
385,999
|
|
|
(298,426
|
)
|
|
232,357
|
|
||||
Derivative instruments
|
1,185
|
|
|
—
|
|
|
—
|
|
|
1,185
|
|
||||
Other
|
9,625
|
|
|
1,717
|
|
|
—
|
|
|
11,342
|
|
||||
Total adjustments
|
(23,838
|
)
|
|
480,855
|
|
|
(412,737
|
)
|
|
44,280
|
|
||||
Net cash provided by operating activities
|
553,260
|
|
|
573,421
|
|
|
(512,737
|
)
|
|
613,944
|
|
|
Six months ended June 28, 2015
|
||||||||||||||
|
HDMC Entities
|
|
HDFS Entities
|
|
Eliminations
|
|
Consolidated
|
||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
(83,282
|
)
|
|
(1,898
|
)
|
|
—
|
|
|
(85,180
|
)
|
||||
Origination of finance receivables
|
—
|
|
|
(4,526,313
|
)
|
|
2,549,750
|
|
|
(1,976,563
|
)
|
||||
Collections of finance receivables
|
—
|
|
|
3,707,444
|
|
|
(2,137,013
|
)
|
|
1,570,431
|
|
||||
Sales and redemptions of marketable securities
|
4,500
|
|
|
—
|
|
|
—
|
|
|
4,500
|
|
||||
Other
|
5,111
|
|
|
—
|
|
|
—
|
|
|
5,111
|
|
||||
Net cash used by investing activities
|
(73,671
|
)
|
|
(820,767
|
)
|
|
412,737
|
|
|
(481,701
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of medium-term notes
|
—
|
|
|
595,386
|
|
|
—
|
|
|
595,386
|
|
||||
Intercompany borrowing activity
|
250,000
|
|
|
(250,000
|
)
|
|
—
|
|
|
—
|
|
||||
Proceeds from securitization debt
|
—
|
|
|
1,195,668
|
|
|
—
|
|
|
1,195,668
|
|
||||
Repayments of securitization debt
|
—
|
|
|
(454,332
|
)
|
|
—
|
|
|
(454,332
|
)
|
||||
Net decrease in credit facilities and unsecured commercial paper
|
—
|
|
|
(616,586
|
)
|
|
—
|
|
|
(616,586
|
)
|
||||
Borrowings of asset-backed commercial paper
|
—
|
|
|
40,209
|
|
|
—
|
|
|
40,209
|
|
||||
Repayments of asset-backed commercial paper
|
—
|
|
|
(35,730
|
)
|
|
—
|
|
|
(35,730
|
)
|
||||
Net change in restricted cash
|
—
|
|
|
(40,159
|
)
|
|
—
|
|
|
(40,159
|
)
|
||||
Dividends paid
|
(129,745
|
)
|
|
(100,000
|
)
|
|
100,000
|
|
|
(129,745
|
)
|
||||
Purchase of common stock for treasury
|
(358,425
|
)
|
|
—
|
|
|
—
|
|
|
(358,425
|
)
|
||||
Excess tax benefits from share-based payments
|
2,401
|
|
|
—
|
|
|
—
|
|
|
2,401
|
|
||||
Issuance of common stock under employee stock option plans
|
15,664
|
|
|
—
|
|
|
—
|
|
|
15,664
|
|
||||
Net cash (used by) provided by financing activities
|
(220,105
|
)
|
|
334,456
|
|
|
100,000
|
|
|
214,351
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(5,090
|
)
|
|
(605
|
)
|
|
—
|
|
|
(5,695
|
)
|
||||
Net increase in cash and cash equivalents
|
$
|
254,394
|
|
|
$
|
86,505
|
|
|
$
|
—
|
|
|
$
|
340,899
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents—beginning of period
|
$
|
573,895
|
|
|
$
|
332,785
|
|
|
$
|
—
|
|
|
$
|
906,680
|
|
Net increase in cash and cash equivalents
|
254,394
|
|
|
86,505
|
|
|
—
|
|
|
340,899
|
|
||||
Cash and cash equivalents—end of period
|
$
|
828,289
|
|
|
$
|
419,290
|
|
|
$
|
—
|
|
|
$
|
1,247,579
|
|
(1)
|
Note Regarding Forward-Looking Statements
|
|
Three months ended
|
|
|
|
|
|||||||||
(in thousands, except earnings per share)
|
June 26,
2016 |
|
June 28,
2015 |
|
(Decrease) Increase
|
|
% Change
|
|||||||
Operating income from Motorcycles & Related Products
|
$
|
322,749
|
|
|
$
|
380,603
|
|
|
$
|
(57,854
|
)
|
|
(15.2
|
)%
|
Operating income from Financial Services
|
89,573
|
|
|
81,913
|
|
|
7,660
|
|
|
9.4
|
|
|||
Operating income
|
412,322
|
|
|
462,516
|
|
|
(50,194
|
)
|
|
(10.9
|
)
|
|||
Investment income
|
688
|
|
|
1,450
|
|
|
(762
|
)
|
|
(52.6
|
)
|
|||
Interest expense
|
7,094
|
|
|
9
|
|
|
7,085
|
|
|
NM
|
|
|||
Income before income taxes
|
405,916
|
|
|
463,957
|
|
|
(58,041
|
)
|
|
(12.5
|
)
|
|||
Provision for income taxes
|
125,485
|
|
|
164,147
|
|
|
(38,662
|
)
|
|
(23.6
|
)
|
|||
Net income
|
$
|
280,431
|
|
|
$
|
299,810
|
|
|
$
|
(19,379
|
)
|
|
(6.5
|
)%
|
Diluted earnings per share
|
$
|
1.55
|
|
|
$
|
1.44
|
|
|
$
|
0.11
|
|
|
7.6
|
%
|
|
Three months ended
|
|
|
|
|
||||||
|
June 30,
2016 |
|
June 30,
2015 |
|
(Decrease)
Increase
|
|
%
Change
|
||||
Americas Region
|
|
|
|
|
|
|
|
||||
United States
|
54,786
|
|
|
57,790
|
|
|
(3,004
|
)
|
|
(5.2
|
)%
|
Canada
|
3,813
|
|
|
3,737
|
|
|
76
|
|
|
2.0
|
%
|
Latin America
|
2,573
|
|
|
2,708
|
|
|
(135
|
)
|
|
(5.0
|
)%
|
Total Americas Region
|
61,172
|
|
|
64,235
|
|
|
(3,063
|
)
|
|
(4.8
|
)%
|
Europe, Middle East and Africa Region (EMEA)
|
|
|
|
|
|
|
|
||||
Europe
(b)
|
15,188
|
|
|
14,150
|
|
|
1,038
|
|
|
7.3
|
%
|
Other
|
2,325
|
|
|
2,029
|
|
|
296
|
|
|
14.6
|
%
|
Total EMEA Region
|
17,513
|
|
|
16,179
|
|
|
1,334
|
|
|
8.2
|
%
|
Asia Pacific Region
|
|
|
|
|
|
|
|
||||
Japan
|
2,763
|
|
|
2,580
|
|
|
183
|
|
|
7.1
|
%
|
Other
|
5,818
|
|
|
5,937
|
|
|
(119
|
)
|
|
(2.0
|
)%
|
Total Asia Pacific Region
|
8,581
|
|
|
8,517
|
|
|
64
|
|
|
0.8
|
%
|
Total Worldwide Retail Sales
|
87,266
|
|
|
88,931
|
|
|
(1,665
|
)
|
|
(1.9
|
)%
|
Total International Retail Sales
|
32,480
|
|
|
31,141
|
|
|
1,339
|
|
|
4.3
|
%
|
(a)
|
Data source for retail sales figures shown above is new sales warranty and registration information provided by Harley-Davidson dealers and compiled by the Company. The Company must rely on information that its dealers supply concerning retail sales and this information is subject to revision.
|
(b)
|
Includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
|
|
Three months ended
|
|
|
|
|
||||||||||||
|
June 26, 2016
|
|
June 28, 2015
|
|
Unit
|
|
Unit
|
||||||||||
|
Units
|
|
Mix %
|
|
Units
|
|
Mix %
|
|
Increase (Decrease)
|
|
%
Change |
||||||
United States
|
57,804
|
|
|
65.6
|
%
|
|
55,128
|
|
|
64.7
|
%
|
|
2,676
|
|
|
4.9
|
%
|
International
|
30,356
|
|
|
34.4
|
%
|
|
30,044
|
|
|
35.3
|
%
|
|
312
|
|
|
1.0
|
|
Harley-Davidson motorcycle units
|
88,160
|
|
|
100.0
|
%
|
|
85,172
|
|
|
100.0
|
%
|
|
2,988
|
|
|
3.5
|
%
|
Touring motorcycle units
|
27,675
|
|
|
31.4
|
%
|
|
34,563
|
|
|
40.6
|
%
|
|
(6,888
|
)
|
|
(19.9
|
)%
|
Cruiser motorcycle units
|
37,655
|
|
|
42.7
|
%
|
|
29,952
|
|
|
35.2
|
%
|
|
7,703
|
|
|
25.7
|
|
Sportster
®
/ Street motorcycle units
|
22,830
|
|
|
25.9
|
%
|
|
20,657
|
|
|
24.2
|
%
|
|
2,173
|
|
|
10.5
|
|
Harley-Davidson motorcycle units
|
88,160
|
|
|
100.0
|
%
|
|
85,172
|
|
|
100.0
|
%
|
|
2,988
|
|
|
3.5
|
%
|
|
Three months ended
|
|
|
|
|
|||||||||
|
June 26, 2016
|
|
June 28, 2015
|
|
(Decrease)
Increase |
|
%
Change |
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Motorcycles
|
$
|
1,330,632
|
|
|
$
|
1,308,837
|
|
|
$
|
21,795
|
|
|
1.7
|
%
|
Parts & Accessories
|
258,208
|
|
|
256,840
|
|
|
1,368
|
|
|
0.5
|
|
|||
General Merchandise
|
75,757
|
|
|
77,518
|
|
|
(1,761
|
)
|
|
(2.3
|
)
|
|||
Other
|
5,516
|
|
|
7,588
|
|
|
(2,072
|
)
|
|
(27.3
|
)
|
|||
Total revenue
|
1,670,113
|
|
|
1,650,783
|
|
|
19,330
|
|
|
1.2
|
|
|||
Cost of goods sold
|
1,062,555
|
|
|
1,003,569
|
|
|
58,986
|
|
|
5.9
|
|
|||
Gross profit
|
607,558
|
|
|
647,214
|
|
|
(39,656
|
)
|
|
(6.1
|
)
|
|||
Selling & administrative expense
|
236,428
|
|
|
228,148
|
|
|
8,280
|
|
|
3.6
|
|
|||
Engineering expense
|
48,381
|
|
|
38,463
|
|
|
9,918
|
|
|
25.8
|
|
|||
Operating expense
|
284,809
|
|
|
266,611
|
|
|
18,198
|
|
|
6.8
|
|
|||
Operating income from Motorcycles
|
$
|
322,749
|
|
|
$
|
380,603
|
|
|
$
|
(57,854
|
)
|
|
(15.2
|
)%
|
|
Net
Revenue
|
|
Cost of
Goods Sold
|
|
Gross
Profit
|
||||||
Three months ended June 28, 2015
|
$
|
1,650.8
|
|
|
$
|
1,003.6
|
|
|
$
|
647.2
|
|
Volume
|
40.0
|
|
|
25.0
|
|
|
15.0
|
|
|||
Price, net of related cost
|
28.7
|
|
|
13.8
|
|
|
14.9
|
|
|||
Foreign currency exchange rates and hedging
|
(2.8
|
)
|
|
20.6
|
|
|
(23.4
|
)
|
|||
Shipment mix
|
(46.6
|
)
|
|
(29.0
|
)
|
|
(17.6
|
)
|
|||
Raw material prices
|
—
|
|
|
(7.6
|
)
|
|
7.6
|
|
|||
Manufacturing and other costs
|
—
|
|
|
36.1
|
|
|
(36.1
|
)
|
|||
Total
|
19.3
|
|
|
58.9
|
|
|
(39.6
|
)
|
|||
Three months ended June 26, 2016
|
$
|
1,670.1
|
|
|
$
|
1,062.5
|
|
|
$
|
607.6
|
|
•
|
Volume increases were driven by an increase in wholesale motorcycle shipments in the second quarter of 2016.
|
•
|
On average, wholesale prices for the Company’s 2016 model-year motorcycles are higher than the prior model-year resulting in the favorable impact on revenue during the period. The impact of revenue favorability resulting from model-year price increases on gross profit was partially offset by increases in cost related to the additional content added to the 2016 model-year motorcycles.
|
•
|
Gross profit was negatively impacted by foreign currency due to lower hedge gains, given the significant gains experienced in the prior year's second quarter, and lower revenues behind a slightly stronger U.S. dollar.
|
•
|
Shipment mix changes negatively impacted gross profit. Strong demand for Cruisers and Sportster
®
motorcycles led to higher-than-expected mix unfavorability during the quarter.
|
•
|
Raw material prices were lower in the second quarter of 2016 relative to the second quarter of 2015.
|
•
|
Manufacturing costs in the second quarter of 2016 were negatively impacted by higher year-over-year start-up costs, including costs related to the implementation of the ERP system at the Company's Kansas City manufacturing facility, significant plant re-tooling and lower efficiencies related to plant disruptions and lost absorption. The Company's fixed cost absorption was unfavorable as a result of lower production in the second quarter of 2016 compared to the second quarter of 2015.
|
|
Three months ended
|
|
|
|
|
|||||||||
|
June 26, 2016
|
|
June 28, 2015
|
|
Increase
(Decrease) |
|
%
Change |
|||||||
Interest income
|
$
|
157,009
|
|
|
$
|
150,284
|
|
|
$
|
6,725
|
|
|
4.5
|
%
|
Other income
|
24,434
|
|
|
23,325
|
|
|
1,109
|
|
|
4.8
|
|
|||
Securitization income
|
9,521
|
|
|
—
|
|
|
9,521
|
|
|
—
|
|
|||
Financial Services revenue
|
190,964
|
|
|
173,609
|
|
|
17,355
|
|
|
10.0
|
|
|||
Interest expense
|
42,895
|
|
|
41,188
|
|
|
1,707
|
|
|
4.1
|
|
|||
Provision for credit losses
|
23,461
|
|
|
15,175
|
|
|
8,286
|
|
|
54.6
|
|
|||
Operating expenses
|
35,035
|
|
|
35,333
|
|
|
(298
|
)
|
|
(0.8
|
)
|
|||
Financial Services expense
|
101,391
|
|
|
91,696
|
|
|
9,695
|
|
|
10.6
|
|
|||
Operating income from Financial Services
|
$
|
89,573
|
|
|
$
|
81,913
|
|
|
$
|
7,660
|
|
|
9.4
|
%
|
|
Three months ended
|
||||||
|
June 26,
2016 |
|
June 28,
2015 |
||||
Balance, beginning of period
|
$
|
156,184
|
|
|
$
|
132,820
|
|
Provision for finance credit losses
|
23,461
|
|
|
15,175
|
|
||
Charge-offs
|
(26,460
|
)
|
|
(21,003
|
)
|
||
Recoveries
|
11,459
|
|
|
12,239
|
|
||
Other
(a)
|
(3,291
|
)
|
|
—
|
|
||
Balance, end of period
|
$
|
161,353
|
|
|
$
|
139,231
|
|
|
Six months ended
|
|
|
|
|
|||||||||
(in thousands, except earnings per share)
|
June 26,
2016 |
|
June 28,
2015 |
|
(Decrease)
Increase |
|
%
Change |
|||||||
Operating income from Motorcycles & Related Products
|
$
|
655,206
|
|
|
$
|
726,057
|
|
|
$
|
(70,851
|
)
|
|
(9.8
|
)%
|
Operating income from Financial Services
|
145,944
|
|
|
146,577
|
|
|
(633
|
)
|
|
(0.4
|
)
|
|||
Operating income
|
801,150
|
|
|
872,634
|
|
|
(71,484
|
)
|
|
(8.2
|
)
|
|||
Investment income
|
1,454
|
|
|
2,772
|
|
|
(1,318
|
)
|
|
(47.5
|
)
|
|||
Interest expense
|
14,262
|
|
|
18
|
|
|
14,244
|
|
|
NM
|
|
|||
Income before income taxes
|
788,342
|
|
|
875,388
|
|
|
(87,046
|
)
|
|
(9.9
|
)
|
|||
Provision for income taxes
|
257,422
|
|
|
305,724
|
|
|
(48,302
|
)
|
|
(15.8
|
)
|
|||
Net income
|
$
|
530,920
|
|
|
$
|
569,664
|
|
|
$
|
(38,744
|
)
|
|
(6.8
|
)%
|
Diluted earnings per share
|
$
|
2.91
|
|
|
$
|
2.71
|
|
|
$
|
0.20
|
|
|
7.4
|
%
|
|
Six months ended
|
|
|
|
|
||||||
|
June 30,
2016 |
|
June 30,
2015 |
|
(Decrease)
Increase
|
|
%
Change |
||||
Americas Region
|
|
|
|
|
|
|
|
||||
United States
|
90,112
|
|
|
93,278
|
|
|
(3,166
|
)
|
|
(3.4
|
)%
|
Canada
|
6,283
|
|
|
5,860
|
|
|
423
|
|
|
7.2
|
|
Latin America
|
4,459
|
|
|
5,273
|
|
|
(814
|
)
|
|
(15.4
|
)
|
Total Americas Region
|
100,854
|
|
|
104,411
|
|
|
(3,557
|
)
|
|
(3.4
|
)
|
Europe, Middle East and Africa Region (EMEA)
|
|
|
|
|
|
|
|
||||
Europe
(b)
|
23,783
|
|
|
22,279
|
|
|
1,504
|
|
|
6.8
|
|
Other
|
3,940
|
|
|
3,288
|
|
|
652
|
|
|
19.8
|
|
Total EMEA Region
|
27,723
|
|
|
25,567
|
|
|
2,156
|
|
|
8.4
|
|
Asia Pacific Region
|
|
|
|
|
|
|
|
||||
Japan
|
4,869
|
|
|
4,552
|
|
|
317
|
|
|
7.0
|
|
Other
|
11,278
|
|
|
11,062
|
|
|
216
|
|
|
2.0
|
|
Total Asia Pacific Region
|
16,147
|
|
|
15,614
|
|
|
533
|
|
|
3.4
|
|
Total Worldwide Retail Sales
|
144,724
|
|
|
145,592
|
|
|
(868
|
)
|
|
(0.6
|
)%
|
Total International Retail Sales
|
54,612
|
|
|
52,314
|
|
|
2,298
|
|
|
4.4
|
%
|
(a)
|
Data source for retail sales figures shown above is new sales warranty and registration information provided by Harley-Davidson dealers and compiled by the Company. The Company must rely on information that its dealers supply concerning retail sales and this information is subject to revision.
|
(b)
|
Includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
|
|
Six months ended
|
|
|
|
|
||||||
|
June 30,
2016 |
|
June 30,
2015 |
|
(Decrease)Increase
|
|
%
Change |
||||
United States
(b)
|
177,447
|
|
|
187,163
|
|
|
(9,716
|
)
|
|
(5.2
|
)%
|
Europe
(c)
|
248,519
|
|
|
229,277
|
|
|
19,242
|
|
|
8.4
|
%
|
(a)
|
Data includes on-road 601+cc models. On-road 601+cc models include dual purpose models, three-wheeled motorcycles and autocycles. Registration data for Harley-Davidson Street 500
TM
motorcycles is not included in this table.
|
(b)
|
United States industry data is derived from information provided by Motorcycle Industry Council (MIC). This third party data is subject to revision and update.
|
(c)
|
Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Industry retail motorcycle registration data includes 601+cc models derived from information provided by Association des Constructeurs Europeens de Motocycles (ACEM), an independent agency. This third-party data is subject to revision and update.
|
|
Six months ended
|
|
|
|
|
||||||||||||
|
June 26, 2016
|
|
June 28, 2015
|
|
Unit
|
|
Unit
|
||||||||||
|
Units
|
|
Mix %
|
|
Units
|
|
Mix %
|
|
Increase
(Decrease)
|
|
%
Change |
||||||
United States
|
115,439
|
|
|
67.4
|
%
|
|
111,792
|
|
|
67.9
|
%
|
|
3,647
|
|
|
3.3
|
%
|
International
|
55,757
|
|
|
32.6
|
%
|
|
52,969
|
|
|
32.1
|
%
|
|
2,788
|
|
|
5.3
|
|
Harley-Davidson motorcycle units
|
171,196
|
|
|
100.0
|
%
|
|
164,761
|
|
|
100.0
|
%
|
|
6,435
|
|
|
3.9
|
%
|
Touring motorcycle units
|
66,172
|
|
|
38.7
|
%
|
|
73,360
|
|
|
44.5
|
%
|
|
(7,188
|
)
|
|
(9.8
|
)%
|
Cruiser motorcycle units
|
64,584
|
|
|
37.7
|
%
|
|
53,348
|
|
|
32.4
|
%
|
|
11,236
|
|
|
21.1
|
|
Sportster
®
/ Street motorcycle units
|
40,440
|
|
|
23.6
|
%
|
|
38,053
|
|
|
23.1
|
%
|
|
2,387
|
|
|
6.3
|
|
Harley-Davidson motorcycle units
|
171,196
|
|
|
100.0
|
%
|
|
164,761
|
|
|
100.0
|
%
|
|
6,435
|
|
|
3.9
|
%
|
|
Net
Revenue |
|
Cost of
Goods Sold |
|
Gross
Profit |
||||||
Six months ended June 28, 2015
|
$
|
3,161.4
|
|
|
$
|
1,923.9
|
|
|
$
|
1,237.5
|
|
Volume
|
96.6
|
|
|
61.0
|
|
|
35.6
|
|
|||
Price, net of related costs
|
51.1
|
|
|
23.2
|
|
|
27.9
|
|
|||
Foreign currency exchange rates and hedging
|
(16.9
|
)
|
|
17.1
|
|
|
(34.0
|
)
|
|||
Shipment mix
|
(45.5
|
)
|
|
(16.5
|
)
|
|
(29.0
|
)
|
|||
Raw material prices
|
—
|
|
|
(15.0
|
)
|
|
15.0
|
|
|||
Manufacturing and other costs
|
—
|
|
|
55.2
|
|
|
(55.2
|
)
|
|||
Total
|
85.3
|
|
|
125.0
|
|
|
(39.7
|
)
|
|||
Six months ended June 26, 2016
|
$
|
3,246.7
|
|
|
$
|
2,048.9
|
|
|
$
|
1,197.8
|
|
•
|
Volume increases in the first half of 2016 were driven by the increase in wholesale motorcycle shipments.
|
•
|
On average, wholesale prices for the Company’s 2016 model-year motorcycles are higher than the prior model-year resulting in the favorable impact on revenue during the period. The impact of revenue favorability resulting from model-year price increases on gross profit was partially offset by increases in costs related to the additional content added to the 2016 model-year motorcycles.
|
•
|
Gross profit was negatively impacted by foreign currency due to lower hedge gains, given the significant gains experienced in the prior year, and lower revenues behind a slightly stronger U.S. dollar.
|
•
|
Shipment mix changes negatively impacted gross profit primarily due to changes in motorcycle family mix.
|
•
|
Raw material prices were lower in the first
half
of
2016
relative to the first
half
of
2015
.
|
•
|
Manufacturing costs in the first six months of 2016 were negatively impacted by higher year-over-year start-up costs, including costs related to the implementation of the ERP system at the Company's Kansas City manufacturing facility, significant plant re-tooling and lower efficiencies related to plant disruptions and lost absorption. The Company's fixed cost absorption was unfavorable as a result of lower production in the six months of 2016 compared to the first six months of 2015.
|
|
Six months ended
|
||||||
|
June 26,
2016 |
|
June 28,
2015 |
||||
Balance, beginning of period
|
$
|
147,178
|
|
|
$
|
127,364
|
|
Provision for credit losses
|
60,584
|
|
|
41,422
|
|
||
Charge-offs
|
(66,104
|
)
|
|
(53,736
|
)
|
||
Recoveries
|
22,986
|
|
|
24,181
|
|
||
Other
(a)
|
(3,291
|
)
|
|
—
|
|
||
Balance, end of period
|
$
|
161,353
|
|
|
$
|
139,231
|
|
|
2016
|
|
2017 - 2018
|
|
2019 - 2020
|
|
Thereafter
|
|
Total
|
||||||||||
Principal payments on debt
|
$
|
1,169,085
|
|
|
$
|
2,385,835
|
|
|
$
|
2,183,218
|
|
|
$
|
1,347,045
|
|
|
$
|
7,085,183
|
|
Interest payments on debt
|
92,544
|
|
|
301,409
|
|
|
133,279
|
|
|
428,153
|
|
|
955,385
|
|
|||||
|
$
|
1,261,629
|
|
|
$
|
2,687,244
|
|
|
$
|
2,316,497
|
|
|
$
|
1,775,198
|
|
|
$
|
8,040,568
|
|
|
June 26, 2016
|
||
Cash and cash equivalents
|
$
|
864,670
|
|
Current marketable securities
|
5,070
|
|
|
Total cash and cash equivalents and marketable securities
|
869,740
|
|
|
|
|
||
Credit facilities
|
444,513
|
|
|
Asset-backed U.S. commercial paper conduit facility
(a)
|
600,000
|
|
|
Asset-backed Canadian commercial paper conduit facility
(b)
|
22,908
|
|
|
Total availability under credit facilities
|
1,067,421
|
|
|
Total
|
$
|
1,937,161
|
|
(a)
|
The U.S. commercial paper conduit facility expires on December 14, 2016. The Company anticipates that it will renew this facility prior to expiration.
|
(b)
|
The Canadian commercial paper conduit facility, which is limited to Canadian denominated borrowings, expired on June 30, 2016. The Company renewed this facility and the new facility expires June 30, 2017.
|
|
Six months ended
|
||||||
|
June 26, 2016
|
|
June 28, 2015
|
||||
Net cash provided by operating activities
|
$
|
456,290
|
|
|
$
|
613,944
|
|
Net cash used by investing activities
|
(115,965
|
)
|
|
(481,701
|
)
|
||
Net cash (used by) provided by financing activities
|
(201,782
|
)
|
|
214,351
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
3,918
|
|
|
(5,695
|
)
|
||
Net increase in cash and cash equivalents
|
$
|
142,461
|
|
|
$
|
340,899
|
|
|
June 26,
2016 |
|
June 28,
2015 |
||||
Unsecured commercial paper
|
$
|
1,020,487
|
|
|
$
|
114,983
|
|
Asset-backed Canadian commercial paper conduit facility
|
161,626
|
|
|
160,940
|
|
||
Medium-term notes, net
|
4,063,297
|
|
|
3,923,638
|
|
||
Senior unsecured notes, net
|
740,982
|
|
|
—
|
|
||
Term asset-backed securitization debt, net
|
1,074,931
|
|
|
2,011,461
|
|
||
Total debt
|
$
|
7,061,323
|
|
|
$
|
6,211,022
|
|
Principal Amount
|
|
Rate
|
|
Issue Date
|
|
Maturity Date
|
$400,000
|
|
2.70%
|
|
January 2012
|
|
March 2017
|
$400,000
|
|
1.55%
|
|
November 2014
|
|
November 2017
|
$878,708
|
|
6.80%
|
|
May 2008
|
|
June 2018
|
$600,000
|
|
2.25%
|
|
January 2016
|
|
January 2019
|
$600,000
|
|
2.40%
|
|
September 2014
|
|
September 2019
|
$600,000
|
|
2.15%
|
|
February 2015
|
|
February 2020
|
$600,000
|
|
2.85%
|
|
January 2016
|
|
January 2021
|
|
2016
|
|
2015
|
||||||||||||
|
Transfers
|
|
Proceeds
|
|
Transfers
|
|
Proceeds
|
||||||||
First Quarter
|
$
|
6,600
|
|
|
$
|
5,800
|
|
|
$
|
19,200
|
|
|
$
|
16,800
|
|
Second Quarter
|
31,400
|
|
|
27,500
|
|
|
26,800
|
|
|
23,400
|
|
||||
|
$
|
38,000
|
|
|
$
|
33,300
|
|
|
$
|
46,000
|
|
|
$
|
40,200
|
|
•
|
assume or incur certain liens;
|
•
|
participate in certain mergers or consolidations; and
|
•
|
purchase or hold margin stock.
|
(i)
|
execute its business strategy,
|
(ii)
|
manage through changes in general economic conditions, including changing capital, credit and retail markets, and political events,
|
(iii)
|
accurately estimate and adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices,
|
(iv)
|
prevent a cybersecurity breach involving consumer, employee, dealer, supplier, or Company data and respond to evolving regulatory requirements regarding data security,
|
(v)
|
drive demand by executing its marketing strategy of appealing to and growing sales to multi-generational and multi-cultural customers worldwide in an increasingly competitive marketplace,
|
(vi)
|
manage the credit quality, the loan servicing and collection activities, and the recovery rates of HDFS' loan portfolio,
|
(vii)
|
develop and introduce products, services and experiences that are successful in the marketplace,
|
(viii)
|
balance production volumes for its new motorcycles with consumer demand, including in circumstances where competitors may be supplying new motorcycles to the market in excess of demand at reduced prices,
|
(ix)
|
manage the impact that prices for and supply of used motorcycles may have on its business, including on retail sales of new motorcycles,
|
(x)
|
prevent and detect any issues with its motorcycles or any associated manufacturing processes to avoid delays in new model launches, recall campaigns, regulatory agency investigations, increased warranty costs or litigation and adverse effects on its reputation and brand strength,
|
(xi)
|
continue to develop the capabilities of its distributors and dealers and manage the risks that its independent dealers may have difficulty obtaining capital and managing through changing economic conditions and consumer demand,
|
(xii)
|
manage risks that arise through expanding international manufacturing, operations and sales,
|
(xiii)
|
manage through the effects inconsistent and unpredictable weather patterns may have on retail sales of motorcycles,
|
(xiv)
|
manage supply chain issues, including quality issues and any unexpected interruptions or price increases caused by raw material shortages or natural disasters,
|
(xv)
|
implement and manage enterprise-wide information technology systems, including systems at its manufacturing facilities,
|
(xvi)
|
manage changes and prepare for requirements in legislative and regulatory environments for its products, services and operations,
|
(xvii)
|
manage its exposure to product liability claims and commercial or contractual disputes,
|
(xviii)
|
execute its flexible production strategy,
|
(xix)
|
adjust to healthcare inflation and reform, pension reform and tax changes,
|
(xx)
|
retain and attract talented employees,
|
(xxi)
|
successfully access the capital and/or credit markets on terms (including interest rates) that are acceptable to the Company and within its expectations, and
|
(xxii)
|
continue to manage the relationships and agreements that the Company has with its labor unions to help drive long-term competitiveness.
|
2016 Fiscal Month
|
Total Number of
Shares Purchased (a) |
|
Average Price
Paid per Share |
|
Total Number of Shares
Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum Number of
Shares that May Yet Be Purchased Under the Plans or Programs |
|||||
March 28 to May 1
|
1,035,753
|
|
|
$
|
48
|
|
|
1,035,753
|
|
|
24,557,192
|
|
May 2 to May 29
|
742,712
|
|
|
$
|
46
|
|
|
742,712
|
|
|
23,815,214
|
|
May 30 to June 26
|
786,347
|
|
|
$
|
45
|
|
|
786,347
|
|
|
23,028,965
|
|
Total
|
2,564,812
|
|
|
$
|
46
|
|
|
2,564,812
|
|
|
|
(a)
|
Includes discretionary share repurchases and shares of common stock that employees surrendered to satisfy withholding taxes in connection with the vesting of restricted stock awards
|
|
HARLEY-DAVIDSON, INC.
|
|
|
Date: 8/4/2016
|
/s/ John A. Olin
|
|
John A. Olin
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
|
(Principal financial officer)
|
Date: 8/4/2016
|
/s/ Mark R. Kornetzke
|
|
Mark R. Kornetzke
|
|
Chief Accounting Officer
|
|
(Principal accounting officer)
|
Exhibit No.
|
|
Description
|
10.1*
|
|
Director Compensation Policy (revised) effective April 29, 2016
|
31.1
|
|
Chief Executive Officer Certification pursuant to Rule 13a-14(a)
|
31.2
|
|
Chief Financial Officer Certification pursuant to Rule 13a-14(a)
|
32.1
|
|
Written Statement of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. §1350
|
101
|
|
Financial statements from the quarterly report on Form 10-Q of Harley-Davidson, Inc. for the quarter ended June 26, 2016, filed on August 4, 2016, formatted in XBRL: (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements.
|
*
|
Represents management contract or compensatory plan, contract or arrangement in which a director or named executive officer of the Company participated.
|
I.
|
Annual Retainer Fee for Non-Employee Directors
|
Annual Retainer Fee for Non-Employee Directors
|
|
$110,000
|
|
Additional Retainer Fee for the Non-Executive Chairman of the Board of Directors
|
160,000
|
|
|
Annual Retainer Fee for Audit Committee Members
|
5,000
|
|
|
Annual Retainer Fee for Audit Committee Chair
|
20,000
|
|
|
Annual Retainer Fee for Human Resources Committee Chair
|
20,000
|
|
|
Annual Retainer Fee for Nominating and Corporate Governance Committee Chair
|
15,000
|
|
|
Annual Retainer Fee for Sustainability Committee Chair
|
10,000
|
|
II.
|
Annual Grants to Non-Employee Directors
|
III.
|
Additional Compensation for and Payments to Non-Employee Directors
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Harley-Davidson, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors:
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 4, 2016
|
/s/ Matthew S. Levatich
|
|
Matthew S. Levatich
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Harley-Davidson, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors:
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 4, 2016
|
/s/ John A. Olin
|
|
John A. Olin
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
Date: August 4, 2016
|
/s/ Matthew S. Levatich
|
|
Matthew S. Levatich
|
|
President and Chief Executive Officer
|
|
|
|
/s/ John A. Olin
|
|
John A. Olin
|
|
Senior Vice President and
|
|
Chief Financial Officer
|